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Tva Webinar Target Markets Food Processing & Packaging Shared Version

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The document discusses trends, challenges, and opportunities in the food processing and packaging industry. It provides statistics on the size and growth of the US food industry. Key trends include increasing demand for organic, healthy, ethnic, and locally-sourced foods. Challenges involve ensuring adequate water supply and wastewater treatment. The Valley region is well-positioned for food processing due to its existing industry base, skilled workforce, and central US location. Competition comes from other low-cost regions in the South and Southeast.

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T E N N E S S E E VA L L E Y A U T H O R I T Y E C O N O M I C D E V E L O P M E N T The Valley Works Online Learning Series: Target Markets Food Processing & Packaging October 18, 2011 Business Sensitive not for further distribution without TVA ED Permission
Jeffrey R. Taylor, Target Market Specialist Business Sensitive not for further distribution without TVA ED Permission 2
Todays Goals Facts Trends Challenges Competition Prepare to Recruit Questions Business Sensitive not for further distribution without TVA ED Permission 3
Basic Need Psychologist Abraham Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory of Human Motivation Self Actualization Self personal growth and fulfillment Esteem Needs esteem achievement, status, responsibility, reputation, etc. Belongingness and Belongingness and Love Needs love needs family, affection, relationships, work group, etc. Safety Needs stability, etc. Safety protection, security, order,needs law, limits, Biological and Biological and Physiological Needs physiological needs basic life needs air, food, drink, shelter, warmth, sleep, etc. Business Sensitive not for further distribution without TVA ED Permission 4
Food Processing Facts U.S. largest producer of processed foods Recession-proof Immune to global competition Business Sensitive not for further distribution without TVA ED Permission 5
Facts: 10 Largest U.S. Manufacturing Industries Based on 2010 Revenue in Millions 1. Petroleum and Coal Products: $1,027,938 (ExxonMobil, Chevron, Conoco) 2. Computers and Other Electronic Products: $581,344 (HP, IBM, Microsoft) 3. Chemicals: $387,326 (P&G, Dow, Dupont) 4. Food: $284,390 (ADM, Kraft, Tyson) 5. Pharmaceuticals: $257,975 (J&J, Pfizer, Abbot) 6. Aerospace & Defense: $250,446 (Boeing, United, Lockheed Martin) 7. Electrical Equipment & Appliances: $245,307 (GE, Emerson, Whirlpool) 8. Machinery: $194,098 (Caterpillar, Deere, Xerox) 9. Motor Vehicles: $150,721 (Ford, Navistar, PACCAR) 10. Beverages: $133,619 (Pepsi, Coke, Dr. Pepper/Snapple) Business Sensitive not for further distribution without TVA ED Permission 6
Some Food Processing & Packaging Companies in the Valley Business Sensitive not for further distribution without TVA ED Permission 7
Food Processing & Packaging: Location Drivers Building requirements (well lit, washable walls, floor drains, climate control, freezer space) Quality control: Hazard Analysis & Critical Control Points (HACCP) General Manufacturing Practice (GMP) Isolation (Green Mountain Coffee) Proximity to suppliers Business Sensitive not for further distribution without TVA ED Permission 8
Food Processing & Packaging: Location Drivers Food related clusters (supplement workforce and suppliers) Water volume and water quality Wastewater treatment capacity Workforce availability Business Sensitive not for further distribution without TVA ED Permission 9
Valley Strengths Strong existing industry base Reliable, competitively priced power Skilled machine operators Excellent technology training Central U.S. location Transportation network Business Sensitive not for further distribution without TVA ED Permission 10
Food Processing: Trends Business Sensitive not for further distribution without TVA ED Permission 11
Food Processing: Organic Organic means product grown in a chemical-free environment 78% of manufacturers label at least some products as natural (Natural means that product has been made solely from botanical resources without additives or preservatives) Consumers increasingly favor foods that do not contain complicated additives or preservatives U.S. sales of organic food and beverages growth 1990 = $1 billion 2010 = $26.7 billion Highest growth in 2010 were organic fruits and vegetables up 11.8% over 2009 Certified organic acreage in the U.S. reached more than 4.8 million acres in 2008, according to latest data posted by USDA Business Sensitive not for further distribution without TVA ED Permission 12
Food Processing: Organic Business Sensitive not for further distribution without TVA ED Permission 13
Food Processing: Health Trend continues for healthy diet and lifestyle growth; new products include: Whole grains Antioxidants Omega-3 fatty acids Probiotics Portion-sized snack foods are important for healthy diet Value-added convenience foods also important Greater demand for functionally defined foods. These products target a certain condition or specific parts of the body, such as foods to: Boost the immune system Aid eye, bone health, etc. Business Sensitive not for further distribution without TVA ED Permission 14
