Back to list November 16, 2016 Food Processing and Manufacturing Locations When it comes to feeding hungry mouths, agricultural businesses need to meet a complex series of new demands and logistical challenges in order to bring products from the farmer’s field to American dinner tables. One of the greatest advancements in agribusiness is the advancement of food processing technology. With the ever-changing technological advancements in agriculture and food processing technology, businesses can now deliver foods that last longer, reduce waste, conserve natural resources and deliver a safer, healthier product to hungry consumers browsing the shelves of their local grocery store. One of the greatest assets for agribusiness come from their food processing plants, and selecting the right location is one of the most important steps facing today’s food processing industry. Processing foods has a different meaning depending on who you ask, but it usually consists of transforming the product from the raw materials grown into the food you eat. Highly processed foods include products like yogurt and cheese, but despite some misconceptions, the overall degree of processing does not impact the nutritional quality of the product. Some processed foods provide an even richer nutritional advantage than their unprocessed counterparts. Depending on the type of product made, plants will have different demands for resources and labor. In some cases, plants take advantage of automation, while other products require a skilled labor force to operate the equipment to create the finished product. Regardless of the product, packaging and transportation will always be needed to deliver the food to market. Without the technological advancements provided by food processing, certain fruits and vegetables might not be available to consumers out of season, lactose intolerant customers wouldn’t have digestible dairy products and companies wouldn’t be able to offer the reduced sugar and salt food products. When selecting a location for a new plant or renovating an existing one, subsidies and other financial incentives are important aspects of selecting a location. It is also imperative to consider the overall geographic features of the new region and how that will translate into economic gains and productivity for your food business. Because local authorities and planners see the potential for increased labor opportunities within their communities, many compete by providing incentives to attract companies to their area. Since there are a number of complex demands facing food processors, logistical demands, infrastructure for transporting goods and the potential need for a skilled labor force are all factors to consider before signing over for the new plant location. Financial incentives may be the initial motivator that draws your eye to a specific locale, but these many challenges will remain long after the money for construction and relocation has vanished. You must conduct water quality and accurate measurements for wastewater flow in a geographic area also before selecting an area. In addition, determining the other resources your plant will need to operate and their cost is also essential in making an informed decision. Utility costs may vary greatly from region to region, depending on how readily available a particular resource is. Even the annual climate can impact your annual expenditures. In the long-term, high utility costs may eat away at your bottom line and whatever financial incentives attracted you to the location in the first place. Constructing a new plant, while costing a significant financial investment, may also face time issues and other challenges depending on the topography in the region. Take a look at some of the specific details to consider when considering the construction of a new plant, or are planning on relocating to an existing one. What to Consider When Selecting a Location for Food Processing and Manufacturing For some large food companies, picking a location for a new manufacturing facility may not be as problematic if there is a steady supply of capital and resources available. However, for smaller food manufacturers, the location process might prove a little more challenging. As mentioned above, many states offer a variety of food business incentives for those looking to expand their operation by building a new manufacturing plant, or relocating into an existing building. Nevertheless, even though the initial investment capital is readily available, a good location requires much more than business incentives. Meeting the plant’s needs in a way that fits into your business’s plan is essential in ensuring that the investment is feasible in the long-term. As with any good business plan, determining a good location is specific to what type of product you will produce, how much you will produce, how many years of production planning, how it will be delivered to the customer and if it will fit into your expectations for the company’s growth. By determining these particular aspects of your business, you will have a better idea of the size and energy requirements the plant will need for efficient operation. While building a new plant might be the only solution to meet these long-term goals, there are other options for those looking to take over an existing location for their food manufacturing needs. Instead of long-term development planning and construction, simple renovations and additions may be possible to an existing building to get it running in a way that will meet your needs. In addition to determining the overall size and energy requirements you may face, site selection also poses its own considerations outside of just the operating of the manufacturing plant. Geographic Challenges