Food Processing Supplement to the Q4 2018 Issue of Area Development

2018

Challenges of Siting A New Production Plant

A Strategic Approach to Building a New Processing Facility

The Value of Laser Scanning to Your Food Facility Project

Healthy-Eating Trends Challenge Food Manufacturers

AREADEVELOPMENT S I T E

A N D

F A C I L I T Y

P L A N N I N G

Special Supplement to Area Development Magazine

Industry is at a Crossroads.

It’s called Woodstock, Ontario, Canada The City of Woodstock is a rapidly growing, industry based community, centrally located in Southwestern Ontario’s manufacturing corridor. Uniquely positioned at the crossroads of super-highways 401 and 403, Woodstock boasts one of the most optimal ground transportation systems in the province. Quick and easy access to international airports, shipping ports and rail systems, further add to Woodstock’s logistical excellence.

With these attributes Woodstock has attracted more than $2 billion in new investment and created more than 4500 private sector jobs over the last decade.

At the intersections of industry, productivity and sustainability, it’s not surprising why economic powerhouses such as Toyota, Sysco & General Motors continue to invest in the City of Woodstock.

(519) 539 2382 x2115 information@cityofwoodstock.ca

www.cometothecrossroads.com

©2018 Custom Publishing Group of Halcyon Business Publications, Inc., Publisher of Area Development Magazine

EDITOR’S NOTE

FEATURES

As the U.S. population continues to grow, it’s not surprising that the food processing industry is helping to drive manufacturing growth. According to data from Emsi — a labor market and economic analytics firms based in Moscow, Idaho1 — all of the major food processing states added jobs between 2014 and 2018, most at double-digit rates. According to the BLS,2 this sector had only a mild dip during the Great Recession and has thrived in the years since.

With that in mind, our 4th annual Food Processing supplement looks further into the food processing industry’s concerns, including new consumer trends and food safety issues. Also, the sponsoring organizations provide some concrete examples of how food processing companies in their areas are meeting the challenges. This information will prove valuable as your firm makes its next facility planning decision.

4 SITING A NEW PRODUCTION PLANT: A CHALLENGE INTENSIFIES

The increasing role of food safety has caused a geological upheaval in how and where food is manufactured.

7 A STRATEGIC APPROACH TO BUILDING A NEW PROCESSING FACILITY

The use of available data, due diligence, and a traceable decision-making process will yield the best result for your company when locating a new food processing facility.

11 THE VALUE OF LASER SCANNING

TO YOUR FOOD FACILITY PROJECT

Data captured through laser scanning of your existing food processing facility can help with build out of a new or customized operation.

14 HEALTHY-EATING TRENDS CHALLENGE

HOW FOOD MANUFACTURERS DO BUSINESS

Editor 1

https://www.economicmodeling.com/data/ https://data.bls.gov/timeseries/CES3231100001?amp%253bdata_tool=XGtable&output_ view=data&include_graphs=true

2

Food manufacturers are modifying their processes and investing in new technologies in order to meet rapidly evolving consumer trends.

SPONSORS KENTUCKY

Kentucky helps new and existing companies of all sizes meet their workforce needs. Kentucky fosters growth through a variety of services designed to raise capital, increase business, and encourage investment within the food processing and other industries.

Explore the many advantages of the Commonwealth and you’ll find Kentucky will go the extra mile to exceed your needs.

Terry Gill, Secretary Kentucky Cabinet for Economic Development 300 West Broadway Frankfort, KY 40601 502-564-7670 • 1-800-626-2930 Econdev@ky.gov Terry.Gill@ky.gov www.thinkkentucky.com

NEW JERSEY

ONTARIO, CANADA

Sandy Forosisky, Director, Economic Development Department City of Vineland 640 E. Wood Street P.O. Box 1508 Vineland, NJ 08362-1508 856-794-4100 sforosisky@vinelandcity.org www.vinelandbusiness.com

Len Magyar, Development Commissioner City of Woodstock 500 Dundas Street P.O. Box 1539 Woodstock, ON N4S 0A7 519-539-2382 Ext. 2112 Fax: 519-539-3275 lmagyar@cityofwoodstock.ca http://cometothecrossroads.com

The Department of Economic Development serves as your point of contact and liaison to city government for companies looking to start-up, expand, or relocate to the City of Vineland. We offer “Business Concierge Service,” which is designed to make your job easier by guiding you smoothly through the planning process.

PUBLISHER: Dennis J. Shea ART & DESIGN: Patricia Zedalis EDITOR: Geraldine Gambale PRODUCTION MANAGER: Jessica Whitebook FINANCE: Mary Paulsen

ADVERTISING: Bill Bakewicz Valerie Krpata

Woodstock, Ontario, is located in the heart of southern Ontario at the crossroads of superhighways 401 and 403. With easy access to six Canada-USA border crossings, Woodstock enjoys the best ground transportation system in the province. With our relaxed and affordable lifestyle, you will see why your business belongs at the Crossroads!

