Where would we be today without the advances in food processing such as ready-to-eat or easy-to-use food products that can be heated and on our tables within minutes?

As food processors continue to add value to their products in order to meet consumers' demands for organic and farm-style foods or functional foods, which add vitamins and minerals to food products, their marketplaces will continue to grow.

A scan of the country finds that corporations will find that local, regional and state economic development groups are dedicated partners in the growth process.

In Washington state, new technology developed at Washington State University includes a new food-grade material that works like an herbicide. The material prevents potatoes stored in warehouses from growing sprouts, without the use of herbicides. The technology has been licensed to one of the state's major potato producers.

Corporations in Washington are also implementing enhancements to their products. For example, FruitSmart, which produces all-natural ingredients for food and cosmetic products, among others, converts agricultural byproducts into products such as fruit juice powders, by using a radiant zone drying system.

Washington farmers will benefit from a $200,000 legislative award to support the shipment of their produce and frozen commodities with the creation of a pool of refrigerated railcars. The pilot program will use 75 refurbished railcars to move crops from the state to locations across the country. The federal government has also awarded the project $2 million during a two-year period.

Another Pacific Northwest location, southern Idaho, is home to a diverse base of agricultural and food processing companies. The region includes the cities of Twin Falls, Jerome, Burley, Rupert and Heyburn. It is the state's leading region for dairy industry growth. The cluster features several cheese and dairy processors, such as Glanbia Foods, Inc., which is the largest cheese manufacturer in the Northwest. The company has two cheese plants and two whey plants in southern Idaho, and has recently expanded its Gooding facility in order to increase its production by 20 percent.

Glanbia Nutritionals conducts cutting-edge production of value-added, dairy-based ingredients supplied to industries such as functional and processed foods. The company is working to patent a product that uses two of its products to create a natural, appetite suppressant/weight loss product.

Southern Idaho is also home to several potato processing plants such as Con Agra/Lamb-Weston, which is the No. 1 producer of frozen French fries in the country; and McCain Foods, which is the world's largest processor of French fries, producing one-third of the world's supply.

Further down the West Coast, in Fairfield, Calif., food processors can partner with local community colleges and the University of California-Davis' ag and food research institute, to grow their companies. A majority of Anheuser-Busch's brewmasters have been trained at UC-Davis.

A Fairfield location offers an abundant supply of high-quality water. Anheuser-Busch uses 3 million gallons of water a day. NRE Bento even had a sample of Fairfield's water sent overnight to Japan to be tested to ensure it was of the highest quality. The firm is a joint venture between the Japanese Railroad Co. and Lumberg Family Farms, an organic rice grower in California. The rice is shipped to Japan every day from an airport near Fairfield.

“Food processing companies will also find a city that is pro-business and understands its unique needs,” says Sean Quinn, community development director, City of Fairfield. In addition to loan programs and tax rebates, Fairfield officials assist companies in terms of exporting issues and workforce training.

Jockeying For Future Investments

While certain areas immediately come to mind as agricultural production leaders, such as California and the states located in the nation's heartland, it may be surprising to learn that Minnesota is the nation's leading turkey producer. The Jennie-O Turkey Store, a wholly owned subsidiary of Hormel Foods Corp., has six plants located in Minnesota and one in Wisconsin.

The company's Montevideo facility opened in 1996 and employs 400 people in the town of 5,500 people. Among its business advantages, this rural location features 112 acres designated as Job Opportunity Building Zones, which is a state program that offers tax free zones for businesses. Montevideo officials also work with state organizations to fund corporate workforce training needs.

What's more the community is near Southwest Minnesota State University, which features an Agricultural Utilization Research Institute. “The program features value-added ag resources to keep the ag industry moving in Minnesota,” says Scott Marquardt, economic development director, City of Montevideo.

