The document summarizes the food chain assets and opportunities in Solano County, California. It finds that the county's food chain activities represent 10% of total economic output and have grown significantly over time. Innovation is driving growth across the food chain segments of agricultural support, production, processing, distribution, and new waste markets. The region has strengths in agriculture, food processing, and distribution that provide opportunities for further economic development.
Solano Index Presentation @ Solano Economic Summit 4
Solano Food Chain Cluster Study
1. SOLANO
COUNTY’S
FOOD CHAIN
ASSETS AND OPPORTUNITY IN FOOD
PRODUCTION AND PROCESSING
Solano EDC
Prepared by
Collaborative Economics
AUGUST 2010 DRAFT
2. Solano EDC CONTENTS
The Mission of the Solano EDC is to attract, grow and retain business and industry EXECUTIVE SUMMARY...................................................................................................3
in Solano County that enhance the economic vitality and quality of life in our
communities. We serve as the facilitator of countywide and regional discussions THE FOOD CHAIN AS A CLUSTER OF OPPORTUNITY.................................................6
on how to improve the way we work together and take action on critical employer,
FOOD CHAIN CLUSTER............................................................................................7
transportation, and education issues.
ECONOMIC IMPACT.................................................................................................9
ASSETS AND INNOVATION IN SOLANO COUNTY....................................................15
REGIONAL ASSETS..................................................................................................15
INNOVATION IS KEY TO THE SUCCESS OF THE REGION’S FOOD CHAIN..........18
OPPORTUNITIES FOR THE FUTURE............................................................................22
Appendix A...................................................................................................................24
Appendix B...................................................................................................................26
Endnotes.......................................................................................................................27
Prepared by
COLLABORATIVE
ECONOMICS
Doug Henton
John Melville
Tracey Grose
Tiffany Furrell
Amy Kishimura
Bridget Gibbons
Collaborative Economics is a nationally-recognized consulting firm specializing in developing
regional indexes, working with private and public sector leaders to develop innovative solutions to
pressing economic and community challenges, and advising civic entrepreneurs across the country
and globally.
3. EXECUTIVE SUMMARY The region benefits from many natural assets that support the production of high-
value crops, and the region’s advantageous location between metro areas supports
The Food Chain, with its diverse set of industries, plays an important the process and distribution of foods and beverages.
role in the vitality of the Solano and Yolo County region. Activities • The region’s natural assets include prime agricultural land, stable water resources, and strong winds.
associated with the Food Chain span agriculture support and production, The region also benefits from its convenient access to surrounding metropolitan areas major national
highway systems.
food processing, packaging and distribution as well as waste byproducts.
• Increasing values of agricultural land discourages the expansion of lower valued crops in the region.
Innovation is taking place in every segment as consumer demand The net loss of Agricultural Land has decreased 76 percent since the 2002 to 2004 period.
changes and technological advance opens up new opportunities. Food • Two of Solano County’s top crops, almonds and walnuts, are currently experiencing rising demand
Chain activities are highly concentrated in the region and represent 10 locally, nationally, and internationally.
percent of total economic output. Statewide, these activities account for
Innovation across the region’s Food Chain is improving process and resource
only 6 percent of total output. This report highlights the strengths within efficiencies as well as food quality.
the Food Chain and how innovation in each segment can support the • Organic farming in Solano and Yolo Counties represents 10 percent of total crop sales in the region, but
creation of new markets for regional products and new job opportunities in California as a whole, organics account for only 6 percent.
for its residents. • The influence of agriculture biotechnology is most prevalent in seed biotechnology research and
production, and 7 of the 10 top seed producers in the world are located in the region. The University
of California at Davis Seed Biotechnology Center also provides valuable research opportunities and
The Food Chain in Solano and Yolo Counties is a dynamic system of multi-faceted graduates to fill new jobs in the field.
components and interactive processes that are driving competition and boosting the
• Farms and businesses in the region are adopting renewable energy systems including wind, solar, and
region’s competitiveness in the global food market. Central to the region’s Food biomass.
Chain vital cycle is the role of innovation. The segments of the Food Chain consist
of 1) Agricultural Support Products and Services, 2) Agricultural and Livestock The region is fertile with opportunities for growth across the Food Chain
Production, 3) Food Processing and Packaging, 4) Distribution of Food and • Farmer’s markets and other forms of Community Supported Agriculture (CSA) present an opportunity
Beverages, and 5) New Markets for Waste Byproducts. for the counties to make the most of local agricultural production, specifically organic products. The
growing demand for local and sustainable products aligns favorably with the resources in the region.
