Ohio’s Food Processing & Packaging Industry

Ted Strickland, GovernorLee Fisher, Lieutenant Governor

A message from Ohio’s Lt. Governor.

Thank you for your interest in Ohio’s food processing industry. I hope that you gain a greater understanding of the benefits of locating your next facility in the Buckeye state.

Ohio’s varied agricultural sector provides inputs for the food processing industry, leading to a concentration of processors within the state. In 2006, Ohio’s food and beverage manufacturing industry shipped $25.2 billion worth of products. Ohio currently ranks in the top five states in one-half of the food processing groups, first in the production of Swiss cheese, and second in the production of tomatoes. The industry employs more than 60,000 workers at 1,106 production plants.

Ohio has a great location for food processing companies between the grain belt and the populous Eastern markets. In fact, Ohio’s borders are within 500 miles of 60 percent of both the U.S. and Canadian populations. Combined with a strong transportation infrastructure and intermodal connections, Ohio is the best location to access your suppliers and your customers.

I hope that you will consider Ohio for your next business location, or expand in Ohio if you are already part of our state. For more information, please contact the Strategic Business Investment Division at 614.466.4551 or at sbi@development.ohio.gov.

Sincerely,

Lee FisherLt. Governor of OhioDirector, Ohio Department of Development

Become profitable faster by locating your business in Ohio’s leading food processing industry.Ohio’s strategic location brings together all of the elements that comprise food production and underlies Ohio’s strength in food processing. Ohio’s rich food production industry is a diverse sector that includes farming, seed supply, agrichemicals, agbioscience, farm machinery, wholesale and distribution, processing, marketing, and retail sales. At the strategic crossroads between the grain belt and Eastern markets, Ohio is also a leading manufacturer of key food and agricultural products such as fruits, vegetables, specialty foods, Swiss cheese and eggs. Ohio is home to food industry leaders such as Kroger, J.M. Smucker, Honeybaked Foods, Inc., Chiquita Brands International, and Bob Evans Farms. Ohio’s food and beverage manufacturing industry exports equal $25 billion annually.

Ohio’s commercial and public food research institutions include commercial nutraceutical industry leaders such as Abbott Nutrition and institutions such as The Ohio State University’s Ohio Agricultural Research and Development Center.

Here’s why so many food industry leaders have located in Ohio:

• Strategiclocationprovideseasyaccesstoprofitablemarketsandsuppliers. Ohio’s strategic location allows easy access to customers and the world’s second largest supply of fresh water.

• Public-privatesupporteliminatesobstaclesandacceleratesbusinessgrowth. Ohio is a pro-business state that understands partnering with the private sector.

• Low-costofdoingbusinesswithOhio’snewtaxstructure. Ohio has the lowest state taxes in the Midwest.

• IncreasedproductivitywithOhio’sexperiencedworkforce. Ohio employs more than 60,000 workers in the food and beverage industry.

•Breakthroughinnovationswithindustryleadingresearchpartners. Ohio’s expertise in agbioscience research helps get your products to market sooner.

• ImprovedP&LperformancewithOhio’spromiseofperfectbalance. Ohio is a place where you can achieve both your business and personal aspirations.

Strategic location provides easy access to profitable markets and suppliers.Ohio’s strategic location is a key reason for its dominance in food related industries. Food processors are able to bring in bulk raw materials and ship out finished goods at a low cost. Ohio is located within 500 miles, or one day’s trucking distance, of 60 percent of both the U.S. and Canadian populations.

Extensive Transportation Infrastructure

Ohio’s roads, rail, waterways, and international airports provide many viable and reliable options for moving products to your final market. Import and export in Ohio is facilitated by 10 Foreign Trade Zones and many sub-zones offering duty-free, quota-free secured sites where goods can be stored, repackaged, assembled, and manufactured.

Leading Exporter of Food Related Products

Exports of food and beverage products from Ohio exceeded $25 billion in 2006. More than $650 million is shipped to international markets, experiencing substantial increases over the last four years. The vast majority of exports are food products, with only a small fraction from beverage producers.

Abundant Supply of Water

Bordered by Lake Erie to the north and the Ohio River to the south, Ohio is a water rich state with more than 29,000 miles of rivers and streams, a 451 mile border on the Ohio River, more than 500 lakes, ponds, and reservoirs, and more than 230 miles of Lake Erie shoreline. Access to the Great Lakes provides the world’s second largest supply of fresh water, right behind the polar ice caps, with roughly 20 percent of all the fresh water on the planet. Vast aquifers lie underneath two-thirds of the state, with some of the nation’s largest and most productive sources of potable water.

TheGrainBeltregion–comprisedofIllinois,Indiana,Iowa,Kansas,Minnesota,Missouri,Nebraska,Ohio,andWisconsin–producesasubstantialamountoftheworld’sgrainandsoybeans.Thisregionalsoproducesnearly 50percentofallcorngrownintheU.S.

Highway

Ohio has the nation’s fourth largest interstate highway system.

Ports

Nine ports on Lake Erie (in addition to many terminals along the Ohio River) rank Ohio as the fourth largest maritime state by tonnage moved – more freight traffic each year than goes through the Panama Canal.

