From Farm to Consumer: Breaking Down Ohio’s Food Value Chain

Ohio’s food industry value chain is a robust end-to-end system. From the farms to the tables of consumers, food and agribusiness companies and stakeholders have a well-rounded state filled with assets to keep them successful.

Ohio is positioned on the easternmost end of the highly productive “corn belt” that stretches roughly from west to east from Nebraska to Ohio and north to south from Minnesota to Missouri. The state ranks No. 1 in soft red wheat production, No. 7 in soybeans and No. 10 in corn. Including smaller grains, Ohio produces about 24 million tons of grains each year with the majority being processed in state.

All three major commodity processing industries are the foundation for both the strong animal agriculture production in the state and the 1,300 food manufacturing facilities throughout Ohio. The soybean meal and corn feeds roughly 5 million hogs, 45.5 million chickens and turkeys, and 1.5 million cows, which leads to 9 billion eggs and 630 million gallons of milk (some of which is used to produce yogurt at the nation’s second largest plant in Minster, Ohio). In addition, the meat of these animals is processed and consumed in Ohio as well as nationally and globally.

Ohio counts 76,000 farms producing vegetables, fruits, grains, and livestock, wool, and many more vital products and commodities. Farming launches the value-added ride through processing, manufacturing, packaging, distribution, and ultimately to the consumer in many convenient, nutritious, and inexpensive products.

The strong production of basic grains and oilseeds supports a significant processing industry in Ohio’s end-to-end food system. Four soybean processing plants turn out vegetable oils and high protein animal feed. Additionally, Ohio is home to one corn starch and seven corn ethanol plants producing sweeteners, starch, animal feed, and ethanol fuel. These plants use about half of Ohio’s corn production in state. There are 13 commercial flour mills in Ohio, including the largest soft red wheat mill in the world, which is owned by Mondelez. (Soft red wheat is used primarily for cookies and cakes; Ohio is the largest grower of this variety.) Its Toledo operation is also the second largest of all U.S. flour mills, producing over 3 million pounds daily. Mills also blend various wheats to meet specific flour requirements of commercial bakeries, restaurants, and residential kitchens.

With abundant grain production and processing in state, it’s no surprise that Ohio also hosts a multitude of large livestock production and processing entities. Companies like Cooper Farms, Case Farms, and Koch Foods transform Ohio’s livestock into meat, dairy products, and egg production (No. 2 nationally). Ohio is ranked No. 3 among states in tomato production and has a large vegetable farming and greenhouse industry. Ohio is also among the top 10 states for the production of milk, cheese, hogs, and turkey. It’s the No. 1 producer of Swiss cheese, and home to Dannon’s yogurt plant, the second largest in the U.S.

An example of value-added processing is the state’s four large bacon production plants:

1. Fresh Mark in Massillon
2. SugarCreek in Fairfield and Washington Courthouse
3. J.H. Routh in Sandusky
4. Kraft Heinz in Coshocton (the sole supplier of Oscar Meyer products)

Using processed meat, eggs, grains and dairy to manufacture finished food products are hundreds of companies, such as JTM Foods, Tyson/AdvancePierre, Cooper Farms, Wornick, Case Farms, SugarCreek, Sandridge, General Mills, Nestlé, Bellisio, and Koch Foods. These facilities can be smaller local and regional processors on up to national players with extensive supply chains that market their products nationally and globally.

Ohio produces more than just meat, dairy, and eggs. It’s home to makers of Dum Dums and Sweethearts candies (Spangler Candy), jellies, jams, and peanut butter (Smucker’s), animal feed (Provimi, Land O’Lakes, and many more), pet food (BrightPet, Iams, Purina, Bil-Jac and others), cake mixes and frostings (Pillsbury), popcorn (Mennel), beer (280 craft breweries, Budweiser, MillerCoors, and Sam Adams), and many more food ingredients and products.

Food Manufacturing, or processing, is the primary focus area for JobsOhio’s growth incentives, and the main contributor to the value-add in the food ecosystem throughout Ohio. Approximately 1,300 facilities in the state are involved in food manufacturing, adding over $12 billion in annual gross state product. Ohio hosts 431 bakery and tortilla sites, 257 beverage makers, 89 sugar and confectionary plants, and 67 dairy processors.