Food Processing: Ethnic Its been said that all food is ethnic food According to Mintel, there are a variety of outlets where consumers are learning more about foods that arent common to their ethnic background: 26% of ethnic food-lovers say they were introduced to the cuisine by TV programs, newspapers or magazines featuring cuisine from other countries 23% tried the items after reading cookbook recipes that included ethnic dishes 18% said they grew to like ethnic fare after traveling abroad 25% were introduced to a new ethnic cuisine because of living in a culturally diverse neighborhood Business Sensitive not for further distribution without TVA ED Permission 15
Food Processing: Local and Artisan Swiftly becoming a lifestyle is a return to old world shopping: visiting the butcher, baker, farmers markets More locally raised meats and produce, farm shares and communally supported agriculture (CSA) Popular food network shows are highlighting the talent of highly skilled and focused chefs, i.e., unusual ice cream and popsicle flavors, specialty bacon, small batch cheeses, gourmet junk foods, etc. Business Sensitive not for further distribution without TVA ED Permission 16
Food Processing: Packaging Recent survey indicated that 72% of U.S. consumers are willing to pay more for improved food and beverage packaging that guarantees taste, freshness and safety Advanced packaging includes: Advanced films to prevent spoilage Use of biodegradable and edible packaging materials Active packaging interacts chemically with the food inside to safeguard against product degradation from exposure to oxygen or moisture Benefit: you do not need to add preservatives to the food Current uses include produce, bakery items, fresh pasta and meats Business Sensitive not for further distribution without TVA ED Permission 17
Food Processing: Challenges Water volume Water quality Wastewater treatment capacity Environmental (especially meat-related) Business Sensitive not for further distribution without TVA ED Permission 18
Food Processing: Water Supply Receive water from various locations Groundwater (aquifers) Surface water (lakes and rivers) Conservation and the sea through desalination Purified, disinfected through chlorination or fluoridation Sent to reservoirs where stored for use Business Sensitive not for further distribution without TVA ED Permission 19
Food Processing: Water Quality Physical, chemical and biological characteristics of water Measure of water condition relative to requirements of biotic species and/or any human need or purpose Vital role to food manufacturing to ensure food quality and efficient production Should not produce smells or flavors that would affect the final food product Drinking water quality has a microbiological and a physicochemical dimension Business Sensitive not for further distribution without TVA ED Permission 20
Food Processing: Aquifer Aquifer a wet, underground layer of water-bearing permeable rock or unconsolidated materials (gravel, sand or silt) from which groundwater can be usefully extracted using a water well Business Sensitive not for further distribution without TVA ED Permission 21
Food Processing: Competition South and Southeast (SEC more than football) Similarities: Climate Workforce Suppliers Transportation Proximity to customers Business Sensitive not for further distribution without TVA ED Permission 22
Project Passport: Green Mountain Coffee Traditional Drivers: Transportation Building Characteristics Not Traditional Drivers: Sustainability Culture Arts Isolation Business Sensitive not for further distribution without TVA ED Permission 23
Project Green: Tanimura & Antle Driver: Eastern U.S. location Greenhouse and hydroponic process Larger number of consumers Driver: Climate and weather Elevation about sea level Number of sunny days versus cloudy days Relative humidity levels year round Business Sensitive not for further distribution without TVA ED Permission 24
Active Projects in the Valley Legend and Leaders $27M, 285 jobs Drivers: transportation and distribution Project White Wave $20M, 100 jobs Drivers: transportation and distribution Project Fishbowl $19M, 90 Jobs Drivers: transportation, distribution, arts, culture, music outdoor activities and sustainability Business Sensitive not for further distribution without TVA ED Permission 25
Food Processing: Prepare to Recruit Showcase available specialized buildings and good sites Improve water volume/quality Showcase or improve wastewater treatment capacity Utilize related industry clusters for workforce and suppliers Highlight or improve specialized workforce training Inventory community sustainable assets and green- focused industries Business Sensitive not for further distribution without TVA ED Permission 26
Food Processing: Prepare to Recruit Build a spec building (consider LEED certification) Specs: 50,000 square feet expandable (flexibility to expand twice) 24-foot ceiling height Unfinished floor Business Sensitive not for further distribution without TVA ED Permission 27
Your Community Based on trends and facts, do you think that the food processing sector is a compatible target for your area? Yes No Business Sensitive not for further distribution without TVA ED Permission 28
Food Processing & Packaging Questions Business Sensitive not for further distribution without TVA ED Permission 29