Rail

With 5,354 miles of track, Ohio has the fourth largest network of operating railroads.

Public-private support eliminates obstacles and accelerates business growth.Ohio’s commitment to support the development and growth of businesses is backed by a low-cost tax structure that will make your business more competitive around the world. Ohio’s resources includes many incentives, loans, grants, and tax credits to encourage business growth. In fact, many popular privately held companies have food related companies located in Ohio.

Ohio is home to more than 1,106 food processing production plants. Key Ohio food processing firms include Chiquita Brands International, in Cincinnati, WorthingtonFoods/Kellogg’s in Greater Columbus, Heinz’WeightWatcherdivision in Massillon, General Mills, with the world’s largest pizza plant in Wellston, and Nestle, which produces Stouffer products near Cleveland. Access to Ohio companies that manufacture food processing machinery, such as Hobart Corp., build synergy in this important industry.

More than half the total of manufacturing expansions in the U.S. have located in the American Midwest. Domestic and international companies have placed Ohio at the top of the list because they know it’s the best place to take advantage of access to corporate manufacturing customers, suppliers and joint partnerships.

Abbott NutritionArcher Daniels MidlandCampbell Soup CompanyChiquita Brands InternationalCooper Farms Dannon Company, Inc.General Mills Pillsbury

H. J. Heinz Harry & DavidHoneyBaked Foods, Inc.Iams CompanyThe J.M. Smucker CompanyKellogg Company Kraft Foods Global

The Kroger Company Land O’Lakes, Inc.Nestle Prepared FoodsPepperidge Farm Pierre FoodsT. Marzetti CompanyVelvet Ice Cream Company

*Information taken from The Center for Innovative Food Technology, www.eisc.org and the Ohio Department of Development, Policy Research and Strategic Planning Division July 2008

Popular Food-Related Companies Located in Ohio*

“Ohio’s tax reform initiatives have simplified the tax system and improved both the state’s business environment and the competitiveness of Ohio companies.”

TimSmucker,Chairman&Co-CEOTheJ.M.SmuckerCompany–Orrville,Ohio

Sources:2006 County Business Patterns, U.S. Census Bureau and Selectory® Business Database, Harris InfoSourcePrepared by: Ohio Department of Development, Policy Research and Strategic Planning

H. J. Heinz

Bunge NorthAmerica

Fresh Mark

Wyandot, Inc.

Cooper Farms

Food Processing IndustryEmployment by County

7,573 – 1,000 999 – 500 499 – 100 99 – 1 None

Notable Food ProcessingIndustry Establishment

Archer Daniels Midland Pepperidge Farm

Velvet Ice Cream Company

Harry & David

75

75

70

71

70

71

77

77

76

80

80

80

90

90

33

33

30

23

23

23

24

30

33

3350

90

15

32

Portion Pac

Pepsi-Cola General Bottlers

Kellogg Company

Miller Coors

Pierre Foods

Kroger –Inter-American

ProductsChiquitaBrandsInternational

General Mills –PillsburyBellisio Foods

Sugar Creek PackingRichelieuFoods

Anheuser-BuschG & JPepsi-ColaBottlersAbbott Nutrition

IamsCompany Bob Evans Farms

T. Marzetti Company

Dannon Company, Inc.

ConagraGroceryProducts

Campbell Soup

Hickory Farms

Land O’ Lakes, Inc.

H. J. Heinz

J. M. Smucker

Nickles Bakery

Nestle Prepared Foods

Pepsi-ColaMetropolitan

BottlingSchwebel

BakingCompany

Kraft Foods Global

Cleveland

Toledo

Columbus

Dayton

Cincinnati

Akron

Canton

Ohio Food Processing Workforce andNotable Industry Establishments

“Initially I was skeptical about tax reform – believing it would simply result in winners and losers. Now that the dust has cleared, it is quite evident to me that tax reform has been good for The Andersons, good for business and good for the people of Ohio.”

RichardP.Anderson,ChairmanTheAndersons–Maumee,Ohio

Low-cost of doing business with Ohio’s new tax structure.

Maximize your profits. Eliminate corporate income and franchise taxes.Taxing profits hurts your company and hampers growth opportunities. These taxes will be eliminated completely in Ohio by tax year 2010.

Boost your ROI. Eliminate tax on sales of goods and services to customers outside of Ohio.Only sales within the State are taxed at a flat rate of 0.0026, which translates to $2.60 per $1,000 of Ohio sales. You get a greater return on your investment dollar.

Reward your entrepreneurial ventures – Commercial Activity Tax is $150 on the first $1 million in annual gross receipts.This provides attractive relief for small and emerging businesses, especially those that transact most or all of their business in Ohio, and helps new businesses get established and show a profit sooner.

Eliminate tax on machinery, equipment, furniture, and fixtures.Ohio’s revised tax code eliminates tax on capital for new machinery and equipment so you can invest in greater productivity with zero tax burden. The tax on furniture and fixtures will be eliminated as of tax year 2009.

