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Green cheese: Food makers taking advantage of low construction costs

Samantha Hansen inspects slices of cheese at the Sargento Foods Inc. facility Friday in Plymouth. During the sluggish economy, many food producers have decided to expand their operations, given the relatively low costs of construction. (AP Photo by Morry Gash)

Samantha Hansen inspects slices of cheese at the Sargento Foods Inc. facility Friday in Plymouth. During the sluggish economy, many food producers have decided to expand their operations, given the relatively low costs of construction. (AP Photo by Morry Gash)

By Dinesh Ramde
AP Writer

Milwaukee — While the recession took a toll on manufacturing and other industries, one part of the economy has remained a bright spot over the past few years: food production.

Across the nation, food producers are seeing enough growth that many are expanding and investing in new equipment.

For cheese makers, dairy farmers and vegetable growers, the slow economy has brought opportunities to expand while construction costs are low. Food makers have also benefited from having products that consumers still buy in hard times and from ongoing efforts to open up new markets overseas.

The result is growth — both in sales and in facilities. The expansions include cheese-making operations in Wisconsin and Idaho and a sweet potato canning plant in Arkansas. Hershey Co. is spending $200 million to expand and update a plant in its namesake town in Pennsylvania, and General Mills Inc. has been pouring millions into yogurt plants in Michigan and Tennessee.

“Even in tough economic times, people are still going to buy groceries,” said Barbara Gannon, a spokeswoman for Wisconsin-based Sargento Foods Inc.

While Chrysler, General Motors and other companies tied to the auto industry have closed factories in Wisconsin in recent years, Sargento is among the food makers expanding there. It’s adding a multimillion-dollar building to its headquarters in Plymouth.

Sargento is the fifth local cheese company to expand in the past five years, Plymouth Mayor Don Pohlman said. Their growth makes his job easier when it comes to attracting other companies, he said.

“Businesses want to be around other businesses that are growing and expanding,” Pohlman said. “The cheese industry here really helps me sell the city.”

Unemployment in surrounding Sheboygan County was 7 percent in September, slightly better than the state average of 7.8 percent.

Gannon said Sargento began considering expansion a few months ago to keep up with demand that has remained brisk even as the economy stalled. The company, which is best known for its cheddar, Swiss and provolone cheeses, had about $900 million in sales last year and projects about $950 million in sales this year, Gannon said.

Other cheese makers and distributors — from Vern’s Cheese Inc. in Chilton, Wis., to Jerome Cheese in Jerome, Idaho — also are expanding factories and office spaces, saying they expect their good times to last.

That’s because cheese is recession food, said John Umhoefer, the executive director of the Wisconsin Cheese Makers Association. People are eating more frozen pizzas, he said, or adding string cheese to the lunches they’re increasingly packing at home.

“Even we didn’t necessarily see this coming,” Umhoefer said, “where a recession is a net positive for cheese sales.”

Another reason companies are expanding now is that construction costs have come down. Edith Knoespel, who owns Vern’s Cheese with her husband, said their business hasn’t fully recovered from a dip two years ago but it has come back enough that now is a smart time to grow. They expanded their retail store so the space that once held 10 customers can now fit 60.

“It’s just a good time to invest in building costs right now,” Knoespel said.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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