T E N N E S S E E VA L L E Y A U T H O R I T Y E C O N O M I C D E V E L O P M E N T Put the TVA Economic Development team to work for you! Contact: Jeffery R. Taylor, Target Market Specialist 615-289-4667 / jrtaylor@tva.gov Business Sensitive not for further distribution without TVA ED Permission

More Related Content

Tva Webinar Target Markets Food Processing & Packaging Shared Version

  • 1. T E N N E S S E E VA L L E Y A U T H O R I T Y E C O N O M I C D E V E L O P M E N T The Valley Works Online Learning Series: Target Markets Food Processing & Packaging October 18, 2011 Business Sensitive not for further distribution without TVA ED Permission
  • 2. Jeffrey R. Taylor, Target Market Specialist Business Sensitive not for further distribution without TVA ED Permission 2
  • 3. Todays Goals Facts Trends Challenges Competition Prepare to Recruit Questions Business Sensitive not for further distribution without TVA ED Permission 3
  • 4. Basic Need Psychologist Abraham Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory of Human Motivation Self Actualization Self personal growth and fulfillment Esteem Needs esteem achievement, status, responsibility, reputation, etc. Belongingness and Belongingness and Love Needs love needs family, affection, relationships, work group, etc. Safety Needs stability, etc. Safety protection, security, order,needs law, limits, Biological and Biological and Physiological Needs physiological needs basic life needs air, food, drink, shelter, warmth, sleep, etc. Business Sensitive not for further distribution without TVA ED Permission 4
  • 5. Food Processing Facts U.S. largest producer of processed foods Recession-proof Immune to global competition Business Sensitive not for further distribution without TVA ED Permission 5
  • 6. Facts: 10 Largest U.S. Manufacturing Industries Based on 2010 Revenue in Millions 1. Petroleum and Coal Products: $1,027,938 (ExxonMobil, Chevron, Conoco) 2. Computers and Other Electronic Products: $581,344 (HP, IBM, Microsoft) 3. Chemicals: $387,326 (P&G, Dow, Dupont) 4. Food: $284,390 (ADM, Kraft, Tyson) 5. Pharmaceuticals: $257,975 (J&J, Pfizer, Abbot) 6. Aerospace & Defense: $250,446 (Boeing, United, Lockheed Martin) 7. Electrical Equipment & Appliances: $245,307 (GE, Emerson, Whirlpool) 8. Machinery: $194,098 (Caterpillar, Deere, Xerox) 9. Motor Vehicles: $150,721 (Ford, Navistar, PACCAR) 10. Beverages: $133,619 (Pepsi, Coke, Dr. Pepper/Snapple) Business Sensitive not for further distribution without TVA ED Permission 6
  • 7. Some Food Processing & Packaging Companies in the Valley Business Sensitive not for further distribution without TVA ED Permission 7
  • 8. Food Processing & Packaging: Location Drivers Building requirements (well lit, washable walls, floor drains, climate control, freezer space) Quality control: Hazard Analysis & Critical Control Points (HACCP) General Manufacturing Practice (GMP) Isolation (Green Mountain Coffee) Proximity to suppliers Business Sensitive not for further distribution without TVA ED Permission 8
  • 9. Food Processing & Packaging: Location Drivers Food related clusters (supplement workforce and suppliers) Water volume and water quality Wastewater treatment capacity Workforce availability Business Sensitive not for further distribution without TVA ED Permission 9
  • 10. Valley Strengths Strong existing industry base Reliable, competitively priced power Skilled machine operators Excellent technology training Central U.S. location Transportation network Business Sensitive not for further distribution without TVA ED Permission 10
  • 11. Food Processing: Trends Business Sensitive not for further distribution without TVA ED Permission 11
  • 12. Food Processing: Organic Organic means product grown in a chemical-free environment 78% of manufacturers label at least some products as natural (Natural means that product has been made solely from botanical resources without additives or preservatives) Consumers increasingly favor foods that do not contain complicated additives or preservatives U.S. sales of organic food and beverages growth 1990 = $1 billion 2010 = $26.7 billion Highest growth in 2010 were organic fruits and vegetables up 11.8% over 2009 Certified organic acreage in the U.S. reached more than 4.8 million acres in 2008, according to latest data posted by USDA Business Sensitive not for further distribution without TVA ED Permission 12
  • 13. Food Processing: Organic Business Sensitive not for further distribution without TVA ED Permission 13
  • 14. Food Processing: Health Trend continues for healthy diet and lifestyle growth; new products include: Whole grains Antioxidants Omega-3 fatty acids Probiotics Portion-sized snack foods are important for healthy diet Value-added convenience foods also important Greater demand for functionally defined foods. These products target a certain condition or specific parts of the body, such as foods to: Boost the immune system Aid eye, bone health, etc. Business Sensitive not for further distribution without TVA ED Permission 14
  • 15. Food Processing: Ethnic Its been said that all food is ethnic food According to Mintel, there are a variety of outlets where consumers are learning more about foods that arent common to their ethnic background: 26% of ethnic food-lovers say they were introduced to the cuisine by TV programs, newspapers or magazines featuring cuisine from other countries 23% tried the items after reading cookbook recipes that included ethnic dishes 18% said they grew to like ethnic fare after traveling abroad 25% were introduced to a new ethnic cuisine because of living in a culturally diverse neighborhood Business Sensitive not for further distribution without TVA ED Permission 15
