FOOD & BEVERAGE PROCESSING...Mar 02, 2018 · for driving growth in food and beverage processing...

FOOD & BEVERAGE PROCESSING

MARKETING & BUSINESS DEVELOPMENT STRATEGY

Prepared for:

Indiana Michigan Power

March 2, 2018

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................ 1

PROJECT BACKGROUND ............................................................................ 8

METHODOLOGY ........................................................................................ 10

BAKING AND SNACK FOOD .................................................................... 19

DAIRY ......................................................................................................... 30

FRUIT AND VEGETABLE PROCESSING ...................................................... 42

MEAT AND POULTRY ................................................................................. 54

BEVERAGE ................................................................................................. 67

CONFECTIONERY ...................................................................................... 77

FLAVORS, DRESSINGS, AND SEASONINGS .............................................. 85

ANIMAL FOOD .......................................................................................... 93

LABOR ANALYSIS .................................................................................... 100

WATER AND WASTEWATER ..................................................................... 111

APPENDICES ............................................................................................ 116

Executive Summary

1

EXECUTIVE SUMMARY

Austin Consulting (Austin) developed a research based Marketing and Business

Development Strategy for Indiana Michigan Power (I&M) to drive growth within

the food and beverage processing and value-added agricultural industries. The

food and beverage subsector has been identified by I&M and its regional

economic development partners as a target growth industry. The industry plays

an important role in the region’s industrial economy and the region has

demonstrated success in attracting investment from food and beverage

companies. Between 2006 and 2016, the region added 24% employment in the

subsector, while U.S. subsector employment grew by just 8% during that time.

A wide range of food and beverage products are produced within the region.

Baking and Snack Food accounts for the largest share of employment in the

industry, followed by Dairy, Fruit and Vegetable Processing, Meat and Poultry

and Beverage. The Beverage group has experienced the most significant

growth in employment since 2006, followed by Dairy, and Meat and Poultry.

Employment totals and employment growth in each industry group are

highlighted in Figure ES.1 below.

Austin conducted in-depth research into each of these industry groups to

understand what regional assets support these companies, and what issues or

barriers may exist that would limit future growth opportunity within each group.

An important part of this research included a detailed analysis of the regional

supply chain that supports each of these industry groups. Figure ES.2 below

Description2016

Jobs

% Change

in Jobs

(2006-2016)

Baking and Snack Food 4808 26%

Dairy 2482 40%

Fruit and Vegetable Processing 2059 -17%

Meat and Poultry 1811 40%

Beverage 1515 248%

Confectionery 1080 26%

Flavors, Dressings, and Seasonings 559 16%

Animal Food 258 -17%

Figure ES.1: Food and Beverage - Overview of

the I&M Region

Source: Emsi 2017.3 Class of Worker

Executive Summary

2

demonstrates the important supply chain connections between agricultural

resources and the various stages of processing of food and beverage products.

Austin examined existing supply chain assets and relationships, and looked for

gaps that could reveal potential opportunities.

Figure ES.2: Food and Beverage Supply Chain

Agricultural Products Primary processing Secondary processing Tertiary processing

Fruits and vegetables Sorting, grading,

cleaning, cutting

Packaged fresh,

freezing, canning

Blending / repackaging,

potato chips, sauces, juices,

pickles

Grains Sorting, grading,

drying

Milled corn / wheat,

refined corn oil, corn

solids / sweeteners,

biofuels, animal feed

Breads, cakes, snacks, tortilla

chips

Oilseeds Sorting, grading Animal feed, soybean

oils, shortening

Salad dressings, baking and

snack foods

Milk Grading,

refrigeration

Fluid milk, cream,

condensed milk

Cottage cheese, ice cream,

cheese, yogurt, butter,

protein products

Eggs Sorting, grading,

cleaning

Liquid / dried egg

products

Pastas, baking and snack

foods, protein products

Meat and poultry Sorting, slaughtering,

refrigeration

Separation, cutting,

rendering, packaging Cooked meats, prepared

meals Aquaculture Sorting, freezing Cutting, packaging

Austin also examined national trends within each industry group to understand

what types of companies are more likely to be expanding based on consumer

preferences, new product development, and other issues affecting each group.

The following summarizes key findings from the research into each industry

group.

Executive Summary

3

Industry Groups

Baking and Snack Food businesses are dispersed throughout the region, with

over 84 businesses in total. These companies produce a wide range of products,

including breads, cookies, crackers, pastries, potato chips, pretzels, tortillas,

popcorn, and other snack foods.

• The industry has access to regional supply chain assets, including proximity

to suppliers of flour, refined oils and fats, and sweeteners.

• The region has demonstrated success in attracting major investment from

both new and existing companies, and forecasted growth projections for

the industry are favorable.

• The industry has important connections to other industry groups, including

Dairy, Fruit and Vegetable Processing and Confectionery.

Dairy companies throughout the region are some of the largest food industry

employers. Products produced by these companies include, fluid milk, cheese,

butter, cream, sour cream, cottage cheese, and ice cream.

• The industry is heavily supported by dairy farms concentrated in Northeast

Indiana and Southern Michigan.

• Regional dairy processors have experienced strong growth, and the area

successfully landed a major Walmart dairy processing facility expected to

come online soon. Forecasted growth projections for the industry group

are also favorable.

• Key opportunities for growth include other value-added products such as

yogurt and cheese, which are currently underrepresented in the area.

Fruit and Vegetable Processing operations are concentrated in the Southwest

Michigan and East Central Indiana areas.

• The industry group’s presence has strong ties to local agricultural

production, especially in the Southwest Michigan area due to the unique

microclimate and soils that support a diverse range of fruit and vegetable

crops.

• Overall, the industry has experienced a decline in employment as some

area processors have been adversely impacted by an increasing

demand for fresh and organic fruit and vegetables over canned

products. Industry growth forecasts both nationally and regionally are not

favorable.

Executive Summary

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• Opportunities to address some of these challenges include refocusing on

minimally processed products, fresh products, and a growing organic

sector.

Meat and Poultry companies in the region include large-scale poultry processors

and producers of cured meats, prepared meats, and egg products.

• Strong growth within the industry group has been driven by increasing

demand for poultry and pork products, including bacon. Business

expansion projects in and around the I&M region serve as evidence.

• The industry has strong ties to area livestock farms, which have grown to

keep up with increasing demand from processors.

• Growth forecast data for the I&M region is very positive.

Beverage manufacturing employment in the region is heavily concentrated on

alcoholic beverage production, but also includes production of juices and

bottled soda, water, and teas.

• Recent business and employment growth within the sector can be largely

attributed towards growth from start-ups and small-scale craft breweries,

wineries, and distilleries.

• Area fruit production supports the region’s juice and wine producers.

• Growth forecasts for the U.S. and the I&M region are positive. A high level

of innovation and new product development occurring within the

beverage industry presents opportunities for future growth and

diversification.

Confectionery production within the region is largely influenced by two major

confectionery plants which produce non-chocolate confectionery products.

• In comparison to other segments of the food industry, the confectionery

industry has been challenged with growth at the national level.

• Despite national data, employment growth has been very positive within

the I&M region.

Executive Summary

5

Flavors, Dressings, and Seasonings includes a small number of diverse companies

that produce flavorings, extracts, colors, syrups, condiments, dressings, and

other products, which are primary used as ingredients by consumers and other

processors.

• Industry presence in the region is primarily concentrated around the

Kalamazoo area.

• National growth forecasts for the industry are strong, especially for

natural-based food flavorings and ingredients.

• The industry depends on highly educated workers with backgrounds in

food science, chemistry, biochemistry, biology, engineering, and other

science disciplines, which contributes to higher wages than most

segments of the food and beverage industry.

Animal Food production in the area includes pet food manufacturing and

animal feed operations.

• Animal food manufacturing accounts for the smallest share of industry

employment within the region.

• Animal feed plant investments will continue to be influenced by locations

of livestock farms and meat and poultry processing plants.

• National growth forecasts for the industry are favorable.

Supporting Assets

Labor

Austin evaluated the area labor market by looking at employment and wage

data, and gathering feedback from area processors. Median wages within the

occupations that support the food and beverage industry are generally

competitive with or lower than the U.S., which is an advantage for attracting

new facility and expansion projects. A high rate of employment growth within

the industry subsector does not appear to have created significant pressures on

wages based on the most current available data.

However, companies interviewed by Austin also noted more recent pressures on

the labor market which have forced them to increase their wage structures to

attract and retain employees. Improvement in the industrial job market has also

created pressure on many food and beverage companies nationally. Employers

interviewed by Austin frequently cited competition for labor from the

recreational vehicle (RV) and automotive industries, which generally offer higher

Executive Summary

6

wages, as a challenge. Companies located in rural areas furthest from a city

population center cited the greatest challenges.

Food companies interviewed also noted the advantage of being able to recruit

food science graduates from regional universities, including Purdue, Michigan

State, and Ohio State.

Transportation

The regional transportation network is extensive with the presence of Interstates

69, 94, 80/90, and a state and U.S. highway system that supports delivery of

products to and from area food and beverage manufacturers. Food and

beverage processors within the I&M area benefit from the proximity and

connections to two major consumer markets, Chicago and Detroit, and a

central location for Midwest and eastern U.S. distribution.

While some companies benefit from direct access to the area rail network,

many regional food and beverage processors are dependent on intermodal

terminals in Chicago, a major connection hub between eastern and western

U.S. railroad providers. While some companies in the region expressed frustration

with having to truck shipments to and from Chicago for intermodal shipments,

the proximity of these hubs to the region can also be advantageous.

Water and Wastewater

Given the high importance of water and wastewater to food and beverage

production operations, Austin completed a survey of area providers to gather

information on available capacities and costs. While water and wastewater

rates vary significantly from one provider to another, rates evaluated were on

average competitive with comparative rate data from other communities within

each state and the U.S. Notably, several providers offer very low water and

wastewater rates.

Many of the providers surveyed also reported high volumes of available water

and wastewater treatment capacity. Some of the larger regional wastewater

systems indicated that they can also accept high volumes of effluent without

requiring pretreatment. This can be a significant competitive advantage for

attracting food and beverage facilities that would otherwise require investment

in significant pretreatment facilities.

Executive Summary

7

Recommendations

Based on the culmination of research, Austin developed a Marketing and

Business Development Strategy that identified targeted ideas and opportunities

for driving growth in food and beverage processing and value-added

agriculture. Key recommendations include:

• Support and identification of expansion opportunities from existing food

and beverage companies within the region.

• Targeted marketing material development leveraging information on

regional assets.

• Business attraction strategy focused on high growth industry groups for

which the region has supporting assets:

o Baking and Snack Food

o Dairy

o Meat and Poultry

o Beverage

• Agricultural support, including opportunities for agricultural diversification,

support of small farms, and growth in higher value and organic

agriculture.

• Entrepreneurial / start-up support through development of a regional

Food Business Accelerator program.

Project Background

8

PROJECT BACKGROUND

Indiana Michigan Power (I&M) is an American Electric

Power (AEP) company, which is an investor-owned

electric utility. Headquartered in Fort Wayne, Indiana,

I&M has a service territory that covers Northeast

Indiana, East Central Indiana, North Central Indiana,

and Southwest Michigan. The company generates,

transmits and distributes power to 592,000 residential,

commercial and industrial customers in both Indiana

and Michigan. Within I&M, the Economic & Business

Development (E&BD) department is responsible for

attracting new customers and assisting current

customers with expansions in its service area.

Value-added agriculture and food and beverage processing has been

identified as a target industry by all four regions in I&M’s service territory, as well

as AEP’s national business development team. These industries have been

targeted because these businesses tend to use high amounts of energy with

equipment such as heating elements, conveyors and mixers. Additionally, I&M’s

service territory is known for its ability to support existing and additional value-

added agriculture and food and beverage processing operations since it has

access to an abundant water supply via the Great Lakes and aquifers.

In the Summer of 2017, the I&M E&BD department engaged Austin Consulting as

a research and strategic marketing partner to create a business development

and marketing strategy for the value-added agriculture and food and

beverage processing industries. Based on research and industry trend data

collected and evaluated during the second half of 2017, Austin developed this

Business Development and Marketing Strategy to assist I&M and its regional

economic development partners in attracting new and growing existing value-

added agriculture and food and beverage processing businesses in its service

territory. This document represents the culmination of this effort.

This comprehensive report details the completed research and recommended

marketing and business development strategies for the I&M service territory. This

report is intended to provide meaningful information and effective actionable

recommendations that can be incorporated into the current marketing and

business development efforts used by I&M and its economic development

partners. Key data collected and analyzed for the project, and ancillary

Project Background

9

information from various sources, has been compiled and included in the

Appendices to this document.

About Austin Consulting

Austin Consulting is a diverse team of professionals which specializes in providing

site selection assistance to clients around the globe that are expanding,

consolidating or relocating operations. With over 70 years of experience

advising clients on location strategy for investment decisions, Austin Consulting

has worked with numerous clients in the food and beverage processing industry,

establishing itself as a leading service provider to the industry. Over the past

decade, clients in the food and beverage processing industry have comprised

more than half of the clients that our consulting group has supported.

Austin Consulting is a division of The Austin Company, a leading design-build

company headquartered in Cleveland, Ohio, with additional offices in

California, Georgia, Michigan, Missouri and Mexico. The food and beverage

processing industry is a core focus of the entire company, which has a lengthy

history of designing and constructing state-of-the-art food and beverage

production facilities.

Methodology

10

METHODOLOGY

For this project, Austin employed a straight-forward research process to develop

results that could be applied to a Marketing and Business Development

Strategy. This process followed three steps which included:

1. Gathering Data

2. Conducting Analyses

3. Developing Strategies

The following text describes how Austin carried out this three-step process.

Gathering Data

Gathering valuable data was essential to the success of this project. This

foundation of data was strengthened by the practical knowledge and

experience of the consulting team to determine key insights throughout the

project. To ensure the accuracy of data, multiple methods were utilized to

strengthen and validate findings. These methods were applied systematically in

the order listed below:

• Literature Review

• Qualitative Research

• Quantitative Research

Literature Review

By starting with a literature review Austin developed an initial impression of the

targeted industry and its overall health in the I&M territory. A desktop evaluation,

including review of online trade publications, press releases, news media

articles, studies, and government reports, was completed to gain a better sense

of value-added agriculture and food and beverage processing within the I&M

region. Some of the most valuable insights uncovered from this review were of

studies conducted for regions in both states as well as news articles. The findings

of the studies gave Austin a sense of the issues that have been discovered

previously, while the news articles provided current activity on what is

happening in the industry. Austin continued to view media sources throughout

the project to maintain a current knowledge of industry activity.

Methodology

11

Qualitative Research

During the initial stages of literature review, Austin also began an outreach

campaign to local economic developers within the I&M region. The goal of this

outreach was to set up phone interviews with local professionals possessing

industry knowledge for insight into value-added agriculture and food and

beverage processing within the region. These conversations yielded more

literature and research to review, additional contacts to interview, and regional

businesses to contact. Economic development partners also agreed to assist

Austin with setting up meetings with companies to secure a business

perspective. At the end of this campaign, Austin interacted with over 100

individuals for this project including economic development professionals,

company representatives, and utility providers.

Interviews with economic development partners were conducted via phone

and began in the third week of September 2017. Correspondence with

economic development partners were ongoing until Austin’s field visits were

completed in the beginning of November 2017.

Two Austin consultants devoted three separate field visits to the I&M territory to

speak to a large enough sample of companies to be representative for this

project. Visits were conducted the following days:

1. October 11 - 13

2. October 18 - 20

3. October 30 - November 3

During these field visits, Austin either visited companies with an economic

development professional or privately. Questions that company

representatives were asked focused on business operations and industry

outlook. Specific categories of questioning are listed below:

• Business operation overview

• Industry outlook

• Agriculture connection

• Labor (workers, wages, hiring, retention)

• Supply chain (supplier and customer relationships, local sourcing

opportunities)

• Innovation, technology, and automation

• Government relationship and legislative issues

Methodology

12

Quantitative Research

Austin used various methods to collect quantitative data for analysis. Data

collected were primarily based upon codes from the U.S. Census Bureau’s North

American Industry Classification System (NAICS). These codes are broken down

by levels from two-digits to six and help with organizing data into groups and

categories. The six-digit level of NAICS codes is the most detailed that is offered

for industries. All quantitative data were developed from this categorization

including industry, demographics, supply chain, and occupations. Definitions for

important industry categories at the six-digit level are shown in Appendix A of

this report. An example of a six-digit NAICS code breakdown is provided below:

• 31-33 – Manufacturing

• 311 – Food Manufacturing

• 3112 – Grain and Oilseed Milling

• 31121 – Flour Milling and Malt Manufacturing

• 311211 – Flour Milling

Occupations have their own unique classification system. The Standard

Occupational Classification (SOC) system is used to classify workers into

occupation categories. This system covers four levels of detail; major groups,

minor groups, broad occupations, and detailed occupations. The most specific

level on information is given at detailed occupations, whereas the broadest is

provided at the major groups. For the purposes of this study the detailed

occupations level was used for analysis. An example of a five digit (first two

numbers are considered one digit) SOC code breakdown is provided below.

• 51-0000 – Production Occupations

• 51-3000 – Food Processing Workers

• 51-3090 – Miscellaneous Food Processing Workers

• 51-3092 – Food Batchmakers

Most data used in this project were obtained via desktop from the EMSI

Developer analytical tool, which utilizes data from a variety of relevant

government sources. This tool allowed quantitative data to be collected quickly

at a much more detailed level than the U.S. Census Bureau and Bureau of Labor

Statistics (BLS) provide, since government data sources typically suppress

information to protect companies from competitors. EMSI unsuppresses these

data and provides estimates at the most detailed level possible. These

proprietary data (EMSI) were also supplemented with government data sources

Methodology

13

where appropriate for verification purposes. For more information on how EMSI

sources its data, see Appendix B.

All quantitative data were collected at the most detailed level (six-digit NAICS)

for 23 counties in which I&M provides service. These counties were selected

based upon areas which I&M provides electrical service and confirmed by I&M

staff. A map of the 23 counties, organized into their respective sub-regions is

provided below and followed by a list:

Methodology

14

Fort Wayne / NE Indiana

1. Adams County, IN

2. Allen County, IN

3. DeKalb County, IN

4. Huntington County, IN

5. Noble County, IN

6. Steuben County, IN

7. Wells County, IN

8. Whitley County, IN

South Bend / NC Indiana

9 Elkhart County, IN

10. La Porte County, IN

11. Marshall County, IN

12. St. Joseph County, IN

Muncie / EC Indiana

13. Blackford County, IN

14. Delaware County, IN

15. Grant County, IN

16. Jay County, IN

17. Madison County, IN

18. Randolph County, IN

Benton Harbor / SW Michigan

19. Berrien County, MI

20. Cass County, MI

21. Kalamazoo County, MI

22. St. Joseph County, MI

23. Van Buren County, MI

EMSI was able to supply sufficient county level data for demographics, labor,

and supply chain portions of this project, but additional data were required to

carry out the entire scope of the proposed work. Spatial, agriculture, and utility

data were needed to add further value to the project. Primary research was

conducted to gather various data used in supplemental documentation, but

government sources were used where available. Spatial base layer data for

mapping was obtained from the U.S. Census Bureau TIGER/Line Shapefiles, while

agriculture data were sourced from the USDA NASS Quickstats data application.

ESRI data were also used in the mapping process, but mainly consisted of base

layer data as well. These data were essential in providing necessary insight for

recommendations.

Conducting Analyses

Analyses for this project were primarily conducted using quantitative data that

was collected in the Gathering Data step of the process. Literature and

qualitative data provided perspectives on the analyzed quantitative data to

better reference and explain outcomes. There were four main components to

this step which are listed below:

1. Asset Identification

2. Legislation Review

3. Industry Analysis

4. Labor Analysis

Methodology

15

Asset Identification

Asset identification for the I&M region was performed mainly through primary

research. Austin consultants reviewed a variety of information via desktop to

identify regional assets. Research was highly focused on spatial and

geographical advantages that the region can access. Specific assets are

explained in individual detail below.

• Major companies were identified and mapped in an interactive format

on Google Maps. Companies were categorized by industry group and

labeled with colored pins to differentiate one category from another.

Under the description of each company there was an address and a list

of reported products that were produced at that location. A complete list

of companies in the I&M region is contained in Appendix C.

• Grain mills and refineries were identified on a multi-state level across

Illinois, Indiana, Michigan, and Ohio to show the distribution and access

the I&M territory has to these assets. These mills and refineries were

categorized into three groups: Wheat, Corn, and Soybeans. These data

were mapped interactively on Google Maps as well as statically in ArcGIS.

A list of these operations is contained in Appendix D.

• Water and wastewater utility providers were surveyed across the region to

compare rates, capacities, and regulations. These responses were

analyzed and advantages were highlighted in the Water and Wastewater

section of this report.

• Climatic advantages were reviewed for the I&M territory. Indiana and

Michigan both have unique features that make it advantageous to grow

certain crops in the area. More information on these advantages are

contained in Appendix E (Microclimates) and Appendix F (Soils).

• Transportation assets were mapped and included in Appendix G (Rail

Lines and Intermodal Terminals) and Appendix H (Ports and Interstates) for

reference purposes.

• Education institutions are important to employers looking for resources of

talent to employ within their organizations. Austin identified institutions

offering programs in agriculture, food, and animal sciences. A list of

institutions and programs is contained in Appendix I.

Methodology

16

Legislation Review

Input on current or proposed changes to state and local legislation that impact

the agricultural and food and beverage processing communities was obtained

from interviews with regional stakeholders. Stakeholders included companies,

growers, economic development organizations, and agricultural departments.

Specific legislative issues affecting the industry, either positively or negatively,

were incorporated into the appropriate industry groups and other sections of

within the report.

Industry Analysis

The industry analysis sections of this report are the largest and most in-depth.

Since there were so many six-digit industry classifications (49) for food and

beverage processing, these categories were first grouped to make the analyses

less cumbersome and easier to understand. Eight groups were established for

the analyses based on the relationships and similarities of the industry

categories. These groups are:

1. Baking and Snack Food

2. Dairy

3. Meat and Poultry

4. Fruit and Vegetable Processing

5. Beverages

6. Flavors, Dressings, and Seasonings

7. Confectionery

8. Animal Food

Each group was analyzed from multiple perspectives that followed a similar

format outlined below. Data in these analyses were primarily obtained from EMSI

Developer. However, government sources were used to verify these data when

available and necessary.

• An overview of each industry group was discussed and accompanied by

a list of major companies in the I&M region.

• An industry analysis followed, which showed an overview of employment,

wages, labor density (location quotients in Appendix J), businesses, and

gross regional product by industry category. Specific data points that

were further analyzed include employment and wage growth. In these

two forms of growth, the I&M region was compared to the U.S. average

Methodology

17

for each food and beverage industry group. Recent, newsworthy activity

was also highlighted in this portion of each industry group section.

o A shift share analysis was also conducted as part of each industry

analysis. This form of analysis is further explained in Appendix K, but

for reference it shows competitiveness of a region based on

national and industry trends.

• The regional supply chain analysis followed the industry analysis of each

group. The supply chain of each industry group was examined in detail

from a purchases and sales stand point. Any industry connection that was

above a 2% threshold (dollars of purchases or sales) was shown in

included visuals. These visuals illustrate the relationships between suppliers

and service providers and processors which the industry group sells to. This

threshold was created because it represented a rational break in the

amount of useful data to include graphically. On the sales side, data

varied significantly between the I&M region and the U.S., so the visuals

also show a comparison between I&M region and the U.S. This analysis is

further explained in Appendix L.

o As part of the supply chain analysis, Austin also examined trade

data, in terms of imports and exports, for each industry group. These

data showed trade flows into and out of the I&M region.

• Following this analysis, industry group sections included dedicated

subsections that described the national industry outlook and trends,

opportunities, and issues and concerns for each. These subsections

tended to offer more anecdotal information that was collected through

literature and qualitative methods.

Labor Analysis

The labor analysis provides a high-level review of the workforce in the I&M

territory and its four sub-regions. All data in this section were obtained from EMSI

Developer, and the section is broken into three components that are described

in the following order:

1. Occupations - This section identifies the most prevalent occupations

required by the food and beverage processing industry subsector at a

national level, then shows the presence of these occupations by

employment in the I&M region. The top 25 occupations for Food and

Beverage Processing in the U.S. were used for comparative purposes. All

other occupation categories either had a percentage make-up for the

Methodology

18

industry that was insignificant (below 1%) or were retail in nature and not

critical to performing tasks needed in a food and beverage processing

operation.

2. Sub-regions – Data were also collected for Food and Beverage Processing

in four I&M sub-regions. Data for these sub-regions were collected at the

county level. Industry and occupation data were analyzed in this

component and are further explained below:

a. Occupation – Building upon data collected in the previous

component (Occupations), the top 25 occupations at the national

level were also examined for each of the four I&M sub-regions.

b. Industry – All Food and Beverage industry groups were then

compared at the sub-region level. Only the most important figures

were shared in the report.

3. Competitors – Labor and demographic data for competing regions in the

Midwest were compared to I&M. The data shows differences in industry

employment growth, job density, wages and other information for

comparison purposes. Data used for competing regions were collected at

the MSA level.

Developing Strategies

The marketing and business development strategies contained in this report

were developed from the foundational data and project research, combined

with Austin’s industry knowledge and experience. The strategies focus on

opportunities to promote industry growth within the three key target audience

groups identified by Indiana Michigan Power. These include food and beverage

processing companies, the agricultural community, and entrepreneurs and

small businesses.

Baking and Snack Food

19

BAKING AND SNACK FOOD

Industry

Baking and Snack Food is the largest industry group in the I&M territory with

employment that amounts to about a third of the total for Food and Beverage

Processing in the region. There are an estimated 84 businesses which employ

approximately 4,808 workers and between 2006 and 2016, employment in the

industry group grew by 26%. Employment in the industry is not heavily weighted

by one or more major employers, but rather spread across many small to mid-

size companies that are either locally based or have production facilities in the

region. The major products produced by companies in the region include

breads, cookies, crackers, pastries, potato chips, pretzels, tortillas, popcorn, and

other snack foods. Figure BS.1 below lists the major Baking and Snack Food

companies in the I&M region.

More specific data on employment, wages, and other information for the

Baking and Snack Food industry group is included below in Figure BS.2.

Company City State Products

Alpha Baking Co., Inc. La Porte IN Breads

Bimbo Bakeries Elkhart IN Breads, baked products

Café Valley Bakery Marion IN Cakes, muffins, croissants

Ellison Bakery Fort Wayne IN Cookies, inclusions

Hearthside Food Solutions Michigan City IN Cookies, crackers, snacks

Holsum (Lewis Brothers Bakies) Fort Wayne IN Breads

Holsum (Lewis Brothers Bakies) La Porte IN Breads

Inventure Foods, Inc. Bluffton IN Kettle chips, snack foods

New Horizons Baking Co. Fremont IN Buns, rools, muffins

Olde York Potato Chips (Saratoga Potato Chips) Fort Wayne IN Potato chips

Perfection Bakeries, Inc. (Aunt Millie's) - Headquarters Fort Wayne IN Baked products

Perfection Bakeries, Inc. (Aunt Millie's) Kalamazoo MI Breads

Pretzels, Inc. Bluffton IN Pretzels, corn puffs

Pretzels, Inc. Plymouth IN Pretzels

Tyson Foods Portland IN Tortillas, taco shells, chips, flatbreads

Weaver Popcorn Van Buren IN Popcorn

Wickes Pies, Inc. Winchester IN Pies, pie shells, doughs

Figure BS.1: Baking and Snack Food - Major Companies in the I&M Region

Source: Austin Consulting


20

The most important findings from Figure BS.2 are as follows:

1. Certain Baking and Snack Food categories have experienced stronger

employment growth than others, but growth across most categories is

very strong.

2. Only four categories have experienced a decline in employment; Retail

Bakeries (311811), Cookie and Cracker Manufacturing (311821), Dry Pasta,

Dough, and Flour Mixes Manufacturing from Purchased Flour (311824),

and Roasted Nut and Peanut Butter Manufacturing (311911).

3. Employment density in the region for the group is 1.74 times greater than

the U.S. average in 2016, as shown by the location quotient.

4. The Commercial Bakeries (311812) category has the most employment in

the region, making up more than 37% of the total for this industry group,

with 1,789 jobs. These data are underscored by the number of

Commercial Bakeries that are included in Figure BS.1.

5. Baking and Snack Food makes up more than 26% of the GRP in Food and

Beverage Processing for the I&M region, at over $457,9 million.

Description NAICS2016

Jobs

% Change

in Jobs

(2006-2016)

2016 Wages,

Salaries, &

Proprietor

Earnings

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Retail Bakeries 311811 459 -15% $ 21,372 0.71 34 $ 18,319,653

Commercial Bakeries 311812 1789 32% $ 37,989 1.93 25 $ 121,123,179

Frozen Cakes, Pies, and Other Pastries

Manufacturing311813 110 79% $ 54,213 1.26 2 $ 10,492,817

Cookie and Cracker Manufacturing 311821 497 -3% $ 46,526 2.13 4 $ 64,937,017

Dry Pasta, Dough, and Flour Mixes

Manufacturing from Purchased Flour311824 180 -2% $ 48,003 1.16 5 $ 24,392,141

Tortilla Manufacturing 311830 371 28% $ 26,859 2.81 1 $ 27,120,603

Roasted Nuts and Peanut Butter

Manufacturing311911 64 -16% $ 54,123 0.62 4 $ 18,406,344

Other Snack Food Manufacturing 311919 589 65% $ 35,012 2.15 4 $ 113,037,502

All Other Miscellaneous Food

Manufacturing311999 749 68% $ 47,027 3.46 5 $ 60,115,564

Summary Data Unique 4808 26% $ 38,430 1.74 84 $ 457,944,821

Figure BS.2: Baking and Snack Food - Overview of the I&M Region

Source: EMSI 2017.3 Class of Worker


21

One category would traditionally be left out of this grouping is All Other

Miscellaneous Food Manufacturing (311999). However, the industry category

covers some snack food products, such as popcorn. The data suggests that

most of the employment for the I&M region can be attributed towards Weaver

Popcorn, which validated its inclusion.

