Completing the Chain

From the Port to Cold Storage to Packaging, Virginia's Supply Chain Helps Feed America and the World

Virginia International Gateway, Portsmouth

The information age has empowered consumers to demand more from their products. Deloitte’s 2019 Future of Fresh study found that two-thirds of U.S. consumers have increased their spending on fresh food over the last two years. Sales of fresh food contributed to 49% of total fast-moving consumer goods growth across late 2017 and early 2018, according to a 2018 Nielsen consumer report.

With those evolving consumer preferences, companies must consider access to large markets and the flow of goods to those markets when making site location decisions. Virginia offers food and beverage processors a prime location within a day’s drive of 43% of the U.S. population, while its infrastructure fills in the gaps between producer and consumer, allowing freshness-minded consumers to select Virginia-produced foods with confidence. Virginia’s supply chain networks and their efficiency, safety, and diversity continue to attract — and retain — companies within the food and beverage industry.

Port Delivers on Cargo and Sustainability

Virginia has six interstate highways and boasts two Class I railroads that connect to the Northeast and Midwest. But the Commonwealth’s infrastructure advantages start with The Port of Virginia, ranked as one of the top six most advanced ports in the U.S. by Global Trade magazine. The port is roughly halfway through a $1.5 billion improvement project that spans from terminal expansion and greater double- stack rail capacity to more space for refrigerated cargo and new cranes to dredging to become the deepest port on the East Coast. “We are making strategic investments to be able to meet the needs of our customers, the cargo owners, and our partners today, tomorrow, and for decades to come,” said John Reinhart, CEO and executive director of the Virginia Port Authority. “We are creating a world-class port that is delivering safe, efficient, and reliable service to all of our users. The Port of Virginia is growing, and these strategic investments will allow our users to grow in parallel over the long term.”

“In Hampton Roads, there is a robust tea and coffee roasting and packaging cluster, as well as pork processing and seafood processing,” said Tony Beck, senior managing director for CBRE. “Proximity to The Port of Virginia has driven the establishment of refrigerated warehouses for blast freezing and storage of products for the international market and dry warehouses for handling water, wine and beer imports, and exports. We have also seen an increase in food packaging providers across the state.”

Moving west, Virginia’s Gateway Region, south of Richmond and about an hour west of the port, offers the strategic location and advanced transportation networks needed to efficiently move product. The heart of the region sits at the intersection of Interstates 95 and 85 and U.S. 460, which connects the area with Hampton Roads and The Port of Virginia. The region is also home to Norfolk Southern and CSX intersecting Class 1 rail services, while UPS and FedEx operate major hubs in the area, providing third-party logistics services. Companies taking advantage of that infrastructure include Campofrio, Boar’s Head, Goya, and Perdue.

Food and beverage suppliers, including packaging companies, have also found success in Virginia. Last year, Flow Alkaline Spring Water, which offers co-packing in Tetra Pak sustainable paperboard packaging, announced it would locate its first U.S. spring water manufacturing facility in Augusta County. TemperPack, a Richmond-based manufacturer of sustainable packaging technology for perishable goods, raised $10 million to further expand its operations and add jobs. In October, Mexico-based packaging company Cartograf announced plans to build a new manufacturing plant in Chesterfield County. Colombia-based Grupo Phoenix established its North American headquarters in Pulaski County in 2010 and has expanded that facility three times since, most recently a $48 million expansion in 2017.

Symbiotic relationships have sprung up around large food processing companies. In Wytheville, Amcor Rigid Plastics supplies bottles for the nearby Gatorade bottling plant. In Williamsburg, O-I Glass and the Ball Corporation manufacture bottles and cans for Anheuser-Busch beverages. These ecosystems have shortened the supply chain by serving processors and strengthened local economies.

Whether at restaurants or in grocery stores, U.S. consumers are making freshness, transparency, and sustainability priorities in their purchasing decisions. Virginia’s proximity and accessibility to some of the country’s most populated areas makes it a prime location for food and beverage processors that need to move product in a safe, efficient manner, and the Commonwealth’s supply chain infrastructure delivers the food consumers want at the peak of freshness.