  • 16. Food Processing: Local and Artisan Swiftly becoming a lifestyle is a return to old world shopping: visiting the butcher, baker, farmers markets More locally raised meats and produce, farm shares and communally supported agriculture (CSA) Popular food network shows are highlighting the talent of highly skilled and focused chefs, i.e., unusual ice cream and popsicle flavors, specialty bacon, small batch cheeses, gourmet junk foods, etc. Business Sensitive not for further distribution without TVA ED Permission 16
  • 17. Food Processing: Packaging Recent survey indicated that 72% of U.S. consumers are willing to pay more for improved food and beverage packaging that guarantees taste, freshness and safety Advanced packaging includes: Advanced films to prevent spoilage Use of biodegradable and edible packaging materials Active packaging interacts chemically with the food inside to safeguard against product degradation from exposure to oxygen or moisture Benefit: you do not need to add preservatives to the food Current uses include produce, bakery items, fresh pasta and meats Business Sensitive not for further distribution without TVA ED Permission 17
  • 18. Food Processing: Challenges Water volume Water quality Wastewater treatment capacity Environmental (especially meat-related) Business Sensitive not for further distribution without TVA ED Permission 18
  • 19. Food Processing: Water Supply Receive water from various locations Groundwater (aquifers) Surface water (lakes and rivers) Conservation and the sea through desalination Purified, disinfected through chlorination or fluoridation Sent to reservoirs where stored for use Business Sensitive not for further distribution without TVA ED Permission 19
  • 20. Food Processing: Water Quality Physical, chemical and biological characteristics of water Measure of water condition relative to requirements of biotic species and/or any human need or purpose Vital role to food manufacturing to ensure food quality and efficient production Should not produce smells or flavors that would affect the final food product Drinking water quality has a microbiological and a physicochemical dimension Business Sensitive not for further distribution without TVA ED Permission 20
  • 21. Food Processing: Aquifer Aquifer a wet, underground layer of water-bearing permeable rock or unconsolidated materials (gravel, sand or silt) from which groundwater can be usefully extracted using a water well Business Sensitive not for further distribution without TVA ED Permission 21
  • 22. Food Processing: Competition South and Southeast (SEC more than football) Similarities: Climate Workforce Suppliers Transportation Proximity to customers Business Sensitive not for further distribution without TVA ED Permission 22
  • 23. Project Passport: Green Mountain Coffee Traditional Drivers: Transportation Building Characteristics Not Traditional Drivers: Sustainability Culture Arts Isolation Business Sensitive not for further distribution without TVA ED Permission 23
  • 24. Project Green: Tanimura & Antle Driver: Eastern U.S. location Greenhouse and hydroponic process Larger number of consumers Driver: Climate and weather Elevation about sea level Number of sunny days versus cloudy days Relative humidity levels year round Business Sensitive not for further distribution without TVA ED Permission 24
  • 25. Active Projects in the Valley Legend and Leaders $27M, 285 jobs Drivers: transportation and distribution Project White Wave $20M, 100 jobs Drivers: transportation and distribution Project Fishbowl $19M, 90 Jobs Drivers: transportation, distribution, arts, culture, music outdoor activities and sustainability Business Sensitive not for further distribution without TVA ED Permission 25
  • 26. Food Processing: Prepare to Recruit Showcase available specialized buildings and good sites Improve water volume/quality Showcase or improve wastewater treatment capacity Utilize related industry clusters for workforce and suppliers Highlight or improve specialized workforce training Inventory community sustainable assets and green- focused industries Business Sensitive not for further distribution without TVA ED Permission 26
  • 27. Food Processing: Prepare to Recruit Build a spec building (consider LEED certification) Specs: 50,000 square feet expandable (flexibility to expand twice) 24-foot ceiling height Unfinished floor Business Sensitive not for further distribution without TVA ED Permission 27
  • 28. Your Community Based on trends and facts, do you think that the food processing sector is a compatible target for your area? Yes No Business Sensitive not for further distribution without TVA ED Permission 28
  • 29. Food Processing & Packaging Questions Business Sensitive not for further distribution without TVA ED Permission 29
  • 30. T E N N E S S E E VA L L E Y A U T H O R I T Y E C O N O M I C D E V E L O P M E N T Put the TVA Economic Development team to work for you! Contact: Jeffery R. Taylor, Target Market Specialist 615-289-4667 / jrtaylor@tva.gov Business Sensitive not for further distribution without TVA ED Permission