By Dominique Cantelme
From the July/August 2012 issue
Agribusiness includes entities that most significantly affect how food is grown, processed and distributed. As one of the largest segments of Agribusiness, the food processing industry interacts with farmers, livestock growers, distributors and consumers to convert fresh ingredients such as fruits, vegetables, grains, meats and dairy products into finished goods. It involves the methods and techniques used to transform raw elements into food for human consumption—removing toxins, easing marketing and distribution tasks and increasing food consistency and shelf life. Food processing also increases the seasonal availability of many foods and enables transportation of perishable foods across long distances, creating more diverse food opportunities.
Food manufacturing is one of the United States’ largest manufacturing sectors and the demand for processed food tends to be less susceptible to fluctuating economic conditions than other industries.
A number of technology fields, including biotechnology and nanotechnology, are connected to the food processing industry. Since innovation can boost profits, it is a main driving force, helping companies cut production expenses by reducing waste, employ effective manufacturing techniques, optimize automation to lower labor costs, and cut down on input materials such as energy.
Food processing industries and practices include canneries, meat and vegetable packing plants, and slaughterhouses among others. Occupations include butchers and meat cutters, poultry and fish trimmers, and operators and tenders of roasting, baking and drying machinery.
A number of factors must be taken into account when processing food. Companies must consider hygiene, energy efficiency, waste, labor and cleaning stops. Food can be produced by several methods.
- One-Off Production is when one product is made. It is used when customers order something to their own specifications.
- Batch Production is when a small quantity of the product is made. It is used when there is range within a product line and the size of the market is not clear. This involves estimating the amount of customers that will want to buy a product.
- Mass Production is when a large quantity of a product is made on a production line. It is used when there is a sizeable market for a large number of identical products.
- Just In Time is when all components of the product are there. The customer chooses what they want so that the final product is made on the spot, such as in sandwich shops and some fast food restaurants.
Many people have gained valuable time replacing the longer task of preparing meals from scratch with buying or using food that only needs to be baked, boiled or opened. What may have otherwise demanded an hour can be accomplished in less than ten minutes, taking a strain off most families and individuals with tight schedules.
Food quality also is a major concern for many consumers and has therefore influenced the trend toward buying organic. And while it may take food processors more time and money to produce the product, with retail sales growing each year, it may be worth it in the end.
Organic is a guarantee about how an agricultural product was grown and handled before it reached the consumer.
Organic processors maintain a food’s organic status by producing it using methods that do not involve inputs such as synthetic pesticides and chemical fertilizers; by not processing it using irradiation, industrial solvents or chemical food additives; by carefully tracking ingredients; and by using detailed record keeping.
Ingredients in organic food must be grown and the product manufactured according to the national standards specified by the National Organic Program (NOP). Both the ingredients and the facility where the food is processed must be certified organic.
In addition to pleasing consumers through food safety, ingredients, taste, cost and ease of preparation, food processors also must consider their proximity to raw materials and their final destination. Here are some locations that can help companies cut down on transportation and distribution costs.
Genesee County, NY is a Food Processing Hub
Just an hour North of New York City begins a great expanse of farmland that extends hundreds of miles to the Pennsylvania border.
Agriculture is the second largest industry in NY behind tourism. In fact, in 2009, the agribusiness cluster of industries generated $49 billion to the state economy.
In 2010, NY ranked second in the U.S. in apples and maple syrup production; third in grape production; fourth in dairy, squash and pear production; and fifth in onion production. In Western NY and the Finger Lakes region, which includes Genesee County, there are approximately 342 food processing entities and 670 farm equipment dealers, service companies and wholesalers. In 2011, the food manufacturing sector employed almost 16,500 people with an average annual salary of $54,081.
The food processing and agricultural industries in the region continue to grow, particularly in Genesee County, which was named the third-fastest growing food processing region in the U.S. by Business Facilities in 2010 and 2011.
New companies to the region include Barilla, Alpina and Muller Quaker Dairy. Both the crop and dairy industries are benefiting from the increase in food processors locating in the area and existing processors such as Perry’s Ice Cream, O-AT-KA Milk, Rosina, Kraft, Yancey’s Fancy’s and Rich Products continue to grow by taking advantage of new market opportunities.
The region has incredible dairy, crop and viticulture supply chains as well as outstanding natural resources, including a significant natural water supply. The area is between two major metropolitan regions—Buffalo and Rochester—providing a highly educated, trained and productive workforce.
Growth of the food processing sector in NY has been spurred by the completion of the 202-acre Genesee Valley Agri-Business Park in Batavia, NY. The Ag-park was nearly a decade in the making, including a $10.5-million investment in infrastructure hookups and water supply.
The success at the Ag-park has been evidenced by two yogurt manufacturing plants to the region that are now under construction. The total construction investment of both projects is approximately $225 million.
Alpina will create 50 jobs in the near term. The facility is expected to begin production in the fall of 2012. Long-term Alpina has the potential to triple the size of the plant which could lead to a doubling of the workforce.
The other new yogurt manufacturing plant is a joint venture between Muller Quaker Dairy—one of Europe’s largest dairy processors—and global giant Pepsico. The plant will initially create 286 production jobs when it opens in 2013.
Economic development agencies are diligently working with other projects actively considering locating at the Ag-park. They aim to make Genesee County the yogurt capital not only of New York State, but of the world.
Livingston County Delivers its Bounty to a Rich Market
Just south of Rochester, in the beautiful Finger Lakes region of western New York State, you will discover Livingston County. Bisected by I-390 and only 10 miles south of the New York State Thruway (I-90), this community of 65,000 residents displays continuous growth in population and employment, especially in the food processing sector.
Barilla America, which produces the nation’s #1 brand of pasta, selected Avon, NY for its $100-million manufacturing and distribution center after a site-selector led search of 54 locations in 13 states. The company has expanded twice since locating in Livingston County. Using the IDA and Empire Zone program, $3.3 million of infrastructure (roads, water, sewer, lighting and a railroad siding) was constructed at no cost to local taxpayers. Using the BUILD NOW NY program to pre-permit sites as “shovel-ready,” all permits were obtained in 54 days and the facility was constructed in only 53 weeks.
Agriculture and food production thrive and grow in the Finger Lakes region for many reasons. One of the most important factors is the proximity of high volume specialty support suppliers. Sweeteners Plus is one of those critical suppliers as it furnishes sweetener ingredients to more than 300 food manufacturers in New York and nearby states.
The Livingston County IDA assisted the company through tax abatements to expand three times and increase its territorial market. Today the company directly employs 90 and has created many more jobs at Kraft, wineries and beverage manufacturers and in rail and truck distribution.
Because time is of the essence—particularly with delivering food products—Livingston County is a great location for food processing. The richest market in the world is within a radius of 750 miles of New York State; this radius includes half of the total U.S. and Canadian populations and covers the 18 Northeast states and parts of two Canadian provinces.
Half of the U.S. personal income, wholesale sales, and about 50 percent of its retail trade are accounted for within this radius. More than 50 percent of the land area in Livingston County is used for agriculture, and the county is within the top five New York counties in grain, beet, bean and dairy production.