DCs Dominate List of Recent Food Projects

To expedite food to retailers and restaurants and subsequently, consumers, more and more companies are going to the big box concept for state and multi-state food distribution centers.
        Sysco, the largest food service marketing and distribution company in North America, is quite busy these days building large distribution centers in several locations around the U.S., all part of the company's foldout strategy to put trucks and salespeople closer to markets. The company has posted 26 consecutive years of record sales, reaching $23.4 billion for the year ended July 31.
        On the grounds of the newly completed Sysco facility in Columbia, S.C., Bruce H. Matthews, president and CEO of Sysco Food Services of Columbia, talked about his company's site-selection process.

Bruce H. Matthews, president and CEO of Sysco Food Services of Columbia

        "We looked at several sites across the state, but like in the old days when they put the capital in the middle of the state so everyone could get there by horse, we chose Columbia," Matthews says. "Columbia has a good labor base and local and state government worked with us."
        Matthews says the 102-acre (41-hectare) tract of land, an erstwhile farm, came at a reasonable price and affords room for future expansion. Sysco donated 20 acres (eight hectares) for wetlands preservation. The company also built a rail siding. The site-selection process took about two months, and construction took nearly a year. The 266,000-sq.-ft. (24,711-sq.-m.) facility features multiple temperature zones in the cooler, freezer and dock areas. By the end of the year, the operation will employ about 400 with anticipation of a work force of around 600 by 2005.
        "The facility is built to handle a lot more business," Matthews says. "We build in everything we can to make sure our customers are taken care of."
        Following is a look at some other recent distribution projects around the U.S.:

• Kraft Foods chose Clayco Construction Co. to design and build a single level, 864,873-sq.-ft. (80,346-sq.-m.) distribution center in Aurora, Ill. Set for completion in December, the facility will include both dry storage and air-conditioned space and is near an existing Kraft storage facility which will be sold after the new center opens.

• U.S. Foodservice plans to invest $22 million and create 200 jobs with expansion at its Salem, Va., distribution facility. The company plans to build three new buildings for a total of 400,000 square feet (37,160 sq. m.). Proximity to its markets in North Carolina, West Virginia and Tennessee and a $300,000 grant to the City of Salem from Virginia's Governor's Opportunity Fund were keys.

• Wal-Mart selected Bartlesville, Okla., as the site for its new 893,900-sq.-ft. (83,043-sq.-m.) food distribution center that will eventually employ 400. Construction will begin in Spring 2003. "The Bartlesville food distribution center will provide Wal-Mart the opportunity to better serve the growing number of customers who shop for groceries at our stores in Oklahoma, Kansas, Missouri and Arkansas," says Rollin Ford, senior vice president of logistics for Wal-Mart.

        These huge facilities present special requirements to be considered as the site-selection process unfolds.
        "Most food-related distribution centers tend to have a refrigeration component," says Tom Schroyer, president of Claycorp, the real estate subsidiary of St. Louis-based Clayco,. "So the design of these boxes tends to be from the inside out and there's generally a unique flow of materials inside the box. That flow of materials and operation tends to dictate what the site plan needs to be for the building."
        Schroyer says site size, configuration and topography also come into play, as do energy rates, which are given extra consideration due to the heavy loads required to power cold docks and refrigeration units. Rail access and proximity to trucking routes, along with timing of inbound and outbound trucking volume, are part of the equation, too. Local economic incentives and available labor are other major factors.
        "These tend to be large facilities which is a function of the industry today," Schroyer says. "Companies are building larger facilities as a cost-cutting measure. They are consolidating out of a lot of inefficient leased space."
        Logistics is paramount at large distribution centers, and companies handle that in a variety of ways: some outsource it, some handle it in-house and others manage a combination. Duration of the selection process depends on the client, but normally takes six to eight months, Schroyer says. Of course, that also depends on the breadth of the search.
        "On average, if we start with a three-state region, we will initially look at 20-40 possibilities and will generally work it down to five or six sites," Schroyer says. "Those five or six will be narrowed to two or three. At that point, our client usually becomes much more involved. In the end, it gets down to how good a feel our clients get when they come to town, kick and touch the tires and meet the community."