ravel the Romanesque Road through Saxony-Anhalt in eastern Germany and you will feel like you've been transported back through time. Castles, monasteries, cathedrals and manors dating back to the 900s dot the landscape around Magdeburg, Dessau, Halle and many villages in between.
   Look closer and you'll see something else that hasn't changed much in the past 1,100 years: fields upon fields of farmland that provide the food and drink consumed by much of the world.
   In fact, the combined impact of agriculture, food processing and the beverage industry make up the single largest business segment in all of Saxony-Anhalt, a state with 1.1 million workers and 2.6 million total residents.
   In 2006, nearly 22,000 people were employed at 195 companies in the food and beverage industry in the state, accounting for €6.97 billion (US$10.2 billion) in total sales revenues, representing 21 percent growth from 2005.
   With 1.2 million hectares (2.97 million acres) of farmland, Saxony-Anhalt has been called "the cradle of plant cultivation." A mild climate and high-quality soil – considered the best for growing crops in all of Germany – make food and beverage production a natural fit for the state.
   As a result, global companies are expanding in Saxony-Anhalt in the dairy industry, organic farming, frozen foods, bakery products, sausage factories, flour mills, wine and beer making, cereal production, candy and jam factories, medicinal and spice plant processing, sugar and milk processing, among others.
   "When you look at the natural resources that are found here in this region, including the highest quality soil and wheat grown in all of Germany, companies in the food and beverage processing industries want to come here," says Dr. Carlhans Uhle, the managing director of IMG, the Investment and Marketing Corp. of Saxony-Anhalt. "Magdeburg, Halle and the southern region of the state are all especially attractive to these firms."
   Uhle also cites the work force and transportation infrastructure as site selection factors that lure agri-food employers to the region.
   "The workers here are very experienced in this type of industry. They have a history of doing a good job, Saxony-Anhalt offers high working flexibility and flexible working time models," Uhle says. "One reason employers like this location is the cost of the work force. The cost structure here is competitive because labor is 30 percent cheaper than what employers must pay in the western part of Germany. The second big factor is our logistics infrastructure. We have a good network of roads, railways and waterways. That network makes it very easy for companies to deliver their products quickly and efficiently to the major markets of Germany and Eastern Europe."
   Berlin, Prague, Amsterdam and Copenhagen are all accessible within a half-day's driving time or less.
   Uhle adds that the low unionization rate in Saxony-Anhalt "makes it easier for the investors to reach individual tariff agreements."
   The Saxony-Anhalt work force is also extremely productive, generating a food industry output of €255,000 (US$373,000) per employee, the highest productivity rate in all of the East German states.    Investment in the food and beverage sector in Saxony-Anhalt is both home-grown and from abroad. Among the largest international investors are Cargill, Barilla, Nestlé, Unilever, Ditsch, Coca-Cola and Schwan's.
   U.S.-based Schwan's makes frozen pizzas at its 350-worker plant in Osterweddingen. The company made the decision to invest in Saxony-Anhalt 10 years ago because of the state's central location in Europe, the availability of skilled and motivated workers, low start-up costs, and the availability of government grants to lower the firm's amount of investment.
   Under the state's incentive program, a company making an investment of €30 million (US$44 million) can qualify for up to €12 million (US$17.6 million) in subsidies. Nowhere else in the European Union are there higher grants for investors.
   Today, Schwan's operates a 45,000-sq.-m. (484,000-sq.-ft.) plant that produces pizzas under the Tony's, Red Baron, Freschetta and other brand names. Newly acquired land adjacent to the site will allow the company to expand to 100,000 sq. m. (1 million sq. ft.).
   Dr. Winand Rose, former managing director of Schwan's Food in Germany, recently told Site Selection that "people are more flexible here than they are in western Germany. Overtime is not an issue, and working on weekends is not an issue. The work week here is Monday to Saturday, whereas in western Germany it's only Monday to Friday, and that makes a big difference."
   Ironically, Schwan's was founded in America in 1952 by the son of German Paul Schwan, who emigrated to the U.S. in 1921. Marvin Schwan founded the firm in Marshall, Minn., as a company that made ice cream.
   Schwan's German branch, Schwan's Food GmbH, located near Magdeburg, opened on April 22, 1998 – bringing the company back to its historic roots.
   History plays a big part in the success of the food and beverage industry in Saxony-Anhalt. In 1883, the very first Halberstädter sausages were produced in Friedrich Heine's kitchen with a self-built smoker in the town of Halberstadt.
   The 20-year-old entrepreneur made 270 pairs of sausages on his first day of production and sold all of them that same day. Thirteen years later, he introduced another innovation – sausage in a can – at the Culinary Arts Exhibition in Wiesbaden.
   The successful curing of the sausages created the foundation for a mail order business. Today, the company known as Halberstädter Würstchen und Konservenvertriebs GmbH is one of the most famous sausage makers in the world.    The Halberstädter is but one of many well-known food and beverage products that trace their origins to Saxony-Anhalt. The first German crispbread production was founded in 1931 in Burg because the region offers the best soil conditions for growing rye.
   The Halloren Chocolate Factory, dating back to the founding of a honey cake bakery in 1804, is the oldest in Germany. And the Rotkäppchen sparkling wine company was founded in 1856 in Germany's northernmost wine-growing region, Freyburg an der Unstrut.
   The wine maker currently employs over 300 workers in Saxony-Anhalt and sells more than 115 million bottles per year, recording revenues of €371.5 million (US$543.8 million) in 2006.
   Kathi Rainer Thiele GmbH began in Halle in 1951 as a family enterprise making soups, sauces and cake flour. The firm is now the third biggest seller of cake mixes in all of Germany.
   Tradition has played a big role at Kathi Rainer Thiele since its founding more than five decades ago. Products like Choco Split, Tangerine Dream and Nut Cake became favorite foods for many Germans, including Federal Chancellor Angela Merkel, who visited the company in 2006 and said she fondly recalled enjoying those tasty treats as a child.
   Supporting the expansion of agri-business and food processing in Saxony-Anhalt are two major university institutes in the region: the University of Applied Science Anhalt (UAS) and Martin Luther University at Halle-Wittenberg (MLU).
   The UAS offers a master's degree in food and agri-business, while MLU offers courses at both the Institute of Food Science and the Institute for Food Chemistry and Environmental Chemistry.
   "The universities in the region cooperate very closely with companies on research and development," says Dr. Carlhans Uhle. "In fact, they often help create new products."
   The schools are also busy developing more nutritious foods. "Eat yourself fit" is the new mantra throughout much of the state, and new R&D into high-nutrition food is leading the way.
   An emerging industry in Saxony-Anhalt is organic farming. Some 300 firms conform to strict ecological specifications as they farm 43,000 hectares (106,253 acres) of arable land in the state, about 4 percent of all farmland in Saxony-Anhalt.
   Supporting this growth is an aggressive posture by the state government. From 2000 to 2007, about 170 food and beverage plant projects with an investment volume of more than €1.1 billion (US$1.6 billion) received €217 million (US$318 million) in public subsidies.
   In 2006, Saxony-Anhalt placed third among all German states in total jobs created by foreign direct investment, trailing only the much larger states of Bavaria and Saxony, according to a study conducted by IBM-PLI.
   And the state is looking for more. A recent partnership with the U.S. state of Minnesota is leading to even greater cooperation between American and German firms, and perhaps even greater investment into new and expanded facilities in Saxony-Anhalt.