Moose Munch Confection's ever-growing popularity has outstripped Harry and David's ability to produce the popular snack at its Medford campus.

Moose Munch Confection's ever-growing popularity has outstripped Harry and David's ability to produce the popular snack at its Medford campus.

So on Tuesday, Harry and David Holdings Inc. announced it was breaking ground on a $16 million expansion to its Hebron, Ohio, facility to handle increased candy, chocolate and packaging operations.

"We just can't make it fast enough," said Harry and David spokesman Bill Ihle of the Medford kitchen that operates 20 hours a day, allowing four hours for cleaning.

"This expansion is in response to sales growth of these products in all channels," said Bill Williams, president and chief executive officer of Harry and David, in a prepared statement. "This addition will allow us to reduce transportation costs while at the same time increasing our production to meet customer demand."

The company will increase its Moose Munch line production by 4 million pounds annually and ramp up chocolate-covered fruit by another 3 million pounds.

Much of Harry and David's marketing targets Eastern metropolitan areas.

"Our Ohio distribution center is a key activity hub for us," Williams said. "Last year, we shipped more than 3.6 million gifts, which is 1 million more than we sent from our Medford distribution center."

The Hebron expansion is expected to create about 160 new full-time jobs, with an annual payroll of about $4 million, in addition to its present 225-person work force. Construction is expected to be completed by fall 2008. In 1997, the company opened a $34 million regional distribution and call center at the same location.

On July 10, the Ohio Tax Credit Authority announced approval of job creation tax credits for six companies, including Harry and David.

The gift and gourmet food manufacturer was awarded a 45 percent tax credit for seven years. The value of the tax credit is estimated at $351,532 over the term, and the company is required to maintain operations at the project site for 14 years.

According to the OTCA, Harry and David considered Illinois, Kentucky, Tennessee and Pennsylvania sites prior to settling on expanding in Licking County.

"There were others in contention," Ihle said. "But we already had an employee base and existing operation in Hebron. Ultimately, with state incentives it made business sense for us."

The company's most recent expansion was an upgraded 450-seat call center in Eugene last year.

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.