The Food Chain contributes significantly to the economic vitality of the region in • The addition of livestock processing facilities and other intermediate processing facilities will help
terms of economic output, employment, and business growth. maintain the diversity of activities in all segments of the Food Chain in the region. This will create new
markets, jobs, and output value in the local Food Chain.
• Generating $25 billion in 2009, Food Chain activities represent 10 percent of total regional output.
Distribution accounted for nearly one third of Food Chain output and has tripled in value since 1990. • Growing global demand for high-value products such as almonds will create more consistency of
demand as products are sent to multiple and diverse markets across the world.
• Agricultural Support is larger in employment than any of the other segments in the region, and it is the
only segment reporting growth in each of the past 3 years. Employment in this segment is primarily in
Services and represents 27 percent of total Food Chain employment in the region.
• There is a diverse range of occupations and earnings potential within the Food Chain. Between 2001
and 2008, Food Chain earnings increased by 12 percent, and the highest average annual earnings of
$52,722 were reported in Processing. However, better connecting local education programs at the
secondary and post-secondary level will be required in order to provide the necessary workforce for
continued success of the region’s Food Chain.
• The region’s Food Chain consists of a vibrant landscape of local, small businesses. Regional earnings
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
of small businesses (with no employees) and small farm owners are exceeding the state average.
Total annual farm proprietor income (income from sole proprietorships and partnerships, excluding
the income received by corporate farms) increased 21 percent in the region between 1999 and 2008
but dropped 7 percent statewide. Nonemployers in agriculture earned roughly $3,000 more than
nonemployers in California.
4 5
4. THE FOOD CHAIN AS A CLUSTER OF OPPORTUNITY FOOD CHAIN CLUSTER
The Food Chain in Solano and Yolo Counties is a dynamic system of multi-faceted components and interactive
processes that are driving competition and boosting the region’s competitiveness in the global food market.
The Food Chain with its diverse set of Central to the region’s Food Chain vital cycle is the role of innovation. The Food Chain encompasses all
activities from agricultural support and production to distribution. The segments of the Food Chain consist of
industries plays an important role in the 1) Agricultural Support Products and Services, 2) Agricultural and Livestock Production, 3) Food Processing and
Packaging, 4) Distribution of Food and Beverages, and 5) New Markets for Waste Byproducts. (This is broader
vitality of the region made up of Solano and than the Advanced Food & Beverage Manufacturing Cluster presented in the Solano County Index in 2009
which focused on crop production, animal processing, and manufacturing.)
Yolo Counties. Activities associated with The diagram below illustrates the dynamics of the Food Chain Vital Cycle. The five segments are linked
the Food Chain span agriculture support and together by the varied processes (represented by the yellow arrows) that begin in the field and result in food
products arriving in the hands of consumers. Central to this cycle is the element of innovation that infuses the
production, food processing, packaging and cycle at each segment with new products, new processes, new materials, and increased efficiencies. Finally,
the vital role of consumer demand cannot be overlooked in this system: innovation is both the product and the
driver of consumer demand. Consumer demand is driven by the demands for quality, convenience, variety and
distribution as well as waste byproducts. by the perception of reduced environmental impact.
Innovation is taking place in every segment as FOOD CHAIN VITAL CYCLE
consumer demand changes and technological
advance opens up new opportunities. Food Grocery and related CONSUMER
Agricultural implement
manufacturing
product wholesalers DEMAND
Chain activities are highly concentrated in
Food product machinery
Beer, wine and manufacturing
distilled alcoholic Irrigation systems
the region and represent 10 percent of total beverage wholesalers
Specialty food stores
construction
Pesticide and fertilizer
Farm supplies
economic output. Statewide, these activities
DISTRIBUTION SUPPORT manufacturing
Merchant wholesalers Technical consulting
Veterinary services
account for only 6 percent of total output.
