So far, the safety, security and labor issues point, if anything, to a 2008 focused on holding the fort and not making waves, with a few prayers thrown in for avoiding recalls. But there’s still optimism in the air. About 20 percent anticipate production in ’08 to increase by 20 percent or more – only 3 percent lower than last year; 31percent (identical to last year’s survey) foresee a 5-9 percent increase. The big jump was in the 10-19 percent increase range: The 26 percent looking at a production increase at that level is a full 5 percentage points over last year. That brought the total number looking toward a production increase to 77 percent
Decreases barely measured but we should keep an eye on the pessimism coming from the 2 percent who foresee a production drop of 20 percent or more.
The numbers for plant consolidation and expansion remain virtually unchanged for this year over last: 10 percent see a consolidation, 28 expansion and 48 percent hope to stay the same. The capital spending budgets, too, compare close to last year’s figures. About a quarter see that budget staying the same; 44 see it increasing and 9 percent see it decreasing.
The green machine
Last year saw enough green flag-waving to make one think St. Patrick’s Day had become a year-round affair. Environmental concerns are on everyone’s radar screen. The number of processors finding themselves “very” or “extremely” concerned about the environment went up more than 5 percent, to 70 percent. In fact, numbers for concern over environmental issues and sourcing and materials issues were higher than they’ve ever been.
Not surprisingly, nearly every processor sounds worried about energy bills: 50 percent are “very worried” and 47 percent are “somewhat worried.” Last year, “only” 90 percent were as worried about energy costs.
Nearly twice as many 2007 respondents as those for 2006 (16 vs. 9 percent) also claim to be “severely impacted” by energy costs. Those “moderately” impacted accounted for about three-fourths, just as in last year’s survey. Costs increased “much more than expected” for 13 percent in 2007, a 25 percent increase over last year’s 10 percent.
The steps processors are taking to manage energy haven’t changed and include:
- Conservation (two-thirds)
- Audits (one-third)
- Recycling (three in 10)
- Renegotiation (one-fourth)
- Alternate sources (one-fifth)
- Consultants (one in nine)
- Co-generation (one-tenth).
Those not looking at any form of energy management for the year dropped from almost 10 percent to under 9 percent compared to last year.
For this year’s survey, we asked about alternate energy sources, such as solar, wind and biodiesel. We discovered almost 20 percent are considering such power. Other alternative energy plans to be implemented include: heating with hot waste water or steam; methane capture; and converting factory waste into biogas for fuel.
But one of the best ways to reduce energy and save money is by implementing a number of small, easy changes. “Our big push to save energy has included upgrading lighting to fluorescent, and to T8 electronic ballast fluorescent tubes from T12,” says Matt Merkle, technical manager for Kellogg Co.’s (www.kelloggs.com) Memphis, Tenn., plant. “We've also installed sensored lights in low-traffic areas. Other efforts include upgraded efficiency on the ammonia compressors in our refrigeration units, we changed our defrost process to conserve energy, updated steam traps and enhanced leak detection and maintenance. To conserve water, we’ve shifted to low-flow plumbing systems.”
What goes around
The rise in energy worries was a wake-up call that what goes out the pipe goes out the pocket. Overall, environmental issues rank as “extremely” or “very” important among 71 percent (last year 67 percent). And 56 percent of processors surveyed say they’re recycling more than they did last year. In fact, 90 percent are engaged in some form of recycling/re-use program. Fewer than 3 percent are not recycling and have no plans to.
Barriers to recycling included: Too many products not accepted for recycling, not enough room to store recyclables and cost of implementation outweighing the benefits. Some processors also found themselves stymied by regulatory issues and lack of alternative products for those components of their process that cannot be recycled.
However, with most processors riding the “save some green by going green” bandwagon, clever steps are being employed. Examples include computerized “fine-tuning” control of machinery, lighting and thermostats; getting maximum usage out of natural lighting and heat; retrofitting machinery; and controlling leaks on machinery.
Our seventh manufacturing trends survey gave us better-than-ever insight into the issues moving the half-trillion dollar food industry. For instance, one trend that “blipped” on the radar and bears watching is the impact of adding and maintaining certifications for foods and beverages, specifically kosher, organic and halal. These were merely mentioned by several processors as general concerns, but they are certainly strong trends. We’ll keep you up to date on how your fellow processors are coping with those and other such emerging trends in the future.
The editors of Food Processing wish to thank all who took the time to take the survey (nearly twice as many as last year) and who contributed comments. If you have any questions or feedback, or ideas on how to improve this annual survey, please contact us.
How we did it
Our seventh annual Manufacturing Trends Survey was an e-mail survey taken during November. There were 395 respondents, divided among the following food categories:
- Bakery (11 percent)
- Breakfast Cereals/Grain Products/Pasta (3 percent)
- Beverages – non-dairy, including carbonated drinks, juice, alcohol, water, etc. (7 percent)
- Condiments/Jams/Jellies (2 percent)
- Confectionery (5 percent)
- Dairy – milk, cheese, ice cream, etc. (6 percent)
- Fruits And Vegetables (4 percent)
- Frozen Dinners (2 percent)
- Further-Processed Foods and Specialties (10 percent)
- Herbs/Spices/Dry Flavorings (4 percent)
- Meats/Poultry, fresh or frozen (18 percent)
- Packaging (5 percent)
- Seafood, fresh or frozen (1 percent)
- Snack Foods/Chips (4 percent)
- Other (17 percent)