Dreyer's Plant Is a Sweet Win in Laurel

Ice Cream Maker Adds 450 Jobs

Workers package Coconut Fruit Bars at the plant. Dreyer's pumped $210 million into expanding the facility. (By Katherine Frey -- The Washington Post)

Dreyer's Grand Ice Cream Holdings Inc. plans today to celebrate the opening of an ice cream plant on the edge of Howard County that's large enough to cover more than 14 football fields, churn out 58 million gallons of ice cream a year and supply the entire eastern half of the United States with pints of Haagen-Dazs.

During the past two years, the Oakland, Calif., company invested $210 million into expanding a small ice cream-making facility in Laurel and creating one of the largest ice cream plants in the world. To make space for the growth, Dreyer's purchased an adjacent 32-acre mobile home park, chipped in to buy out the tenants, and even found homes for some 50 feral cats on the property.

The project, and the 450 new jobs it created in Laurel, marks a coup for the county. Howard bested at least four other localities eager to lure Dreyer's, which also makes Edy's and Nestle ice creams.

For about a decade, Dreyer's toyed with the idea of adding an East Coast plant to the six it owned elsewhere. Pennsylvania, home to most of the company's milk supply, appeared to be the front-runner. But when food giant Nestle SA acquired a majority stake in Dreyer's in 2003, the search expanded to Laurel, where Nestle already had a plant.

The company also explored sites in Anne Arundel, Prince George's and Frederick counties because of their proximity to major roadways that would make it easier and cheaper for Dreyer's to distribute its products along the East Coast, company officials said.

"We looked at this project as ours to lose because we had a leg up on the competition since we already had a plant in Howard County," said Richard W. Story, chief executive of the Howard County Economic Development Authority.

To keep Dreyer's in Laurel, the county agreed to defer $1 million in property taxes for four years and to invest another $1 million in road access and infrastructure improvements. The state did its part by promising to give Dreyer's $1.6 million in grants if it employed at least 515 hourly workers by Dec. 31, 2007, and invested at least $183 million in the plant by December 2008.

"We've exceeded both those targets well over a year in advance," said Peter A. Laport, director and manager of the Laurel plant.

Today, the plant employs 725 full-time workers and plans to add 240 more in the next two years. It has fielded 9,000 online job applications, Laport said. In addition to the $210 million Dreyer's pumped into the plant, it expects to invest another $30 million in 2007.

Ultimately, the company decided it would be wiser to add to the plant it already owned than to build a new one, Laport said. "If we built a new plant, we would have had to maintain two operating facilities and we would have had to hire and train new workers from scratch."

Since it was built in 1962, the Laurel plant has had five owners, including Nestle, which bought it in 1996, when Nestle had a small stake in Dreyer's.

The Swiss conglomerate owned about 25 percent of Dreyer's stock, increased its stake by 42 percent in summer 2003, and announced its plan to acquire the remaining shares by last January, which it did.

Nestle, the largest food company in the world, does not break out earnings for Dreyer's. Experts who track the ice cream business say it is a competitive sector that has been static for years, even though ice cream is the most popular dessert other than fruit. People are not eating more of it more frequently, said Harry Balzer, a vice president at the consumer marketing research firm NPD Group. "It's a market share business more than anything else," Balzer said.

Nestle and Unilever, which makes the Ben & Jerry's and Breyer's brands, are battling to win a larger share of that market and more freezer space in grocery stores. Any savings that Dreyer's can squeeze out by having a more-efficient plant in Laurel and more-innovative products makes a difference.

That plant, which is six times bigger than the original, can store enough milk to fill 10 Olympic-size pools. And it has added five ice cream production lines to its previous six, and plans to add nine more.

"We built the building large enough to accommodate our growth for years," Laport said.