Ohio is a powerhouse in food packaging, with approximately 98 companies producing plastic wrap, recycled paper bowls, foam clamshells, gas-permeable produce bags, labels, cans, lids, bottles, jars, and more. Having these food packaging suppliers in close proximity to food manufacturing shortens the supply chain and lends itself to innovation, a priority in the rapidly changing food marketplace. Companies like Valfilm, Crown Cork and Seal, Interpak, Graham Packaging, and Sonoco products demonstrate the breadth of packaging in Ohio.

Both processed and fresh foods require distribution channels with high degrees of food safety and cost efficiency. The fastest growing segment is cold storage (refrigerated and frozen) as preservatives are removed and convenience foods are increasingly in demand. Efficient warehousing tends to be driven by proximity, automation, and building layout.

Private label foods account for about 26 percent ($135 billion) of all grocery sales, making it a potent player in the food manufacturing sector. Ohio has some nationally significant manufacturers of store-brand or private label foods, as part of a broader category of contract manufacturers. Under contract, and generally with high confidentiality, Ohio food plants produce ketchup, cookies, meat, eggs, cheese, ice cream, frozen dinner, dips, chips, and every other category of food for brand-name companies. Hearthside, Mennel-Martel, Bellisio, Koch, SugarCreek, Smith’s Dairy, Foxtail Foods, and Wornick Foods are just a few of the 48 identified co-packers active in the state. Contract manufacturing, or outsourcing, enables efficiencies throughout the value chain while preserving proprietary ingredients, recipes,
and processes.

An integral step in the end-to-end food system in Ohio is the warehousing and distribution function. With its advantageous location within a one-day drive of 60 percent of the U.S. and Canadian population, Ohio hosts numerous modern food warehousing facilities and the fifth highest concentration of warehousing and storage services in the nation, including McLane Co., Campbell Soup Company, Kroger, Walmart, and Global Cold Storage. With the fourth largest interstate system, the third largest number of active rail miles, a full 13 intermodal terminals, and the fourth largest (by value) maritime system in the U.S., food products produced in Ohio are close to market end to end.

Several food and agribusiness companies have dedicated research and development facilities in the state, and most every Ohio food manufacturing company maintains robust product development centers as well. Many companies, including Tyson (AdvancePierre), Kroger, SugarCreek and Mennel, have significant investments in facilities and people dedicated to the science of food, from safety to taste to nutrition. Nestlé, for example, has three global centers in the state, and J.M. Smucker has food, coffee and pet food R&D centers in Ohio. These companies are supported by the Ohio State University’s Food Science Department and a number of private food laboratories working on innovation and food safety. The Ohio State University also hosts initiatives such as the Flavor Research and Education Center, the Food Industry Center, and inter-college work on nutrition and human health with OSU’s hospitals.

Nine of the top 10 food processing companies have facilities in Ohio, as do 20 of the top 25. At least four of the top 100 are headquartered in Ohio, including J.M. Smucker, Great Lakes Cheese, Lancaster Colony, and SugarCreek.

Four of the top five pet food manufacturers have facilities in Ohio, and one of the largest is based in Orrville (J.M. Smucker). Pet food is a $127 billion retail sales market in the U.S., and the premium category is fast growing.

Four of the top five dairy companies have manufacturing in Ohio. Three of the top five fresh bread bakeries are represented in Ohio, and the state is particularly strong in prepared meals and entrees, where eight of the top 12 have production facilities.

The origin of Ohio’s major food manufacturers can often be traced to small, family endeavors. Tomorrow’s food giants may well be seen in today’s startup companies, or food disrupters. A quick walk through history shows that:

T Marzetti, of Columbus, was founded in 1896 as a restaurant by Teresa Marzetti, a new immigrant. Similarly, The Kroger Company started as a single store in downtown Cincinnati. Today, it has well over 2,500 stores and 40 in-house food processing and manufacturing plants nationwide. Freshway Foods in Sydney, established in 1988 by the Giraldi brothers and recently folded into the U.S. Foods company. Today’s Bellisio Foods, with one of Ohio’s largest food plants in Jackson, grew out of entrepreneur Jeno Paulucci’s increasingly bold food businesses. He founded Chun King in 1949, started Jeno’s Pizza Rolls (now General Mills and the world’s largest pizza plant) in Wellston and Bellisio (with more than 1,100 employees) in nearby Jackson, Ohio. There are many more bootstrap “disrupter” stories of successful food companies in the state, at many stages of growth. Great Lakes Cheese, J.M. Smucker, JTM Foods, Nature’s One (organic baby food), Superior Dairy, SugarCreek, Schwebel’s Bakery, and Savor Seasonings are inspirational growth stories. The companies have stayed home even as they become regional, national, and global food powerhouses.

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