Today, food processing is a major U.S. industry. Each year, Americans spend more than $1 trillion on food.

In the Pacific Northwest, food processing is the third largest manufacturing sector, with annual revenue of $21 billion and more than 100,000 employees.

Industry Overview

Food processing is the third largest manufacturing sector employer in Oregon, the Northwest and in the U.S.  The Northwest (OR, WA and ID) Food Processing cluster represents a diverse group.

The Oregon cluster includes 637 food manufacturing companies. Members of Northwest Food Processors Association (NWFPA) operate 115 food manufacturing plants in the state and account for a high percentage of food production volume in the state.

Food manufacturing (processing) companies include bakery, dairy, fruits and vegetables, meat and poultry, seafood, snacks, and specialty.  The companies process products of all types: canned, dehydrated, freeze dried, fresh cut, frozen, juice, organic, powder, and puree.  In addition to food processing, the expanded food cluster also includes farm production, packaging and machinery, transportation and warehousing. Concentrations of food processing firms are found in Greater Portland, the Willamette Valley, the Columbia Gorge, the Oregon Coast, and Southern Oregon.

In 2003 Northwest Food Processors Association (NWFPA) responded to unprecedented regional threats in the global marketplace by initiating the nation’s first comprehensive, multi-state cluster initiative and competitive assessment of the food manufacturing cluster.  Support for this program came from three governors, state and regional government, members of Congress, the U.S. Economic Development Administration, industry, educators, and others.

NWFPA’s major goal is to reposition the three-state food processing industry to compete globally through dramatically increased productivity and innovation.  The model is simple: Innovation leads to productivity gains, which lead to global competitiveness, which leads to increased profitability.

Industry Trends

  • Market consolidation
  • Increased price competition
  • Consumer health consciousness
  • Organic and natural foods
  • Energy supply and prices, including transportation expenses, inflate the cost of delivered goods.
  • More global sourcing
  • Increasing attention to food safety by regulatory agencies and customers
  • Aging workforce resulting in a shortage of qualified workers with replacements needed for retiring baby boomers (including engineers, electricians, and mechanical technicians).
  • Aging facilities
  • Increased technology
  • Openness to increased innovation in managing all challenges of the industry

Food Processing by the Numbers

Sector

Food Processing

Economic  Impact

Total Food Processing Locations: 637 (2012)
Average Annual Wages: $35,549 (2012)
Direct Employment: 24,679 (2012)
Output: $6.1 Billion in Added Value

Source: Northwest Food Processors Association and Oregon Employment Department

Oregon’s Food Manufacutring Sector: A Staple of Oregon’s Economy,” Worksource published November 12, 2013.  Food manufacturing tends to weather economic slowdowns and recessions fairly well.  People may hold off on purchasing a new house, new appliances, or they may cut back on dining out when the economy is slow.  But people have to eat, even when the economy is not doing well.  That certainly has been the case during the recent recession and recovery.  From 2007 to 2012, Oregon’s total employment declined 5.3 percent.  During that same period of time, Oregon’s manufacturing sector shed 15.8 percent of its jobs.  In contrast, Oregon’s food manufacturing employment managed to grow 7.8 percent from 2007 to 2012, bucking the trend of large employment losses experienced by the rest of the manufacturing sector during the recession.

Food manufacturing has also been a steady industry in the long run.  From 1990 to 2009, Oregon’s manufacturing employment declined nearly 16 percent.  During that same period of time, food manufacturing employment grew 1,000 or 4.2 percent

Cluster Strengths

  • Able to weather economic slowdowns and recessions.
  • Access through seaports to the Pacific Rim.
  • Hydro-electric infrastructure.
  • Northwest pioneering spirit and appetite for risk-taking.
  • Farmland exceeding 17.5 million acres in Oregon.
  • Healthy lifestyles, healthy foods, and consistent market demand.
  • Partnerships with more than 100 public and private organizations
  • Energy management, including partnership with Northwest Energy Efficiency Alliance.

Cluster Challenges

  • Compared to midwest and east coast competitors, transportation rate disadvantage to populous eastern markets for bulk of sales.
  • Energy supply and prices, including transportation expenses, inflate the cost of delivered goods.
  • Fresh water supply.
  • Increased regulatory environment.
  • Shortage of qualified workers with replacements needed for retiring baby boomers (including engineers, electricians, and mechanical technicians).
  • The need for increased innovation in managing all challenges of the industry.

Core Priorities & Key Initiatives

NWFPA’s six core priorities, as established by an annual survey of 157 companies and the Board of Directors, are:

  • Food Policy
  • Government Affairs
  • Environmental Policy
  • Energy Issues & Policy
  • Workforce Training and Education
  • Sustainability

Additional priorities include:

  • Talent Retention & Replacement
  • Innovation Capacity
  • Communications
  • Industry Economic Research
  • Transportation Efficiency

Key Initiatives:

  • Implementing 25 percent energy intensity reduction in 10 years.
  • Increasing the capacity of the Northwest’s innovation infrastructure
  • Forming strategic alliances to improve food processing industry’s competitiveness
  • Developing a robust workforce pipeline.
  • Developing an industry-wide sustainability process.

