Pod Pack International, a Baton Rouge-based coffee and tea products manufacturer, is kicking off a $10 million expansion over the next three years.

The announcement was made by Mayor-President Kip Holden and Baton Rouge Area Chamber President Adam Knapp along with Pod Pack Executive Vice President Tom Martin on Wednesday morning.

The expansion will create 19 new jobs with an average salary of $30,100 plus benefits. It will generate an additional $600,000 in payroll, officials said.

Pod Pack started in New Orleans in 1996, but moved to the Baton Rouge Industrialplex in 2000. Pod Pack currently has about 25 employees, Martin said.

The expansion will be located within the same area and require a new, 75,000-square-foot building for new equipment.

“This expansion is a big win for all of our small businesses,” Holden said, adding that there is often a misconception that economic development efforts only target big business. “When you look at the states of who creates jobs, it’s small businesses. So we don’t ever want to get to the point where we ignore the role small businesses play in our economy and what they’re doing to employ millions of people.” Pod Pack creates espresso pods, one-cup coffee pods and other single-cup coffee systems for offices, hotels, restaurants and home brewing.

Martin said the demand for single-cup production is skyrocketing. He said 4 percent of coffee drinkers used single-cup brewing in 2010, compared to 29 percent of drinkers this year.

“Single-cup brewing has grown tremendously, and we’re in the position to be there and to take advantage of it,” Martin said.

Martin said 95 percent of the company’s business is done out of state, with major labels like Folgers, but he said it also does work with local coffee purveyors like PJ’s and Community Coffee.

That means Louisiana and Baton Rouge will miss out on much of the sales tax benefits from the business. When merchandise is sold and shipped out of the state, sales taxes are paid to the location where the delivery is made, not the seller’s location.

BRAC and the Louisiana Economic Development targeted Pod Pack earlier this year in an effort to identify incentive packages for the company.

The expansion is being made possible with an incentive package offered by LED, which includes a $760,000 performance-based award from the Economic Development Loan Program. The company also will utilize the state’s Quality Jobs and Industrial Tax Exemption programs.

Holden foreshadowed the announcement last week during a debate about the proposed city of St. George at the Metro Council meeting. He was trying to demonstrate that he is an advocate of the entire parish, not just the city of Baton Rouge.

“This will be built in the proposed St. George area. This is bringing more jobs there and there will be other jobs that come there generating a lot of income,” Holden said in an interview. “Across the whole parish, we are very transient. Therefore, we need to make sure in all places we have in East Baton Rouge Parish, we have people willing to go and accept these jobs.”

Follow Rebekah Allen on Twitter @rebekahallen. For more coverage of city-parish government, follow City Hall Buzz blog at http://blogs.theadvocate.com/ cityhallbuzz/