Food Processing

The food industry is one of the United States’ largest manufacturing sectors, accounting for more than 10 percent of all shipments. The processed food industry has experienced steady growth over the 1997-2004 period. In 2004, the value of food shipments reached $ 511.5 billion, an increase of 21 percent versus1997. Demand for processed food products is less affected by economic upswings and downswings since food is a necessity.

According to the Department of Agriculture (USDA), families spend only nine percent of their disposable income on food; five percent on food consumed at home and four percent on food consumed away from home. Due to sustained economic growth, consumer demand for food is expected to increase with rising disposable personal income.

Processed foods are “value-added” products since any food product requiring additional work is referred to as a processed product, regardless of whether the work is minor, such as for canned fruit, or more complex, such as for snack foods. Of the sub sectors comprising the food manufacturing industry, the largest four are: meat products; dairy products; grain and oilseed milling, and other food, making up 66 percent of total shipment values of $ 511 billion in 2004. Other sectors include fruit and vegetable preserving and specialty food manufacturing, which accounted for 10 percent, bakeries and tortilla manufacturing (10 percent), animal food (6 percent), sugar and confectionery products (5 percent) and seafood products (2 percent). Employment in the food-manufacturing sector stood at 1.472 million (as of 2005).

Food manufacturers are increasingly concerned with implementing greater automation in the manufacturing process. Spending for plant equipment, upgrades and automation is currently at stronger levels than in past years. Increasing use of automation and advances in technology are increasing productivity in the food manufacturing industry. In particular, automation is being heavily used in packaging, inspection and inventory control. Both Italian and German companies are major participants in the U.S. food processing and packaging equipment sector thanks to their providing turn-key services, including design, engineering and installation of complete food processing and packaging lines.

The U.S. processed food industry is a major participant n the global economy, both exporting and in foreign direct investment. More than a third of the world’s top 50 food and beverage processing firms are headquartered in the United States. Major foreign companies active in the U.S. include Unilever, Groupe Danone, Diageo, Kirin, SABMiller, Cadbury Schweppes, Heineken and Asahi Breweries.

Significant opportunities exist for European companies in the U.S. food-processing sector. Demographic growth and ever changing tastes and lifestyles offer a wide range of opportunities to European companies willing to enter the U.S. food processing industry.

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