Fluctuating costs of building materials, shaky economic indicators and uncertain credit markets continue to bring pause to construction projects throughout the baking and snack industries. This year’s construction report identified 75 significant construction projects classified as announced, under construction or completed. These projects span a time period from January 2008 through July 2009. While the total is comparatively down from the 89 projects identified in 2008, some interesting comparisons can be made when analyzing the project lists.
From all reports, personal visits to plants and conversations with personnel, the major focus for every facility is maximizing efficiencies of operations and space before any consideration of expansion or new construction is discussed. It is encouraging to see and hear about projects that reduce waste heat, water use and energy output. The economy and cost-per-lb of product output, however top the list of drivers for capital projects.
However, while up to now reducing energy use has been voluntary and mandated by company philosophy, a new realm may soon hit the US manufacturing market as it has to a portion of the Canadian market — carbon tax.
Golden West Bakery (see Canadian Gold in Baking & Snack, August 2009) located in Delta, BC, is in the jurisdiction of the first Canadian province that assigns a carbon tax to consumers and industry based on energy use and emissions. “It gives us all a strong incentive to find savings and ways of reusing waste heat to reduce energy needs,” said Sylvain Alie, operations manager.
NEEDS OF THE MANY.
As the economy begins to rebound, and consumers continue their expanding desire for new varieties and types of baked foods, there comes a point that plants run out of capacity or lack the capability to keep up with demand. When this happens, and signs point to this trend increasing, physical expansion or new construction must occur.
Throughout the past few years, Baking & Snack has reported on emerging, growing and mainstream consumer eating trends that affect plant operations and scheduling. These include wholegrain products, health and wellness attributes and health claims, convenience, value-added, nutrition, and even the continued desire for indulgent products despite the other contrary trends.
While the economy has pressed the industry to become more efficient, consumers’ desires now push processors to make room for new products and more SKUs. In many cases, new wholegrain versions of products or convenience packaging or multipacks require new production lines or space not available in existing buildings. Some product fads became trends and are now mainstream. Processors wanting market share are acting fast to accommodate.
Comparing the breakdown of projects, differences in products closely reflect the current and emerging marketing trends in the industry. While there is a lot of capital being applied within snack plants, physical construction for new or expanding facilities dipped from 14 dedicated snack food projects noted last year to only 11 this year. Yet this remains the leading category other than the more generic “Bakery products.” Among the more prominent snack projects noted this year is the Shearer’s facil ity in Massillon, OH (see LEEDing ? Initiatives, page 42). ? Frito-Lay and General Mills continue expansions to their multiple plant locations. With Frito-Lay, many of the projects include renovations to incorporate energy management systems, solar power and other techniques to reduce carbon footprints.
Herr’s latest construction, completed in February, added 70,000 sq ft to its existing 350,000-sq-ft operation. Two-thirds of the building is warehouse, and the structure is designed to easily expand for more production. Baked chip and extruded snack lines are up and running and already taking up much of the added capacity. Baked chips are fast becoming a mainstay, with new formulations, processing and seasoning techniques, popularity is spreading.
Cracker-specific projects were indicated five times this year compared with only one dedicated cracker expansion project last year. Tortilla and flatbread projects were also significantly more prevalent this year, while donuts, pasta and frozen bakery and desserts were noticeably down in numbers.
Acquisitions of bakeries by Lance, Flowers Foods and Weston prompted construction projects as well. Efficiency, modernization through renovations, consolidation of production and other factors played into the scope of many of these projects.
Consumer need for speed, less long distance travel and continued consumer realization of quality from convenience stores were major factors in Kwik Trip’s announcement of its 80,000-sq-ft new facility adjacent to the existing 65,000-sq-ft plant in LaCrosse, WI. According to Doug Ingle, director of bakery operations, the facility is expected to open in fall 2010 with one bread and bun combination line and sufficient space for a second dedicated line. “For us, the recession has been very beneficial to business as consumers look for value, quick stops for baked items and convenience of shopping for quality items while getting fuel and other needs.” Mom’s Bakery, Atlanta, GA, has several projects in place. The first, set for completion in 2010 is the purchase of a 21,000-sq-ft facility in White, GA, to which it is doubling the size. When complete, the facility will house two frozen dough lines including one to produce a healthier version (higher protein and fiber and lower fat) of its mainstay retail and food service biscuit.
Mom’s is also planning relocation to a 60,000-sq-ft facility in Carterville, GA. In addition to relocating its three current production lines, the bakery will be adding a fourth line to also focus on frozen dough production. Renovations are underway at the new facility and production lines will be moved one at a time throughout 2010. All lines are expected to be up and running by January 2011.
Lance Inc., is putting the final touches on its 8,000-sq-ft expansion that will accommodate a proofing room adjacent to a new bakery line being installed at Columbus, GA. It will be used for bulk dough resting, retarding and fermentaion. The line is expected to be commissioned by the end of this year, according to Jack Warden, general manager.
Room conditions will be webmonitored and can be modified from any remote location. Lighting within the proof room will be motion controlled for enegy conservation. The plant was originally built in 1967 by General Mills and expanded in 1999. It houses six production lines producing wire-cut cookies; sandwich crackers in mini, single-serve and large varieties; rotary cookies and saltines. Two of the plant’s lines are organic certified.
Bakeries and snack manufacturers continue to seek more capacity and more efficiency. However, once both mandates are met within existing facilities, and the economy continues to improve, even more projects will be initiated, and those put on hold will be revisited.