DIGITAL MEDIA MANAGER: Justin Shea BUSINESS DEVELOPMENT: Matthew Shea WEB DESIGNER: Carmela Emerson

BUSINESS SERVICES: Barbara Olsen

2018 / 3

By Jeffrey J. Counsell, Co-Founder & Managing Broker, Global Food Properties

SITING A NEW PRODUCTION PLANT: A CHALLENGE INTENSIFIES The increasing role of food safety has caused a geological upheaval in how and where food is manufactured.

Raw milk stainless steel receiving bays are featured in this 140,000-square foot USDA-certified dairy thermal processing facility capable of processing over 1,100,000 gallons of milk daily.

Location decisions are rarely obvious; supply chains are complex, and comparing business, tax, and incentive climates requires specialized skills. But this dynamic is not new, as generations of leaders have parsed data, narrowing to one the costs and benefits of competing locations.

What is new, however, is the risk profile of acquiring an existing food facility, where unforeseen issues or hidden defects are magnified by the immediate necessities of speed, efficiency, and throughput.

Perhaps the single most visible change in how food manufacturers expand their manufacturing footprint and acquire capacity is the role food safety now plays in site selection. Historically, industry executives relied on brokers and site consultants to provide surveys of available plants and sites; business, tax, and incentive filters narrowed the list, and the property tours began. Against the perception that vacant food facilities provided the least cost and quickest path to production, buildings were ranked and inspected, with the newest and most modern plants 4 / FOODPROCESSING

garnering keen attention. Pricing was secondary, if even relevant in the early stages; more rigorously analyzed were the facility’s production infrastructure — bulk ingredient systems, refrigeration, process steam, chilled water, and waste pre-treatment — and the fitness for intended use of the structure, site, and labor pool. Marshalling the parade were process and mechanical engineers, and manufacturing and operations executives charged with creating the production capacity within the building envelope.

For the most part, the site acquisition process in 2000 remained as it was in the 1950s; to be sure, the size, scale, and necessities of automation and efficiency evolved, but the process remained unchanged. That is until 9/11, when fears of bioterrorism seemed randomly to intersect with increasing product recalls and food safety issues, all of which aggregated public and regulatory anxiety, resulting in 2010’s revised and strengthened Food Safety & Modernization Act (FSM).

The ensuing shift in how and where food was manufactured, and in what size, type, and configuration of facility, was geologic in its upheaval. To call the FSMA a “disruption” fails to capture the full impact; the process of how food facility site selection, and indeed the types of facilities deemed desirable, forever changed. Even today, conditions remain uncertain as food manufacturers attempt to anticipate the regulatory standards of occupancy and production to which they will be held.

In this connection, it is noteworthy today what leads site pursuits, appearing early and with significant sway. Clear heights, expandability, column spacing, truck loading, and roof condition are still discussed, but the sharpest questions focus on present and historic food safety: Which third-parties audited the plant, and toward what certification? What ingredients and products were on-site, and under what timeframes, conditions, and temperatures?

Had there ever been a product recall, and if so, what was the result and where are the documents? Who were the facility’s primary contractors (roof, structure, refrigeration,

IN LESS THAN 20 YEARS, PLANT SANITATION AND FOOD SAFETY EVOLVED FROM NEARLY AN AFTERsteam, sanitation, pre-treatment), and never-ending margin compression at THOUGHT TO A were they properly licensed and crethe hands of consolidated retailers, and dentialed? How much deferred mainteswiftly changing trends and behavior.

