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A SITE SELECTION SPECIAL FEATURE FROM NOVEMBER 2002
Expanded Web Edition
FOOD INDUSTRY REVIEW

Food for Thought

Food industry seeks efficiency as
distribution centers sprout across U.S.

by JOHN W. McCURRY

F

ood is never far from the minds of most Americans if you believe recent studies and reports regarding eating habits of an increasingly overweight populace. While this may raise medical concerns, it virtually ensures a healthy food processing industry which estimates place at an annual US$500 billion business employing approximately 1.7 million production workers in the U.S.

Sysco Food Services of Columbia, S.C.
The grounds of the newly completed Sysco Food Services of Columbia, S.C.

        The food processing and beverage industry accounts for about one-sixth of the U.S. manufacturing sector's activity, according to the U.S. Dept. of Agriculture, but has undergone significant reorganization as profits have fallen. Processors continue to reduce costs through restructuring and expansion while also developing more value-added products.
        After a period of consolidation, merger activity in the food industry has quieted considerably during the first half of 2002, according to statistics compiled by The Food Institute. The Elmwood Park, N.J., organization tracked just 219 deals, a 26 percent drop from a year ago and 37 percent below the first half of 2000. Since the industry's record 813 deals in 1998, mergers and acquisitions have been on a gradual decline. The number fell to 516 in 2001.
        Analysis of Conway Data Inc.'s New Plants Database shows that while food-related projects for the 12-month period ending July 31, 2002, were dispersed throughout the U.S., New York continued to lead the way with 40 new and expanded facilities. Kentucky was second with 28, followed by North Carolina with 25 and California with 23.

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