Innovation is the buzz word all around the country because companies in every industry are experiencing the need to trim costs in this economy to do more with less. The food processing business is no exception. And where there is innovation, there are one-of-a-kind efforts to help streamline the production process with the bonus of “greening” operations and creating healthier foods.
Take the case of fruit processor Wawona Foods Inc. in Fresno County, Calif., located in a valley that is one of the largest food processing regions in the world, and home to some of the most well-known food brands from growers and processors like Del Monte and Foster Farms. “I ship my peaches to the Midwest and to the East Coast to some of the pie manufacturers,” says Bill Smittcamp, president and CEO, Wawona Frozen Foods. “Then they end up shipping the finished pies back to the West Coast to the sales entities and grocery stores of the world. It would be much better on a carbon footprint to have the manufacturers closer to where the raw material is. And so that is our push here in the valley, in our food cluster.”
Smittcamp says that it is “our time to be on the leading edge” now because of the obesity problem in the country, which has increased demand for what the valley is able to produce. “If we don't take hold of this opportunity that is given us because of the obesity [in the U.S.] population then we are failing,” Smittcamp says. “So this just gives us a jump start to move more fruits and vegetables closer to the consumer.”
To capitalize on these new opportunities, food processing companies need to ramp up research and development efforts. To that end, the California State University-Fresno has developed the Institute for Food and Nutrition Innovation. With the addition of the Jordan College of Agricultural Sciences and Technology research building being folded in to that institution, the changes will occur at an even faster clip. “We are working with their technology transfer coordinators and their scientists,” says Jeanette Ishii, economic development coordinator, Fresno County. “And one of the things that we are doing is looking at what [types of] food processing technology would enhance our economy and businesses in Fresno.” With that academic assistance, the county is looking at what new crops can be introduced in the county and how they can pair that with the food processing technologies currently being developed.
Moving east to Wisconsin, there is a growing corporate mentality when it comes to innovation in the milk production business, says Bruce Mommaerts, executive director, Oconto County Economic Development Corp., which is located in northeastern Wisconsin. He says the children of farm families are earning chemistry degrees or business management degrees, and then return to help run the farm.
Mommaerts says the sophistication required to operate a dairy farm, which runs 24 hours is completely different than running an operation in previous years. “That raises the bar,” he says. “There was a time in agriculture where there was always the issue of was the farmer producing A grade milk or B grade milk. Now, pretty much everybody in the marketplace is producing A grade milk. That is a good thing for the consumer and good for the farmer,” who consider innovation to be just another aspect of success in the food processing business.
Talent
In addition to educating an ag-based workforce, an available pool of qualified workers is a key concern because the larger the business, the greater the need. A large food processing region located on the Eastern Seaboard of the country, home to manufacturing operations such as The Hershey Co., Archer Daniels Midland Co. and Bimbo Bakeries is Hazleton, Pa. That city has taken advantage of a food processing initiative created by CAN DO, Inc., a nonprofit economic development corporation in Greater Hazleton that was created to assist companies in all aspects of their operations, including networking and the certification of food workers. There are a total of 2,250 employees and more than 2.5 million square feet of food processing and food distribution in Greater Hazleton. Here, distribution, logistics and low operating costs are just some of the advantages that help companies in Greater Hazleton compete with other markets, says Joseph Lettiere, vice president of sales and marketing, CAN DO.
The pace of expansion is picking up in Hazleton. Archer Daniels Midland is leading the charge, and expects to employ up to 220 people when the company ramps up its cocoa processing operations. And, the demands for a qualified and trained workforce to handle the highly automated and technologically advanced ADM operations is a prime concern. “Our goal is to create technical jobs that are value-added ones,” Lettiere says. “We can utilize the skills of the labor force that we have here to give us the competitive advantages [working] in a stable product line [like cocoa processing] that help keep companies here for 30, 40, 50 years or beyond.”
While food production with cocoa is a legacy business in the region, there is also a focus on creating more jobs by nurturing the development of more food processing related companies. That's where Ben Franklin Technology Partners of Northeastern Pennsylvania (BFTP/NEP) comes in, one of four state-funded economic development organizations, and which supports job creation efforts.
“Since 1983, we created almost 14,000 jobs, and we retained more than 21,000 jobs,” says Laura Eppler, director of marketing, BFTP/NEP. “And these are jobs that pay roughly 23 percent over the state average and they are non-farm jobs. So from a state perspective they have gotten a 3.5 to 1 percent return on the state tax revenue for every dollar that they have invested in the program.”
Growing Markets
Back in Wisconsin, a well established rail infrastructure that has supported the paper industry for years has contributed to the attraction of food processors, says Connie Loden, president and CEO, Heart of Wisconsin Business and Economic Alliance, which markets the Wisconsin Rapids region, located in central Wisconsin. “We have a landscape that supports our agriculture product,” Loden says, “with this rail infrastructure adopted from another industry and a telecommunications infrastructure that is quite advanced for most rural communities due to some Fortune 500 software companies [located in the area].”