PRIMARY FILTER nance accumulated leading up to the closure, and what is the estimated cost • Alternative property assets are DRIVING THE of the cure? Had the facility ever failed increasing in demand: What was once a third-party or customer audit, or lost unheard of, to wit, a food manufacturer SITE SELECTION customers over audit results? acquiring and renovating an existing Simply put, in less than 20 years non-food plant, has become more PROCESS FROM plant sanitation and food safety commonplace, particularly if the facility evolved from nearly an afterthought to has valuable infrastructure: a large size, COMMENCEMENT. a primary filter; rare is the existing facilwhere volume provides the necessary ity that gets a close if answering “yes” antidote to thin margins; heavy and or having to further explain the inquiredundant power; a linear configuration ries catalogued above. And again, the significance is conducive to efficient, line-of-sight production; concrete not that food safety and sanitation is a concern newly walls and double-tee concrete roof decks, sanitation minted, but rather, how today it drives the site selection friendly and conducive to heavy loads; clear ceiling process from commencement. heights sufficient for gravity flow mixing, interstitial spaces, So, what does this mean, and how does it end? As a or elevated machinery and equipment; and a secure boutique property brokerage firm focusing exclusively site, ideally with monitored and gated access, and large on food production facilities, we have an advantaged enough to allow at least a doubling in size of the plant view of the process and decision-making, and offer these footprint. informed observations: Perhaps anecdotally, a client seeking up to 1,000,000 square feet of additional manufacturing space recently • Second-generation food plants are under pressure: told us, after touring five existing buildings, the only propWhether due to the costs of curing functional obsoleserty its board would approve was a former computer cence (size, nonlinear configuration, low ceiling heights, manufacturing facility in the Southeast, which had the lack of expandability), or having to invest toward sanicredible infrastructure catalogued above, yet with no tation and regulatory targets seemingly in motion, the exposure to food and pathogens. This, we were told, was rewards of speed-to-market are increasingly offset by the “the food plant of the future,” which provided the speedrisk of inheriting exposure to food safety issues. Corporate to-market benefits of existing construction, yet with no boards, in particular, are loath to approve any property exposure to food safety risk. acquisition presenting uncertain investment in seeking regulatory approvals, which one client recently described • Warehouse conversions can make sense: Though packas “chasing a mirage.” So not only has the market for age shipping continues to absorb Class A space in top trading food plants among end-users evolved, it has also markets, warehouses with 26-foot clearance; room for exdiminished, to an extent, due to the now higher bar of pansion; access to elevated power, water, sewer, and gas; occupancy. and room to accommodate expanded workforce parking One final question would be whether the harsh ecoare increasingly in demand. Even more interesting still are nomics of supply and demand will impact this dynamic. dual- or tri-temperature warehouses with existing power For example, if pre-existing food facilities were to fall out and refrigeration infrastructure, where production can be favor as the default site selection, then time-on-market built out in previously dry or unimproved spaces. Accordwould increase, carry and opportunity costs would skyingly, owners and brokers marketing warehouses, dry or rocket, and prices might then fall; if prices fell far enough, refrigerated, only to other warehouse operators may be perhaps occupiers would be more willing and able to missing a sector of potential growing demand. invest to modern standards. Of course, these decisions must be weighed against speed-to-market mandates, • Public and private speculative construction is now part

2018 / 5

A Winning Formula for the Food and Beverage Industry

of the mix: Seeking to minimize delay while capturing existing entitlements and municipal approvals, today’s site availability surveys routinely include spec buildings, whether privately for profit or publicly to entice new corporate citizens. Again, the obvious benefits include a jump on timing, an ability to customize the interiors, ideally before the floors are poured, and no pre-existing risk to food pathogens.

In sum, the property and occupancy side of the food industry reflects the same level of flux and turmoil as the category as a whole.

Site selection remains relatively easy were there to be a supply of large, mass volume, high-audit facilities available for secondgeneration occupancy. Unfortunately, the present market skews inversely, with scant availability of modern facilities, and an oversupply of functionally obsolete and value-engineered older properties.

Top-tier production plants trade quickly, often with little visibility, at pricing exceeding $100 a square foot. If marketed properly, premium properties can be made frothy, returning to the seller princely sums vis-à-vis the broader market. The dual necessities of throughput and food safety — and how those prongs define occupancy and use, and drive or diminish plant value — are not yet widely understood, which is why, in site selection and the brokerage of food facilities, expertise is paramount; bigger firms do not equal better firms, and who you choose truly matters.

6 / FOODPROCESSING

One of the most important aspects in food production is the ability to deliver fresh products to customers in a timely manner. Anything short of that simply will not cut it in a highly competitive market. That is why so many food production companies are turning to Kentucky for their distribution needs.

The food and beverage industry has long been a driving force within Kentucky’s economic makeup, from longstanding agricultural roots to its prominence as a producer of 95 percent of the country’s bourbon. Food processing in Kentucky has come a lot further than that, however, as the Commonwealth has become a premier location for new and expanding companies. A leading factor behind that growth has been logistics and distribution.

The most recent example — which highlights Kentucky’s logistical prowess within the industry — was the announcement in July that Kroger will expand its distribution center in the northern Kentucky community of Florence with an $18 million investment that will create 250 full-time jobs. The expansion came just nine months after the facility initially opened in October 2017.

Kroger’s facility is located Gov. Matt Bevin joined local officials and executives from in close proximity More Than A Bakery in July 2016 to celebrate the groundwith Cincinnati/ breaking of the company’s $57 million facility in Versailles.

The company is a subsidiary of Richmond Baking, which Northern Kenserves customers throughout the U.S., including Fortune tucky International 100 food brands, grocery chains, and school cafeterias.

Airport (CVG), the home of DHL’s cargo hub and a major selling point for numerous companies in the region. Consider Louisville International Airport — which is home to UPS Worldport — the state’s location along the Ohio River, and railways and interstates woven throughout every corner of the state, and it is easy to see why a company with distribution needs would locate in Kentucky.

Growth like that of Kroger’s facility is nothing new for Kentucky companies.

In 2017 alone, 55 new or expanding food and beverage industry projects were announced, totaling $804 million in investment and 1,125 new jobs.

All told, there are currently more than 325 food and beverage facilities across the Commonwealth that employ approximately 50,000 people, and the result has generated more than $7 billion in GDP from food, beverage, and related products manufacturing.

