Phillips Foods relocates; ups crab cakes output

Daily Record, The (Baltimore), Apr 4, 2002 by Nancy Kercheval

Phillips Foods Inc. -- the seafood company that introduced the crab cake to all of America in 1996 -- is relocating its world headquarters to East Fort Avenue in South Baltimore, taking with it 250 jobs and the ability to double -- and eventually triple -- its daily output to 600,000 crab cakes a day.

As an added attraction, when the $25 million headquarters opens this fall, visitors can learn about the life cycle of crabs, experience the history of seafood manufacturing, watch an employee hand-craft 16,000 crab cakes a day -- and get a sample taste of a Phillips crab cake, too.

The company is scheduled to hold its official groundbreaking today at the site of the old Coca-Cola syrup company in Locust Point, which will provide 270,000 square feet of office, manufacturing, freezer space and tourist attraction compared to the present 80,000-square- foot production facility on Warwick Avenue.

"We're shoulder to shoulder at our plant," said Mark Sneed, president of Phillips Food. "We can't introduce any new products. This will allow us to diversify our product line and double it rapidly."

Before 1996, anyone in Kansas was hard-pressed to find a Maryland crab cake on the local menu. But Phillips learned to pasteurize fresh crab meat and quick-freeze it so that the product retained its freshness, consistency and taste.

Since 1996, when it introduced its retail brands, revenue has increased 940 percent from $7 million to $131 million just in U.S. sales (excluding restaurant revenue). The manufacturing plant produces 200,000 crab cakes a day and has kettles to cook up 1,000 gallons of soup. "When we reach 200,000 crab cakes a day [the record is 211,000], we are just starting to shake a bit," Sneed said.

The new facility allows the production of 400,000 crab cakes per day -- employees are paid on the basis of the number of crab cakes they make by hand each day -- and the crab soup capacity doubles to 2,000 gallons. Eventually a third line will boost output to 600,000 crab cakes per day.

Each worker makes the crab cakes from eight-pound batches in order to handle the delicacy of the meat.

Phillips' sales are, however, somewhat limited by the lack of crab meat, Sneed said. At any given time, the company is filling less than 50 percent of its orders.

"The product is superior," Sneed said. "Restaurateurs want it, but the industry is outstripping what we can produce," Sneed said. The search for more crabs is taking Phillips' investigators into isolated areas of Southeast Asia and South America.

Besides the offices, manufacturing facilities and an $8 million freezer component, the headquarters will be set up to entertain tours that will end with a fresh crab cake for each visitor and a cash-and- carry shop for take-home items.

Sneed said the company spent nearly two years looking for a city location. Since most of his workers travel by foot or public transportation, he wanted to make sure they had access to a new location.

Phillips had plenty of space to expand at the Warwick Avenue property, but the Maryland Department of Transportation nudged it off the land with plans to build a maintenance yard for the Camden Yards- Penn Station-MARC connection. The transaction was $6.8 million for 11.45 acres.

The contract was approved Jan. 23 by the Board of Public Works.

Maryland Department of Business and Economic Development Secretary David S. Iannucci said finding a location for Phillips "was a higher priority since we were part of the problem. They had the bad luck to have a piece of property that was the exact parcel of land MDOT wanted. MDOT, while it essentially needed the property, said they were serious about coming up with a solution."

Bill Struever, meanwhile, had an old syrup plant that had been destined to be the Locust Point Technology Park. But the dot-com bust took the wind out of those sails.

Lee Driskill, a principal of Hord Coplan Macht, the architectural firm that has taken the building through several design plans, said of all the proposals, the Phillips' plan is close to being perfect for the site.

"When everything went south, we scrambled. Struever is great at scrambling about and looking at the glass half full instead of the glass half empty," Driskill said.

"The buildings were set up for a similar use and we had no major surgery to any of the buildings," he said. "It was a little tough to get the manufacturing in with all the columns, but Phillips worked it out. It's a nice fit for the building."

There has been a rush to get the building completed in order to take advantage of the historic tax credits, Driskill said.

The office building will open Aug. 1, with the manufacturing facilities scheduled to open Dec. 1.

Phillips produces a signature crab cake for sale under its own name, as well as proprietary crab cakes for those who have their own recipes.

Sneed cringes when he thinks of the client who wanted the crab meat ground up. "And it breaks my heart to see a crab cake overpowered by peppers and spices to the point you can't taste the crab meat. But some of our customers have different views on what a crab cake is. The customer gets what he wants."