The ag industry in Pennsylvania will certainly keep moving thanks to a $100 million private-public partnership that was announced last fall. A new, 1 million-square-foot food distribution center will replace an aging food distribution center at the Navy Yard in Philadelphia. The new center will expand refrigeration and storage capacities from 660,000 packages to 2.3 million packages.

Heading to the Southeast portion of the country, Kentucky, which is home to 182 food and kindred product manufacturers, has seen an increase in food processing prospects and sitings. State officials recently conducted a study in regard to the business advantages Kentucky can offer the industry, which is available at www.thinkkentucky.com.

A recent food processing project finds Gourmet Express LLC investing $7.3 million and creating 200 jobs in two years when it moves its manufacturing operation to Greenville from Gridley, Ill. The company will renovate a former Supervalu facility.

Gourmet Express embarked on its own site search based on supply and customer matrixes. The company found that the existing 312,000-square-foot site in Greenville fit its matrix, strategic objectives and future growth plans, said Robert Scully, chairman and CEO, Gourmet Express, at the time of the announcement. Affordable energy costs were also important to this large energy user, which can access the lowest industrial power rates in the country with this Kentucky location, says John McCarty, commissioner of new business development, Kentucky Cabinet of Economic Development.

Gourmet Express also required an abundance of available freezer space. “The Supervalu building was a distribution center so it featured freezer space that will allow Gourmet Express to keep its raw materials frozen and packaged meals frozen,” says Brett Traver, project manager, Kentucky Cabinet of Economic Development.

Gourmet Express' relocation decision is supported by a Kentucky Rural Economic Development Act award, which will allow the company to recover an approved incentive package during a 15-year period, which in this case equals $4.9 million.

An Abundance Of Commodities

Moving to Virginia, Rockingham County finds itself the No. 1 ag producing county in the state. As such, it has witnessed several expansions of food processors during the past 24 months. The county also includes proximity to markets, a quality workforce, low costs of conducting business and a high quality of life, says Billy Vaughn, director, community development, Rockingham County.

Coors Brewing Co. will work with the local community college to train its workforce as part of the expansion to its packaging plant in the county, with the establishment of a $200 million to $250 million investment for a new brewery. The build-out will include two brew lines, fermentation and aging equipment, a new rail spur, and several structures to house controls and related processes.

Also in Rockingham County, WhiteWave Foods, Inc. will conduct a $100 million capital investment and add 67 new jobs. This division of Dean Foods is the nation's leading manufacturer of soymilk, organic milk and other organic foods.

Much like Rockingham County, North Carolina's southeast region has many built-in advantages, including being the home to four counties that are ranked among the top producing ag counties in the country. North Carolina's Southeast markets 11 counties in this part of the state. The area's crops include soybeans, corn, sweet potatoes and blueberries, and the value-added production that accompanies these crops.

“North Carolina is the nation's largest sweet potato producer,” says Steve Yost, marketing manager, North Carolina's Southeast. He is located in Elizabethtown, which is the central point of this 11-county region. Yost says companies that have sweet potatoes shipped to their locations from the region are looking into establishing facilities in the area.

An existing firm, George Foods, is conducting a $6 million expansion and will create up to 50 new jobs to support value-added activities for sweet potatoes. A new company to the region is Everfresh, a South Korean company that will make soy products, such as soy pasta, and ship it back to South Korea from the Port of Wilmington.

Officials from North Carolina's Southeast work with a partner organization to award loans from the Community Reinvestment Fund to area companies. The fund is designed to support the more rural areas of the region, where nine out of the 1l counties are classified as rural. Yost says the $2 million low-interest loan program is not available in another North Carolina location.

In South Carolina, the four counties marketed by the SouthernCarolina Regional Development Alliance offer the advantages of a Tier V classification by the state, which means the communities are not as developed and do not have the infrastructure in place to compete with metro areas. As such, the state provides funding to these counties in order to support industry efforts. “Companies can come in get the best possible opportunities because they are locating in a more distressed area,” says Danny Black, president, SouthernCarolina Regional Development Alliance.

