By Frank Spano and Susan Riffle
The number of food manufacturing establishments has steadily increased since 2009, with now over 30,000 establishments across the United States. Worldwide, this industry tops $4 trillion in sales annually, with approximately $1 trillion in sales in the United States. With a burgeoning worldwide population and continuous industry advancements, growth in food processing is expected to continue.
Small-to-mid-sized processors account for two-thirds of this industry’s employment, and while the U.S. Bureau of Labor Statistics forecasts modest job growth in food processing through 2022, the industry is continuously growing and adapting to changing consumer tastes and by improved manufacturing efficiencies through automation. Due to these changes and increasing automation, food processors are finding the need to build new, updated facilities on greenfield sites. Below are major site considerations food processors should explore when locating on a greenfield site. Major considerations impacting site location are typically raw materials and market proximity. Food processors want to locate where they can quickly and cost- effectively source raw materials and transport finished product to the ultimate end-users. Furthermore, once the location is narrowed down, food processors evaluate specific sites based on numerous location factors. Perhaps the most impactful factors relate to the availability of water and wastewater systems. For most food manufacturers, water and wastewater have a large, direct impact on site selection.
During the site selection process, food processors should consider a number of factors relating to water and wastewater. Communities looking to locate food manufacturers can prepare for these inquiries by compiling the information referenced below and by working with municipal water and wastewater authorities to ensure adequate resources are in place for potential food processing facilities. Food processors often prefer to tap into municipal water and wastewater systems over developing their own private water and wastewater system. To ensure that the municipal system resources meet their needs, food processors must evaluate the “3 C’s” of water and wastewater – Community, Capacity and Costs – before selecting a new site.
Community The community’s readiness and standards have a tremendous impact on food processing site selection. Food processors typically require large water capacity, so the community must have system-wide capacity large enough and with sufficient excess for a food processing facility. They should be prepared to respond to inquiries such as: What are their standards? Is it ground or surface water? Where are the treatment plants in relation to the site – distance and direction? Also, how will the communities’ water quality affect the company’s final product? Communities must also be prepared to discuss their municipal water system infrastructure. Food processors will want to know: How old is the system? What investments are being made to maintain the system and update it as needed? Is there or has there been a water and/or wastewater moratorium in place that will affect the company’s ability to produce their product? Finally, communities often work with local, regional and state government and economic development agencies to offer incentives to encourage new food processors to locate on their site. Such incentives may involve improvements to the infrastructure, extension of the desired utility lines to the site at no cost, and waiver of water / wastewater connection fees.
Capacity Capacity refers to water flow at the site. Food processors typically need a good deal of quality water, with strong water pressure. Standard line sizes needed to adequately serve most mid- sized food processors range from 10” or 12” line service. Even food processors implementing sustainable practices have a great need for water. Does the municipal water system provide the capacity that the food processor needs or is there a surplus available? What are the local wastewater effluent guidelines? Food processors typically have high biological oxygen demand, suspended solids and pH levels.
Costs Of course, costs are an important consideration. Food processors will look at the cost of water and wastewater service, along with other sewer surcharges. Additional costs may include one-time impact and connection fees, which are based on ultimate usage or “EDU” (equivalent dwelling unit). These fees range from community to community and can be significant. In addition, some communities, such as those in urban and fast-growing areas, tend to have higher connection fees. All costs should be provided to the food processor in a water cost schedule. Finally, consider whether connection fees be waived as part of an incentives package.
Beyond minding the “3-C’s” above, below is a checklist of factors that should be evaluated during site visits. These are questions typically asked and what you need to know at the community level as part of your site analysis.
1. What is the system capacity in gallons per day for: Total Capacity, Average Daily Usage, Peak Daily Usage, and Excess Capacity?
2. What is the static water pressure at the site (lbs/psi)? Residual water pressure at site (lbs/psi)?
3. What is the water flow at the site (gallons per minute)?
4. Discuss any proposed improvements to the water system within the next 2 years or any recent improvements. Include completion date and funding.
