Tuesday, June 2, 2015

Bimbo's new plant

$75M Lehigh Valley bakery planned for 2014

Bimbo's new plant

Bimbo Bakeries USA, the Horsham-based American arm of Mexico's Bimbo bread conglomerate, says it has bought 30 acres of land at 105 Boulder Drive, Breinigsville, Macungie Township, near the Amazon.com warehouse in the Lehigh Valley, and will spend $75 million building a new bakery there, to open in 2014.

The plant will "bring more than 100 jobs to the area," but will also apply "significant advantages in baking technology that will make our operations more efficient," Bimbo said in a brief email statement.

Spokesman David Margulies told me the company won't comment on how this will affect the future of the company's existing Stroehmann bakery near Norristown (corrected) or other aging Bimbo-owned plants in Pennsylvania and nearby states.  

Americans aren't buying sliced white factory bread or durable baked snack cakes like they used to. Money-losing Hostess, maker of Wonder Bread and Twinkies, shut its bakeries in Philadelphia and other cities last year, idling 19,000 workers nationwide.

Rivals like Flowers Foods, owner of South Philly-based Tastykake, have boosted production to fill the market void. But industrial bakers are "still getting squeezed," says Robert Costello, owner of $55 million-asset Costello Asset Management, Huntington Valley, and a longtime observer of local food processors. 

The East Norriton plant "is in a great location," near the junctions of the Schuylkill Expressway, the Pennsylvania Turnpike, I-476 and US 202, and Stroehmann's is a beneficiary of generations of "Grandpa Stroehmann" and "Tastes Great Because We Bake It Great" brand advertising -- but firms like SuperValu's Acme Markets and Lehigh Valley Dairies have already moved production facilities out of the Philly area to upstate counties in search of "lower labor costs," Costello told me.

Besides its headquarters and bakery, Bimbo maintains stores, distribution centers and other small facilities throughout the region. Besides Stroehmann, the company also owns and bakes Arnold, Entenmann's, Freihofer's, Sara Lee, Thomases and other brands. Flowers has been expanding production of its Nature's Own breads, among others.

About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano