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Pepsi: Still in the Carolinas

Sep 02, 2015 02:41PM ● Published by Jason Huddle

By: Kim Cassell

In April, Pepsi Bottling Ventures (PBV) announced the purchase of 32 acres of land in Harrisburg. The goal? To consolidate the Midland and Charlotte Pepsi facilities into one sales and distribution location. 

Consolidation became a buzzword during the recession, more as a means to save money and increase efficiency than to expand operations. Now that the economy appears to be on the rebound, some companies see relocating as an avenue to growth. 

Eric Stavriotis is managing director at Jones Lang LaSalle, a commercial real estate services provider. “In the last 12 months we’ve seen more projects that are focused on deploying new capital and growth, whether it’s a relocation, expansion, even just a reset of the overall corporate footprint,” he says.

Motivators to relocation and consolidation include tax credits, a built-in qualified employee base and adequate road infrastructure.

“If a company can take advantage of lucrative state and local incentive packages to help defray moving costs, now could be the right time in the cycle to make a move, with property prices on existing property rising, and low interest rates and cheap financing spurring new build-to-suit and speculative development,” Stavriotis adds.

Such is the case of PBV, headquartered in Raleigh and an independent bottler and distributor of Pepsi products in the Carolinas, Virginia, Maryland and Delaware. In 2013, it swapped out territories in Vermont and Idaho for the Charlotte franchise with Pepsi Bottling Co. That got possible consolidation wheels turning.

A subsequent yearlong study yielded a deal that sees $371,875 in corporate incentives from the town of Harrisburg over five years as well as improvements to NC Highway 49, its main thoroughfare. In return, PBV is spending $12.5 million to build a 200,000-square-foot facility on Cedar Drive. Projected to be complete in June 2016, all 200 or so employees from the Midland and Charlotte facilities are expected to make the corporate move to Harrisburg.

“Our Charlotte facility, while a great location for many years, was not as easily accessible for our trucks and lacked the space we needed for the expanding market,” Claire Niver, PBV senior vice-president of human resources and corporate affairs, says. “We were already in a facility in Cabarrus County (Midland), and we are comfortable with the solid workforce in place there and confident in our ability to staff as needed with the right talent.”

As to what will happen to the vacated properties, Niver explains, “The Charlotte facility is under contract. The Midland facility is being evaluated to determine next steps as we speak.”

 

While the Charlotte plant sits on 5.2 acres of prime real estate on South Boulevard, just south of Remount Road, there’s some concern about the future of the Midland location. On Highway 24/27, just east of Highway 601, the town obviously doesn’t want to see it sit empty for any length of time.

 

Altruism

Large, profitable corporations – while beneficial to their local communities economically – exist under a microscope. Corporate responsibility and philanthropy have come to be expected, whether they’re environmental or humanitarian. Sure, the underlying goal might be to offset concerns about the use of natural resources during manufacturing, but the idea is still a positive one.

So the fact that Cabarrus County is becoming home to more corporate big-leaguers is good news. “Pepsi has a long history of philanthropy in this region, going back to when Dale Halton owned the franchise that her grandfather established over 100 years ago,” Niver shares. “PBV purchased the Charlotte region in a territory swap two years ago and has begun to cultivate new relationships and strengthen existing ones to continue that heritage.”

A Charlotte native, Halton ran the family-owned Pepsi-Cola Bottling Company (now PBV) for 20-plus years, breaking down many corporate barriers – with regard to women – along the way. She also initiated Pepsi employee benefits and community-wide giving amounting to millions of dollars during her tenure.

Halton may have sold the business 10 years ago, but PBV retains what it calls its Environmental Sustainability Goals. These include such integrations as workplace safety, and local environmental conservation in the form of water, energy, fuel and recycling.

Being global, PepsiCo – PBV’s parent company – can extend the impact. According to the company’s 2013 Sustainability Report, Frito-Lay North America utilizes more than 280 electric vehicles and 208 compressed natural gas trucks in its commercial fleet: about 20 percent of its total U.S. fleet.