Figure BS. 3 compares employment growth in the I&M region to the U.S. overall

within the Baking and Snack Food industry group. The chart includes

employment growth records for the years 2006 to 2016 and projected

employment growth through the year 2026.

The figure illustrates that the industry group has recently experienced much

stronger growth within the I&M region compared to the U.S. Industry

employment growth for I&M is projected to continue to outpace the U.S., rising

to 34% by 2021, compared to just 18% for the U.S. over the same timeframe.

Essentially, the employment growth over the 20-year period is expected to

double that of the U.S.

Recent project announcements and investments in the I&M region underscore

these projections.

• Café Valley Bakery, a Phoenix, AZ based company, opened a 2nd bakery

in Marion, IN in 2014. This location produces cakes, croissants, and muffins


22

for grocery stores. The company currently has over 400 employees and

continues to expand, adding a third shift earlier this year.1

• Pretzels, Inc., a Bluffton, IN based pretzel / snack food company opened a

2nd 45,000 square foot location in Plymouth, IN in 2017. The location

produces pretzel products.2

• Saratoga Potato Chips, a Canadian based potato chip company

established new operations in Fort Wayne, IN in 2010. In 2017, the

company announced a 43,000 square-foot expansion at its Indiana plant

and expects to add 25 new processing jobs.3

While most of the regional industry announcements have been positive, Aunt

Millie’s, a regional baking company headquartered in Fort Wayne, IN

announced plans to close its Fort Wayne bakery by April 2018.4 The facility

produces bread and other bakery products. Aunt Millie’s has several other

bakeries in Indiana, Ohio, and Michigan. In April 2017, Aunt Millie’s started

production at a new bakery in Lowell, IN near Chicago, IL where it produces hot

dog and hamburger buns.5

Other industry related expansion announcements near the I&M region include:

• CraftMark Bakery, which makes frozen baked products, announced a

113,00 square-foot expansion at its Indianapolis, IN bakery that is

expected to add 130 to 150 new jobs.6

• Skally’s Old World Bakery, a Cincinnati, OH based bakery announced

plans for a new 345,000 square-foot facility in Harrison, OH.7 The company

was reportedly considering a location in West Harrison, IN before backing

out of those plans.

1 McGowan, D. 2017. “Demand Drives Cafe Valley to Add Third Shift.” Inside Indiana Business. May 17.

2 Schroeder, E. 2016. “Pretzels Inc. to open new plant in Plymouth, Ind.” BakingBusiness.com. September 7.

3 PotatoPro.com. 2017. “Snack food manufacturer Saratoga Potato Chips LLC plans expansion in Fort

Wayne.” June 14.

4 Schroeder, E. 2017. “Aunt Millie's to close Fort Wayne baking plant.” BakingBusiness.com November 6.

5 Benman, K. 2017. “Aunt Millie's to fire up the ovens in Lowell.” Indiana Economic Digest. March 23.

6 Malovany, D. 2017. CraftMark Bakery initiates major expansion. BakingBusiness.com. June13.

7 Perleberg, M. “Skally’s Takes Big Bakery Plans Across State Line To Harrison.” Eagle Country 99.3.

November15.

http://www.insideindianabusiness.com/story/35449646/demand-drives-cafe-valley-to-add-third-shift

http://www.bakingbusiness.com/articles/news_home/Business/2016/09/Pretzels_Inc_to_open_new_plant.aspx?ID=%7BD942747B-CB21-417F-9C15-AA17DC22C8B2%7D&cck=1

http://www.potatopro.com/news/2017/snack-food-manufacturer-saratoga-potato-chips-llc-plans-expansion-fort-wayne

http://www.potatopro.com/news/2017/snack-food-manufacturer-saratoga-potato-chips-llc-plans-expansion-fort-wayne

http://www.bakingbusiness.com/articles/news_home/Business/2017/11/Aunt_Millies_to_close_Fort_Way.aspx?ID=%7bFC85E5E8-E1BD-49C4-94F1-AA4334521F94%7d

http://indianaeconomicdigest.com/Main.asp?SectionID=31&SubSectionID=70&ArticleID=87476

http://www.bakingbusiness.com/articles/news_home/Business/2017/06/CraftMark_Bakery_initiates_maj.aspx?ID=%7B0F771AAA-4B8D-460D-B451-FF616698C9D4%7D

http://eaglecountryonline.com/local-article/skallys-takes-big-bakery-plans-across-state-line-harrison/

http://eaglecountryonline.com/local-article/skallys-takes-big-bakery-plans-across-state-line-harrison/


23

Austin completed a shift share analysis to measure the competitiveness of the

region based on national and industry trends. More information and

background on this type of analysis is contained in Appendix K. The shift share

analysis is summarized in Figure BS.4.

Commercial Bakeries (311812), All Other Miscellaneous Food Manufacturing

(311999), and Other Snack Food Manufacturing (311919) categories show the

highest competitive advantage in the region from 2006-2016, significantly

outperforming expected job growth. Commercial Bakeries performed

exceptionally well, exceeding job growth expectations by 406 jobs between

2006-2016.

In addition to the employment strength, there has been a considerable amount

of wage growth in Baking and Snack Food across the I&M territory as displayed

by Figure BS.5.

Description NAICSExpected

Change

Actual

Change

Regional

Competitive

Effect

Retail Bakeries 311811 123 -82 -205

Commercial Bakeries 311812 33 439 406

Frozen Cakes, Pies, and Other Pastries Manufacturing 311813 14 49 35

Cookie and Cracker Manufacturing 311821 28 -16 -44

Dry Pasta, Dough, and Flour Mixes Manufacturing from Purchased Flour 311824 6 -4 -10

Tortilla Manufacturing 311830 35 81 46

Roasted Nuts and Peanut Butter Manufacturing 311911 25 -12 -37

Other Snack Food Manufacturing 311919 90 232 142

All Other Miscellaneous Food Manufacturing 311999 72 302 231


Figure BS.4: Baking and Snack Food - Shift Share Analysis of the I&M Region (2006-2016)


24

The I&M region experienced an estimated 40% increase wages for the industry

group from 2001-2016. U.S. wages grew by 32% during the same period. This

increase mirrors the growth of employment in the area. However, annual wages

in the I&M region are still less than the national average for this industry group by

more than $2,000, with workers in the I&M region earning approximately $38,400

compared to $40,500 for the U.S. It does not appear that the high industry group

employment growth over this same period has inflated wages disproportional to

the U.S.

Supply Chain

The Baking and Snack Food industry group has a mature, highly developed

supply chain within the region. There is a diverse range of products produced

which require a variety of raw and processed inputs, including wheat flour, corn

flour, oils, shortening, sweeteners, potatoes, eggs, and dairy ingredients. To

evaluate the supply chain, data for purchases and sales between the industry

group and other industries were assessed. Purchases show relationships between

suppliers and service providers, while sales data shows customer relationships.


25

Figure BS.6 below illustrates the most significant industries from which the Baking

and Snack group purchases. Each industry accounts for at least 2% of the total

group purchases.

Major raw inputs account for an estimated $97.8 million in total purchases, while

processed ingredients (flour and fats/oils) account for $85 million. These

combine for more than 22% of the total purchases. Packaging material

purchases are estimated at $38 million and services at $117.1 million. A detailed

breakdown of these purchases can be found in Appendix L.

Given the importance of processed ingredients in baking and snack foods,

Austin identified major supplier locations to determine whether the region has an

adequate supply base to support the industry group or if companies must

purchase the ingredients from outside. Companies typically prefer to transport

these ingredients short distances when possible to avoid higher shipping costs.

Large operations may also transport these in bulk by rail. Included in the map

(Figure BS.7) below are the major locations of wheat flour milling, corn milling

and oilseed refining operations located within Indiana, Michigan, Ohio and

Illinois.

Raw Processed Packaging Services

Crop Production Flour Milling Plast ics Bott le ManufacturingCorporate, Subsidiary, and Regional

Managing Offices

Animal Production and

AquacultureFats and Oils Refining and Blending

Corrugated and Solid Fiber Box

Manufacturing

Wholesale Trade Agents and

Brokers

Figure BS.6: Baking and Snack Food Supply Chain - Purchases



26

There are two wheat flour mills located in the I&M region; Star of the West in

Ligonier, IN and Knappen Milling Company in Augusta, MI. There are also several

other wheat flour mills located near the region and across the four states. Bunge

has a major oilseed refining location in Decatur, IN, where it produces a wide

range of food-grade oils and shortenings used in baking and snack foods.

Agricor operates a dry milled corn facility in Marion, IN which produces corn

flour, meal, grits and other dry milled corn ingredients. There are no wet corn

milling facilities within the I&M region; however, several suppliers are located

nearby. These types of facilities produce corn sweeteners, starches and other

ingredients used in some baking and snack foods. A complete list of these

supplier locations is included in Appendix D.

To examine customer supply chain relationships for the Baking and Snack Food

group, Figure BS.8 below illustrates the top processing industries which the group


27

sells to. Each of these industries account for at least 2% of the total sales for the

group. Sales for I&M are focused on in-region sales and are compared to the

United States to show differences between relationships to other processing

industries.

These data illustrate the extent of regional inter-industry supply chain

relationships within the Baking and Snack Food group. Compared to the U.S.,

data illustrates that the number of relationships between the group and other

processors within the I&M region is much more diverse. The inclusion of industries

from other subsector groups such as confectionery, fruit and vegetable, and ice

cream products illustrates cross-industry connections. The U.S. data do not

highlight any apparent supply chain gaps or opportunities that could be further

explored. It is important to keep in mind that in-region sales account for only 10%

of the industry group’s total sales.

Total purchases and sales for the Baking and Snack Food group are shown in

Figure BS.9 below.

Indiana Michigan Power United States

Processing Processing

Commercial Bakeries Commercial Bakeries

All Other Miscellaneous Food

ManufacturingFruit and Vegetable Canning

Fruit and Vegetable Canning

Cookie and Cracker Manufacturing

Nonchocolate Confectionery

Manufacturing

Ice Cream and Frozen Dessert

Manufacturing

Figure BS.8: Baking and Snack Food Supply Chain - Sales


% In-region % Imported Total % In-Region % Exported Total

Baking and Snack Food Unique 21% 79% $832,703,647 10% 90% $1,384,411,268

Figure BS.9: Baking and Snack Food - Trade Analysis of the I&M Region (2016)

Purchases Sales


NAICSDescription


28

The difference between total sales and purchases highlights the value added

by the industry group. These data also show percentages of purchases and

sales activity occurring within the region, versus transactions with businesses and

customers outside the I&M area. Since 90% of the industry group sales are made

with customers outside the region, data suggest that most of the sales are likely

final products intended for wider distribution.

National Industry Outlook and Trends

Baking and Snack Food will likely continue to be an important economic driver

in the region based on the industry diversity and growth forecast data.

Moreover, the industry has a strong presence in the Midwest, sometimes referred

to as the “Bread Basket” of the U.S. In fact, the Chicago metropolitan area has

the 2nd highest industry employment in the U.S. and Midwest states also rank

high (Illinois - 2nd, Indiana - 9th, and Michigan - 12th).

• Over the past 10 years in the U.S., all industry categories have added jobs

and are forecasted to add more jobs over the next 10 years (EMSI 2017.3

Class of Worker).

• The strongest growth segments are Frozen Cakes, Pies and Other Pastries

Manufacturing (311813), Tortilla Manufacturing (311830), and Roasted

Nuts and Peanut Butter Manufacturing (311911), and Other Snack Food

Manufacturing (311919).

There is a significant, increasing demand for more unique and healthy baking

and snack foods. Health claims that are having a high impact on the industry

include:8

• Gluten free

• Non-GMO

• Organic

• Natural (free of artificial colors / flavors)

• No / reduced sugar and sugar alternatives

As consumers demand more unique and healthy baking and snack foods, the

products have become more diverse and segmented. A wider range of

ingredients including grains, oils, vegetables, and other ingredients are being

used in baking and snack food products. Growth of these niche segments will

likely plan a more important role in major facility expansion projects as they

become more mature.

8 Gelski, J. “Snackers seek non-G.M.O., free-from and reduced-sugar claims.” BakingBusiness.com.

November 30.

http://www.bakingbusiness.com/articles/news_home/Trends/2017/11/Snackers_seek_nonGMO_freefrom.aspx?ID=%7bBAAA8378-1D7E-4D9D-9BC3-D36160147334%7d

http://www.bakingbusiness.com/articles/news_home/Trends/2017/11/Snackers_seek_nonGMO_freefrom.aspx?ID=%7bBAAA8378-1D7E-4D9D-9BC3-D36160147334%7d


29

Opportunities

The I&M region could continue to see growth opportunities in traditional staple

Baking and Snack Foods. Also, new products within traditional segments such as,

health focused cookies and crackers, and gluten free breads and pastries may

present opportunities for businesses in the region to respond to recent consumer

trends. The I&M region offers many supply chain advantages, with major

suppliers of wheat and corn flour, vegetable oils / shortening, corn sweeteners,

potatoes, eggs, and dairy products in the region or close by. These advantages

should be realized as opportunities to support future growth.

Other targeted opportunities include:

• Tortilla manufacturing

o This sector has been growing due to rising U.S. Hispanic population

and cultural influence.

o The region offers notable supply chain advantages, including corn

production and dry corn milling operations.

• Chips

o The region is close to a major potato growing region in Michigan,

which supplies the majority of the potatoes used in chip production

in the U.S.

o There is also a rising demand for other types of chips, including

vegetable based and more baked chip options that could be

explored.

• Health focused baking and snack companies

o These companies are typically small to mid-size businesses;

however, larger baking and snack companies are also responding

to recent trends.

o This offers an opportunity to add more diversity of products.

Issues and Concerns

• While Baking and Snack Food has experienced strong growth in the I&M

region, new product development appears to be lagging other areas of

the U.S., especially in the trending product categories.

• Labor tends to be less skilled than other segments within the food industry,

with lower than average wages. Hiring and retaining labor continues to

be a challenge for many baking and snack food companies both

nationally and within the region, per companies interviewed by Austin.

Dairy

30

DAIRY

Industry

A wide range of products are produced from raw and processed milk, including

fluid milk, cheese, butter, cream, sour cream, cottage cheese, dips, ice cream,

and yogurt. Despite the industry’s reliance on automation, the industry group

accounts for over 16% of the total employment for Food and Beverage

Processing in the I&M region with an estimated 2,484 jobs. Moreover, regional

employment grew by 40% from 2006-2016. Figure D.1 below lists the major Dairy

processing companies located in the I&M region.


Dairy Farmers of America Goshen INCondensed milk, cream, non-fat dry

milk

Dean Foods (Land -O-Sun Dairies) Decatur IN Ice Cream

Dean Foods (Schenkel's Dairy) Huntington IN Fluid Milk

Michigan Milk Producers Association Constantine MIButter, cream, condensed milk, non-fat

dry milk, instant milk

Michigan Milk Producers Association

(Heritage Ridge Creamery)Middlebury MI Cheese

Prairie Farms Dairy Fort Wayne INFluid milk, cottage cheese, dip, sour

cream, butter, other dairy products

Prairie Farms Dairy (East Side Jersey

Dairy)Anderson IN Fluid milk, other dairy products

Reny Picot (Old Europe Cheese) Benton Harbor MI Cheese

Walmart (Under Construction) Fort Wayne IN Fluid milk


Figure D.1: Dairy - Major Companies in the I&M Region

Dairy

31

More specific data on employment, wages, and other information for the Dairy

industry group is included below in Figure D.2.

Key findings from Figure D.2 include:

1. Industry employment growth is primarily attributed to Fluid Milk

Manufacturing (311511). This category has the highest number of jobs,

and grew at a considerable rate of 186% during the 2006-2016 period.

2. Most categories have strong employment numbers but Cheese

Manufacturing (311513) has very low employment. However, this category

has almost tripled in job growth.

3. There is no reported data in the I&M region for Creamery Butter

Manufacturing (311512). Butter is produced in the region; however, it is

often made from the fat that is removed in making fluid milk, and

therefore not a primary focus of many dairy processors. Only 47 businesses

at the national level that report their primary function as Creamery Butter

Manufacturing.

4. The number of jobs in this group is 2.68 times as dense as the nation, while

Fluid Milk Manufacturing, Dry, Condensed, and Evaporated Dairy Product

Manufacturing (311514), and Ice Cream and Frozen Dessert

Manufacturing (311520) are much higher than that at 3.07, 5.16, and 4.98

times respectively. This highlights the specialization in the regional labor

force for Dairy products.


Jobs

% 2006-

2016

Jobs

2016 Wages,

Salaries, &

Proprietor

Earnings

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Fluid Milk Manufacturing 311511 1125 186% $ 56,559 3.07 6 $144,844,464

Creamery Butter Manufacturing 311512 0 0% $ - 0.00 0 $ -

Cheese Manufacturing 311513 92 158% $ 29,717 0.30 2 $ 7,178,292

Dry, Condensed, and Evaporated

Dairy Product Manufacturing311514 567 -17% $ 62,636 5.16 3 $ 87,256,386


Manufacturing311520 698 4% $ 40,353 4.98 3 $ 97,357,225

Summary Data 3115 2482 40% $ 52,390 2.68 14 $336,636,367


Figure D.2: Dairy - Overview

Dairy

32

5. The wages in this industry group are higher than many other Food and

Beverage Processing industry groups, which can be expected because of

the highly technical processes and skill levels typically used in these

operations.

6. The only category that experienced a decline in jobs is Dry, Condensed,

and Evaporated Dairy Product Manufacturing category, with a 17% drop

in employment between 2006-2016.

Figure D. 3 compares employment growth in the I&M region to the U.S. overall

within the Dairy group. The chart includes employment growth records for the

years 2006 to 2016 and projected employment growth through the year 2026.

Figure D.3 not only illustrates that the I&M region has experienced more

employment growth than the U.S., but also that the I&M territory has seen more

than four times the growth from 2006 to 2016. This growth is projected to

continue to outpace the U.S. as well.

Recent project announcements and investments in the I&M region accentuate

these projections.

• Wal-Mart is nearing completion of its first dairy processing facility in Fort

Wayne, IN that is expected to employ more than 200. The 250,000 square-

foot facility will produce fluid milk to be sold in Walmart stores. This project

Dairy

33

has been linked to the Indiana State Department of Agriculture (ISDA)

2015 Dairy Strategy which is aimed at growing the dairy industry

statewide. 9

• Prairie Farms Dairy is investing approximately $9 million on a 22,500 square-

foot expansion of its Fort Wayne, IN dairy. The expansion will create

additional capacity for value-added specialty products.10

Other industry related expansion announcements near the I&M region include:

• Foremost Farms USA announced plans in November 2017 for a new dairy

processing facility in Greenville, MI. The facility is planned to be

operational within 12 to 14 months and accept up to six million pounds of

raw milk per day. The facility would reportedly help to stabilize the

regional milk supply, which there has been an oversupply of in recent

years. 11 12

• Glanbia, based in Ireland, announced plans for a new cheese and whey

plant in Michigan in January 2017. The new plant would reportedly be a

joint venture with Dairy Farmers of America, Michigan Milk Producers

Association, and Foremost Farms. A location for the project has yet to be

publicly announced.13

While most of the news has been positive, Dean Foods which has been

struggling financially due to declining demand for fluid milk announced the

closing of its Rochester, IN dairy which produced milk and cottage cheese.14

There is also speculation that the Walmart dairy could negatively impact Dean

Foods’ dairies in the region that have supplied milk for Walmart’s private label

brands.

9 Cornall, J. 2016. “Walmart to build milk processing plant in Indiana.” DairyReporter.com. March 18.

10 Brown, A. 2017. “Prairie Farms Expanding Fort Wayne Dairy.” Inside Indiana Business. February 10.

11 Foremost Farms USA. 2017. “Foremost Farms USA® Announces Plans to Build a Dairy Campus in

Michigan.” November 9.

12 Harger, J. 2017. “Wisconsin firm plans to build dairy processing campus in Greenville.” M Live Media

Group. November 10.

13 Burke-Kennedy, E. 2017, “Glanbia to open major new production plant in Michigan.” The Irish Times.

January 27.

14 Seiler, C.M. 2016. “Dean Foods closing Rochester plant by mid-October, costing 138 job.” Indiana

Economic Digest. July 17.

http://www.dairyreporter.com/Article/2016/03/18/Walmart-to-build-milk-processing-plant-in-Indiana

http://www.insideindianabusiness.com/story/34476216/prairie-farms-expanding-fort-wayne-dairy-operation

http://www.foremostfarms.com/News-and-Events/current/Foremost%20Farms%20USA%20Announces%20Plans%20to%20Build%20a%20Dairy%20Campus%20in%20Michigan.pdf

http://www.foremostfarms.com/News-and-Events/current/Foremost%20Farms%20USA%20Announces%20Plans%20to%20Build%20a%20Dairy%20Campus%20in%20Michigan.pdf

http://www.mlive.com/business/west-michigan/index.ssf/2017/11/post_141.html

http://www.mlive.com/business/west-michigan/index.ssf/2017/11/post_141.html

http://www.irishtimes.com/business/agribusiness-and-food/glanbia-to-open-major-new-production-plant-in-michigan-1.2953483

http://www.irishtimes.com/business/agribusiness-and-food/glanbia-to-open-major-new-production-plant-in-michigan-1.2953483



Dairy

34

Austin also completed a shift share analysis to measure the competitiveness of

the region based on national and industry trends. The shift share analysis is

summarized in Figure D.4.

Fluid Milk Manufacturing (311511), Cheese Manufacturing (311513) and Ice

Cream and Frozen Dessert Manufacturing (311520) all show a regional

competitive advantage when comparing actual job change to expected

changes. Only Cheese Manufacturing was expected to grow based on national

and industry forecasts. Fluid Milk Manufacturing yielded a competitive effect of

737 (rounded), adding 732 jobs over the period while the category was actually

expected to decline. On the other hand, the Dry, Condensed, and Evaporated

Dairy Product Manufacturing category had a negative competitive effect of

227. This is because the industry was expected to grow by 114 jobs, but actually

lost 113. Austin was unable to determine the exact cause of this loss.

In addition to job growth and competitiveness, the Dairy industry group in the

I&M territory has also seen steady wage increases, as shown in Figure D.5 below.


Change

Actual

Change

Regional

Competitive

Effect

Fluid Milk Manufacturing 311511 -6 732 737

Creamery Butter Manufacturing 311512 0 0 0

Cheese Manufacturing 311513 8 57 49

Dry, Condensed, and Evaporated Dairy

Product Manufacturing311514 114 -113 -227

Ice Cream and Frozen Dessert Manufacturing 311520 -35 29 64


Figure D.4: Dairy - Shift Share Analysis (2006-2016)

Dairy

35

Industry wages increased by an estimated 34% within the I&M region from 2001

to 2016. However, wage growth lagged the U.S., which currently has average

annual wages of more than $57,400, more than $5,000 above I&M. Despite very

strong employment growth, the data suggests that wage inflation has not been

an issue for the region.

Supply Chain

Companies within the Dairy group tend to locate in proximity to the dairy farms

for access to raw milk, since milk is the major ingredient in most dairy products.

To evaluate the supply chain, data for purchases and sales between the

industry group and other industries were assessed. Figure D.6 below illustrates the

overall supply chain for the Dairy group within the region from a purchases

standpoint. Purchases show relationships between suppliers and service

providers, while sales data shows customer relationships.

Dairy

36

To summarize the information in Figure D.6, 45% of the purchases for the Dairy

group are coming from raw milk with an estimated total of $614.6 million.

Purchases from both processed ingredients and services make up a much lower

amount at an estimated $237.8 million and $38.7 million respectively. Although

these dollar amounts are much less than the raw material purchases from

Animal Production and Aquaculture, they still represent significant expenditures

for the Dairy group. Overall these purchases indicate that Dairy companies in

the I&M region make significant investments into the inputs and services that are

needed to produce products. More details on Dairy purchases can be found in

Appendix L.

To better display the access the I&M region has to raw milk, Austin mapped milk

sales by county for Illinois, Indiana, Michigan, and Ohio. These data highlight the

density of milk sales (by county) in darker areas on the map (Figure D.7) below.

Raw Processed Services

Animal Production and Aquaculture Fluid Milk ManufacturingCorporate, Subsidiary, and Regional

Managing Offices


Dairy Product Manufacturing

Cheese Manufacturing

Figure D.6: Dairy Supply Chain - Purchases


Dairy

37

Data shown in Figure D.7 above shows where Dairy processing companies in the

I&M region can secure milk. There are several counties in the region with milk

sales over $20 million that Dairy processors can access. In addition, there are

many other counties that are adjacent or near the I&M region that have high

milk sales. These counties are easily within the reach of companies in the Dairy

group.

On the sales side of the supply chain, industry relationships with the Dairy group

become more diverse. While analyzing sales data, Austin chose to focus on

industry categories that further processed Dairy products to highlight more

value-added relationships. Figure D.8 below indicates the top processing

industries to which the Dairy group sell its products within the I&M region, and

compares these sales to Dairy on a national level.

Dairy

38

For the Dairy industry group, most of the sales are going to other Dairy industry

categories. These sales make up 75% percent of the total sales with an

estimated $ 127.9 million. Dry, Condensed, and Evaporated Dairy Product

Manufacturing, Fluid Milk Manufacturing, Ice Cream and Frozen Dessert

Manufacturing, and Cheese Manufacturing make up about 32%, 27%, 13%, and

4% of these sales respectively. These findings suggest that there is more value-

added processing in this particular industry group. However, the supply chain is

limited almost exclusively to the Dairy industry group.

An important distinction can be made from the above figure, which is the

Cheese Manufacturing industry’s relationship to the rest of the Dairy industry

group. In the I&M region the least significant amount Dairy sales (4%) is going to

Cheese Manufacturing, compared to 20% for the U.S. This distinction shows that

there is a clear gap in the I&M region for Cheese Manufacturing, which is

supported by earlier data that shows the lack of cheese manufacturing for the

region. For more information on the sales of the Dairy industry group see

Appendix L.

Thus far, purchases and sales data have been focused on those inside of the

region. Figure D.9 below shows the total purchases and sales for the Dairy group.




Dairy Product ManufacturingCheese Manufacturing

Fluid Milk Manufacturing Fluid Milk Manufacturing


Manufacturing


Dairy Product Manufacturing

Cheese ManufacturingIce Cream and Frozen Dessert

Manufacturing

Frozen Specialty Food

Manufacturing

Figure D.8: Dairy Supply Chain - Sales


Dairy

39

There is a significant difference between the total purchases and sales of the

Dairy group. Having more sales than purchases suggests that the industry group

is doing well in the I&M region. It is estimated that 76% of the purchases for this

industry are coming from outside the region. With 45% of the supply chain

purchases going towards raw milk, it is somewhat surprising that in-region

purchases are not higher. It is very likely that these imports are from areas that

are just outside of the I&M footprint, which is supported by Figure D.7. On the

sales side, an estimated 86% of Dairy products are being exported out of the

region. Having a high percentage of exports suggests that most of these sales

are final products which are being distributed to a larger consumer base.


Nationally, the dairy industry has recently seen more growth in value-added

products as fluid milk consumption continues to decline. According to data from

the USDA, per capita consumption of fluid milk in the U.S. has been steadily

declining since 1975. This decline is highlighted in recent years by a 16.3%

decrease from 2006 to 2016. Despite the decline, fluid milk still retains the largest

share of consumption amongst dairy products at 154 lbs. per person, per year in

2016. Dairy products that have seen increases in per capita consumption are

highlighted in Figure D.10 below.

% In-Region % Imported Total % In-Region % Exported 2016 Total

Dairy 3115 24% 76% $ 1,366,972,990 14% 86% $ 1,708,451,858

Purchases Sales


Figure D.9: Dairy - Trade Analysis of the I&M Region (2016)

NAICSDescription

Dairy

40

Value added products, such as yogurt and cheese offer more room for

innovation within the dairy industry.

• Yogurt has recently seen growth from International styles including Greek,

Icelandic, Australian, and French as well as yogurt drinks. The yogurt

segment offers a host of flavor options and opportunities for various baked

inclusions and fruit preparations.

• The U.S. cheese industry continues to grow, especially in specialty,

farmstead and artisanal cheeses.

Increasing demand for organic products is playing a role across the dairy sector.