The expansion of food processing clusters leads to the attraction of supporting businesses, such as cold storage facilities. For example, in Ottumwa, Iowa, an Omaha, Neb.-based refrigeration company has set up operations adjacent to the Cargill Meat Solutions plant in Ottumwa. These businesses naturally represent new construction developments, not just a remodeling of older buildings, which is another boost to the economic development in an area. “They can't just take a building and upgrade it to a food-grade building,” says Roger Jones, executive director, Ottumwa Economic Development Corp. “These companies want to build their own facilities.”
The focus on delivering fresher products to consumers that demand healthier and fresher foods has created opportunities for food processing cluster developments throughout the country, such as in Louisiana and its sweet potato crops. “We think that Louisiana sweet potatoes are very high quality,” says Charlie Kirkbride, plant manager, ConAgra Foods, Inc. “And we are very confident that the [sweet potato] acreage can expand to supply this plant. Those are the main drivers to putting this processing operation here.”
ConAgra's new $200 million sweet potato processing plant, scheduled to open in November 2010, will be one of the first food plants in the country built from the ground up with the newest and best processing and packaging technologies in the industry. What helped the decision to build a plant in Delhi, La.? The tipping point Kirkbride says was the state's assistance with providing water and waste water treatment services. “Both of those things are real important to a potato processing plant, and neither one of them make any money,” Kirkbride says. “We pay them back in user fees, but at least we don't have to put up the capital up front.”
Sustainable Food
Expanding food processing businesses are also taking advantage of developments in the sustainability sector to keep their operations lean in order to continue the focus on research and development activities. Hazleton has identified a parcel of land to host a solar farm. “We are actively trying to recruit solar manufacturers and develop a solar farm to assist in the existing industry's energy needs,” Lettiere says. The identified site is located near the Humboldt Industrial Park, and is projected to host a five megawatt solar farm, which provides another competitive advantage to existing and prospective industries.
New ways of finding and using energy from natural sources has become a common theme among food processors, and it seems to fit perfectly with an industry that uses the all-natural elements to create a product that they manufacture and bring to market.
For example, Fresno's Wawona Frozen Foods uses the byproducts of its peach processing operation to assist the company in becoming “better stewards of what we manufacture here,” Smittcamp says. The company dries the pits and burns them for fuel. The peels are dried and used as feed for cattle.
A new cycle is beginning as growers find better ways to grow and develop their crops, and processors find better ways to deliver products to consumers, as well as incorporating sustainability practices to ensure a more efficient manufacturing process.
David Hodes is a freelance writer based in Overland Park, Kan. He is the owner of a media content production company, DH Productions. E-mail Hodes at dhodes1@studioatamg.com.
For complete details on the organizations featured in this article, visit:
Ben Franklin Technology Partners of Northeastern Pennsylvania, www.nep.benfranklin.org
California State University-Fresno, www.csufresno.edu
CAN DO Inc., www.hazletoncando.com
ConAgra Foods, www.conagrafoods.com
Economic Development Corporation of Fresno County (Calif.), www.fresnoedc.com
Heart of Wisconsin Business and Economic Alliance, www.heartofwi.com
Oconto County (Wis.) Economic Development Corp., www.ocontocounty.org Ottumwa (Iowa) Economic Development Corp., www.ottumwadevelopment.org
Wawona Frozen Foods, www.wawona.com
Controlled Environments Vital To Food Processing
For food processing companies, meeting federal regulations, such as installing certified floors, ceilings, and specific drain types, as well as installing approved dust and air handling systems, is a must. A controlled environment manufacturing facility is a key to success.
“In northern Nevada, we have the perfect climate for clean room and controlled environment manufacturers,” says Rob Hooper, executive director, Northern Nevada Development Authority, which includes Carson City. A major operational cost of any controlled environment is found in the heating, ventilation and air conditioning systems. Because of the low humidity element in northern Nevada, these costs are lower than other regions. “Due to the lack of humidity you do not have to put in expensive humidity scrubbers,” Hooper notes. Also, the Sierra region lacks temperature spikes, such as those that occur in Las Vegas and Arizona.
What's more, the high altitude of the Sierra region reduces mold, bacteria and fungi, which also reduces heating, ventilation and air conditioning costs.
In addition to cost advantages, controlled environment manufacturers benefit from expertise on the ground, in the form of Carson City resident Anne Marie Dixon, president of Cleanroom Management Associates, Inc., who is an international expert in the field of contamination control. She works with companies to analyze their needs, as well as develops curriculum for the industry. Western Nevada College will offer an initial controlled environment and clean room manufacturing certification course, complete with hands-on training.
While access to talent is important to expanding companies, so is the ability to select from an abundance of sites and facilities. Recently, a national food manufacturing company selected Carson City to build its West Coast location, and will realize a savings of $5.5 million, Hooper notes. That is because Carson City has placed a two-year moratorium on hook up fees for water and sewage, which can be exorbitant in the western United States. And in addition to the low-cost operating structure, the company will benefit from a logistical standpoint, as northern Nevada can equally serve, distance wise, Seattle to San Diego, Hooper says, which are within a one-day drive.
To learn more about the advantages of northern Nevada for controlled environment manufacturing activities, visit www.nnda.org.
