2007 Annual Manufacturing Survey - Labor Pains
Food safety remains the top concern in our sixth annual Manufacturing Trends Survey, with labor issues and energy also topping the worry list.
By David Feder, Managing Editor | 01/10/2007
Food processors had a busy year in 2006, and our sixth annual Manufacturing Trends Survey shows it with some shuffling in the order of what keeps processors awake at night.
It’s no surprise that, with a growing economy, talk of minimum wage increases and the possibility of a 700-mile wall across our southern border, labor issues popped back to the second spot on the concern list. But food safety not only held onto its traditional top position, it increased its score. This year 47 percent of respondents name food safety their No.1 concern for the new year, up from an historic low of 30 percent last year (although we changed the scoring mechanism).
The spate of natural disasters — primarily Hurricanes Katrina and Rita — reflected in the previous survey responses certainly made for an unusual 2005. But 2006 had its ripples, too, including several high-profile food safety scares, all traced back to fresh produce. Despite the threat of all-out global chaos and rising interest rates, the stock market climbed to record highs, energy prices dropped and things got back to something resembling business as usual.
Overall business looks reasonably promising for the food industry in 2007. The snapshot we got from our respondents shows three in four processors expect total production to increase by at least 5 percent in 2007 (see graphic). That’s about the same as 2006. Only three of those replying anticipate any decrease in production for the coming year.
Next year’s survey should prove interesting. Right before this year’s survey closed, a stunning, across-the-board upset by the Democratic Party inverted the balance of power in the House, the Senate and state governorships for the first time in a dozen years. And two key issues of the elections — wages and immigration — likely will be engaged to very different ends under this new political power structure. In fact, during those historic elections, seven states passed their own minimum wage laws.
One respondent puts it this way: “The new Congress will find it hard to tackle key issues such as immigration due to the (new) balance. This coupled with a push for higher minimum wages will only increase the labor pressures in the food industry.”
Click on the image to download charts of the 2007 Manufacturing Survey results (in PDF).
We’ll have to wait for the 2008 Manufacturing Trends Survey to see how all that shakes out. For now, here’s what manufacturers had to say about how 2006 went for them, and what they are planning for 2007.
Food safety — yet again
Using a new statistical analysis for responses, we were able to get a clearer picture of processor concerns. We assigned weighted relevance to each of nine categories to determine level of importance. As you can see, food safety had no trouble maintaining its perennial No. 1 ranking: 47 percent of manufacturers mentioned it first for an aggregate score of 1,734.
Nearly three-quarters of survey participants (72 percent) implemented food safety measures last year. Moreover, nearly the same amount (69 percent) said they’d be attending to it this year. (Hopefully, the 4.1 percent who say their plants have not implemented nor will implement food safety practices already are employing superior food safety protocols.)
“With Taco Bell as a reminder, many of my food clients have elevated food safety in their business risk continuum,” says Dexter Manning, national food and beverage industry leader at accounting and business advisory firm Grant Thornton LLP. “Many companies have augmented their internal operations audits with external food safety audits. I expect to see many more food companies develop specific, periodic food safety inspection programs to augment other company policies.”
Far and away the practice of choice for food safety involves the human element: employee training. Nearly nine out of 10 processors say it’s on the agenda for 2007. Around half will employ hazard and critical control points (HACCP) plans, improve their pest control procedures and focus on more or improved sanitary equipment. Some noted how security measures will dovetail with food safety with respect to protecting against bioterrorism.
Rapid microbial detection and other systems for detecting and/or eliminating microbes will be used by 28.6 and 19.8 percent of processors, respectively. Other processors also will go right to the sources, that is, make use of preferred, prequalified suppliers as another method of improving food safety. Another proactive measure mentioned was “rigorous risk analysis for any work that is not normal production activity.”
One processor is “adding a certified bacteria lab” and another is going all-out, installing “UV lights for evaporator ducts in (the) environment-controlled dry room” and is “looking into an ‘Air-O-Care’ system — a new product using corona charge and hydrogen peroxide.” Look out, bugs!
Concern for allergens was identical to last year, with just more than 82 percent dividing evenly along the curve of “somewhat” to “extremely” concerned. And, once again, about half (49.3 percent) chose “improved washdown/clean in place” as their primary method of allergen control. Detection and testing will be used by 28.6 percent and 22.1 percent are relying on dedicated lines as at least one method of control.