Executive Briefings

Food Manufacturing in Chicago Gets a Boost

Chicago has been a food and beverage manufacturing hub since the days when James Kraft delivered cheese by horse and buggy and the newborn National Biscuit Company went on a bakery-buying bender. In 1914, the city became "hog butcher to the world" and "stacker of wheat" in Carl Sandburg’s poem. Sandburg, had he had more wind left in him, also might have added "palace of sweets" - as Brach's called itself - and "citadel of Cracker Jacks."

Food Manufacturing in Chicago Gets a Boost

Today, for every Wrigley, Tyson and Morton Salt - companies with a corporate footprint but not necessarily much manufacturing in Chicago - there's a Vienna Beef or Ingredion with significant production in the region. And there is also a critical mass of small producers - tortilla makers, craft breweries, gourmet chocolatiers - looking to expand.

It all adds up to a big impact on region’s economy. According to mapping data from Harvard University’s Institute for Strategy and Competitiveness, the Chicago metropolitan area is the second largest food production economic cluster in the country, behind only Los Angeles.

All told, the Windy City region has 4,500 companies in food and beverage manufacturing, packaging, wholesale and distribution; food-related equipment, tools and machinery; and farm product wholesalers. The industry employs 130,000 workers, and brings in $32bn in annual sales. It’s gained a more healthy diversity in recent decades, moving from meat and grain to eight different subsectors.

But there are some challenges. Growth in Chicago’s food manufacturing has been lackluster, with companies skewing older and not quickly adapting to changing consumer tastes toward natural and gourmet foods. Productivity is also not as stellar as it used to be compared to other parts of the country. Smaller manufacturers, making up 94 percent of Chicago’s food manufacturing establishments, are having trouble making the connections they need to flourish, or don’t have the means or the expertise to update their technology.

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Today, for every Wrigley, Tyson and Morton Salt - companies with a corporate footprint but not necessarily much manufacturing in Chicago - there's a Vienna Beef or Ingredion with significant production in the region. And there is also a critical mass of small producers - tortilla makers, craft breweries, gourmet chocolatiers - looking to expand.

It all adds up to a big impact on region’s economy. According to mapping data from Harvard University’s Institute for Strategy and Competitiveness, the Chicago metropolitan area is the second largest food production economic cluster in the country, behind only Los Angeles.

All told, the Windy City region has 4,500 companies in food and beverage manufacturing, packaging, wholesale and distribution; food-related equipment, tools and machinery; and farm product wholesalers. The industry employs 130,000 workers, and brings in $32bn in annual sales. It’s gained a more healthy diversity in recent decades, moving from meat and grain to eight different subsectors.

But there are some challenges. Growth in Chicago’s food manufacturing has been lackluster, with companies skewing older and not quickly adapting to changing consumer tastes toward natural and gourmet foods. Productivity is also not as stellar as it used to be compared to other parts of the country. Smaller manufacturers, making up 94 percent of Chicago’s food manufacturing establishments, are having trouble making the connections they need to flourish, or don’t have the means or the expertise to update their technology.

Read Full Article

Food Manufacturing in Chicago Gets a Boost