Dive Brief:
- Starbucks' York, PA, distribution center will be the company's largest in the world by mid-September, after a 1.2 million-square-foot expansion.
- The York location was chosen due to its proximity to a Starbucks coffee roasting plant, which produces more than 3 million pounds of coffee each week. Pennsylvania is growing as an ideal location due to its proximity to multiple northeast hubs, Retail Dive reports.
- The expansion will increase the company's distribution capacity by 35%, supporting the company's supply chain throughout the Northeast U.S., Canada and Europe, according to Starbucks.
Dive Insight:
"Central Pennsylvania's continued growth creates an ideal area for logistics operators to expand their presence," Gary Frederick, senior vice president and market leader of the real estate developer's northeast division, said in a press release.
Starbucks is just one of many companies that have recently announced increased investments in Pennsylvania. FedEx Ground has started building an 800,000-square-foot automated distribution center roughly 100 miles away, in Allen Township, PA.
A recent analysis by Retail Dive suggests the region's distribution allure is due to shifting expectations, as products must now be delivered to the consumer quickly, and at low cost. For that reason, companies like Starbucks, FedEx — just like Wal-Mart, Dollar General, PetSmart and Samsung — are investing in large industrial real estate proximate to hubs like New York, Philadelphia, and northern New Jersey.
"As we looked at our long-term growth plans for the business, and the current demands for distribution at scale, we needed to invest in additional capacity," said Jim Wells, vice president of Starbucks Distribution and Supply Chain Operations. The distribution center's expansion will bring an estimated $490 million economic impact to the region, in addition to 300 new jobs.