Meanwhile, dairy substitutes, such as soy, almond, and coconut milk have

continued to chip away at market share in many categories, including fluid milk

to ice cream.15

15 Berry, D. 2017. “State of the industry: Dairy.” Food Business News. November 13.

Product2016 Pounds per

Person (annually)

2006-2016

% Change

Dry whole milk 0.3 142%

Bulk and canned skim – evaporated and condensed milk 5.4 28%

Dry buttermilk 0.3 26%

Yogurt 13.7 24%

Butter 5.7 22%

Cheese – other 22.0 15%

Cheese – American 14.3 10%

Bulk, whole – evaporated and condensed milk 0.7 4%

Ice cream, reduced fat 6.4 4%

Nonfat dry milk 3.0 -6%

Other frozen dairy products 2.8 -7%

Ice cream, regular 13.1 -14%

Canned, whole – evaporated and condensed milk 1.4 -15%

Fluid milk 154.0 -16%

Cottage 2.2 -17%

Dry whey and WPC 2.3 -19%

Sherbet 0.8 -36%

Figure D.10: Dairy - U.S. Product Consumption per Capita

Source: USDA, National Agriculture Statistics Service

http://www.foodbusinessnews.net/articles/news_home/Business_News/2017/11/State_of_the_industry_Dairy.aspx?ID=%7bF5D2521F-729B-4618-9869-390A54BDD15B%7d

Dairy

41

Opportunities for the I&M Region

While project opportunities can be found across the dairy industry, sectors that

appear to represent the greatest opportunity based on current trends are

outlined below. However, even in declining categories such as fluid milk, the

area has seen success in the recent Walmart announcement.

• Yogurt

o There is currently no major yogurt production in region, which offers

potential to diversify the regional dairy industry.

o While yogurt growth has slowed in very recent years, there may be

growth opportunities given the ever-changing landscape of yogurt

varieties and fierce competition across the sector.

• Cheese16

o Production in the region is low compared to other prominent dairy

regions

o Demand for specialty / artisanal cheeses continues to be strong

o Potential to diversify into goat / sheep cheeses.

• Other value added dairy products

o Drinks, dairy based snacks, dairy protein products.

• Regionally, interest has been expressed in the byproduct from the new

Walmart Dairy facility. This could create opportunities for other dairy

processors in the area.

• Dairy processing facilities tend to be highly automated, utilize large

volumes of water for sanitation, and have high electric consumption

based on refrigeration and processing equipment requirements.

Issues and Concerns

• Demand for natural based milk alternatives has been rising recently due

to a growing concern by a significant number of consumers over milk

consumption, which could threaten future growth in the industry.

• Given the size of the new Walmart dairy facility in Fort Wayne, which is

nearing completion, impacts to the local supply chain should be

expected. It is difficult to assess how significant the impact will be or how

much time it may take for the market to adjust. Changes, such as

availability and price of raw milk should be monitored, as they have the

potential to impact existing dairy processors and limit new growth.

16 Kennedy, S.M. 2017. “Three key trends shape the specialty and artisan cheese market.” Dairy Foods.

October 5.

http://www.dairyfoods.com/articles/92485-three-key-trends-shape-the-specialty-and-artisan-cheese-market?v=preview

http://www.dairyfoods.com/articles/92485-three-key-trends-shape-the-specialty-and-artisan-cheese-market?v=preview

Fruit and Vegetable Processing

42

FRUIT AND VEGETABLE PROCESSING

Industry

Fruit and Vegetable Processing has a strong representation in the region,

accounting for an estimated 2,059 jobs in 2016. The industry group has a labor

density of 3.35 times the U.S. and contributes approximately $161.2 million to the

region’s GRP. There are wide range of fruit and vegetable products, including

tomatoes, cucumbers, apples, grapes, and other produce grown in the region

that are processed and packaged to be sold. Figure FV.1 below lists the major

Fruit and Vegetable Processing companies located in the I&M region.


Burnette Foods Hartford MI Fruit and vegetables processing

Coloma Frozen Foods Coloma MIJuices and concentrates, frozen fruit

and vegetables

Dole (Dole Packaged Foods) Decatur MIFruit blending, packaging, cold

storage

Eden Foods (Meridian Foods) Eaton IN Canned beans

Flamm Pickle and Packing Co. Eau Claire MI Pickle products

Freestone Pickle Company, Inc. Bangor MI Pickle products

Knouse Foods Paw Paw MI Apple sauce, bottled tea

Packer Canning Company, Inc.

(Honee Bear Canning Co.)Lawton MI

Canned fruit, juices, pickled

vegetables, beans, pie fillings

Pero Family Farms Benton Harbor MIGreen bean processing, packaged

vegetables

Red Gold, Inc. Geneva IN Processed tomato products

Red Gold, Inc. Oresters IN Processed tomato products

Red Gold, Inc. Elwood INProcessed tomato products, ketchups,

sauces, juices, salsa

Sechler's Pickles Saint Joe IN Pickle products

The Coca-Cola Company (Minute

Maid)Paw Paw MI Juices

Welch's Lawton MI Juices

Zentis North America LLC Plymouth IN Fruit fillings and preparations


Figure FV.1: Fruit and Vegetable Processing - Major Companies in the I&M Region


43

More specific data on employment, wages, and other information for the Fruit

and Vegetable industry group is included below in Figure FV.2.

Key information from the overview table above are as follows:

1. Fruit and Vegetable Canning makes up the bulk of employment for the

Fruit and Vegetable group with 2,003 out of 2,059 jobs. This category also

has 4.96 times the national average of jobs in this category. An

employment density this large shows labor specialization, which can be

marketed.

2. Industry employment declined by 17% over the 10-year period from 2006-

2016.

In examining the data more closely, it does not appear that Coca-Cola (Minute

Maid) and Welch’s operations are included under the Frozen Fruit, Juice, and

Vegetable Manufacturing (311411) category. These two juice companies have

significant employment. Austin was unable to determine how they were

categorized in the data.

As a special note, other categories in the 3114 industry group are not included in

this analysis. The rationale for this exclusion is twofold:

1. Frozen Specialty Food Manufacturing (311412) is more closely attributed

to Meat and Poultry products than Fruit and Vegetable Processing for the

I&M region.

2. The other two categories in this group, Specialty Canning (311422) and

Dried and Dehydrated Food Manufacturing (311423) did not have a

Description NAICS 2016 Jobs

% Change

in Jobs

(2006-2016)

2016

Average

Annual

Wages,

Salaries, &

Proprietor

Earnings

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Frozen Fruit, Juice, and

Vegetable Manufacturing311411 56 -58% $ 26,734 0.27 3 $ 2,459,967

Fruit and Vegetable Canning 311421 2003 -15% $ 45,483 4.96 17 $158,724,794

Summary Data 3114 2059 -17% $ 44,971 3.35 20 $161,184,761

Figure FV.2: Fruit and Vegetable Processing - Overview of the I&M Region



44

presence (less than 10 jobs) in the region. These categories would include

soups and dried fruits and vegetables.

In order to better understand the job decline in the Fruit and Vegetable

Processing group, Figure FV.3 shows a comparison of employment change in

the I&M region to the U.S. from 2006-2016, with projected future changes.

As Figure FV.3 shows, the Fruit and Vegetable Processing industry group was

adding employment in the I&M region through 2009, before starting a gradual

decline that became much steeper starting in 2015. The decline is projected to

continue for the I&M region, while the industry is also losing jobs at the national

level. These data do not consider two recent closures in the region:

• Tree House Foods announced, in August 2017, plans to close its Bay Valley

Pickle plant in Plymouth, IN which employed 150 workers. The facility also

processed peppers. Tree House Foods also announced that it was closing

plants in Alabama and Minnesota as part of a restructuring plan.17

• Del Monte in September 2017, announced plans to close its tomato

processing facility in Plymouth, IN, shifting production to its California

facility. The facility produces ketchup and tomato-based sauces, and

17 16 WNDU. 2017. “TreeHouse Foods to close Plymouth facility, others.” August 3.

http://www.wndu.com/content/news/TreeHouse-Foods-to-close-Plymouth-facility-others-438389913.html


45

juice from concentrate. The closure was expected to impact 100

workers.18

On a positive note, Pero Family Farms recently added a fresh-cut vegetable

processing line to its existing cold storage and distribution operations in Benton

Charter Township, MI. The $2.7 million expansion announced in 2015 is estimated

to create approximately 74 new jobs.19

Near the I&M region, Austin identified some limited growth activity in terms

expansion announcements. In 2015, Campbell Soup acquired Garden Fresh

Gourmet, a fresh salsa and dip manufacturer based in Ferndale, MI. The

acquisition included plans for $20-million in facility expansions, the first phase of

which began in 2016.20


region based on national and industry trends. More information and

background on this type of analysis is contained in Appendix K. The shift share

analysis is summarized in Figure FV.4.

The shift share analysis shows there is no competitive advantage in Fruit and

Vegetable Processing for the I&M region. Fruit and Vegetable Canning

employment was expected to lose 208 jobs between 2006-2016 but lost 340.

Frozen Fruit, Juice, and Vegetable Manufacturing also lost more jobs than

expected.

Wage growth for the industry group was also examined. Figure FV.5 below

illustrates recent wage growth in the I&M region compared to the U.S.

18 Daily Herald. 2017. “Del Monte closing Indiana plant, shifting work to California.” September 12.

19 Cox, S. 2015. “Pero Family Farms Food Company to Add Vegetable Processing Facility in Benton Charter

Township.” Cornerstone Alliance September 17.

20 Welch, S. 2016. “Campbell launches expansion, new products at Garden Fresh.” Crain’s Detroit Business.

August 7. Updated April, 1, 2017.


Change

Actual

Change

Regional

Competitive

Effect

Frozen Fruit, Juice, and Vegetable Manufacturing 311411 0 -78 -78

Fruit and Vegetable Canning 311421 -208 -340 -132

Figure FV.4: Fruit and Vegetable Processing - Shift Share Analysis of the I&M Region (2006-2016)


http://www.dailyherald.com/article/20170912/business/309129899

https://cstonealliance.org/news/2015/09/17/business-retention-expansion/pero-family-farms-food-company-to-add-vegetable-processing-facility-in-benton-charter-township/

https://cstonealliance.org/news/2015/09/17/business-retention-expansion/pero-family-farms-food-company-to-add-vegetable-processing-facility-in-benton-charter-township/

http://www.crainsdetroit.com/article/20160807/NEWS/160809913/campbell-launches-expansion-new-products-at-garden-fresh

http://www.crainsdetroit.com/article/20160807/NEWS/160809913/campbell-launches-expansion-new-products-at-garden-fresh


46

Historically since 2001, wages of Fruit and Vegetable Processing in the I&M

region have slightly lagged those of the U.S. on average. The gap has grown in

more recent years, with average annual wages for the I&M region lagging the

U.S. by more than $3,700 in 2016. Recent job losses could have contributed to

the slower growth in wages. However, competitive wages and a surplus of

trained workers resulting from these losses could be selling points to prospective

companies considering expanding to the region.

Supply Chain

The Fruit and Vegetable Processing industry group within the I&M region is a

mature industry with a developed supply chain that is closely linked to the

region’s agricultural assets. Companies in the industry tend to locate near their

supply of these perishable products to minimize transportation costs. Many of

these companies are also vertically integrated, owning some of the farms from

which they source to have more control over their supply and cost structure.

Purchases and sales of the Fruit and Vegetable Processing group were analyzed

to uncover relationships between companies in the industry and their suppliers,

service providers and customers. Figure FV.6 below illustrates the most significant

industries to which the Fruit and Vegetable Processing group purchases. Each

industry accounts for at least 2% of the total group purchases.


47

Compared to many of the other industry groups covered in this study, Fruit and

Vegetable Processing has a more diverse range of industries from which it

purchases inputs. Raw purchases for this group come from crops and total an

estimated $34.1 million. While significant, it only represents 5.5% of the total

purchases for the Fruit and Vegetable group in the region. Processed ingredients

make up a much larger portion of purchases for this industry group at an

estimated $131.6 million. Additionally, packaging materials and services also

represent larger shares of the total purchases by the industry group, estimated

at $68.2 million and $51.8 million respectively. These data mean that even

though crops are essential to the production of Fruit and Vegetable products,

they have a relatively low cost when compared with other inputs.

Of the industry categories in Figure FV.6 above, there are two notable

relationships to point out for the Fruit and Vegetable group. The Fruit and

Vegetable industry group purchases 82% of Fruit and Vegetable Canning

category inputs from inside the region, suggesting a strong connection.

Additionally, the in-region purchases for crop production amount to 67% of the

total purchases for this category. This shows a strong connection between crops

produced in the region and Fruit and Beverage Processing. More details on Fruit

and Vegetable purchases are in Appendix L.

To enhance the purchases data for the Fruit and Vegetable group, Austin

mapped berries (by county) in acres grown and vegetables (by county) in acres

harvested for Illinois, Indianan, Michigan, and Ohio. These data are illustrated in

Figure FV.7 (berries) and Figure FV.8 (vegetables) below.


Crop ProductionFlavoring Syurp and Concentrate

ManufacturingMetal Can Manufacturing

Corporate, Subsidiary, and Regional

Managing Offices

Fruit and Vegetable CanningOther Metal Container

Manufacturing


Brokers

Spice and Extract ManufacturingCorrugated and Solid Fiber Box

Manufacturing

Coffee and Tea Manufacturing

Mayonnaise, Dressing, and Other

Prepared Sauce Manufacturing

Figure FV.6: Fruit and Vegetable Processing Supply Chain - Purchases



48


49

Figures FV.7 and FV. 8 show where Fruit and Vegetable processing companies in

the I&M Region can source crops. While there is far more vegetable (including

tomatoes) production than fruit in the I&M region, these data only show a

significant density of berry production just north of the I&M region in counties

along the shore of Lake Michigan.

The fertile areas of the I&M region along Lake Michigan depicted in these figures

represents the southern extent of Michigan’s “Fruit Belt”. Most of the benefits of

this Fruit Belt can be attributed to climate and soils. The climate experienced in

the Fruit Belt is unique in to this geography, and often termed as a microclimate.

This small and distinct climate pattern is associated with the leeward (eastern)

side of Lake Michigan that lends to longer growing season and protection from

untimely frosts. When the microclimate is paired with the very fertile soils

common throughout the Great Plains and Mississippi and Ohio River Valleys, the

area became unique with its ability to cultivate fruit and vegetables (see

Appendices E and F).

The diversity of crops produced throughout each state are highlighted in Figures

FV. 9 and FV.10 below which show total production by product and the

percentage which each state contributes to U.S. production.

Commodity Indiana United States Indiana Contribution

Snap Beans 34,500,000 2,003,000,000 1.7%

Cantaloup 31,500,000 1,377,400,000 2.3%

Watermelon 301,000,000 4,019,600,000 7.5%

Pumpkins 66,200,000 1,607,000,000 4.1%

Sweet Corn 41,800,000 7,392,600,000 0.6%

Tomatoes 490,900,000 28,746,400,000 1.7%

Corn (Grain) 52,993,360,000 848,290,128,000 6.2%

Hay 3,562,000,000 269,562,000,000 1.3%

Maple Syrup 12,000 34,918,100 0.0%

Peppermint (Oil) 575,000 5,800,000 9.9%

Spearmint (Oil) 264,000 3,208,000 8.2%

Soybeans 19,423,500,000 257,765,160,000 7.5%

Wheat 1,360,800,000 138,523,380,000 1.0%

Source: USDA, NASS, Quick Stats

Notes: Some calculations had to be made to get all of these data transferred into

pounds. Assumptions were made to calculate Maple Syrup (8.3 lbs per gal), Soybeans (60

lbs per bu), and Wheat (60 lbs per bu).

Figure FV.9: Indiana Fruit and Vegetable Production (2016) - Measured in

Pounds


50

Based on Figures FV.9 (Indiana) and FV.10 (Michigan), Indiana has less diversity

in crops when compared with Michigan. However, there are some products that

are produced in Indiana that do not appear in Michigan. Cantaloupe,

watermelon, peppermint, and spearmint are present and accessible in Indiana

whereas there is not a significant enough presence in Michigan for the USDA to

report. Meanwhile, Michigan ranks notably high in terms of production and

Commodity Michigan United States Michigan Contribution

Apples 1,175,000,000 11,273,500,000 10.4%

Asparagus 23,000,000 70,500,000 32.6%

Snap Beans 166,700,000 2,003,000,000 8.3%

Blueberries 110,300,000 593,610,000 18.6%

Cabbage 115,500,000 2,266,500,000 5.1%

Carrots 139,600,000 3,030,600,000 4.6%

Celery 106,200,000 1,706,200,000 6.2%

Sweet Cherries 45,220,000 700,480,000 6.5%

Tart Cherries 227,000,000 329,300,000 68.9%

Cucumbers 541,400,000 1,768,800,000 30.6%

Grapes 186,800,000 15,338,060,000 1.2%

Peaches 21,200,000 1,591,260,000 1.3%

Peppers 36,400,000 1,561,500,000 2.3%

Potatoes 1,702,000,000 44,141,100,000 3.9%

Pumpkins 79,100,000 1,607,000,000 4.9%

Squash 146,400,000 613,100,000 23.9%

Sweet Corn 85,600,000 7,392,600,000 1.2%

Tomatoes 314,600,000 28,746,400,000 1.1%

Dry Beans 400,200,000 2,871,200,000 13.9%

Corn (Grain) 17,935,680,000 848,290,128,000 2.1%

Hay 4,714,000,000 269,562,000,000 1.7%

Maple Syrup 747,000 34,918,100 2.1%

Oats 55,680,000 2,072,640,000 2.7%

Soybeans 6,241,800,000 257,765,160,000 2.4%

Sugarbeets 9,178,000,000 73,762,000,000 12.4%

Wheat 3,043,800,000 138,523,380,000 2.2%

Figure FV.10: Michigan Fruit and Vegetable Production (2016) Measured in

Pounds


Notes: Some calculations had to be made to get all of these data transferred into pounds.

Assumptions were made to calculate Oats (32 lbs per bu), Maple Syrup (8.3 lbs per gal),

Soybeans (60 lbs per bu), and Wheat (60 lbs per bu).


51

contribution of asparagus, blueberries, tart cherries, cucumbers, and squash.

These tables highlight the diversity of crops which processors in the region have

access to nearby.

On the sales side of the supply chain relationships, Figure FV.11 below focuses on

industry categories that further process Fruit and Vegetable products to show

value added relationships.

When compared with the U.S., Figure FV.11 illustrates that there is less significant

diversity in the number of relationships with processors for the Fruit and

Vegetable group. Commercial Bakeries and Specialty Canning are two

important categories that are missing in the Fruit and Vegetable Processing

sales. These two industries use a significant amount of outputs from Fruit and

Vegetable Processing to add value to their final products. In the case of

Commercial Bakeries, fruit fillings are used in a variety of products including pies,

cakes, and other pastries. Specialty Canning operations use fruit and vegetable

products similarly in products like soups. These data represent opportunities that

could be further explored.

Trade in terms of total purchases and sales for Fruit and Vegetable Processing in

the I&M region are shown in Figure FV.12 below.



Fruit and Vegetable CanningFrozen Specialty Food

Manufacturing

Frozen Specialty Food

ManufacturingFruit and Vegetable Canning

Spice and Extract ManufacturingFrozen Fruit, Juice, and Vegetable

Manufacturing

Commercial Bakeries

Specialty Canning

Dried and Dehydrated Food

Manufacturing

Soft Drink Manufacturing

Figure FV.11: Fruit and Vegetable Processing Supply Chain - Sales



52

The group imports an estimated 77% of its inputs from outside the I&M region.

Given the seasonality of crop yields, it is reasonable to expect companies to

import goods to produce products year-round. With 89% of the sales being

exports, many of the products being sold are likely final goods that are

distributed to a much larger area.


As highlighted previously, the industry has been challenged with growth on a

national level. Increasing demand for fresh and organic fruits and vegetables

has particularly affected the market for canned produce. Competition from

imported fruits and vegetables has also affected some U.S. growers and

packagers.

Other trends that are impacting the industry include:

• Increasing demand for healthy but convenient foods has been positive for

certain fresh fruits and vegetables, such as pre-cleaned, pre-sliced /

diced, and other basic preparation that can be conveniently consumed

or cooked.

• The juice market is seeing a rise in demand for fresh cold-pressed juices in

place of heat pasteurized and juices from concentrate due to health

benefits.

• Natural fruit and vegetable juices are also being increasingly used for

flavoring and health benefits in other beverages.

• Many successful fruit and vegetable processors have shifted from a

regional to a national or global sourcing model to meet year-round

consumer demand for fresher products.

• Demand for locally grown produce continues to play a role in how and

where consumers purchase their produce.

• Hydroponic greenhouses have become increasingly popular based on

their ability to support year-round and organic production in a more

controlled environment.

Opportunities

Given the relative volume and diversity of fruits and vegetables produced and

processed in the region combined with how the industry is changing, several


Fruit and Vegetable Processing 3114 23% 77% 617,347,012$ 11% 89% 866,249,611$

Figure FV.12: Fruit and Vegetable Processing - Trade Analysis of the I&M Region (2016)

Purchases SalesNAICSDescription



53

opportunities for area growers, existing businesses, entrepreneurs, and business

attraction may include:

• Co-packing – canning companies reported excess production capacity

and interest in new co-packing opportunities.

• Suppliers opportunities to other regional industries such as Baking and

Snack and Dairy (e.g. fruit preparations)

• Trending products:

o Ready to eat fruit snacks.

o Ready to cook fresh vegetables.

o Cold-pressed juices.

• Potential to transition towards a growing organic sector.

• Value-added products (sauces, salsas, dried / dehydrated fruits and

vegetables).

• Meal kit delivery.

Issues and Concerns

• The regional industry is in decline and the national outlook for many of the

products that are processed in the area does not look favorable in the

near-term based on current trends.

• Area growers reported increased competition from foreign (lower cost)

growers, including Peru, Brazil, and Turkey, in certain categories.

• The canning industry is concerned about the potential of a tariff on

tinplate, which is primarily imported into the U.S. from China.

• Many of the orchards in southwest Michigan are small and require manual

harvesting.

• Current and future State / Federal migrant worker policies could affect

the overall health of the industry given competition from foreign countries.

• The area’s climate and humidity pose challenges for large-scale organic

production in the region.

o Many farmers are also reluctant to make the switch given the

significant transition period and lack of support network.

o Challenges include disease (fungus) and pests (e.g. Spotted Wing

Drosophila).

o However, some eastern states have been very successful in

overcoming these challenges (i.e. New York, Wisconsin).

Meat and Poultry

54

MEAT AND POULTRY

Industry

The Meat and Poultry industry group has an estimated total of 1,811 jobs spread

across 30 companies in the I&M region. This industry group has experienced 40%

growth in jobs from 2006 to 2016 and contributes over $122.2 million to the

region’s GRP. There is a large variety of Meat and Poultry manufacturing

in the region including slaughtering and basic processing, cured meats,

prepared meats, and egg products. A list of major Meat and Poultry processors

are included in Figure MP.1 below.

More specific data on employment, wages, and other information for the Meat

and Poultry industry group are included below in Figure MP.2.


Culver Duck Middlebury IN Duck processing

Echo Lakes Foods Huntington IN Cooked egg and breakfast products

HRR Enterprises, Inc. La Porte IN Beef rendering

Miller Poultry Orland IN Poultry processing

Monogram Food Solutions Bristol IN Corn dogs

Plumrose USA Elkhart IN Bacon


Figure MP.1: Meat and Poultry - Major Companies in the I&M Region


Jobs

% Change

in Jobs

(2006-2016)

Average

Annual

Wages,

Salaries, &

Proprietor

Earnings

(2016)

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Animal (except

Poultry) Slaughtering311611 239 -9% $ 33,243 0.26 13 $ 17,840,075

Meat Processed from

Carcasses311612 781 9% $ 32,520 0.94 11 $ 56,924,712

Rendering and Meat

Byproduct Processing311613 31 -34% $ 35,479 0.54 2 $ 2,524,221

Poultry Processing 311615 760 184% $ 40,524 0.49 4 $ 44,975,600

Summary Data 3116 1811 40% $ 36,026 0.54 30 $ 122,264,608


Figure MP.2: Meat and Poultry - Overview of the I&M Region

Meat and Poultry

55

Key observations from Figure MP.2 are included below.

1. Meat Processed from Carcasses (311612) and Poultry Processing (311615)

account for the largest employment for the Meat and Poultry industry

group. Meat Processed from Carcasses is the largest category with an

estimated 781 jobs. These jobs can mostly be attributed to Monogram

Foods Solutions and Plumrose USA.

2. Most of the employment growth is attributed to the Poultry Processing

category, which saw 184% growth over the ten-year period. Miller Poultry

and Culver Duck are the top regional employers in this category.

3. There is no significant density of labor within the I&M region in this industry

group. All location quotients are below the national level (1.00) and Meat

Processed from Carcasses has the highest with 0.94, despite high industry

employment numbers.

4. Wages in Meat and Poultry are relatively low when compared to other

Food and Beverage industry groups. Poultry Processing has the highest

average annual wages in the group at $40,524.

It is important to note that the Seafood Product Preparation and Packaging

(311710) category has been excluded from this industry group, because the

category has virtually no presence (less than 10 jobs) within the region.

Another category that was excluded from the industry data is Frozen Specialty

Food Manufacturing (311412). This category covers a broad range of products,

some of which including frozen meals containing meats and poultry products.

Data suggests that Echo Lakes Foods, which produces cooked egg and

breakfast products in Huntington County, IN is covered under this category.

However, the category was excluded for purposes of the industry analysis

because it likely represents non-meat related businesses.

Austin further examined industry employment growth. Figure MP.3 below

compares industry employment growth in the I&M region to industry

employment changes in the U.S. The chart also shows forecasted growth

through 2026.

Meat and Poultry

56

The I&M region has experienced considerable growth in Meat and Poultry. From

2006-2016, this region has seen 40% growth in jobs, while the U.S. average has

declined by 2%. In fact, U.S. employment is stagnant over the entire period in

the figure (2006-2026). The I&M region is also expected to grow at a steady rate

through 2026 with an overall growth rate of 73% over the 20-year period.

Recent expansion projects that have been announced in the I&M region

underscore this growth.

• Monogram Foods announced plans in 2016 to invest $5 million in a new

mini corn dog line at its 104,000 square-foot facility in Bristol, IN, creating

up to 74 new jobs. This announcement followed a $13 million investment in

its plant in 2015.21

• Fisher Meats announced plans in 2017 to expand its smoked meat

processing operations into an existing 26,000 square-foot plant in Redkey,

IN.22

21 16 WNDU. 2016. “Elkhart County food manufacturer to expand, add up to 74 jobs.” September 7.

22 Area Development. 2017. “Fisher Meats Opens Idle Plant, Triples Footprint In Redkey, Indiana.” February

10.

http://www.wndu.com/content/news/Elkhart-County-food-manufacturer-to-expand-add-up-to-74-jobs-392633141.html

http://www.areadevelopment.com/newsItems/2-10-2017/fisher-meats-jay-county-indiana.shtml

http://www.areadevelopment.com/newsItems/2-10-2017/fisher-meats-jay-county-indiana.shtml

Meat and Poultry

57

Additionally, the surrounding areas have also seen significant investment in new

and existing facility expansions. Several of these projects are highlighted below:

• Clemens Food Group started production in 2017 at its new 550,000 square-

foot pork processing plant in Coldwater, MI. The project was estimated to

cost over $255 million and create over 800 new jobs when the operation is

at full capacity.23

• Boar’s Head Brand opened, in 2016, its newly constructed 150,000 square-

foot delicatessen products manufacturing facility and R&D center in New

Castle, IN.24 The project was estimated to cost an initial $80 million and

employ up to 200 workers.25

• Indiana Packers Corporation invested over $40 million in a 43,000 square-

foot addition at its Delphi, IN pork processing plant to increase bacon

production capacity in 2015.26 In December 2016, the company also

announced plans for a $23 million cold storage distribution center next to

the plant.27

• Select Genetics, a Minnesota based company which announced plans in

March 2017 to invest $22 million to construct an 83,000 square-foot turkey

hatchery in Terre Haute, IN.28

• Kent Quality Foods, a producer of sausages and franks, announced plans

to build a $34.8 million processing facility in Jamestown, MI near Grand

Rapids, MI.29

Other notable industry activity within the region that could have an impact on

existing and new operations include:

23 Day, C. 2017. “Clemens Food Group leads the way in expanding U.S. shackle space.” National Hog

Farmer. July 31.

24 McCrory, J. 2016. “Boar’s Head brand to open new manufacturing facility in Henry County.” WSVX Giant

96 News. April 13.

25 Indy Star. 2014. “Boar’s Head Meats to build New Castle plant with 200 jobs.” August 28.

26 Vizza, C.M. 2015. “Indiana Packers to expand Delphi plant.” Journal & Courier. September 15.

27 Brown, A. 2016. “Indiana Packers Boosting Delphi Operations.” Inside Indiana. December 6.

28 U.S. News & World Report. 2017. “$22M Turkey Hatchery Project Planned in Western Indiana.” March 18.

29 Runyon, C. 2016. “New meat-processing plant in Jamestown to create 140 new jobs.” M Live Media

Group. May 15.

http://www.nationalhogfarmer.com/marketing/clemens-food-group-leads-way-expanding-us-shackle-space

http://www.nationalhogfarmer.com/marketing/clemens-food-group-leads-way-expanding-us-shackle-space

http://www.wsvx.com/2016/04/13/boars-head-brand-to-open-new-manufacturing-facility-in-henry-county/

http://www.wsvx.com/2016/04/13/boars-head-brand-to-open-new-manufacturing-facility-in-henry-county/

http://www.indystar.com/story/money/2014/08/28/boars-head-meats-plans-new-indiana-plant/14725995/

http://www.jconline.com/story/money/2015/09/15/indiana-packers-plant-expand-delphi-indiana/72302670/

http://www.insideindianabusiness.com/story/33943085/indiana-packers-boosting-delphi-operations

http://www.usnews.com/news/best-states/indiana/articles/2017-03-18/22m-turkey-hatchery-project-planned-in-western-indiana

http://www.mlive.com/hudsonville/index.ssf/2016/05/new_meat_processing_plant_in_j.html

http://www.mlive.com/hudsonville/index.ssf/2016/05/new_meat_processing_plant_in_j.html

Meat and Poultry

58

• JBS USA announced in March 2017 the acquisition of Plumrose USA, which

has a bacon processing facility in Elkhart, IN.30

• AquaBounty, a biotech company that has developed a genetically

engineered salmon, announced in June, 2017 the purchase of a fish farm

previously operated by Bell Fish Company.31 This would be the company’s

first U.S. fish farm. Following the purchase, the U.S. decided to renew a

ban on the import of genetically engineered salmon, so the project has

been put on hold.32

With such a high amount of positive activity in and around the I&M region in

Meat and Poultry, companies are seeing advantages to locating in the region.


region based on national and industry trends. The shift share analysis is

summarized in Figure MP.4 below.

