Original article: http://www.industryweek.com/education-training/food-manufacturing-chicago-gets-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.”
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.
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“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.
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.”
New group aims to make Chicago the ‘Silicon Valley of food and beverage’
By Adi Menayang, 10-Apr-2017
Non-profit Chicagoland Food & Beverage Network, backed by the Chicagoland Chamber of Commerce and World Business Chicago, launched last week to establish the Midwestern city as a hub for food manufacturing innovation.
Original content posted at http://www.chicagobusiness.com/article/20170404/NEWS07/170409979
Crain's Chicago Business: Food and beverage manufacturing already racks up $32 billion a year in the Chicago area. A new nonprofit, Chicagoland Food & Beverage Network, wants to see that number get even bigger.
Chicago is an “economic cluster” for the food and beverage industry, just as Hollywood is a cluster for entertainment and Silicon Valley is a cluster for technology, says Alan Reed, executive director of the newly formed Chicagoland Food & Beverage Network. The initiative was announced today and its first meeting is scheduled for today at Kendall College in Chicago. Reed, the nonprofit's sole paid employee to date, most recently was executive vice president of strategy and innovation at Dairy Management in Rosemont, an organization that aims to help increase sales and demand for dairy products.
The network focuses on what Reed calls “the middle ground” of the food supply chain—not agriculture, and not retail outlets such as grocery stores and restaurants, but food packaging and processing plants. The network plans to boost that slice of the industry's presence in Chicago, and at the same time create jobs in economically underdeveloped areas of the city.
For its first initiative, the network is working with Instituto del Progreso Latino, a West Side nonprofit, to develop Career Pathways in Food Manufacturing, a curriculum that could serve as the foundation for a food-manufacturing training institute. “Food and beverage manufacturers are concerned about their labor force moving forward,” Reed says. The training institute would “meet the needs of the industry and do something incredible for the neighborhoods,” he says. The area's 4,500 food and beverage manufacturing firms employ 130,000 people.
The network does not include restaurant partners, such as the Illinois Restaurant Association, but might in the future. “We hope there would be natural synergies over time” with such groups, Reed says.
World Business Chicago and Chicagoland Chamber of Commerce are key partners in the network, which has applied for 501 (c) 3 status. Theresa Mintle, CEO of the chamber and Jeff Malehorn, CEO of World Business Chicago, serve on the board of the network. “Chicago has been a hub for food production and distribution in three centuries,” said Mintle in the release announcing the initiative. “This new vision for collaboration across the modern supply chain, plus stakeholders from colleges to city neighborhoods, could help create the next great era in innovation and opportunity.”
Board members from the industry include Alejandro Silva, former chairman and CEO of Chicago-based Evans Food Group, maker of pork-rind products, and Ricardo Alvarez, CEO, Raymundo's Food Group, the Bedford Park manufacturer of gelatin-based and pudding snacks.
MacArthur Foundation and JPMorgan Chase Foundation provided initial funding of just less than $1 million, Reed says. Other partners include Cook County, the nonprofit Family Farmed, Industrial Corridor of Nearwest Chicago, Instituto del Progreso Latino, Illinois Institute of Technology, the Institute for Food Safety & Health and the Chicago section of the Institute of Food Technologists.
CHICAGO (CBS) — A new non-profit seeks to grow the food and beverage manufacturing industry in and around Chicago.
The Chicagoland Food & Beverage Network is a nonprofit that will seek to bring together the region’s food and beverage companies, focusing on innovation, collaboration and growth. WBBM’s Mike Krauser reports
“We are technically a food and beverage cluster organization. You’re familiar with Hollywood, as an entertainment cluster; food and beverage is such a big business here in town that we actually are the second largest food and beverage cluster in the United States,” said Alan Reed, Executive Director of the Chicagoland Food & Beverage Network.
Link to originl content: http://chicago.cbslocal.com/2017/04/04/the-chicagoland-food-beverage-network-launches-seeks-to-grow-industry/
Link to story on Chicago Tribune: http://www.chicagotribune.com/business/ct-chicagoland-food-beverage-network-0405-biz-20170404-story.html
A new Chicago nonprofit hopes to establish the city's reputation as the Silicon Valley of the food and beverage industry by partnering with local businesses to address regional concerns.
The Chicagoland Food & Beverage Network, backed by World Business Chicago and the Chicagoland Chamber of Commerce, launched Tuesday at a Kendall College event. Though it's just getting started, the group intends to secure funding for a new food manufacturing institute to train workers, said Alan Reed, executive director for the Chicagoland Food & Beverage Network.
The Chicago area, home to giants of the food and beverage industry like Kraft Heinz, Mondelez International, Beam Suntory and MillerCoors, also boasts a growing number of small and midsized food companies, Reed said. Working together to develop the workforce would benefit all, he said.
Ultimately, the network could be a catalyst for decent-paying jobs in economically depressed Chicago neighborhoods, he said. But first, the nonprofit has to convince food and beverage companies, some of whom are competitors, to work together.
