By Jay Garner, President, Garner Economics LLC & Cyndi Dancy, director of research, Garner Economics LLC
Top Areas for the Food & Beverage Manufacturing Industry
The food and beverage industry remains a generous slice of the nation’s manufacturing sector with steadily increasing employment. Consumers drive trends on what is being produced, how it is packaged, and the industry continues to adapt and thrive. Metro areas with large populations have a foothold on food productions, while other areas have found their specialties driving employment.
More than 1.8 million people across the United States work in food and beverage manufacturing sectors as of June 2017, according to the Bureau of Labor Statistics. These two sectors show continual employment growth since 2010 with strong advancement in the past five years.
Although the food processing sector has a much higher employment level, the beverage sector is increasing at a faster rate. Rates of growth over the past five years are at seven percent for food processing and 37 percent for beverage manufacturing based on preliminary figures for the first six months of 2017.
More than half of the employment growth in the beverage manufacturing industry is accounted for in the development of breweries as the craft brew scene expanded greatly across the United States. We’ll sip on that and other beverages later in this article.
So where are these food and beverage manufacturing sector jobs? California leads the U.S. with the most facilities and employment largely due to the farming output in the Central Valley. The top metro areas for food manufacturing, covering all activity under NAICS code 311 Food Manufacturing, are generally the most populous MSAs across the nation. All the metro areas on the ranking are within the top 25 MSAs ranked by population.
Now, if we review the regions based on the concentration, or location quotient (LQ), the ranking becomes a vastly different list. The LQ displays the comparison of regional workers compared to the national rate of employment for that industry. The higher the LQ, the higher the specialization a region has for that particular industry sector. These metros tend to be mid-sized or small in regard to population but have a high concentration of food manufacturing workers.
Then there’s beverage production. Beverage manufacturing has a strong presence in California with five of the top ten metro areas for this sector located in the state. The Napa region ranks number one on this list with an average of 10,054 employees engaged in primarily wine production. As well-known as the region is for wine, it is no surprise that the LQ of 75.51 shows concentrated employment in the beverage industry. Additional California metros also have strong wine production, while other metros on the list are headquarters for major beer brands.
Taking the cue from Napa, CA having a specialization in wine, below are the top metro areas for subsectors of food and beverage production. Napa Valley, when evaluated for just their wine production, had an employment LQ of 290. Decatur, IL also portrayed an extreme concentration (270 LQ) within the Grain & Oilseed Milling category. Louisville, KY had the third highest LQ of 28.28 for distilleries employment reflecting its recognized bourbon heritage.
The food & beverage processing industry continues to change with consumers increasingly choosing healthy, fresh, organic, and ready to eat alternatives over traditional products. Specialty foods, snack foods, and sauce manufacturing are three subsectors of the food processing industry that have seen a rise and are forecasted to grow. On the beverage manufacturing side, craft breweries and distilleries are undergoing exceptional growth nationally.
Millennials are now America’s largest living generation, surpassing baby boomers. As a result, their purchasing behavior greatly influences the retail landscape and the plans of food & beverage processors. Despite some impressions that they love healthy food and want to prepare it themselves, millennials spend more of their grocery money on prepared foods, pasta, sugar and sweets than other generations, according to a report from USDA’s Economic Research Service (ERS). The study also found that millennials, on average, devote less of their food budgets to grocery store purchases and make fewer trips to the grocery store than the other generations examined. They do demand healthier and fresher food—including fruits and vegetables—when making food-at-home purchases, but they place a higher preference on convenience than do other generations.1
Look for the future of the industry to quickly adapt and retool as consumer preferences continue to evolve and change.
1 Foodprocessing.com January 2018
About Jay Garner: Jay A. Garner, CEcD, CCE is the president and founder of Garner Economics, LLC, an economic development and site location consulting firm headquartered in Atlanta, GA, now celebrating their 15th anniversary serving companies and communiities alike. Jay is a leader and innovator in the economic development profession, having served for 38 years as both an award-winning economic development, Chamber of Commerce CEO, and site location professional. His firm assists clients throughout the world on a wide variety of projects, offering innovative, yet real-world solutions to achieve success. Jay often lectures and provides counsel on creating and implementing proactive global business development strategies and tactics. His firm is also a leader in providing assistance to corporate clients in their site selection process, such as Anchor Glass, Academy Sports, Hatfield Quality Meats, Hill’s Pet Foods, Stork Food Systems, Future Pipe Industries and others. His firm is the exclusive provider of site location services for Primus Builders—a global leader in architecture, engineering and construction management specializing in food processing manufacturing, and their worldwide clients. He is a founding member and past vice chair for the Site Selectors Guild, a prestigious group of the top site location consultants globally.
About Cyndi Dancy: Cyndi Dancy is Director of Research for Garner Economics, an economic development and site location consulting firm headquartered in Atlanta, GA. Cyndi has more than 20 years of economic development experience including specialties of research, geospatial analytics, marketing and business development. She serves as the director of research at Garner Economics.
About Garner Economics: We are data driven strategists helping companies, communities and organizations, large and small, urban and rural, achieve success.
We offer location advisory services, analytical research, industry targeting, strategic planning, and organizational assessments with a wealth of expertise to companies, communities, and organizations globally.
Garner Economics and Primus Builders have partnered to create one of the most extensive site certification initiatives in the economic development and food/beverage industry. Their goal is to help communities prepare for the location of food and beverage projects, which also helps companies in that industry sector understand that a communities’ site or building has met rigorous review requirements. See more at https://garnereconomics.com/services/food-processing-site-certification.
Garner Economics is based in Atlanta, GA with representative offices in Europe, Asia and North Carolina.