By Frank Spano, Managing Director and Susan Riffle, Manager of Communications, The Austin Company
The food and beverage industry is currently of great interest to progressive communities seeking to expand their industrial base. The reasons are clear: according to the 2017 annual U.S. Food & Beverage Industry Study by WeiserMazars LLP, most food and beverage companies anticipate an increase in sales this year. Survey participants — drawn from over 200 companies across the industry — are confident that sales will increase 21 percent compared to 2016, and net profits will rise by 16 percent.1
In June 2017, the Bureau of Labor Statistics placed employment in the food processing sector at over 1.5 million workers. So far in 2017, the industry has added an average of 26,000 jobs per month to the U.S. economy,2 paying out $83 billion in total salary and benefits.3
Given the above statistics, there is no doubt the food and beverage industry holds a great deal of promise for regions and communities lucky enough to attract them. As a result, the number of communities vying for new and expanding food and beverage industries seeking suitable sites for their operations is large and growing, and the competition to attract them is fierce.
Compounding the competition is the fact that the industry has especially rigorous criteria when defining site suitability. Transportation characteristics, environmental concerns, infrastructure needs, utility requirements and neighboring land uses all make finding the right site especially challenging. Because of these unique concerns and the increased potential for error they represent, site selectors in the food and beverage industry are especially risk-averse, which makes the site evaluation process significantly more complex and time consuming.
How can a community get ahead of the competition while attracting food and beverage manufacturing facilities? Ideally, that community would offer a number of sites certified as “shovel-ready” for food and beverage use as options. However, before allocating time, effort and funding toward working with a qualified third-party consulting firm to conduct a food and beverage certification program, a community can narrow the field of sites in contention through an internal analysis to pre-qualify them for certification suitability, making the eventual certification process much more effective and efficient.
Pre-Certification Analysis is Key
A sound pre-certification analysis can help a community evaluate its sites and develop rankings for site suitability and potential, based on characteristics that are particularly important to food and beverage operations.
Key to this pre-certification analysis are two areas of focus: the general setting/environment for the site, and the utilities serving the site. It is wise to do a thorough evaluation of the wider surrounding environment for the potential site, prior to evaluating the actual site itself. Also vital is a complete study of utilities involved at the site from both a community/municipal and site-specific standpoint. A thorough evaluation of these two areas of focus will uncover which sites have the most potential for success in hosting a food and beverage operation, and determine worthiness for certification down the line.
Evaluating the Site Location/Setting
When evaluating a site, wider geographical setting and accessibility are certainly prime considerations for the food and beverage plant and its successful inbound and outbound operations. Once a site is deemed suitable from a geographical perspective, it is wise to begin to assess the immediate surroundings of the site.
Sites with the most general potential for food and beverage operations tend to be situated in light industrial areas, with at least 20 contiguous acres having a slight rectangular configuration. With regard to neighboring businesses, however, most food processors are very particular with respect to their surrounding environment. Even if nearby businesses are also food and beverage operations, they are not necessarily compatible neighbors. For example, odors from meat or poultry rendering, pet food processing, and some yeast-based operations can be carried by prevailing winds toward a site, bringing with them the potential to contaminate a highly-sensitive finished product (such as bagged salad or fresh fruits and vegetable processors) with unwanted odors/flavors. Dust and particulates from heavy manufacturing operations can also deliver unwanted contamination to vulnerable consumable products. Sites situated near these types of businesses are not suitable, and should be eliminated from certification consideration early in the evaluation process.
Sites with the most potential for food and beverage operations have compatible neighboring businesses such as assembly operations, warehousing and distribution facilities, even injection molding or other similar factories, especially if they have been constructed in the past 20 years. In addition, most food processors other than the group cited earlier, are ideal neighboring properties. These types of businesses pose little if any negative impact on the operations of a food and beverage facility, and should prove to remain compatible neighbors for years to come.
Evaluating utilities for site certification suitability is a two-fold process. First, utilities must be evaluated from a community-wide or municipal perspective. Factors such as ongoing service charges, one-time impact fees, capacity, and reserve capacity for both water and wastewater, for example, must be taken into consideration. Since food processing operations use relatively large amounts of water, and generally prefer to take advantage of municipal water and wastewater services, it is critical to determine early on whether a community can handle the challenge of the new operation in terms of capacity and reserve capacity. Generally, a community should offer an excess or reserve capacity that measures (in MGD, or million gallons per day) at least 25-30 percent of peak daily usage. In addition, the municipal water and waste water provider should have an action plan regarding any improvements for possible system expansion. This is especially important if food and beverage operations are being targeted by the community.
