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Coca-Cola completes first shipments out of new Mitchell facility

With its first shipments complete, Mitchell's new Coca-Cola distribution center has been deemed the "flagship" for beverage distribution in South Dakota.

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Workers move pallets across the floor while unloading a truck inside Mitchell's Coca-Cola Bottling Co. new plant on Tuesday afternoon at its new home on Commerce Street. The Sioux City-based Chesterman Co. built the brand new facility to replace the prior one which was destroyed after a fire burned it down back in August 2015. (Matt Gade / Republic)

With its first shipments complete, Mitchell’s new Coca-Cola distribution center has been deemed the “flagship” for beverage distribution in South Dakota.

The first shipments of Coca-Cola products were trucked out of the company’s newly constructed Commerce Street facility on Tuesday, 17 months after the last Mitchell distribution center was destroyed in a fire, and the facility’s manager says the company is better situated than ever.

“It was a good building that served our purpose, but this will serve our needs better over time,” said Matt Morgan, general manager of central South Dakota operations, which includes distribution centers in Mitchell, Pierre, Huron and Watertown, for Chesterman Co., the Sioux City-based company that owns all four facilities.

The new 55,000-square-foot facility, located west of Floor to Ceiling near the Highway 37 bypass, cost $2.7 million, according to a building permit issued with the city of Mitchell in May. While it’s not the biggest facility in the Chesterman network - which includes distribution centers in four states - Morgan said it’s the newest and boasts the best design.

“This would be the flagship, definitely,” Morgan said of Coca-Cola distribution centers in South Dakota.

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The construction project, completed by Mitchell-based Area Steel, stemmed from the loss of the company’s last home at 120 S. Kimball St. The building caught fire in the early-morning hours of Aug. 18, 2015.

The fire started near an ice maker, authorities said, and quickly spread, causing extensive damage to the 42,000-square-foot structure. Fifteen Mitchell firefighters and 25 from Letcher, Alexandria, Ethan, Rosedale and Mount Vernon responded to the scene, and the fire was extinguished in less than 1 1/2 hours.

The west end of the building collapsed, and the east end was heavily damaged by smoke. The company was only able to recover four damaged vehicles and tablets used to sell equipment. All drinks with corn sweeteners and sugar were turned into ethanol, Morgan said, and packaging was recycled.

Rebuilding

For the next seven weeks following the fire, the distribution center moved into the company’s 5,000-square-foot shed across the street, where trucks were stored. It soon leased a 17,000-square-foot building on South Langdon Street, but the structure had no loading docks, meaning the company was short on space and had to load all the trucks by hand.

Despite the loss, distribution was paused for just one day, but the center had to cut back on some flavors of Monster Energy drinks, teas and 12-packs.

In addition, there were no floor drains, so snow and slush would build up on the floor, keeping forklifts from gaining traction, and an in-floor heating system prevented storage racks from being bolted to the ground.

Other Chesterman facilities and independent bottlers rerouted products to Mitchell to assist, and while the company avoided laying off any of its 28 employees, Morgan said it was still a stressful situation.

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“There’s nothing worse than the day of the fire, the employees looking at you with fear in their eyes over how long they’ll be without work, and immediately after the fire, you don’t have the answers,” Morgan said.

But with a building specifically designed for Coca-Cola distribution for the first time in Mitchell, Morgan said he’s glad with how it turned out and praised the hard work of his employees over the past 1 1/2 years.

“If you ever want to know the caliber of employees, just go through a fire. I’ve got the finest people on Earth to work here,” Morgan said. “We had a lot of customers who didn’t even know we went through a fire.”

Branch Manager Bob Herman is one of those employees. Herman has worked for Coca-Cola in Mitchell for 19 years, and he knew he had to stick through the rebuilding process.

“There are a lot of guys who have been here 20, 30 years,” Herman said. “There isn’t one of them that wouldn’t jump in a foxhole with you.”

Herman said he was “extremely pleased” to be sitting in his new office and looks forward to the future. He praised his fellow employees, saying sales actually increased over the last year.

“You talk to a lot of Coca-Cola guys around, and they just can’t even fathom the idea of having their business burn down. We didn’t even have a paper clip the next day,” Herman said. “It says a lot for the group of guys.”

The Mitchell facility is used to distribute beverages across a large area in central South Dakota, stretching from Winner to west of Salem and some areas in Huron.

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Bigger and better

The Kimball Street facility was constructed in 1904, Morgan said, and didn’t have a sprinkler system installed. The new building has sprinklers throughout the building and beefed up fire suppression systems, which help extinguish fires without human intervention.

The new building also includes four loading docks, instead of two in the old location, and a wash bay, which will be used to clean trucks and equipment and will be finished later this week, capping off the entire project.

A completion date was initially set for fall, but wet conditions and late recommendations by an insurance company led to delays.

Morgan expects to hold approximately 40,000 cases of drinks inside the warehouse, but he said the structure is large enough to hold twice that many, as well as space for about 14 trucks. And if the company ever needs to expand, there’s an additional 150 feet of land available for more development.

The location is also a boon, Morgan said. Situated just off the Highway 37 bypass, trucks have more space to load and better access to Interstate 90 and other major highways. It’s also visible to more motorists, so signage serves as advertising.

With about 50,000 square feet of open space, the facility is significantly larger than the old one.
But Cy Chesterman, president of Chesterman Co., said the company has expanded the number of products sold out of the Mitchell branch, so building a larger facility facility made sense. He said it is now the largest single-standing Chesterman facility in South Dakota.

After the fire, Chesterman said the company considered whether it was smarter to rebuild in Mitchell or give the branch’s routes to other distribution centers. But it was decided that the company needed a presence in town.

“We always feel it’s best to put your resources as close to the customer as you possibly can,” Chesterman said. “We’ve got a lot of great employees that work there, and they call it home, so we call it home, too.”

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