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A scene from Chicago's Candy Expo.

Food Manufacturing in Chicago Gets a Boost

April 14, 2017
Specialized workforce training and access to capital for small manufacturers are part of a new plan to give the legacy industry a lift. 

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.”

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 $32 billion 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% 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.

A new nonprofit organization, the Chicagoland Food & Beverage Network, is hoping to inject some innovation into the landscape here, partnering with manufacturers large and small, workforce organizations and neighborhood leaders. With the help of $1 million in seed funding from the MacArthur Foundation and JPMorgan Chase, it was formed last year with an eye toward bringing inclusive job growth to Chicago.

“We see this as a way to ensure that we maintain and grow our edge in food manufacturing,” says Theresa E. Mintle, president and CEO of the Chicagoland Chamber of Commerce, one of the partners in the project.

Inclusive economic clusters are a relatively new idea in economic development, and a particular focus of the MacArthur Foundation. They focus on areas that have potential for job growth at all levels, wage earner and professional, high school/vocational education and  college degrees.

“When you look at some industry sectors, you don’t see the diversity of jobs,” says Alan Reed, a former dairy industry organizer from Rosemont, Illinois, who is now CFBN’s executive director.  “If you look at technology for instance, it’s usually people with four-year degrees and beyond.” With food and beverage, however, “really there’s a variety of jobs all the way from entry level manufacturing where you can have less than a high school diploma, all the way up to white collar jobs and everywhere in between.”

In Chicago, “food and beverage was a clear place where there was just a lot more opportunity for inclusive growth,” he says.

CFBN plans to work on four areas: talent and workforce development, food safety and regulatory, innovation and technology, and business services like capital and financing and risk mitigation. Small manufacturing enterprises (SMEs), with less than 250 employees, often have trouble getting access to capital to expand, or may need to collaborate with a co-manufacturer to increase production.

First order of business is assembling the board and raising funding for a workforce training pilot program with Instituto del Progreso Latino, a well-respected vocational training program based on the Near South Side of Chicago.

Alejandro Silva, former chairman and CEO of pork-rind maker Evans Food Group, is a board member, as is Ricardo Alvalrez, CEO of snackmaker Raymundo’s Food Group. So is Theresa E. Mintle, president and CEO of the Chicagoland Chamber of Commerce

“We see this as a way to ensure that we maintain and grow our edge in food manufacturing,” says Mintle.

Workforce Training

The 12-week workforce pilot program is scheduled to begin this summer, with 75 students. A third will have never worked in any manufacturing before, a third will have manufacturing experience but are looking to get to the next level, and a third will be working toward the supervisory level.

Reed calls the workforce piece “a massive issue,” because food manufacturing is one of the most regulated industries, especially with the Food Safety Modernization Act of 2011, and its automation tends to be very specialized.

“Not only do you have to manufacture that food correctly, it has to get into the right package, labeled with the right allergens,” says Reed.

And unlike other manufacturing sectors, food and beverage historically hasn’t done a good job of collaborating with educational institutions or each other on training.

Shelley Jurewicz is executive director of FaB Wisconsin, a food manufacturing association that CFBN has looked to as its studying workforce training programs. Jurewicz says that the National Restaurant Association has a certificate that is ubiquitous, offering a basic level of safety training, “but there’s nothing similar to that in food and beverage manufacturing.”

It also takes work behind the scenes to change perceptions of food manufacturing so people are willing to take the career training, says Jurewicz. FaB “spent a good deal of time” developing a technical one-year diploma in food processing, “with a lot of excitement around it, but it did not attract students,” says Jurewicz. “We had all the employers, the tech college on board. We were calling it a “Food Maker School.”

Now they’ve regrouped and are doing work around perception. “The public in general was either demonizing food manufacturing or they were largely unaware of it,” Jurewicz says. “What it even looked like. What happened behind the scens of the products they saw at their markets and their grocers.”

Instituto del Progreso Latino, which will host the CFPN training, already has well-established programs (and even two charter high schools) with an emphasis on general manufacturing and healthcare. Ricardo Estrada, vice president of education and programs, is optimistic that there will be interest in food manufacturing training here. The neighborhoods the institute primarily serves—Pilsen, Little Village and Back of the Yards—are 70% Latino, with some residents already trained in their home countries in either food manufacturing or machining.

“We have a community that is eager to learn, to make more money, but the challenge is that they don’t have the basic skills necessary to learn the technical skills.”

Instituto’s training is three-pronged: college readiness first, transferable skills like time management and critical thinking second, and then technical skills. The technical skills require working closely with employers to determine “what is their production process, what is their new technology, what are the skills needed to operate the equipment,” says Estrada.

“There are a lot of immigrants in our community [especially those from Central and South America] who are actually coming from their countries with a lot of technical skills,” says Estrada. “They bring their expertise in operating machines and being able to understand processes. In this case we need to concentrate on the language for them to become employable.”

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