The only category that exceeded growth exceptions in the I&M region is Poultry

Processing, which added 492 jobs between 2006-2016 while it was expected to

lose nine. This resulted in a competitive effect of 502 (rounded) for the region. A

competitive effect this high is impactful for the region and shows a clear

competitive advantage. The other categories have insignificant results in the

shift share analysis. What can be gleaned from results this close to zero is that

these industries are aligned with national and industry job trends.

Industry group wage growth was also examined. Figure MP.5 below compares

wage growth in the I&M region to the U.S. since 2001.

30 Crews, J. 2017. “JBS to acquire Plumrose USA.” Food Business News. March 14.

31 Vinluan, F. 2017. “AquaBounty Lines Up First U.S. Fish Farm With Deal for Indiana Site.” Exome. June 13.

32 Brooks, J. 2017. “U.S. Senate looks to renew ‘Frankenfish’ import ban.” Juneau Empire. July 24.


Change

Actual

Change

Regional

Competitive

Effect

Animal (except Poultry) Slaughtering 311611 -21 -25 -3

Meat Processed from Carcasses 311612 70 61 -9

Rendering and Meat Byproduct Processing 311613 -1 -15 -14

Poultry Processing 311615 -9 492 502


Figure MP.4: Meat and Poultry - Shift Share Analysis of the I&M Region (2006-2016)

http://www.foodbusinessnews.net/articles/news_home/Business_News/2017/03/JBS_to_acquire_Plumrose_USA.aspx?ID=%7b78241DE2-30E7-4EEC-80B5-34DD80862D39%7d

http://www.xconomy.com/boston/2017/06/13/aquabounty-lines-up-first-u-s-fish-farm-with-deal-for-indiana-site/

http://juneauempire.com/news/2017-07-24/us-senate-looks-renew-frankenfish-import-ban

Meat and Poultry

59

The figure above illustrates that industry wages in the I&M region have been

prone to fluctuation. Data from the most recent year (2016) shows that average

annual wages in the I&M region are $36,026 compared to $38,328 for the U.S.

Industry wages have generally been slightly below the U.S. in recent years. This

could be due to trending employment growth in the region accompanied by

entry level and less experienced workers. Major industry employers interviewed

by Austin for this project noted that local labor market conditions have

contributed to significant increases in wages to be able to compete for labor.

These data would not reflect those more recent increases.

Supply Chain

Meat and Poultry processors generally locate near the farms from which they

source livestock from or the processing plants from which they purchase fresh or

frozen meat for further preparation. Because of this, regional supply chains are

very important to the overall health and growth of the industry. To evaluate the

supply chain, data for purchases and sales between the Meat and Poultry

industry group and other industries were assessed. Purchases show relationships

between suppliers and service providers, while sales data shows customer

relationships.

Meat and Poultry

60

Figure MP.6 below illustrates the most significant industries from which the Meat

and Poultry group purchases. Each industry accounts for at least 2% of the total

group purchases.

Animal Production and Aquaculture accounts for about 58% of the purchases

for Meat and Poultry, totaling an estimated $316.4 million in 2016. All three

processed input categories of this supply chain make up about 7% each, and

total an estimated $113.6 million. Services only make up $20.6 million of the

purchases for this industry group. These data underscore the importance of

livestock in the Meat and Poultry supply chain. Further details on Meat and

Poultry purchases are contained in Appendix L.

To better understand where livestock are raised and sold in and around the I&M

region, Austin mapped counties in Illinois, Indiana, Michigan, and Ohio with

significant livestock (cattle, goats, hogs, and sheep) and poultry (including

eggs) sales. Figures MP.7 (livestock) and MP.8 (poultry) below display these

animal production data.

Raw Processed Services

Animal Production and Aquaculture Poultry ProcessingCorporate, Subsidiary, and Regional

Managing Offices

Animal (except Poultry)

Slaughtering

Meat Processed from Carcasses

Figure MP.6: Meat and Poultry Supply Chain - Purchases


Meat and Poultry

61

Meat and Poultry

62

The above two figures illustrate where Meat and Poultry processing companies

in the I&M region can source from. There are multiple counties within the I&M

region that sell more than $50 million in livestock and some adjacent counties

that sell more than $90 million, as indicated by the darker blues in Figure MP.7.

Figure MP.8 shows concentrations of poultry sales in several areas of the I&M

region and adjacent regions. Around the South Bend area, the concentration of

poultry farms, many of which are Amish, that supply regional poultry producers

can be seen. Other concentrations include the area near Muncie, IN reaching

into Ohio, and Southern Michigan which contain several counties with poultry

sales exceeding $100 million. Not as apparent from the map, but worth noting is

the concentration of shell-egg producers near the I&M region, particularly

around Warsaw, IN.

To provide more data on these livestock sales, Figure MP.9 summarizes total

animal products sold in Illinois, Indiana, Michigan, and Ohio. Although these

data are from 2012, updated 2017 figures will be released later in 2018. It will be

important to monitor any significant changes between 2012 and 2017,

especially in the poultry segment.

Moving forward to sales side of the supply chain for Meat and Poultry processors

in the I&M region, Figure MP.10 below shows the most significant sales

relationships with industries that further process or add value to these products,

and compares them with the U.S.

StateCattle

(Including Calves)Goats Hogs

Sheep

(Including Lambs)

Poultry

(Including Eggs)Total

Illionis 984,466,000$ 1,988,000$ 1,519,514,000$ 7,017,000$ 136,876,000$ 2,649,861,000$

Indiana 522,694,000$ 2,709,000$ 1,273,099,000$ 6,128,000$ 1,164,199,000$ 2,968,829,000$

Michigan 603,653,000$ 1,602,000$ 482,177,000$ 10,327,000$ 472,218,000$ 1,569,977,000$

Ohio 689,655,000$ 3,398,000$ 788,761,000$ 12,853,000$ 946,592,000$ 2,441,259,000$

Figure MP.9: Animal Product Production (2012) - in Annual Sales


Meat and Poultry

63

There are similarities between the top purchasers of Meat and Poultry products

within the I&M region and the U.S. One notable difference is that Dog and Cat

Food Manufacturing is not significant in the I&M regional supply chain. This

highlights the low industry presence of pet food manufacturing in the I&M

region, and could be an opportunity given the region’s supply chain resources

that support this industry. Also, sales to Poultry Processing accounts for 33% of the

total Meat and Poultry group sales for the I&M region, compared to just 11% for

the U.S. This points to the heavy influence of Poultry Processing to the industry

group for I&M.

Total purchases and sales for the Meat and Poultry industry group in the I&M

region area summarized in Figure MP.11 below.

Relative to other Food and Beverage industry groups, Meat and Poultry

purchases within the I&M region account are noticeably higher. This highlights

the industry’s connection to local livestock producers. Also, 29% of the industry

group’s sales are made to customers in the region, highlighting the fact that

many of these products are intended for regional distribution. Still 71% of the

sales are exported from the region.



Poultry ProcessingAnimal (except Poultry)

Slaughtering

Meat Processed from Carcasses Meat Processed from Carcasses

Animal (except Poultry)

SlaughteringPoultry Processing

Pharmaceutical Preparation

ManufacturingDog and Cat Food Manufacturing

Figure MP.10: Meat and Poultry Supply Chain - Sales



Meat and Poultry 3116 38% 62% $549,579,462 29% 71% $689,480,333

NAICSDescription

Figure MP.11: Meat and Poultry - Trade Analysis of the I&M Region (2016)


SalesPurchases

Meat and Poultry

64


Overall, meat consumption and production in the U.S. continues to rise, driven

primarily by pork and poultry. Eggs have also seen steady increases while beef,

lamb and veal have struggled in comparison. Total production and growth for

each product are illustrated in Figure MP.12 below.

Many consumers are becoming increasingly concerned about how livestock is

raised and processed. Some of the more common concerns include:

• Antibiotic and hormone use

• Ethical treatment – concerns over Concentrated Animal Feeding

Operations (CAFOs)

• Diet – increasing demand for animals raised on more natural diets (e.g.

grass fed)

• Use of additives and preservatives in cooked and cured meats

These concerns have forced large meat and poultry processors to adapt, while

creating opportunities for companies that focus on organic and pasture raised

meats / eggs.

Other trends impacting the industry include:

• Meat snacks, such as jerkies, have seen significant recent growth and

global demand is projected to continue to rise at a high rate.33

33 Cision PR Newswire. 2017. “Global Meat Snacks Market - Growth, Trends and Forecasts (2017-2022) - New

Approaches in Marketing & Innovative Flavors - Research and Markets.” May 16.

Product Measurement 2006 2016 2006-2016 % Change

Beef Million Pounds 25,792 24,908 -3%

Veal Million Pounds 144 74 -49%

Pork Million Pounds 20,877 24,789 19%

Lamb and mutton Million Pounds 177 138 -22%

Total red meat Million Pounds 46,990 49,909 6%

Broilers Million Pounds 35,500 40,696 15%

Other chicken Million Pounds 505 549 9%

Turkey Million Pounds 5,682 5,981 5%

Total poultry Million Pounds 41,823 47,364 13%

Total red meat and poultry Million Pounds 88,813 97,273 10%

Total Eggs Million Dozen 7,650 8,565 12%

Figure MP.12: Meat and Poultry - Federally Inspected Production

Source: USDA, National Agriculture Statistics Service

http://www.prnewswire.com/news-releases/global-meat-snacks-market---growth-trends-and-forecasts-2017-2022---new-approaches-in-marketing--innovative-flavors---research-and-markets-300457372.html

http://www.prnewswire.com/news-releases/global-meat-snacks-market---growth-trends-and-forecasts-2017-2022---new-approaches-in-marketing--innovative-flavors---research-and-markets-300457372.html

Meat and Poultry

65

• The U.S. is also seeing an increasing demand and start-up activity for plant

based meat / protein alternatives (e.g. Impossible Foods, Beyond Meat).

This has previously been a niche segment, but new and improved product

development combined with increasing demand from vegetarians and

flexitarians is fueling growth. Many of these startups are also well-funded.

Opportunities

Based on the analysis and recent industry trends on a national level,

opportunities for future growth and development for the I&M region include:

• Value-added meat products - including cooked / cured meats, prepared

meals, meat snacks

• Ethnic inspired foods – continues to be an opportunity in value-added

meats as the U.S. becomes more diverse and consumers seek out more

authentic flavors.

• Aquaculture – sustainable seafood production through manmade

fisheries is on the rise globally and the U.S. could expect to see more

activity in this industry. The U.S. also currently imports a lot of seafood

products, which has a major impact on costs.

• Plant based meat substitutes – not dependent on meat but competing

with the industry. Can be made from a variety of plant based ingredients,

which may be grown or could be grown nearby.

• Pet foods – many pet foods contain meat products. This is addressed

more specifically under the Animal Food section of the report.

• Meat exports - raw meat exports continue to be an opportunity for

processors. China just recently lifted a ban on U.S. beef imports, which has

potential to impact production in the U.S.34

• Contract meat processing – smaller farms throughout the region reported

having to ship their meat outside the area for processing.

• Organics – rising demand for organic and pasture raised meats and

poultry products presents market and financial opportunities for growers

and processors.

• Utility growth – Meat and poultry processing operations, particularly those

that slaughter and process raw meats, tend to be large in scale, and use

high volumes of water for sanitation and electricity for processing

equipment and refrigeration.

34 Bloomberg News. 2017. “U.S. Beef Debuts in China After 14 Years, May Help Balance Trade.” June 30.

http://www.bloomberg.com/news/articles/2017-06-30/u-s-beef-debuts-in-china-after-14-years-may-help-balance-trade

Meat and Poultry

66

Issues and Concerns

• Regulations on CAFOs – there have reportedly been increasing

conversations among stakeholders in Indiana and Michigan about

regulations on CAFOs, with some residents and activists expressing

concerns over animal welfare, negative impacts to residences, storm

water quality, and other concerns. Any future regulations at the state level

that would put the state in a less favorable regulatory position versus other

states could impact industry growth. More restrictive zoning regulations at

the local level can also have an adverse impact on growth of existing

CAFOs or new ones.

• Labor shortages tend to be most pronounced in large animal slaughtering

and processing facilities, which account for a large percentage of

regional industry employment.

• Indiana currently has no USDA beef inspectors in the state due to a

reported lack of business.

Beverage

67

BEVERAGE

Industry

The Beverage industry group is comprised of approximately 60 companies within

the I&M region that employ more than 1,500 workers. Products produced in the

region include bottled water, teas, juices, and sodas; alcoholic beverages,

including beer, wine, and distilled spirits; and other specialty beverages.

Beverage companies in the I&M territory have access to large quantities of fresh

water via aquifers and Lake Michigan, which is an important strength for the

region. The industry has experienced very strong regional growth, with

employment increasing by 248% over a 10-year period between 2006 and 2016.

Figure B.1 below identifies the major Beverage companies in the I&M region.


Beverage industry group is included below in Figure B.2.


Bell's Brewery Galesburg MI Beer

Coca-Cola Consolidated Portland IN Soft drinks, bottled beverages

The Coca-Cola Company (Minute Maid) Paw Paw MI Juices

Knouse Foods Paw Paw MI Apple sauce, bottled tea

Nestle USA Anderson IN Beverages, non-dairy creamers

Welch's Lawton MI Juices

Figure B.1: Beverage - Major Companies in the I&M Region



Jobs

% Change

in Jobs

(2006-2016)

2016 Wages,

Salaries, &

Proprietor

Earnings

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Soft Drink Manufacturing 312111 101 51% $ 28,947 0.19 1 $ 6,761,943

Bottled Water Manufacturing 312112 261 38% $ 78,573 2.54 4 $ 46,507,131

Ice Manufacturing 312113 66 25% $ 30,208 1.30 5 $ 4,612,260

Breweries 312120 737 1064% $ 22,476 1.85 20 $117,831,740

Wineries 312130 275 342% $ 21,349 0.66 26 $ 18,422,663

Distilleries 312140 74 7341% $ 22,695 0.89 4 $ 33,726,157

Summary Data 3121 1515 248% $ 32,702 0.95 60 $227,861,893


Figure B.2: Beverage - Overview

Beverage

68

Key observations from the overview data in Figure B.2 include:

1. Breweries account for the largest share of employment in the group with

737 jobs. This category also grew at a high rate of 1,064% from 2006 to

2016 and has a density of labor that is 1.85 times the U.S. average.

2. Like Breweries, Distilleries (312140) also experienced high job growth. Both

categories show high numbers because of their low employment in 2006.

Breweries only had 63 jobs at that time, whereas, Distilleries did not have

any reported employment until 2011.

3. The high job numbers for the Breweries and Wineries categories are split

among many companies which suggests that most of these operations

are of smaller scale. The only exception is Bell’s Brewery, which is one of

the largest craft breweries in the U.S.

4. The Soft Drink Manufacturing (312111) category can be attributed to the

Coca-Cola Consolidated production facility in the territory.

It is important to note that the industry employment data is not inclusive of

bottled dairy products and fruit and vegetable juices. These are typically

considered under their respective industry categories and difficult to separate

for this type of analysis. However, there are many relationships between those

industries such as packaging technologies and materials, that warrant

consideration in terms of labor and supply chain similarities.

Also, Austin was unable to account for the significant employment in the Bottled

Water Manufacturing category. Data showed that there is a large employer in

Kalamazoo County, MI, but Austin was unable to pinpoint the specific company.

It is possible that this is the result of a miscategorization.

To expand upon the favorable employment growth of the Beverage industry

group in the I&M territory, Figure B.3 compares the employment growth of the

I&M region to that of the U.S.

Beverage

69

Figure B.3 illustrates the strong employment growth in the industry within the I&M

region and at the national level. Much of this growth can be attributed to

breweries and other alcoholic beverage producers. There has been a recent

explosion in craft beer and other alcoholic beverages across the nation and

growth in the I&M region has followed this trend.

In addition to the growth in alcoholic beverages at the regional level, Nestlé

announced, in December 2017, it was investing $79.5 million on new equipment

upgrades at its Anderson, IN beverage plant, adding approximately 30 jobs.

Nestlé opened the plant in 2009 and has completed multiple expansion and re-

investment projects.35

Looking near the I&M region at other industry related activity, Nestlé Waters

North American announced, in 2016, a $36 million expansion in its water bottling

facility in Stanwood, MI. The project was slated to add two bottling lines at the

plant.36 Subsequently, Nestlé has had its permits denied to increase pumping

35 Powder & Bulk Solids. 2017. “Nestle to Invest $79M in New Equipment for Indiana Plant.” December 15.

36 Nestlé Waters North America. 2016. “Nestlé Waters North America Announces $36 Million Expansion of Ice

Mountain® Bottling Plant.” Press Release. October 31.

http://www.powderbulksolids.com/news/Nestle-to-Invest-79M-in-New-Equipment-for-Indiana-Plant-12-15-2017

http://www.nestle-watersna.com/en/nestle-water-news/pressreleases/nestle-waters-expansion-of-michigan-bottling-plant

http://www.nestle-watersna.com/en/nestle-water-news/pressreleases/nestle-waters-expansion-of-michigan-bottling-plant

Beverage

70

capacity at the plant and has faced public opposition to the project due to

concerns over impacts to regional groundwater supply.37

Austin also completed a shift share analysis to measure the competitiveness of

the region based on national and industry trends. The shift share analysis is

summarized in Figure B.4.

Each of the Beverage categories have a positive competitive effect for the I&M

region. These data seem to be reflective of the large employment growth that

wasn’t expected at the same level for the U.S. Breweries and Wineries

performed especially well from a competitive standpoint with effects of 593 and

173 respectively. This underscores the fact that the Breweries category has been

the leading driver of growth for the Beverage group in the I&M region.

Figure B.5 below depicts overall industry wage growth for the I&M region and

the U.S. since 2001.

37 Cassleman, D. 2017. “We’ve Got Issues: Nestle’s push to pump more water held up in northern Michigan.”

Interlochen Public Radio. August 21.


Change

Actual

Change

Regional

Competitive

Effect

Soft Drink Manufacturing 312111 0 34 35

Bottled Water Manufacturing 312112 1 71 70

Ice Manufacturing 312113 -6 13 19

Breweries 312120 81 674 593

Wineries 312130 40 213 173

Distilleries 312140 1 73 73


Figure B.4: Beverage - Shift Share Analysis (2006-2016)

http://interlochenpublicradio.org/post/we-ve-got-issues-nestle-s-push-pump-more-water-held-northern-michigan

http://interlochenpublicradio.org/post/we-ve-got-issues-nestle-s-push-pump-more-water-held-northern-michigan

Beverage

71

As shown in Figure B.5, there is a significant difference in the Beverage wages for

the I&M region and the U.S. In 2016 there is a gap of more than $18,000 between

I&M ($32,702) and the U.S. ($51,128). When looking at the trendline (in red) for

the I&M region, wages have slightly decreased over this period, despite

significant wage inflation in the U.S. Given that craft alcoholic beverage

producers largely influence the industry group, this would explain the lower

wages. Many of these are small start-up companies that require bartenders,

servers, and other service and retail oriented staff that may work part-time and

receive cash tips. These wages are not representative of those found at

industrial beverage production facilities, which have a limited presence in the

I&M region.

Supply Chain

To evaluate the rest of the supply chain, data for purchases and sales between

the Beverage industry group and other industries were assessed. Purchases show

relationships between suppliers and service providers, while sales data shows

customer relationships. With water being the top ingredient in most beverage

products and important for processing foods in general, Austin assessed regional

water assets under a separate section of this report.

Beverage

72

Figure B.6 below illustrates the most significant industries in which the Beverage

group purchases. Each industry accounts for at least 2% of the total group

purchases.

From the figure above, the Beverage industry group has a variety of inputs that

add complexity to the supply chain. There is quite a diversity of packaging

materials that are purchased for Beverage production. Packaging materials

make up the largest portion of purchases for this industry group at 22% or an

estimated $72.0 million. Purchases from services, processed ingredients, and

crops are estimated at $56.2 million, $42.9 million, and $8.0 million respectively.

Commonly purchased processed ingredients include flavorings, syrups,

sweeteners, and grains used in the production of alcoholic beverages. The full

detail of Beverage purchases are described in Appendix L.

Because data in Figure B.6 is based on national averages which reflect many

non-alcoholic beverages, Austin also analyzed the Alcoholic Beverage supply

chain which better aligns the industry in the I&M region. Figure B.7 below shows

the purchases for the Alcoholic Beverage industry group in the region.


Crop ProductionFlavoring Syrup and Concentrate

ManufacturingPlast ics Bott le Manufacturing


Managing Offices

Wet Corn Milling Metal Can ManufacturingLessors of Nonfinancial Intangible

Assets (except Copyrighted Works)

Flour MillingGlass Product Manufacturing

Made of Purchased Glass

Other Aluminum Rolling, Drawing,

and Extruding


Manufacturing

Aluminum Sheet, Plate, and Foil

Manufacturing

Other Metal Container

Manufacturing

Figure B.6: Beverage Supply Chain - Purchases


Beverage

73

Much like the overall Beverage group, the Alcoholic Beverage group purchases

a variety of packaging materials. The main difference with the Alcoholic

Beverage group is highlighted in processed ingredients. Wet Corn Milling and

Flavoring Syrup and Concentrate Manufacturing industry categories are not

significant enough (below 2% of purchases) to show up in the Alcoholic

Beverage purchases. This is because Alcoholic Beverages are not using as much

sweeteners and flavoring additives in products. Purchases from Distilleries can be

attributed to the use of barrels that are used for aging beer.

Sales to other processing industries in the Beverage supply chain for the I&M

region were compared to the U.S. below in Figure B.8.

It is difficult to identify any major supply chain gaps or specific opportunities for

further value-added processing from these data, as is sometimes possible with


Crop Production Flour Milling Metal Can ManufacturingCorporate, Subsidiary, and Regional

Managing Offices

Dist illeriesGlass Product Manufacturing

Made of Purchased Glass

Lessors of Nonfinancial Intangible

Assets (except Copyrighted Works)

Other Metal Container

Manufacturing


Manufacturing

Glass Container Manufacturing

Other Pressed and Blown Glass and

Glassware Manufacturing

Figure B.7 : Alcoholic Beverage Supply Chain - Purchases




Dist illeries Dist illeries

Wineries Soft Drink Manufacturing

Dog and Cat Food Manufacturing Other Animal Food Manufacturing

Wineries

Figure B.8: Beverage Supply Chain - Sales


Beverage

74

other food products. Most beverages are processed for final sale, and not

further processed at other facilities. Relationships between alcoholic beverage

companies are common in terms of selling grain, barrels, and other materials to

one another. These relationships have more to do with supplies. Also, spent grain

from breweries and distilleries is commonly used as animal feed.

Total purchases and sales were also reviewed as a part of the supply chain

analysis for the Beverage industry group. These data are presented in Figure B.9

below.

Purchases from outside the region make up more than three-quarters of the

total purchases. By contrast, a higher percentage of sales that are kept in the

region, which is likely influenced by the significance of small Alcoholic Beverage

companies in the area that do not have as wide of a distribution network to sell

their products. These data also show a substantial difference between the total

value of purchases and sales in comparison to other industry groups. This

highlights the higher margins associated with many alcoholic and specialty

beverages.


Large global companies such as Coca-Cola and PepsiCo have a strong

influence on the U.S. beverage market. For alcoholic beverages, Anheuser-

Busch InBev, Constellation Brands, Diageo, and other multinational companies

control many of the largest brands of beer, wine, and spirits. These companies

have recently faced competition from smaller specialty beverage and craft

breweries and have responded by acquiring those successful smaller brands

with high growth potential to diversify their portfolio. This trend is expected to

continue as these smaller companies have been driving innovations in the

industry.


Beverage 3121 24% 76% 324,405,928$ 31% 69% 611,226,465$

Figure B.9: Beverage - Trade Analysis of the I&M Region (2016)

Description NAICSPurchases Sales


Beverage

75

Other trends affecting the beverage industry include:

• Demand in certain natural, health focused ready-to-drink segments that

offer a healthy alternative to traditional sodas and sweetened beverages

including:

o Kombucha / teas

o Cold brew coffees

o Cold pressed juices

• Competition for shelf space, especially in the craft beer and ready-to-

drink categories is fierce. This is a growth barrier for many local craft

breweries seeking to expand distribution beyond the immediate region.

• The alcoholic beverage market is strong, with craft producers accounting

for much of the growth. Many of these companies are solely focused on

local growth and cater to consumers who prefer to support local

businesses and are looking for experience (beer, wine, food,

entertainment). These companies have also played a vital role in

community development efforts. Growth is expected to slow as local

markets become more saturated. Categories include:

o Craft breweries

o Craft distilleries

o Wineries

o Mead, cider, other fermented beverages

Opportunities

• The region has many advantages that could be attractive to beverage

companies, including proximity to beverage packaging suppliers, location

for distribution, and water capacity.

• Beverage companies in the area can leverage regional resources

including fruit production for juices and flavoring companies for new

product development.

• The industry offers opportunities for entrepreneurial / start-up growth,

especially in craft beverages. This can also community redevelopment

efforts.

• Many beverage companies require large volumes of water as a product

ingredient and for sanitation. Electric usage varies depending on process

equipment, blow-molding capabilities, refrigeration requirements and

scale of operations.

Issues and Concerns

• Limited organic fruit production in the area limits potential in the juice

category.

Beverage

76

• The craft beer market is becoming very saturated and not expected to

continue to grow at the pace experienced over the past several years.

• New beverage plants, especially large bottled water facilities, are prone

to public scrutiny due to the large volume of water they consume, and

low rate of discharge since a high percentage of the water goes into the

finished product. When considering these projects, it’s important to

understand the potential impacts on area water resources, identify any

barriers, and be prepared to respond to any public criticisms that can

stymie recruitment efforts.

Confectionery

77

CONFECTIONERY

Industry

The Confectionery industry group’s prominence in the I&M region is primarily

attributed to Kraft Heinz and American Licorice, the two largest industry

employers. Data shows that these companies account for most of the industry

group’s 836 jobs in the region.

Figure C.1 below highlights these two companies and the products they

produce.


Confectionery industry group is included below in Figure C.2.


American Licorice Company La Porte IN Candy

The Kraft Heinz Company Kendallville IN Marshmallows, caramels

Figure C.1: Confectionery - Major Companies in the I&M Region



Jobs

% Change

in Jobs

(2006-2016)

2016 Wages,

Salaries, &

Proprietor

Earnings

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Beet Sugar Manufacturing 311313 0 0% $ - 0.00 0 $ -

Cane Sugar Manufacturing 311314 0 0% $ - 0.00 0 $ -


Manufacturing311340 836 56% $ 40,358 6.00 4 $ 92,890,322

Chocolate and Confectionery

Manufacturing from Cacao Beans311351 0 0% $ - 0.00 0 $ -

Confectionery Manufacturing from

Purchased Chocolate311352 244 -24% $ 24,783 1.16 11 $ 17,395,712

Summary Data 3113 1080 26% $ 36,837 3.08 15 $110,286,033

Figure C.2: Confectionery - Overview of the I&M Region


Confectionery

78

Key observations from the data shown above includes:

1. The Nonchocolate Confectionery Manufacturing category accounts for

most of the industry group’s jobs and has a labor density that is six times

that of the U.S.

2. Confectionery Manufacturing from Purchased Chocolate has 244 jobs

that are spread across an estimated 11 companies. These data are likely

attributed to smaller, specialty retail chocolate shops.

3. The Nonchocolate Confectionery Manufacturing category accounted for

all the industry’s growth in the region.

Although these data show no presence of Beet Sugar Manufacturing (311313)

and Cane Sugar Manufacturing (311314), there are beet sugar refineries

located close to the region in Michigan and sugar distribution centers near the

area.

Since there is such a high rate of growth in the Confectionery industry group, it is

important to make a comparison with the rest of the nation to see how well the

I&M region is doing. Figure C.3 displays this relationship.

Confectionery

79

Industry employment in the U.S. has been rebounding recently after a period of

decline. In contrast, the I&M region has seen more substantial growth in

employment. Future employment projections for the U.S. are not favorable,

showing a gradual decline consistent with many other economic forecasts for

the industry. While projections look more favorable for the I&M region, this may

be misleading given a high rate of recent growth in the industry, influenced by a

relatively small number of companies.

The positive performance for the I&M region is highlighted by recent plant

investments by the two largest employers.

• American Licorice Co. announced, in 2013, plans to invest $10 million in

equipment and renovations at its La Porte, IN manufacturing plant,

creating 35 jobs.38

• Kraft Heinz announced, in 2017, a $5 million investment in new equipment

and a boiler system at its Kendallville, IN plant.39

Another recent industry expansion project near the region was also identified.

