Expanded Bonus Web Edition
FOOD PROCESSING
From Site Selection magazine, July 2007
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Sweet Deals

Several states scoop up creamy projects.

by JOHN W. McCURRY,
john.mccurry bounce@conway.com
 
Dreyer's Grand Holdings recently completed a $210- million expansion of its plant in Laurel, Md., making it the largest of the company's six manufacturing facilities.
Photos courtesy of Howard County
Economic Development Authority
A
merica has long screamed for ice cream and all its variations. Nearly 1.6 billion gallons of ice cream, frozen yogurt, water ices and other frozen dairy products were sold in the U.S. in 2006, accounting for nearly $22 billion in sales, according to the USDA's National Agricultural Statistics Service. These products are made at approximately 370 U.S. ice cream plants. California leads all states in production, with about 10 percent. Sales are generally cyclical, spiking during summer months, especially during July, designated National Ice Cream Month by President Ronald Reagan in 1984.

Taking the Ice Cream Cake
   New Britain, Conn., residents could likely be heard saying "sweet" in June when Celebration Foods announced it will consolidate its ice cream cake operations into a 120,000- sq.- ft. (11,150- sq.- m.) plant to be built in the city's Smart Park, a remediated brownfield site, formerly home to a Fafnir ball bearing plant, that has been vacant for more than a decade. Celebration, a division of Focus Brands, makes ice cream cakes for its Carvel subsidiary. Celebration plans to consolidate manufacturing from California, Maryland and Massachusetts into the New Britain facility. The company, which will hire 225 manufacturing workers, will also move its corporate headquarters and 40 employees from Rocky Hill, Conn., to the new facility.
   Tim Shanley, Celebration Food's vice president of manufacturing, research and development, says his company's search narrowed to six cities initially, and then became a choice between New Britain and Middletown, N.Y. He says Celebration's supply chain needs required that the new site be within 100 miles (62 km.) of north New Jersey.
   "We ran out of capacity and we knew we had to add capacity," Shanley says. "We hired a site selection firm and looked at all the opportunities. Our labor requirements are unique. We are very hands on and we were looking for labor at $8 to $12 per hour. The labor force issue was critical."
   Shanley says Celebration wanted the deal to work in Connecticut because of its history in the state. The New Britain- New Haven- Hartford corridor rose to the top of the list and eventually New Britain emerged, largely through the efforts of the community, the city council and the mayor.
   "New Britain had all the right people at the first meeting," Shanley says. "It was a very productive first 90 minutes."
   The efforts of New Britain and Middletown took different approaches, Shanley says, noting that initially Connecticut did not offer state incentives.
   "In New York, the state really stepped up and the town did not. In Connecticut, the town stepped up and the state didn't. But, eventually after working with the mayor, Connecticut stepped up and made an offer it was hard to say no to."
   The site was cleaned up through the state's brownfields program. Local and state officials see its redevelopment as a key to the city's revitalization. Celebration chose the New Britain site following a lengthy search that examined more than 50 potential sites.
   "Carvel will be utilizing about 13 acres [5.3 hectares]," says New Britain Mayor Timothy Stewart, who described the announcement as the most exciting of his term. "This is a once in a lifetime opportunity for the City of New Britain."
   Stewart says the site's location near the Highways 9 and 72 provides good accessibility. The City of New Britain sold the property to Centerplan Development, which will build the facility for Celebration Foods. Construction is on a tight timetable as Carvel expects to begin production in the spring of 2008.
   Celebration will receive an incentive package from the state and city that includes enterprise zone tax incentives, work force training funds, tax credits and loan program availabilities.

Conglomerate Control
   Most of the recent U.S. ice cream manufacturing projects involve companies expanding at existing sites. Two heavyweights dominate the U.S. ice cream manufacturing scene, and both have ongoing expansion programs.
   Dreyer's Grand Ice Cream Holdings, part of the Nestlé food processing empire, manufactures many of the other familiar ice cream names, including Edy's, Häagen- Dazs and all of the Nestlé brands. Dreyer's completed a major expansion of its Laurel, Md., facility last October and is now embarking on a much smaller expansion of its Fort Wayne, Ind., plant.
   The Laurel plant is now one of the world's largest ice cream factories following a $210- million expansion, making it the largest of Dreyer's six ice cream plants. The Laurel facility will now make and distribute more than 120 different Dreyer's, Edy's, Häagen- Dazs, Nestlé and Skinny Cow ice cream products and frozen snacks.
   The Laurel plant, which will produce nearly 58 million gallons of packaged ice cream and 370 million dozen frozen snacks annually, hired an additional 450 employees – mostly ice cream makers, and shipping and maintenance personnel – to staff the new 705,000 sq.- ft. (65,500- sq.- m.) facility. More than 725 employees now work at the Laurel plant, and the company has plans to add 240 more by the end of 2008.
   Dreyer's is investing $29.5 million to expand its Edy's plant in Fort Wayne, Ind., with a completion date of July 2008. Edy's will increase its Nestlé Drumstick capacity with a 30,000- sq.- ft. (2,800- sq.- ft.) addition to house a new production line. Edy's will add 65 employees to a work force of more than 300.
   "By expanding Nestlé Drumstick capacity to the U.S. heartland, we also get product closer to customer demand," said Tony Sarsam, executive vice president – operations & supply chain. "This will reduce transportation costs and ensure that our stringent product quality standards are achieved."
   Unilever's Good Humor- Breyers Ice Cream subsidiary, which has six plants, is the largest manufacturer and marketer of branded packaged ice cream and frozen novelty products in the U.S. Brands also include Klondike and Popsicle products. Good Humor- Breyers completed a $7- million, 38- employee expansion of its Hagerstown, Md., plant, last September. The project included construction of a new manufacturing line and an upgrade to the company's wastewater treatment plant.
   Good Humor- Breyers also expanded its Sikeston, Mo., plant with a $17- million, 70- job project.

Novelty Niche
   The novelty ice cream business is relatively small, accounting for about 10 percent of overall sales, but is experiencing growth. California's ice cream leadership was further solidified in January as start- up novelty ice cream firm MolliCoolz opened a 53,000- sq.- ft. (4,900- sq.- m.) production facility in Stockton, Calif. MolliCoolz manufactures colorful beads of ice cream and is a competitor of Dippin' Dots.
   "Demand for our products continues to grow exponentially," said Bryan Freeman, president of MolliCoolz. "Our first year was a tremendous success and now with our new Stockton plant, we are well positioned to fulfill demand in 2007 and beyond. Consumers love MolliCoolz and we are now able to supply this truly unique product throughout the country."

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