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Ingredients for a Healthy Site Selection Process in the Food Industry

In an industry that often preaches “innovate or die” and is constantly adapting to meet the evolving needs of today’s health-conscious and food-savvy culture, it has become imperative for food companies to plant their roots in communities that foster, nurture and inspire innovation

Q2 2019
Area Development interviewed Scott Kupperman, Founder, Kupperman Location Solutions, at our Miami Consultants Forum about the food industry dynamics that are influencing site selection in 2019 and beyond. Interview conducted by Margy Sweeney, Founder and CEO, Akrete, Inc. and Area Development Editorial Board member.
Economic developers are hungry for food processing and manufacturing companies to locate in their communities—and it’s easy to understand why. Food companies are proven economic drivers and diversifiers, breathing new life into almost every area of the supply chain, from raw materials and suppliers to transportation and packaging. The question then becomes, what does a food company need to be lured into a particular state, region or community?

In an industry that often preaches “innovate or die” and is constantly adapting to meet the evolving needs of today’s health-conscious and food-savvy culture, it has become imperative for food companies to plant their roots in communities that foster, nurture and inspire innovation. Savvy economic development organizations (EDOs) can ensure that this goal is met by understanding your company’s needs, wants and capital restraints and providing solutions that deliver on these requirements.

First things first
The food industry is incredibly dynamic, and companies come in all shapes and sizes. Each site selection must be treated as unique and it is fundamental to establish concrete goals and criterion for defining success. What is important to your business? While there’s no one-size-fit-all solution, two things reign supreme: profitability and innovation.

Food processors and manufacturers work on very tight profit margins, leaving very little room for error. When you meet with an EDO, its team should bring to the forefront the parts of their communities that drive value, increase profitability and mitigate risk. Typically, their message includes financial incentives such as tax abatements and rebates. But while financial incentives are great for hooking your attention, an EDO may be able to offer many more opportunities to drive innovation.

What do we mean by innovation?
With regard to site selection for food companies, innovation can take on many forms. An experienced EDO will know that the food sector operates on incredibly thin margins, so finding solutions for shortening supply chains, reducing operation costs and mitigating risks are essential. Traditional financial incentives aren’t the only form of support that a community can offer. Other vehicles for innovation include:
  • Access to mix of labor: A processing and manufacturing plant cannot function without being fully staffed with skilled workers. That’s why being close to sustainable streams of talent is crucial for success. Plus, much of the innovation needed to improve processing and manufacturing efficiencies will have to emerge through modifying packaging, waste use, water use and more. Wise EDOs offer community job training programs to help support your current and future labor needs. It is also important to get projected costs of labor from your EDO to assess if it fits within your business model.
  • Geography: Location is fundamental to shortening supply chains and improving efficiencies, but balance is key. Consider your most important supply chain needs, whether it’s proximity to raw materials and suppliers, or proximity to final end-users to reduce transportation costs.
  • Vibrant local economy: Collaboration with local businesses is a must for food companies. Wielding a mix of suppliers, raw materials, and proximity to end users and machine maintenance technicians ensures that your site will run smoothly from its introduction through growth and maturity.
Moving forward
It’s an incredibly exciting time in the food industry, and many EDOs want a piece of the pie in their communities. The key will always be innovation. Food companies should seek out the EDOs that create a welcoming atmosphere that supports and inspires innovation, with a healthy mixture of financial incentives, geographic excellency, community resources, and collaboration and support. If EDOs provide these ingredients, your company will be primed for a healthy site selection that sustains innovation and growth.

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