• Albanese Confectionery, a candy and gummy maker, announced a $33

million investment at its Hobart, IN facility in 2017, that is expected to add

150 additional employees.40

Considering the industry group’s growth in the I&M region, a shift share analysis

was completed to measure the competitiveness of the region based on

national and industry trends. The shift share analysis is summarized in Figure C.4

below.

38 NWI Times. 2013. “American Licorice Co. planning $10 million expansion in LaPorte.” January 23.

39 Nartker, D. 2017. “Council OKs Kraft Heinz abatement.” Noble County Economic Development

Corporation. March 22..

40 Caffarini, K. 2017. “Candy company announces $33M expansion in Hobart.” Post-Tribune. December 21.

http://www.nwitimes.com/business/local/american-licorice-co-planning-million-expansion-in-laporte/article_ee831d79-7b6c-5c71-a482-ce268fd7a99f.html

http://noblecountyedc.com/news/council-oks-kraft-heinz-abatement

http://noblecountyedc.com/news/council-oks-kraft-heinz-abatement

http://www.chicagotribune.com/suburbs/post-tribune/news/ct-ptb-albanese-expansion-st-1224-20171223-story.html

Confectionery

80

The analysis showed a regional competitive effect of 217 for the Nonchocolate

Confectionery Manufacturing category. Employment in the category between

2006 and 2016 grew by 301, outperforming the expected increase of 84. Other

categories were less significant given the low regional presence. As noted

earlier, Confectionery Manufacturing from Purchased Chocolate declined in

the region, but at a greater rate than expected.

Wage growth for the industry is illustrated in Figure C.5 below, which compares

growth in wages to the U.S.


Change

Actual

Change

Regional

Competitive

Effect

Beet Sugar Manufacturing 311313 0 0 0

Cane Sugar Manufacturing 311314 0 0 0

Nonchocolate Confectionery Manufacturing 311340 84 301 217

Chocolate and Confectionery Manufacturing

from Cacao Beans311351 0 0 0

Confectionery Manufacturing from Purchased

Chocolate311352 -40 -75 -36

Figure C.4: Confectionery - Shift Share Analysis of the I&M Region (2006-2016)


Confectionery

81

The fluctuation in wages for the I&M region is likely the result of a smaller sample

size of companies compared to other industry groups. The red trendline better

illustrates the growth in wages. The chart shows that regional wage growth has

generally followed a similar trend as the U.S., with annual average wages of less

than $37,000 for the I&M region in 2016.

Supply Chain

To evaluate the supply chain, Austin examined purchases and sales data for the

industry group. Purchases show relationships between suppliers and service

providers, while sales data shows customer relationships. Figure C.6 below

illustrates the most significant industries in which the Confectionery group

purchases. Each industry accounts for at least 2% of the total group purchases.

Processed ingredients offer the most variety of industries from which the

Confectionery group purchases. Confectionery purchases an estimated total of

$63.1 million from this segment which amounts to over 28% of its total purchases.

Purchases from services, crops, and packaging materials amount to estimates of

$25.4 million, $22.5 million, and $5.7 million respectively. For more details on

Confectionery purchases in the I&M territory see Appendix L.

From viewing data in Figure C.6, it appears that the Confectionery industry

group purchases from other Confectionery categories that do not have a

presence in the region. As mentioned previously, Michigan has as concentration

of beet sugar refineries, and cane and beet sugar are both available from

nearby distribution centers. Wet corn milling facilities that produce corn

sweeteners and starches are also located near the region (see Appendix C).


Crop ProductionConfectionery Manufacturing from

Purchased Chocolate


Manufacturing


Managing Offices


Manufacturing


Brokers


Manufacturing from Cacao Beans

Cane Sugar Manufacturing

Fluid Milk Manufacturing

Wet Corn Milling

Beet Sugar Manufacturing

Figure C.6: Confectionery Supply Chain - Purchases


Confectionery

82

The Confectionery group also benefits from Fluid Milk Manufacturing companies

in the I&M region but this connection only amounts to about 2.6% of the

purchases.

To examine supply chain connections with customers that purchase

confectionery ingredients for further processing, interindustry sales to other

processing industries were examined. Sales within the I&M region were also

compared to the U.S. to look for differences. Figure C.7 illustrates these sales

data.

As seen in Figure C.7 above, there are a variety of processing industry

categories that Confectionery sells to on the regional and national levels. For

example, the inclusion of the Cookie and Cracker Manufacturing, Commercial

Bakeries, and Ice Cream and Frozen Dessert industries highlight the applications

of confectionery ingredients in these products. These sales particularly reveal the




Manufacturing


Purchased Chocolate

Cookie and Cracker ManufacturingNonchocolate Confectionery

Manufacturing


Purchased ChocolateCommercial Bakeries

Commercial Bakeries Cookie and Cracker Manufacturing


Manufacturing from Flour


Manufacturing from Cacao Beans

Fluid Milk Manufacturing Cane Sugar Manufacturing

Fruit and Vegetable Canning Breakfast Cereal Manufacturing


Manufacturing


Manufacturing from Flour


Dairy Product ManufacturingBeet Sugar Manufacturing

Retail Bakeries

Tort illa Manufacturing


Manufacturing

Figure C.7: Confectionery Supply Chain - Sales


Confectionery

83

connection of Confectionery to the Baking and Snack Food industry, which

could be an opportunity for further exploration.

To build upon the supply chain data described above, Austin also analyzed the

total purchases and sales data for the Confectionery industry group. These data

for the I&M region are detailed in Figure C.8 below.

The Confectionery group purchases about three-quarters of its inputs from

outside the I&M region. Given that many major ingredient suppliers are located

outside the I&M region, this is not surprising. On the sales side, most (90%) of the

Confectionery products are being sold outside the I&M region. This supported by

the fact that the area’s top employers (listed in Figure C.1) primarily produce

final products that are widely distributed.


U.S. Confectionery industry growth is expected to be very moderate in the

coming years and some analysts are even predicting a decline. The industry

group is facing challenges with a growing health-conscious consumer base in

the U.S., where excess sugar consumption has been linked to obesity and other

health issues.

Other trends affecting the industry include:

• While still widely used, the use of corn sweeteners is declining. This has

given way to cane sugar and relatively new commercial sugars from

other plants, some of which offer more sweetness with less calories.

• Consumers are also demanding use of natural ingredients. Large industry

players such as Mars, Nestlé and Hershey have already announced plans

to remove artificial colors from their products.

• Chocolate and fruit combinations have been recently growing in

popularity.


Confectionery 3113 24% 76% $224,598,958 10% 90% $370,134,918

Figure C.8: Confectionery - Trade Analysis of the I&M Region (2016)



Confectionery

84

Opportunities

The industry does not appear to offer the same growth prospects compared to

other industries evaluated for this report. Recent industry investment trends and

growth forecasts are less favorable. The industry is also less concentrated in the

I&M region. One potential opportunity could involve further exploration on

linkages with area baking and snack food companies.

Issues and Concerns

The presently bleak future of corn sweetener use in the industry could impact

the region’s current cost advantage for these confectionery ingredients.

Flavors, Dressings, and

Seasonings

85

FLAVORS, DRESSINGS, AND SEASONINGS

Industry

The Flavors, Dressings, and Seasonings group focuses mostly around larger

companies with an estimated total of six establishments that employ 559

workers. This industry group has about 1.67 times the labor density of the nation

and contributed over $84.7 million to the I&M region’s GRP in 2016. Additionally,

many of the products produced by the industry are ingredients that can add

value to and support other food and beverage products produced in the

region. The major industry employers in the I&M region are listed in Figure FDS.1

below.


industry group is included below in Figure FDS.2.


International Bakers Services, Inc. South Bend IN Flavor and flavor blends

Kalsec, Inc. Kalamazoo MINatural flavorings, extracts, colors, and

antioxidants

McCormick & Company, Inc. South Bend IN Condiments, dressings, and sauces

National Flavors Kalamazoo MI Flavors, colors, and syrups

Wild Flowers and Special

Ingredients (A.M. Todd)Kalamazoo MI Mint oils and extracts

Figure FDS.1: Flavors, Dressings, and Seasonings - Major Companies in the I&M Region



Jobs

% Change

in Jobs

(2006-2016)

2016 Average

Annual

Wages,

Salaries, &

Proprietor

Earnings

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Flavoring Syrup and Concentrate

Manufacturing311930 16 -53% $ 59,463 0.22 1 $ 4,737,682

Mayonnaise, Dressing, and Other

Prepared Sauce Manufacturing311941 72 -10% $ 46,006 0.68 1 $ 7,187,751

Spice and Extract Manufacturing 311942 471 28% $ 76,245 3.03 4 $ 72,815,248

Summary Data Unique 559 16% $ 71,841 1.67 6 $ 84,740,681

Figure FDS.2: Flavors, Dressings, and Seasonings - Overview of the I&M Region



Seasonings

86

Important information to glean from these data include:

1. Most of the employment in this industry group can be attributed to Spice

and Extract Manufacturing (311942), which covers most of the companies

on the employer list above that produce a variety of extracts and

flavorings used as food ingredients.

2. The data suggests that all the jobs in the Mayonnaise, Dressing, and Other

Prepared Sauce Manufacturing (311941) category are likely linked to

McCormick & Company, Inc.

3. Employment growth in Spice and Extract Manufacturing accounted for all

the growth in the industry category between 2006 and 2016.

Figure FDS.3 illustrates the growth of the industry group in the I&M region

compared with that of the U.S.

Employment in the industry spiked in 2007 for the I&M region, followed by a

sharp decline before stabilizing over the past several years. Nationally, the

industry has experienced strong growth in employment and is projected to

continue to improve over through at least 2026. Weaker projections for the I&M

region could be the result of fluctuations in job performance, influenced heavily

by a small group of employers. For this reason, the national forecast data may


Seasonings

87

be more useful in looking at potential growth prospects for companies doing

business in the region.

A steady flow of investment from companies in and around the I&M region

further support the growth data.

• National Flavors started construction, in 2017, on a new 30,000 square-foot

manufacturing facility near Kalamazoo, MI, where the company is based.

Investment in the new facility was expected to be $4.9 million.41

• Ken’s Foods broke ground, in 2017, on a new 320,000 square-foot

manufacturing and distribution facility in Lebanon, IN for production of

dressings, sauces and marinates. Investment in the new plant is estimated

at $90 million.42

• Kraft Heinz Company announced, in 2016, a $17.2 million expansion at its

Holland, MI plant to consolidate its entire Grey Poupon mustard

production and insource the majority of its Heinz Yellow Mustard.43

• Litehouse, Inc. recently completed a 25,000 square-foot expansion of its

Lowell, MI dressings manufacturing plant and plans to add 77 new jobs.44

• Sensient Flavors announced, in 2015, that it would close plants in

Indianapolis, IN and Canada, shifting production to its facility in Harbor

Beach, MI.45

Given the amount of recent activity that is happening near the I&M territory

there may be an advantage for companies. Competitive advantages can be

measured by a shift share analysis. This type of analysis can show the regional

competitiveness of an area based on variances from national and industry

trends. Figure FDS.4 provides a summary of the shift share analysis.

41 Barrett, M. 2017. “Door hinge manufacturer, flavor company expand in Oshtemo Township.” Kalamazoo

News. November 16.

42 Veleta, K. 2016. “Ken’s Foods’ $90 Million Adds to Recipe for Growth.” Inside Indiana Business. November

16.

43 Achtenberg, K. 2016. “Please pass the mustard. Kraft Heinz brings Grey Poupon mustard production to

Holland.” Michigan Economic Development Cooperation. August 25.

44 The Right Place. 2017. “The Right Place assists Litehouse, Inc. with area expansion.” November 8.

45 Harp, R. 2015. “Sensient Flavors says it will grow.” Huron Daily Tribune. February 19.

http://www.mlive.com/news/kalamazoo/index.ssf/2017/11/brownfield_plan_business_expan.html

http://www.mlive.com/news/kalamazoo/index.ssf/2017/11/brownfield_plan_business_expan.html

http://www.insideindianabusiness.com/story/33724039/kens-foods-90-million-adds-to-recipe-for-growth

http://www.insideindianabusiness.com/story/33724039/kens-foods-90-million-adds-to-recipe-for-growth

http://www.michiganbusiness.org/news/please-pass-the-mustard/

http://www.michiganbusiness.org/news/please-pass-the-mustard/

http://www.rightplace.org/news/the-right-place-assists-litehouse-inc-with-area-expansion

http://www.michigansthumb.com/news/article/Sensient-Flavors-says-it-will-grow-7261235.php


Seasonings

88

There appears to be no significant competitive advantages for the industry

categories in Flavors, Dressings, and Seasonings. All the competitive effect results

are too close to zero to show competitiveness. The only category that has a

positive result is Spice and Extract Manufacturing, which added 102 jobs

between 2006 and 2016, 30 more than expected.

Wage growth for the industry group is illustrated in Figure FDS.5 below and

compared to changes in wages at the U.S. level.


Change

Actual

Change

Regional

Competitive

Effect

Flavoring Syrup and Concentrate Manufacturing 311930 1 -18 -19

Mayonnaise, Dressing, and Other Prepared Sauce

Manufacturing311941 19 -8 -27

Spice and Extract Manufacturing 311942 72 102 30


Figure FDS.4: Flavors, Dressings, and Seasonings - Shift Share Analysis of the

I&M Region (2006-2016)


Seasonings

89

Over the 2001-2016 timeframe the U.S. maintains higher wages than the I&M

region in Flavors, Dressings, and Seasonings. However, the I&M region follows a

very similar growth trend. Based on the 2016 data, average annual industry

wages for the U.S. were almost $8,500 higher than the I&M region, at $80,304

and $71,841 respectively. These wages are higher than other industry groups

since the industry requires highly educated professionals with backgrounds in

food science, chemistry, biochemistry, biology, engineering, and other science

disciplines.

Supply Chain

Given the importance of flavorings, extracts, and seasonings as ingredients in a

wide range of food and beverage products, Austin examined the industry

supply chain by looking closely and purchases and sales data for the industry

group. Purchases show relationships between suppliers and service providers,

while sales data shows important customer relationships.

Figure FDS.6 below illustrates the most significant industries in which the Flavors,

Dressings, and Seasonings group purchases from. Each industry accounts for at

least 2% of the total group purchases.

Raw materials and processed ingredients make up an estimated $29.5 million

and $33.4 million of the purchases respectively, and combine for a about 30% of

the total purchases for the industry group in the I&M region. Packaging materials

represent an estimated $24.1 million in purchases and purchases of services

were $13.4 million. Crop Production accounted for the highest percentage of in-

region purchases at an estimated 73%. Many natural flavorings and spices are

derived from various plants and data suggests most of these are growth within

the region. The diversity of crops grown has already been discussed in the Fruit

and Vegetable section of the report.


Crop Production Fats and Oils Refining and Blending Plast ics Bott le ManufacturingCorporate, Subsidiary, and Regional

Managing Offices

Animal Production and

AquacultureFluid Milk Manufacturing

All Other Plast ics Product

Manufacturing

Fruit and Vegetable CanningPaper Bag and Coated and

Treated Paper Manufacturing

Wet Corn Milling

Figure FDS.6: Flavors, Dressings, and Seasonings Supply Chain - Purchases



Seasonings

90

More detail on Flavors, Dressings, and Seasonings purchases in the I&M region

can be obtained from Appendix L.

Given the important role of products produced by the industry group as

ingredients in food and beverages, sales data between the industry group and

other industries was reviewed to look for potential opportunities. Figure FDS.7

below shows the most significant industries which the Flavors, Dressings, and

Seasonings group sells to in the I&M region compared to the U.S.

Only Fruit and Vegetable Canning and Spice and Extract Manufacturing

account for significant sales in the I&M region. Combined these sales make up

about 64% of the total regional sales for this group. Fruit and Vegetable Canning

makes up 54% alone, showing a clear supply chain connection to those

companies within the region. At the U.S. level, there is much more diversity in

significant purchasers of Flavors, Dressings. and Seasonings. This illustrates the

wide range of food and beverage applications. Aside from Fluid Milk

Manufacturing, the rest of these industries have very low presence in the I&M

region.



Fruit and Vegetable Canning Soft Drink Manufacturing

Spice and Extract Manufacturing Fruit and Vegetable Canning

Bott led Water Manufacturing

Specialty Canning

Dried and Dehydrated Food

Manufacturing

Fluid Milk Manufacturing

Figure FDS.7: Flavors, Dressings, and Seasonings Supply Chain -

Sales



Seasonings

91

Understanding the total purchases and sales of the Flavors, Dressings, and

Seasonings group in the I&M region also aids the overall supply chain analysis.

Data on total purchases and sales are displayed in Figure FDS.8.

An estimated 30% of the industry group’s total purchases occurs within the

region highlighting the close linkage between the region’s agricultural resources

and ingredient suppliers and the industry group. The sales data shows that an

estimated 89% of the products are being sold outside the region, either as

packaged finished product or as ingredients used by other food and beverage

processing companies. Given the specialization that exists within the flavors and

extracts industry and the lesser role that transportations costs play in how food

and beverage processing companies source these ingredients, the high

percentage of exported sales is understandable.


The flavors industry can provide great insight into trends affecting the food and

beverage industry because of its wide range of applications in processed foods

and beverages. Research and development plays an important role in the

development of new flavors, extract methods, and product formulation. The

industry can provide a glimpse into changes in consumer preferences and spur

new innovations in food and beverage products. Recently, consumers have

been demanding more authentic, natural flavorings and seasonings over

artificial ingredients.

Dressings and sauces, while not growing rapidly is seeing growth in certain

categories including ethnic, premium, and health conscious products. This is

relatively mature industry that continues to look at new applications for growth.

Opportunities

• There are several prominent flavoring companies in the area such as

Kalsec and National Flavors that are closely monitoring flavor trends and

focused on research and development of new flavors. These businesses

already support other food industries with a strong presence in the region


Flavors, Dressings,

and Seasonings3119 30% 70% $ 206,775,151 11% 89% $ 314,183,772

Figure FDS.8: Flavors, Dressings, and Seasonings - Trade Analysis of the I&M Region (2016)




Seasonings

92

(e.g. baking and snack, dairy) and could be a resource for further

product development and innovation.

• Dressings / sauces utilize products that are produced in the region,

including refined oils, dairy, fruits / vegetables, flavorings, and packaging.

• Some extracts have applications other than food including

aromatherapy, cosmetics, and other consumer products.

• Flavoring companies offer some of the highest wages in the food and

beverage processing industry subsector due largely to the fact that they

require highly educated professionals with backgrounds in food science,

chemistry, biochemistry, biology, engineering, and other relevant science

disciplines. Focusing on efforts to make the community more attractive for

professionals to relocate will be critical to future growth of these industries

as competition for this type of talent is very high.

Issues and Concerns

• Demand for more natural food ingredients could impact the future of

companies that focus on artificial flavorings.

Animal Food

93

ANIMAL FOOD

Industry

Animal Food is primarily comprised of operations that manufacture animal feed

and pet food products. It is the smallest industry group covered in this report,

with only one major company, Wellpet LLC in Mishawaka, IN, identified in the

I&M region through the research. One employer with 62 employees in Madison

County, IN, did appear in the data, but could not be verified.

Even though there is not a large Animal Food presence within I&M boundaries

there several significant operations have recently located nearby (see recent

activity on the following page).


Animal Food industry group is included below in AF.1.

There are an estimated 258 jobs in the Animal Food group in the region. These

jobs have been decreasing in number since 2006 by a total of 21% over a ten-

year period. This decrease is mainly attributed to a decline in Dog and Cat Food

Manufacturing. The Animal Food group also has a lower density of labor than

that of the U.S. with a location quotient of 0.65. Average wages for the industry

are higher than many other food processing industry groups, and the group

contributed over $59.1 million to the region’s GRP in 2016.

Figure AF.2 illustrates the year-over-year decline in employment and compares

employment change for the industry group in the I&M region to the U.S.


Jobs

% Change

in Jobs

(2006-2016)

2016

Average

Annual

Wages,

Salaries, &

Proprietor

Earnings

2016

Location

Quotient

2016

Payrolled

Business

Locations

2016 GRP

Dog and Cat Food Manufacturing 311111 160 -31% $ 59,184 0.95 3 $ 45,435,603

Other Animal Food Manufacturing 311119 98 -5% $ 53,415 0.43 10 $ 13,665,221

Summary Data 3111 258 -21% $ 57,000 0.65 13 $ 59,100,824


Figure AF.1: Animal Food - Overview of the I&M Region

Animal Food

94

The I&M region experienced a decline of almost 35% from 2006 to 2015. In 2016,

there was a sharp increase in employment in the region and this may be driving

the upward projection to 2026. The positive forecast also aligns with projected

growth for the industry in the U.S.

A review of recent industry investment activity found several investments in

animal feed facilities in the I&M region.

• Co-Alliance and Farmers Grain announced, in August 2017, a joint venture

to build a feed mill at the Farmers Grain facility in Columbia City, IN.46

• Naturally Recycled Proteins announced, in 2016, plans invest $10 million to

expand its manufacturing plant in Montpelier, IN by 24,000 square-feet.

The company produces protein additives for pet food manufacturers.47

46 Schroeder, E. 2017. “New joint venture to build feed mill in Indiana.” World-Grain.com. August 3.

47 PetfoodIndustry.com. 2016. “Pet food ingredient supplier expanding in Indiana.” July 19.

http://www.world-grain.com/articles/news_home/World_Grain_News/2017/08/New_joint_venture_to_build_fee.aspx?ID=%7B06B6DA8F-074E-4A3E-A28E-E35E2EE590A1%7D&cck=1

http://www.petfoodindustry.com/articles/5918-pet-food-ingredient-supplier-expanding-in-indiana

Animal Food

95

There has also been very strong investment activity near the I&M region recently,

highlighted by these projects.

• Blue Buffalo Co. broke ground on a $147 million pet food manufacturing

complex in Richmond, IN, in 2016 which is expected to create up to 165

new jobs.48

• Micronutrients announced plans in 2017 to construct a new 164,000

square-foot manufacturing and warehouse facility in New Castle, IN to

produce animal feed additives. The project is expected to create up to

50 new jobs.49

• OP Nutrition announced plans in 2017 to invest $24 million to build its first

feed-mill operation in Peru, IN.50

• Cargill in December 2016, announced plans to invest $19 million to build a

75,000 square-foot animal feed plant in Owosso, MI.51

A shift share analysis was conducted to measure the competitiveness of the I&M

region for the Animal Food industry group. Figure AF.3 below summarizes this

analysis.

The shift share analysis yielded negative competitive effects for the I&M region.

While the industry was expected to grow based on national and industry trends,

both categories lost jobs.

48 Shuey, M. 2017. “Blue Buffalo plans to begin hiring workers soon.” Pal-Item. April 23.

49 Indiana Economic Development Corporation. 2017. “Micronutrients.” May 10.

50 Gerber, C. 2017. “Feed company to invest $24 million to build mill in Peru.” Kokomo Tribune. February 22.

51 Sturgeon, G. 2016. “Cargill Breaks Ground on Owosso Animal Feed Plant.” Independent Newsgroup.

December 14.


Change

Actual

Change

Regional

Competitive

Effect

Dog and Cat Food Manufacturing 311111 72 -49 -122

Other Animal Food Manufacturing 311119 10 -5 -15


Figure AF.3: Animal Food - Shift Share Analysis of the I&M

Region (2006-2016)

http://www.pal-item.com/story/money/business/2017/04/23/blue-buffalo-plans-begin-hiring-workers-soon/100578400/

https://www.iedc.in.gov/news/details/2017/05/10/micronutrients

http://www.kokomotribune.com/news/feed-company-to-invest-million-to-build-mill-in-peru/article_78f209ae-f941-11e6-aaf5-ebfd25241b12.html

http://owossoindependent.com/cargill-breaks-ground-owosso-animal-feed-plant/

http://owossoindependent.com/cargill-breaks-ground-owosso-animal-feed-plant/

Animal Food

96

Wage growth for the industry group was compared to the U.S. from 2001 to 2016

as shown in Figure AF.4.

Because of the low employment numbers of the Animal Food industry, the

figures are more sensitive in their reaction to changes, which helps explain the

wide variance for the I&M region displayed above. With a sample size this small

it is difficult to draw conclusions from these data. However, more recently wages

have risen closer to U.S. averages.

Supply Chain

To evaluate the supply chain, data for purchases and sales between the

industry group and other industries were assessed. Purchases show relationships

between suppliers and service providers, while sales data shows customer

relationships.

Figure AF.5 below illustrates the most significant industries from which the Animal

Food group purchases. Each industry accounts for at least 2% of the total group

purchases.

Animal Food

97

Industry purchases in the processed section of Figure AF.5 make up about 30%

of the total purchases for an estimated $50.9 million. This segment also has the

most variety and shows purchases from industries that the region has a strong

presence in, such as Animal (except Poultry) Slaughtering, Meat Processed from

Carcasses, and Soybean and Other Oilseed Processing categories. Additionally,

crops makeup $21.2 million in Animal Food purchases, while packaging

materials and services account for an estimated $11.7 million and $12.8 million in

purchases respectively. Further details on Animal Food purchases can be found

in Appendix L.

Figure AF.6 displays significant sales (more than 2%) to other processing industries

in the I&M region, compared to the U.S.

The only industry identified in Figure AF.6 is Dog and Cat Food Manufacturing in

the I&M region. This industry category only makes up an estimated 2.81% of the

sales for this group, showing little opportunity for further value-added processing


Crop ProductionAnimal (except Poultry)

SlaughteringMetal Can Manufacturing


Managing Offices

Meat Processed from CarcassesOther Metal Container

ManufacturingRail t ransportat ion

Soybean and Other Oilseed

Processing


Brokers

Wet Corn Milling

Fats and Oils Refining and Blending

Dist illeries

Medicinal and Botanical

Manufacturing

Flour Milling

Figure AF.5: Animal Food Supply Chain - Purchases

Source: ESMI 2017.3 Class of Worker



Dog and Cat Food Manufacturing None

Figure AF.6: Animal Food Supply Chain - Sales


Animal Food

98

of these products. More than 90% of the sales are final products that go either to

farmers (82%) or veterinarians (8%). Appendix L describes sales relationships for

the Animal Food group in more detail.

Total purchases and sales for the industry group are summarized in Figure AF.7.

Approximately three-quarters of goods are both sourced and sold outside of the

I&M region. Based on the presence of industries in the I&M region that supply

Animal Food manufacturers, the data suggests that there could be

opportunities to boost local sourcing opportunities for the industry.


Overall Industry outlook for growth in Animal Food continues to look very

positive. Important trends are outlined below.

• Investments in animal feed plants will continue to follow growth in the

meat and poultry industry.

• Like trends in human food, consumers are demanding more natural

based pet foods that more closely align with their pets’ natural / heretical

diet (i.e. no-grain dog food).

• The pet food industry has had to conform to more stringent food safety

requirements under the new Food Safety Modernization Act (FSMA) rules

and is now being treated similarly to food manufacturing intended for

human consumption.

Opportunities

• The region has strong supply chain resources to support additional

investments in pet food and animal feed plants.

• Investment in these types of facilities often occur in more rural locations,

which serves as an opportunity for some rural communities that are not

always the first to be considered for certain projects.


Animal Food 3111 25% 75% $152,675,464 24% 76% $230,513,685

Figure AF.7: Animal Food - Trade Analysis of the I&M Region (2016)



Animal Food

99

Issues and Concerns

• Any state regulatory changes that adversely impact Concentrated

Animal Feeding Operations (CAFOs) would likely have an adverse effect

on existing industry and potential new plants.

• Concerns by residents over odors commonly associated with pet food

plants can be a challenge for existing companies and a major location

criteria for new plant investment. Efforts to attract these types of

companies should consider site location, applicable local zoning and

land use regulations, and general community attitude towards these

types of projects.

Labor Analysis

100

LABOR ANALYSIS

Labor is typically a major consideration in site location decisions for new food

and beverage plants. Nationally, the food and beverage industry has been

growing steadily. This steady growth, combined with other changes in the U.S.

economy has created challenges for food companies. While labor challenges

are not limited to the food and beverage manufacturing industry, there are

critical issues that create unique challenges for the industry.

U.S. consumers spend over $1.5 trillion annually on food and beverage products.

Competition within the food and beverage industry is fierce, and there is a

constant pressure on manufacturers to keep operating costs low, especially

since the industry is largely considered to be supplying a basic need. The

pressure includes wages, which are generally among the highest operating

costs for food and beverage plants. Considering this with the labor market

pressures resulting from a growing industry and a U.S. economy that has been

transitioning more heavily towards a service and technology based economy,

food and beverage manufacturers have become increasingly more concerned

about labor supply and cost. Companies are also looking more closely at

automation technologies to address these challenges; however, facility

constraints and cost are frequent obstacles.

As previously highlighted, the I&M territory has experienced even more

significant growth in food and beverage processing jobs than the U.S. To better

understand the labor market, Austin evaluated occupational employment and

wage data for the I&M territory and each of its four labor market sub-regions.

General comparisons were also made to other competing regions throughout

the Midwest. Feedback was collected from area food and beverage processors

interviewed for the project to understand specific labor market challenges,

strengths, and points of concern. Information is detailed in the following order:

1. Occupations

2. Labor Market Sub-Regions

3. Competitor Evaluation

4. Employer Input

Labor Analysis

101

Occupations

When evaluating labor markets, companies and consultants often consider the

availability of experienced workers within the required job categories. Austin

identified the top 25 occupations that the Food and Beverage subsector draws

employees from at a national level. The information was compared with

occupational data for the I&M region. Several occupations were omitted from

this comparison because these were more retail / service based, and not critical

to most production operations. Additionally, all other categories with

accounting for less than 1% of the total employment were omitted.

