The food and beverage industry has experienced significant changes and advancements in the past several years. From regulations to technology and automation capabilities, the industry is being faced with new challenges. But, these challenges also lead to opportunities.
You Might Also Like
Explore This IssueOctober/November 2016
What’s Driving Food & Beverage Market Growth?
Growing consumer demand and the rise of new types of domestic and international requirements are largely driving these changes. Manufacturers recognize the need to update their operations to meet these demands and want to integrate flexibility, efficiency, and automated technology into all their processes. These requirements have also paved the way for financing to become more readily available to companies.
The implementation of the Food Safety Modernization Act (FSMA) is also a factor contributing to food and beverage market growth since companies must ensure their operations accommodate the new policies. As a result, many manufacturers are finding it more cost-effective to build new facilities instead of renovating their current operations.
In sectors such as U.S. protein, there is also significant growth as offshoring poses a growing number of challenges. Pennsylvania-based Clemens Food Group is designing and building a new pork processing facility in Coldwater, Mich. that is expected to process 10,000 hogs each day.
Mergers and acquisitions have always played an important growth role in the food industry, and recent years have held many of them. Brands such as Tyson Foods and Hillshire Brands merged, and Mars, Inc. acquired Proctor & Gamble’s pet food business. Kraft and Heinz also successfully completed their merger to form the Kraft Heinz Company, a transaction that created the fifth largest food and beverage company in the entire world.
When these deals take place, business strategies often change as well. Sometimes, the new business plan recommends new construction as opposed to working through the process of combining operations. For example, after acquiring Chicago-based Wrigley in 2008, Mars, Inc. expanded its existing manufacturing plant in Illinois to add the production of Skittles to its operations.
Last but certainly not least, the U.S. continues to attract food and beverage manufacturers for multiple reasons including its energy resources, its marketplace stability, and its workforce.
How to Make the Growth a Reality
Before food companies embrace growth in the form of new greenfield facilities or expansion projects, several considerations must be made; the most important is the critical control points (CCPs), the heartbeat of the food manufacturing process. As food safety is the foremost motivation for a food and beverage facility, all manufacturers have in place critical components that guarantee their brand’s commitment to food safety and quality. For some, this may be a certain piece of equipment that is central to all food preparation; for others, it might be the workers and their performance in producing a perfect product.
CCPs must be clearly defined and understood by all engineering, design, and construction partners before moving the first pile of dirt because they drive the design-build process. This understanding helps define the quantity and quality of products produced in a unit of time, how big the warehouse must be, how often the manufacturer ships products and receives raw materials, how many docks are needed, how the process flow should be developed, and how the layout should be positioned. It’s a process that begins at the goal and meticulously takes steps backwards to fully realize the project and bring it to fruition.