Slash your operating costs. Eliminate tax on inventory.Carrying inventory costs can be a heavy burden for your company, especially warehousing and distribution operations. Tax on inventory held in Ohio will be eliminated by January 1, 2009.

Attract the best talent. Shrink labor costs. Reduce personal income tax by 21 percent.High personal income tax adversely affects your company’s ability to attract and retain top-level executives and highly skilled workers. Lowering the State personal income tax makes Ohio a more attractive location for corporate entrepreneurs to live and work.

Enjoy a level playing field. All businesses are taxed at the same low rate.No unfair advantages. No favored competitors.

Ohio has the lowest state taxes in the Midwest.

Based on: • Afoodprocessingfirmplansoninvesting$70millioninafacility – Real Property = $20 million – Machinery & Equipment = $40 million – Inventory = $10 million

• Planstohire150employees – Average wage of $41,600 per year

• Totalexpectedsalesof$20million

• ExpectedsalestocustomersoutsideofOhio= 90 percent

Increased productivity with Ohio’s experienced workforce.The food and beverage industry in Ohio includes over 60,000 workers at 1,106 production plants throughout the state. Ohio’s overall labor market is nearly six million strong, including 800,000 highly skilled manufacturing employees.

Ohio is home to approximately 80 colleges and universities, including 24 two-year technical and community colleges. The Ohio Department of Development can provide assistance with high volume recruitment, assessment, pre- and post- employment training, and stackable credentialing for high skill manufacturing positions through an extensive network of Adult Workforce Education Centers from full service training institutions and two-year colleges. Customized training packages can be developed based on company specific needs and requirements.

Breakthrough innovations with industry leading research partners.Ohio Agricultural Research and Development Center (OARDC), part of The Ohio State University, is the largest and most comprehensive agbioscience research and development center in the country. OARDC provides research on sustainable food and agricultural products, safe and healthy food, rural and urban communities, natural resources and the environment, and keeping Ohio favorably positioned in the global economy.

ATECH, a branch of the OARDC, provides commercialization, business development and marketing for the agbioscience industry. In addition, ATECH provides sponsored research and available lab space for newly formed companies. ATECH is the only agricultural bioscience business development department of its kind.

Another available research source in Ohio is the Center for Innovative Food Technology (CIFT). CIFT’s mission is to help members of the agribusiness sector improve their competitive position through the development and adaptation of emerging technologies, industry best practices, and novel business approaches.

“Ohio’s agribusiness and automated manufacturing industries provide important synergies. Having access to operational knowledge of companies in these industries and the academic programs that support them is very helpful when we face challenges to further improve our process productivity.” GaryCooper,VicePresidentandChiefOperatingOfficerCooperFarms–FortRecovery,Ohio

Improved P&L performance with Ohio’s promise of perfect balance.

Welcome to Ohio, the State of Perfect Balance, where world class companies and those who aspire to be don’t have to compromise professional or personal satisfaction in pursuit of their ambitions. The same goes for their families and the employees whom they lead. The Great State of Ohio offers business and industry many unique qualities that contribute to better balance and, ultimately, optimal business performance. It’s a correlation that is becoming increasingly clear.

Ohiooffersmanyoutstandingculturalandrecreationalopportunities,including:

• Morethan800publicandprivategolfcourses,rankingOhiosixthinthenation; home to eight of the top 100 golf courses in the U.S.

• Superiorsymphonyorchestras,museums,balletandtheatercompanies,including the Cleveland Orchestra, which is consistently rated one of the top five orchestras in the world.

• Sevenmajorleaguesportsteamsincludingprofessionalsoccer,baseball,football, and hockey.

• World-classzoos,locatedinCincinnati,Cleveland,Columbus,andToledo.

• Top-rankedhealthcarefacilitiesincludingtheClevelandClinicandCincinnatiChildren’s.

• OneofAmerica’sfinestnetworksofstateparksandscenicareas.

Locate in Ohio, you’ll build a profitable business. And you’ll enjoy a rich, full life.

•Strategiclocationprovideseasyaccesstoprofitablemarketsandsuppliers. Ohio’s strategic location allows easy access to customers and the world’s second largest supply of fresh water.

•Public-privatesupporteliminatesobstaclesandacceleratesbusinessgrowth. Ohio is a pro-business state that understands partnering with the private sector.

•Low-costofdoingbusinesswithOhio’snewtaxstructure. Ohio has the lowest state taxes in the Midwest.

• IncreasedproductivitywithOhio’sexperiencedworkforce. Ohio employs more than 60,000 workers in the food and beverage industry.

•Breakthroughinnovationswithindustryleadingresearchpartners. Ohio’s expertise in agbioscience research helps get your products to market sooner.

• ImprovedP&LperformancewithOhio’spromiseofperfectbalance. Ohio is a place where you can achieve both your business and personal aspirations.

Ohio Department of Development 77SouthHighStreet,Columbus,Ohio43215U.S.A.

Phone: (614) 466-4551 or 1-800-848-1300www.ohio.govwww.OhioMeansBusiness.comwww.development.ohio.gov

Ted Strickland, Governor

Lee Fisher, Lieutenant GovernorDirector, Ohio Department of Development