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Inward Investment Guides
Food Processing Adapts to Environmental, Government Challenges
The food processing industry is adjusting to the challenges of energy efficiency, an environmental disaster in the Gulf of Mexico, and unfavorable legislation.
John K. Borchardt (September 2010)
(page 3 of 3)
The plant at the University of California at Davis converts food processing and restaurant waste into useful energy. Photo courtesy University of California, Davis.
Trends and challenges
Environmental damage from the Gulf of Mexico oil spill has significantly diminished the catch of oysters, shrimp, and fish, particularly in Louisiana. This has resulted in economic hardship for those who harvest these animals, as well as the food processing plants that package and sell them to restaurants and grocery stores. Seafood imports, already climbing before the spill, will accelerate, and recovering the lost market share will challenge U.S. food processors.

Depending partly on the spill's long-term effects, opportunities may grow for freshwater shrimp fisheries. Freshwater shrimp farms are located as far away from the sea as Kentucky. While most production currently comes from Asia and South America, U.S. freshwater shrimp farming is a $9 billion dollar industry, and poised to expand.

New federal government dietary guidelines expected this fall will encourage reduced consumption of sweeteners, fats (particularly trans fat), and salt. Additionally, several states are passing sin taxes to discourage production and consumption of sweetened soft drinks. California, Washington, Arkansas, Tennessee, Virginia, and the city of Chicago will add the tax, and similar taxes have also been proposed in Arizona, Connecticut, Hawaii, Massachusetts, Michigan, New Hampshire, New Mexico, New York, Rhode Island, and Vermont.

Governments are also targeting school food with proposed laws to eliminate trans fats in cafeterias and serve more fresh fruits and vegetables. And vending machine sales of sweet snacks and sodas may be restricted.

But no matter the constraints placed on the industry, its history of growth and innovation will allow it to rise to the challenges of the day.

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