Second, once a surrounding community and its potential to serve the site with utilities (without imposing high costs or fees) is deemed satisfactory, the site can then be evaluated based on the “nuts and bolts” of utility use specifically at the site itself. Measurements and rankings can then be developed for key utilities like water, wastewater, natural gas and electricity.
Water. Since a food processing operation can use anywhere from 100,000 to one million gallons of water each day, it is vital that several aspects of water as a key utility be considered when it comes to evaluating the site itself. Water source (surface vs. ground), type of water system (looped vs. terminating at the site), size of the water main (10 and 12-inch lines are ideal), water flow (measured in gallons per minute), and static and residual water pressure (the difference in pressure, measured in PSI, when water is and isn’t flowing) are all important criteria. Water quality – of utmost importance to a food and beverage operation – should be assessed as well; a formal analysis can be done to specifically determine the chemical content of the site’s water, identifying not only the presence of, but also the density of organisms and dissolved minerals that could potentially interfere with food and beverage processes and purposes.
Wastewater. Wastewater services to potential sites can be evaluated and ranked in much the same way as water services. Of course, capacity, reserve capacity, line size (greater than eight-inch lines are desirable) and gravity-feed vs. forced main system should be considered. But of even greater importance is the total community impact an operation may have on the wastewater system, as well as any one-time or ongoing fees involved with that impact. A thorough investigation into the wastewater treatment system should be done.
Communities vary widely regarding whether they will accept untreated effluent, as well as how much and what type of untreated effluent they will allow to flow into their treatment plant. Additional costs or surcharges are often imposed by a community based on effluents discharged by a company, and the type of treatment those effluents require. These costs are typically based on the measured value of Chemical or Biochemical Oxygen Demand (COD or BOD), which is the amount of dissolved oxygen required during the treatment process to biologically decompose any organic matter in the wastewater. Also important is the measured value of Total Suspended Solids (TSS), which is the total amount of materials in the wastewater.
A thorough discovery of maximum allowable limits for effluents in general (measured in mg/l), as well as any surcharges for exceeding limits in terms of BOD, TSS and other effluents, should be conducted. Also of importance to food and beverage operations regarding water treatment needs is the presence of Fats, Oils and Grease (FOG) in wastewater, which is a growing concern to municipalities and solid-waste facility operators.
Electric Power and Natural Gas. As with any industrial operation seeking a suitable site, food and beverage processors require solid service in the form of electric and process fuel (usually natural gas) utilities. The distance between the site and the electrical substation, the capacity and reserve capacity of the substation, and transmission line type (overhead or underground) should all be assessed. Electricity needs at the site itself should be evaluated based on industry averages of daily needs to run food and beverage equipment, that type of key equipment’s sensitivity to power fluctuations, time of use/amount of use per day, and potential maximum demand – all based on use averages in the food and beverage industry.
The natural gas potential at the site can be determined in much the same way, using industry averages for the consumption of natural gas used for heating and production processing (usually calculated in therms). Line size, delivery pressure in PSI, probable time of use, and probable hours of use should all be assessed. Non-interruption issues and accommodations, especially for processors who may be running boilers, process ovens or other temperature-dependent equipment for food safety, are of particular importance.
Pre-Certification Leg Work Will Pay Off
There is no doubt that the food and beverage industry holds great potential for communities seeking to expand their industrial base. Ideally, these communities will offer up sites that are certified, through the help of a third-party consultant, for food and beverage industry use. But prior to embarking on that worthwhile, but time-consuming and costly step, smart communities will pre-qualify any potential sites through a self-analysis to determine their suitability for the certification process. With this extra step of self-examination and pre-qualification, the route to food and beverage site certification will be a much more efficient and effective one. The result will hopefully place the community at the top of the ever-growing, highly-competitive field furthering economic growth in the food and beverage sector.
About the Authors:
Frank Spano, Managing Director
As Managing Director of Austin Consulting, Frank develops and leads new strategies to increase The Austin Company’s leadership in aerospace, food and beverage and other manufacturing sectors. Frank also serves as a senior project manager, directs site location studies, and conducts detailed field investigation analyses for clients.
Frank’s areas of expertise include the aerospace and aviation, automotive, food and beverage, general manufacturing and consumer products industries, in addition to pharmaceuticals, publishing and alternative energy. Frank.Spano@theaustin.com
Susan Riffle, Manager of Communications
In her role as Manager of Communications, Susan creates and manages both internal and external communication materials and processes relating to thought leadership, media relations, online and content marketing, and employee training and development. Susan holds a Master’s degree in Business Administration with a concentration in Strategic Marketing. Susan.Riffle@theaustin.com