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Chicago-Cook County: #1 Food Market
Illinois is the second largest combined food processing and distribution state in the U.S. Approximately 1,400 of the nation’s 26,000 food processing companies have processing and packing facilities within the state. Illinois boasts a $10.1 billion food processing industry. The state’s processed food industry accounts for more than 8 percent of Illinois’ manufacturing jobs. Because of Illinois’ agricultural traditions, this industry continues to boom and provides an environment in which specialty food manufacturers can secure the finest ingredients for their products. Contributing to specialized food tastes are Illinois’ diverse ethnic populations, including the largest Polish population outside of Warsaw, Poland, and a large Latino population.
Chicago-Cook County is the number one market in the U.S. in combined food processing and distribution with over $50 billion in sales. The major food industry shows in the U.S. are held in Chicago, including The Food Marketing Institute, the National Restaurant Show, the National Food Brokers Association, and the Private Label Manufacturers Show. The Fancy Food show (usually held in New York or San Francisco) will be held in Chicago for the next 3 years. The food-related shows of Pack Expo (packaging), Promat (material handling), and NPE (plastics) are all regularly held in Chicago.
Food processing is a highly fragmented business with many small companies that can serve a local or regional market since there are no significant barriers to entry. There are several large industry leaders such as Heinz, Campbell and Cook County’s own Sara Lee, but none of them dominate the market. U.S. companies are the undisputed industry leaders domestically and worldwide. There are over 20,000 companies in the U.S. food processing sector. In 1996, the combined sales of food and beverage in the United States came to $675 billion.|
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Tortilla chips and corn chips had the largest dollar growth
- Sales for tortilla chips rose $36 million, or 2.4 percent, from $1.4 billion to $1.5 billion. Corn chip sales rose $30 million, or 10.7 percent, from $278 million to $308 million.
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Refrigerated and frozen food industry leader
- According to the February 1998 issue of Refrigerated & Frozen Foods, the Chicago region has 11 out of the 120 top runners in the $188 billion refrigerated and frozen food industry.
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Potato chips and puffed cheese snacks tracked moderate growth
- Potato chip sales were estimated at $2.1 billion, up 0.8 percent, or $17 million. Puffed cheese snacks sales increased $27 million, or 8.5 percent, from $320.5 million to $347.6 million.
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Pretzels and popcorn decreased
- According to the SCANTRACK Market Planner from ACNielsen, Chicago, pretzel sales for the 52 weeks ended June 6, 1997, were $557.5 million, down 3.3 percent compared to the year before.These data also showed that popped popcorn sales were estimated at $96.38 million, a drop of 2.8 percent compared with 1996. Caramel popcorn sales, estimated at $77.9 million, dropped 5.2 percent.
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Top 15 food processing sectors
in the Midwest (Illinois, Indiana, Iowa, Michigan, Wisconsin)
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Value
added |
%
of all Midwest |
|
Rank |
($
billion) |
food
processing |
Industry |
1982 |
1992 |
1982 |
1992 |
1982 |
1992 |
|
|
|
|
|
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Breakfast foods |
3 |
1 |
1.26 |
3.47 |
6.9 |
10.6 |
Confectionery |
2 |
2 |
1.47 |
2.49 |
8.0 |
7.6 |
Wet corn milling |
5 |
3 |
0.90 |
2.39 |
4.9 |
7.3 |
Cheese |
8 |
4 |
0.79 |
2.19 |
4.3 |
6.7 |
Meat processing |
7 |
5 |
0.80 |
1.85 |
4.4 |
5.7 |
Meat packing |
1 |
6 |
1.56 |
1.74 |
8.5 |
5.3 |
Processed milk |
9 |
7 |
0.78 |
1.69 |
4.3 |
5.2 |
Soft drinks |
6 |
8 |
0.85 |
1.65 |
4.6 |
5.1 |
Bread |
4 |
9 |
1.11 |
1.48 |
6.1 |
4.5 |
Cookies and crackers |
15 |
10 |
0.52 |
1.21 |
2.8 |
3.7 |
Canned
fruits & vegetables |
17 |
11 |
0.50 |
0.94 |
2.7 |
2.9 |
Flavorings |
16 |
12 |
0.52 |
0.90 |
2.8 |
2.8 |
Fluid milk |
14 |
13 |
0.55 |
0.89 |
3.0 |
2.7 |
Frozen specialties |
18 |
14 |
0.39 |
0.86 |
2.1 |
2.6 |
Animal feeds |
13 |
15 |
0.58 |
0.74 |
3.1 |
2.3 |
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Top
15 |
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12.58 |
24.49 |
68.7 |
74.9 |
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All food processing |
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Midwest |
|
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18.31 |
32.69 |
100.0 |
100.0 |
U.S. |
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88.42 |
156.84 |
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According to an analysis of the food processing industry conducted by the Federal Reserve Bank of Chicago, “Food processing firms...play a major role in the [Midwest’s] industrial sector. Among the 20 major manufacturing groups, food processing in the Midwest states ranks second in sales and value added and fifth in employment. In international trade, the gains in consumer food exports have been much more dependable in recent years...Furthermore, long-term forecasts released by the U.S. Department of Agriculture predict more rapid gains for manufactured food exports relative to bulk commodities well into the next century” (Chicago Fed Letter, September 1996).