"Everyone loves the idea but says, 'I'm not sure who's in charge of that in our company.' ... It's going to take a minute to bring all the parties together," Reed said.
With regards to the proposed manufacturing institute, the nonprofit is seeking foundation funding to help develop the concept before trying to partner with businesses, he said. The Chicagoland Food & Beverage Network is teaming up with Instituto del Progreso Latino on that effort.
Such an institute could train workers new to the industry, as well as providing midcareer training on new technology and skills, Reed said.
More generally, the network hopes to convene and collaborate with food and beverage businesses on workforce development, food safety and business services. The Chicagoland Food & Beverage Network received initial funding from the MacArthur Foundation and the JPMorgan Chase Foundation.
Media Contact: Orly Telisman
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The Chicagoland Food & Beverage Network Launches, Driving Industry Growth
New organization to spur innovation and economic development within the region
Chicago, IL – April 4, 2017 – The Chicagoland Food & Beverage Network launches today. This newly formed nonprofit brings together the region’s food & beverage leaders to collaborate and drive economic growth – both in the industry and for neighborhoods across Chicagoland.
“We believe that a growing, innovative food & beverage industry is vital to a prosperous Chicago metro area. We are launching with a clear focus on fostering innovation, collaboration and growth among Chicagoland’s diverse group of food & beverage industry companies,” said Alan Reed, Executive Director of the Chicagoland Food & Beverage Network.
A group of industry leaders and innovators is gathering today at Kendall College to discuss the future of this food and beverage cluster organization. The event is hosted by the Chicagoland Chamber of Commerce and World Business Chicago. They will discuss business and economic development opportunities in areas including: workforce development, food safety, innovation and business services.
The event features keynote speaker Giacomo Fallucca, CEO of Palermo’s Pizza and a founding member of FaB Wisconsin, the state's food & beverage cluster organization. Mr. Fallucca will discuss how FaB Wisconsin drives their local food economy and helps Wisconsin companies innovate to meet the changing needs of consumers.
With approximately 4,500 companies, 130,000 employees and $32B in annual sales, Chicago area’s food & beverage industry represents a significant part of our regional economy. Chicago’s food and beverage industry is the second largest economic cluster of its kind in the U.S.
“Chicagoland Food & Beverage Network brings a strategic mission to a key sector of our regional economy,” Chicagoland Chamber of Commerce President & CEO Theresa E. Mintle said. “Chicago has been a hub for food production and distribution in three centuries. This new vision for collaboration across the modern supply chain, plus stakeholders from colleges to city neighborhoods, could help create the next great era in innovation and opportunity.
“In terms of economic development, Chicago’s food & beverage industry is uniquely positioned for inclusive job growth,” said World Business Chicago President & CEO Jeff Malehorn. “Chicago has historically been a leading city in the food industry. So, whether it’s in urban agriculture or distribution and logistics, we want that innovation to continue.”
The Chicagoland Food & Beverage Network is now accepting member applications. Membership is available to enterprises ranging from early-stage F&B entrepreneurs to large, established companies. Membership benefits include: access to industry events, affiliate discounts, Network Concierge Services, and support services designed to guide innovation and accelerate company growth.
With initial funding from the MacArthur Foundation and the JP Morgan Chase Foundation, Chicagoland Food & Beverage Network’s founding industry partners include: World Business Chicago, The Chicagoland Chamber of Commerce, Cook County, Family Farmed, Industrial Corridor of Nearwest Chicago (ICNC), Instituto del Progreso Latino, and the Illinois Institute of Technology, the Institute for Food Safety & Health, the Chicago section of the Institute of Food Technologists, as well as leadership from a cross section of food & beverage companies in the region.
For more information, visit www.chicagolandfood.org and follow @chgofood on Twitter.
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Simple Mills CEO Katlin Smith writes in Inc. about Why Chicago Is the Best City to Start a Business in Food
I came to Chicago to attend University of Chicago's Booth School of Business. Before I knew it, I was launching a startup, raising money, hiring employees and establishing an office.
A year in, it dawned on me that I hadn't made the decision to base the business (or my life!) in Chicago. My heart sank. It's a decision that you should be very intentional about as an entrepreneur.
But, then I asked myself - if you could choose anywhere in the country to start this business, where would it be? I realized my answer was still Chicago. Here's why:
Availability of Hires
Multiple major consumer product goods (CPGs) companies are in the region, including Kraft, Mondelez, Conagra, PepsiCo, Tyson, and McDonald's. MARS just announced its move here. This means a huge availability of hires looking to join the next wave of the food movement.
Gaining a bit of big company talent intermixed with startup spirit is a game changer - it helps you scale growth curves much quicker, and anticipate issues before they happen. It also can help attract customers, investors, and partners.
Affordability of Talent
It's not San Francisco or New York - the cost of living is much lower, so you don't have to pay an arm and leg for talent. You also don't have to compete with the large number of companies that often drive up the cost of hiring talent.
