The little Wiregrass city of Brundidge — population just over 2,300 — has plunked down $1.2 million and taken on a $2.2 million debt to upgrade its wastewater system, in a play for new jobs, a platform to support its locally grown canning business and, hopefully, attract even more industry.
It’s a big bet for such a small town. But it’s based on the 14-year track record of one of the area’s biggest industries, Southern Classic Food Group, which is putting up $8.7 million of its own money for an expansion and a brand new canning company.
Southern Classic Food Group has been in existence since 2001. Manager Chuck Caraway had 18 years of experience in the food industry when he decided to start his own company. What started in a rented former Piggly Wiggly building quickly grew to 205, 000 square feet. The new expansion, a $3.2 million investment by Southern Classic Food Group, will bring the space up to 240,000 square feet. And that will allow Southern Classic to diversify, partnering with a nationally distributed juice company under a multiyear contract agreement leading to production of about 1.7 million gallons of orange juice, as well as other juice products.
“This is an ever changing and ever growing business, ” Caraway says. “We’ve been blessed with several bursts of growth and we anticipate even more than that.”
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In addition to that expansion, Southern Classic has created a subsidiary, Magnolia Vegetable Processors, in which it is investing $5.5 million.
Magnolia Vegetable Processors will produce pickled products, salsas, salad dressings, sauces and other food products for the retail, foodservice and industrial markets. The firm hopes to use Alabama-grown produce and establish relationships with local farmers to meet the needs of the company.
When Alfa’s magazine “Neighbors” reported the firm’s interest in locally grown produce, “more than 80 people contacted us about growing for us, ” Caraway says.
Magnolia’s new 60,000-square-foot building plus parking lot and receiving area got under way in the fall, with land acquisition, ground breaking and more.
“For years people have asked about pickled products and salsas but in our current plant that wasn’t a good fit, ” Caraway says. “Companies have requested large volumes of products so we are building a new plant.”
According to Caraway, Magnolia Vegetable Processors will do more niche and specialty products. But they are not trying to compete with national companies. Instead, they are trying to fill the niche for smaller companies.
Magnolia Vegetable Processors is a new company, but many of the partners in Southern Classic Food Group are also partners in Magnolia Vegetable Processors, with Caraway serving as manager of both.
Magnolia will receive technical, administrative and engineering support from established Southern Classic Food Group, and Magnolia Vegetable Processors will reimburse Southern Classic Food Group for those services.
The city of Brundidge invested $1.2 million in the project by purchasing 222 acres of land adjacent to Southern Classic Food — the site for the new Magnolia Vegetable Processors. Gov. Robert Bentley traveled to Brundidge in October to announce that the Alabama Department of Transportation has authorized $472,295 to build an access road to the new plant and the industrial park where it will sit. And the company plans to request $250,000 from the Alabama Department of Economic and Community Affairs for water and sewer and a road to service Southern Classic Food Group.
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According to Mayor James Ramage, the city of Brundidge, which has its own water and sewer system, has been approved by Alabama Department of Environmental Management for a loan to update its wastewater treatment plant for $2.2 million, fixed at 2.25 percent for 20 years.
“This will help the food processors have an opportunity to grow, ” he says. “Magnolia Vegetable Processors and Southern Classic Food Group hope to produce product by spring of 2016.”
“We’re in Brundidge because the city was prepared to handle wastewater from a food plant. They stay ahead of the curve and allow us to continue to grow, ” Caraway adds.
Funds for the city’s investment come from ad valorem taxes generated by a Wal-Mart Distribution Center in Brundidge. The city council gave Wal-Mart a tax break for 10 years and earmarked subsequent ad valorem taxes collected for further economic development. The Southern Classic expansion and Magnolia startup are the first such reinvestment, and it is expected to pay off in just 30 months. Magnolia Vegetable Processors expects to have 55 to 60 new jobs and Southern Classic Food Group’s expansion will create 21 new jobs. Magnolia Vegetable Processors will take on five or six significant customers to start and will add more in 2017.
“The new investments between the two is $8.7 million by the company and will create 75-80 new jobs, ” says City Manager Britt Thomas.
“This will help the financial stability of the city for years to come, ” says Ramage.
“They are funding opportunities to make more opportunities, ” Caraway says.
Laura Stakelum and Tim Skipper are freelance contributors to Business Alabama. Both are based in Dothan.
