The largest privately held meal kit delivery company in the U.S., Chicago-based Home Chef delivers more than 3 million meals a month. It does so from three locations in Chicago, Atlanta and San Bernardino County, California, where due to growth in its retail and e-commerce business, it’s nearly tripling its footprint before the paint was even dry on its first facility.
“As Home Chef has grown, we have identified the need to have multiple production facilities to accommodate our distribution, especially as we consider retail volume due to the meal solutions that are available now at Kroger grocery stores,” explains Alice Thompson, Home Chef’s vice president of operations. “We opened our first facility in San Bernardino in 2016 and are quickly outgrowing the space! We began the search process for a new site in July of last year, and we visited locations in San Bernardino, Salt Lake City, and Portland. These were locations selected after narrowing the options from a larger list across the West Coast. Ultimately, we decided to remain in San Bernardino.”
The company signed a lease in early 2019 for nearly 206,400 sq. ft. at Rockefeller Group’s Tri-City Industrial Complex along Southern California’s I-10 corridor, where it plans to move in by July 2019.
At the new space, the facility layout is optimized for flow of both e-commerce and retail products, with dedicated production areas for each and significantly more dock space to support increased outbound volume. The company also moved to a new facility in Bedford Park, Illinois, in 2018. And it’s not stopping there.
“We are currently evaluating our need for future additional facilities across our network,” says Thompson. “We don’t have a set location yet, but we know that we will eventually need more capacity to keep up with our projected growth.”
Retail sales of meal kits are a trend on the upswing.
“We rolled out our retail products at Kroger grocery stores in August of last year and we are very excited by the initial sales results and customer feedback,” Thompson says. “We expect our retail channel to grow even more by the end of 2019, and a growing percentage of that volume will be served by our facility in San Bernardino.
“Our location in San Bernardino puts us in a great position for distribution for our e-commerce business, via FedEx, as well as access to Kroger’s significant network for its West Coast banner stores,” she continues. “We have built up an excellent team in San Bernardino, from management to a dedicated hourly staff, and appreciate the support the region’s departments and leaders provide. We look forward to growing that team and continuing to bring a positive impact to the local community.”
Perfect for the Pouch
You may not know ePac Flexible Packaging, but you probably know their product: digitally printed premium flexible packaging, often in re-closable pouch format, for everything from socks to food. The company’s niche in quick-turn, short- to medium-run-length production of flexible packaging is driving tremendous growth.
That’s why ePac is opening a new 25,000-sq.-ft. facility in Chino that will focus on Southern California and the surrounding area. With a focus on small and medium size businesses, ePac is the only U.S. company based on the latest in digital printing technology (the Hewlett Packard Indigo 20000), providing brands of all sizes fast time to market, high definition graphics, low minimum orders and the ability to customize packaging to select target markets.
“We are thrilled to continue to support the growth of ePac in the county and the fact that they are bringing more than 70 jobs to the region,” said San Bernardino County Deputy Executive Officer, Workforce and Economic Development Reg Javier in May. San Bernardino County’s Economic Development Agency facilitated key meetings between ePac and its various resource partners to ensure the company could take advantage of a number of incentives. To that end, ePac was successfully awarded $2.3 million in tax credits through the California Competes program. The County’s workforce development agency is also supporting the firm’s staffing needs as it plans for its business growth.
Walid Boustani, managing partner of ePac Los Angeles, and Carl Joachim, the company’s Austin-based chief marketing officer, say Chino and San Bernardino County make sense for their operation. Joachim co-founded the company in 2012 with George Boustani and Virag Patel, coming from more than 25 years in the digital printing world. Around a decade ago he and colleagues saw the phenomenon of SKU proliferation unfolding — more products, more variations, faster time to market, and lower volumes per job. So he knew what a revolutionary product like the Indigo 20000 could mean.
“Smaller business were having the biggest problem,” he says, because the packaging converter would require such large minimum orders. The idea for ePac started to take shape in 2013, and the first location opened in 2016 in Madison, Wisconsin. Feedback was fast enough to quickly add a second press, and before they knew it, the company had evolved into a model where ePac Holdings retains a 51% ownership stake, and an owner-operator invests in and runs each plant.
Joachim calls the L.A. market “a no-brainer.” Walid Boustani, who used to sell plastic to ePac, was lured in by their business model, and was ready to operate their second location in Colorado. “We ended up getting a lot of organic and other food packaging,” Boustani said, from entrepreneurs whose firms fit perfectly with ePac’s model — the types of entrepreneurs one also finds in plentiful supply in Southern California.
Boustani, already living there, talked to ePac Holdings about opening a new location in the L.A. area, and investigated locations in San Bernardino and Orange Counties, as well as in Henderson, Nevada. He was guided through site choices, incentives and recruitment and training program options in San Bernardino County by its economic development team, which helps lead business development and entrepreneurship in the county. “That really encouraged me to be in San Bernardino County,” Boustani says, and the $2.3 million tax credit from the state “was a decision factor that really took Nevada out of the mix.”