Figure L.1describes the national occupation requirements of the Food and

Beverage subsector and compares these requirements with employment in the

I&M region.

Jobs

% Change

(2006-

2016)

% of Total

Industry

Median

Hourly

Earnings

Jobs

% Change

(2006 -

2016)

% of Total

Industry

Median

Hourly

Earnings

51-9111Packaging and Filling Machine Operators and

Tenders152,322 10% 8.4% $13.60 1,359 22% 9.0% $14.02

51-3092 Food Batchmakers 122,414 7% 6.8% $13.37 960 9% 6.3% $12.05

51-3022 Meat, Poultry, and Fish Cutters and Trimmers 121,170 (4%) 6.7% $11.80 501 44% 3.3% $12.92

51-3023 Slaughterers and Meat Packers 75,638 (2%) 4.2% $12.81 124 25% 0.8% $13.17

53-7062Laborers and Freight, Stock, and Material Movers,

Hand70,569 6% 3.9% $12.59 577 22% 3.8% $12.63

53-7064 Packers and Packagers, Hand 65,078 6% 3.6% $10.65 746 24% 4.9% $11.14

51-3011 Bakers 64,168 10% 3.6% $11.84 461 15% 3.0% $10.79

51-1011First-Line Supervisors of Production and Operating

Workers58,293 7% 3.2% $27.51 558 22% 3.7% $25.80

51-9198 Helpers--Production Workers 57,755 1% 3.2% $11.94 766 21% 5.1% $11.96

53-7051 Industrial Truck and Tractor Operators 44,339 9% 2.5% $15.62 367 14% 2.4% $15.30

49-9041 Industrial Machinery Mechanics 41,510 20% 2.3% $23.84 426 33% 2.8% $21.63

51-9061 Inspectors, Testers, Sorters, Samplers, and Weighers 38,270 7% 2.1% $17.91 412 22% 2.7% $16.54

49-9071 Maintenance and Repair Workers, General 34,454 7% 1.9% $17.75 346 22% 2.3% $17.65

51-3093 Food Cooking Machine Operators and Tenders 28,311 6% 1.6% $13.63 294 7% 1.9% $14.50

53-3032 Heavy and Tractor-Trailer Truck Drivers 28,263 14% 1.6% $19.26 256 34% 1.7% $18.79

51-9012Separating, Filtering, Clarifying, Precipitating, and

Still Machine Setters, Operators, and Tenders27,255 22% 1.5% $18.44 177 36% 1.2% $18.02

51-9023Mixing and Blending Machine Setters, Operators,

and Tenders25,416 15% 1.4% $17.16 219 11% 1.4% $16.12

51-3099 Food Processing Workers, All Other 25,352 1% 1.4% $11.61 123 6% 0.8% $12.03

11-1021 General and Operations Managers 22,376 13% 1.2% $47.41 209 25% 1.4% $37.64

43-5071 Shipping, Receiving, and Traffic Clerks 22,265 5% 1.2% $15.02 250 21% 1.7% $14.22

51-2092 Team Assemblers 22,133 8% 1.2% $14.51 375 17% 2.5% $15.77

53-7061 Cleaners of Vehicles and Equipment 19,435 5% 1.1% $10.90 165 11% 1.1% $10.73

43-5081 Stock Clerks and Order Fillers 18,517 15% 1.0% $11.48 153 37% 1.0% $11.13

43-9061 Office Clerks, General 17,012 9% 0.9% $14.75 144 20% 1.0% $14.49

53-3033 Light Truck or Delivery Services Drivers 16,100 16% 0.9% $14.64 141 45% 0.9% $14.18


Figure L.1: Occupation Comparison (2016)

SOC Description

United States Indiana Michigan Power

Labor Analysis

102

Observations from data in Figure L.1 and are summarized below.

• Median occupation wages for the I&M region are generally in line with or

lower than U.S. wages. This highlights a competitive advantage of the

I&M region. The largest difference in wages are among the managerial

occupation categories. These categories usually require the most

experience and education.

• The percentage of job growth changes between 2006 and 2016 were

much higher in the I&M territory, which generally shows that companies in

the region are hiring for these positions. The significant growth has not had

an adverse impact on wage competitiveness to this point.

• For the most part I&M follows the U.S. trends for amounts (percentages) of

occupations required by the Food and Beverage subsector. There are

only two categories that lack the same employment share, which are

Slaughterers and Meat Packers (51-3023) and Food Processing Workers, All

Other (51-3099).

• I&M has notably more than the U.S. average of Team Assemblers, Helpers-

Production Workers, and Packers and Packagers, Hand.

Labor Market Sub-Regions

Building upon the occupation comparison shown in Figure L.1, Austin also

collected these data for each of the four I&M sub-regions. These regions were

first described in the original request for proposals and were later refined based

on conversations I&M staff. Data for these regions were collected at the county

level. Each sub-region is connected to a population center. Given the size of the

I&M service territory, these data highlight differences in industry subsector

employment and occupation data within each labor market sub-region.

Figure L.2 below shows the employment by occupation for each of the four I&M

regions along with the U.S. for 2016.

Labor Analysis

103

Data in the table above are generally consistent with a fairly even spread of

employment across regions in the I&M territory. There are, however, a few things

that stand out about these data. Benton Harbor and Muncie generally have

lower employment across occupation categories. This reflects the fact that

these two sub-regions have lower populations and labor forces.

The Benton Harbor and Muncie labor markets do not have a significant

presence of Meat, Poultry, and Fish Cutters and Trimmers (51-3092) and

SOC DescriptionUnited

States

Indiana

Michigan

Power

Benton

Harbor

Fort

WayneMuncie

South

Bend

51-9111Packaging and Filling Machine Operators and

Tenders152322 1359 325 345 214 475

51-3092 Food Batchmakers 122414 960 171 234 320 235

51-3022 Meat, Poultry, and Fish Cutters and Trimmers 121170 501 <10 241 <10 247

51-3023 Slaughterers and Meat Packers 75638 124 19 62 <10 42

53-7062Laborers and Freight, Stock, and Material Movers,

Hand70569 577 113 185 138 141

53-7064 Packers and Packagers, Hand 65078 746 111 215 177 242

51-3011 Bakers 64168 461 70 164 61 167

51-1011First-Line Supervisors of Production and Operating

Workers58293 558 140 174 111 133

51-9198 Helpers--Production Workers 57755 766 131 287 96 252

53-7051 Industrial Truck and Tractor Operators 44339 367 76 117 100 75

49-9041 Industrial Machinery Mechanics 41510 426 156 119 81 69

51-9061 Inspectors, Testers, Sorters, Samplers, and Weighers 38270 412 125 135 68 84

49-9071 Maintenance and Repair Workers, General 34454 346 80 111 66 89

51-3093 Food Cooking Machine Operators and Tenders 28311 294 67 105 41 81

53-3032 Heavy and Tractor-Trailer Truck Drivers 28263 256 74 85 49 48

51-9012Separating, Filtering, Clarifying, Precipitating, and

Still Machine Setters, Operators, and Tenders27255 177 91 57 16 12

51-9023Mixing and Blending Machine Setters, Operators,

and Tenders25416 219 54 43 59 63

51-3099 Food Processing Workers, All Other 25352 123 11 42 31 39

11-1021 General and Operations Managers 22376 209 49 63 41 55

43-5071 Shipping, Receiving, and Traffic Clerks 22265 250 39 93 45 74

51-2092 Team Assemblers 22133 375 93 86 82 113

53-7061 Cleaners of Vehicles and Equipment 19435 165 50 46 33 36

43-5081 Stock Clerks and Order Fillers 18517 153 52 43 25 33

43-9061 Office Clerks, General 17012 144 48 36 27 33

53-3033 Light Truck or Delivery Services Drivers 16100 141 61 35 17 29

Figure L.2: Sub-Region Employment by Occupation Comparison (2016)


Labor Analysis

104

Slaughterers and Meat Packers (51-3023) occupations. The Meat and Poultry

industry has a limited presence in these two markets, in comparison to the Fort

Wayne and South Bend regions.

As described in previous sections of this report, the I&M territory has been

exceeding the growth of the U.S. in Food and Beverage by a significant

amount. This growth has been experienced fairly equally across the four I&M

regions as well. All four regions are experiencing over 20% growth in Food and

Beverage. This relationship for I&M, the four regions, and the U.S. is better

highlighted by the figure below.

In addition to high employment growth in Food and Beverage, the I&M service

territory also has lower wages than that of the U.S. with the exception of the

Muncie region. Wages across these regions vary significantly from nearly $40,000

to $50,000 for the Food and Beverage subsector. These differences are

highlighted in Figure L.4 below.

Labor Analysis

105

Job density for each industry group was also compared across sub-regions, to

highlight local concentrations of employment within each industry group. These

measures varied between sub-regions, with each area having different

strengths. Figure L.5 below summarizes the Location Quotient for each industry

group in the I&M region and each sub-region. Any quotient above 1.00

indicates a stronger concentration of employment relative to the U.S. For more

information on location quotients see Appendix J.

Description

Indiana

Michigan

Power

Benton

Harbor

Region

Fort

Wayne

Region

Muncie

Region

South

Bend

Region

Animal Food 0.65 0.19 0.26 1.09 1.11

Confectionery 3.08 0.38 3.88 2.02 4.83

Fruit and Vegetable 3.35 4.69 0.10 9.47 2.68

Dairy 2.68 3.23 4.36 3.68 0.22

Meat and Poultry 0.54 0.10 0.84 0.00 0.83

Baking and Snack Food 1.74 0.61 1.89 3.29 1.76

Flavors, Dressings, and Seasonings 1.67 4.40 0.00 0.00 1.86

Beverage 0.95 2.92 0.30 0.51 0.20

Total Food and Beverage 1.25 1.22 1.25 1.70 1.06

Figure L.5: 2016 Regional Job Density (Location Quotient)


Labor Analysis

106

To summarize these data, key points are listed below:

• The Muncie Region has the most significant density of jobs in the Food and

Beverage Processing industry subsector. Muncie’s strength comes primarily

from the Fruit and Vegetable industry group with a location quotient of

9.47. This relates to the presence of Red Gold, which has its headquarters

and multiple facilities located throughout the area. Muncie also has very

high job density rates in Dairy, Baking and Snack Food, and Confectionery

groups as well.

• Categories with particularly low-density rates include Animal Food, Meat

and Poultry, Flavors, Dressings, and Seasonings, and Beverage groups.

Conversely, Benton Harbor is the exception to some of these categories

with high location quotients in Flavors, Dressings, and Seasonings and

Beverage groups.

The location quotient highlights the employment density of an area as a

comparison to the national average. Areas with a low employment density may

still have a significant amount of labor employed within the given sector. The

share or percentage employed within a given industry can vary quite a bit from

the density. The figure below illustrates the share of Food and Beverage

employment by industry in the I&M regions.

Labor Analysis

107

Figure L.6 confirms many of the other findings discussed in the other tables in this

section, including the location quotient figures. However, this figure conversely

shows that there is indeed a notable industry presence in the Meat and Poultry

industry group in the I&M territory. This simply means that there is a large amount

of employment within the Meat and Poultry industry group, but this employment

is not on par with the national average. With a strong employment base in Meat

and Poultry, I&M can work towards growing this segment further.

Competitor Evaluation

Austin also examined competitor areas in the U.S. Given the geographic

diversity of the U.S., regions are inherently unique with different advantages and

disadvantages. Regions from the Midwest U.S. were chosen for comparative

purposes since these regions are likely more frequent competitors for food and

beverage processing projects due to the importance of supply chain in site

location decisions for most plants.

Metropolitan statistical area (MSA) data was used for the competitor analysis.

The table below includes an overview of this competitor comparison.

Overall the I&M territory compares well against these competitor regions.

Specifics are described in more detail below.

• Food and Beverage subsector growth is very high in the I&M region but

other areas, such as Dayton, Grand Rapids, and Indianapolis, have also

experienced strong growth.

• The I&M territory has among the lowest average wages in Food and

Beverage among its competitors, only the Detroit metro region is lower.

This highlights a competitive advantage for the region.

Description

Indiana

Michigan

Power

Chicago-

Naperville-

Elgin, IL-IN-

WI

Cincinnati,

OH-KY-IN

Columbus,

OH

Dayton,

OH

Detroit-

Warren-

Dearborn, MI

Grand

Rapids-

Wyoming, MI

Indianapolis-

Carmel-

Anderson, IN

Milwaukee-

Waukesha-

West Allis,

WI

Toledo,

OH

Percent of Job

Change (2006-2016)24% 4% 14% -6% 45% 6% 44% 31% 7% -23%

Average Wage

(2016) $ 43,430 $ 57,847 $ 54,026 $ 65,158 $ 44,135 $ 40,776 $ 49,230 $ 52,213 $ 47,647 $45,160

Job Density (2016) 1.25 1.02 1.25 0.79 0.71 0.46 1.77 0.80 1.18 0.57

Competitiveness

(2015-2016)1907 -2442 850 -1523 835 -188 2961 1695 -162 -850

Figure L.7: I&M Food and Beverage Competition


Labor Analysis

108

• I&M region is tied for second with Cincinnati in industry employment

density, behind only Grand Rapids. Half of the other areas have a lower

density than the U.S. (shown in red).

• Competitiveness (2015-2016) for the I&M territory is only second to Grand

Rapids. All other areas rank lower, and half are even negative which

indicate these areas are not keeping up with national and industry trends.

For a further comparison of I&M to its competitor areas, Figure L.8 below

compares some high-level demographic data.

The I&M territory experienced some population growth from 2006 to 2016, but at

a slower rate than about half of the other areas. Total jobs decreased in the

region over this period. The I&M region also has the lowest college attainment

rate among these areas. However, I&M has the lowest cost of living among its

competitors, which can be highlighted as an advantage in conversations with

companies located in areas within the U.S. experiencing sharp increases in the

cost of living.

Employer Input

Austin interviewed area food and beverage companies to gather further insight

into the area labor market for this report. The interviews covered a range of

labor issues including availability, hiring, productivity, skill shortages, wages, and

other concerns. The following summarizes the most critical findings from these

interviews.

• Many employers noted difficulties with workforce recruitment and

retention due to competition from other industries that offer higher wages,

Description

Indiana

Michigan

Power

Chicago-

Naperville-

Elgin, IL-IN-

WI

Cincinnati,

OH-KY-IN

Columbus,

OH

Dayton,

OH

Detroit-

Warren-

Dearborn, MI

Grand

Rapids-

Wyoming, MI

Indianapolis-

Carmel-

Anderson, IN

Milwaukee-

Waukesha-

West Allis,

WI

Toledo,

OH

Total Population

(2016) 2,230,910 9,513,071 2,165,150 2,041,537 800,686 4,297,741 1,047,100 2,004,315 1,572,501 605,222

Population Change

(2006-2016)2% 2% 5% 12% 0% -3% 7% 11% 3% -2%

Total Industry Jobs

(2016) 1,067,417 4,833,671 1,113,271 1,103,282 404,267 2,029,922 588,089 1,078,758 892,780 320,518

Total Industry Jobs

Change (2006-2016)-1% 1% 1% 9% -4% -2% 11% 10% 0% -4%

Cost of Living Index

(2016)94 116 100 102 98 101 97 100 110 98

Bachelor's Degree

or Higher (2016)15% 24% 21% 23% 19% 20% 20% 21% 22% 17%

Figure L.8: I&M Demographics Comparison


Labor Analysis

109

most notably the recreational vehicles (RV)and automotive industries. This

issue was noted for both entry level jobs and for skilled positions (e.g.

maintenance).

• Employers also noted issues with competition from similar paying service

jobs, particularly when it comes to younger workers. Many service jobs

offer more flexible scheduling options, less stringent dress code

requirements (no hair nets, aprons, etc.), and a more relaxed working

environment that is attractive to many younger workers.

• Many employers indicated that they have recently raised wages, some

significantly, to address wage competition from other industries.

• Several employers indicated that their inability to add and retain

additional workers was the biggest barrier to growth. In fact, in several

instances employers noted that demand for their products exceeded

their ability to increase production due to labor constraints.

• Employers located closer to a city population center seem to have less

difficulties with workforce recruitment than those located in more rural

areas outside of reasonable driving distance to a city.

• Generally, companies in the industry noted more success in hiring and

retaining immigrant and minority workers (notably Hispanic) for hourly

positions and seasonal work. This mirrors national trends. Many individuals

interviewed expressed concerns over future changes to U.S. and state

immigration policies that would negatively impact the labor supply.

• Plant automation adoption varied widely, with some employers still

depending heavily upon manual labor. These employers generally noted

the most issues with entry level job recruitment and retention.

While some of these issues may cause concern, it’s important to keep this

feedback in perspective. Concerns over labor shortages is becoming a

common occurrence by food and beverage companies across the U.S. Growth

in the industry combined with a job market that has significantly rebounded

over the past few years has exacerbated the issue. Considering that the I&M

territory has seen more significant job growth rates than the U.S., it’s

understandable that many local companies indicated some difficulty is securing

the necessary workers to grow their operations. However, the pressures have not

had an adverse impact on wage competitiveness, in the I&M territory as

previously detailed. Austin recommends that I&M and its partners remain

focused on providing a high level of support to these companies through

business retention and workforce development efforts. In addition, additional

dialog with local area technical schools and community college administrators

to address worker shortages in the food and beverage sectors may result in

Labor Analysis

110

some creative ways to recruit the necessary workforce for future expansion

needs.

During employer interviews for this report, Austin received insightful feedback on

the area labor market that is important and should be useful to I&M and its

economic development partners. Local and regional workforce development

programs can play an important role in addressing skill shortages through

training and other support. Awareness of these issues and preparedness can

also be helpful in attracting other food and beverage companies to locate to

the area.


111

WATER AND WASTEWATER

Water of high quality and volume is critical to food and beverage industries. It is

incorporated directly as a component of food and beverage products and / or

utilized indirectly for processing and cleaning (raw materials and machinery /

equipment). Except for the water incorporated into products or lost through

other means (e.g. steam), much of this water finds its way to the drain as

wastewater, after accumulating heavy concentrations of organic and inorganic

wastes. For these reasons, the availability of excellent water and wastewater

utility services is vital to nearly all food and beverage companies. Thus, the

presence and the costs attributed to these services are key considerations for

strategic location decisions of food and beverage companies.

Austin distributed a water and wastewater survey and information request to

regional and county EDOs to support a high-level review of the water and

wastewater utilities. The surveys targeted 35 communities across 22 counties

within or adjacent to the I&M service territory. Responses to the survey varied

from full completion to partial completion or no response. Feedback from

additional communities were included with EDO responses and have been

incorporated in this review. Among the locations requested, Austin received

partial to full feedback from 25 of 35 communities. The obtained information

was used to identify strengths and weaknesses within the service territory and

beyond, including available capacities and consumption rates.

Communities responding to the water portion of the survey revealed that most

locations are served by groundwater, while only a few utilize available surface

water resources. Water treatment plants in the responding communities have

robust capacity available to new users. Twelve of the 18 responding

communities could more than double their current peak demand, and still

remain below their design capacities. Available capacities range from a

reported 225,000 gallons per day (GPD) in Redkey, IN to over 37 million GPD in

Kalamazoo, MI, with 12 communities reporting over 1 million GPD available

capacity.

Similarly, wastewater treatment plants in responding communities have plenty of

capacity available to new users. Eleven of the 19 responding communities

could more than double their current peak demand, and still remain below their

design capacities. Available capacities range from a reported 246,000 GPD in

Churubusco, IN to over 27 million GPD in Kalamazoo, MI, with 12 communities

reporting at least 1 million GPD available capacity. While most communities


112

reported discharge limits for certain parameters (e.g., biochemical oxygen

demand [BOD], chemical oxygen demand [COD], total suspended solids [TSS],

fats, oils and grease [FOG]), nearly all had the ability to accept high-strength

discharges with additional surcharges.

Rates

Within each location surveyed, charges are variable. Bills often include a base

charge (typically tied to meter size) and commodity charge based on a usage

rate (e.g., per gallons or cubic feet). Rates showed variation within each

community between locations within city limits or outside city limits and by user

type (e.g., residential, commercial, industrial). Some rate schedules showed

changes over time, some phasing municipality-wide rate increases over

consecutive years. Commodity, or flow-based, rates were either flat (single)

rates or tiered rates tied to increasing consumption. Additionally, for

wastewater, the physical and chemical composition of the discharge could

warrant high-strength surcharges, and these additional charges have the

potential to be substantial.

Outside of high-strength surcharge exceptions, the commodity, or flow-based

charges would comprise the largest proportion of water and wastewater bills for

large industrial users. For the purpose of this high-level assessment, Austin’s

approach was to compare these commodity rates to make generalizations

about water and wastewater service in the Indiana Michigan Power service

territory. Austin assumed large industrial water and wastewater users were

located within city limits. For instances of phased rate increases, Austin assumed

rates associated with the first half of the year 2018. When tiered rates were

provided, Austin evaluated the rates of the highest volume tier (i.e., volume in

excess of a specified amount) since most of the total water / wastewater usage

for a large-volume user would typically be billed at this rate. In most cases, the

utility applies the lowest rate to the highest volume tier.

For comparative purposes, the same approach was applied to the 10 largest

municipalities within the states of Indiana and Michigan when rate information

could be obtained readily from city websites. To provide nationwide

perspective, Austin considered information obtained from Water and

Wastewater Annual Price Escalation Rates for Selected Cities across the United

States, reported by the U.S. Department of Energy’s Office of Energy Efficiency &

Renewable Energy (September 2017). This report used a subset of the water


113

and wastewater rate survey data from the American Water Works Association

(AWWA) including data from 60 water utilities and 40 wastewater utilities.

NOTE: The US DOE data used in this report are not inclusive of all AWWA data, but rather a subset compiled from utilities that contributed to at least four of five survey years.

Among responding communities in the I&M territory, water rates ranged from

$0.94 to $6.00 per 1,000 gallons in South Bend, IN and Dunkirk, IN respectively,

with a median rate of $2.08 per 1,000 gallons (Figure WW.1). Throughout the

largest communities in Indiana and Michigan outside I&M territory, water rates

ranged from $1.07 to $4.80 per 1,000 gallons in Lafayette, IN and Warren, MI

respectively, with a median rate of $3.04 per 1,000 gallons. Selected cities

among the AWWA data set representing the United States included water rates

from $1.01 per 1,000 gallons to $7.45 per 1,000 gallons, with a median rate of

$2.80 per 1,000 gallons.

Figure WW.1. Water rates per 1,000 gallons among responding communities within Indiana Michigan Power

territory and representative larger communities within Indiana and Michigan, and selected cities across the

United States. Box and whisker plots represent minimum, 25th percentile, median, 75th percentile, and

maximum values.

Among responding communities in the I&M territory, wastewater rates ranged

from $1.59 to $10.98 per 1,000 gallons in Kalamazoo, MI and LaPorte, IN

respectively, with a median rate of $4.59 per 1,000 gallons (Figure WW.2).

$0

$1

$2

$3

$4

$5

$6

$7

$8

Indiana Michigan

Power Territory

Major Cities in Indiana

and Michigan

United States (AWWA

Data)

Ra

te (

/1,0

00

ga

llon

s)

Lowest rates(25% of data)

Highest rates(25% of data)

Middle rates(50% of data)


114

Throughout the largest communities in Indiana and Michigan outside I&M

territory, wastewater rates ranged from $2.99 to $8.56 per 1,000 gallons in

Livonia, MI and Evansville, IN respectively, with a median rate of $5.66 per 1,000

gallons. Selected cities among the AWWA data set representing the United

States included wastewater rates from $1.46 per 1,000 gallons to $17.29 per 1,000

gallons, with a median rate of $3.79 per 1,000 gallons.

Figure WW.2. Wastewater rates per 1,000 gallons among responding communities within Indiana Michigan

Power territory and representative larger communities within Indiana and Michigan, and selected cities

across the United States. Box and whisker plots represent minimum, 25th percentile, median, 75th percentile,

and maximum values.

Although firm conclusions cannot be made based on the limited data set and

simplified approach, some general trends can be observed based on

commodity charges for large volume users. Water and wastewater rates in the

Indiana Michigan service territory compare somewhat favorably to other larger

cities in Indiana and Michigan outside the territory. Compared to the nation,

water rates in the territory trend lower, but wastewater rates trend higher. Within

the territory, water rates tend to be lower in Indiana, but wastewater rates trend

lower in Michigan. Combined, large water users with high-volume wastewater

discharges may favor Michigan over Indiana for locations within the I&M territory

(Figure 3).

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

Indiana Michigan

Power Territory

Major Cities in Indiana

and Michigan

United States - AWWA

Data

Ra

te (

/1,0

00

ga

llon

s)

Highest rates (25% of data)

Middle rates (50% of data)

Lowest rates (25% of data)


115

Figure 3. Water and wastewater rates per 1,000 gallons for high volume users among responding communities within the Indiana Michigan Power service territory. Rates presented include flat and tiered rates. When tiered, the rate presented is the highest volume tier.

Dunkirk, INGas City, INMarion, IN

Muncie, IN

Portland, IN

Redkey, IN

Elkhart, INLaPorte, IN

South Bend, IN

Butler, IN

Decatur, IN

Fort Wayne, IN

Kendallville, IN

Dowagiac, MI

Kalamazoo, MI

Paw Paw, MI

Portage, MI

Three Rivers, MI

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

$11

$12

$0 $1 $2 $3 $4 $5 $6 $7

Wa

ste

wa

ter

Ra

tes

(/1

,00

0 g

allo

ns)

Water Rates (/1,000 gallons)

East Central Indiana North Central Indiana Northeast Indiana Southwest Michigan

Appendices

116

APPENDICES

Appendix A: North American Industry Classification System Codes

The NAICS code definitions in this appendix provide detailed information on

product inclusions for each industry category. This information is meant to be

used as a quick reference for readers looking to learn more about the types of

products included in specific industry categories. These definitions were taken

directly from the U.S. Census Bureau website. Further information and illustrative

examples of products can be viewed directly on the NIACS portion of the U.S.

Census Bureau’s website.

311111 Dog and Cat Food Manufacturing

This U.S. industry comprises establishments primarily engaged in manufacturing

dog and cat food from ingredients, such as grains, oilseed mill products, and

meat products.

311119 Other Animal Food Manufacturing


animal food (except dog and cat) from ingredients, such as grains, oilseed mill

products, and meat products.

311211 Flour Milling

This U.S. industry comprises establishments primarily engaged in (1) milling flour or

meal from grains (except rice) or vegetables and/or (2) milling flour and

preparing flour mixes or doughs.

311212 Rice Milling

This U.S. industry comprises establishments primarily engaged in one of the

following: (1) milling rice; (2) cleaning and polishing rice; or (3) milling, cleaning,

and polishing rice. The establishments in this industry may package the rice they

mill with other ingredients.

311213 Malt Manufacturing


malt from barley, rye, or other grains.

311221 Wet Corn Milling

This U.S. industry comprises establishments primarily engaged in wet milling corn

and other vegetables (except to make ethyl alcohol). Examples of products

Appendices

117

made in these establishments are corn sweeteners, such as glucose, dextrose,

and fructose; corn oil; and starches (except laundry).

311224 Soybean and Other Oilseed Processing

This U.S. industry comprises establishments primarily engaged in crushing oilseeds

and tree nuts, such as soybeans, cottonseeds, linseeds, peanuts, and sunflower

seeds. Examples of products produced in these establishments are oilseed oils,

cakes, meals, and protein isolates and concentrates.

311225 Fats and Oils Refining and Blending

This U.S. industry comprises establishments primarily engaged in one or more of

the following: (1) manufacturing shortening and margarine from purchased fats

and oils; (2) refining and/or blending vegetable, oilseed, and tree nut oils from

purchased oils; and (3) blending purchased animal fats with purchased

vegetable fats.

311230 Breakfast Cereal Manufacturing

This industry comprises establishments primarily engaged in manufacturing

breakfast cereal foods.

311313 Beet Sugar Manufacturing


refined beet sugar from sugar beets.

311314 Cane Sugar Manufacturing

This U.S. industry comprises establishments primarily engaged in (1) processing

sugarcane and/or (2) refining cane sugar from raw cane sugar.

311340 Nonchocolate Confectionery Manufacturing


nonchocolate confectioneries. Included in this industry are establishments

primarily engaged in retailing nonchocolate confectionery products not for

immediate consumption made on the premises.

311351 Chocolate and Confectionery Manufacturing from Cacao Beans

This U.S. industry comprises establishments primarily engaged in shelling, roasting,

and grinding cacao beans and making chocolate cacao products and

chocolate confectioneries.

Appendices

118

311352 Confectionery Manufacturing from Purchased Chocolate


chocolate confectioneries from chocolate produced elsewhere. Included in this

industry are establishments primarily engaged in retailing chocolate

confectionery products not for immediate consumption made on the premises

from chocolate made elsewhere.

311411 Frozen Fruit, Juice, and Vegetable Manufacturing


frozen fruits; frozen vegetables; and frozen fruit juices, ades, drinks, cocktail mixes

and concentrates.

311412 Frozen Specialty Food Manufacturing


frozen specialty foods (except seafood), such as frozen dinners, entrees, and

side dishes; frozen pizza; frozen whipped topping; and frozen waffles, pancakes,

and french toast.

311421 Fruit and Vegetable Canning


canned, pickled, and brined fruits and vegetables. Examples of products made

in these establishments are canned juices; canned jams and jellies; canned

tomato-based sauces, such as catsup, salsa, chili sauce, spaghetti sauce,

barbeque sauce, and tomato paste; and pickles, relishes, and sauerkraut.

