Review of government data highlights how food and beverage industry contributes to US economy

By Adi Menayang contact

- Last updated on GMT

CED report: Food and beverage industry an economic powerhouse in US

Related tags: Beverage industry, Economics, Food

Every year $8 billion is invested in new products or processes in the food and beverage industry each year, according to a new report released earlier this month that looked at how the food and beverage industry impacts the overall US economy.

The Economic Impact of the Food and Beverage Industry​ ​draws from multiple public data issued by the government, including from the US Census Bureau and the US Department of Agriculture.

It was prepared by Laurian Unnevehr, professor emerita of agricultural and consumer economics at the University of Illinois at Urbana-Champaign, and commissioned by the Committee for Economic Development of The Conference Board​—a non-profit, nonpartisan, business-centric public policy organization.

Collected data was reviewed and synthesized to highlight in what ways the food and beverage industry “is a significant and stable contributor to the US economy as an employer, economic growth stimulator, and innovator in the food system,” ​according to a statement by the Committee for Economic Development.

Focusing on the food and beverage sector (defined as “everything from washing and packing fruit to the complex process of assembling a frozen entrée”​), here are some of the report’s highlights:

Contributions to food system innovations

Food industry research expenditures amounted to $5.4bn annually on research, a third of the global total. Venture capital firms invest an additional $3bn to fund innovations in food market and processing technologies.

“The food and beverage industry has responded to the dynamics of consumer demand and food retailing by introducing new product offerings that meet growing demands for consumer healthfulness and quality,” ​the report said.

Analysis of new ingredient and new product data revealed that 40% of new foods and beverages were formulated with positive nutrition or health attributes.

Increased demand for US exports

Processed food products now account for more than half of food and agricultural exports from the United States, the report said.

Exports oriented to the consumer as well as intermediate products account for $70bn of agricultural exports, exceeding the $63bn generated in bulk or raw commodity exports. Driving growth in exports for this sector are dairy products, pork products, prepared foods, and non-alcoholic beverages. Much of the growing demand for processed exports come from emerging economies.

Additionally, the sector has been a client of more than 2 million farms in the US, transforming raw farm commodities from these farms into consumer food and beverage products marketed through nearly 680,000 retail stores and foodservice outlets in the US alone.

The food and beverage industry as an employer

There are around 1.46 million workers in the food and beverage industry (counting only food processing and manufacturing), which is about 13% of all US manufacturing employment and about 1% of all US nonfarm employment.

Bakers and tortilla manufacturing dominate the industry with 39% of the sectors establishments and 18% of the sector’s employees. It’s followed closely by animal slaughter and processing, at 14% of establishments and 33% of employees.

“The food and beverage industry has been more stable in terms of employment and labor income than other manufacturing industries in the US,” ​the report said, attributing it to the “consistent demand for food and the competitive prices of raw commodities.”

CED_Food_Infographic

You can find the full report HERE

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