2012 Manufacturing Trends Survey: Can Production This Year Top 2011?

Processors can't get a break from uncertain markets, rising costs and changing safety standards, but they continue to grow and keep optimism high.

By Bob Sperber, Plant Operations Editor

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Asked if the economy led to capital projects being deferred from 2011, 32 percent of respondents said their plants did delay some work -- a pleasant surprise from last year's survey, when 45 percent said 2010 projects got the red light.

Energy management projects gained proverbial steam in this year's survey, likely for the simultaneous benefits of environmental sustainability and the reality that they offer a measurable payback. While energy management is "not a burning issue right now" for 24 percent of survey-takers, that number represents a three point drop from last year's survey. 61 percent say they are "taking steps in energy conservation," up four points from last year. A wide variety of initiatives are being pursued, led by energy audits (34 percent) and followed by recycling/redirecting energy (18 percent), negotiating with energy providers (17 percent) and seeking alternate energy sources (16 percent).

Asked how their plants' "green" initiatives are faring "given the state of the economy," 36 percent, or roughly the same proportion of respondents, said such projects are becoming more important than they were in the previous year. An interesting difference between last year's survey and this one is that 19 percent say green projects are either becoming less important or are not important to them, up from 14 percent a year ago.

Overall, the industry remains optimistic, but with reservations caused by market and regulatory uncertainties which threaten that optimism. In open-ended comments, numerous processors suggested a need to shed additional light on, for example, the uncertainty and practical implementation of standards and regulations. Some survey-takers mentioned environmental issues, while more cited food safety-related issues.

One respondent sees a need for more detail on FSMA rules, including costs of compliance and third-party audit requirements. He also called for more cost-benefit data on GFSI compliance as allocations in audit time have "significantly increased." Another said he'd like more research on regulatory concerns, taxes, fees, labor costs, pesticides and international differences. One would like to see more and better reporting by all processors to the FDA, but at the same time, reduced costs, and a separation of the agency's food and drug functions.

Others called for more investigation of broad cost-containment issues across the board, while others cited "people" issues. Like the processor who said: "We have a lot of experienced employees retiring and have concerns about a reduction in the knowledge/experience level of those employees filling in the openings." And another, who noted that processors need to make their employees trust their primary issue, because "fear is the black hole the machinery falls into."

That's in line with the age-old need to combat the "FUD" factor of fear, uncertainty and doubt. Which is exactly what the industry is struggling to keep at bay as it enters another tough but hopeful year of growth.

Food Processing welcomes additional input, whether on the record or anonymous, which may help fuel additional editorial coverage in the magazine for 2012. Send comments to dfusaro@putman.net.

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