311422 Specialty Canning


canned specialty foods. Examples of products made in these establishments are

canned baby food, canned baked beans, canned soups (except seafood),

canned spaghetti, and other canned nationality foods.

311423 Dried and Dehydrated Food Manufacturing

This U.S. industry comprises establishments primarily engaged in (1) drying

(including freeze-dried) and/or dehydrating fruits, vegetables, and soup mixes

and bouillon and/or (2) drying and/or dehydrating ingredients and packaging

them with other purchased ingredients, such as rice and dry pasta.

311511 Fluid Milk Manufacturing

This U.S. industry comprises establishments primarily engaged in (1)

manufacturing processed milk products, such as pasteurized milk or cream and

Appendices

119

sour cream and/or (2) manufacturing fluid milk dairy substitutes from soybeans

and other nondairy substances.

311512 Creamery Butter Manufacturing


creamery butter from milk and/or processed milk products.

311513 Cheese Manufacturing


manufacturing cheese products (except cottage cheese) from raw milk and/or

processed milk products and/or (2) manufacturing cheese substitutes from

soybean and other nondairy substances.

311514 Dry, Condensed, and Evaporated Dairy Product Manufacturing


dry, condensed, and evaporated milk and dairy substitute products.

311520 Ice Cream and Frozen Dessert Manufacturing

This industry comprises establishments primarily engaged in manufacturing ice

cream, frozen yogurts, frozen ices, sherbets, frozen tofu, and other frozen

desserts (except bakery products).

311611 Animal (except Poultry) Slaughtering

This U.S. industry comprises establishments primarily engaged in slaughtering

animals (except poultry and small game). Establishments that slaughter and

prepare meats are included in this industry.

311612 Meat Processed from Carcasses

This U.S. industry comprises establishments primarily engaged in processing or

preserving meat and meat byproducts (except poultry and small game) from

purchased meats. This industry includes establishments primarily engaged in

assembly cutting and packing of meats (i.e., boxed meats) from purchased

meats.

311613 Rendering and Meat Byproduct Processing

This U.S. industry comprises establishments primarily engaged in rendering animal

fat, bones, and meat scraps.

Appendices

120

311615 Poultry Processing

This U.S. industry comprises establishments primarily engaged in (1) slaughtering

poultry and small game and/or (2) preparing processed poultry and small game

meat and meat byproducts.

311710 Seafood Product Preparation and Packaging

This industry comprises establishments primarily engaged in one or more of the

following: (1) canning seafood (including soup); (2) smoking, salting, and drying

seafood; (3) eviscerating fresh fish by removing heads, fins, scales, bones, and

entrails; (4) shucking and packing fresh shellfish; (5) processing marine fats and

oils; and (6) freezing seafood. Establishments known as "floating factory ships"

that are engaged in the gathering and processing of seafood into canned

seafood products are included in this industry.

311811 Retail Bakeries

This U.S. industry comprises establishments primarily engaged in retailing bread

and other bakery products not for immediate consumption made on the

premises from flour, not from prepared dough.

311812 Commercial Bakeries


fresh and frozen bread and bread-type rolls and other fresh bakery (except

cookies and crackers) products.

311813 Frozen Cakes, Pies, and Other Pastries Manufacturing


frozen bakery products (except bread), such as cakes, pies, and doughnuts.

311821 Cookie and Cracker Manufacturing


cookies, crackers, and other products, such as ice cream cones.

311824 Dry Pasta, Dough, and Flour Mixes Manufacturing from Purchased Flour


manufacturing dry pasta and/or (2) manufacturing prepared flour mixes or

dough from flour ground elsewhere. The establishments in this industry may

package the dry pasta they manufacture with other ingredients.

311830 Tortilla Manufacturing


tortillas.

Appendices

121

311911 Roasted Nuts and Peanut Butter Manufacturing

This U.S. industry comprises establishments primarily engaged in one or more of

the following: (1) salting, roasting, drying, cooking, or canning nuts; (2)

processing grains or seeds into snacks; and (3) manufacturing peanut butter.

311919 Other Snack Food Manufacturing


snack foods (except roasted nuts and peanut butter).

311920 Coffee and Tea Manufacturing


following: (1) roasting coffee; (2) manufacturing coffee and tea concentrates

(including instant and freeze-dried); (3) blending tea; (4) manufacturing herbal

tea; and (5) manufacturing coffee extracts, flavorings, and syrups.

311930 Flavoring Syrup and Concentrate Manufacturing


flavoring syrup drink concentrates and related products for soda fountain use or

for the manufacture of soft drinks.

311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing


mayonnaise, salad dressing, vinegar, mustard, horseradish, soy sauce, tarter

sauce, Worcestershire sauce, and other prepared sauces (except tomato-

based and gravy).

311942 Spice and Extract Manufacturing


manufacturing spices, table salt, seasonings, flavoring extracts (except coffee

and meat), and natural food colorings and/or (2) manufacturing dry mix food

preparations, such as salad dressing mixes, gravy and sauce mixes, frosting

mixes, and other dry mix preparations.

311991 Perishable Prepared Food Manufacturing


perishable prepared foods, such as salads, sandwiches, prepared meals, fresh

pizza, fresh pasta, and peeled or cut vegetables.

Appendices

122

311999 All Other Miscellaneous Food Manufacturing


food (except animal food; grain and oilseed milling; sugar and confectionery

products; preserved fruits, vegetables, and specialties; dairy products; meat

products; seafood products; bakeries and tortillas; snack foods; coffee and tea;

flavoring syrups and concentrates; seasonings and dressings; and perishable

prepared food). Included in this industry are establishments primarily engaged in

mixing purchased dried and/or dehydrated ingredients including those mixing

purchased dried and/or dehydrated ingredients for soup mixes and bouillon.

312111 Soft Drink Manufacturing


soft drinks and artificially carbonated waters.

312112 Bottled Water Manufacturing

This U.S. industry comprises establishments primarily engaged in purifying and

bottling water (including naturally carbonated).

312113 Ice Manufacturing


ice.

312120 Breweries

This industry comprises establishments primarily engaged in brewing beer, ale,

lager, malt liquors, and nonalcoholic beer.

312130 Wineries


following: (1) growing grapes and manufacturing wines and brandies; (2)

manufacturing wines and brandies from grapes and other fruits grown

elsewhere; and (3) blending wines and brandies.

312140 Distilleries


following: (1) distilling potable liquors (except brandies); (2) distilling and

blending liquors; and (3) blending and mixing liquors and other ingredients.

322211 Corrugated and Solid Fiber Box Manufacturing

This U.S. industry comprises establishments primarily engaged in laminating

purchased paper or paperboard into corrugated or solid fiber boxes and

related products, such as pads, partitions, pallets, and corrugated paper

Appendices

123

without manufacturing paperboard. These boxes are generally used for

shipping.

322212 Folding Paperboard Box Manufacturing

This U.S. industry comprises establishments primarily engaged in converting

paperboard (except corrugated) into folding paperboard boxes without

manufacturing paper and paperboard.

322219 Other Paperboard Container Manufacturing


paperboard into paperboard containers (except corrugated, solid fiber, and

folding paperboard boxes) without manufacturing paperboard.

322220 Paper Bag and Coated and Treated Paper Manufacturing


following: (1) cutting and coating paper and paperboard; (2) cutting and

laminating paper, paperboard, and other flexible materials (except plastics film

to plastics film); (3) manufacturing bags, multiwall bags, sacks of paper, metal

foil, coated paper, laminates, or coated combinations of paper and foil with

plastics film; (4) manufacturing laminated aluminum and other converted metal

foils from purchased foils; and (5) surface coating paper or paperboard.

326111 Plastics Bag and Pouch Manufacturing

This U.S. industry comprises establishments primarily engaged in (1) converting

plastics resins into plastics bags or pouches and/or (2) forming, coating, or

laminating plastics film or sheet into single-web or multiweb plastics bags or

pouches. Establishments in this industry may print on the bags or pouches they

manufacture.

326112 Plastics Packaging Film and Sheet (including Laminated) Manufacturing


plastics resins into plastics packaging (flexible) film and packaging sheet.

326130 Laminated Plastics Plate, Sheet (except Packaging), and Shape

Manufacturing

This industry comprises establishments primarily engaged in laminating plastics

profile shapes such as plate, sheet (except packaging), and rod. The lamination

process generally involves bonding or impregnating profiles with plastics resins

and compressing them under heat.

Appendices

124

326140 Polystyrene Foam Product Manufacturing


polystyrene foam products.

326150 Urethane and Other Foam Product (except Polystyrene) Manufacturing


plastics foam products (except polystyrene).

326160 Plastics Bottle Manufacturing


plastics bottles.

326199 All Other Plastics Product Manufacturing


plastics products (except film, sheet, bags, profile shapes, pipes, pipe fittings,

laminates, foam products, bottles, and plumbing fixtures).

327212 Other Pressed and Blown Glass and Glassware Manufacturing


glass by melting silica sand or cullet and making pressed, blown, or shaped glass

or glassware (except glass packaging containers).

327213 Glass Container Manufacturing


glass packaging containers.

327215 Glass Product Manufacturing Made of Purchased Glass

This U.S. industry comprises establishments primarily engaged in coating,

laminating, tempering, or shaping purchased glass.

332431 Metal Can Manufacturing


metal cans, lids, and ends.

332439 Other Metal Container Manufacturing


metal (light gauge) containers (except cans).

333241 Food Product Machinery Manufacturing


food and beverage manufacturing-type machinery and equipment, such as

Appendices

125

dairy product plant machinery and equipment (e.g., homogenizers,

pasteurizers, ice cream freezers), bakery machinery and equipment (e.g.,

dough mixers, bake ovens, pastry rolling machines), meat and poultry

processing and preparation machinery, and other commercial food products

machinery (e.g., slicers, choppers, and mixers).

333993 Packaging Machinery Manufacturing


packaging machinery, such as wrapping, bottling, canning, and labeling

machinery.

493110 General Warehousing and Storage

This industry comprises establishments primarily engaged in operating

merchandise warehousing and storage facilities. These establishments generally

handle goods in containers, such as boxes, barrels, and/or drums, using

equipment, such as forklifts, pallets, and racks. They are not specialized in

handling bulk products of any particular type, size, or quantity of goods or

products.

493120 Refrigerated Warehousing and Storage


refrigerated warehousing and storage facilities. Establishments primarily

engaged in the storage of furs for the trade are included in this industry. The

services provided by these establishments include blast freezing, tempering, and

modified atmosphere storage services.

493190 Other Warehousing and Storage


warehousing and storage facilities (except general merchandise, refrigerated,

and farm product warehousing and storage).

Appendices

126

Appendix B: EMSI Developer

Input-Output Data

The input-output model is EMSI's gravitational flows multi-regional social account

matrix model (MR-SAM). It is based on data from the Census Bureau's Current

Population Survey and American Community Survey; as well as the Bureau of

Economic Analysis' National Income and Product Accounts, Input-Output Make

and Use Tables, and Gross State Product data. In addition, several EMSI in-house

data sets are used, as well as data from Oak Ridge National Labs on the cost of

transportation between counties.

Cost of Living Data

EMSI cost of living data is based on the Cost of Living Index published quarterly

by the Council for Community and Economic Research (C2ER).

Industry Data

EMSI industry data have various sources depending on the class of worker. (1)

For QCEW Employees, EMSI primarily uses the QCEW (Quarterly Census of

Employment and Wages), with supplemental estimates from County Business

Patterns. (2) Non-QCEW employees data are based on a number of sources

including QCEW, Current Employment Statistics, County Business Patterns, BEA

State and Local Personal Income reports, the National Industry-Occupation

Employment Matrix (NIOEM), the American Community Survey, and Railroad

Retirement Board statistics. (3) Self-Employed and Extended Proprietor classes of

worker data are primarily based on the American Community Survey,

Nonemployer Statistics, and BEA State and Local Personal Income Reports.

Projections for QCEW and Non-QCEW Employees are informed by NIOEM and

long-term industry projections published by individual states.

State Data

EMSI uses state data from the following agencies: Indiana Department of

Workforce Development; Michigan Department of Labor and Economic

Growth, Bureau of Labor Market Information and Strategic Initiatives

EMSI U.S. Data Sources

• U.S. Department of Commerce

o Bureau of Economic Analysis

▪ State Personal Income and Employment (SPI)

▪ Local Area Personal Income and Employment (LPI)

▪ National Income and Product Accounts (NIPA)

Appendices

127

▪ Annual Input-Output (I-O) Accounts

▪ Benchmark Input-Output (I-O) Accounts

▪ GDP by State

o U.S. Census Bureau

▪ American Community Survey (ACS)

▪ County Business Patterns (CBP)

▪ ZIP Code Business Patterns (ZBP)

▪ Nonemployer Statistics (NES)

▪ Quarterly Workforce Indicators (QWI)

▪ OnTheMap (OTM)

▪ TIGER/Line File (with additions by DM Solutions Group)

▪ Population Estimates

▪ U.S. National and State Population Projections

▪ Census 2000 & 2010 Summary Files

▪ Census of Government — State and Local

▪ Government Finances by State

▪ Journey-to-Work (JtW)

▪ Consumer Expenditures Survey (CEX)

▪ Current Population Survey (CPS)

▪ Commodity Flow Survey (CFS)

• U.S. Department of Health and Human Services

o National Center for Health Statistics

▪ Health, United States

• U.S. Railroad Retirement Board

o Annual Railroad Retirement Act and Railroad Unemployment

Insurance Act Statistical Tables

• Oak Ridge National Laboratory

o County-to-County Distance Matrix (Skim Tree)

• U.S. Department of Labor

o Bureau of Labor Statistics

▪ Quarterly Census of Employment and Wages (QCEW)

▪ Current Employment Statistics (CES)

▪ Current Population Survey (CPS)

▪ Local Area Unemployment Statistics (LAUS)

▪ National Industry-Occupation Employment Matrix (10-year,

current/projected)

▪ Occupational Employment Statistics (OES)

Appendices

128

▪ Occupational Education and Training Projections

o Employment and Training Administration (ETA)

▪ Characteristics of the Insured Unemployed

▪ National O*NET Consortium, O*NET Production Database

o Wage and Hour Division

▪ Minimum Wage Laws in the States

• U.S. Department of Education

o National Center for Education Statistics

o Integrated Postsecondary Education Data System (IPEDS)

o Classification of Instructional Programs

o Common Core of Data

• U.S. Postal Service

o USPS Delivery Statistics

o USPS City State Product

• Private Sources

o DatabaseUSA

Appendices

129

Appendix C: I&M Major Food and Beverage Companies

I&M Region Company List

Company Industry HQ City State

Alpha Baking Co., Inc. Baking and Snack N La Porte IN

American Licorice Company Confectionery Y La Porte IN

Bell's Brewery Beverages Y Galesburg MI

Bimbo Bakeries Baking and Snack N Elkhart IN

Burnette Foods Fruit and Vegetable

Processing N Hartford MI

Café Valley Bakery Baking and Snack N Marion IN

Clemens Food Group Meat and Poultry N Coldwater MI

Coca-Cola Consolidated Beverages N Portland IN

Coloma Frozen Foods Fruit and Vegetable

Processing Y Coloma MI

Culver Duck Meat and Poultry N Middlebury IN

Dairy Farmers of America Dairy N Goshen IN

Dean Foods (Land-O-Sun Dairies) Dairy N Decatur IN

Dean Foods (Schenkel's Dairy) Dairy N Huntington IN

Dole (Dole Packaged Foods) Fruit and Vegetable

Processing N Decatur MI

Echo Lake Foods Meat and Poultry N Huntington IN

Eden Foods (Meridian Foods) Fruit and Vegetable

Processing N Eaton IN

Ellison Bakery Baking and Snack Y Fort Wayne IN

Appendices

130


Flamm Pickle and Packing Co. Fruit and Vegetable

Processing y Eau Claire MI

Freestone Pickle Company, Inc. Fruit and Vegetable

Processing Y Bangor MI

Hearthside Food Solutions Baking and Snack N Michigan

City IN

Holsum (Lewis Brothers Bakeries) Baking and Snack N Fort Wayne IN

Holsum (Lewis Brothers Bakeries) Baking and Snack N La Porte IN

HRR Enterprises, Inc. Meat and Poultry Y La Porte IN

International Bakers Services, Inc. Flavorings, Dressings and

Seasonings Y South Bend IN

Inventure Foods, Inc. Baking and Snack N Bluffton IN

Kalsec Inc. Flavorings, Dressings and

Seasonings Y Kalamazoo MI

Knouse Foods Fruit and Vegetable

Processing N Paw Paw MI

McCormick & Company, Inc. Flavorings, Dressings and

Seasonings N South Bend IN

Michigan Milk Producers

Association Dairy N Constantine MI

Michigan Milk Producers

Association (Heritage Ridge

Creamery)

Dairy N Middlebury IN

Miller Poultry Meat and Poultry Y Orland IN

Monogram Food Solutions Meat and Poultry N Bristol IN

National Flavors Flavorings, Dressings and

Seasonings Y Kalamazoo MI

Nestlé USA Beverages N Anderson IN

Nestlé USA (Edy's) Dairy N Fort Wayne IN

Appendices

131


New Horizons Baking Co. Baking and Snack N Fremont IN

Olde York Potato Chips (Saratoga

Potato Chips) Baking and Snack N Fort Wayne IN

Packer Canning Company, Inc.

(Honee Bear Canning Co.)

Fruit and Vegetable

Processing Y Lawton MI

Perfection Bakeries, Inc. (Aunt

Millie's) Baking and Snack

N (Fort

Wayne) Kalamazoo MI

Pero Family Farms Fruit and Vegetable

Processing N

Benton

Harbor MI

Plumrose USA Meat and Poultry N Elkhart IN

Prairie Farms Dairy Dairy N Fort Wayne IN

Prairie Farms Dairy (East Side

Jersey Dairy) Dairy N Anderson IN

Pretzels, Inc Baking and Snack Y Bluffton IN

Pretzels, Inc Baking and Snack N

(Bluffton) Plymouth IN

Red Gold, Inc. Fruit and Vegetable

Processing Y Elwood IN


Processing N Elwood IN


Processing N Geneva IN


Processing N Orestes IN

Reny Picot (Old Europe Cheese) Dairy N Benton

Harbor MI

Sechler's Pickles Fruit and Vegetable

Processing Y Saint Joe IN

The Coca-Cola Company (Minute

Maid)

Fruit and Vegetable

Processing N Paw Paw MI

The Kraft Heinz Company Confectionery N Kendallville IN

Tyson Foods Baking and Snack N Portland IN

Appendices

132


Walmart (Under Construction) Dairy N Fort Wayne IN

Weaver Popcorn Baking and Snack Y Van Buren IN

Welch's Fruit and Vegetable

Processing N Lawton MI

WellPet LLC Pet Food N Mishawaka IN

Wicks Pies Inc. Baking and Snack Y Winchester IN

Wild Flavors and Speciality

Ingredients (A.M. Todd)

Flavorings, Dressings and

Seasonings N Kalamazoo MI

Zentis North America LLC Fruit and Vegetable

Processing N Plymouth IN

Appendices

133

Appendix D: Nearby Grain and Oilseed Milling and Refining Operations

Grain and Oilseed Milling & Refining Operations near the I&M Region

Company Industry City State

ADM Wheat (Flour) Milling Chicago IL

ADM Wheat (Flour) Milling Indianapolis IN

ADM Wheat (Flour) Milling Mt Vernon IN

ADM Wheat (Flour) Milling Beech

Grove IN

Ardent Mills Wheat (Flour) Milling Columbus OH

Ardent Mills Wheat (Flour) Milling Loudonville OH

Ardent Mills Wheat (Flour) Milling Alton IL

Ardent Mills Wheat (Flour) Milling Chester IL

Grain Craft Wheat (Flour) Milling Cleveland OH

Keynes Bros Inc Wheat (Flour) Milling Logan OH

King Milling Company Wheat (Flour) Milling Lowell MI

Knappen Milling Company Wheat (Flour) Milling Augusta MI

Prairie Mills Wheat (Flour) Milling Rochester IN

Siemer Milling Company Wheat (Flour) Milling West

Harrison IN

Siemer Milling Company Wheat (Flour) Milling Teutopolis IL

Star of The West Milling Co. Wheat (Flour) Milling Frankenmuth MI

Star of The West Milling Co. Wheat (Flour) Milling Quincy MI

Star of The West Milling Co. Wheat (Flour) Milling Willard OH

Star of The West Milling Co. Wheat (Flour) Milling Ligonier IN

The Mennel Milling Co. Wheat (Flour) Milling Dowagiac MI

The Mennel Milling Co. Wheat (Flour) Milling Fostoria OH

The Mennel Milling Co. Wheat (Flour) Milling Bucyrus OH

The Mennel Milling Co. Wheat (Flour) Milling Mt Olive IL

ADM Oilseed processing /

refinery Quincy IL


refinery Decatur IL


refinery Frankfort IN

Bunge North America Oilseed processing /

refinery Decatur IN


refinery Morristown IN

Appendices

134

Company Industry City State


refinery Bellevue OH

Cargill Oilseed processing /

refinery Sidney OH

Incobrasa Oilseed processing /

refinery Gilman IL

Zeeland Farm Soya Oilseed processing /

refinery Zeeland MI

ADM Corn Mill (Wet) Decatur IL

ADM Corn Mill (Dry) Peoria IL

Agricor Inc Corn Mill (Dry) Marion IN

AZTECA MILLING LP Corn Mill (Dry) Evansville IN

Bunge Corn Mill (Dry) Worthington IN

Bunge Milling, Inc.. Corn Mill (Dry) Danville IL

Bunge Milling, Inc.. (former J.R. Short

Milling) Corn Mill (Dry) Bradley IL

Cargill Corn Mill (Wet) Dayton OH

Cargill Corn Mill (Dry) Paris IL

Cargill Corn Mill (Dry) Indianapolis IN

Cargill Corn Mill (Wet) Hammond IN

GRAIN PROCESSING CORP Corn Mill (Wet) Washington IN

Ingredion Corn Mill (Wet) Mapleton IL

Ingredion Corn Mill (Wet) Bedford Park IL

Ingredion Corn Mill (Wet) Indianapolis IN

Tate & Lyle Corn Mill (Wet) Decatur IL

Tate & Lyle Ingredients Americas LLC Corn Mill (Wet) Lafayette IN

Tate & Lyle Ingredients Americas LLC Corn Mill (Wet) Lafayette IN

Prairie Mills Corn Mill (Dry) Rochester IN

Appendices

135

Appendix E: Microclimates

The narrow coastal area along the eastern shore of Lake Michigan has long

been heralded as Michigan’s Fruit Belt due to its unique ability to cultivate fruit.

This area benefits from a microclimate largely attributed to its location on the

leeward coast of Lake Michigan. With consistent lake breezes, the Lake acts as

a heat source during the times when the larger region begins to cool and as a

heat sink when the surrounding area begins to heat up. These effects help to

moderate temperature extremes that may be experienced beyond the roughly

30-mile width, as impact decreases further from the lake. Air is cooled by a cold

lake in spring which delays fruit bud development and reduces potential

impacts by frost. Spikes in summer air temperature are moderated by the slowly

warming lake. As fall arrives and temperatures begin to drop with the potential

for early frost, the warm lake extends the growing and harvest season with

warmer air temperatures.

Increasing seasonal temperatures have been observed in this region over the

past decade — attributed to climate change — and with these changes, an

evolving fruit landscape is expected as new varieties become viable.

Appendices

136

Appendix F: Soils

A close relationship exists between the physical / chemical properties of soil and

plant growth. Among physical characteristics, the most important for

determining productivity include soil texture, density, aggregation, drainage

and infiltration rates, slope and the degree of erosion. Based on the

understanding that geography, soils, and climate largely influence vegetation,

the USDA’s Natural Resources Conservation Services (NRCS) produced

Agricultural Handbook 296. This document divided the United States into Land

Resource Regions (LRRs) that share similar climate, soils, and land use activities

and further subdivides these regions into Major Land Resource Areas (MLRAs).

The Indiana Michigan Power service territory is located within two LRRs and

predominately includes four MLRAs:

• (L) Lake States Fruit, Truck Crop, and Dairy Region

o 97 – Southwestern Michigan Fruit and Truck Crop Belt

o 98 – Southern Michigan and Northern Indiana Drift Plain

• (M) Central Feed Grains and Livestock Region

o 111A – Indiana and Ohio Till Plain, Central Part

o 111B – Indiana and Ohio Till Plain, Northeastern Part

Other MLRAs also reach into small portions of the territory (99 – Erie-Huron Lake

Plain, 110 – Northern Illinois and Indiana Heavy Till Plain, 111C – Indiana and Ohio

Till Plain, Northwestern Part, and 111D – Indiana and Ohio Till Plain, Western Part).

The map below further describes MLRA’s.

Appendices

137

USDA classifies soils to reflect primary Soil Forming Factors. Much of the soils

within the service territory is dominated by the soil orders Alfisols and to a lesser

extent, Mollisols.

• Alfisols are formed under forest vegetation and found extensively in the

Mississippi and Ohio River valleys. They are generally very fertile (less so

than Mollisols) with high concentrations of nutrients and the ability to hold

and supply moisture due to accumulated clay in the subsoil. Suborders in

the area include Aqualfs (found with water table at or near the surface)

and Udalfs (found in humid climates).

• Mollisols are mineral soils developed under grassland vegetation and are

the dominant soil of the Great Plains region. They are considered very

fertile, consisting of rich organic topsoil and saturated with essential

Appendices

138

nutrients. The suborder in the area is Aquolls (found with water table at or

near the surface).

Soils in the Lake States Fruit, Truck Crop, and Dairy Region include added

variability with soil orders, Entisols and Histosols.

• Entisols often occur where soil deposition or erosion rates outpace soil

development. The soils are variable in productivity. Here, the suborder

Psamments is prevalent, noted for being dry and sandy.

• Histosols are often produced in wetlands in saturated and aerobic

conditions, and as such they are high in organic content. Here, the

suborder Saprists is prevalent, which consists of highly decomposed

organic materials, often called muck.

Soils throughout the service territory are very deep. Along Lake Michigan (MLRA

97), soils are excessively drained to very poorly drained. Further from Lake

Michigan (MLRA 98), soil drainage varies more from well drained to very poorly

drained. Within the Central Feed Grains and Livestock Region (MLRAs 111A and

111B), soils are very poorly drained to somewhat poorly drained, and described

as loamy and clayey.

Appendices

139

Appendix G: Rail Lines and Intermodal Stations

Appendices

140

Appendix H: Ports and Interstates

Appendices

141

Appendix I: Education Institutions and Programs

Universities and colleges within the counties serviced by Indiana Michigan Power

offer numerous opportunities for students pursuing careers in the value-added

agriculture and food processing industries. Associate, Bachelor, and Graduate-

level degrees are available at many institutions within and around the service

territory. These institutions act as educational assets by producing a highly-

educated labor pool prepared for jobs focused on agriculture, animal science,

botany, dietetics, farming, food sciences, horticulture, and nutrition. Beyond the

schools within the territory, many companies indicated direct major recruitment

efforts towards food science graduates of Michigan State University, Purdue

University, and The Ohio State University.

