Industry clusters are groups of businesses in interconnected fields that thrive on their associations with one another. Usually geographically concentrated, they are believed to increase productivity and competition, both nationally and globally.
The Wisconsin Economic Development Corporation (WEDC) is home to one such cluster for food and beverage companies. Food and Beverage (FaB) Wisconsin works to connect businesses in symbiotic relationships and pours resources into education and professional development for food manufacturing and packaging companies in Wisconsin.
Food Industry Executive spoke with Cate Rahmlow and Shelley Jurewicz of the WEDC’s FaB program to find out how the State of Wisconsin is fostering economic development and innovation in food and beverage sectors.
How has Wisconsin developed its Food and Beverage industry cluster? Did you have examples or models in mind when you began?
Cate Rahmlow, WEDC FaB Industry Sector Development Manager: Wisconsin’s FaB industry cluster has emerged over time through natural concentrations around production, variety, and academic resources in research and development. The WEDC strategy includes customizing the network and leveraging key stakeholders in support of both individual business needs and programs that advance the entire industry. It’s a very intentional public-private partnership.
How can a state or region leverage resources and business attraction skills to make itself more inviting to big-name food processing companies or to encourage the growth of existing businesses?
CR: Key for all forward-thinking companies—big-name, fast-growing, and startups alike—is a robust supply chain, access to talent, and innovative solution providers. Here in Wisconsin, we have all this and more.
For example, Wisconsin has more food equipment manufacturers than any other state, and we lead the nation when it comes to flexible packaging. The University of Wisconsin (UW) in Madison has one of the best Food Science programs in the country, with world-renowned centers of excellence, such as the UW Dairy Research Center and UW Food Research Institute. These are just a few of the reasons global companies such as Kerry Ingredients, Chr. Hansen, Emmi Roth, Sensient Technologies, and Organic Valley call Wisconsin home.
What is the FaBcap program, and what is it doing to further encourage food processing growth in Wisconsin?
Shelley Jurewicz, Executive Director of FaB Wisconsin: Wisconsin is home to more than 1,700 food, beverage, and ingredient manufacturers. Nearly two-thirds have fewer than 10 employees. FaB Wisconsin, in collaboration with the Food Finance Institute, saw the opportunity to help those with ambitions to grow their business through an industry program called FaBcap, a business and finance accelerator.
FaBcap was designed to build the capacity and capitalization of 10 pre-screened and scaling food or beverage enterprises. The selected businesses must be Wisconsin-based and generating revenue in food, beverage, ingredients, equipment, or packaging manufacturing or technologies.
The class of “Cappers” goes through a one-year program on how to grow and fund a sustainable business. The program provides a range of valuable resources:
- A personal business and certified financial coach
- 50 hours of coaching
- Access to FaB member mentors and experts
- Monthly cohort meetings at area food companies
- A $10,000 cash award
- A pitch to investors/funders in the program’s closing ceremony
With grant support from the WEDC and the JP Morgan Chase Foundation, along with corporate sponsorship, FaB Wisconsin launched FaBcap_one in October 2015. FaBcap_One included City Lights Brewing, Clock Shadow Creamery, East Shore Specialty Foods, Gorilly Goods, Mob Craft Beer, Nikki’s Cookies, Noble View Cheese Co., Quigistics, Top Note Tonics, and Valentine Coffee Roasters.
The class will graduate in September 2016. Continued grants from WEDC and Chase will also seed FaBcap_Two, starting in February 2017.
What opportunities does FaBcap cohort membership offer a business or organization?
SJ: Access to industry expertise, professional preparation for working with investors and funders, the camaraderie of a cohort, and a heightened awareness for their business.
The end game is to create a plan for focused business growth and to acquire the required funding to reach objectives because with growth comes the need for capital investment. Each Capper receives a prepared financial analysis and package, which they can use to meet with, and pitch to, potential investors and funders at the program’s capstone event. The $10,000 grant that each business receives can also become leverage for a loan.
Being accepted in the FaBcap program also became a “stamp of approval” for our first cohort, telling their industry peers, as well as investors and bankers, that they have what it takes to grow.
How is the Industrial Internet of Things (IIoT) impacting business development and changing the way FaB operates?
SJ: FaB has introduced the potential of IIOT to its members, leveraging Milwaukee-based Headquarters of Rockwell Automation – a global leader in integrated systems for food and beverage processing manufacturing.
Along with resource capability of The Milwaukee Institute – a preeminent Milwaukee-based nonprofit computational science and engineering organization that offers advanced computational systems and services to regional commercial organizations. At a FaB co-sponsor Executive Food & Beverage Forum, in 2014, Rockwell shared that only 14% of manufacturers had completely integrated their plant floor information to the cloud.
Madison-based, Quigistics (and FaBcapper) offers a cloud-based, traceability, and inventory management solutions for food processors to ease FSMA compliance. And is suitable for small to medium sized companies.
What trends are most important to watch right now, particularly in processing and manufacturing?
Connecting better food with better talent
SJ: FaB is a proponent of the industry moving to cleaner, closer, safer, bolder, better food and beverage. The companies that can adapt and innovate in an authentic, transparent, and sustainable manner will grow—and they’ll be in a better position to attract talent as the labor market tightens across the U.S.
Gearing up for the talent shortfall, FaB has a partnership with Milwaukee-based The Good Jobs – a turnkey solution for attracting talent that includes a company culture assessment and employment branding. Its members receive 50% of the annual subscription. The strategy is to create an employment brand for the industry. Some Wisconsin food and beverage companies found in the Good Jobs directory include Plymouth-based, Master’s Gallery Foods, maker of quality cheese products, and Milwaukee-based Palermo’s Pizza, maker of premium frozen pizzas.
Food safety technologies
SJ: Another emerging trend we see is with food-safety technologies like High Pressure Processing (HPP). Milwaukee-based American Pasteurization Company is the first in the U.S. to offer HPP on a commercial basis. Some Wisconsin companies employing HPP included Kenosha-based Good Foods Group, a leading manufacturer of HPP, refrigerated foods and juices; and Oak Creek-based Stella & Chewy’s, a maker of HPP, premium raw, freeze-dried pet food products.
How has FaB Wisconsin impacted the food and beverage production cycle in Wisconsin and beyond?
SJ: FaB’s work on industry talent development and attraction is important against a national talent shortfall backdrop. The general public seems largely unaware of the lifelong career opportunities the industry has to offer from farm to factory to fork.
FaB is currently developing an outreach plan and resources that will showcase “an industry that offers life-long opportunities to feed and quench the world better.” It will launch its statewide Industry Talent Needs Assessment Survey in September of 2016 to better inform collaborative work with the Wisconsin State Technical College Systems to develop new food manufacturing technical programs to serve the growing demand for talent.
FaBcap has also drawn crucial attention to the unique needs of scaling a food and beverage business. FaBcap collaborator, The Food Finance Institute, has determined that food businesses make money, and don’t, in predictable ways. Those that succeeded were using the right kind of financing and business coaching at the time their business evolves. As the FaBcap program expands so will the network of resources and expertise available to help those companies that want to grow, such as FaBcap Partner, California-based Nutrition Capital Network.
Read more about FaB Wisconsin, the state’s cluster organization supporting food and beverage industry growth and awareness.