New Target Distribution Center comes to Denton, brings 140 jobs to the area
Editor's note: The following article was printed in the September 2012 edition of the Denton Business Chronicle.
One of Denton's industrial park complexes will have a new neighbor fully operational by next spring.
Minnesota-based Target Corporation's first robotic food and perishables distribution center is expected to begin shipments early next year with the goal to improve the company's ability to deliver better and fresher produce and other grocery products to roughly 235 stores throughout Texas, Arkansas, Kansas, Louisiana, Mississippi, Oklahoma and Tennessee.
The 366,000-square-foot, state-of the-art facility - at a cost of $100 million - will join other companies like Fastenal and Aldi, Inc. that in the past couple of years brought new jobs and opportunities to the city.
At a recent Denton Mayor and City Council breakfast, officials with Target outlined their plan for opening the center beginning in the fall and culminating with its first shipping set for early March. Company officials also outlined the center's automated system, including its 20 banana-ripening rooms.
FROM MERCHANDISE TO GROCERY STORE
Target with its recognizable "red and white bulls-eye logo," has been serving customers by providing general merchandise at discounted prices since 1962.
Today, the fourth-largest retailer has 355,000 employees at 1,755 stores with 37 distribution facilities and plans to expand into Canada and elsewhere, including overseas.
Its first stores included wide aisles, easy-to-shop displays, fast checkout and lots of parking spaces, according to Target's corporate website.
But it was not until 2009, during an economic downturn, that Target officials considered expanding their concept to offer grocery products by opening SuperTarget stores across the country.
Steve Dembowski, general manager for the Target distribution center in Denton, said the company's food strategy began about a decade ago.
"People love our food offerings," Dembowski said. 'What if we could take an existing footprint of a store and simply create a market and a feeling and add about 40 percent more food products."
The open market style would offer produce, dairy, fresh meat and fresh-baked goods. A total of 108 stores would carry the new format.
Dembowski said the rapid growth and expansion of Target's grocery business prompted the corporation to expand its food distribution operation to better ensure product freshness for its customers.
In response to the growth, Target added 900 more stores with the market format in just two years.
"Food is definite part of our business, so self distribution for us made a lot of sense," Dembowski said.
ADDING FOOD DISTRIBUTION CENTERS
Target Corp. opened its first food distribution center in Lake City, Fla., in the summer of 2008.
The facility opened with a 380,000-square-foot refrigerated distribution area equipped with an automated storage and retrieval system (AS/RS), and 40,000 square feet of office space, according to a document found on the developer website, Ryan Companies Inc.
Other food distribution centers would follow, opening in Iowa in 2009 and Arizona in 2011.
The Denton center would be its fourth food distribution center.
The same year as the opening of a distribution center in Iowa, Target officials searched for their fourth distribution center.
The new center would replace the Supervalu Inc. distribution center located in Fort Worth.
After considering 42 locations across the country, and conducting extensive research to find a food distribution site throughout North Texas, Dembowski said in an email that Target chose the city of Denton because it offered an excellent location, work force and quality of life as well as an impressive partnership offered by municipal and economic development officials.
"These attributes make Denton an ideal location for Target's new food distribution center," he said.
Target received a tax break worth an estimated $1.7 million over five years, approved in 2010 by the City Council to open the new center at 3952 Corbin Road.
Denton Mayor Mark Burroughs told breakfast attendees that Target wanted to build something it had never built before and build a place that would create a new precedence for its company.
"Think of what was happening in the nation financially then, during the depth of economic uncertainly," Burroughs said.
"Still, Target went ahead with their commitment to build in Denton."
FROM ROBOTIC CENTER TO THE BANANA ROOM
Since its announcement, city officials have been excited to see the construction of the new center.
Chuck Carpenter, president of the Denton Chamber of Commerce, said in an e-mail Target was the right company to join the Denton community because of all it stood for.
"Target meets the profile of what we need to help keep this a balanced community: career opportunities, significant real and personal property tax benefactor and a generous commitment to philanthropic, educational and charitable causes," he said.
Target policy is to invest five percent of its gross income into the communities it serves - investing a total of $2.2 billion since 1962 or the equivalent of $3 million per week.