It doesn't just mean acquiring better talent at less cost. It can also create the ability to afford more talent - larger teams, better support - for your business.
Abundant Financing Resources
Chicago is a hub for food incubators, accelerators and investment firms. Former McDonald's CEO Don Thompson is launching a food-focused VC firm, Cleveland Avenue, and there's a strong group of other investors focused on food entrepreneurship - S2G, 2x Partners, Gastronome Ventures, RealFoodMBA, and Arbor Investments
These join incubators like The Hatchery and The Good Food Business Accelerator, and The Kitchen, a shared-use commercial kitchen that helps food startups launch with less overhead.
The top two business schools - University of Chicago's Booth School of Business (#1) and Northwestern's Kellogg School of Management (#2) - are located in Chicago.
You'll also find the Illinois Institute of Technology (IIT) with a Foodscience program and its Institute of Food Safety and Health (IFSH). IFSH is home to partnerships with more than 50 food companies, 50 FDA personnel and the U.S. Department of Agriculture.
Top academic institutions mean top talent - and interns - for cost-effective growth.
The city is notorious for its manufacturing resources. They're at a close reach, which means less cross-country trips for entrepreneurs.
We've already worked with six partners within a two-hour driving distance of Chicago. The proximity means you can be on-site to oversee line trials, review packaging, ensure the quality of your product, or operate without time zone or shipping limitations.
Strong Local Food Movement
As a community, Chicago supports its local food. There are over a dozen food-related events every year, including the Good Food Festival and Conference. 2015 and 2016 presenters at the event included Walter Robb, the Co-CEO of Whole Foods; Rahm Emmanuel, the Mayor of Chicago; and Tom Vilsack, Secretary of the U.S. Department of Agriculture, to name a few.
It is this movement that creates progress that starts in Chicago and is replicated across the country. In fact, Chicago was one of the first cities in the country to pass a Soda Tax and one of the first cities to introduce antibiotic-free chicken to its schools.
A Budding Food Entrepreneurship Scene
There's an exciting food startup environment in Chicago. Protein Bar, Vital Proteins, RxBar, Simple Squares, Tiesta Tea, We Deliver, I Heart Keenwah, Mighty Vine, GrubHub, and Simple Mills are just a sampling.
In Chicago there's a culture of helping other startups - you don't see the competitiveness found in other cities. We have food entrepreneurship meetups on a weekly basis, which helps us learn from each other, share our accomplishments, and share our struggles.
A Goid Place to Test Concepts
We've seen San Francisco and New York City give misleading results in product testing. The cities aren't a representative of the U.S. population. Instead, you want to start a CPG company in a place that will hone your concepts for broad appeal.
It's the reason why the production Hamilton debuts in Chicago before other cities - it's an excellent test market for middle-of-the-road concepts so that you can fail fast.
Transportation and Distribution Hub
Chicago has one of the most diverse transportation networks in the world, and it's a hub for distribution. If you're based on the coasts, your product will stop in Chicago before going somewhere else. In fact, the largest specialty food distributor in the country (KeHE) is also based just outside the city.
By basing our product here in Chicago, we reduce shipping costs, increase responsiveness, and decrease working capital needs -- all by decreasing shipping time by 3 days.
And if those aren't enough reasons, there is always the Chicago restaurant scene with some of the top restaurants in the world or the amazing Chicago summers spent sailing the waterfront!
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
Published on: Jan 30, 2017
See the full article at: http://www.inc.com/katlin-smith/why-this-city-is-the-best-city-for-food-entrepreneurship.html
On December 15th 2016, the MacArthur Foundation announced $11.6 million in new Chicago investments to help spur economic development in low-income neighborhoods, create opportunities for youth and prevent violence, promote police reform and accountability, and support arts and culture.
Over the past 35 years, the Chicago region has received the largest share of the Foundation’s philanthropy: $1.1 billion invested in 1,300 organizations and individuals across the city and especially in low-income neighborhoods – more than any other place in the world.
“MacArthur is deeply committed to Chicago,” said Foundation President Julia Stasch. “These new awards build on our long local history and our commitment to help address some of the city’s most pressing challenges – from spurring economic development and creating jobs in struggling neighborhoods to preventing violence, from promoting police reform and accountability to creating opportunities for youth.”
Through our fiscal sponsor, Kinzie Industrial Development Corporation, MacArthur generously granted $400,000 to support the Chicagoland FOOD project, which promotes growth in the food and beverage industry with a goal of increasing employment in Chicago neighborhoods.
We at Chicagoland FOOD are extremely proud of and grateful for this support. This funding allows us to make progress against the important work of collaborating across the food & beverage industry in Chicagoland to make our local economy stronger and more inclusive.
To learn more, see the press release from the MacArthur Foundation. https://www.macfound.org/press/press-releases/116-million-new-chicago-investments/
Chicagoland Food & Beverage Network
1 W Monroe Street
Chicago, IL 60603
Tel (312) 525-9653