This report highlights the strengths within INNOVATION
the Food Chain and how innovation in each
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
segment can support the creation of new PACKAGE/
PRODUCTION Crop farming
PROCESSING Vegetable farming
markets for regional products and new job Diary product
manufacturing
Animal farming
Poultry and egg
opportunities for its residents. Beverage
manufacturing
production
Animal aquaculture
Bakeries and tortilla
manufacturing NEW
Plastic bottle MARKETS
manufacturing FOR WASTE Packaging materials
BYPRODUCTS
Construction materials
Biomass/Energy
6 7
5. ECONOMIC IMPACT
Technological advance taking place in each segment is driving the Food Chain Vital Cycle. Advances are
boosting process and resource efficiencies, improving product quality and safety, and creating new products
and markets. In Agricultural Support Products and Services, advances in biotechnology are improving
efficiencies through the creation of pest and drought resistant seeds and seed coatings that allow for multiple Generating $25 billion in 2009, the Food Chain represents 10 percent of the total economic output of Solano
plantings. Applied advances in sustainable farming practices are reducing fertilizer and pesticide use in and Yolo Counties. Exploring new opportunities and further developing industries unique to the region in all
Agricultural and Livestock Production. New uses for waste byproducts are being leveraged, for example, by segments of the Food Chain will lead to continued economic growth and prosperity in this sector. Tracking
harnessing nutrients from wastewater to produce fuel for production activities. Diagnostic testing and high- and small business growth, employment growth, and occupational mix help to tell the story about the region’s
speed mechanization are both improving the quality and quantity of food products. In Distribution, electronic progress and where potential for growth exists.
data interchange is vastly shortening the time lag between production and consumption thereby improving
food quality. The economic activity related to the food chain generates a sizeable share of the region’s economy. Although
dropping from its peak of 13.6 percent in 1996, the Food Chain accounted for 10 percent of the combined
GDP of Solano and Yolo Counties in 2009. In comparison, California’s food chain industries represented less
TECHNOLOGICAL INNOVATION DRIVING EACH SEGMENT than 6 percent of the state’s total GDP ($101.6 billion.)
SUPPORT
PERCENTAGE OF TOTAL ECONOMIC OUTPUT
DISTRIBUTION Novel seed varieties Generated by the Food Chain
Pest-resistant seed varieties Solano and Yolo Counties
Coated seeds for regulating
multiple planting
Scan-based inventory systems 14%
Recycling of agricultural waste
Electronic data interchange (EDI)
products for construction
Management of point of sale data
Monitoring technology for air and 12%
Category management
water quality
10%
HAIN VITAL C
O DC Y CL
FO E 8%
CONSUMER
DEMAND 6%
Quality
Convenience
4%
Variety
Reduced
2% Solano & Yolo
environmental PRODUCTION
impact
Diagnostic testing for detection California
of plant/animal disease and feed 0%
PACKAGE/PROCESSING
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1990
contaminants
Diagnostic testing for the detection Precision irrigation
of food contaminants GPS-directed micro-tractors with The GDP for Agriculture/Production segment is based on a more inclusive definition than the Food Chain Production segment.
High-speed processing weed triggers and herbicide Data Source: Moody’s Economy.com
mechanization MARKETS FOR WASTE Advances in organic production Analysis: Collaborative Economics
Nitrogen-filled salad bags methods
BYPRODUCTS
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
Advanced membrane technology
Biodegradable plastics/packaging
Fiberous organic matter can
be used for:
• Packaging materials
• Construction materials
Anaerobic digesters generate
electricity from biomass
which can cut energy costs
of operations or be sold back
to the grid.
8 9
6. FOOD CHAIN EMPLOYMENT DISTRIBUTION Guittard Chocolates
Solano & Yolo Counties - 2nd Quarter 2009
Generating $872 million in 2009, Distribution accounted for the largest portion of Food Chain output.
Established in 1868, Guittard
The region’s GDP in Distribution increased almost three times since 1990, faster than any other segment. Storage Chocolates is the oldest family-
In 2009, Support generated $670 million in the region’s economic output, while Processing and >1% Services Water owned chocolate company
Agriculture/Production accounted for $500 million and $426 million respectively. 27% 5%
Specialty
Materials
in the United States. The
2%
2% company headquarters are
Machinery located in Burlingame, and
1%
Wholesale the processing plant is located
ECONOMIC OUTPUT OF FOOD CHAIN 17% Crops
Gross Domestic Product by Segment 21% in Fairfield. The majority of
Solano and Yolo Counties inputs for the chocolate factory
come from local sources.