Kentucky’s strength in agriculture isn’t wavering either. Farmland still covers more than 50 percent of the state, ranking it in the top 15 for production of corn, soybeans, and wheat. More than ever, companies within Kentucky’s food industry are working hand-in-hand with local farmers to ensure the freshest, highest quality products for their customers.

For many within the food and beverage industry, Kentucky’s strength in agriculture and distribution has proven to be a winning formula.

Copy supplied by Kentucky Cabinet for Economic Development

By Chris Urchell, Consulting Manager, Baker Tilly

A STRATEGIC APPROACH TO BUILDING A NEW PROCESSING FACILITY The use of available data, due diligence, and a traceable decision-making process will yield the best result for your company when locating a new food processing facility.

The five phases of project development

and include (1) concept, (2) feasibility, (3) detailed design, (4) project finance, and (5) project launch.

It is extremely important that dedicated resources are identified up front, the approach is organized, and due diligence is performed during the early concept and feasibility phases. Subsequent phases will require increased engineering and funding, as well as significant executive-level resource dedication on what may be a point of no (or very expensive) return.

The concept and feasibility phases address the foundation of the project’s business model upon which site location decisions are based.

Decision factors around building a new processing facility are inevitably overwhelming, but using a strategic process can streamline efforts and utilize data effectively. It is vital to follow an efficient approach that can be defended to your board members and is also rooted in sound analytics. Taking on an initiative this complex involves many key stakeholders and can often be seen as a drain on their day-to-day job functions. By following a strategic and phased approach, your organization can move forward feeling confident with the large capital spend of the project, along with the assurance that the decisions being made are fully informed and backed by data analysis.

• Clearly outline the business, strategic, and operating objectives of the owner or project stakeholders.

• Establish desired current and future product mix, packaging size, and production volume.

• Map capacity of the processing equipment, storage, utilities, and supporting infrastructure based on both supply side and demand side constraints.

• Define the risks attributed to supply, demand, subsidies programs, and commodity markets.

Framework: The Project Development Approach

Location Feasibility Analysis: Macro-Level

Every large capital spend project can be broken down into phases of execution. These phases combine to create a holistic approach for project development from the initial idea to a level of completion that facilitates funding

Depending on your company’s specific situation, the starting point for geography exploration can be anywhere from multi-national to [U.S.] county specific. It is imperative to understand the logistical and financial key drivers

It’s necessary to have many of these aspects quantified, at least preliminarily, before considerations around where to place the facility can be tackled.

2018 / 7

OFTENTIMES IN of the business to initiate this process.

Each of these criteria will have some FOOD PROCESSING, Oftentimes in food processing, the most metric tied to it (distance to a point, impactful drivers will be supply chain employees per square mile, dollars per THE MOST (raw material in and finished goods mile, etc.). The criteria may be adapted out), labor cost and availability, and to the specific situation and are only IMPACTFUL utility service cost and availability. The limited by the available data sets. The good news is that a significant portion metrics, each with different units, can DRIVERS WILL BE of the data is available, and sophistibe numerically common-sized (0 to 100 SUPPLY CHAIN, cated tools to process that data exist to score). assist in narrowing down the macro site Next, the management team needs LABOR COST AND suitability effort to be in line with your to quantitatively assign weighted scorbusiness objectives. ing to the common-sized criteria that AVAILABILITY, AND The first step is to construct a dymatches the impact to the cash flow namic mapping tool which overlays within your business model. This second UTILITY SERVICE the primary measurable drivers affectcut provides a clearer picture to the few ing a business. Various data inputs and potential areas that meet operating COST AND geographic information systems can be objectives of the business. used as tools to evaluate site suitability A geographical “heat map” further AVAILABILITY. over a large geographic area. This apnarrows the search based on criteria proach uses criteria such as distance to that have been specified. The locations electric and gas transmission, proximity identified might not be perfect in the to an existing wastewater treatment eyes of management, but the process is facility, manufacturing labor employrooted in data and highlights where the ment density, raw material transport cost, and potential current design basis will be most profitable. This process credits and incentives for which the project qualifies. This informs management that the location matters to make data-mapping approach allows you to keep score on the their business successful. factors that affect location decisions. Figure 1 illustrates Using available tools and advisors, it is important to the starting point using three primary driver categories that identify sites that meet your business objectives. Colcan be assessed over the desired geography. laborating with qualified commercial/industrial brokers, economic development organizations, and even utility representatives can guide you to available sites that meet your identified criteria, both on and off the MLS. The value Demographics of the macro-level analysis described above is even more pronounced if a lack of “listed” suitable sites shifts the approach toward finding a “farm field” or other property that • Labor rate and/or labor population by industry can meet your needs.

• Educated (skilled labor) population

Proximity to infrastructure • Gas and electric • Water and wastewater • Transportation

Supply chain • Raw material supply • Finished product destinations Figure 1

8 / FOODPROCESSING

Site Suitability Analysis: Micro-Level There is still significant due diligence to complete before an economical, buildable site can be selected with both the attributes that meet the logistical needs of your engineering team and the financial feasibility your stakeholders can accept. This next phase focuses on a drill down into the quantitative and qualitative information collected and develops a framework to measure each of the highlighted sites’ impact on the project in the areas described in Figure 2.

