2016 Manufacturing Survey: Greater Throughput, Larger Staffs

Production and staffing are expected to increase, but food and beverage manufacturers are less optimistic about the year ahead than they were in 2015.

By Kevin T. Higgins, Managing Editor

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On the surface, 2016 looks like a positive period for food and beverage production in North America, based on responses to Food Processing’s 15th annual Manufacturing Outlook Survey.

Three-quarters of the 251 participating food professionals anticipate increased production at their facilities, marginally higher than last year’s feedback, with the greatest increase occurring at plants with predicted throughput hikes of 20 percent or higher. Expansion of the workforce is expected at almost half of all plants, the highest ratio in recent years.

Nonetheless, an undercurrent of unease is evident, with two-thirds expressing optimism about the year ahead, down from three-quarters last year. And while the era of across-the-board pay cuts continues to recede, respondents are less likely to anticipate salary increases in 2016 than they were last year.

Americans may be tightening their belts and watching their waistlines, but food and beverage remains a manufacturing growth sector. That puts the industry in select company: Most manufacturing sectors are shrinking, according to the Institute of Supply Management, victims of a strong dollar and weak foreign demand. As long as locally produced has any meaning, food & beverage is insulated from those factors.

The pessimism needle barely budged for 2016, with one in 10 survey respondents indicating they are somewhat or very pessimistic heading into the New Year, the same ratio as last year. The biggest changes are slippage in those somewhat optimistic and an increase in those ambivalent about 2016’s prospects. The latter group almost doubled to one in four.

Product safety is Job No. 1 in food and beverage manufacturing, as attested to by the one-fourth of production professionals who rank it as the top priority in 2016. January marks the fifth anniversary of passage of the Food Safety Modernization Act (FSMA), and with enforcement of FSMA regulations beginning to phase in later this year, manufacturers are paying closer attention to it.

FSMA references hazard analysis and risk-based preventive controls, FDA’s version of the HACCP plans required by USDA for 20 years. Whether it’s called HARPC or HACCP, almost half of survey participants indicate their firms are re-evaluating those practices as part of an effort to improve sanitation and food safety. An even higher proportion—two thirds—are focusing on more rigorous employee training in these areas. Two in five are arming sanitation workers with upgraded equipment.

The need for better food safety practices goes beyond regulatory requirements. As a processor of case-ready meat notes, “Regaining the trust of the consumers due to the increase in food recalls” is a top priority at his firm.

Microbial testing of products and the environment is standard procedure for meat, poultry and fresh produce, and the practice is spreading to other sectors. Only one in eight respondents are from the meat and poultry sector, yet 22 percent of respondents say rapid microbial detection systems are used in their plants.

Several professionals volunteer comments on the increased use of environmental monitoring at their facilities, and others say quality assurance programs are targets for capital spending this year. In-line monitoring via sensors and laboratory automation systems were singled out, although one respondent questions the ROI on food safety. “Value added to the product is not there,” a produce professional lamented, “and the retail outlets are not willing to pay for the increased cost.”

Third-party audits can be a burden, but a plurality of professionals welcome outside scrutiny and certification programs to help improve food safety. Many retailers, foodservice suppliers and food companies regard standards certified by the Global Food Safety Initiative (GFSI) as the gold standard, and almost half of respondents say their plant has been GFSI certified. Less than a third are not considering certification audits.

Half of the plants have been certified under SQF level 2 or 3, the same ratio as last year. BRC Global grew to one-third of certified facilities, followed by FSSC 22000 and IFS. Among those considering certification, SQF 2, BRC and IFS were the most frequently cited schemes.

Wanted: skilled workers

“Availability of qualified workers” and “Lack of key talent availability” are common refrains when professionals cite specific issues facing their organizations. Two in five indicate their companies have expanded in-house technical training programs to address the skills gap.

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