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Report: Specialty food supports 15,300 jobs

Eric Gneckow, Business Journal Staff Reporter
Monday, November 12, 2012, 7:07 am
Categories: Food and Beverage, Industry News, Manufacturing, North Bay News, Top News Item, Top News Stories | No Comments

NORTH BAY — Each of the 6,170 full-time-equivalent jobs in food and non-wine beverage manufacturing in the North Bay helps to sustain an average of more than one-and-a-half additional jobs in other industries, making it one of the most economically stimulating sectors in the region.

Dr. Robert Eyler

The finding — along with other detailed analysis of the sector’s regional presence and impact — was described in a new report by Dr. Robert Eyler, chair of the economics department at Sonoma State University and director of the school’s Center for Regional Economic Analysis.

The report sought to isolate data for companies directly involved in processing agricultural goods, excluding wine production and other sub-industries from existing data sources. The included industries represented at least 350 producers of baked goods, coffees, teas, juices, cheese, milk, spices and other products consumed directly or included in another process.

The group represents 14 percent of total manufacturing employment in counties of Sonoma, Marin, Napa, Solano, Mendocino and Lake. The companies support $4.06 billion in annual business revenue, 15,300 direct and supported jobs and $106 million in annual state and local tax revenue.

Direct employment in those fields is expected to grow 10 percent by 2020, though some sectors are growing much faster. Employment in the “coffee, tea and juice” sub-sector in Sonoma County has doubled since 2005, with 223 full-time-equivalent jobs across the North Bay.

In the 10-year period from 2001 to 2011, statewide food and beverage manufacturing jobs have declined by more than five percent. Meanwhile, in the North Bay, levels have grown by approximately 20 percent, an indicator that the region is becoming a notable destination for these industries, according to the report.

“At a time when people say manufacturing is contracting, food and beverage manufacturing are growing in the North Bay,” said Dr. Eyler, who created the report under the umbrella of his consulting firm, Economic Forensics & Analytics.

The largest industry employer was “baked goods and breads,” with 1,090 full-time-equivalent employees as of January 2012. There were 927 employees in the “meat, poultry and seafood” sub-sector, 865 in “fruit products,” and 645 working in the “dairy and cheese” sub-sector. Other large sectors included tortilla manufacturing, dessert and vegetable product producers.

The number of businesses in the food and beverage manufacturing sector has declined both statewide and in the North Bay, with a decline of approximately 17 percent in California and approximately 7 percent across the six North Bay counties from 2001 to 2011, according to the report. However, 1,630 new self-employed food and beverage manufacturers have been launched in California since 2002, with indicators that these and future smaller producers are an area of potential growth for the North Bay.

“We have an environment where food and beverage manufacturers feel like they can live and grow in this region” said Dr. Eyler, citing the North Bay’s proclivity towards craft producers and products that offer a healthier alternative.

The report was commissioned by Warren Capital Corp., a Novato-based business lending and advising firm that sought data on the industry in response to an enduring flow of business from the sector over the years. The report was released a North Bay Business Journal conference Thursday.

“It’s generally a third of our business, year in, year out,” said Clay Stevens, president and CEO of Warren Capital. “There’s a lot of data out there about wine, but not about the North Bay food industry. It’s a vital industry for us, and I think it’s a real strength for the North Bay.”

As these manufacturers — with large players that include frozen organic food producer Amy’s Kitchen, dairy producer Clover Stornetta and tea producer Traditional Medicinals — conduct business, jobs are supported in areas like supply chains and shipping. Professionals in various fields are also supported, both to provide company services like accounting and to provide services like medical care to employees. The relationship holds true for smaller companies as well, Dr. Eyler said.

Challenges do exist for food and beverage manufacturers in the region, including the necessity to import certain agricultural products from outside of the North Bay and the impact of limits in municipal wastewater processing capacity. The report notes that economic development could focus on enhancing access to local supply chains and generally reducing costs for these industries.

“The reason why the multiplicative effect can be so high is that this industry depends on other businesses,” Dr. Eyler said.

 


Link to article: http://www.northbaybusinessjournal.com/64493/report-specilty-food-sector-supports-15300-jobs/

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