Kannapolis, a city once marred by the shuttering of textile mills, is set to become a leader of the emerging food manufacturing sector thanks to a $5 million budget provision and the research of the agricultural program at North Carolina State University.
The budget, approved Wednesday after the General Assembly overrode Gov. Cooper’s veto, provides $4.4 million to equip the Food Processing Innovation Center. The center will be housed at the North Carolina Research Campus in Kannapolis, and will also receive $700,000 in recurring funds for leasing costs. N.C. State’s College of Agriculture and Life Sciences and the U.S. Department of Agriculture are taking the helm in the creation of the center — set to open in 2018.
It’s a fitting project for a city that became the national poster child of the decline of manufacturing. The North Carolina Research Center is housed at the former site of Pillowtex Corp. textile mill, which made headlines in 2003 when it closed down and laid off 4,3000 residents — the largest single-day layoff in North Carolina.
The North Carolina Research Center, a private-public hub for nutrition and food science research, took the place of the old mill, and now has 21 community, university and corporate partners that employ around 1,000 in the area. Seven university campuses, including UNC-Chapel Hill, N.C. State, Duke University and North Carolina Central University, house research hubs on the campus.
The state money is not the project’s only source of funding. Spitzer said Castle & Cook and foundational money will contribute to the center’s creation. “The public dollars can’t do it alone, they are there to spawn and to spur and to enable what is the much larger outcome of economic and job growth that is spawned by this type of center,” Spitzer said.
The funds will go towards building a GMP-compliant plant on the site — meaning not only can the on-site scientists conduct research, but companies can actually produce and sell new food products. Richard Linton, Dean of the N.C. State College of Agriculture and Life Sciences, said while other states have research centers, the combination of the research facilities and the GMP-compliant plant is unique.
“Say a company wanted to test three varieties of a new pizza that’s being created,” he said. “They could come in, produce it within the facility, and then they could in fact serve it and consume it.”
The goal is to give companies looking to build food manufacturing plants an incentive to expand in North Carolina, said Richard Reich, assistant commissioner for agricultural services for the Department of Agriculture and Consumer Services.
“There’s always competition, and so what we’re trying to do is provide a comprehensive list of services and resources that would be available to show the unique opportunity in North Carolina,” he said.
Major players in the food industry have expressed interest in the project, said Spitzer, including Nestle (VTX: NESN), General Mills (NYSE: GIS), Cargill, PepsiCo (NYSE: PEP) and Conagra (NYSE: CAG), as well as food packaging companies.
And the economic potential is huge. An economic feasibility study conducted in 2014 for the state legislature showed that if the report’s recommendations were implemented, food manufacturing could add $10.1 billion to the economy and 38,000 jobs. The study’s findings led former Gov. Pat McCrory to create a task force, which recommended the formation of a centralized hub for food processing and innovation funded in this year’s budget.
According to the U.S. Census Bureau, California had the most food and beverage manufacturers as of 2010. But Linton said migration patterns create a need for a food manufacturing hub in the Southeast in order to reduce costs associated with transportation and storage.
“I am taking my beans, growing them in North Carolina, I’m taking my beans and shipping them to Ohio, they’re putting the beans in a can and cooking them and sending them back to me,” he said.
Mary Ann Lila, director of N.C. State’s Plants for Human Health Institute, which is housed on the North Carolina Research Campus, said the academic research focus will be on the molecular compounds in plants that can improve the human metabolism or prevent diseases. The facilities at the plant will help her team go beyond just research and actually produce the packaged foods that can be tested by humans.
“You can do all kinds of things in the lab and get research results and publish papers but if it can’t get to people and be adapted by industry you really haven’t done your job as a scientist,” she said.
The budget mandates the creation of an advisory committee to oversee the creation of the center, chaired by the commissioner of agriculture, that Spitzer said will meet in early July to draw up plans.