Throughout today’s economy, job creation is largely an urban phenomenon. It is true in North Carolina, too, as employment figures released last week attest: Orange County’s 3.9 percent jobless rate stands in stark contrast to Graham County’s 12.8 percent. But recent experiences in southeastern North Carolina offer evidence that a sound strategy for rural economies may be no farther away than the nearest dinner table.
While the consumer food and beverage industry may not have the edgy appeal of smartphone apps or “the Internet of Things,” it’s making a powerful economic impact.
Acme Smoked Fish Corporation’s new facility in Pender County has begun producing cold-smoked salmon to fill booming demand for proteins rich in Omega-3 fatty acids. Butterball is now investing $67 million at a production facility in Hoke County. Sanderson Farms, the nation’s third-largest poultry producer, is building a 1,100-worker plant in Robeson County, not far from where Trinity Frozen Foods is producing sweet potato French fries, a popular side-item on restaurant menus.
These and other 21st century food and beverage plants operate under strict safety, quality assurance and supply-chain standards, and their workforces have the skills and knowledge reflecting those high expectations. Some firms deploy exciting next-generation technologies. In Montgomery County, Wright Foods licenses aseptic processing techniques pioneered at N.C. State University that extend product shelf-life without preservatives or refrigeration. The procedure is economical and “green,” cutting down on energy consumption, packaging materials and distribution costs.
Eastern North Carolina is poised for additional job growth in this industry cluster. A 2014 study by N.C. State University’s College of Agriculture and Life Sciences found an impressive concentration of consumer foods-related firms in the “coastal plains” – about twice that of the nation overall. From 2001 through 2012, employment in the East’s value-added food operations grew by 5.2 percent while statewide jobs in the cluster increased by a scant 0.2 percent. Nationally, consumer foods-related employment fell by 1.5 percent over the same period.
Innovation, competitive business costs and market access account for much of our success with food processors, an industry whose economic potential for rural North Carolina can be more effectively harnessed with modest policy actions:
▪ Water and Wastewater Capacity Common to food and beverage processors is a high demand for water. Whether used as an ingredient or sanitizing agent, water is the lifeblood of this industry. Communities seeking even modest-sized facilities must have modern water and sewer infrastructure with supply to spare. State and federal grant programs should help fund needed upgrades.
▪ Specialty Sites and Parks Consumer food manufacturers have unique location requirements. While North Carolina’s Certified Site program has greatly improved the quality of industrial properties, more is needed. Specially designated food processing parks are now the industry’s gold standard. Columbus County’s Southeast Regional Park is a model worth replicating, having earned credentials specific to the consumer foods cluster on top of the state’s site readiness certification.
▪ Global Accessibility North Carolina’s mid-Atlantic geography puts food manufacturers here within easy reach of North American consumers. But much of the industry’s growth in coming decades will be overseas, as surging middle-class populations in developing countries adopt diets more like our own. North Carolina’s ports can facilitate this access. Completion of the 100,000-square-foot cold storage facility at the Port of Wilmington, for example, will go far in internationalizing the state’s food industry.
▪ Labor Readiness Manpower is our edge. Statewide, food-processing workers are about 50 percent more productive than the national average in terms of dollar-value added, the CALS study found. For purposes of comparison, North Carolina’s total private workforce is about one percent more productive than that of the nation. Our community colleges, universities and public schools should collaborate in building new curricula focused on sharpening this human resource advantage.
▪ Reliable Incentives Like all manufacturers, food and beverage processors compete globally. They select locations where state and local governments demonstrate a willingness to share part of the risks – along with the obvious rewards – of new and expanded operations. Performance-based incentive programs like JDIG will help communities attract food manufacturers whose large payrolls can move the needle on rural economies.
Consumer food and beverage processing can put rural North Carolina on the winning side of the global economy. And there’s ample room for both horizontal and vertical growth. Our region’s vision, for example, includes closer integration with other points on the value-chain: packaging suppliers, distribution operations and equipment manufacturers. We seek opportunities to innovate, forge partnerships and think globally.
It’s a strategy that can restore hope to rural communities well into the future.
Steve Yost is president of the Southeastern Partnership, a 14-county economic development organization based in Elizabethtown.