The first objective is to check any gating qualifications that would cause immediate elimination of a site before advancing to further review, such as: • Is there a sufficient rail, highway, and/or interstate road network nearby providing access to the site?

• Is it estimated that a qualified labor pool exists to support the number of new positions being created?

• Are gas and electric capacity requirements met with

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• Zoning restrictions • Labor force availability • Worker training at education institutions Figure 2

2018 / 9

Growth Opportunities for Food Processors As food processing companies grow, they look for critical resources in pro-business communities. With a focused economic development strategy, the City of Vineland, New Jersey, has built a diverse economy which includes a thriving food processing sector. Located in the heart of the Northeast corridor with millions of potential customers, the city offers both an affordable business location and an excellent quality of life.

Del Rey can provide customers organic avocados year-round, giving them a significant competitive advantage in the marketplace.

“Selecting the perfect location is a key component of any strategic business model,” said Mayor Anthony Fanucci. “Companies look for the right blend of incentives, workforce, logistics, and business climate to be successful. Vineland offers this, and much more.”

Critical resources for food processors include access to rail; several trucking operations; low-cost electric, water, and sewerage rates through the Vineland Municipal Utilities; and nearly 30 percent of New Jersey’s cold storage capacity.

These advantages and the city’s pro-business approach continue to attract new companies looking to expand their Northeast presence. Companies like California-based Del Rey Avocado now serve customers from Maine to the Carolinas, and West to the Missouri Valley from their 60,000-square-foot Vineland plant. Likewise, Florida-based Pero Farms is constructing an 118,400-square-foot facility that will employ over 200. “We are excited at the prospect of building Pero’s presence in the Northeast and see Vineland as a strategic point for meeting the growing demand for our products,” said President and CEO Frank Pero.

While Vineland officials are excited about the present, they are preparing for the long term. The city recently formed a public-private partnership to develop a third industrial park covering 285 acres. “We are transforming an underutilized property into a substantial redevelopment initiative, which will enable us to satisfy current needs and to pursue exciting new opportunities for the future,” Mayor Fanucci concluded.

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10 / FOODPROCESSING

existing transmission infrastructure? If not, are upgrades to the system within reasonable customer contribution amount and timeframe feasible?

• Is there a potential outlet (surface or groundwater) for wastewater direct discharge? If not, is the existing municipal infrastructure (collection system and treatment system) capable of handling facility outflows? If not, are upgrades to the system within reasonable customer contribution amount and timeframe feasible?

• Is there a municipal water supply system to support the facility water needs? If not, is there a potential option for drilling high-capacity wells to provide water? If so, does the water quality meet the desired quality standards?

• Can a site with the desired number of contiguous acres be identified as “for sale” or “potentially for sale”?

• Are there any site characteristics that immediately preclude it from supporting a preferred facility design without major complications (wetlands, access points, proximity of higher density residential communities, etc.)?

If all of the above are met, the process to seek out the rates structures associated with a given site begins. Areas to be quantified by your team and the external service providers would include: • Supply chain (transport) costs • Gas and electric cost of service based on rate calculations provided (or validated) by utility companies • Wastewater treatment cost of service (OpEx and CapEx estimates) • Water supply cost of service • Geotechnical costs for site prep and foundation design • Property purchase costs • Incentives potential (state and local, federal) The quantitative criteria satisfy the financial feasibility needs and transfer directly into your business model. The result is a clear view of the capital and operating costs that are comparable across multiple sites by using net present value (NPV) calculations.

While final decisions may not be solely based on calculated lowest cost (NPV), it is an objective analysis rooted in data. The subjective comparison is important to include, but much more difficult to defend in debate among stakeholders.

Finally: Selecting a Site Building a new facility may be a once in a lifetime event for an organization. Even if you have been through it before, it can be an overwhelming distraction for executive management given the multi-disciplinarian input required to finalize project decisions. By maximizing the use of available data, completing a comprehensive due diligence package, and following a process whereby decision-making is traceable along the way, your company can follow a clear and measurable approach to yield the best return for the project.

By Michael Vetter, PE, PMP, Senior Project Manager and Senior Associate, SSOE Group

THE VALUE OF LASER SCANNING TO YOUR FOOD FACILITY PROJECT Data captured through laser scanning of your existing food processing facility can help with buildout of a new or customized operation.

measurements to create a point cloud, which can then be overlaid into a Building Information Modeling (BIM) or 2D CAD file. The end product is an incredibly realistic and detailed 3D model of the existing facility that serves as a highly accurate as-built drawing.

Using Laser Scanning in a Project’s Early Stages

By utilizing a laser scan with the equipment layout and sections, you can easily determine clash points and which pipe and conduit will need to be relocated to ensure good installation.

