Growing Minnesota’s food industry

Friday, July 20, 2018

Agriculture and food processing have long been an integral part of Minnesota’s economy. The state’s agriculture and food production industries now account for $57.5 billion in sales and more than 147,000 jobs.

Food manufacturers are increasingly harnessing advanced technology to move the industry forward. Two-thirds of the state’s food production companies are located in rural areas, which presents an opportunity for Great River Energy’s member-owner cooperatives.

Great River Energy’s economic development services team is developing a cohesive strategy to help its member-owners capitalize on Minnesota’s growing food industry, with financing programs to support expanding businesses and shovel-ready sites to attract new investment into cooperative service areas.

“Minnesota’s food production industry is showing tremendous potential. Great River Energy and our member-owner cooperatives intend to play an active role in catalyzing its growth,” says Tom Lambrecht, Great River Energy’s economic development services manager.

Innovators in food production

Substantial wheat crops in the late 1800s helped put the state in the forefront of the flour milling industry. Minneapolis held the title "Flour Milling Capital of the World” for some 50 years.

The tradition of food production continued with meat processing, dairy products and the preservation of fruits and vegetables as well as frozen foods. Pioneers in frozen foods and canning, such as Schwan’s and Faribault Foods, began in Minnesota.

Such companies continue to innovate and expand. Some have received help from Great River Energy’s 28 member-owner cooperatives.

Faribault Foods, which has long produced familiar household brands such as Butter Kernel, recently completed a $140 million expansion at its Faribault plant, which is served by Steele-Waseca Cooperative Electric. The electric cooperative worked with various stakeholders to help make the ambitious project a reality.

Faribault Foods, now owned by Mexican food production giant La Costeña, is shifting its focus to the canned beans market, which has seen substantial growth in recent years. The multimillion-dollar upgrade at the Faribault facility increased the company’s production capacity by 30 percent.

Home to emerging entrepreneurs

Minnesota also boasts some impressive entrepreneurial success stories. Small and mid-sized food manufacturers are able to take advantage of distribution deals, advancements in technology and economic development financing to quickly ramp up production and grow.

One example is Heggies Pizza, which has come a long way since Don and Polly Hegedus started the business in their Onamia garage in 1989. Their line of frozen pizzas first established an enthusiastic base of support with sales in bars and resorts around Lake Mille Lacs.

In 2008, Heggies Pizza moved into a new, state-of-the-art manufacturing plant in the East Central Energy (ECE) service area in Milaca, where the freezer alone is about the same size as the previous production facility.

Heggies Pizza is now distributed in grocery stores across Minnesota, Iowa and the Dakotas. It has become another in a long line of beloved Minnesota brands.

And, like Great River Energy’s other member-owner cooperatives throughout the state, ECE is ready to support the continued growth of Heggies and other area food manufacturing businesses with rebates, economic development financing programs and technical assistance.

This piece is the first of a three-part series that covers Minnesota’s growing food and beverage industry and the role Great River Energy and its member-owner cooperatives play in supporting its expansion.

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