Construction report 2016
September 26, 2016
by Nico Roesler
(From left): Woodford County Judge/Executive John Coyle, Versailles Mayor Brian Traugott, More Than A Bakery owner Rob Quigg, Gov. Matt Bevin, More Than A Bakery owner Bill Quigg, State Representative James Kay commemorate the More Than A Bakery groundbreaking by turning cookie crumbs instead of traditional dirt.
When the owners of Richmond Baking Co., Richmond, IN, began planning the new More Than A Bakery production facility in Versailles, KY, they sought more than public incentives or the right deal on an existing building or greenfield space. They were looking for a new home.
That word, home, meant a lot to Bill Quigg, president, Richmond Baking and the affiliated More Than A Bakery. Finding the right expansion site took three years of consideration, and eventually, it came down to a simple question. “What it really came down to was where did we want to live and where did we want our next generation of ownership to live?” Mr. Quigg said.
Richmond Baking is the oldest family-owned cookie and cracker bakery in the US, and there are currently seven members of the fifth generation of the family working for the business. The company decided on Versailles as the home of the new 200,000-sq-ft, $57 million processing facility where the bakery will produce cookies, crackers and graham cracker crumbs.
“It was very important to us to pick a location that had good school systems, had a friendly environment and was a welcoming and attractive, fun place to live,” Mr. Quigg said. “That was really the final test.”
Architectural, engineering and construction firms agree a contributing factor that makes brownfield projects so attractive is that companies are trying to fully use their existing resources and buildings before investing in a brand-new greenfield facility.
Mr. Quigg said More Than A Bakery leadership was open to brownfield site options when it began working with The Austin Co. on the new site location and engineering design but soon realized that to meet their needs, they would need to build a new bakery from the ground up.
“We quickly found that the standards by which we are now using to build the facility, particularly food safety standards — hygienic zoning, cleanability and allergen control — it was really from our perspective impossible to use an existing facility for that purpose,” Mr. Quigg said. “There would just be too many changes that would have to be made, and it would probably end up costing us more than if we just went greenfield.”
Mr. Quigg had a set vision on what the new bakery needed for its new construction project and never deviated from that. According to some architectural, engineering and construction experts, establishing that framework of necessities is the first and most important element when considering a new construction project. Greenfield and brownfield site consideration, along with the expansive list of other factors, come later. But ultimately, companies must create a blueprint for a new processing plant where that they will eventually call home.
Construction crews work outside the Clif Bar Baking Company of Twin Falls. Clif Bar recently completed the $90 million greenfield project in Idaho.
Proof is in the planning
When a company decides either renovation or new construction is necessary to improve operations, it needs to keep an open mind regarding greenfield and brownfield options, said Jim Kline, president of the EnSol Group and contributing editor for Baking & Snack.
Mr. Kline noted that companies need to define what their needs are and stick to them over any preconceptions about brownfield or greenfield. Companies should consider if they are looking for modernization, expansion or optimization and what it will take to get them there. Once those goals have been established, then they can begin looking at renovating an existing building or starting new.
When it comes to brownfield facilities, there are several factors to consider. Mr. Kline explained that research should be done on any existing potential properties. He used an example of a company having to spend a lot more than expected on ground and floor construction in an existing facility after discovering the building was once used as a chrome plating factory — presenting an enormous contamination issue. Those hidden costs can be avoided most of the time with the right due diligence.
Then, the costs associated with renovating, retrofitting or modernizing the building have to be considered. Mr. Kline said that 40 to 70% of the cost in a brownfield project is associated with the roof and floor of buildings. Many times, roofs have to be heightened to fit modern equipment while floors have to be redone to upgrade drain and pipe systems to meet Food Safety Modernization Act (FSMA) requirements. Ultimately, Mr. Kline said, companies have a better idea of what a project is going to cost if they know how their operation needs to fit and work in that space.
“The building should fit around the process, not the other way around,” Mr. Kline said.
Fireking Baking Co., Braintree, MA, is a shining success story of a recent expansion into an existing building.
For almost 13 years, Fireking existed in a 10,000-sq-ft building with six rack ovens and two deck oven units. In 2012, owner Greg Acerra bought the current 40,000-sq-ft facility in Braintree. He spent three years researching existing buildings in the Boston area, trying to find the right match. Today, he’s already reached capacity in the new facility and is expanding again. This time, it’s just next door into a 26,000-sq-ft space, and he is currently in the process of constructing a new freezer and processing areas.