Local geography might require the purchase of additional land, as well as provide other challenges due to topography, drainage and government regulations. Local building and zoning codes vary across the nation, and you should research them extensively when selecting a location. In addition to the site location, considering how the daily demands and operations of the plant and the nearby community may impact one another is important. Raw ingredient processing, delivery and distribution will generate traffic, and determining how often can help you make informed decisions long before a problem arises. Depending on your manufacturing plant’s specific transportation requirements, access to major transportation corridors, rail lines for freight and air travel might be important aspects to meeting your business needs. A bad location can greatly hamper the logistics of your business and end up costing more money over time. As mentioned above, utilities and access to resources also vary from region to region. Once you determine how many square feet your plant will require, it’s time to crunch the numbers on energy and resource expenses. Estimating utility requirements in advance can help during the planning phases and provide an additional level of data for your business plan. Consulting with professionals and engineering firms can help iron out details as well. Water is one of the most important resources in most food processing and should be analyzed not only for quality, but measured for proper wastewater and drainage demands. In addition, having an abundant energy supply that meets your requirements is also important. Whether it is water consumption or energy expenses, you can’t afford to ignore these essential utilities. Proximity from customers, distribution centers and warehouses may also be an issue depending on the particular business plan. With the increased costs for fuel and transportation, conducting a detailed analysis of overall distribution and shipping costs can help save you money, and determine whether a specific location is feasible for your food company. Both inbound materials for processing and outbound products need consideration. Minimizing the transportation demands and distance between you and your customer may outweigh any other expense if quick delivery is your primary objective. Environmental Considerations As with topographical factors, environmental challenges should be considered when constructing a food processing plant, because of the nature of the business. Depending on what product you are producing, you should consider if there are environmental factors that could cause contamination risks that would make processing food unsuitable. Consultants can provide an analysis that will benefit both you and the local area. Air pollution, toxins and other unforeseen risks may be present in an area that would make it a bad choice for a food processing facility. In addition, climate conditions in the area may also increase utility expenses and energy consumption. Other factors to consider when selecting a location have less to do with the geographic locale and more to do with the market. Since the real estate crash of 2007, food and beverage manufacturers have changed the way they look at site selection because of increased sustainability concerns. Flexibility is becoming increasingly important, and many food businesses are forming long-term plans anywhere between five and fifteen years in advance. Some may consider the option of remaining in a specific location longer than originally planned, while others may want to think about a backup plan of leasing or selling the facility for another purpose. Changing demands and consumer habits all play a part in how food manufacturers plan and prepare to adapt. Economic Benefits and Challenges While the weakening of the economy in 2007 provided new challenges for food business, the real estate crash also opened up opportunities for manufacturers who are currently looking to expand. Buildings and facilities that once housed productive business operations are now abandoned and are on the market again. For those looking to expand, but do not have the need of constructing a new plant, taking an advantage of the existing real estate market can prove advantageous.In addition to financial incentives provided by state and local sources, food manufacturers may also be eligible for a wide range of energy incentives. Energy incentives are just as important, as utility and water demands will ultimately affect the long-term efficiency and financial feasibility of the facility. Sustainability is also becoming an important goal for food processing manufacturers. By creating a sustainable business model, you can help mitigate emission impacts on the environment while also cutting back on energy expenditures and increasing the operating efficiency of your plant. Another factor to consider is the labor force, and cost of labor in the area where you’re planning to relocate. Considering if there are enough skilled laborers who can perform the functions needed to run the plant in the area, and what competition you may have is an important factor. Competition among businesses for skilled laborers is important. You should assess the other businesses in the area to better understand their labor costs. Some locales might offer a more abundant and feasible labor force than others. By indentifying these challenges, strategies and factors in advance, food manufacturers can better prepare themselves for the future, save money and determine a location that will serve their business requirements and growth long while eliminating potentially costly problems in the future. Building New or Retrofitting an Existing Building In some cases, building a new plant