Rochester snatches South Jersey sauce jobs

Jun 10, 2011

Rochester, 1; Pennsauken, N.J., 0.

When Fairport, N.Y.-based LiDestri Foods announced on Wednesday that it was consolidating its East Coast sauce-making operations in Rochester, it was a tale of two headlines.

In Rochester: jubilation. The move meant 150 new manufacturing jobs were coming to town.

In Jersey: despair. The move meant exactly the opposite.

"There's no easy way to sugarcoat this for the Pennsauken folks," says David Stoklosa, LiDestri's director of business development. "But if you're sitting on the other side of the fence in New York, this is very good news."

"How many businesses are choosing to move from one state to another and that state being New York?" Stoklosa added. "It's a rare story."

Stoklosa says the move will roughly double the workforce at LiDestri's Eastman Business Park manufacturing plant.

He says making more pasta sauce in Rochester will save the company money. Early reports attributed the move primarily to reducing shipping costs. A company spokeswoman had said that being closer to the company's glass jar supplier in Corning would save LiDestri $1 million a year in diesel fuel.

Stoklosa said that was one factor among many.

"Frankly, Rochester is much better positioned to produce these products at a cheaper cost," says Stoklosa. "That's what drove it. It was certainly more holistic than just one thing."

Surging sector

The LiDestri consolidation is the latest in a string of moves that has positioned food as a major force in the Rochester area economy.

"I think it reinforces the fact that food and beverage processing is probably one of the strongest industry sectors for us," says Greater Rochester Enterprise (GRE) CEO Mark Peterson, pointing to recent investments by Seneca Foods, Constellation Brands, Alpina Foods and others. According to Peterson, the Rochester region has over 100 food and beverage manufacturing companies.

"That industry sector is continuing to grow," says Peterson. "It's growing rapidly."

Zero-sum game?

Adding 150 jobs in New York at the expense of 150 jobs in New Jersey may strike some as a wrongheaded approach to economic development.

GRE's Peterson disagrees. He says it's all part of the process of companies finding what works best for them.

"I don't think it's a zero-sum game," says Peterson. "It's about regions defining who they are."

LiDestri's Stoklosa concedes that it was a tough announcement to make.

"Our ideal position would've been not to have to hire anybody - to have 150 families move up from Pennsauken to Rochester," says Stoklosa, who says the company offered its Pennsauken employees the chance to keep their jobs - if they were able to relocate. "That didn't happen. So what's going to happen is that most of the 150 [jobs] will be new hires."

Stoklosa says the Pennsauken plant will ultimately be re-purposed to make foods other than tomato sauce, and that LiDestri hopes to rehire many, "if not more, of all of the folks that were let go."

Sweetening the pot

LiDestri's consolidation in Rochester was not without government help.

According to an Empire State Development (ESD) spokeswoman, the move was aided by a $2 million loan from the state, as well as tax incentives from Monroe County. LiDestri received a similar $1.5 million loan from ESD in 2009, when it bought a former Kodak facility at Eastman Business Park and renovated it into a state-of-the-art sauce plant.

LiDestri's Stoklosa says the help from ESD, Monroe County and the Governor's office wasn't the deciding factor in making the move - but it definitely helped.

"They were very instrumental in making this happen," says Stoklosa. "If not for them, I'm not sure we would be sitting here today making this announcement."