Skip to main content
#
 
rss feedemail usour twitterour facebook page pintrestlinkdin
Home
Economic Development News
Magazine
Conference & Expo List
Target Industry Directory
Advertise With Us
About Us



 Feature Industry Articles 
Monday, May 23 2016
Food Processing Today: Organics (and Beer) Win!

Have there been any changes in food processing lately? Yes there has, big time!

Let’s look at my morning so far. After my walk, I prepared some green juice for my wife and me using our Breville juicer, as I do every day that I’m not traveling.

It makes about 12 ounces of delicious green juice that will absorb into your cells and become “life force energy” within about 15 minutes. It makes you feel energized and ready for the day!

I next had a bowl of cereal. I had recently bought some new gluten free multigrain Cheerios and low sugar Grape Nuts. I chose the Grape Nuts today and added some organic raspberries and blackberries followed by organic hemp milk. Delicious and healthy!

I started to think about shopping for these breakfast items. We recently shopped at:

  • Costco – they now post many green signs and the signs mean organic items.
  • Sprouts – a new lower priced supermarket similar to Whole Foods with a gigantic organics produce section. They started here in Phoenix and are expanding east, now in Nashville and Atlanta.

This is all related to the nation’s big push toward eating more Super Foods. In addition to organic fruits and vegetables other super foods include acai berries, chia seeds, flax seeds, cacao, ginger, hemp seeds, dates, sprouts and Gogi berries.

According to our health coach who works a company called “Rediscovered Health” (www.rediscoveredhealth.com): With the nation’s obesity epidemic, people are becoming more aware of the relationship between food and health.

Our story of new eating habits goes on and on, as it has for millions of families worldwide. Families are eating more salads, grass fed meats, fish, beans, seeds, less processed foods, less dairy, less sugar and more and more organic and super foods for much better health. And yes, as you will see, you might add beer to the list!

The world’s new eating habits have transformed supermarkets, restaurants/bars (Fox’s new Flower Child restaurant is all organic!) and the food processing industry, overall. There has been far less offshoring of the food processing industry as the vast majority of food processing for the United States (U.S.) population will take place here in North America. The key site selection criteria are:

  • Access to raw food materials and
  • Access to the population centers.

Let’s look at some U.S. food/beverage and location/expansion trends (from Conway Data - we use trend data like this to analyze clustering in our site selection work):

  • Location/expansion activity is up dramatically from 2009-10 until 2013-14!

Location/expansions by type of product:

  • There has been a dramatic increase in the number of meat/poultry/fish locations due to increased demand for exported products and for antibiotic-free/organic products. For example, Tyson Foods Inc. and Perdue Farms Inc. are producing more antibiotic-free chicken, and McDonald’s Corp has curtailed antibiotic use in its U.S. poultry. McDonald’s Corp. also plans to stop using eggs from chickens raised in cages in the U.S. and Canada over the next decade, an image-boosting effort that is likely to have a major impact on North America’s egg industry.
  • There has also been a huge increase in brewery locations due to the craft beer explosion. According to the Brewers Association, the craft beer industry witnessed a 16 percent jump in U.S. production volumes in the first half of 2015, alongside capturing 11 percent share of the overall beer market. Also, as consumer preference for this category of beer has been on the rise, these brewers target expansion of their market share to about 20 percent by 2020.

Food employment and plants in the United States continues to rise. According to US BLS/Garner Economics:
In 2010 (1st Quarter) there were:

  • 1,413,774 employees
  • 28,193 firms

And in 2015 (1st Quarter) there were:

  • 1,476,670 employees
  • 31,436 firms

Other food trends are important too. I directed the following discussion points at a recent Site Selectors Guild (www.siteselectorsguild.com) conference:

  • Meat consumption in U.S. and overseas increases, but health risks and obesity are key concerns
  • Organics “Explosion” – all food products are being transformed due to concerns about pesticide uses and unsanitary processing
  • Genetically Modified Organism (GMO) products have expanded rapidly and many food companies and health specialists are resisting this and going toward Non-GMO products (no pesticides)
  • Recently four major food companies – ConAgra Foods, Kellogg’s, General Mills and Mars, Inc. – announced they will label food products that contain genetically modified organisms, or GMOs.  These companies join Campbell’s Soup, which declared its intent to do likewise back in January. The news comes less than a week after GMO labeling supporters in the Senate defeated the latest attempt at a bill that opponents have dubbed the Deny Americans the Right to Know Act, or DARK Act. That legislation would have prohibited states from requiring GMO labeling.
  • Whole Foods is seeking full product GMO transparency by 2018.
  • Vegetarian - Locally grown and harvested products
  • Farm to market product push
  • Low sugar and gluten free products – huge health issues
  • Craft Beers and Liquors – some might say…“for more fun!”
  • Non-dairy movement – due to difficulties in digestion and related health issues
  • Soy, Almond, Hemp Milk growth
  • Hemp products come mostly from Canada now. Hemp can now be grown in over 20 states, but there are currently few plants to produce it.