5. Estimated itemized monthly billing based on water service usage information including all state and local taxes.
6. Water Analysis Report, covering the amount of minerals in the municipal water system.
7. Request a Commitment Letter from the municipal water provider that includes:
a. Confirmation of ability to meet Water Service Usage
b. Confirmation of water line size and location at the site
c. Total system capacity / average daily usage / average peak usage / excess capacity
d. Static and residual water pressure at site
e. Water flow in gallons per minute
f. Water provider source
g. Location, distance and direction of the water treatment plant
h. Summary of current cost schedule of water rates and connection / impact fees
i. Any planned or recent improvements to the water system
j. Summary of estimated itemized monthly bill along with any one-time
connection or impact fees based on usage
k. Projected increases in municipal water costs during the next 2 to 5 years
1. Are wastewater lines serving the site gravity or forced main?
2. What is the wastewater system capacity (in million gallons per day – MGD): Including Total Capacity, Average Daily Usage, Peak Daily Usage and Excess Capacity?
3. What are the state maximum allowable limits for effluents (in mg/l)? List any surcharges for exceeding these limits: BOD, COD, TSS, FOG and pH levels.
4. Discuss any proposed improvements to the wastewater system within the next two years or any recent improvements.
5. Confirm whether the community can accept the effluents listed above. Indicate whether on-site pretreatment is required by the company before effluents may be discharged into the sanitary sewer system.
6. An estimated itemized monthly billing based on both wastewater service usage and sewer effluences usage, including all state and local taxes.
7. Sewer Ordinance Manual from service provider
8. Request a Commitment Letter from the municipal wastewater provider that includes:
a. Confirmation of ability to meet Wastewater Service Usage
b. Confirmation of ability to meet Sewer Effluents Usage
c. Confirmation of wastewater line size and location at the site
d. Confirm whether wastewater line is gravity or forced main
e. Total wastewater system capacity / average daily usage / average peak usage / excess capacity
f. Maximum allowable limits for effluents BOD/COD/TSS/FOG/pH
g. Location, distance and direction of the wastewater treatment plant
h. Any planned or recent improvements to the wastewater system
i. Inclusion whether community can accept effluents or if on site pretreatment is required
j. Estimated itemized monthly bill for wastewater and effluents along with any one-time connection or impact fees based on your usage
k. Projected increases in municipal water costs during the next 2 to 5 years.
Of the hundreds of factors evaluated during the site location process, those related to water and wastewater have, perhaps, the greatest impact on a site’s success, especially for food processors. Water and wastewater have far-reaching implications that relate to not only the site itself and its infrastructure; but also community impact, cost implications, initial development fees and potential assistance programs to lower those fees; and ability to operate successfully in the foreseeable future. It is wise to thoroughly examine these considerations to confirm that a potential site truly has what it takes for the success of the future food processing facility.
Frank Spano, Managing Director As Managing Director, Mr. Spano leads the Austin Consulting division and develops new strategies to increase The Austin Company’s leadership in food and beverage, nutraceuticals and other manufacturing sectors. Frank also serves as a senior project manager, directing site location studies and conducting detailed field investigation analyses for clients. Frank has advised and recommended locations for numerous food processing clients in his 25 years with Austin Consulting. As of 2010, Frank also took the lead role for Austin Consulting to designate sites as “shovel- ready” for the food and beverage industry and marketing this service primarily to economic development organizations. In addition to the food and beverage industry, other areas of expertise include automotive, aviation/aerospace, general manufacturing and consumer products.
Susan Riffle, Communications Specialist Ms. Riffle joined The Austin Company as Communications Specialist in January 2013. Prior to this position, Susan spent six years in marketing and communications roles, focused on developing and implementing all facets of B2B marketing and communications activities, from brainstorming and strategy, through creation and implementation. As Communications Specialist, Susan is responsible for creating and managing corporate communications, employee communications, online and content marketing activities, and thought leadership materials, including whitepapers, articles and blogs. Susan holds a Masters degree in Business Administration with concentrations in Strategic Marketing.