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4

News & Views Magazine

Edition 1, 2015

President & CEO Message

By Rob Neenan

CLFP President & CEO

Food Processing is

a Big Contributor

to California's Food

Industry

The feature article in this edition

of

News & Views

focuses on a

recently-completed study by U.C.

Davis economists regarding the

impact of the food processing industry on the California

economy. The study was led by Dr. Rich Sexton, chair of

the Department of Agricultural and Resource Economics,

and was sponsored by CLFP.

The study's findings show the enormous impact the

California food processing industry has on the economy

of the entire state. Some of the results were quite

surprising, such as the total number of firms in this sector

— over 3,000 — and the broad size and scope of the food

processing industry in Southern California.

Elected officials in Sacramento and across the state should

take note of the study’s findings. The food processing

sector and its multitude of suppliers collectively generate

$220 billion in revenue and 760,000 jobs. Virtually every

major metropolitan area of the state has numerous food

processors, ranging from large multi-national companies

to small artisanal start-ups. In the Central Valley, the

food processing industry accounts for a large portion

of revenue and employment and contributes a large

amount in taxes to local governments.

California food processors and other manufacturers face

many challenges to remain viable and competitive. High

energy costs, a byzantine regulatory system, inadequate

transportation infrastructure and frivolous business

litigation such as Proposition 65 lawsuits have made

California an expensive and complex place to conduct

business. The impact of this situation has been tangible.

In recent years, California has lagged behind much of the

rest of the country in terms of manufacturing investment

and job growth. Since 2010, total manufacturing job

growth in California has been less than two percent,

compared to 7.5 percent for the entire U.S.

We need a manufacturing renaissance in California, and

CLFP and its members need to take this issue directly

to our elected officials. Staff will be briefing legislators

about the U.C. Davis study and the impact of food

processors on the state’s economy. But we also urge our

members to reach out to their local officials on a regular

basis to make sure they understand the jobs, income

and tax revenue that you contribute to your community.

Invite local officials to tour your facility to learn about

your products, meet your workers and hear about your

challenges. Congressman Tip O’Neill, former Speaker

of the House, once said that “all politics is local.” That

thought is a good place for us to start.

Food and beverage processing

is California's third largest

manufacturing sector.

Key economic impacts for

California's food and beverage

processors for 2012 are:

$25.2 billion in

direct

value-added

$56.7 billion in

additional

value-added

through indirect and induced impacts

$82 billion of

total

value added

198,000

direct

full and part-time jobs

562,000 jobs through

indirect

and

induced activity

760,000

total

jobs

$220 billion in

total

value output

$10.5 billion in

federal tax revenue

$8.2 billion in state/local tax revenue