Understanding the Challenges Facing the Food Manufacturing Industry

Abstract

The Northeast's share of US food processing activity has decreased significantly over the last three decades as many food processing firms have exited the region and located elsewhere, particularly in the South and the West. This decline has been most severe in New Jersey, the state that is frequently cited as having the most stringent business and regulatory climate in the nation. To investigate why food processors have found the New Jersey environment to be so unfriendly, this study organized focus groups of food processing industry executives, trade organizations and researchers. The findings suggest that the area of environmental and other regulation is the most problematic for food processors. Other areas of concern include, in order of importance, taxation and fiscal problems, economic barriers to development and expansion, high cost of doing business, education, training and labor concerns, communication and public relations, and transportation. Policy makers in New Jersey, and in other northeastern states facing similar food processing declines, interested in the retention and economic development of food processing firms need to be cognizant of the impediments currently constraining the industry. Industry-based public policy recommendations for enhancing the business climate for food processors are presented.