Boustani praises the “dynamic” economic development team with the county.
“When I expressed my intention of opening in Southern California, San Bernardino County was the only one who pretty much contacted me every day — not pushing, but in a very nice way,” he says. “They connected me to everyone from the state level level as well as Southern California Edison, and they’re still keeping in touch with me. Most impressive was they organized one day where we visited four locations in four different cities, and a member from every city was present. They guided me through permits. You feel you’re very well welcomed here in San Bernardino County. So far the choice has been very good for us.”
It could get better for all.
“We think there’s an insatiable demand for quick-turn, high-quality flexible packaging,” Joachim says. In San Bernardino, the customers range from organics and granola to greens and sports nutrition powders.
The company’s objective was 15 plants by 2020, and that will be surpassed, with a plant in Vancouver, B.C., Canada, announced in June marking No. 17. Each ePac site starts with around 35 people. San Bernardino’s site could reach as many as 75. And they’re not done yet.
“As business grows, we might need to grow to a second location in California,” says Boustani, possibly in Victorville — home to the Southern California Logistics Airport, and also located in San Bernardino County.
The Teardown Business Builds Up
Another major airport in the huge county is San Bernardino International Airport, where Unical Aviation, based in City of Industry, California, first set up shop five years ago. The company has grown its business by 20% annually ever since.
What do they do? Let Dominique Tan, the company’s chief social innovation officer, explain:
“When an airplane is near the end of its life, we will purchase that plane, it will fly into San Bernardino International Airport, our team will tear it down, and then either take off parts and ship them right away to an international or domestic customer, or inventory and store them.”
Unical’s six companies cover the life cycle of solutions — brokerage, repair, teardown, maintenance. “We manufacture our own parts as well,” Tan says, with 200 of the company’s 800 employees in San Bernardino, helping an overall effort that serves around 3,500 aviation customers in more than 90 countries. “That’s the fastest growing segment of our company — services within teardown and repair,” she says.
Unical was one of the first tenants at the former Norton Air Force Base. “We approached the airport to see if they wanted to deeply partner with us,” Tan says, sparking what she calls “a really amazing relationship” with airport leadership, headed by Mike Burrows. “If we could recreate that relationship in other parts of San Bernardino County, we would. They were able to accommodate many things. It was just a blank canvas when we moved there, so there was a lot of ability to dream about what could be. What if we open a teardown facility and then expand and get both hangars? They accommodated that. We wanted to create warehousing space, and that was accommodated as well. They’ve been flexible in addressing our needs at any given moment — we’ve had six different lease or capital improvement agreements with them.
“We’ve invested a lot in capital improvements in the airport,” Tan continues. “We’re working on making the ground functional for our teardown operation on 20 additional acres. We’re working on where to expand beyond that, still within the county.”
The company is also working on increasing its workforce development partnerships.
“We’ve been partnering with community colleges throughout the region,” says Tan. Sometimes gaps still exist, however.
“We’re trying to have a deeper partnership with the county to address that gap between when they graduate and when they start working with us,” Tan says, and high school is the natural next step. “The county invited us to their Generation Go! event. I had no idea it was such a comprehensive approach to career pathways, and that the middle school and high school were only a half-mile away from our operations. We looked at their advanced manufacturing program — there is actually a lot of alignment with their career pathways program to the majority of jobs we offer — mainly mechanics and warehouse logistics, but also planning and quality control and management positions. So we’re exploring what it would look like to go deeper at the high school level.”
Tan says taking part in a San Bernardino County-led trade mission to South Korea allowed company leaders to get to know county officials better. Meanwhile, Unical is evaluating possible expansion at two additional sites beyond the airport. All of these efforts, including the trade mission and participation in Generation Go!, allow Unical to deepen its relationship with the county.
“A lot of it is happening organically,” says Tan. “Now we’re getting invited to participate in Generation Go!, and to get a sense of all the work the county is doing that we were unaware of. It could be impactful to us.”
And that means impactful for county residents, as Unical aims to live out its corporate social responsibility and sustainability goals.
“You can do really well by doing good,” Tan says, noting that Unical is the type of company that thinks long term. “We’re proud that we’re rooted here. We pay full benefits, above or at market-rate wages, offer retirement and a pretty good work/life balance. You want to engage in a partnership that is mutually beneficial. We want one that is going to be really good for the generation to come as well.”
This Investment Profile was prepared under the auspices of San Bernardino County government. Employers interested in San Bernardino County Workforce Development Board programs may call (800) 451-JOBS or visit www.sbcounty.gov/workforce. For more information, contact the county Economic Development Agency at 909-387-4700. On the web, go to www.SelectSBCounty.com.
Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.