Recent Accomplishments

  • NWFPA was recognized by the U.S. Department of Commerce, Economic Development Administration (EDA) as a “finalist” for the 2010 Regional Innovation Cluster of the Year award.
  • NWFPA has signed a 10 year MOU with U.S. Department of Energy to reduce energy intensity (btu’s / pound) by 25% in 10 years. A sophisticated baseline of production and energy use has been developed by NWFPA – the first food industry trade association in the U.S. to do so.  More than 120 food manufacturing plants are participating in the baseline project.
  • As part of the state’s six-year Innovation Plan, Oregon InC invested $5.5 million in funding as a catalyst to jumpstart the NWFPA Education & Research Institute (ERI) and to further the successes of this industry-led initiative. NWFPA President David Zepponi and his team responded with these exceptional returns on the state’s investments:
    • 468 jobs retained or created directly by ERI
    • Continued growth of Oregon’s food processing industry in a recession (the only manufacturing sector in Oregon to show positive gain.)
    • $13.1 million in operations savings by Oregon food processors through direct efforts of ERI to increase output at lower cost.

NWFPA launched in January 2014 the Food Resources & Education Institute (FREDi), an industry-led initiative as a resource for food processors, industry suppliers and service providers to connect and access resources they need to meet competitive challenges and grow businesses.  FREDi training offerings, in partnership with the best trainers in the country, supported by centralized records maintenance, will result in efficient and accessible delivery of high-quality training tailored to identified needs.  Go to FredTalks.com to begin connecting and enriching your workforce development programs.

Cluster Organizations

Oregon food processors are formally organized as part of Northwest Food Processors Association, a regional trade association, with processor members also in Washington and Idaho.

Example Oregon companies include: Ajinomoto Frozen Foods, Boardman Foods, ConAgra Foods, Darigold, Danon (formerly YoCream International), DePaul Industries Food Packaging Group, Everfresh Fruit, Foster Farms, National Frozen Foods, NORPAC Foods, Oregon Freeze Dry, Oregon Fruit Products, Pacific Natural, Pacific Seafood Group, RainSweet, Inc., Reser’s Fine Foods,  Smith Frozen Foods, Sunshine Dairy, Tillamook County Creamery, Tree Top (formerly Sabroso), Truitt Family Foods and U.S. Bakery.

Cluster activities include the full range of the food manufacturing industry workforce – from job seekers and entry-level employees through the entire management structure, including chief executive officers of global food companies. The extended cluster includes suppliers, education, and government representatives. The following Education and Research Institutions, Non Profit Organizations, and state agencies play a significant role:

Oregon State University offers research programs in Food and Science Technology.  Located within the College of Agricultural Sciences, the Department of Food Science and Technology (FST) offers undergraduate and graduate programs of study. Off campus facilities include the Food Innovation Center in Portland and the Seafood Laboratory in Astoria.  Food Science and Technology has active research initiatives supported by more than $1.9 million in funding.

The Food Innovation Center (FIC) Agricultural Experiment Station is located in Portland. The FIC is a resource for client based product and process development, packaging engineering, shelf life studies, and consumer sensory testing. Research is conducted to develop innovative processing and packaging technologies. The FIC also engages in scholarly research in Agricultural Economics and Marketing.

NWFPA established the Education Research Institute (ERI) in 2007 as an affiliated 501(c)3 nonprofit organization for charitable, educational, and scientific purposes in support of the food processing industry.

Oregon Tilth is a nonprofit research and education membership organization dedicated to biologically sound and socially equitable agriculture. Oregon Tilth offers educational events throughout the state of Oregon, and provides organic certification services to organic growers, processors, and handlers internationally.

The Food Alliance works at the juncture of science, business and values to define and promote sustainability in agriculture and the food industry, and to ensure safe and fair working conditions, humane treatment of animals, and careful stewardship of ecosystems.

The Oregon Food Bank is a community-based nonprofit organization dedicated to fighting hunger and its root causes. Food from a variety of sources moves through warehouses to a network of eighteen regional food banks across Oregon and 280 local agencies in Multnomah, Clackamas and Washington counties and in Clark County, Washington. The Oregon Food Bank also makes more efficient use of foods, with volunteers gleaning unharvested food from farmers’ fields and distributing some of it through its distribution system.

The Oregon Department of Agriculture has a mission 1) to ensure food safety and provide consumer protection; 2) to protect the natural resource base for present and future generations of farmers and ranchers, and 3) to promote economic development and expand market opportunities for Oregon agricultural products.

Cluster Contact

David Zepponi
President
Northwest Food Processors Association
8338 NE Alderwood Road, Suite 160
Portland, OR 97220
503-327-2208

Cluster Events

The expanded cluster meets annually (January 11-14,2015) at the Northwest Food Processors Expo at the Oregon Convention Center. With 3,500 attendees and 400+ equipment and services booths, this is the largest regional gathering of food processors and suppliers in North America.  NWFPA’s 100th Anniversary NW EXPO and Conference was conducted January 12-15, 2014, also at Oregon Convention Center.

Since 2007, the Northwest Industrial Energy Efficiency Summit (planned by NWFPA) is co-located at the NWFPA Expo January 14, 2015.

Other major meetings of NWFPA include an Annual Sustainability Summit in April, an Executive Business Summit in May, and an Autumn Assembly of Committees in October.