Why Farmer Bros. Moved From California to Texas: To Cut Millions in Costs and Reinvent Itself

When companies relocate to Texas, they often talk about the pro-business climate. Here’s how that translates for Farmer Bros. Co., a national coffee maker that moved here from Torrance, Calif.Farmer expects to save $18 million to $20 million annually after its giant new facility near Alliance Airport goes operational in the next several months. That’s a big upside for a company that reported $8 million in operating income in the last fiscal year.But the move isn’t only about cutting costs. The new facility is designed to meet the latest food safety standards and improve product quality. Combined with lower expenses, Farmer is expected to win new commercial clients and increase sales significantly.One analyst forecast double-digit growth for the next several years and a pathway to a billion-dollar business, which would be almost double the current size.Farmer sold its Torrance property for $43 million, cashing in on California’s high real estate prices. That gain, along with the annual savings from the Texas move, will quickly offset the $100 million-plus spent on the relocation.Such economics help explain why many California companies move here.“The business reasons made it so compelling we had to do it,” CEO Mike Keown said in an interview last week.  Continue reading...

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