For packaged food manufacturers, the sector’s everchanging market conditions frequently bring about the need to adapt or customize facilities. After a deal closes and the dust settles, manufacturers are often faced with the logistics of moving product lines in or out of their facilities and/or adapting those facilities to meet changing needs. While every project has unique characteristics, 3D laser scanning is a tool that can benefit all stakeholders by enhancing the project’s speed, reducing costs, improving safety, and helping the project run smoother.

What Is Laser Scanning?

Laser scanning, a reality capture method, is extremely useful when the manufacturer has no drawings of the facility or project site, or their drawings are outdated. It’s the most quick, accurate, and efficient way to record the existing conditions of a facility or site.

Rather than manually recording measurements, the engineering team or partnering vendor utilizes laser scanning equipment to obtain 360-degree 3D images of the existing facility. During this process, the scanner gathers data and

Using laser scanning at a project’s inception makes full use of its benefits. It’s not unusual for a client to have facility drawings that pre-date plant and maintenance projects that have taken place over the years. These drawings may not reflect the current placement of equipment, ducts, conduits, hoses, or other physical attributes of the space. When this happens — and an engineering team has missing, outdated, or inaccurate facility plans and drawings to work with — the team begins the project at a disadvantage. Clashes are likely to occur during the design process, which, in turn, cause re-work in the design phase or costly field change orders during the construction phase.

Using Laser Scanning During the Design Phase With a laser scan available, design reviews and coordination meetings will proceed more smoothly. All team members can take a virtual tour through the facility without leaving the conference room. Stakeholders are able to make decisions more quickly and efficiently, as they all have current, accurate information at hand. For example, deciding where to place a piece of equipment is as easy as moving its precisely scaled image around within the model.

The engineering team is also able to more easily produce accurate demo packages. Images from the laser scan can be added into the demo scope of work or placed on drawings to show the contractor exactly which pipe, conduit, or duct needs to be relocated or removed.

2018 / 11

RATHER THAN If done correctly, the contractor should have very few questions as to the scope of the demo package.

HAVING A

items to complete in a short window of time. When the contractor and construction manager begin the construction LARGE GROUP phase with a coordinated point cloud Benefits of Laser Scanning from laser scanning incorporated in the ON SITE, A SINGLE With an accurate 3D model available, 3D design, they can be confident that the project team has better visibility to LASER-SCANNING the work will proceed smoothly and that avoid collisions with the proposed design. clashes or surprises during the construcTECHNICIAN CAN Construction managers have accurate tion window are unlikely to occur. information about the facility to work with On-site safety also improves with the ACQUIRE VAST from the start. The need for field change use of laser scanning. Rather than having orders and costly rework is greatly rea large group of engineers and designers AMOUNTS OF DATA duced, as is the amount of time needed on site to gather information and meato complete the project. This minimizes the surements, a single laser scanning techniFROM THE GROUND need for stoppages and downtime. There cian can acquire vast amounts of data will be fewer requests for information (RFIs) from the ground in a safe, and much more IN A SAFE, AND on basic items when creating drawings for efficient, manner. When needed, the construction because of the full breadth technician can take additional scan posiMUCH MORE of information available. tions from platforms, catwalks, or elevated Many of today’s projects are run in areas. When safety managers have the EFFICIENT MANNER. multiple construction phases. Project data they need in the form of a 3D point teams utilize any and all downtime wincloud, they can more easily read plans, dows available for construction. During these downtimes anticipate potential safety issues, and prevent accidents.

— whether maintenance days, weekend shutdowns, or Laser scanning can minimize travel costs and related holiday shutdowns — the project team usually has a list of expenses. Instead of using outdated as-builts, or manual

New Innovative Food Processing Facility to be Built in Ontario Maple Leaf Foods has announced plans to build a $660 million value-added fresh poultry facility in London, Ontario. The new 640,000-square-foot facility is expected to be one of the most technologically advanced poultry processing plants in the world, with leading-edge food safety, environmental, and animal welfare processes and technologies, according to a company press release.1 The project represents a $605.5 investment on the part of the company, $34.5 million from the government of Ontario, and $20 million from the government of Canada’s Strategic Innovation Fund. Maple Leaf will also receive an $8 million loan from the AgriInnovate Fund and will invest another $5 million over the next five years to adopt advanced technologies and support its goal of reducing its environmental footprint by 50 percent by 2025.

“This world-class facility will enable Maple Leaf to meet the steadily growing consumer demand for premium, value-added poultry products and strengthen Canada’s food system,” Maple Leaf President and CEO Michael McCain said. “It will incorporate leading-edge food safety, environmental, and animal care technologies that advance our vision to be the global leader in sustainable protein. This is an historic investment in the Canadian poultry sector, providing significant stakeholder and economic benefits and ensuring that Canada has sufficient domestic processing capacity to meet forecasted poultry production and demand.”