“An important characteristic of the food processing industry in the [Midwest] states is its ties to the region’s production agriculture. This is evident from [the preceding table], which lists the major food processing industries in the region in terms of value added. The linkages of many of these industries - such as corn milling, cheese production, and meat packing - to the [Midwest’s] production agriculture are quite obvious. Some are not so clear. For example, confectionery and soft drinks are large-scale users of corn sweeteners, a product of corn milling. Frozen specialties are heavy users of meat and vegetable products in frozen dinners and meat and cheese in frozen pizzas. Although [the preceding table] lists only 15 of the nearly 50 industries in the food processing sector, these 15 industries account for nearly three-quarters of the economic activity that stems from food processing in [Midwest] states” (Chicago Fed Letter, September 1996).
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Chicago-Cook County Candy Industry
The Chicago metropolitan area is home to 46 companies (operating in 52 facilities), whose primary business is confectionery manufacturing. Another 40-plus companies also make candy or candy products but are not listed as industry manufacturers, due to their smaller size or business activity.
The candy industry in Chicago-Cook County is a significant employer in the region. Chicago metropolitan candy companies employ more than 16 percent of the national candy industry labor force. In 1995, very conservative statistics showed 10,281 people working in Chicago-Cook County candy manufacturing, and more realistic figures reveal 13,000 people employed in this field, making up 20 percent of the national workforce.
The Chicago-Cook County confectionery industry labor force is diverse. Forty-three percent of jobs are held by women, 21 percent by African-Americans, and 39 percent by people of Hispanic origin. The Chicago-Cook County confectionery industry is one of the manufacturing industries with the highest ratios of women and Latino employees.
A number of Chicago-Cook County companies are industry leaders. Two of them, Tootsie Roll Industries, Inc. and William Wrigley Co. are on Moody’s list of five companies which predict industry trends.
Chicago-Cook County confectionery companies produce a wide range of products, including gum, non-chocolate candies, and chocolates made from cocoa beans. They are both market leaders in most categories of confectionery products, as well as leading small niche players.
Cook County has the greatest concentration of confectionery manufacturing facilities in the nation (44 companies operating in 49 facilities). Ninety-five percent of all of the metropolitan area confectionery industry employees work in Cook County. Nearly 46 percent of candy companies (21 companies) in the metropolitan area are located in the City of Chicago, the County’s seat.
The Chicago-Cook County confectionery industry’s multiplier effect results in providing the metropolitan area with at least 17,500 jobs. For a base of 10,000 direct jobs, another 7,500 indirect jobs are created in servicing the industry. This manufacturing activity also creates almost $1 billion in business for other industries such as ingredient suppliers, machinery, packaging, material handling, logistics and transportation.
The Chicago-Cook County confectionery industry makes a tremendous contribution to the regional economy, and in order to sustain and expand this growth the industry faces a number of issues. It needs to address successorship, foreign ownership, exporting and workforce training.|
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Chicago-Cook County Unparalleled Infrastructure
Information Technology Infrastructure - leaders in wireless, computing, fiber optic, and cable technology, telecommunications systems. Access to unique supercomputing resources.
Superior Air, Highway, Rail and Public Transit - with O’Hare and Midway airports, truck and rail shipping, and state of the art intermodal facilities, the region leads the nation as a transportation and distribution hub.
World-Renowned Universities and Research Institutions - 20 colleges and universities produce thousands of well-trained graduates. Manufacturing technology, medical, biotechnology, and software research parks provide a supportive entrepreneurial environment, incubator space and financing for business growth. Two federal research centers are internationally acclaimed for technology innovation and transfer to commercial production.
Diversified Industrial and Service Economy - The region ranks second in the nation as a headquarters for Fortune 500 companies. Chicago is regarded as a premier trade show and convention location. A major international financial center with a Federal Reserve Bank and numerous top international and foreign banks, Chicago is also renowned as the capital of risk management for its international exchange markets.
Experienced Well-trained Labor Force - Four million workers in the region provide high qualifications and skill levels to perform any job.
