Uncertainty dogged all manufacturing sectors in the wake of the 2008 financial crisis, including food and beverage processing. But a much more bullish outlook is taking hold, as responses to Food Processing’s 13th Annual Manufacturing Trends Survey suggest, making the outlook for 2014 the most upbeat since the pre-recession years.
In fact, fully two-thirds of food professionals participating in the web-based survey indicate they are optimistic as their organizations prepare to meet challenges in the New Year. However, the upbeat assessment may have less to do with production increases or workforce expansions than with personal pocketbooks.
Only two-fifths of last year’s respondents expected their salaries to increase in 2013. But 51 percent ended up getting 2013 salary bumps, according to this year's respondents, and only a shade more than 1 percent saw salaries dip, a third of the number who anticipated reductions. For the year ahead, 44 percent anticipate higher pay, and less than 1 percent are concerned about payroll deflation. Uncertainty about compensation prospects declined fourfold.
Expectations for capital expenditures also show a small improvement, with most of those with growing budgets anticipating spending increases in the high single digits or double digits. More tellingly, only one in 13 respondents say their firms will reduce capital spending, a marked improvement over last year, when economic uncertainty was frequently cited as a reason for delaying or canceling projects.
Processing professionals are upbeat about their own facilities’ asset utilization, with three-quarters anticipating throughput growth this year. The majority of those plants are on track for double-digit production increases. That helps explain why capacity constraints are frequently mentioned as a key manufacturing issue in 2014, along with regulatory challenges, equipment reliability and logistics.
Food safety is like motherhood and virtue, so it’s unsurprising that respondents overwhelmingly ranked food safety as 2014’s most important manufacturing issue, far and away the top priority in a list of 11 that readers were asked to rank (see chart). Cost control received the second-highest ranking scores, followed by labor, inspections and certifications, sourcing and materials issues and the Food Safety Modernization Act (FSMA).
You can agree with the concept of food safety without supporting the framework for improving outcomes, as readers indicated. Describing the vital manufacturing issues of 2014, one respondent grumped, “Over-regulation from FDA (FSMA), OSHA and EPA, as well as the growing requirements for certifications.” That last complaint is a swipe at industry self-regulation, notably the third-party certification programs endorsed by the Global Food Safety Initiative (GFSI). Almost two-fifths of respondents’ facilities have been certified under one of the GFSI standards, and an additional 7 percent have received certification by outside auditors not affiliated with GFSI.
Validation of a plant’s food safety practices is a desirable assurance for customers, but it contributes little to actual food safety and sanitation practices. Employee training is the key to continuous improvement in safe outcomes, and seven in 10 survey participants say their companies are investing in training. Half are either developing or upgrading their HACCP plans, and about a third are acquiring more equipment for sanitation, improving the sanitary design of production equipment and/or improving their pest-control programs.
HACCP plans are a fundamental requirement of FSMA, and while only USDA facilities and juice manufacturers previously were required to have a plan, customer expectations have made HACCP a condition for doing business for many food companies. Past surveys consistently found about 85 percent of food manufacturers had initiated HACCP.
The rigor of those programs and whether they will pass muster with FDA is another matter, and 10 percent of respondents indicate there is concern within their organizations that existing plans are not sufficiently grounded in the science-based evaluations FDA will require. More than a quarter of readers say their firms are evaluating their HACCP programs, and others are reviewing the accessibility of their records and current GMPs and prerequisite programs. Not everyone is concerned: One in eight say they have yet to assess the impact of FSMA on their operations.