Asian-style food manufacturing facility coming to Sioux Falls

Food manufacturer Schwan’s Co. is acquiring a 142-acre site in Sioux Falls, SD, where it will develop a 700,000-square-foot food manufacturing facility. The facility will be located in Foundation Park, an industrial park on the northwest side of the city that is also the location of Amazon and FedEx facilities, among others.

The plant will produce Asian-style foods, primarily for Schwan’s Korean food brand, Bibigo, and includes a wide range of Asian-style meals, side dishes, snacks and appetizers in both frozen and shelf categories. The new manufacturing campus will also include a warehouse and distribution center, shipping and receiving docks, and office space.

The company also plans to open a regional office in downtown Sioux Falls to support the manufacturing facility. That office will initially include 50 more employees, with the potential to grow to 100 employees, according to the company.

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Plans for such a manufacturing facility were announced in 2021. The company has not released a purchase price for the newly acquired property or a timeline for construction of the plant, although it has said 600 people will work there when it is up and running. . Schwan’s has not released information about the incentives it may have received, but Foundation Park has been eligible for a tax increment financing district since 2020 to pay for infrastructure.

FedEx Freight purchased 43 acres in the southeast corner of the park along I-29 late last year and built the site more recently. Health care product specialist Owens & Minor, along with Avera Health, is developing a 330,000-square-foot building on the northeast side of the park.

Schwan’s is investing in the new facility to strengthen its position in Asian-style foods, which the company’s newly appointed CEO Brian Schiegg called one of the Korean food conglomerate’s fastest-growing food categories in USA, CJCheilJedang, the parent company of Schwan’s, estimates that Asian frozen. the grocery category represents an estimated $3.2 billion annual opportunity for U.S. grocery retailers

The Korean food giant, through its US operations, currently operates Asian-style food production facilities in California, Ohio, New York and New Jersey and Texas.

Sioux Falls’ tight industrial market

The deal comes at a time when demand for industrial property has been falling, coming off pandemic-era demand peaks of a few years ago. Demand for industrial space in the Sioux Falls market was stronger than nationally in the first quarter of 2024, the National Association of Realtors reports, but even so absorption turned negative in the first quarter by about 22,800 square feet. A year earlier, the market recorded about 162,000 square meters of positive absorption.

Just under 8,000 square feet were delivered in the first quarter of this year in the Sioux Falls industrial market, according to NAR, compared to 145,000 square feet in the same quarter last year. Industrial vacancies for the first quarter of 2024 were 1.9 percent, up slightly from 1.5 percent a year ago.

Overall, Sioux Falls is experiencing economic growth. Job growth for the 12 months to March 2024 was 5.4 percent, compared with the national average of 1.9 percent. The local unemployment rate for the area is 1.8 percent, compared to the national average of 3.9 percent.