Cosmopolitan Cultural, Entertainment and Recreational Attractions - LakeMichigan, forest preserves, magnificent architecture, performing arts, world class museums, and exciting sports teams attract visitors from around the world.|
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Competitive Advantages for the Food Industry Cluster
Industry leaders in various food and food-related sectors are clustered in Chicago-Cook County. The dominating presence of food processing, packaging, wholesale trade/distribution, plastics, industrial machinery and equipment, logistics firms serve as a catalyst for the mid-size aligning manufacturers to either migrate to or remain in this area for local partnering, distribution, supply sales, and the key labor force.
Immediate availability of raw materials, in particular in the specialty foods/ethnic foods/dry snacks area.
Illinois plastics companies seeking overseas connections are in good company: Illinois ranks third in the number of foreign-owned companies operating in a state, with more than 1,400 firms. It ranks fourth in the number of people employed by foreign-owned firms, with more than 246,000.
Global business is a language spoken by Illinois manufacturers. One out of every four manufacturing jobs in Illinois is dependent upon exports, and the state is sixth in the nation in the value of exports.
Good public/private sector linkages between the city, county, state and industry trade associations is significant to food industry manufacturers as they are able to share data and intellectual resources when exploring new markets.
Most of the industry trade association headquarters are located in this area which generates considerable weight in policy development within the industry. Many of the companies feel that they have more control within their industries due to this proximity of leadership.
The variety of food industry trade shows held at McCormick Place generate additional opportunities for meetings with global industry leaders.
Chicago-Cook County is home to 60 foreign consulate offices which provide excellent access to trade opportunities with their respective countries.
The presence of food industry-specialized software designers in the County has played a critical role for the small to mid-size firms. These software firms are able to design software for the food processing, machinery and packaging sectors. Both the Chicago Software Association and the American Electronics Association - Midwest are key alliance partners here.|
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Food Trade Associations & Industry-Related Resources
American Bakers Association (DC area)
202-789-0300 or 202-789-1164
American Institute of Baking (DC area)
Julie 913-537-4750 or 913-537-1493
Association for Manufacturing Technology (DC area)
Woody Hasemann, VP-Exhibits 703-827-5283 or 703-827-5298
sponsor: IMTS trade show
Bakery Production & Marketing Magazine (Chicago-Cook County)
Pete 847-390-2470
Biscuit & Cracker Manufacturers Association (DC area)Christina Blue, Govt. Affairs/Frank Rooney, Pres./Christy McWard, Publications Editor
301-608-1552 or 312-608-1557
Sosland Publishing
Alison for research 816-756-1000
Dairy Food Association (DC area)
202-737-4332 or 202-331-7820
Food Marketing Institute
Marcy 202-452-8444
Food Distributor International (DC area)
Dennis Madsen, Vice President-Educ. 703-532-9400 or 703-538-4673
David Goya/Tandy Jo Lanfrini ext. 237
Food Processing Magazine (Chicago-Cook County)
630-467-1300
Jim Berbeka ext. 336
Grocers Manufacturers of America (DC area)
Christopher Clark 202-337-9400
International Association of Food Industry Suppliers (DC area)
Jennifer Brown/Chris Rao, research 703-761-2600 or 703-761-4334
International Dairy Food Association(DC area)
202-737-4332 or 202-331-7820
Mid-America Agricultural Trade Organization (Chicago-Cook County)
www.miatco.org
312-944-3030 or 312-944-1144
Timothy Hamilton, exec.dir./Greg Cohen, comm. & outreach mgr. 312-944-7777 x212
National Frozen Food Association
Lori Pullman 717-657-8601 or 717-657-9862
National Food Processors Association (DC area)
202-639-5900 pr 202-639-5932
National Institute of Package Handling (DC area)
James Russell 301-459-9105
Retailers Bakers of America
Mary 800-638-0924
The Candy Institute (Chicago-Cook County)
Friederika Kaider/Jacqui Stark 773-278-3251
The Society for the Plastics Industry (Chicago-Cook County)
773-380-0808
sponsor: NPE/Plastics USA
Thomas Food Industry Register
Edward Devane 212-290-7262
U.S. Food Export Showcase
703-876-0900|
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Chicago-Cook County Business Assistance Resources
Chicago-Cook County Department of Planning, Office of Economic Development
Business Center 312-603-1070
Economic research and Publications 312-603-1070
International Trade Partnership Program 312-603-1070
Chicago Department of Planning & Development
Export Evaluation Program 312-744-6559
International Business Services 312-744-7076
Chicago Economic Development Commission
Sandra Streed 312-832-0302
Illinois Department of Agriculture
Nieves Friedman 312-814-7212
Illinois Department of Commerce & Community Affairs
Larry Michaud 217-524-6493 or 800-785-6055
Sandy Rolando 217-782-6675
State of Illinois European Office
Bart Smit, Managing. Dir. 011-32-2646-5730|
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