Explaining this expansion/renovation trend, survey respondents cited two fundamental reasons for the weak state of new construction -- time and money. "The most notable trend involves the speed at which projects move from inception to completion," said Alex McLaughlin, manager of the Research Division of the West Virginia Development Office (Charleston, W.Va.). According to McLaughlin, food companies are moving faster than ever to expand their offerings in response to increased competition. Therefore, they elect to renovate or expand their existing facilities, which is typically faster and cheaper to do than starting from scratch. And cheaper is a big issue. One plant owner summed up the industry's economic situation in this way: "If we had a 'dot com' after our name, maybe then we'd be able to garner the capital needed to build new."
In addition, the industry has seen a significant number of consolidations over the last few years, notes Jim Thonn, vice president of business development with Suitt Construction Co. (Greenville, S.C.). As a result, companies are reorganizing and renovating newly acquired plants to quickly come up with the best and most economical mix of production locations.