Lucrative process

Bringing together agriculture and commerce, the Food Processing and Manufacturing Initiative will create jobs and grow the economy.

Think about a can of beans. Before it can hit the grocery store shelf, the beans have to be processed and packed, the can manufactured and the label printed – all of which add up to a product that’s worth far more than the beans alone.

This, in a nutshell, is the premise behind a massive new initiative designed to elevate North Carolina as a food manufacturing destination, bolstering the state’s economy and breathing new life into its rural communities.

Born of seeds planted by the College of Agriculture and Life Sciences at NC State University, the North Carolina Food Processing and Manufacturing Initiative is quickly becoming a reality.

In 2014 the North Carolina General Assembly funded the initiative to diversify and add value to agricultural-based businesses through food processing. An economic feasibility study led by CALS and the N.C. Department of Agriculture and Consumer Services revealed that North Carolina has a significant opportunity to catalyze food processing, manufacturing and industrial development statewide.

The anticipated economic impact of the Food Processing and Manufacturing Initiative, if four key recommendations are established, will be an increase of nearly 38,000 jobs and associated economic output of $10.3 billion.

That’s no small potatoes.

“The results of the feasibility study are staggering,” said Dr. Christopher Daubert, head of the CALS Department of Food, Bioprocessing and Nutrition Sciences. “The Food Processing and Manufacturing Initiative could have a huge impact on our state, especially in our poorest communities.”

The decline of three of North Carolina’s traditional industrial strengths (textiles, tobacco, furniture) over the past 20 years has hit rural communities hard, but it also presents a unique opportunity for the state to leverage its agricultural resources, industrial capacity and research innovation assets to fuel the growth of new value-added industry.

“North Carolina has the potential to be the breadbasket of the South,” said CALS Dean Richard Linton. “We are the third most diverse state in the country when it comes to production of ingredients. We produce just about anything you’d want to put into a value-added good.”

The state also boasts “an abundant water supply, clean watersheds and a sizable, capable workforce, not to mention NC State University and its associated intellectual capital,” Daubert said.

The Food Processing and Manufacturing Initiative will focus on four main goals:

• Capture added value from North Carolina’s agricultural commodities through the development of innovative food products and processing technologies
• Foster the growth of food manufacturing entrepreneurial endeavors
• Proactively target site selection attraction opportunities within the food manufacturing supply chain
• Provide regulatory training and outreach to the food processing/manufacturing sector

After announcing the initiative in his State of the State address in February 2015, N.C. Gov. Pat McCrory assembled a task force of 35 representatives of all aspects of food manufacturing, from farming to transportation to economic development.

Linton chairs the Food Manufacturing Task Force, and Daubert serves as his designee. N.C. Agriculture Commissioner Steve Troxler, N.C. Lt. Gov. Dan Forest and N.C. Secretary of Commerce John Skvarla make up the rest of the task force’s core leadership.

“This is significant because it’s the first state-directed strategic initiative that has brought agriculture and commerce together,” Linton said.

The task force has four sub-committees that focus on business recruitment, communications/advocacy, infrastructure needs/assets and food industry needs assessment. Together, they plan to present a report of recommendations to the governor in the spring, Linton said.

The committee also received grant funding from the N.C. Tobacco Trust Fund Commission to support their work and to make possible a full-time joint position in the N.C. Department of Commerce and N.C. Department of Agriculture and Consumer Services that will focus solely on attracting food manufacturing industries to North Carolina.

“This could be an opportunity – like RTP was 30 years ago – to establish a centralized hub focused on food manufacturing that could serve the Southeast and be a huge economic bolster to the entire state,” Linton said.

“We have a goal to expand the economic impact of agriculture and agribusiness in North Carolina to $100 billion by the year 2020. Food manufacturing is a big part of the solution to get us there.”

McCrory agrees.

“This state’s economy is built upon those industries that make things, that innovate things, that build things, that produce things and that grow things,” McCrory said at the first task force meeting. “And I firmly believe as we continue to recover from this recession that we’re going to still be very dependent upon those industries to create the jobs and grow the economy of North Carolina. I’m proud of the manufacturing and agriculture industry that’s been an important part of our past, present, and it will be a very important part of our future.”

