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For Food Manufacturers, the Right Economic Development Partner Is Critical

The ever-evolving food industry requires plenty of due diligence and community support in order to execute an effective relocation or expansion strategy.

Q1 2019
Area Development interviewed Amy Gerber, Executive Managing Director, Business Incentives Practice at Cushman & Wakefield — and lead moderator at our Women in Economic Development Consultants Forum — about the insights and trends discussed at the conference, including incentives negotiation, labor costs and, affordable housing. Interview conducted by Margy Sweeney, Founder and CEO, Akrete, Inc. and Area Development Editorial Board member.
The future of food manufacturing in the United States has never looked better. The industry is experiencing changes in processing, additions of manufacturing staff and new lines, and the opening of new plants while expanding capacity in others. Unprecedented mergers and acquisitions (M&A), including Mondelez’s acquisition of Tate’s Bake Shop, have led to company expansions that are outpacing consolidation. Capital investment by foreign companies is also driving the growth in the U.S. food and beverage sector — growth that is motivating some food processing firms to expand their footprints throughout the country.

If your food processing company is looking to relocate or expand into new markets, you’ll need an economic development partner that understands the food manufacturing industry. Following are a few topics you should be discussing with prospective communities as you look to relocate or expand.

A Path to Profitability
With razor-thin margins, food companies typically need to save anywhere they can — and incentives offer ripe opportunity. The most impactful incentives are those that can benefit your company even before the facility is opened, like cash grants, free land, training grant programs, utility incentives or any other options for offsetting the cost of improving or developing a building. Be sure to ask your economic development partner about any and all incentives that can make your move as cost-efficient as possible, so you can focus your resources on your business.

Minimizing Risks
Facing strict product expiration dates and other quality and safety compliance considerations, the food industry is all about managing risks. Logistics has become a significant concern, because the shortage of truck drivers puts product delivery timelines at risk. Environmental quality is another unknown if you’re considering an unfamiliar community. You’ll need to know exactly what activities are taking place in the surrounding facilities to ensure that nearby plants are not posing pollution risks that could jeopardize your operations.

A well-prepared economic development agency will understand the importance of these and other risks and will be prepared to propose possible solutions or alternatives. For example, the economic development organization should be able to navigate access to reliable and stable transportation providers or identify sites that don’t pose contamination risks. In a more complex scenario, the economic development agency may need to work with property owners to assemble an appropriate site or provide assurances that sites near yours will not be used for polluting industries.

Seeking Innovation Infrastructure
To keep pace with rapidly changing consumer demands, the food industry is one of the most innovative U.S. industries by necessity. However, product development is an expensive process. Your economic development partners should understand that you can’t afford to delay production once approvals are achieved — you need to maintain a constant cycle of innovation and of bringing new products to market. And for that, you need talent.

Your economic development partner should have a long-term strategy for building a pipeline of talent, whether highly trained food scientists for R&D or skilled labor for your advanced manufacturing operations. Specifically, you’ll need to know how they plan to attract millennials and Gen Zers as they graduate from college and their strategy for training younger generations in secondary education programs.

Longevity
For food companies, the ever-evolving industry requires plenty of due diligence and community support to execute an effective relocation or expansion strategy. Having high expectations of your economic development partners will help set the stage for a successful relocation or expansion.

Editor's Note: Area Development’s Women in Economic Development Forum featured a presentation on attracting food processing companies by Amy Gerber, Executive Managing Director, Business Incentives Practice at Cushman & Wakefield. The preceding were some key topics from Gerber’s presentation and subsequent interview with Area Development as compiled by Jennifer Harris, Area Development contributor, Akrete, Inc.

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