by Cyrus Mortazavi, on Feb 19, 2024 7:00:00 AM
The past year saw continued, robust activity in the food & beverage production and distribution sectors. Site Selection Group, a full-service location advisory, real estate and economic incentive services firm, assists manufacturing and distribution companies from a wide range of industrial sectors find the optimal location for their new facility. The food & beverage industry continues to be one of the most well-represented industries in our portfolio of clients. As a result, Site Selection Group carefully monitors the food & beverage landscape to identify key trends and drivers in the industry.
Food & beverage manufacturing growth
The table below represents job growth in the food & beverage manufacturing industry by state from 2022-2023. We measure growth both in terms of absolute job count change and percentage change, as looking at either of these figures on their own does not tell the full story. As a result, the data in the table below reflects an index score that blends those two data points.
In the last year, the top five states in terms of total growth were Tennessee, Texas, New York, Indiana and Kentucky. These states not only saw an increase in the sheer count of food & beverage manufacturing jobs, but they also saw a significant increase in jobs from a percentage perspective.
A variety of factors helped lead to these results – aligned workforces, utility availability, logistical advantages, strategic geographic positioning and site availability. It is important to note that no state will score perfectly in each of those categories and final site selection is dependent on project-specific criteria.
Food & beverage manufacturing growth
The list below shows examples of some notable food & beverage announcements over the past year. Overall, these projects help demonstrate that food & beverage deals continue to become more capital-intensive as industrial automation continues to accelerate. However, Site Selection Group also shows an example of a more traditional, labor-focused food project in Kentucky. Please note that the incentive information provided below may not be a comprehensive sum of all support provided by local, state and utility economic development.
- Fairlife – Webster, NY:
A subsidiary of the Coca-Cola Co., Fairlife produces a variety of milk-based beverages and is investing $650 million resulting in 250 jobs. The project was supported by more than $21 million in tax credits through the New York Excelsior Jobs Fund.
- SK Food Group – Cleveland, TN:
This Arizona-based food manufacturer supplies snacks, sandwiches, burgers and similar food items for corporate branding. They will be investing $205.2 million, creating 840 new jobs. The state of Tennessee supported the project with more than $9 million in incentives.
- Nissin Foods – Greenville, SC:
A global manufacturer of ramen products is investing more than $228 million and creating 300 new jobs in the upstate of South Carolina. Job development tax credits and a set-aside grant from Greenville County supported the project.
- DrinkPak – Fort Worth, TX:
A California-based company that specializes in the production and packaging of alcoholic and nonalcoholic beverages is investing $452 million to open two facilities, totaling over 2.8 million square feet, resulting in the predicted creation of 1,000 jobs. The city of Fort Worth supported the project through a 10-year property tax abatement with a maximum value of $21 million. Tarrant and Denton counties also supported the project through tax abatements.
- Bakery Express – Florence, KY:
This company produces baked goods such as donuts, croissants, bagels and pastries to thousands of retail outlets across the country. The company will be investing $22 million, creating 175 new jobs in the well-established food and flavoring cluster in northern Kentucky and Greater Cincinnati.
The map below represents the count of incentivized food & beverage projects by state in 2023, with darker blue states indicating a higher count of project announcements. Please note, this only includes projects that received publicly reported economic incentives.
SSG’s 2024 outlook for food & beverage manufacturing
Site Selection Group expects to see continued growth in the food & beverage sector in the upcoming year for many of the same reasons that have driven activity in the past. However, we highlight three key trends that we expect will play an outsized role:
- Logistics and Supply Chain:
Although trucking and logistics rates have fallen from post-COVID highs, quick and efficient access to consumer bases will continue to drive food & beverage production location decisions. The drive for fresher products and quicker service won’t subside anytime soon. As a result, Site Selection Group expects established operations to continue to search for complementary facilities to get closer to growing consumer bases – notably in the fast-growing Sun Belt and Mountain West. At the same time, foreign food & beverage companies looking to establish their first operations in the U.S. will need to balance serving consumers from a centralized location, while oftentimes ensuring key ingredient supply from overseas via major ports. - Utilities:
While not all food & beverage projects are water and wastewater-intensive, a large number have significant requirements. Coupled with the strain that recent large-scale industrial activity has put on municipal water and wastewater systems, it can be increasingly difficult to find sites that meet the water needs of food &beverage operations. At the same time, power and gas availability either at the site or system levels can also be a hindrance to meeting those requirements. As a result, it’s important to cast a wide net during a site selection search and carefully down-select from all potential options to ensure the best site options are identified. - Revisiting Existing Food & Beverage Facilities:
One common mistake that Site Selection Group sees food & beverage companies make during the site selection process is overlooking the potential to operate in an existing building, whether an existing food-grade asset or other industrial-grade building. While available food-grade buildings continue to be rare in the marketplace, some food & beverage operations can operate in a standard industrial building. Further, some beverage companies may be able to retrofit a decommissioned dairy, for example, to expedite their timeline to production. Understanding realistic options from the onset of a project can help expedite the site selection process and, in some cases, shave months off a timeline.
