Dr Pepper Distribution Center Brings Nearly 200 Jobs to Twinsburg
With three big soft drink employers, the city now has an enviable cluster
The third big soft drink operation to locate in Twinsburg has put a little more fizz into the city’s economy.
In mid-January, Dr Pepper Snapple Group Inc. opened a distribution center at 8400 Darrow Rd. The new location, which has 197 employees, replaces facilities in Maple Heights and Akron that the Texas-based company said were outmoded.
Just around the corner from Dr Pepper’s new digs, Coca-Cola Refreshments and Pepsi Beverages Co. operate bottling plants. Such a cluster of soft drink manufacturers and distributors in a city the size of Twinsburg is unusual, said Kimberly McConville, executive director of the Ohio Soft Drink Association in Columbus.
“I like to say that Twinsburg has really hit the lottery in terms of our industry,” McConville said. “It is kind of interesting how Twinsburg almost seems like the golden triangle.”
The Maple Heights and Akron distribution centers were in old buildings that needed major repairs and no longer met the company’s needs, said Chris Barnes, spokesman for Dr Pepper Snapple Group in Plano, TX. The 100,000-square-foot Twinsburg site is only a few years old, was mostly vacant and is large enough to combine the local operations under one roof. Between 25 and 50 jobs were lost in the consolidation, according to documents the company filed with the state.
Also a plus is the easy access to Interstate 480 from Darrow Road. That may be one reason the soft drink companies favor Twinsburg, McConville said, plus the fact that the city has been “very welcoming and supportive.”
“All the stars have aligned to make a good business climate,” she said.
Twinsburg awarded Dr Pepper Snapple Group a 10-year tax incentive for moving into the vacant building. Over that period, the company will receive an annual grant equal to 33 percent of payroll withholding taxes. Based on a projected plant payroll of $7.5 million, the grant amounts to about $55,000 a year. Twinsburg will gain about $112,500 annually in tax revenue.
Under an agreement among some Summit County communities to discourage poaching of each other’s businesses, Twinsburg will also will pay Akron a portion of the tax revenue it will lose over the next three years, starting with a 40 percent reimbursement this year, then 30 percent and 20 percent.
The city’s three soft drink companies are all within a block of each other. Pepsi’s bottling plant, at 1999 Enterprise Parkway, bumps up against the back end of the Dr Pepper site. The Coca-Cola bottling plant is just down the street, at 1882 Highland Rd. Pepsi employs about 300 in Twinsburg and Coke about 130, according to ReferenceUSA, a business research provider.
Dr Pepper’s consolidation in Twinsburg reflects a yearslong trend in the nation’s $45 billion soft drink industry, McConville said. Half a century ago there were thousands of small, family-owned bottling franchises. Over time, bigger companies bought most of those. Though there are still hundreds of soft drink manufacturing and bottling companies, Coke, Pepsi and Dr Pepper Snapple Group are the three main players.
“It’s created a fun little network of operations,” Barnes said.
Dr Pepper Snapple Group holds a portfolio of more than 50 brands. Besides its namesakes, the labels include 7Up, A&W, Canada Dry, Diet Rite, Hawaiian Punch, Schweppes, Motts, Hires, Sunkist and others.
The company’s Twinsburg distribution center receives most of its inventory from a bottling plant in Columbus and the rest from out-of-state plants, Barnes said. From there the company fills orders mainly from mass merchandisers, convenience stores and grocery stores in the Cleveland-Akron area.
Strangely, while Coke and Pepsi are fierce competitors, Dr Pepper Snapple Group sees both as partners. It’s hard to imagine Ford selling parts to General Motors, and GM using the parts to build a Ford. Or Goodyear using its clout to get Michelin tires some display space at Sears. But there are some very similar scenarios involving the soft drink industry’s big three.
For example, about two-thirds of Dr Pepper Snapple Group’s 50-plus brands are distributed by Coke or Pepsi because those companies have an easier time commanding shelf space, McConville said. And in Ohio, Pepsi even bottles Dr Pepper. In other places, Coke might be the bottler.
Confused? Even McConville said it took her some time to come to grips with those arrangements.
“They really all do get along,” she said. “They just love to compete, though.”