Mr. Acerra considers himself lucky to have found a building with adequate ceiling height and space in the crowded and competitive Boston area. The building used to be a warehouse and featured 21-ft ceilings, something that’s hard to find in older buildings. Higher ceilings are optimal for silos, freezers, hoists and more. “You go into some of these older places, and they have 14-ft ceilings, and they just won’t work,” Mr. Acerra said.
A greenfield project also wasn’t an option for Fireking because of the cost and limited availability of land in and around Boston, where most of Fireking’s suppliers and customers are located. Mr. Acerra also said Fireking couldn’t afford to move far from its original building because it couldn’t afford to lose its employees. For them, Boston is home.
“I ended up with a building that satisfied all my needs,” Mr. Acerra said. “It has plenty of loading docks, it’s a beautiful masonry brick building, it’s right on the T so people can take public transportation, and it’s on a major intersection of highways. It’s a really great location.”
Transforming a warehouse into a bakery does not come without the challenges most brownfield projects experience. John Mulloy, vice-president of operations, 151 Foods, Bellmawr, NJ, was integral in starting up his company’s 390,000-sq-ft specialty bread, roll and bun bakery last year. During Baking & Snack’s roundtable discussion with engineering experts earlier this year, he said brownfield buildings are often simply empty shells, and companies should have low expectations for what’s inside.
“I once heard someone tell me that with a brownfield, the only thing that’s useful is the vertical walls,” Mr. Mulloy said. “If you put a new product line in and it already had drains, you’re changing the drain pattern. If you’re putting in a line and the building has 100 amp power coming in, and you need 1,200 amp power, you’re making a change. So the only thing that’s really useful in many cases is the walls.”
And that’s exactly what happened with Fireking. The specialty bakery had to significantly increase the electrical capacity for the building to support the numerous process lines. The warehouse also lacked proper drains, so Fireking had to trench a new drainage system to meet sanitary standards throughout the building.
However, with everything accounted for, Mr. Acerra said the process was much more cost-effective for him than a greenfield space. That’s because he had a plan that outlined what he needed, and he was able to find a building that met those needs exactly.
Preliminary renderings of the new More Than A Bakery facility in Versailles, KY, show how designers incorporated several unique features to make it an attractive work environment.
When to go green
For companies in high-density areas like Boston, greenfield simply isn’t an option because there just isn’t affordable land to be found nearby. However, identifying an existing building no matter where a company is located — or shutting down production to redesign a working facility to modern standards — can also be just as challenging and expensive to do.
Frank Spano, managing director of The Austin Co.’s site location consulting division, said companies are often reluctant to accept the fact that an existing brownfield building may not be a viable option. “That’s typically a comment we get — that there has to be a building out there, but reality is often different,” Mr. Spano observed. “That’s what our aim is, to conduct a thorough property analysis to uncover and determine if an existing brownfield building can be compatible for the company’s proposed new operation.”
And the reality today is that companies are now willing to spend more on new facilities designed to not only comply with food safety regulations but also with consumer demands regarding allergens and better-for-you products. New FSMA regulations have increased the risk of susceptibility to litigation and often justify new projects to help minimize the risk to a brand. Food processors are self-policing through third-party audits to achieve Global Food Safety Initiative certifications in order to help them with Food and Drug Administration inspections.
In order to meet these regulations, companies are focusing more than ever on interior air quality, separation of allergens, zones of control, temperature and moisture control, and cleanability. Modern construction standards include designs with complete separation of production areas that house uncooked from cooked, ready-to-eat products. Temperature controls need to be in place that regulate humidity and eliminate potential food safety and bacteria harborage issues. The cleanability of a modern facility must ensure that it is able to resist harsh cleaning chemicals and temperature variation with plenty of space around process equipment for proper maintenance.
“All of these factors contribute to cost and need to be evaluated as recurring costs or one-time costs,” Mr. Spano said. Recurring costs can include utilities like electric power and process fuels including natural gas, costs for each commodity will vary in price throughout the country. One-time initial costs are those that include actual building construction or renovation costs and in some instances extending utilities to a site. Mr. Spano said many companies must consider issues like utilities and often fall back on a greenfield site due to the unexpected high cost of retrofitting an older building.
“When we go out to the field to investigate an existing building that looks good on paper, a rule is to also have a greenfield site as a backup,” Mr. Spano said. “If an existing building has potential, conduct a thorough investigation. But the company should still consider a greenfield site in that same community as a viable alternative if the building does not pass the detailed due diligence phase.”
The challenge, then, is finding the right community.
