In 2005, a rare opportunity emerged for Baton Rouge Coca-Cola Bottling Co. and the state of Louisiana. With an expansion, the Baton Rouge, La., operations could grab a larger share of the marketplace and become a major hub for the production and distribution of Coca-Cola products. To succeed, the company needed the right site, new equipment, stable infrastructure, dedicated employees and local collaboration.
Louisiana officials, dedicated to a business-friendly environment, quickly responded with solutions to ensure the growth of both Baton Rouge Coca-Cola Bottling and the state.
The Challenge
In 2005, after Hurricane Katrina caused a dramatic increase in the Baton Rouge population, Baton Rouge Coca-Cola Bottling Co. quickly hit its production ceiling.
“We started thinking about the next ten years, fifteen, twenty years in our business and where we might be and quickly realized that we couldn’t do it in the operation that we were currently in,” said Darian Chustz, president of Baton Rouge Coca-Cola Bottling Co.
In addition to capacity, efficiency and quality were ever-present topics at Coca-Cola leadership meetings. The new plant needed state-of-the-art production while adhering to Coca-Cola’s dedication to quality.
Coca-Cola contacted the Office of the Mayor-President in Baton Rouge, the Baton Rouge Area Chamber and Louisiana Economic Development to determine how best to move forward on making the company’s operations bigger and better.
“We are positioning ourselves for the next century in the Coca-Cola business,” said Chustz.
In 2007, Baton Rouge Coca-Cola Bottling began building a 500,000-square-foot facility. But the company wasn’t finished growing. The bottler planned new production lines, including Powerade and VitaminWater, which meant additional capacity and infrastructure were needed.
Water wells, water mains and branch lines around the facility needed upgrades to ensure proper water quality and pressure for drink lines at the plant. The new products would require a sizable investment beyond the $85 million already invested in the facility.
The Solution
To ensure the facility could handle new production lines and secure Powerade and VitaminWater production agreements with The Coca-Cola Company, LED provided a customized incentive package.
The package included $1.4 million in performance-based funding for site improvements required by the additional drink lines. Coca-Cola Bottling would need to tap additional groundwater to enhance its water supply. The funding would support a water line extension and upgraded water mains to ensure water pressure stability at the site and in surrounding neighborhoods.
The company also received industrial property tax exemptions on buildings, machinery and equipment; rebates on state income and sales taxes through the Enterprise Zone tax credit program; and a rebate on local sales taxes through the Enterprise Zone program.
LED FastStart™, named the No. 1 workforce program in the nation two years in a row by Business Facilities magazine, provided custom interview guides, leadership training, process videos and orientation videos. To ensure the continuation of the company’s business culture, ethics, attitude and communication,LED FastStart™ also assisted Baton Rouge Coca-Cola Bottling with cultural training for new employees.
“We were very encouraged by all three constituencies (LED, the Baton Rouge Area Chamber and the Office of Mayor-President Kip Holden) in terms of their support,” Chustz said, “but most importantly, the level of integrity and transparency that existed when we were there in terms of just not being about Coca-Cola, but about job creation and economic development and what you are doing for Baton Rouge and for our state. That means a lot to us, because that’s what we’re about.”
The Results
With LED incentives in place and support from Louisiana government officials, the stage was set for Baton Rouge Coca-Cola Bottling to take its place as a leader in the Gulf Coast. In May 2008, the company announced it would expand its new facility by bringing its total size to 781,000 square feet, representing a local investment of $178 million.
The bottler also would increase employment at the site by up to 113 new jobs with an average annual wage of $45,000.
Less than one year later, in April 2009, Baton Rouge Coca-Cola Bottling opened the new plant. Constructed with recycled material, the facility incorporates energy conservation technology and houses an on-site recycling center. Based on these features, the U.S. Green Building Council-Louisiana named the plant the first Louisiana manufacturing facility and the first Coca-Cola bottler to achieve Leadership in Energy and Environmental Design, or LEED, certification.
“This beautiful, state-of-the-art bottling and distribution facility is really the crown jewel of a great relationship between Louisiana and Coca-Cola that spans more than a century,” said Coca-Cola Chairman and CEO Muhtar Kent. “What you really see here is what I like to think of as sustainable community building at its best. When leaders from government, business and civil society can come together to help create real economic, environmental and social benefit, then everyone wins.”
With some of the most modern, efficient equipment in the country, the production facility can churn out 4.5 million 8-ounce servings of Coca-Cola products each day. Completing the model facility gave the Louisiana workforce a chance to demonstrate its true value.
“As I travel and go to other states and cities and look at other operations, whether it be Coca-Cola or not, I see differences in terms of the loyalty, dedication and work ethic of our employees,” Chustz said. “They are absolutely committed to our business. They do their job, and they do it very well.”
To train new and relocating employees on the operation of new equipment, Baton Rouge Coca-Cola Bottling utilized standard operating procedures developed by LED FastStart.
“We transitioned from a facility that was 37 years old that had dated production equipment to a new facility that we’re in now that’s very modern and has the latest technology. A lot of those same employees that have been with us 30 to 35 years have come over and are now operating that equipment,” Chustz said. “They were willing to commit themselves, work hard, and get it done, and I think that’s reflective and representative of our culture and the type of hard-working people that we have in Louisiana.”
With assistance from LED FastStart, Baton Rouge Coca-Cola Bottling Co. was able to transition its employees to the new facility and technology while maintaining its company culture.
“What we wanted to do was to preserve the culture of our company and our employees,” said Chustz. “FastStart has been a tremendous benefit for us, for our company to really increase the level of standards that we have here in terms of our training capabilities pretty significantly. So it’s been a great benefit.”
The facility also houses a 278,000-square-foot warehouse, a quality assurance lab, and the company’s administrative, accounting, marketing and sales operations. An onsite re-creation of a convenience store, named the Red Stick Stop-in-Geaux is used to train Coca-Cola’s product account managers, fountain drink technicians and merchandisers. The store’s location on the premises saves the company fuel costs and time.
The company has found the economic benefits of the state to be undeniable.
“The growth, quite frankly from an economic perspective, and job creation and the resources that we have here are unbelievable,” Chustz said. “Everything that’s happening in Baton Rouge right now, in my opinion, is moving us in the right direction, and I see it. It’s a fascinating place to be for me right now.”
In return, the company’s expansion is bringing new opportunities to the state. With the new expanded facility, Baton Rouge Coca-Cola Bottling is able to export product outside Louisiana.
The success and growth of Baton Rouge Coca-Cola Bottling Co. is just one example of economic success providing high-tech, high-quality jobs in the state. Recent business development projects won by Louisiana are resulting in significant job growth and billions of dollars in capital investment all across the state. These wins are fueling hundreds of millions of dollars in new sales for Louisiana small businesses and continuing the economic growth of the state. Visit the LED News website area for updates about the new Louisiana.
