Bourbon necessarily is distilled and aged in Kentucky, but greenfield activity has spread to Tennessee, usually on a smaller scale. One exception: Jack Daniels recently announced a $140 million expansion at its Lynchburg, Tenn., distillery. More typical are the boutique distilleries sprouting in the Smoky Mountains area, where entrepreneurs are creating their own state’s version of the Bourbon Trail.
Two-year-old Sugarlands Distilling Co. typifies the trend. Initial production focused on moonshine, defined as whiskey that hasn’t been aged. This year, Sugarlands has added American whiskey to the mix. “We’re ground zero for the Tennessee Whiskey Trail,” reports Sugarlands’ Jay Miller. A dozen boutique distillers have cropped up within an hour’s drive of the firm in Gatlinburg, Tenn., where Sugarlands is drawing close to one million visitors a year, according to Miller.
Whiskey is for sipping, beer is for quaffing, and the craft segment continues to experience the kind of growth that drives capacity expansion and new brewery construction. Sixteen new regional craft breweries started production in 2014, and almost as many existing ones – such as Tallgrass Brewing in Manhattan, Kan. – have commissioned new brewhouses that significantly boost capacity.
Craft’s continued growth is taking a toll on major brewers. MillerCoors will close its Eden, N.C., brewery in September. In 2014, Eden produced 7.1 million barrels, an output equal to 50 percent of the throughput growth by regional crafts from 2004 to 2014.
Eden’s shutdown is bad news for the brewery’s 520 employees; on the other hand, per worker productivity is significantly higher at a highly automated brewery than at a local or regional craft brewer, so the net impact of changing beer preferences is positive job growth.
Craft beer’s growth is boosting upstream supply-chain activity. Hop cultivation has returned in the province of Ontario after a long absence, with the new growers organizing under the umbrella of the Ontario Hop Growers Assn. A poor 2015 harvest in Germany promises to put a squeeze on hop supplies this year, ensuring an eager base of regional craft brewers who lack the forward-buying contracts that lock in supplies for major brewers.
Malted barley is beer’s main component, and craft brewers use twice as much malt per unit of production as the majors, points out William Rahr, president and CEO of Rahr Corp., Shakopee, Minn. Rahr is in the midst of building a new malt house that will increase annual malting capacity by 70,000 metric tons.
The project represents the first malt-capacity expansion since the early 1990s, and it isn’t the only one. GrainCorp, an Australian company with three malting facilities in North America, is in the midst of an expansion at its Pocatello, Idaho, plant that will more than double capacity to 220,000 tons. The project is expected to spur expanded barley production and other economic activity valued at $350 million. And Briess Malt & Ingredients Co. reopened a Manitowoc, Wis., malt house that was shuttered in 2012. Briess operates three malting facilities.
Besides Wayne Farms, several other poultry projects in that $50 billion industry segment are in the works. Pilgrim’s Pride, Perdue, Sanderson Farms and Tyson are among the processors with major projects planned or in process.
Domestic chicken consumption continues to rise, but global demand for chicken is the real engine for growth. Worldwide, poultry consumption is expected to increase by more than 52 billion lbs. in the next decade, or about 26 percent, reflecting both population growth and increased per-capita consumption.
More automation is occurring to meet the growing demand. Deboning accounts for about a third of poultry processing’s workforce, and machines are rapidly replacing deboning workers. Shai Barbut, a meat scientist at the University of Guelph in Ontario and author of "The Science of Poultry and Meat Processing," calculates that one-quarter of U.S. deboning now is done mechanically.
When automated deboning machines were introduced 35 years ago, poor force control created bone fragments, and yields were considerably lower than manual deboning, Barbut notes. Today’s machines still can’t match yields from the most-skilled workers, but better force control and higher speeds, along with rising labor costs and injury rates, are accelerating the movement toward automated deboning. The shift is reflected in more specialization, exemplified by partnerships like Wayne Farms and Ala-Trade.
With rare exceptions, food products make multiple stops between the farm and the home or restaurant. Adding value is the essence of food processing, and the more value added, the closer the juxtaposition of food plants and farm fields.
That’s the justification for the Simplot-Caviness partnership. When CS Beef Packers opens its abattoir doors, it will become the local processing center for a region with 1.2 million dairy cows and beef cattle. The closest current packinghouse is in Fresno, Calif.
Chobani’s yogurt plant and Glanbia’s cheese and whey plants are the highest profile milk consumers in southern Idaho, and Chobani recently announced a major expansion to its four-year-old Twin Falls facility. But Chobani’s consumption is a drop in the milk pail of regional availability, according to Rick Naerebout, operations director for the Idaho Dairymen’s Assn.