Beech-Nut Nutrition Production Facility, USA

Beech-Nut Nutrition is a major manufacturer of baby food products in the US. The company produces an extensive range of products such as sauces, spreads, candy and coffee. The company is best known, however, for its infant nutrition products including cereal products and a range of jarred and tray-packaged meals for babies.

The company’s production is centred on two plants in New York State, US. The first, in Canajoharie, has produced baby food products since 1931, while the second plant is at nearby Fort Plain. Swiss manufacturer Hero Corp took over Beech-Nut in 2005 in order to gain market share in the US baby food market from Nestle, which dominates at 70%.

Hero/Beech-Nut is hoping to obtain a 25% market share in the US by 2011. As part of its strategy it has invested $124m in a state-of-the-art, 97,800m² manufacturing and headquarters complex in New York State. This consolidation and improvement of facilities is expected to mean the retention of 365 jobs from the plants and create 135 positions (this will include 37 jobs resulting from the transfer of the company headquarters from St Louis).

The facility will be situated near Route 55. Fruit and vegetables used for production will be sourced from farms in New York State.

Construction

The facility broke ground on a 140-acre site at the Florida Business Park in May 2008 and is expected to be open by the end of October 2009.

The facility will consist of a 585,000ft² head office and baby food production and distribution building along with a separate 385,000ft² processing plant to handle the incoming fresh fruit and vegetables.

Rifenburg Construction of Troy began the construction of the facility and carried out preliminary works on the site in May 2008. The facility was designed by the Facility Design Group using BIM Software and its ONEsource approach for planning, design and construction management. As part of the company’s commitment to green issues the facility will be LEED-certified according to a series of environmental principles developed by the US Green Building Council.

Financial

Investment for the plant is $124m but Beech-Nut received a number of incentives from the state and county as well as tax advantages and grants amounting to $104.5m. Empire State Development Corp helped finance the project by providing $18m for construction, machinery and equipment. The project is located in the Amsterdam Empire Zone allowing Beech-Nut to apply for $42m in tax breaks and incentives. In addition, Montgomery County Industrial Development Agency has provide a further $38.5m in tax incentives.

Other financial benefits include a $2m grant from the New York Energy Research and Development Authority, a $3m grant from the New York State Assembly, $750,000 from the Department of Housing and Community Renewal and $250,000 from the National Grid. Beech-Nut/Hero had already received an investment from the state in 2006 with $3.85m being provided from Assembly Capital.

Offshoot and consequences

One of the offshoots of the project is the expansion of Richardson Brands, a candy manufacturer situated adjacent to the old Beech-Nut site in Canajoharie. Prior to Beech-Nut’s relocation, Richardson was able to purchase excess steam heat from the Beech-Nut plant. Richardson will expand by installing its own boilers for which it has received a grant of $1.5m from the state. The total cost of this expansion is $2.4m.