Food products industry bright spot in state

By for CAES News

In a year when Georgia’s manufacturing sector is expected to have limited growth and heavy job losses, the food products industry is pulling clean of that trend.

“Georgia has a thriving food products industry capitalizing on the variety and availability of Georgia’s agricultural products,” said Sharon Kane, a food business development specialist with the University of Georgia College of Agricultural and Environmental Sciences.

“The food products industry is the single largest contributor to Georgia’s manufacturing sector, consistently accounting for about one-fifth of Georgia manufacturing output,” she said. “Despite the projected overall decline in jobs and output in manufacturing as a whole, food products industries remain a bright spot among manufacturing businesses in Georgia.”

Falling only behind the service sector, which adds $250 billion to Georgia’s economy annually, the manufacturing sector accounts for more than $150 billion in total output each year, according to a recent study by the UGA Center for Agribusiness and Economic Development. Food product industries contribute $29 billion to that total.

With 15 percent of the manufacturing workforce, food product industries employ about 69,000. These workers process meat, vegetables and other raw materials into food products for both immediate consumption and continued processing.

Other components of the industry include animal food, sugar and confectionery products, seafood production and baked goods.

The industry is expected to grow at a rate of 2 percent in 2007. And it will find its sales growth in a variety of markets.

“The greatest growth rates will occur in dominant segments of food products such as animal slaughtering and processing and bread and bakery product manufacturing,” Kane said.

Jeffrey Humphreys, director of the Selig Center for Economic Research at UGA, brings those numbers to life.

“For example, Perdue Farms plans to add nearly 1,000 workers at its facility in Houston County by 2009,” he said, “and the Wrigley Company is expanding its Gainesville plant for the second time since 2005.”

Much of the fresh chicken sold in the eastern United States falls under the Perdue brand. And Wrigley doesn’t just make gum. The company also produces such candies like Life Savers.

As populations and personal income grows, Kane expects the food products industry to follow.

Many consumers are expected to trade up to more expensive foods, Humphreys said, adding their income increases into Georgia’s collective food products sales pot. And they’ve also developed an increased desire for niche products with higher value-added margins.

These niche products follow national trends such as organic and natural products, Kane said. Other areas receiving increased consumer interest are locally-grown products, health-and-wellness-oriented foods, consumer convenience and a food quality and safety focus.

Stephanie Schupska is a news editor with the University of Georgia Public Affairs Office.