Food processing is candidate for high tech
NEWARK, DEL. - “High
technology” implies industries
such as computers, electronics and
precision instruments which invest
heavily in research and
development. These are con
sidered growth industries and
most communities are eager to
have them.
Food processing is another
candidate for high technology.
According to University of
Delaware resource economist
Gerald F. Vaughn, the future of
this industry looks bright thanks to
recent biotechnical food in
novations, including new
preservation and packaging
systems and new product forms
which are expected to enhance the
food we eat. Computer-controlled
processes and microwave ap
plications are also part of this new
technology.
“The area from northern
Delaware to central New Jersey is
favored to become a center of high
technology food processing
(HTFP),” he says, “because of its
closeness to the necessary food
sources, technology and markets.
The folks who are exploring the
opportunities for HTFP in this
region feel it offers a solid foun
dation for growth.”
Technologically the industry can
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draw on research and development
support services at the University
of Delaware and other institutions;
area chemical, pharmaceutical,
food processing and packaging
industries; and the U.S. Depart
ment of Agriculture’s food
laboratories in Philadelphia.
Scientists and development of
ficials are already talking about
steps they could take to encourage
growth of this new industry.
What could this mean for
Delmarva? “I feel HTFP is an
idea well worth exploring,” the
economist says. “But, while the
industry requires a sound
technological base to succeed,
profitability is the bottom line in
any new venture. And to determine
this, a comprehensive feasibility
study is needed which thoroughly
addresses the economic as well as
the technological considerations.”
In assessing the potential for
HTFP in this region, he recom
mends decisionmakers consider
the following economic factors:
* Delmarva’s need for greater
economic diversification;
* The mid-Atlantic region’s
potential as a premium market for
food products;
* The present need for new
capital investment in the region’s
food processing plants;
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* Potential raw commodity
supply problems;
* International trade
possibilities;
* Current unfavorable em
ployment trends in the region;
* Environmental concerns.
“I believe high technology food
processing could help Delmarva
achieve greater economic
diversity,” Vaughn says. Today’s
leading food processors are very
diversified. Besides food, they
produce a wide range of nonfood
items including chemicals,
machinery, containers, clothing,
soap and other toiletries, and
games.
Also on the plus side is the fact
that the mid-Atlantic is a premium
market for high quality food
products. It has a vast, stable
population with a concentration of
above average incomes. Higher
incomes and changing lifestyles
usually mean greater demands for
processed food--ready-to-cook
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What would be the most
profitable place to invest new food
industry capital in the mid-
Atlantic? According to Vaughn,
regional capital investment is in
good balance in the agricultural
industry’s other main sectors
production supplies, farming,
wholesaling, retailing and food
eaten away from home. But plant
modernization and new investment
have lagged in food processing.
Though it’s possible to find ultra
modern food plants in some
suburbs near interstate highways,
he says mid-Atlantic food
processing plants tend to be ob
solete and located in central cities
or small towns. Typically, these
plants are older and smaller than
in other regions. And their
equipment is often outmoded.
“Obsolescence could be a
barrier to profitability,” Vaughn
says, “making it hard for plants in
this area to operate efficiently. So
any exploration of HTFP’s
potential in the mid-Atlantic must
start with a thorough appraisal of
the needs of existing food
processors. Could HTFP serve the
area best by helping improve
existing businesses, by creating
entirely new ones, or by doing
some of both?”
As attention shifts to the Sun Belt
and other currently favored
growth regions, the economist says
there could be less competition for
investment capital among mid-
Atlantic businesses. So this may be
the most opportune time to expand
or start promising new ventures
here.
“To succeed, any regional HTFP
effort must have a reliable supply
of raw commodities,” he says.
“Existing food plants rely heavily
on shipped-in supplies, since farms
within the region produce only a
small share of what processors
need. Besides costing more,
shipped-in commodities carry a
greater risk of supply disruption
due to crop disasters and tran
sportation of work stoppages
elsewhere.
“The supply of local farm
products for processing is limited
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