The region also features 10 state certified industrial parks, comprising 3,000 acres, with full infrastructure in place. “A company will save six months in the construction process because the sites are shovel ready,” Black says.

Recent site selection activity in this four-county region includes Grant Forest Products of Canada's decision to locate the world's largest OSB manufacturing plant, from square footage and volume standpoints, to Allendale County. The company will invest $240 million in the plant, which should begin production early this fall. It will also build a second plant in Clarendon County, which will be a mirror-image of the Allendale County plant.

Grant Forest Products will tap into the region's abundance of softwood pines, such as loblollies and shortleaf pines, to create its product. In addition to Grant Forest Products, these commodities have attracted saw mills, furniture companies, and a laminated flooring company to the area.

Perhaps one of the leading advantages of a South Carolina location is the Center for Accelerated Technology Training workforce training program. The state provides training at no cost to industries. The training is set up so that workers are trained on the company's machinery and according to its specifications. CATT program officials will also screen, interview and test applicants to determine if they are qualified for the available positions.

Economic development organizations, including local and state groups, are making favorable investments in their business climates in order to support ag-related and food processing industries' solutions to consumer demands.

For complete details on the organizations featured in this article, visit:

City of Fairfield (Calif.), www.ci.fairfield.ca.us

City of Montevideo (Minn.), www.montevideomn.net

Kentucky Cabinet for Economic Development, www.thinkkentucky.com

North Carolina's Southeast, www.ncse.org

Rockingham County, Va., www.rockinghamcountyva.gov

SouthernCarolina Regional Development Alliance, www.southerncarolina.org

Southern Idaho Economic Development Organization, www.southernidaho.org

Washington State Department of Trade, Community and Economic Development, www.cted.wa.gov

Harvesting Green Energies

Green energy has been this year's headline grabber as the costs for traditional energy methods continue to skyrocket. Many of these technologies get their start from commodity agricultural products, such as corn and soybeans, which are used for biofuels processing.

Communities and states throughout the country are positioned to support the greening of America as alternative energy companies step up the research, development and manufacturing for a variety of energy generating methods.

States are so behind the industry's potential that they are passing laws requiring the use of clean energy sources for fuel. In Washington state, starting in 2008, fuel suppliers will be required to ensure 2 percent of the diesel and 2 percent of the gasoline they sell contains biodiesel and ethanol. Seattle Biodiesel announced it would build a refinery at the Port of Grays Harbor to produce up to 100 million gallons of biodiesel yearly, once operations begin in late 2007.

The development of ethanol plants has been rapidly occurring across the country. Plants are even sprouting up in the lower peninsula of Michigan. “There has been a significant investment in our state in terms of ethanol plants,” says Chris Peterson, director of the Product Center at Michigan State University. He was part of a team that recently published a working paper that highlighted the economic value and jobs created by the state's agri-foods system.

“We only have one ethanol plant running, but we have several more that have broken ground and are in the process of construction,” Peterson says. What's more, a biodiesel facility is going up in the state, with one more slated to break ground.

Officials in southern South Carolina are also excited about the possibilities that the biofuels industry could bring to its area, which is home to ag commodities such as soybeans, and to a significant softwood pine tree industry.

An investor group, Carolina Soya, has purchased a former soybean oil processing facility in Estill and is in the process of investing $8 million to take the soybean oil to another level of development. As of this writing, a joint venture company had plans to take the refined oil and produce biofuels, says Danny Black, president, SouthernCarolina Regional Development Alliance. The company will make a $10 million investment for the facility, which will be built next door to Carolina Soya to pipe the oil to its plant.

Adding value to commodity products such as soybeans to produce biofuels will bring the nation closer to lessening its dependence on foreign-based energy sources.

