Asian-Style Food Producer Coming to Sioux Falls
The U.S. subsidiary of a Korean conglomerate is acquiring 142 acres for the project.
Schwan’s Co. is acquiring a 142-acre site in Sioux Falls, S.D., where it will develop a 700,000-square-foot food production plant. The facility will be in Foundation Park, an industrial park in the northwest part 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 including a broad range of Asian-style meals, sides, snacks and appetizers in both the shelf-stable and frozen 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 include another 50 workers at first, with the potential to grow to 100 employees, according to the company.
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The plans for such a manufacturing facility were announced in 2021. The company didn’t release a purchase price for the newly acquired property nor a timetable for construction of the factory, though it did affirm that 600 people will work there when it is up and running. Schwan’s didn’t release information on any incentives it might have received, but Foundation Park has benefited from a tax-increment financing district since 2020, to pay for infrastructure.
FedEx Freight acquired 43 acres in the southeast corner of the park along I-29 late last year and has been building out the site more recently. Health-care product specialist Owens & Minor, along with Avera Health, are developing a 330,000-square-foot building in the northeast part of the park.
Schwan’s is investing in the new facility to strengthen its position in Asian-style food, which incoming company CEO Brian Schiegg called one of the fastest-growing food categories in the U.S. Korean food conglomerate CJCheilJedang, parent company of Schwan’s, estimates that the frozen Asian food category represents an estimated $3.2 billion annual opportunity for food retailers in the U.S.
The Korean food giant, through its U.S. holdings, 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 of dropping demand for industrial properties, coming off the pandemic-era demand highs of a few years ago. Demand for industrial space in the Sioux Falls market was stronger than nationwide during 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 saw about 162,000 square feet of positive absorption.
Only a scant 8,000 square feet was delivered in the first quarter of this year in the Sioux Falls industrial market, according to NAR, compared with 145,000 square feet during the same quarter a year earlier. Industrial vacancies for the first quarter of 2024 were a tight 1.9 percent, up a little from 1.5 percent a year ago.
As a whole, Sioux Falls is seeing economic growth. Job growth for the 12 months up 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 with the national average of 3.9 percent.
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