Relevant programs are presented below:

Ancilla College – Donaldson, Indiana

Associate Degree Programs:

• Agriculture: Crop Science

• Agriculture: Animal Science

Andrews University – Berrien Springs, Michigan


• Agriculture, Crop Production Emphasis

• Agriculture, Dairy Herd Management Emphasis

Bachelor Degree Programs:

• Agriculture

• Agriculture, Agribusiness Emphasis

• Agriculture, Animal Husbandry Emphasis

• Agriculture, Crop Production Emphasis

• Animal Science, Management Emphasis

• Animal Science, Pre-Veterinary Medicine Emphasis

• Horticulture, Horticultural Crop Production Emphasis

• Nutrition Science & Dietetics

Pre-Professional Program

• Pre-Professional Program in Veterinary Medicine

Certification

• Graduate Certificate in Nutrition & Dietetics (Dietetic Internship)

Ball State University – Muncie, Indiana


• Nutrition and Dietetics

Appendices

142

Huntington University – Huntington, Indiana


• Agricultural Studies

International Business College – Fort Wayne, Indiana


• Veterinary Technology

Ivy Tech Community College of Indiana – Various Locations, Indiana


• Agriculture

Kalamazoo Valley Community College – Kalamazoo, Michigan


• Culinary Arts & Sustainable Food Systems

Manchester University – North Manchester, Indiana


• Pre-Veterinary (Biology-Chemistry)

Southwestern Michigan College – Dowagiac, Michigan


• Agricultural Technology

University of Saint Francis – Fort Wayne, Indiana


• Nutrition

• Pre-Veterinary

Western Michigan University – Kalamazoo, Michigan


• Dietetics

Michigan State University* – East Lansing, Michigan


• Agribusiness Management

• Agriculture and Natural Resources

• Agriculture, Food and Natural Resources Education

• Animal Science

• Crop and Soil Sciences

• Dietetics

Appendices

143

• Environmental Biology/Plant Biology

• Fisheries and Wildlife

• Food Industry Management

• Food Science

• Horticulture

• Plant Biology

• Preveterinary

Master Degree Programs:

• Agricultural, Food and Resource Economics

• Animal Science



• Food Safety (Online Program)

• Food Science

• Horticulture

• Plant Biology

• Plant Breeding, Genetics and Biotechnology - Crop and Soil

Sciences

• Plant Breeding, Genetics and Biotechnology-Horticulture

• Plant Breeding, Genetics and Biotechnology-Plant Biology

• Plant Pathology

Doctoral Degree Programs:

• Agricultural, Food and Resource Economics

• Animal Science


• Crop and Soil Sciences - Environmental Toxicology


• Food Science

• Horticulture

• Plant Biology

• Plant Breeding, Genetics and Biotechnology - Crop and Soil

Sciences

• Plant Breeding, Genetics and Biotechnology-Horticulture

• Plant Breeding, Genetics and Biotechnology-Plant Biology

• Plant Pathology

Purdue University* – West Lafayette, Indiana


• Veterinary Technician


• Agribusiness: Agricultural Finance Concentration

Appendices

144

• Agribusiness: Agricultural Marketing Concentration

• Agribusiness: Commodity Marketing Concentration

• Agribusiness: Food Marketing Concentration

• Agribusiness: Agribusiness Management Concentration

• Agricultural Communication

• Agricultural Economics: Applied Agricultural Economics

Concentration

• Agricultural Economics: Commodity Marketing Concentration

• Agricultural Economics: Quantitative Analysis Concentration

• Agricultural Engineering

• Agricultural Systems Management

• Agronomy: Agronomic Business and Marketing Concentration

• Agronomy: Crop and Soil Management Concentration

• Agronomy: International Agronomy Concentration

• Animal Sciences: Animal Agribusiness Concentration

• Animal Sciences: Behavior/Well-Being Concentration

• Animal Sciences: Biosciences Concentration

• Animal Sciences: Pre-Veterinary Medicine Concentration

• Animal Sciences: Production Concentration

• Animal Sciences: Products Concentration

• Crop Science

• Farm Management

• Fisheries and Aquatic Sciences

• Food Science

• Foods and Nutrition in Business

• Horticulture: Horticultural Production and Marketing Concentration

• Horticulture: Landscape Enterprise Management Concentration

• Horticulture: Plant Science Concentration

• Horticulture: Public Horticulture Concentration

• Nutrition and Dietetics

• Nutrition Science, BS

• Plant Genetics, Breeding, and Biotechnology

• Plant Science

• Pre-Veterinary Medicine

• Soil and Water Sciences

• Sustainable Food and Farming Systems

• Veterinary Technology

Graduate Programs:

• Agricultural & Biological Engineering

• Agricultural Economics

• Agronomy

Appendices

145

• Animal Sciences

• Food Science

• Nutrition

• Nutrition Science

• Veterinary Clinical Sciences

• Veterinary Medicine

The Ohio State University – Columbus, Ohio


• Agribusiness and Applied Economics

• Agricultural Communication

• Agricultural Systems Management

• Agriculture, Exploring

• Culinary Science

• Food Business Management

• Food Science and Technology

• Food, Agricultural and Biological Engineering

• Forestry, Fisheries and Wildlife

• Meat Science

• Medical Dietetics

• Plant Health Management

• Plant Pathology

• Pre-Veterinary Medicine

• Sustainable Plant Systems

Master Degree Programs:

• Agricultural and Extension Education

• Agricultural and Extension Education, Distance Learning

• Agricultural, Environmental and Development Economics

• Animal Sciences



• Horticulture and Crop Science

• Plant Health Management

• Plant Pathology


Doctoral Degree Programs:

• Agricultural and Extension Education

• Agricultural, Environmental and Development Economics

• Animal Sciences



Appendices

146

• Horticulture and Crop Science

• Ohio State Nutrition Program

• Plant Pathology

• Translational Plant Science


*Note: Main campus locations are outside of the Indiana Michigan Power

service territory.

Appendices

147

Appendix J: Location Quotients

Location quotients are used to quantify the density of a particular industry,

cluster, occupation, or demographic group in a region when compared to the

nation as a whole. It is used to identify the uniqueness of a specific region from a

comparative point of view. For example, if a particular industry makes up 10

percent of the jobs in a region but 1% nationally, this region’s particular industry

has a location quotient of 10. This means that this specific regional industry is 10

times larger than that of the same industry nationally, thus having a

disproportionately larger share of the total jobs for this industry. Location

quotients are always greater than zero, and a location quotient that is greater

than one shows a larger share than the nation and less than one shows a smaller

share than the nation. An industry with a location quotient that is one has the

same concentration of the industry as the nation, and these industries tend to

be either service or retail related.

Appendices

148

Appendix K: Shift Share Analysis

A shift share analysis is used to determine what portions of regional economic

growth or decline can be attributed to national, industrial, and regional factors.

The main purpose of this analysis is to identify industries where a regional

economy has competitive advantages over a larger economy (usually the

nation). This is accomplished by taking the changes over time of an economic

variable, such as employment, within industries of a regional economy and

dividing the change into components.

There are three components in a shift share analysis. The national growth effect

shows the change of the economic variable (e.g. employment) that can be

expected based on national trends across all industries. The industry mix effect

shows the change of the economic variable that can be expected based on

trends of the specific industry. Together the national growth effect and industry

mix effect show the total change that can be expected in a given industry

based on national industrial trends. The third effect is the most important to a

region, and is called the regional competitive effect. This effect is the difference

between the change that a region is expected to have in a given industry and

the change that actually happens in the same regional industry. A positive

value suggests that the region has some sort of competitive advantage while a

negative value suggests a competitive disadvantage. The base value for this

analysis would be zero and a value close to zero would suggest that the specific

industry is aligned with national and industry trends. It is important to note that

this method does not identify what the competitive advantage may be; this is

left up to the local officials to determine.

Appendices

149

Appendix L: Supply Chain Analysis

The purpose of a supply chain analysis is to show backward (purchases) and

forward (sales) linkages in a targeted industry’s supply chain. From determining

these linkages, gaps or leakages can be identified for a specific region.

Generally, gaps occur when purchases are made from companies outside the

region and leakages occur when sales are made to companies outside the

region. These gaps and leakages may represent opportunities to attract new

businesses to the region that could provide the supplies (purchases) or further

process food products (sales). The goal of this exercise is twofold: 1.) to identify

supply chain linkages of the value-added agriculture and food and beverage

processing industry, and 2.) to identify any gaps or leakages of this industry

outside of the Indiana Michigan Power (I&M) service territory. Outcomes and

significant findings of this analysis were used to conduct further industry analyses

and ultimately be incorporated into the marketing and business development

strategy.

The primary source used for distinguishing a supply chain of an industry is the U.S.

Bureau of Economic Analysis’ (BEA) Input-Output (I-O) Accounts Data. The I-O

accounts show how industries provide input to, and use output from, each other

to produce Gross Domestic Product GDP. These data are presented in a set of

tables: Use, Make, Direct Requirements, and Total Requirements. Of these tables,

the Use table is the most important for this analysis because of its applications to

the estimates of GDP. The Use table shows the inputs to industry production and

the commodities that are consumed by final users. These are otherwise known

as backward linkages in the supply chain.

The Direct Requirements table shows the amount of a commodity that is

required by an industry to produce a dollar of the industry’s output. Of the three

Total Requirements tables, the most useful for the purposes of this study is the

Industry by Industry Total Requirements table. This table shows the production

that is required, directly and indirectly, from each industry to deliver a dollar of a

commodity to final users. The information displayed by this table is useful for

showing forward linkages in the supply chain, however it only highlights industries

that are major contributors. This means that a large proportion of an industry

must be aided by contributing industries to matter. Additionally, this table only

displays the relationship of an industry to its end users, otherwise known as the

place that is directly selling the good or service to consumers. Any “middle-

man” is left out of the equation including distributors, wholesalers, and

warehousing. Because of this, Austin has had to supplement this information

based on experience in the industry.

Appendices

150

To conduct this analysis, codes from the U.S. Census Bureau’s North American

Industry Classification System (NAICS) were used for categorization and

organization purposes. These codes are broken down to the 6-digit level, which

is the most detailed level available. The EMSI Developer tool was employed to

conduct the bulk of this analysis. This tool was selected because it unsuppresses

data that would otherwise be unavailable at the 6-digit level using federal data

sources. Additionally, the tool has an Industry Purchases module that tracks the

purchases of one industry to another. These purchases are the backward

linkages in the supply chain that are desired for this type of analysis. These data

include purchases both inside and outside of the target region. The backbone

of this module in EMSI is the aforementioned I-O Accounts Data from BEA.

Value-added agriculture and food and beverage processing is a uniquely titled

industry sector which is meant to encompass a multitude of industry subsectors.

At the essence of this title is the food and beverage processing industry sector

which is clearly defined by NAICS codes. Food and beverage manufacturing

(processing) is listed under the Manufacturing industry sector as industry

subsectors 311 (Food Manufacturing) and 312 (Beverage and Tobacco

Manufacturing), with the exception of Tobacco Manufacturing (3122). The

omission of the Tobacco Manufacturing sector was made because it not only

doesn’t fit in the food and beverage categorization but also does not have a

significant enough presence in the region to warrant further inclusion.

Altogether, this gave Austin a clearly defined way of categorizing data for

analysis within 43 six digit NAICS codes.

Because food and beverage products are used by a myriad of different

industries, there are many other industries that could have been included at the

beginning of this analysis. However, by using food and beverage processing as

the foundation, all other significant contributors to the value-added agriculture

and food and beverage processing sector would be captured. Basically, by

starting with a food processing industry group the inputs can be traced back to

agricultural suppliers. This means that inputs for food and beverage processing

are also inclusive of value-added agriculture as well.

Once Austin determined the NAICS codes to be used in this analysis, data could

be collected. These data were gathered from three different methods:

literature, numbers, and interviews. Data were collected from these methods

simultaneously because of territory visit scheduling.

Appendices

151

Previous work and literature was reviewed to discover any relevant and useful

insight into the potential supply chain for the I&M territory. Information from BEA

and StatAmerica gave particularly useful understanding into which industries

may be included in a supply chain. However, these sources did not describe

industry sectors within the I&M territory, so they were instead used to verify the

final supply chain results.

During visits to companies within the study region, Austin specifically asked

questions to managers about business relationships in the area. Learning the

reasons why companies chose to locate in the region were particularly

interesting. Many of the operations were located within the region to be close to

where their inputs are produced (i.e. farms and natural assets). Company

managers also shared detailed information on their suppliers and to whom they

sell. Information gleaned from interviews was imperative to the early design and

running of the supply chain analysis in EMSI Developer.

Austin employed the EMSI Developer tool to do most of the heavy lifting for the

supply chain analysis in the I&M territory. Data were primarily collected from the

tool’s Industry Purchases and Industry Sales modules. These two modules

represent backward and forward linkages in the supply chain of an industry.

From this Austin determined the most valuable relationships to local companies.

These data also helped in understanding whether or not there are any gaps or

leakages in the supply chain. A detailed description of the supply chain analysis

process is provided below:

1. All 43 industries were run through both modules (purchases and sales) to

collect the unique backward and forward linkages in each industry

sector.

2. The totals and percentages were looked at to determine significance to

each industry.

3. All industry purchases and industry sales were combined (separately) and

sorted based on contribution.

4. A threshold of 2% was used to filter out any linked industry sector that was

less than this mark. This threshold seemed to be a natural break in data.

5. Industry sectors were categorized into where each fit into the overall

supply chain. Categories include:

a. Raw – Farmers, Growers, Raisers, etc.

b. Processed – Food and Beverage Processors

c. Packaging – Bottles, Cans, Boxes, Jars, etc.

d. Services – Freight, Trucks, Warehouse, Cold Storage, Corporate

Services, Trade Brokers, etc.

Appendices

152

6. Graphics were created for each industry group for both the purchases

and sales modules.

a. Purchases were separated into the four categories listed above

i. In the EMSI model, purchasing data for the I&M region did not

differ from data for the U.S.

b. Because data differed at the regional and national levels for sales,

these data were separated into processing and final categories

and compared with sales within the same categories for the nation.

As research was furthered, it became clear which industry subsectors had a

presence in the I&M region. In fact, Austin was able to identify the major

companies in the region. These companies fit into nine major groups:

1. Pet Food

2. Flour Milling

3. Starch and Vegetable Oil and Fats

4. Confectionary

5. Dairy

6. Meat

7. Baking and Snacks

8. Flavors and Ingredients

9. Beverages

Of these categories, only 8 were selected to have a dedicated section in the

final report. The Starch and Vegetable Oils and Fats category was covered

under the Baking and Snack Food section, and is also mentioned throughout

the report because of its importance in the supply chain of other categories.

From the development of these eight groups, other analyses were carried out to

provide more detail on the overall health of the Food and Beverage Processing

subsector. Detailed tables of supply chain purchases and sales are included

below. These tables showcase all industry categories that were above the 2%

threshold for each industry group.

Appendices

153


Purchases from NAICSIn-region

Purchases

% In-region

Purchases

Total

Purchases

% of Total

Purchases

Corporate, Subsidiary, and Regional Managing Offices 551114 6,124,987$ 6% 99,471,863$ 12%

Crop Production 111000 32,014,355$ 49% 65,496,961$ 8%

Flour Milling 311211 12,775,810$ 23% 55,545,228$ 7%

Animal Production 112000 6,170,961$ 19% 32,351,074$ 4%

Fats and Oils Refining and Blending 311225 893,653$ 3% 29,463,628$ 4%

Plastics Bottle Manufacturing 326160 1,592,538$ 8% 19,688,376$ 2%

Corrugated and Solid Fiber Box Manufacturing 322211 4,697,489$ 26% 18,305,178$ 2%

Wholesale Trade Agents and Brokers 425120 4,198,002$ 24% 17,627,115$ 2%

Baking and Snack Food - I&M Region Industry Purchases


Sales to NAICSIn-Region

Sales

% of In-

Region Sales

Limited-Service Restaurants 722513 4,489,135$ 13%

Full-Service Restaurants 722511 3,182,423$ 9%

Commercial Bakeries 311812 2,554,458$ 7%

Colleges, Universities, and Professional Schools 611310 2,508,945$ 7%

All Other Miscellaneous Food Manufacturing 311999 2,450,965$ 7%

Fruit and Vegetable Canning 311421 2,056,721$ 6%

Light Truck and Utility Vehicle Manufacturing 336112 2,015,983$ 6%

Cookie and Cracker Manufacturing 311821 1,303,683$ 4%

Nonchocolate Confectionery Manufacturing 311340 1,016,158$ 3%

Ice Cream and Frozen Dessert Manufacturing 311520 814,329$ 2%

Baking and Snack Food - I&M Region Industry Sales


Sales to NAICS Total Sales% Total

Sales

Limited-Service Restaurants 722513 3,862,500,286$ 19%

Full-Service Restaurants 722511 3,365,550,080$ 16%

Colleges, Universities, and Professional Schools 611310 1,251,684,394$ 6%


State Government, Excluding Education and Hospitals 902999 798,202,597$ 4%

Local Government, Excluding Education and Hospitals 903999 577,802,489$ 3%


Hotels (except Casino Hotels) and Motels 721110 412,658,011$ 2%

Baking and Snack Food - National Industry Sales


Appendices

154

Dairy


Purchases

% In-region

Purchases

Total

Purchases

% of Total

Purchases

Animal Production and Aquaculture 112000 85,733,186$ 14% 614,577,750$ 45%

Fluid Milk Manufacturing 311511 57,396,495$ 46% 123,482,538$ 9%

Dry, Condensed, and Evaporated Dairy Product Manufacturing 311514 54,478,761$ 66% 82,748,083$ 6%


Cheese Manufacturing 311513 6,474,785$ 21% 31,540,719$ 2%

Dairy - I&M Region Industry Purchases



Sales

% of In-Region

Sales

Dry, Condensed, and Evaporated Dairy Product Manufacturing 311514 53,900,993$ 32%

Fluid Milk Manufacturing 311511 45,307,773$ 27%

Ice Cream and Frozen Dessert Manufacturing 311520 22,212,214$ 13%


Cheese Manufacturing 311513 6,517,614$ 4%


General Medical and Surgical Hospitals 622110 3,979,047$ 2%


Dairy - I&M Region Industry Sales

Sales to NAICS Total Sales% of Total

Sales

Cheese Manufacturing 311513 11,923,836,518$ 20%



Fluid Milk Manufacturing 311511 4,556,529,614$ 8%

Dry, Condensed, and Evaporated Dairy Product Manufacturing 311514 3,099,740,760$ 5%

State Government, Excluding Education and Hospitals 902999 2,481,419,172$ 4%

General Medical and Surgical Hospitals 622110 2,091,676,905$ 3%

Ice Cream and Frozen Dessert Manufacturing 311520 1,953,655,571$ 3%

Local Government, Excluding Education and Hospitals 903999 1,785,013,802$ 3%

Frozen Specialty Food Manufacturing 311412 1,528,090,571$ 3%

Hotels (except Casino Hotels) and Motels 721110 1,258,330,419$ 2%


Dairy - National Industry Sales

Appendices

155



Purchases

% In-region

Purchases

Total

Purchases

% of Total

Purchases

Flavoring Syrup and Concentrate Manufacturing 311930 7,313,736$ 18% 41,093,920$ 7%

Fruit and Vegetable Canning 311421 31,998,298$ 82% 39,090,948$ 6%


Metal Can Manufacturing 332431 982,384$ 3% 35,882,615$ 6%

Crop Production 111000 22,861,809$ 67% 34,086,820$ 6%

Spice and Extract Manufacturing 311942 2,755,602$ 13% 21,754,865$ 4%

Other Metal Container Manufacturing 332439 2,115,289$ 11% 19,059,822$ 3%

Coffee and Tea Manufacturing 311920 731,747$ 5% 16,003,575$ 3%


Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing 311941 626,633$ 5% 13,644,562$ 2%


Fruit and Vegetable Processing - I&M Region Industry Purchases



Sales

% of In-Region

Sales


Frozen Specialty Food Manufacturing 311412 5,354,465$ 10%


Spice and Extract Manufacturing 311942 1,464,800$ 3%


Fruit and Vegetable Processing - I&M Region Industry Sales



Sales

Frozen Specialty Food Manufacturing 311412 1,987,806,009$ 13%

Fruit and Vegetable Canning 311421 1,870,879,821$ 12%



Frozen Fruit, Juice, and Vegetable Manufacturing 311411 1,064,153,131$ 7%

State Government, Excluding Education and Hospitals 902999 850,870,510$ 6%


Local Government, Excluding Education and Hospitals 903999 612,642,707$ 4%


Specialty Canning 311422 372,347,863$ 2%


Dried and Dehydrated Food Manufacturing 311423 327,546,353$ 2%

Soft Drink Manufacturing 312111 313,705,470$ 2%


Fruit and Vegetable Processing - National Industry Sales

Appendices

156

Meat and Poultry


Purchases

% In-region

Purchases

Total

Purchases

%of Total

Purchases

Animal Production and Aquaculture 112000 110,114,741$ 35% 316,414,778$ 58%

Poultry Processing 311615 36,840,546$ 94% 39,007,686$ 7%

Animal (except Poultry) Slaughtering 311611 9,030,345$ 24% 37,722,840$ 7%

Meat Processed from Carcasses 311612 13,088,608$ 36% 36,823,222$ 7%


Meat and Poultry - I&M Region Industry Purchases



Sales

% of In-

Region Sales

Poultry Processing 311615 34,362,664$ 33%

Meat Processed from Carcasses 311612 17,831,212$ 17%


Animal (except Poultry) Slaughtering 311611 6,757,495$ 7%



Pharmaceutical Preparation Manufacturing 325412 3,322,926$ 3%

Meat and Poultry - I&M Region Industry Sales



Sales

Animal (except Poultry) Slaughtering 311611 12,095,868,401$ 14%

Meat Processed from Carcasses 311612 11,802,533,935$ 14%

Poultry Processing 311615 9,377,231,710$ 11%



General Medical and Surgical Hospitals 622110 3,259,872,711$ 4%

Dog and Cat Food Manufacturing 311111 2,820,122,373$ 3%

State Government, Excluding Education and Hospitals 902999 2,441,152,637$ 3%

Local Government, Excluding Education and Hospitals 903999 1,754,868,590$ 2%

Meat and Poultry - National Industry Sales


Appendices

157

Beverage


Purchases

% In-

region

Purchases

Total

Purchases

% of Total

Purchases


Flavoring Syrup and Concentrate Manufacturing 311930 6,314$ 0% 23,766,489$ 7%

Plastics Bottle Manufacturing 326160 1,933,533$ 10% 20,311,674$ 6%


Wet Corn Milling 311221 -$ 0% 12,537,533$ 4%

Lessors of Nonfinancial Intangible Assets (except Copyrighted Works) 533110 3,452,620$ 31% 11,117,739$ 3%

Glass Product Manufacturing Made of Purchased Glass 327215 5,805,508$ 66% 8,740,529$ 3%

Other Aluminum Rolling, Drawing, and Extruding 331318 5,935,693$ 70% 8,452,211$ 3%

Crop Production 111000 6,234,565$ 78% 7,979,189$ 2%


Aluminum Sheet, Plate, and Foil Manufacturing 331315 203,592$ 3% 7,125,548$ 2%

Other Metal Container Manufacturing 332439 399,629$ 6% 6,780,374$ 2%

Flour Milling 311211 3,574,525$ 54% 6,640,360$ 2%

Beverage - I&M Region Industry Purchases



Sales

% of In-Region

Sales




Distilleries 312140 3,145,003$ 8%


Wineries 312130 1,126,029$ 3%

Dog and Cat Food Manufacturing 311111 1,054,833$ 3%


Beverage - I&M Region Industry Sales


Sales




Distilleries 312140 1,441,954,030$ 6%

Soft Drink Manufacturing 312111 932,916,162$ 4%

Other Animal Food Manufacturing 311119 883,840,746$ 3%


Wineries 312130 558,385,565$ 2%


Beverage - National Industry Sales

Appendices

158

Alcoholic Beverage


Purchases

% In-region

Purchases

Total

Purchases

% of Total

Purchases



Glass Product Manufacturing Made of Purchased Glass 327215 5,670,930$ 67% 8,440,764$ 5%

Crop Production 111000 6,231,843$ 78% 7,974,920$ 5%

Flour Milling 311211 3,574,507$ 54% 6,640,338$ 4%

Other Metal Container Manufacturing 332439 380,336$ 6% 6,175,631$ 4%


Lessors of Nonfinancial Intangible Assets (except Copyrighted Works) 533110 1,022,591$ 27% 3,782,168$ 2%

Distilleries 312140 2,958,846$ 80% 3,715,031$ 2%

Glass Container Manufacturing 327213 1,007,155$ 29% 3,503,251$ 2%

Other Pressed and Blown Glass and Glassware Manufacturing 327212 126,012$ 4% 3,409,910$ 2%


Alcoholic Beverage - I&M Region Industry Purchases


Sales

% of In-

Region Sales




Distilleries 312140 3,144,878$ 10%

Wineries 312130 1,125,731$ 4%



Other Animal Food Manufacturing 311119 659,487$ 2%


Alcoholic Beverage - I&M Region Industry Sales


Sales



Distilleries 312140 1,500,946,035$ 9%


Other Animal Food Manufacturing 311119 904,717,727$ 5%


Wineries 312130 578,210,100$ 3%



Alcoholic Beverage - National Industry Sales

Appendices

159

Confectionery


Purchases

% In-region

Purchases

Total

Purchases

% of Total

Purchases

Crop Production 111000 10,659,017$ 48% 22,252,334$ 10%


Confectionery Manufacturing from Purchased Chocolate 311352 2,552,791$ 14% 18,670,311$ 8%

Nonchocolate Confectionery Manufacturing 311340 8,317,540$ 56% 14,931,145$ 7%

Chocolate and Confectionery Manufacturing from Cacao Beans 311351 -$ 0% 7,296,696$ 3%

Cane Sugar Manufacturing 311314 -$ 0% 6,007,891$ 3%

Fluid Milk Manufacturing 311511 831,112$ 14% 5,819,773$ 3%


Wet Corn Milling 311221 -$ 0% 5,675,555$ 3%


Beet Sugar Manufacturing 311313 -$ 0% 4,780,984$ 2%


Confectionery - I&M Region Industry Purchases


Sales

% of In-

Region Sales



Confectionery Manufacturing from Purchased Chocolate 311352 1,489,344$ 8%


Dry Pasta, Dough, and Flour Mixes Manufacturing from Purchased Flour 311824 657,240$ 3%

Fluid Milk Manufacturing 311511 571,968$ 3%

Fruit and Vegetable Canning 311421 571,393$ 3%

Ice Cream and Frozen Dessert Manufacturing 311520 518,995$ 3%

Dry, Condensed, and Evaporated Dairy Product Manufacturing 311514 495,228$ 2%

Colleges, Universities, and Professional Schools 611310 404,221$ 2%


Confectionery - I&M Region Industry Sales

Appendices

160


Sales

Confectionery Manufacturing from Purchased Chocolate 311352 1,088,812,170$ 15%




Chocolate and Confectionery Manufacturing from Cacao Beans 311351 422,435,584$ 6%

Cane Sugar Manufacturing 311314 347,625,651$ 5%

Breakfast Cereal Manufacturing 311230 323,952,181$ 4%

Dry Pasta, Dough, and Flour Mixes Manufacturing from Purchased Flour 311824 310,814,433$ 4%

Beet Sugar Manufacturing 311313 275,053,396$ 4%

Retail Bakeries 311811 205,449,030$ 3%

Tortilla Manufacturing 311830 194,691,905$ 3%


Ice Cream and Frozen Dessert Manufacturing 311520 160,185,627$ 2%


Confectionery - National Industry Sales

Appendices

161

Flavors, Dressings, and Seasonings


Purchases

% In-region

Purchases

Total

Purchases

% of Total

Purchases

Crop Production 111000 16,950,371$ 73% 23,366,024$ 11%

Plastics Bottle Manufacturing 326160 991,381$ 7% 15,214,215$ 7%

Fats and Oils Refining and Blending 311225 326,314$ 2% 15,120,311$ 7%

Corporate, Subsidiary, and Regional Managing Offices 551114 810,950$ 6% 13,397,779$ 6%

Fluid Milk Manufacturing 311511 1,774,930$ 22% 8,099,237$ 4%

Animal Production and Aquaculture 112000 916,691$ 15% 6,130,791$ 3%

Fruit and Vegetable Canning 311421 1,587,078$ 29% 5,453,698$ 3%

Wet Corn Milling 311221 -$ 0% 4,710,809$ 2%

All Other Plastics Product Manufacturing 326199 1,658,056$ 37% 4,538,478$ 2%

Paper Bag and Coated and Treated Paper Manufacturing 322220 1,692,578$ 39% 4,333,204$ 2%


Flavors, Dressings, and Seasonings - I&M Region Industry Purchases


Sales

% of In-

Region Sales


Spice and Extract Manufacturing 311942 1,863,860$ 9%


Full-Service Restaurants 722511 957,788$ 5%

Colleges, Universities, and Professional Schools 611310 664,720$ 3%


Flavors, Dressings, and Seasonings - I&M Region Industry Sales

Sales to NAICS Total Slaes% of Total

Sales

Soft Drink Manufacturing 312111 4,166,199,788$ 22%

Fruit and Vegetable Canning 311421 2,691,081,739$ 14%



Bottled Water Manufacturing 312112 793,980,150$ 4%

Specialty Canning 311422 535,586,799$ 3%

Dried and Dehydrated Food Manufacturing 311423 471,144,110$ 3%

Fluid Milk Manufacturing 311511 388,281,275$ 2%

Flavors, Dressings, and Seasonings - National Industry Sales


Appendices

162

Animal Food

Purchases from NAICSIn-Region

Purchases

% of In-Region

Purchases

Total

Purchases

% of Total

Purchases

Crop Production 111000 11,771,837$ 55.5% 21,209,695$ 14%

Animal (except Poultry) Slaughtering 311611 337,516$ 3.4% 9,952,098$ 7%

Meat Processed from Carcasses 311612 1,046,222$ 10.8% 9,714,759$ 6%

Metal Can Manufacturing 332431 271,654$ 3.5% 7,653,712$ 5%

Soybean and Other Oilseed Processing 311224 1,349,794$ 20.5% 6,584,371$ 4%

Wet Corn Milling 311221 -$ 0.0% 6,011,035$ 4%

Fats and Oils Refining and Blending 311225 136,170$ 2.3% 5,898,442$ 4%

Corporate, Subsidiary, and Regional Managing Offices551114 540,634$ 9.7% 5,593,803$ 4%

Distilleries 312140 1,634,019$ 33.1% 4,929,700$ 3%

Medicinal and Botanical Manufacturing 325411 3,005$ 0.1% 4,642,114$ 3%

Other Metal Container Manufacturing 332439 778,416$ 19.1% 4,065,433$ 3%

Rail transportation 482110 2,760,262$ 75.6% 3,652,402$ 2%

Wholesale Trade Agents and Brokers 425120 1,197,534$ 33.4% 3,590,109$ 2%

Flour Milling 311211 505,066$ 16.0% 3,162,013$ 2%

Animal Food - I&M Region Industry Purchases



Sales

% of In-Region

Sales

Animal Production and Aquaculture 112000 11,072,360$ 82.42%

Veterinary Services 541940 1,087,738$ 8.10%

Dog and Cat Food Manufacturing 311111 377,041$ 2.81%

Animal Food - I&M Region Industry Sales


Sale to NAICS Total Sales% of Total

Sales

Animal Production 112000 26,673,176,264$ 88%

Veterinary Services 541940 621,042,444$ 2%

Animal Food - National Industry Sales

Sourec: EMSI 2017.3 Class of Worker

Date post:	11-Mar-2020
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FOOD & BEVERAGE PROCESSING...Mar 02, 2018 · for driving growth in food and beverage processing...

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