                  

Expansion of the food sector means that communities seeking to attract the industry must be ready to go. Select site selection factors must be in place, such as:

  • Skilled labor – skilled machinists, food technicians and maintenance workers, etc.
  • Sites and buildings – especially certified or shovel ready sites
  • Access to markets with good transportation infrastructure – near raw materials and growth markets
  • Utilities – especially excess water and sanitary sewer capacities to handle product development and processing
  • Incentives – especially ways to offset large capital investments, tax credits/abatements and flexible training for new hires.

Buildings are still important in attracting food processing prospects. Over 80 percent of all site locations begin with a building search, however, less than 50 percent of these find a building and they end up building a facility that works better for them. The key here is to have some food processing related buildings that will attract prospects and also plenty of well-planned industrial sites (certified sites work best) that will attract the prospects that cannot find the right building!

We recently worked with a processor of fresh organic fruits and vegetables (Project 4Star) who wanted to get into a new building in the Southwest primarily to serve Southern California markets. We looked aggressively in two key market states and were only able to find two facilities that could work. But neither met their exact specifications. The result was a new search for suitable sites. Luckily, we have identified a number of sites within the market area during the building search and the site search was not that difficult.

One of the hottest trends in site selection today is the identification of “certified or shovel ready” sites and buildings. Certified or shovel ready means that the site/building has passed a rigorous professional site selector inspection and analysis and is deemed “ready to go.” Certified sites” known as the best available or the “cream of the crop” and often are the first products requested/shown in a site selection.

Site selectors seek out certified sites since they know if will save them time and most likely money. Criteria for certified sites include:

  • Acreage (10 acres; minimum levels)
  • All utilities at the site or a formal plan to extend to the site
  • Asking price from a willing seller
  • Certification by a professional site selection firm
  • Minimized risk factors for development
  • No environmental liabilities
  • Outside known flood-prone areas
  • Permitting process, timeline, and fees
  • Property boundary survey and topographic maps completed
  • Report of comprehensive site information from a site selector’s viewpoint
  • Truck quality road access
  • Zoning in place or an expedited rezoning plan.

Many states and regions (over 20 nationally) have developed certified sites programs. We have assisted the states of Oregon, Ohio and Tennessee and regions in California and Iowa in setting up and carrying out successful programs. The good news, others are seeking these out too.

The real keys to a successful site selection are:

  • Careful product trend analysis – what are consumers wanting and buying?
  • What are the best market for these products?
  • What is needed in the manufacturing/distribution of the product? (raw materials within “X” miles radius; water/sanitary  sewer excess capacities; electric power and other utilities; consumer/distribution markets; fully improved sites/building; labor skills at a competitive price, etc.)
  • How do we find the perfect location that is objective and unbiased?
  • The way to answer these important questions is through good communication between company/consultant and the communities and good professional site selection practices. The result, more food processing investment and more jobs!

Well, with that said…some might say that it’s time for another beer, but since I don’t drink, I would say…it’s time for another Organic Green Juice!

About the Author:
Deane C. Foote, CEcD, is President/CEO of Foote Consulting Group, LLC (www. footeconsulting.com), a site selection and economic development consulting company located in the Phoenix area. Deane has over 30 years of development experience, and is a founding member and former Treasurer of the Site Selectors Guild (www.siteselectorsguild.com), a company of the top site selectors in the world.

Contact Information: Phone: (480) 399-4854 Email: deane@footeconsulting.com Web: www.footeconsulting.com

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 10:41 am   |  Permalink   |  Email
Site Mailing List 

Expansion Solutions is a worldwide service of Cornett Publishing Co., Inc. ©2018, all rights reserved. 
Our content is from many sources and not warranted to be accurate or current. 
For general inquiries, email: info@ExpansionSolutionsMagazine.com