Ask Japanese candy maker Morinaga & Co. why it chose North Carolina as home for its first U.S. manufacturing plant, and its executives will tell you: It was the climate.
By that they mean North Carolina’s business climate, quality of life and, yes, the prevailing weather conditions – which makes a difference when you’re making candy.
North Carolina offered a great site, overwhelming support and an overall climate that made this a perfect fit. – Toshiaki Fukunaga, Morinaga & Co. general manager of research and development
“There were so many things we were looking for when we decided to expand to North America,” said Toshiaki Fukunaga, general manager of Morinaga’s research and development. “It was no small task to open a business in a foreign country, to understand all the requirements and culture, but North Carolina offered a great site, overwhelming support and an overall climate that made this a perfect fit.”
Morinaga’s search began in 2012 with more than two dozen sites in the Southeast, Oregon, Pennsylvania and Canada. Company executives made 11 visits to North Carolina, meeting with two dozen state and local leaders – from the Governor to economic development partners to local utility service providers – who over two years cobbled together a package Morinaga would embrace.
The sweet treat maker ultimately selected a 21-acre site in Mebane, investing $43 million, and in 2015 opened a 98,000-square-foot production facility overlooking Interstates 40/85.
Headquartered in Tokyo, Morinaga makes a variety of confectionary treats – from candy and cookies to syrup and frozen desserts – and has global sales of more than $2 billion.
In North Carolina, the company produces its signature fruit chews called Hi-Chew, a top-seller in Japan and increasingly popular in the U.S., with a secret formula that has inspired fans – including Major League Baseball – and retailers across the country. Costco, Walmart and a variety of grocery stores are among retailers now stocking the bright yellow bags with a rainbow of chewy, fruity flavors inside.
“This was Morinaga’s first big investment in the U.S., so they weren’t going to make a lot of compromises on the place they chose to produce their candy for this vast new American market,” said Steve Brantley, director of economic development for Orange County, who worked closely on the deal dubbed “Project Rainbow” with the North Carolina Department of Commerce and state recruiters, now housed under the Economic Development Partnership of North Carolina.
Clusters Boost Business
North Carolina met or exceeded all of their criteria, and our partnership has been well worth it. Morinaga easily met its commitment to create 90 jobs, has already added a second shift, and is attracting customers it never had before.- Steve Brantley, director of economic development for Orange County
North Carolina’s booming food processing and manufacturing industry appealed to Morinaga, which liked the idea of locating near potential suppliers. The industry employs 62,000 people across the state and hosts thriving clusters including agriculture, the second-largest animal processing and manufacturing cluster, and the sixth-fastest growing confectionery production cluster in the United States.
A number of Japanese and other Asian companies have also planted roots in the central part of North Carolina, sparking a vibrant Asian culture with services and events catering to the community. Among the companies are Honda Aircraft, Honda Power Equipment and AW North Carolina, an automotive transmission supplier for Toyota.
Fukunaga, who oversaw Morinaga’s North Carolina operations for more than two years, cites several other attributes that helped seal North Carolina as the place for Morinaga:
- Available Sites. The state offered 18 sites initially at competitive or lower prices than other states. Morinaga ultimately selected the I-40/85 tract to allow for expansion and for its visibility along a highway carrying 90,000 vehicles a day.
- Central Location. Within one day’s drive of 150 million people, North Carolina makes product distribution efficient. Morinaga’s location in Orange County offers close proximity to four of the state’s major highways – Interstates 85, 95, 40 and 77.
- Skilled Labor. With roots in manufacturing, “Workers in North Carolina are very good,” said Fukunaga. “They understand how systems work together as well as the work ethic required because manufacturing is in their DNA.”
- Training. Durham Technical Community College agreed to provide food and workplace safety training valued at $150,000 for Morinaga employees, part of the state’s robust food manufacturing training programs. North Carolina’s community college system is nationally recognized and was first to establish customized training for individual companies.
- Weather. The state’s temperate climate also appealed to Morinaga. The company wanted to avoid extreme humidity of locations further south, which can make candy too soft, as well as extreme winter weather that might disrupt distribution and employees’ commute.
“North Carolina met or exceeded all of their criteria,” said Brantley, “and our partnership has been well worth it. Morinaga easily met its commitment to create 90 jobs, has already added a second shift, and is attracting customers it never had before.”
Partnerships Win Company
North Carolina’s persistent service and problem-solving gave us peace of mind as we made our decision. It’s their way of doing business. And it’s an attitude that continued long after we signed on.- Kyoichi Okamoto, president and CEO of Morinaga America Foods
Ultimately, it was a mix of tangibles and intangibles that demonstrated the value of locating in North Carolina, said Kyoichi Okamoto, president and CEO of Morinaga America Foods, who now oversees the North Carolina operation.
Yes, the state’s robust package of performance-based incentives was critical. They included tax incentives, an access road, and the extension of water, sewer, gas and electric lines to Morinaga’s new home under an aggressive timeframe.
But Okamoto stressed it was something else that connected the dots.
“North Carolina’s persistent service and problem-solving – and little things like picking us up at the airport and seeking out authentic sushi – gave us peace of mind as we made our decision. It’s their way of doing business. And it’s an attitude that continued long after we signed on.”
For more information on Morinaga, visit the Japanese candy maker’s website.
Food processors and manufacturers are among a variety of companies – domestic and from overseas – that are expanding in North Carolina. From Sanderson Farms’ new $145 million poultry plant to Fortune 500 Sealed Air Corporation’s headquarters and food packaging operation, companies are finding what they need to succeed in North Carolina.