Food processing is a growing field

May 2, 2011
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Food processing is a business sector that seems to be rather quietly consuming a larger share of the area’s overall industrial market.

According to data at The Right Place Inc.’s website, the area’s food-processing sector, which includes food service, is ranked 33rd among 172 metro areas nationwide and may be moving its way up that chart. The latest sign that may be the case came from two tax-incentive decisions made recently by the Michigan Economic Growth Authority.

“That means that the food processing industry in West Michigan is growing rapidly, and there are opportunities for growth in this part of our economy. That sector is a leader in the area and will continue to be one. We have always been a leader in this area; it just seems to be growing without much fanfare,” said Kara Wood, economic development director for the city of Grand Rapids.

Wood wasn’t alone in her assessment.

“West Michigan’s food processing and agribusiness cluster has great potential for growth in West Michigan,” said Susan Jackson, vice president of business development for The Right Place. “We’re seeing continued growth and investment in that sector, such as this latest expansion announcement.”

That announcement came from Hearthside Food Solutions LLC, which reported it would make a $17.4 million investment in its Grand Rapids and Kentwood facilities and add 302 jobs to its work force over the next five years. Hearthside plans to increase its output of granola bars and baked snacks through the investment, and that plan was rewarded with $1.2 million in state tax credits by MEGA. Another incentive is likely to come from Grand Rapids city commissioners, who are expected to grant Hearthside a tax abatement soon.

MEGA also gave its OK to a $56.5 million capital investment Gordon Food Service Inc. plans to make in Wyoming, which also has green-lighted the project and likely will grant the company a tax abatement. The project will add 127 jobs to its work force and a new high-tech business initiative to its food-service menu. Gordon gave up a previously approved brownfield tax credit in exchange for a standard MEGA credit.

“These new investments underscore, once more, Michigan’s tremendous talent and the continued growth in core sectors like food servicing and processing,” said Michael Finney, president and CEO of the Michigan Economic Development Corp.

But Wood pointed out that Hearthside and Gordon aren’t the only companies to watch. “The other food processors in the city that the public should be aware of are Butterball Farms, Garden Fresh, Kellogg and Keebler, and Founders Brewing,” she said.

Wood said the products that are worth watching are butter from Butterball Farms, tortilla chips, salsa, and dips from Garden Fresh, pop-tarts and cookies from Kellogg and Keebler, and, of course, beer from Founders Brewing. Then there is Harmony Brewing Co. LLC, which is going through the city’s industrial abatement process for a micro brewery and a pub it wants to open at 1551 Lake Drive SE.

The growth in the food-processing field is subtly spilling over into the industrial real estate market, as well. “It’s very much under the radar — or some of the companies that are here like to be under the radar. But you’ve got Gordon Foods, Roskam (Baking Co.), Kellogg has a good footprint here, Sara Lee, too There is a lot of food-processing manufacturing, (including) Elan Nutrition,” said Steve Marcusse, a principal and industrial advisor with Colliers International of West Michigan. “It’s a big part of our market. It’s really helped take some of the burden off of all the losses that we had having to do with auto and furniture.”

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