$30 Food Sugar, powdered milk and
Agricultural/Production Beverage & Packaging 15%
whey are all purchased from
Billions of Dollars (inflation adjusted)
Processing 2%
$25
Support
Livestock Bay Area suppliers. Similarly,
Distribution
2% machinery used at the factory
comes primarily from local
$20 SUPPORT DISTRIBUTION PROCESSING AGRICULTURE
makers. Guittard Chocolates
Data Source: CA Employment Development Department, Labor Market Information Division (QCEW)
Analysis: Collaborative Economics caters its production to the
$15 growing needs of customers
The segment of the Food Chain with the largest portion of jobs who are also local chocolate
is Support (35%), followed by Production(23%), Processing producers. The market for their
$10
(23%), and Distribution (19%). Each of the four segments chocolate exceeds their current
consists of multiple subsegments. Within the Support segment, production capacity. In the
$5 Service jobs dominate making up 27 percent of total Food future, the company plans to
Chain employment. Production in Crops accounts for 21 relocate its headquarters from
percent. Food in processing represents 15 percent. Wholesale Burlingame to Fairfield and to
0
in Distribution represents 17 percent of the regions total Food increase its workforce from the
13 employees currently with
1990
1991
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1992
Chain employment.
the company to more than
The GDP for Agriculture/Production segment is based on a more inclusive definition than the Food Chain Production segment.
Data Source: Moody’s Economy.com
100. This expansion will help
Analysis: Collaborative Economics
FOOD CHAIN EMPLOYMENT TRENDS BY SEGMENT Guittard meet the growing local
Solano & Yolo Counties
2nd Quarter 2009 demand for their products, as
well as meet national growth
in the demand for premium
Employment is for the most part evenly distributed across the segments of the Food Chain and growing 6,000 Agriculture/Production
Processing chocolate.
fastest in agriculture support activities. Total Food Chain employment increased by 11 percent between Support
5,000
2001 and 2009, while Processing had the largest percentage increase (43%) during that period. At the Distribution
same time, the two segments, Production and Distribution, declined in employment, by 10 percent and
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
4,000
2 percent respectively. In the second quarter of 2009, the subsegment Services, which is under Support,
accounted for the largest percentage of employment in the Food Chain (27%). 3,000
2,000
1,000
0
2001 2005 2009 2001 2005 2009 2001 2005 2009 2001 2005 2009
Data Source: CA Employment Development Department, Labor Marketing Information Division (QCEW)
Analysis: Collaborative Economics
10 11
7. EARNINGS GROWTH IN FOOD CHAIN EXAMPLES OF OCCUPATIONS IN SOLANO’S FOOD CHAIN
Annual Average Earnings by Segment
Food Chain earnings increased by Solano & Yolo Counties 2009 Annual
Segment Occupation Title Education & Training
12 percent between 2001 and 2008; Median Wage
$60,000
however, earnings growth varied by Farmworkers & Laborers, Crop, Nursery, & Greenhouse $19,010 Short-Term On-the-Job Training
segment. Annual average earnings
Annual Average Wage (inflation adjusted)
$50,000 Shipping, Receiving, & Traffic Clerks $28,930 Short-Term On-the-Job Training
growth was strongest in Support with Truck Drivers, Heavy & Tractor-Trailer $40,020 Moderate-Term On-the-Job Training
wages rising 23 percent over the
Distribution
$40,000 Computer Operators $45,550 Moderate-Term On-the-Job Training
period. Earnings grew 13 percent in
Transportation, Storage, & Distribution Managers $92,630 Work Experience
Production, 11 percent in Processing,
and 7 percent in Distribution. $30,000 Bus & Truck Mechanics & Diesel Engine Specialists $53,000 Post-Secondary Vocational Education
Computer Support Specialists $55,140 Associate Degree
Processing
In 2008, Processing reported the $20,000
Network Systems & Data Communications Analysts $65,010 Bachelor's Degree
Distribution
highest average earnings at $52,722. Logisticians $74,620 Bachelor's Degree
Following closely, earnings in $10,000 Support
Market Research Analysts $63,870 Master's Degree
Distribution averaged $46,762, Support Production
0 Food Batchmakers $30,770 Short-Term On-the-Job Training
and Production followed with average
2001 2002 2003 2004 2005 2006 2007 2008
earnings in 2008 of $39,189 and Food Cooking Machine Operators & Tenders $39,470 Short-Term On-the-Job Training
$34,792, respectively. Data Source: CA Employment Development Department, Labor Market Information Division (QCEW)
Analysis: Collaborative Economics Team Assemblers $23,940 Moderate-Term On-the-Job Training