Construction at the London site is expected to begin in the spring of 2019, with start-up planned to commence in the second quarter of 2021. The new plant will initially support more than 1,450 direct full-time and part-time jobs, with additional job growth as production volumes increase over time. Maple Leaf will work closely with local agencies to recruit and train people and provide skilled jobs in a safe and inclusive workplace.

Operations at three of Maple Leaf’s aging plants in Ontario — in St. Marys, Toronto, and Brampton — will eventually be consolidated into the new facility. “Each of these plants is 50 to 60 years old, with location, footprint, and infrastructure constraints that limit opportunities to expand and modernize to meet growing market demand,” according to the company’s press release.

Maple Leaf plans to work with local communities and government to find alternate uses for the facilities when they eventually close.

“Our government is excited to invest in Maple Leaf Foods’ project to help bring new innovations to Canada’s food processing industry, keep Canada competitive in the global market, and create new middle-class jobs in Ontario. This new state-of-theart facility demonstrates how innovation is creating jobs and helping the environment with more sustainable poultry processing,” noted Canada’s Minister of Innovation, Science and Economic Development Navdeep Bains.

1

https://www.mapleleaffoods.com/news/maple-leaf-foods-to-construct-world-class-value-added-poultry-facility-in-london-ontario/

12 / FOODPROCESSING

updates obtained through field visits, a global team can use laser scanning to capture all needed information during a single trip to a facility. The data can be stored for reuse and made available when the time comes to reassess that site. This minimizes the need to repeatedly visit the site to determine equipment layout, utility connections, or other encumbrances.

Finally, the use of laser scanning enables a client to have accurate, up-to-date “as recorded” drawings on-hand after a project is completed. These drawings can come into play downstream during planning, constructability, asset management, or energy modeling. A topographical model of a site can also enhance the process of planning earthwork, construction stockpile, and staging.

Doing It Right the First Time Having a poor quality or incomplete laser scan can defeat the purpose of using this advanced technology. It can be worse than having no scan at all.

Take care to ensure the scan is performed correctly and completely during the first go-round.

To make the best use of your time and the technology, make sure you have a good scope of the area to be scanned. Ensure that the personnel performing the laser scan understand the level of detail needed for each area.

DISCOVER HOW If the area is fairly wide open with OUR RESOURCES CAN good sight lines, then a minimum WORK FOR YOU number of scans of that area should be required. On the other • Several Industrial Parks with existing infrastructure hand, make sure to get additional • Major interstate, rail, air, and port access scans of an area that is dense with existing equipment, pipe racks, • Over 30 million cubic feet of cold storage capacity steel, etc., or has a lot of project • Low cost utility rates through the Vineland Municipal Utilities activity taking place (whether in • Excellent state and local financial incentives the demo phase or new construction phase). If there is a great deal • Available workforce and job training programs of existing equipment or pipes in a particular area, take care to have enough scans performed for a complete model from all sides and angles. Doing it right the first time will save you from mobilizing a scan team a second time. HavJOIN MAJOR ing the definition you require from INTERNATIONAL the first set of scans benefits the project, the budget, and everyone BRANDS LIKE involved.

Tyson Foods

Find Your COMPETITIVE ADVANTAGE in Vineland, NJ

MICHAEL VETTER, PE, PMP, is a senior project manager and senior associate at SSOE Group, a global project delivery firm for architecture, engineering, and construction management. He has over 22 years of experience providing engineering and project management services to recognized companies in the food, chemical, biodiesel, and manufacturing sectors. However, the majority of his experience has been earned delivering capital projects for food sector clients. Vetter can be reached in SSOE’s St. Paul, Minnesota, office at 651-726-7660 or at Mike.Vetter@ssoe.com.

For more information, please call

856.794.4100, or visit our website at

www.VinelandBusiness.com

Bridor USA AGRO Merchants Group Archer Daniels Midland Hanover Foods, and Rich Products that already call Vineland their home.

Vineland Department of Economic Development 640 E. Wood Street Vineland, NJ 08362

2018 / 13

By Mark Crawford

HEALTHY-EATING TRENDS CHALLENGE HOW FOOD MANUFACTURERS DO BUSINESS Food manufacturers are modifying their processes and investing in new technologies in order to meet rapidly evolving consumer trends.

Healthy eating is on the rise. Consumer concerns about gluten, dairy, sugar, and genetically modified organisms (GMOs) drive this trend. Also, with their busy lifestyles, consumers seek out healthy snacks and ready-to-go meals.

According to a recent study,1 49 percent of respondents indicate they seek “mindful eating vs dieting.” The International Food Information Council Foundation2 found the majority of consumers prefer foods they perceive are healthier and safer for the environment. In addition, organic food sales are increasing,3 with a projected compound annual growth rate of 14.8 percent from 2018 to 2022.

Key Consumer Trends Include: • Clean foods — This includes natural ingredients, including “free-from” claims and comprehensive labeling of products for ingredients, nutritional values, and artificial/ synthetic additives.

• Non-dairy — Increased occurrences of lactose intolerance and the growing vegan population are driving the market for plant-based milk products such as almond milk, soymilk, rice milk, and coconut milk.

