California-based beverage flavor manufacturer says Kyle has right vibe for expansion

Rendering of Kyle Sovereign Flavors
Nov 01, 2023
Justin Sayers – Staff Writer, Austin Business Journal

When California-based Sovereign Flavors Inc. was looking to expand into a second market, the city of Kyle passed the vibe check.

The beverage development and flavor company has developed a customer base across the country in its 20 years of operations. It was looking for a centralized location to better serve those customers to reduce lead times and transportation costs. Texas' locale in the middle of the country, and Kyle's emergence as a hub for manufacturing and innovation in the food industry sealed the deal.

"It really seemed like a fit in that it just kind of fit our overall vibe," said Ali Munoz, the company's marketing director. "We really try to be as innovative as possible, and that really is something that we are known for and is a driver for us. ...All those things kind of put together really helped to make Kyle the spot for us in planting and putting some roots in."

Sovereign Flavors is just months away from opening a 40,000-square-foot facility at 341 Plum Creek Meadows that will house manufacturing space, production quality assurance and customer service components. It broke ground earlier this year and executives plan to be up-and-running in February. A filing with the Texas Department of Licensing pegged the project at $8.5 million.

It'll mark the first hub outside of California for the company that likes to call itself a "flavor house." Basically, it manufactures flavors, does flavor matching and works to develop custom flavors for alcoholic beverages, non-alcoholic beverages and some food items. It boasts of having more than 1,300 flavors.

Sovereign Flavors' website notes its products are sold in major retailers such as Safeway, 7/11 and Target. Munoz declined to name any customers, but said they range from large brands, to emerging companies to startups. It really is a business-to-business company, Munoz said, and it's the development that the team really loves to focus on, as about one-third of the roughly 60-person staff are research-and-design members. They are led by a Michelin Star restaurant-trained chef.

"We love working with the little guys and see them grow into the big guys," Munoz said.

The company has been growing rapidly since it launched in 2003. Its footprint has swelled into a 40,000-square-foot, four-building corporate headquarters campus in Santa Ana, about 30 miles south of Los Angeles in Orange County. There, the company houses its administration, along with manufacturing, sales, customer service, quality assurance, production, lab development and warehouse space.

But Sovereign Flavors does have some sales team members scattered across the country to serve a national customer base. That helped precipitate the need to grow to Texas. The plan is to start with roughly 10 employees in Kyle. She said the company asked anyone if they wanted to move to Texas, and two employees already jumped at the opportunity.

"We're excited for the opportunity for grow," Munoz said, noting Sovereign Flavors does not have a target Texas headcount. "We're going to take it step-by-step as it goes. We're always keeping our options open and just following the opportunity."

It marks a continued wave of businesses flocking to Kyle, which is about 20 miles south of downtown Austin. It has a population of about 58,000 and is among the fastest-growing cities of its size in the country. The suburb is attracting a number of employers in the food manufacturing and distribution industries, such as ATX Specialty Foods, a contract manufacturer of dips, sauces and more, and Costco Wholesale Corp.

Kyle Economic Development Director Victoria Vargas said in a statement the city looks forward "to welcoming them to Kyle in the first quarter of next year."

"Sovereign Flavors will be joining several other businesses in our Plum Creek Employment District along FM 1626, adding quality jobs for our community and further expanding on our growing food and product development industry," Vargas said.

The move to Kyle has not come without challenges. When it was originally announced in 2022 they were moving to Texas, Gov. Greg Abbott had said Sovereign Flavors was moving its headquarters to Austin, but that is not the case. Munoz said the company also had planned to build on a different plot of land in Kyle, but quickly found it wouldn't work.

That led the team to their current space, and they've "hit the ground running" since, she said. The company does not plan to ask for incentives from local and state governments, officials said. They credited their construction firm, Kingham Dalton Wilson Ltd., along with consulting firm Hillco Partners for helping them alleviate any challenges, and the city for moving the project along.

"The beginning of it was a little bit of a challenge," Munoz said. "Once we found that second location and once (KDW was) in the picture, it's been such an amazing experience. Such phenomenally talented people who have not been only so good at what they do but just so transparent with everything and really advocates for us to get this up and running."

That has created excitement for the opening. But even then that milestone could be just the start: long-term expansion on the company-owned site Sovereign Flavors is building on in Kyle is something that it's aiming for.

"If things go well and it looks like we need more room to grow, we absolutely would be open to that as well," Munoz said.

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