Food jobs a good fit for N.C.

Mar 6, 2010 — The News and Observer

David Bracken

Mar. 6, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- North Carolina, a state that once relied on tobacco, textiles and furniture to employ its low- and moderately skilled workers, is increasingly turning to the food processing industry to replace those long-lost jobs.

In recent months, food makers have announced plans to add hundreds of jobs in places plagued by high unemployment rates even before the recession began.

The latest example came Friday as Cincinnati-based Pierre Foods said it would add 500 jobs over the next three years as it expands its Claremont plant in Catawba County, a traditional manufacturing hub north of Charlotte.

Food companies are being drawn to North Carolina by what the textile and furniture industries left behind: a large pool of unemployed workers with manufacturing experience, and municipalities and counties with an abundance of unused water and sewer capacity.

Like textile and furniture manufacturing plants, food processors require a lot of water to operate. And counties and towns, which have spent heavily to build up their infrastructure, want to add customers.

In Randolph County, where cereal maker Malt-O-Meal opened a plant in Asheboro, economic development officials are using their water and sewer capacity as a major selling point in trying to recruit more food processing companies.

Most food processing jobs are low-skill and pay annual wages below $30,000. The Pierre Foods jobs will pay an annual average wage of $26,467 with benefits.

No worries of outsourcing

Such jobs are unlikely to prevent rural counties from losing their most talented workers, but they are a natural fit for the work force that exists today.

"Maybe it's not the best-paying job, but there's going to be a group of people that really don't have the skills for the real good jobs," said James W. Kleckley, director of the Bureau of Business Research at East Carolina University.

The jobs are also a good long-term bet in areas that have seen thousands of jobs head overseas in recent years.

"It's very hard to ship food from offshore. It tends to get aged before it gets eaten," said Scott Millar, president of the Catawba County Economic Development Corporation. "That's probably something that you can count on to be a more stable economic base."

Michael Walden, an economist at N.C. State University, said food processing has become one of the state's five growth areas for jobs along with technology, pharmaceuticals, financial services and motor vehicle parts.

The size of the state's food processing industry has increased 30 percent over the past three decades to 52,000 workers, Walden said. The amount of food being processed at facilities in the state has tripled over that same period.

Those numbers are likely to continue to grow if recent population trends continue.

The relocation of many households from the Northeast and Midwest to the Southeast has made North Carolina only more attractive as a distribution center.

"North Carolina, being in the middle of the East Coast, can still service those Northeast and Midwest markets as well as the growing Southeast markets," Walden said.

Pierre Foods makes ready-to-eat sandwiches, the kind sold in vending machines. The company's Friday announcement comes just six weeks after Reser's Fine Foods, an Oregon company that makes potato salad and other prepared food, said it would add 500 jobs at its Halifax County plant.

"We were looking for a place on the East Coast that we could service easily with good transportation services and sewer and water," Ed Reser, the company's CEO, said of the move.

Reser's and Pierre received state grants of $1 million and $600,000, respectively, from the state's One North Carolina fund. Both companies also have arrangements with local community colleges to train new workers.

Last month, Northeast Foods, which supplies buns to McDonald's, said it would create 84 jobs and invest $25.4 million to build a bakery in Clayton.

But the food processing industry in the Triangle was dealt a serious blow this week when ConAgra (NYSE:CAG) announced it would close its Garner plant and shift production to another ConAgra facility in Troy, Ohio, to reduce costs.

Walden said due to the higher cost of labor and land in the Triangle, food makers are likely to target rural counties for future expansions. "Especially rural counties that have access to transportation to interstates," he said.

A small bit of good news

For Catawba County, which in the 1980s had the highest percentage of manufacturing jobs in the country, the Pierre Foods announcement represents one victory in a long-term effort to bring down unemployment.

The county has had its share of good news, including the opening of a Target distribution center that now employees more than 600 people, but its unemployment remains stubbornly high -- a sign that many areas of the state continue to shed more jobs than they create.

"We've had some success but our unemployment is still 14.5 percent," Millar said.

david.bracken@newsobserver.com or 919-829-4548

Newstex ID: KRTB-0170-42635413