Exclusive: Construction report preview
Majority of baking and snack construction centers on expanding or renovating plants to create greater capacity or introduce new products.
BakingBusiness.com, Aug. 29, 2011
by Shane Whitaker
Construction activity dipped slightly this past year in the baking and snack industry, but the pace is ahead of what it was during recession with any new and exciting projects have either been recently completed or are currently under way. Overall, this year’s report identifies 95 construction projects with investments of $1 million or more in North America that have either been announced, completed or are currently under way in the past 18 months. This figure is down approximately 17% from the 111 projects listed in Baking & Snack’s 2010 report; however, it’s up more than 20% compared with the 75 projects listed in 2009.

More than two-thirds of this year’s projects — some 68% of them — are either expansions or renovations. Last year’s report noted that a majority of construction projects that year (nearly 59%) were expansions. Often, processors can add new lines and capacity to an existing plant to keep up with demand or introduce new products through an expansion project. Bob West, business development director, A M King Construction, Charlotte, NC, pointed out that most plants built during the past few decades were constructed so future expansions could be made without disrupting production.

In May, Gonnella Baking Co., Chicago IL, broke ground on a 29,000-sq-ft expansion at its Gonnella Frozen Products operation in Schaumburg, IL. As part of the project, Gonnella will restructure its business units to streamline its sales, according to Tom Marcucci, the privately held company’s vice-president, sales and marketing. As part of the restructuring, its customers will now be able to place orders for fresh and frozen products together. Currently, its frozen and fresh businesses operate as virtually two separate businesses.

The project has presented several challenges such as realigning its traffic patterns and building new docks to ensure that its products continue to be delivered, Mr. Marcucci said, but the company worked around these issues and plans to complete the project on schedule. The $7 million expansion will increase the facility’s overall freezer capacity by 50% from 3 million to 4.5 million lb.

For more information, check out our exclusive report in the September issue of Baking & Snackor take a sneak peek in digital format.