New Regional Study Reveals Major Challenges and Opportunities for Chicagoland Food and Beverage Manufacturers
Chicago, Illinois (PRWEB) August 20, 2015 -- The Chicagoland food manufacturing industry represents a massive part of the regional economy, offering major opportunities for inclusive economic growth, as detailed in the "Chicagoland FOOD" report published August 19, by RW Ventures and IMEC. Extensive analysis and input from scores of food firms and industry stakeholders highlights dramatic changes underway in the food industry – such as rapidly changing consumer tastes, complex new food safety regulations and aging workforces requiring skill upgrades – that are threatening the viability and growth of the region’s food firms. Efforts are underway by the leadership of food firms and the business community to collaboratively grow the food industry, and help it capitalize on emerging product areas, changing industry dynamics, and opportunities for inclusive growth.
Chicago’s food processing and packaging industry is the second largest in the nation, second only to Los Angeles. Approximately 4,500 firms make up the region’s food cluster, accounting for 130,000 employees and $32 billion in sales (see “Food Cluster Snapshot”). Chicago’s food and beverage manufacturers are among the most productive in the nation, but their advantage has been slipping recently, suggesting that these firms would benefit from collaborative efforts to provide new technology, business services, workforce training, finance and other support to seize on significant growth opportunities.
Emerging product areas are opening new markets for manufacturers, especially for small and medium-sized entereprises. Manufacturers are adjusting to changing consumer tastes by producing healthy and convenient foods, while responding to growing demand for local and sustainable products. Additionally, increasingly diverse demographics in the region and across the nation, and consumers’ expanding palates, are driving the growing variety of ethnic foods, blended flavors, and indulgence options in today’s food marketplace.
Changing industry dynamics, particularly around regulatory, technological, and workforce-related issues, are challenging firm operations and begging for coordinated responses. Food safety and regulatory changes such as the federal Food Safety Modernization Act (FSMA) are heightening requirements that firms must meet to minimize risks of foodborne illnesses. Some 71% of businesses surveyed in 2013 expected the new FSMA rules to impact their operations, but nearly half were unsure how. These same manufacturers may also be uncertain how to manage changes in technology and innovation. New processing and packaging technologies (such as self-heating cans and packaging that can indicate product freshness) present openings for firms to develop new product lines or improve productivity and efficiency, but firms report difficulty in harnessing these opportunities. Furthermore, both regulatory and technology changes impact the industry’s workforce, requiring upskilling and incumbent worker training to adjust to these trends.
The characteristics of the food industry also naturally create opportunities for inclusive growth, critical to sustainable economic growth for the region. SMEs represent 94% of all food and beverage manufacturing establishments and account for roughly 40% of employment and sales, and those shares have been growing, creating potential for entrepreneurs and small food firms. Food manufacturing also provides accessible, quality employment options and job ladders, with production facilities distributed throughout the region’s neighborhoods.
Given the impact of this cluster on the Chicago region’s economy and industry trends that are presenting major opportunities and challenges, the time is right to more deliberately focus on Chicagoland’s food cluster and develop collaborative efforts to support its growth. Other regions in the U.S. and around the world have responded to similar opportunities and challenges by forming food cluster organizations, bringing together disparate resources to jointly tackle common concerns. Despite Chicagoland’s considerable number of food firms and institutional resources, and many disparate food-related initiatives, no such organization exists here.
The Chicagoland Chamber of Commerce, Cook County Council of Economic Advisors, World Business Chicago and leadership from the food industry are set to launch a new industry cluster organization for food and beverage manufacturing and packaging companies in the greater Chicagoland area. Chicagoland FOOD will connect food manufacturers and industry stakeholders, providing a vehicle for firms to collaborate to solve common challenges and capitalize on emerging growth opportunities. Major support for this initiative has been provided by the MacArthur Foundation.
The Chicagoland FOOD Report and appendices can be found online at http://rw-ventures.com/publications/r_economies.php.
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About RW Ventures
RW Ventures, LLC specializes in developing market-based products and enterprises for growing urban and regional economies. By bringing sophisticated economic analysis to urban markets, the firm creates the information resources, products and institutions necessary to improve performance and drive inclusive economic growth. RW Ventures is focused on practitioner-driven research and product development to help businesses, civic leadership groups, community-based organizations, local governments and foundations devise targeted economic development strategies at the industry, neighborhood, city and regional level. For more information visit http://rw-ventures.com/
About IMEC
IMEC was established in 1996 with the goal of improving the productivity and competitiveness of Illinois’ small and mid-sized manufacturing firms. A non-profit economic development organization, IMEC is funded in part by the National Institute of Standards and Technology’s Manufacturing Extension Partnership, the Illinois Department of Commerce and Economic Opportunity, and through fees paid by Illinois manufacturers for IMEC’s services. IMEC has 11 offices statewide and 45 full-time manufacturing improvement specialists. For more information visit http://www.imec.org/
Amy Fitzgerald, Illinois Manufacturing Excellence Center, http://www.imec.org, +1 (309) 677-2977, [email protected]
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