The company has sponsored library makeovers, a program titled Take Charge of Education, and has had a longstanding partnership with United Way, officials said.
The company also has a goal to help youngsters learn to read, committing to provide $500 million to the effort by 2015.
John Vinson, the manager at the local SuperTarget located on Loop 288 and Brinker Road, said he and his staff are excited about having the distribution center nearby.
"It is not going to change much for us," Vinson said. "Normally we are able to get our products quickly since our local distribution center is just two and a half hours away."
Having the Target distribution center move from Fort Worth to Denton and be just 30 minutes away allows more convenience, Vinson said.
"We will be able to get anything we need, and it will help us get our stock very quickly," he said.
Dembowski said the robotic distribution center would be a one-of-a-kind facility in North America - "a crown jewel for our corporation."
With the highest level at nine stories tall, the facility sits on a 50-acre lot near the Denton Airport.
Inside, food preservation is stored in freezers ranging from minus 15 degrees to a slightly chilled 55 degrees.
The facility, in total, will have 20 million cubic feet of space.
The automated system can pack pallets with specific items needed for each store - each pallet precisely stacked to maximize space. Robotic arms spin around a pallet, wrapping it snuggly for safe distribution.
In the 20 banana rooms and with a carefully applied mix of ethylene gas and precise temperatures, lime green bananas will be ripened for fresh delivery to its stores, Dembowski said.
"In Denton, we'll do bananas right," he added.
Since the 1990s, there has been a trend toward automation in the grocery industry, according to Marc Wulfraat, president of MWPVL International, a Canada-based global supply chain and logistics consulting service firm in a report entitled, Distribution Center Automation in the Grocery Industry.
Wulfraat described labor inside conventional grocery distribution centers as work that is "physically demanding with associates handling heavy cases and working at high speeds throughout the day in ambient, refrigerated and freezer environments."
Wulfratt explained in the early 1990s, grocery companies invested in automated solutions known as automated storage and retrieval systems or AS/RS.
"The early generations of AS/RS machines were slower and more expensive than the machines that are currently available to the market," Wulfraat wrote.
Part of the problem Wulfraat explained, was that the machines could not move the pallets fast enough to support picking operations.
Target has partnered with Witron Logistik + Informatik GmbH, a German-based company which designed the distribution center's operation.
Since 2002, Witron has implemented automation solutions for a variety of grocery companies nationally and internationally including The Kroger Company in Arizona, C&S Wholesale Grocers in New York and Sobey's Inc. in Ontario, Canada, the report said.
In addition to designing the Denton center, Witron will also help with its maintenance and operations, Dembowski said.
The distribution facility is expected to ship 577,000 cases per week.
Based on the 140 employees it is expected to hire, the throughput or flow rate is 140 cases per man-hour, and that includes all direct and indirect labor, Wulfraat wrote.
The conventional perishable distribution center rate for a typical center is between 60 to 90 cases per man-hour, the report said.
"Which lead us to believe that this facility will be highly automated," Wulfratt wrote.
PLANNING THE 2013 OPENING
Target Corp. officials said the majority of the hiring would take place in early January 2013.
With 170 jobs at maximum operations, including office personnel and a technologically-skilled workforce, Target will also have a full-time Chiquita banana ripener.
Company officials said the first receipt date for the products is expected around Feb. 18 with the first product shipment to take place around March 8.
The center is expected to serve a majority of the Target Corp. stores residing in Texas and Oklahoma.
Chuck Fremaux, chair of the board of directors of the Denton Chamber of Commerce, said in an email that having the Denton Distribution Center in town was another step forward in the city's positive and proper growth.
"High-quality facilities such as this provide the jobs and tax base that Denton desires, and will complement our existing economic base," Fremaux said. "Projects like this, along with Denton's existing assets, such as our location, our airport and its industries, the universities and our existing businesses, such as Peterbilt Motors Company, Sally Beauty Holdings, Inc., and Tetra Pak to name just a few, will most certainly attract other high quality companies and projects to our area."
Staff writer Dawn Cobb contributed to this report.
KARINA RAMIREZ can be reached at 940-566-6878. Her e-mail address is email@example.com.