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Oregon woos California's natural-foods companies

By SARAH LINN
The Associated Press

JEFF CHIU / AP Abelena Belasquez, left, grabs frozen burritos on the Amy's Kitchen assembly line in Santa Rosa, Calif. The company is one Oregon Gov. Ted Kulongoski hopes to persuade to come north.

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Kulongoski has told Amy's Kitchen it could save nearly $4 million on workers' compensation costs, energy and taxes by moving to Oregon.

The Democrat even paid a personal visit to the company's Santa Rosa, Calif., headquarters.

"He just came in and said, 'Hi, I'm Ted,' " said Andy Berliner, who co-founded the $100 million-a-year company.

But California Gov. Arnold Schwarzenegger is fighting back, pledging cheaper workers' compensation and other incentives if the company remains in California.

	Gov. Arnold Schwarzenegger is fighting back.

Kulongoski's effort to woo Amy's Kitchen is part of "Oregon Naturally," a campaign to persuade organic and natural food companies in California to move their operations to Oregon.

The governor sees California's established natural-foods community suffering from skyrocketing operating costs, said Marty Brantley, Oregon's director of economic and community development.

Plus, Brantley said, Oregon needs eco-friendly food processors to help keep its 17 million acres of agricultural land profitable and productive.

The "Oregon Naturally" campaign, launched last fall, comes as both states are struggling to recover from recession. Oregon has suffered the highest jobless rate in the nation for much of the past three years.

Kulongoski has sent letters to 250 California companies advertising Oregon's livability and lower costs for workers' compensation, utilities and taxes. So far, only one company has agreed to move north.

Schwarzenegger has been personally involved in persuading companies to stay, said spokesman Vince Sollitto. But Kulongoski and his staff aren't giving up.

	Gov. Ted Kulongoski is involved in Oregon effort.

"It is a long process," said Brantley, noting that the state economic and community development department is currently wooing three California natural-foods companies.

"The timing to capture people that are expanding or willing to move is kind of catching lightning in a bottle," he said. "You have to be in the right place, and ready."

Last month, Schwarzenegger launched a nationwide marketing campaign to attract jobs to his economically struggling state.

The $600,000 campaign features billboards depicting the actor-turned-governor wearing a California T-shirt and the slogan, "Arnold says California wants your business. (Actually he says Kah-li-fornia.)"

Sollitto said Schwarzenegger has been working actively to keep employers in California, including pushing a package of bills aimed at reforming the state workers' compensation system through the Legislature.

"It's no secret that other states would like to lure companies to them," Sollitto said, "particularly during the last few years, when California was a very difficult place to do business."

	Andy Berliner, co-founder of thriving Amy's Kitchen

Dennis Lindberg, who moved his fledging Mulberry Street Juice Co. to Central Point, Ore., last spring, can attest to the difficulties of commerce in California.

He spent four years trying to establish his Chico, Calif., company, which makes powdered organic juices, before he was approached by the Oregon Department of Agriculture and a score of southern Oregon trade groups.

Lindberg hopes to have 100 employees in four years. "Workers' comp, liability rates, energy ... everything is more attractive in Oregon."

Amy's Kitchen, an industry giant founded in 1987, employs 750 people in a 107,000-square-foot facility and is looking to expand. The company has two options — open a new plant in California or move part of its more energy-intensive functions to southern Oregon.

"Both have strong organic communities," Berliner said.

Oregon is home to one of the company's biggest suppliers of organic fruits and vegetables, Stahlbush Island Farms of Corvallis.

Amy's Kitchen has set November as the deadline to make its decision, Berliner said.

Meanwhile, both states are making pitches to the organic and natural foods industry, which brought in $13.1 billion in 2002, according to the National Nutritional Foods Association.

"California has many unique and inherent qualities that make businesses want or need to be here," Sollitto said, such as access to capital and the overseas market, and "tremendous weather."

"What we need to do is minimize the barriers," he said.

Besides lower business and residential costs, Oregon has an "innovative, fresh, healthy lifestyle" that makes certain companies a natural fit, said Jerry Gardner, business development manager for the Oregon Department of Agriculture.

Among the state's success stories are Oregon Country Beef, an eastern Oregon ranching cooperative that raises beef without antibiotics or hormones, and Kettle Foods, which makes all-natural potato chips and other gourmet snack foods.

"Natural foods have always done well here, from the beginning of time," said Jim Green, spokesman for Salem-based Kettle Foods.

Copyright © 2004 The Seattle Times Company

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