Processing
Mixing & Blending Machine Setters, Operators, & Tenders $31,850 Moderate-Term On-the-Job Training
A wide range of job opportunity exists in the Food Chain. Occupations associated with these areas of Bakers $27,460 Long-Term On-the-Job Training
business activity represent an array of fields, levels of training, and earnings potential. In every segment
Butchers & Meat Cutters $38,810 Long-Term On-the-Job Training
training requirements vary from on-the-job training to graduate degrees. For example, in Distribution jobs
Chefs & Head Cooks $37,910 Post-Secondary Vocational Education
range from the machinists to logisticians. In addition, with all of the changes in agriculture technology
there is a need for horticulturalists and chemical engineers. Chemical Technicians $45,250 Associate Degree
Industrial Production Managers $97,890 Bachelor's Degree
Although Solano County offers a variety of training opportunities related to the Food Chain, there are Marketing Managers $96,710 Work Experience, Plus a Bachelor's or Higher
fewer than in the past. Solano County offers opportunities for residents of all ages to learn about farms Weighers, Measurers, Checkers, & Samplers, $22,160 Short-Term On-the-Job Training
and agriculture. There are farm programs for schoolchildren as well as adult educational opportunities at Recordkeeping
community colleges and the University of California at Davis. These include the following: Laborers & Freight, Stock, & Material Movers, Hand $24,500 Short-Term On-the-Job Training
Industrial Truck & Tractor Operators $30,050 Short-Term On-the-Job Training
• Schoolchildren have the opportunity to learn academic skills in a farm-based setting at Loma Vista
Separating, Filtering, Machine Setters, Operators, & $46,250 Moderate-Term On-the-Job Training
Production
Farm. Since 1974, Loma Vista farm has taught children about plants and animals through hands-on Tenders
activities in an outdoor classroom. Another program for schoolchildren is the Centers for Land Based
Maintenance & Repair Workers, General $43,280 Long-Term On-the-Job Training
Farming located on the Farm on Putah Creek. On 40 acres of land, the Farm on Putah Creek allows
Industrial Machinery Mechanics $61,070 Long-Term On-the-Job Training
visitors to participate in educational field trips and observe demonstration projects, and allows high
school students to participate in the Student and Landowner Education and Watershed Stewardship First-Line Supervisors/Managers of Production & Operating $63,190 Work Experience
Workers
(SLEWS) program.
Farm Equipment Mechanics $45,790 Post-Secondary Vocational Education
• High school students attending Dixon High have the opportunity to develop agricultural interests
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
FOOD CHAIN AS A CLUSTER OF OPPORTUNITY
Sales Managers $65,670 Work Experience, Plus a Bachelor's or Higher
through coursework and participation in agriculture programs. Supervised Agriculture Experience General & Operations Managers $95,690 Work Experience, Plus a Bachelor's or Higher
Programs (SAEP) currently involves approximately 100 students in local agriculture projects ranging Packers & Packagers, Hand $19,210 Short-Term On-the-Job Training
from assisting local farmers to internships at U.C. Davis. Students gain practical experience in a variety Inspectors, Testers, Sorters, Samplers, & Weighers $43,020 Moderate-Term On-the-Job Training
of agricultural fields and some of these internships and partnerships lead to employment opportunities.
Machinists $50,370 Long-Term On-the-Job Training
Comprehensive courses in Agricultural Earth Science and Agricultural Biology spark interest in
agricultural fields. These classes provide guest speakers from U.C. Davis and Chico State University First-Line Sup/Mgrs of Helpers, Laborers, & Material $46,470 Work Experience
Movers, Hand
and a Dixon High farm for enhanced agricultural education is planned for the future.
Support
Electrical & Electronics Repairers, Commercial & Industrial $74,160 Post-Secondary Vocational Education
Equipment
• Solano Community College provides agriculture classes through the Horticulture program, since the
Veterinary Technologists & Technicians $31,250 Associate Degree
school no longer offers Agricultural Business Classes. U.C. Davis offers many degrees and programs
Mechanical Engineers $82,600 Bachelor's Degree
through the College of Agricultural and Environmental Sciences.
Construction Managers $94,320 Bachelor's Degree
Purchasing Managers $100,930 Work Experience, Plus a Bachelor's or Higher
Operations Research Analysts $95,040 Master's Degree
12 13