For complete details on the organizations featured, visit:

Product Center at Michigan State University, www.productcenter.msu.edu

Seattle Biodiesel, www.seattlebiodiesel.com

SouthernCarolina Regional Development Alliance, www.southerncarolina.org

Washington State Department of Trade, Community and Economic Development, www.cted.wa.gov

Shop Around

Entrepreneurs in rural Ferry County, Wash., understand the Internet is perhaps the best way to reach a mass audience of customers in today's marketplace. But the main question they had was: Where is the market and how do I reach it?

As they were conducting eight-week business courses where entrepreneurs could develop comprehensive business plans to present to banks or other lenders, sisters Betty and Jody Buckley of Stone Soup realized that the people from their home town region were willing to start businesses but struggled with how to juggle production and marketing time when Ferry County is located a good two hours from an urban center (Spokane).

Stone Soup provides capacity building grants, training and technical assistance to organizations and communities in Washington, Oregon, Idaho and Alaska, and has reached nearly 250,000 men and women.

In a partnership with the Tri-County Economic Development District and other organizations, Stone Soup developed the www.shopthefrontier.com Web site, which launched last fall.

The site features a broad range of products, from home and garden to clothing and accessories to artworks. To build critical mass, the Web site will include additional communities besides Ferry County. In order to reach a large Web audience, without losing an entrepreneur's identity, the participating communities will have their own Web pages, featuring local products, posted at the shopthefrontier.com Web site.

In August, a mobile marketing tour was scheduled to hit the road to promote the Web site and the entrepreneurs' products. The trailer will feature a wrap that displays pictures of the products available at shopthefrontier.com.

Betty Buckley says the Web site not only provides a marketplace for these rural entrepreneurs but allows them to take an active part in advancing their businesses. “The people in this community do not want a lot of outside assistance and really want to depend on themselves,” she says.

Solution Providers

As food processing industry companies concentrate on growing market share, suppliers are right there with them, staying on top of food industry trends in order to meet its customers' needs. For instance, with the efforts to combat childhood obesity. “We see this occurring, but what does it mean?” asks Steve Schlegel, president and CEO, Food Processing Suppliers Association. “How does that translate to a supplier of ingredients and flavors?”

The association has commissioned a research study to learn the new product trends food processors are looking at in order for industry suppliers to align themselves with their customers' needs. The results of the study will be presented at Process Expo, to be held Oct. 29-Nov. 2 in Chicago.

The FPSA is a 500-member company association that represents the suppliers of equipment, technical services and ingredients and flavors to the food and beverage and pharma industries. Schlegel says one of the biggest ways suppliers can support their clients is by engaging in dialogue with them to learn their issues and problems, such as with energy use or water or wastewater issues. “By sharing that information with the supplier community, the suppliers can hear these challenges first hand,” Schlegel says. “Those who want to do and can do something about the problems can challenge their innovative spirit to solve their customers' problems.”

The membership of the FPSA is bettering positioning itself to be more capable in meeting the needs of the Krafts and Nestles of the world.

For more details on the FSPA, visit www.foodprocessingmachinery.com.

Agribusiness/Food Processing

Based on number of establishments, first quarter 2004 to first quarter 2005.

New Branches

1.      California

2.      Texas

3.      Illinois

4.      Wisconsin

5.      Florida

6.      Virginia

7.      New York

8.      Arizona

9.      Ohio

10.  Pennsylvania (tie)

10.  Minnesota (tie)

Startups

Florida
California
Texas
Michigan
New York
Ohio
Georgia
Washington
New Jersey
Illinois

Data includes the following SICs:

  20 Food products

100 Crops

200 Livestock

700 Agricultural services

Source: Since 1990, BizMiner has built its reputation on quality research in the fields of economic and business development. The company tracks more than 12 million U.S. businesses annually, developing vitality benchmarks and reports on more than 16,000 lines of business in every U.S. county, MSA and state. Measures include sales, business retention, entrepreneurial activity, new branch attraction, business relocation trends and concentrations of high-growth firms.

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