might be the only option to meet the unique requirements of your business plan, but there are several downsides in doing so. First determining the site you want to build on is important, as well as assessing all of the issues facing water, energy and logistical issues like transportation infrastructure. However, the real hold up might come in the following months during site inspections, acquiring the proper permits, engineering and designing the structure, the length of the construction process and then equipment installation before you can get your manufacturing facility running. Because of these numerous time constraints and expenses, some manufacturers might see a better opportunity in purchasing an existing plant that processes food, or adapting a building to their own needs. As with any real estate purchase, compromise might be the only option when weighing the different needs of the business. In some cases, this may come in the form of size, or opportunity for growth. However, it is nearly four to seven times less expensive to purchase a second-generation facility than to construct one from the ground up. Before committing to constructing a new plant, weigh the overall costs and demands, and see what compromises can fit into your business plan over the course of five or even ten years. Why Food Manufacturers Choose Cumberland County Located just three hours drive time from the major cities along the Interstate-95 corridor, Cumberland Valley offers a wide variety of incentives and opportunities for food processing businesses and manufacturers. Not only does the region provide easy access to major metropolitan areas like Washington D.C., Baltimore, New York City, Pittsburgh and Philadelphia, but also it is the fastest growing county in the Keystone State. With abundant, rich farmland, a skilled workforce and a network of accessible transportation infrastructure, Cumberland Valley is a prime location for food manufacturers who need to get their products to market at a reasonable cost. In addition, five major ports are also nearby including Baltimore, Newark, Philadelphia, New York and Newport, all strategic locations for shipping cargo and acquiring the raw materials needed to produce products. In addition, major interstate highways surrounding the area put it in a prime location for transporting goods from Ohio to Massachusetts within 12 hours drive time. Air travel and rail lines are also easily accessible as well as plentiful natural resources like water, which is essential to food manufacturing. At the moment, more than 70 notable food and beverage producers have facilities in the Cumberland County area, a location that fosters a wide range of business incentives for those looking to relocate their plant. There are a number of programs for small business that assist in acquiring land, buildings, machinery and equipment, as well as finding the right tax incentives and project loans to help move your business forward. Depending on your business needs, there are a variety of options that can help get you started in the planning phases of selecting a new location. For those with large land and infrastructure demands, there are several organizations and programs designed to assist. Nearly 43 percent of the county is zoned for agricultural use, which supports approximately 1,400 working farms. Soil is also rich, with 67 percent of the county containing Class 1 to 3 soil. In addition, Cumberland County remains in the top 10 out of the entire state of Pennsylvania for its agricultural products, a business that generates nearly $210 million in annual sales, according to a 2014 estimate. Cumberland County offers a soil that is rich in nutrients while providing a flat topography that’s perfect for growing. Rivers and other fresh water sources are also abundant, easily accessible and provide high quality resources for any operation. Supplies are also plentiful for essentials like equipment, seed, fertilizer and other agricultural commodities that are in high demand. With its rich development of existing food and beverage producers in the area, business like Giant, Weis, Wegmans and Wal-Mart all participate in buying programs to help foster growth in the area. For those considering the Cumberland County region for their next manufacturing facility, the Cumberland Area Economic Development Corporation (CAEDC) is dedicated to connecting you with resources to accelerate your business relocation, growth and innovation. CAEDC can help you with site selection, capital access, productivity improvement, permit navigation, development, community planning and much more. CAEDC promotes and supports the development of businesses and organizations. Over 6,000 businesses call Cumberland Valley home, where they employ over 115,000 people. By working with CAEDC, we can help your business coordinate with local, state and federal officials and agencies to facilitate an efficient, effective review and approval process of your land development, zoning and building plans. In addition, they can also help you navigate specific business opportunities through a variety of programs set up to accommodate the needs of businesses throughout the region. CAEDC will also work with local taxing bodies and businesses to determine if a Local Economic Revitalization Tax Assistance (LERTA) abatement or Tax Incremental Financing (TIF) mechanism is needed. CAEDC is committed to finding the resources you need to help you grow. In addition, other financing incentives, including grants, are available by working with CAEDC. If you’re interesting in learning more about Cumberland County, or need assistance from the Cumberland Area Economic Development Corporation, please contact us by calling 717-240-7180, or by contacting us today.