Drip irrigation and i-crop are being used to reduce water usage, while, “Our ReCon platform and our Treated Water Efficiency Tool enable beverage plants to optimize their water treatment systems, and together have saved an estimated $640,000 and reduced water consumption by more than 200,000 cubic meters per year in our U.S. beverage operations,” according to the report.

i-crop is new Internet technology that allows farmers to reduce water usage. “The data-driven system intersects local weather information with data from soil moisture probes. By making data available for farmers to access online, i-crop empowers them to make better decisions about how and when to water their crops. After initial testing, the software has been shown to help farmers achieve 90 percent efficiency in water usage,” according to bigthink.com.

With the surge of plastic beverage bottle usage in the last decade – and the ban of discarded bottles into our landfills – Pepsi aims to reduce its footprint by using recycled manufacturing scrap in its PET (polyethylene terephthalate: the plastic used to make drink bottles). It began implementing this process in 2004, with rPET (recycled polyethylene terephthalate) currently making up about 10 percent of each bottle.

“In 2013, we completed a system conversion to transition some of our Gatorade multi-packs to lighter-weight secondary packaging,” pepsico.com says. “This change resulted in a reduction of nearly 39 million packaging pounds on an annualized basis. In 2010, PepsiCo set a goal of partnering to increase the U.S. beverage-container recycling rate to 50 percent by 2018, a shift that would capture billions of containers and significantly reduce carbon emissions.”

Another avenue big corporations are taking to impact local communities is through nonprofits. In PepsiCo’s case, those include the American Red Cross, Feeding America, Save the Children, International Rescue, Give2Asia and Habitat for Humanity. These efforts become even more successful when employees become involved, especially when they have a voice as to where donations go; it’s empowering and a morale booster.

PepsiCo employees have the opportunity to give through the PepsiCo Foundation. Within the foundation are programs – PepsiCorps, Water Mother Cellar Project, Food for Good and Diplomas Now – that allow individuals to volunteer their time and services in response to water purification; nutritional education and supplies; societal support; and disaster relief, like hurricanes and earthquakes. These programs take place internationally and some are employee-founded.

“PepsiCo employees regularly volunteer their time, skills and creative insights to help those in need. Whether helping out in simple ways or seeking solutions to global challenges, PepsiCo employees help make a meaningful difference in the lives of others and have an enduring impact on the communities where they live and work,” according to its website.

So, while we in Cabarrus County celebrate the acquisitions and expansions of big business, their effects are being felt both here at home and much farther away.

 

FedEx SmartPost (sidebar in Pepsi article)

 

FedEx is expanding into Cabarrus County in a big way. Impossible to miss at the corner of Poplar Tent Road and International Drive in Concord, the $41-million, 330,780-square-foot distribution center will use the next four years to get its SmartPost operation running.

SmartPost, a division of FedEx, sorts packages but then has them delivered to residents by way of the

United States Postal Service. These packages fall within certain size and weight parameters, are not rush delivery, and can be delivered to the military and post office boxes.

While it’s planning to have about 521 on staff, some 462 will be part-time. Concord’s distribution center will also triple the size of SmartPost, but some employees from the closing facility in Charlotte will transfer here to work.

Altruism

FedEx Cares Week promotes partnerships with charities that have a local impact, like the United Way, American Red Cross, March of Dimes, Teach For America and Junior Achievement.

According to the FedEx website, FedEx Cares Week 2013 included:

• 46,867 volunteer hours by 9,991 FedEx employees in 398 cities in 64 countries

• 593 nonprofits served worldwide, with more than a $1-million value in service hours donated

• More than 27,000 FedEx Cares purple tote bags of supplies delivered to local nonprofits.

Photo: Kim Cassell

Rendering: Courtesy, Pepsi Co.

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