by Scott Richter and Dr. Patrick Jones
Often a strong agriculture sector goes hand-in-hand with processing crops into marketable foods. More importantly, when agriculture and food and beverage manufacturing sectors are prevalent in an area, employment is usually steady and dependable. While nothing is written in stone, these sectors help to form the economic backbone of a region. Why? Perhaps the major reason is crops and food and beverage manufacturing facilities are bound to the ground where the crops are found. In other words, businesses in these sectors do not relocate.
Processing implies keeping more of the eventual value of the crop local. Further, over the last several years, processing is capturing what both economists and farmers call “value-added agriculture”. In other words, a finished bottle of wine is typically more valuable than the grapes it took to produce the wine. Other examples include apples being stemmed, sliced and packaged for sale, drying fruit, and fruit being processed into juices.
While it is a little more difficult to apply the concept of value-added agriculture to grains, but this is likely due to additional processing steps to turn grains into a final consumer end-product – and this is not to imply it does not occur in Chelan & Douglas Counties.
When someone thinks of manufacturing, it’s probably common to think of things like machines, computers, chemicals, toys, and sporting equipment. Food & beverage manufacturing make up a significant part of the manufacturing sector, producing consumables such as cereals, bottled water, and packaged salads.
According to the U.S. Bureau of Labor Statistics (BLS), industries within the Food Manufacturing subsector “are distinguished by the raw materials (generally of animal or vegetable origin) processed into food products”. Once processed, the final products are distributed to wholesalers and retailers, who then sell to consumers. Bakeries and candymakers are also part of the Food Manufacturing subsector.
Washington State defines food processing as “…handling or processing any food in any manner of preparation to be sold for human consumption”. Further, repacking foods (when products from large containers are broken down into smaller packages or combined with other foods to create items such as trail mix, mixed salad, meat and cheese trays, etc.) are also considered food processors.
Since there are no tobacco product manufacturers in either Chelan or Douglas County, this portion of the subsector represents Beverage Manufacturers. According to the BLS, Beverage and Tobacco Product Manufacturing subsector “Beverage Manufacturing, includes three types of establishments: (1) those that manufacture nonalcoholic beverages; (2) those that manufacture alcoholic beverages through the fermentation process; and (3) those that produce distilled alcoholic beverages.”
Food and beverage manufacturing in the two counties is alive and well. Indicator 2.5.3 shows the total number of food and beverage manufacturers in Chelan, Douglas, and the combined counties. Beginning in 2014, the number of manufacturers in the combined counties has increased from 58 to 81 in 2019 while the share of persons working in this sector out of all employed in the two counties increased from 1.0% to 1.4%.
By county, the number of food and beverage manufacturers increased from 55 during 2014 to 74 in 2019, while the share of employed persons working in this sector out all employed persons in Chelan County increased from 1.3% to 1.6%. In Douglas County beginning in 2014, the number of food and beverage manufacturers increased from 3 to 7 in 2019 while the share of employed persons working in this sector out of all employed persons in Douglas County increased from 0.2% to 0.8%.
While manufacturing is not a large sector in the local economy, it lands among the top 10 in each county: the 7th largest in Chelan County and the 6th largest in Douglas County, by headcount. Within local manufacturing, food and beverage production plays an outside role. It is the largest sub-sector in Chelan County, claiming over 35% of the workforce in 2019. At 18% of the manufacturing workforce in Douglas County, it appeared to the largest there as well during 2019.
While food processing is not limited to crops grown or livestock raised locally, Chelan and Douglas Counties undoubtedly have a strong agricultural sector. Indicator 2.1.4 shows Agriculture, Forestry, Fishing, and Hunting was a top-5 employing sector in Chelan & Douglas Counties combined during 2019 paying an annual average wage of $28,812.
While many things are grown and raised in the area, local food and beverage processing manufacturers are most likely to process the local harvest and import much less of what becomes processed food ready for consumption.
During 2017, the top crops (in acres), according to the Census of Agriculture, in:
- Chelan County were Apples (7,917), Pears, all (7,815), Cherries, sweet (5,654), Forage, hay, all (2,199), and Grapes (558).
- Douglas County were Wheat for Grain, all (156,829), Apples (7,501), Forage, hay, all (7,272), Canola, sweet (7,215), and Cherries, sweet (3,127).
The demand for food increases as the population increases. The demand for value added food follows trends of urbanization, time constraints on cooking for busy households and income. This should augur well for food & beverage processing in the counties. The U.S. population continues to grow, urbanization and time-pressed households show little sign of abating, and U.S. incomes are rising. Additional demand and marketing opportunities for processed foods and beverages manufactured locally can come from globe markets
It will be interesting to see how this indicator reflects the impact of COVID-19 on the demand for foods and beverages manufactured locally. While demand is not likely to change other than the annual increases in the number of licensed manufacturers seen in this indicator, the ability of previous customers to continue buying certain products might be affected. If this occurs, let us hope the reaction is short-lived.