BLS & Co. Executive Managing Director Jay Biggins spoke to Food Dive about risk diversification, the site selection process, and what that means for the food and beverage industry looking forward. Read Jay's insights, below.
The business case for expanding
The pandemic has also disrupted supply chains, making it difficult for companies to get their raw materials in and finished products out, said Jay Biggins, executive managing director of site selection firm BLS & Co. He said risk diversification has always been something he supports for manufacturing businesses, but COVID brought the reasons it is vital into sharp focus.
“In addition to expanding production capacity, they are realigning, so they may be actually relocating a portion of their production capacity from what may have been a centralized location to one that's somewhat more decentralized so that it gives them [a] more diverse and better risk-managed productions platform,” Biggins said.
Planning for new facilities screeched to a halt during the first six to eight months of COVID, Biggins said. The site selection process generally takes three to six months, depending on how much work a company has done in scouting out a location's proximity to raw materials, packaging manufacturers, transportation and distribution networks — as well as other needs and incentives, he said.
As things are rolling again now, Biggins said that may partly be why it seems like so many expansions are being announced: Companies are catching up on 18 months of delayed planning.
If they build it, will workers come?
BLS & Co.’s Biggins said site selection can help companies find workers. Knowing the demographics of an area — ages, educational levels and options, skill sets and unemployment levels — can help companies find communities where the jobs they offer will be a better match.
State, county and local economic development entities have long offered big companies incentives to build their facilities nearby. These can include lower property taxes, inexpensive utility service, and infrastructure upgrades near the property. Sometimes, these incentives have been based on the number of jobs that are created.
The pandemic doesn’t seem to have changed incentives by state and local economic development organizations, Biggins said. These groups are still working to do their best to attract businesses, but don’t seem to be offering more generous benefits than prior to the pandemic. But the nature of those benefits may be changing, relying less on job creation, he said.
Biggins said there are many factors which have resulted in the current worker shortage. The resurgence of COVID-19 infections though the delta variant has made people more cautious, plus some people needed to stay closer to home to care for children.
“You've got all these factors in play,” he said. “It's not just the unemployment, which is a popular hobbyhorse for some, but you really have to unpack it. ...All those things play a role but no one of them is singularly responsible for it.”
Changes in policy and on the calendar, however, could spur more people to return to work, Biggins said. The recent end to the eviction moratorium and most unemployment benefits may be sending people back to work. And with most children across the country returning to in-person school, there is less need for someone to be at home with them during the day.