• Gluten-free — Gluten sensitivity has opened markets for a wider assortment of alternative “flours” and foods made 14 / FOODPROCESSING

from non-wheat ingredients, such as pastas made from quinoa and lentils as well as flours made from nuts, rice, and oats.

• Healthier snack foods — These include a wider variety of ingredients such as toasted kale chips, roasted chickpeas, toasted coconut chips, crackers made from nuts and beans, simple-ingredient snack bars, and seaweed snacks.

• Plant-based meat alternatives — More people are eating plant-based meat alternatives, not only for health and ethical reasons but also because these substitutes can taste like real meat, particularly in texture.

“Texture is the next facet of formulation that can be leveraged to provide consumers with opportunities for multisensory food and drink experiences,” says Jenny Zegler, a food and drink analyst with Mintel, a market intelligence agency.4 • Food sustainability — An increasing number of consumers, particularly millennials, demand that their food is grown, harvested, and prepared using sustainable farming and manufacturing processes that minimize environmental impacts.

To meet these challenging demands, food and beverage manufacturers must improve operational efficiencies and update their processes so they can respond quickly to market trends and better compete with new food startups that specialize in these offerings.

Automation and Food Safety Lead the Way Manufacturers are modifying their processes, or investing in new equipment, to produce clean labels, non-GMO ingredients, and other “free-from” categories. According to Food Processing’s 2018 manufacturing survey,5 “Almost one in five manufacturers are adding lines or new plants to produce minimally processed products.” Improvements include automation and robotics, which maximize operational efficiencies and customer order fulfillment as well as increase throughput and quality.

“Factors such as increased demand consumers have now come to expect,” FOOD SAFETY IS A for fresh and clean food ingredients, the says Jack Payne,7 vice president of growing processed food industry, rising Product Management and Solutions CRITICAL CONCERN health consciousness among consumConsulting for Aptean, a provider of ers, and increased instances of food enterprise business software.

FOR CONSUMERS contamination and accidents during processing through human contact call Moving Forward AND FOOD for automation and robotics in the food Food-processing technologies will processing industry,” says Suraj Nagvencontinue to innovate to meet rapidly MANUFACTURERS; kar,6 senior research analyst at Markets evolving consumer trends. Although and Markets. Automation and robots MANY ARE these may seem like daunting chalalso help food processors build in flexlenges to many food and beverage INVESTING IN ibility — for example, the ability to switch manufacturers, to others they represent from one product, package or label opportunities for growth and increased NEW SANITARY to another, as well as real-time tracemarket share. ability in the food production line due “There are a variety of opportuEQUIPMENT OR to frequent changeovers in consumer nities for growing food and beverpreferences, he notes. age businesses in 2018,” states John IMPROVING Food safety is a top concern for Nicolopoulos,8 retail sector leader consumers and food manufacturers. for RSM US LLP, a tax consulting firm.

HAZARD ANALYSIS, “Food safety failures are costly, both “However, staying on top of changin financial terms and in lost public ing customer needs, understanding CRITICAL CONTROL and customer confidence,” comments millennial preferences, leveraging Food Processing. “Some observers put new packaging, and employing key POINTS. the average direct cost of a recall at technologies and acquisition strate$10 million. Almost half are investing gies will all be essential for success in in more equipment for cleaning and this competitive marketplace.” sanitation.” Other manufacturers are investing in new sanitary equipment or improving hazard analysis, critical This article originally appeared on control points (HACCP) plans.

Gray Construction’s blog on Nov. 14, 2018.

The food safety testing services market is booming, 1 thanks to advances in the speed and precision of testhttps://www.fona.com/wp-content/themes/fona/migrated-files/0417_Clean%20Trends%20report.pdf 2 https://www.foodinsight.org/sites/default/files/2017%20Food%20and%20Health%20Survey%20-%20 ing technologies, as well as the portability of equipment.

Final%20Report.pdf 3 https://www.marketwatch.com/press-release/organic-food-beverages-market-projected-to-growChromatography- and spectroscopy-based testing methat-cagr-of-148-during-2018-to-2022available-in-new-report-2018-08-31 ods, such as high-performance liquid chromatography 4 http://www.mintel.com/press-centre/food-and-drink/mintel-announces-five-global-food-and-drinkand mass spectrometry, are in high demand. trends-for-2018 5 https://www.foodprocessing.com/articles/2018/manufacturing-survey/?show=all Cloud-based tracking of production and quality prac6 https://www.foodengineeringmag.com/articles/97109-food-and-beverage-manufacturing-industrypredictions tices (including food safety systems), combined with en7 https://www.manufacturing.net/article/2018/08/healthy-eating-transforming-food-manufacturingterprise resource planning (ERP) software, help companies can-your-business-keep 8 https://www.bizjournals.com/boston/news/2018/01/29/top-5-trends-for-food-and-beveragebe more transparent about their manufacturing processes industry.html and safety and quality controls — “a level of visibility that

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