When outlining the overall needs and plan for a new facility, logistics must play a key role, but so too should personality and culture. The Austin Co. assists food manufacturers in finding their best target regions by conducting a favorable area analysis study. That research looks at distribution logistics for inbound and outbound freight, where commodities will be five to 10 years in the future, labor costs and skill levels, taxes, utilities and more.
For Richmond Baking, which has facilities in Richmond, IN, and Alma, GA, capacity constraints were limiting its continued growth. About four years ago, the company began looking across the Midwest and South regions of the US to build a new facility. The new Kentucky location fit those requirements because it is close to suppliers More Than A Bakery relies on for ingredients such as flour, sugar and oils, and it is close to its customer base. Once the list of potential locations was whittled down, company officials met with local dignitaries to better understand each community.
“We frankly fell in love with this region,” Mr. Quigg said. “In fact, our family moved to Versailles before the final company decision was made just so we could immerse ourselves in the community. We could go to the local coffee shops, talk to the locals and truly get a sense of what it was like to live there on a day-to-day basis.”
And, ultimately, after due diligence was done on the logistics of the location, More Than A Bakery was set to move in.
Constructing a culture
Developing a plan, analyzing costs, weighing incentives, touring potential sites and deciding between greenfield and brownfield all come down to a final decision of whether or not a site is right for a company’s identity.
As consumer trends continue the push toward sustainable products and healthier ingredients, processing facilities are trying to keep up. And some are leading the way.
Mr. Kline said The EnSol Group has noticed a trend over the past few years that not only are companies willing to spend more to do things the right way but also that mid-size production facilities are often downsizing as a result of more efficient equipment. Companies are focusing more on their environmental footprint.
Stuart Jernigan, director of preconstruction, AM King, said the majority of his company’s clients are requesting green initiatives in their renovations, expansions and greenfield facilities. “It appears these initiatives are setting the pace for a number of projects and becoming the new industry norm,” he explained.
From LEED certification to focusing on renewable energy sources, constructing a new facility isn’t just about the bottom line anymore; for many, it’s about presenting a company that recognizes concerns of the modern consumers. According to the US Green Building Council, the number of LEED-certified industrial facilities globally is expected to increase significantly. Currently, there are more than 1,755 LEED-certified industrial facilities around the world with another 2,710 facilities registered to become LEED certified. LEED certification provides independent verification of a building’s green features, allowing for the design, construction, operations and maintenance of resource-efficient, high-performing, healthy and cost-effective buildings.
“Over the past few years, 100% of AM King’s projects in the food industry have incorporated some level of energy efficiency initiatives in building design and construction,” Mr. Jernigan said. “Food processors and distributors are now fully aware that not only are green initiatives and energy efficiencies better for the environment and for building community support, but they also are resulting in significant cost savings over the life cycle of the facility.”
Clif Bar & Company, Emeryville, CA, has embodied a commitment to renewable energy, sustainable practices and better-for-you-foods since its founding almost 25 years ago, and has begun pursuing LEED certification. Last year, Clif Bar built its first greenfield bakery — a $90 million facility in Twin Falls, ID, called Clif Bar Baking Company of Twin Falls. The facility is operational, with its opening officially celebrated recently at an Aug. 30 ribbon cutting.
Clif Bar not only created the bakery’s internal processes with energy efficiency in mind but also designed the building’s structure to improve thermal performance and maximize energy efficiency. The bakery features energy-storing, thermal mass, tilt-up concrete walls which, when exposed to sunlight, absorb the sun’s heat energy. That energy slowly migrates to the inside of the building, releasing heat energy throughout cool Idaho nights. The process reverses at night, storing the cooler temperatures and providing a cooling effect during the warmer daytime.
Inside the building, waste heat is captured and used to heat water and other needs in the bar-making process, eliminating the need for steam boilers. And the facility uses renewable sources for 100% of its electricity — most of which comes from a wind farm close to Twin Falls.
But why did Clif Bar choose Twin Falls? It’s not on a major transportation route, there isn’t an abundance of organic farmers, and there weren’t notably lower taxes. Because Clif Bar owners Gary Erickson and Kit Crawford felt a connection to the area.
“It really fits Clif Bar because of the outdoor culture here and because of the community support of the people they met here,” said Dale Ducommun, the bakery’s general manager, of Clif Bar’s owners’ initial trips to the city. “Gary and Kit felt like the community resonated with them, and that’s why they put it here.”
Yes, there was help from public incentives, but Clif Bar & Company, like so many other companies that have completed or are beginning construction projects, broke ground because it was just the right fit, and it felt like home.