Turning Disruption into Opportunity Within Ohio’s Food Industry
Disruptions in the food industry present the chance to seize opportunities in Ohio
Joe Needham, Director, JobsOhio•Tue Apr 30 2019
Ohio is home to over 1,300 food manufacturing facilities of all sizes and in most every food production segment. With 3.5 percent of the U.S. population, Ohio produces nearly 5 percent of the country’s food and beverages by value.
As a part of the state economy, food manufacturing accounts for 2 percent of the GSP compared to the average across states of 1.2 percent. Ohio’s food and agribusiness sector contributes $16.4 billion to the state’s Gross State Product annually. Employment in food manufacturing totals about 70,000 jobs with an additional 78,000 employment in farming and ranching.
A distinct advantage of being part of the food system in Ohio is its end-to-end supply chain. As the easternmost state in the main area of corn, bean, and soft wheat production of the U.S., Ohio is home to a robust commodity processing sector, significant animal production, one of the nation’s largest food manufacturing industries, extensive food packaging production, storage and distribution systems, and a strong food retail system.
Significant changes in the food, beverage and forestry sectors are being driven by financial pressure on food manufacturing margins, rapidly evolving consumer preferences, and advances in technology. Mega-trends in food include consumer preferences shifting toward convenience, nutrition, and sustainability. These changes are driving realignment among food manufacturing companies, along with numerous new niche manufacturers/marketers, and increased investments around ingredients, packaging, R&D, and distribution.
The reduction of additives and preservatives and the increase in nutritional processing expands the need for a robust cold chain-refrigeration and freezing of food. Cold storage is much more prevalent in the U.S. than in Europe or Asia and is currently in high demand and short supply throughout the U.S. Automation is also a high priority item as food companies reconfigure facilities in response to consumer preferences, food safety, and margin pressures. Premium pet foods, flavors and seasonings, and food packaging are strengths of the Ohio food sector, and areas of significant growth opportunity.
Food manufacturing is currently undergoing disruption, and the opportunity to retain, gain, and expand food manufacturing market share is relatively high. There are numerous companies engaging in mergers and acquisition activities, establishing new R&D centers, and modernizing production as they respond to financial, consumer, and technology pressures. JobsOhio and local communities need to recognize, encourage and support the food sector.