Unilever investing $108M to expand Tennessee ice cream factory

COVINGTON, Tenn.—Consumer products supplier Unilever said it is investing $108-million to expand operations at a Tennessee factory that makes ice cream under the brand names Breyers, Klondike, Good Humor and Popsicle.

Unilever officials and Tennessee Gov. Bill Haslam announced the expansion at the factory in Covington, located northeast of Memphis.

It will add 428 full-time jobs over a four-year period, giving the company a workforce of about 1,000 in the city of about 9,000 people.

Workers will earn $16 to $27 per hour plus benefits, the company said.

With a 40-hour work week, it comes out to between $33,280 and $56,160 annually.

Per capita income in Tipton County, where Covington is located, is about $22,000 a year, Census data shows.

Officials said the expansion will allow increased production capacity of the 800,000-square foot ice cream novelty and frozen dessert factory.

The investment includes $75.9-million for new machinery and equipment and $32.8-million in construction and infrastructure.

The upgrade is expected to be finished in early 2016.

The factory expansion fits into the company’s global vision of doubling its growth rate while cutting its environmental footprint in half and giving back to the community, said Kees Kruythoff, president of Unilever North America.

“When we talk about giving back to society, and making sure we are part of society and a true civil society partner, this is where public-private partnerships actually come in,” Kruythoff said.

Unilever’s global retail ice cream sales are more than $2-billion annually.

Along with the products made at the Covington plant, the Anglo-Dutch company also owns the Ben & Jerry’s and Magnum brands.

Chris Brockman, an analyst at Mintel Food & Drink, said Unilever has become a dominant player in the global ice cream market, where it competes with Nestle.

Brockman said Mintel’s latest ice cream report shows Unilever’s development in the United States has stalled a bit, but he notes there is room for growth.

Unilever and Nestle own more than 40 per cent of the U.S. ice cream and frozen novelties market, Brockman said.

“Expansion of capacity in the U.S. for Unilever reflects the fact that it clearly feels it has the opportunity to expand its position in the market and to overtake Nestle there,” Brockman wrote in an email.

Haslam thanked the company for its investment in Tipton County, where it is the largest employer.

The factory was opened in 1996 by Land O’Lakes Inc., which packed Slim-Fast products.

Unilever bought Slim-Fast in 2000 and began making ice cream in Covington in 2011.

County executive Jeff Huffman said the factory jobs help improve the economy in a region that lost a significant amount of manufacturing jobs in recent years, caused by the economic downturn.

The unemployment rate in Tipton County is about 9.7 per cent, higher than the national rate of 7.3 per cent, according to federal government statistics.

Huffman said 60 high school seniors received scholarships as part of a payment-in-lieu of taxes plan, which also created an $8.6-million tax incentive over 10 years for Unilever.

“West Tennessee needs more good news like this,” Huffman said.

Along with its ice cream brands, Unilever’s portfolio of food, home and personal care products also includes Axe, Country Crock, Dove, Knorr, Hellman’s, Ragu, Vaseline and Wish-Bone.