For Daubert, who grew up in a small rural community in Pennsylvania, it boils down to helping people.

“This initiative translates into jobs, especially for people in our poorest communities,” he said. “Creating new jobs will raise the tax base, which in turn will improve quality of life and bolster the state’s economy.

“Now is the time. And North Carolina is definitely the place.”

Weighing in on the FPMI

John E. Skvarla III
Secretary, N.C. Department of Commerce

Why do you think the Food Processing and Manufacturing Initiative is important for the state of North Carolina? Agriculture has always been a key driver for North Carolina’s economy, approaching 20 percent of our overall GDP. But it’s clear there’s more opportunity we’re leaving on the table. By developing greater capacity for food processing and manufacturing, we will add more value to the agricultural products we currently produce, driving our economy to new heights, especially in the state’s less populated areas.

What do you think the initiative will accomplish? The Food Processing and Manufacturing Initiative is already achieving results. Thanks to a supporting grant from the N.C. Tobacco Trust Fund, we are ramping up our marketing to this important sector. The Economic Development Partnership of North Carolina is hiring a dedicated business development manager to recruit food manufacturers. Over time, as our success builds and food industry leaders hear more about North Carolina’s natural advantages for manufacturers, we’ll see increased investment in our state and, of course, more jobs.

Why is collaborative leadership (Commerce, Lt. Gov., NCDA&CS, NC State, etc.) critical to this initiative? There’s an old saying that economic development is a team sport. That’s certainly true for this opportunity around food manufacturing. North Carolina has expert teams working at many of our public and private institutions. But it’s only when we bring teams together that we see the focus and critical mass that’s necessary to drive success, especially when we tackle an important and complex opportunity like this one.

Steve Troxler
Commissioner, N.C. Department of Agriculture and Consumer Services

Why do you think the Food Processing and Manufacturing Initiative is important for North Carolina? I believe there is a lot of potential for North Carolina in the area of food processing and manufacturing. There have already been a good number of successful food products launched in the state, including sauces, pickles, meats and jams. We have the manufacturing capacity, the agricultural resources and the entrepreneurial drive to grow this sector of agribusiness. Adding value to agricultural products through processing helps farmers, it helps rural communities that have lost traditional manufacturing jobs, and it helps our state as a whole.

How do you think the partnership between NCDA&CS and CALS strengthens the initiative? For many decades, partnership between our department and CALS has led to a number of positive developments for North Carolina agriculture. The combination of research and scientific know-how at CALS with the marketing expertise within our department could be a real asset as the Food Processing and Manufacturing Initiative moves forward.

Tom Holt
Retired, BASF
Chairman of the initiative’s Food Industry Needs Subcommittee

Why do you think the initiative is important for the state? There are several reasons the initiative is important to North Carolina. The initiative can have a direct result in increased manufacturing jobs and indirect employment opportunities in supporting industries, such as transportation. Many of us envision the initiative having a direct and very positive effect on North Carolina producers, some of whom will be able to sell more of their produce, as well as others who will be able to switch from lower-value commodity production to higher-value specialty crops. North Carolina still secures a significant amount of produce from other states, especially California, with burgeoning environmental, labor and regulatory issues, along with the added costs of transportation. The Food Processing and Manufacturing Initiative can provide “food security” for North Carolinians and perhaps secure lower costs. North Carolina is a state proven capable of producing and processing virtually any food; the ultimate vision is that North Carolina establishes itself as the breadbasket of the East Coast.

What do you believe the initiative will accomplish? Whether we move slowly or quickly, I believe the “breadbasket” vision will become a reality. Why? Because the challenges we face – water quantity and quality, regulatory issues, transportation costs, among others – will intensify. Additionally, the Southeast states, including North Carolina, have rapidly increasing populations. My hope is that our efforts and insights will in fact move North Carolina food manufacturing forward at a faster pace.