Regional Food Manufacturing Could Grow Local Ag Economy

Your eyes may glaze over when you hear the term “value-added food production.”

But it’s really just a wonky way to describe any process that turns raw ingredients into food that ends up on our plates.

“That’s what’s in a package, that’s what’s already pre-cut. That’s what's turned into canned tomatoes,” explains David Shabazian, the rural-urban connections strategy manager with the Sacramento Area Council of Governments.

When Shabazian hears “value added food” he thinks of two things: value and jobs.

For every dollar we spend on food, the farmer gets roughly 15 cents, Shabazian says.

"There's another 40 cents or so in aggregating that food, processing it and distributing it into the marketplace," Shabazian says.

And there are job opportunities at every step along the way of food manufacturing.

Shabazian has studied the economic assets of the regional food economy. He argues that if Sacramento wants to capture more of our local food dollar, we've got to do more processing here. 

"So there are trucks taking food out of the region to be processed somewhere else," Shabazian says. "But then there are trucks coming into the region with food that's processed and ready to be put on a shelf. "

Instead of trucks passing in the night, Shabazian says the region can close that loop, and along the way, create more food jobs in the six-county Sacramento area. Plus, the region would be paying itself to do the food manufacturing work instead of sending it out of county or out of state.

Shabazian adds that if local companies successfully scale up food manufacturing, Sacramento could potentially export that product.

Small food manufacturing is a growing trend - like those local breweries popping up everywhere or the small-batch jam company you see at the farmer's market.

And food manufacturing is kind-of a comeback story for this region.

Trish Kelly is the Managing Director for Valley Vision, a non-profit leadership organization focusing on economic development in the Sacramento region.

"We used to have a lot of processing here, and there was a lot of consolidation and different market changes," Kelly says. "So in some ways, we lost a lot of what we had but now we're recapturing it."

Kelly sees great promise in the rise of local food entrepreneurs. She argues they’re an important part of a local economic development strategy.

“We have about 70 breweries in the region,” notes Kelly.

“They’re scaling up and growing fast. As they grow, they not only need locations, they need specialized equipment like bottling facilities.”

Kelly says there are more and more opportunities for the region to supply local producers with the tools and innovation they need to produce their products.

The region's specialty crop value was about $1.5 billion in 2015. The rest of the value in the AG and food sector is another $4.5 billion.

That second number is generated by everything that happens to crops after they come off the branch or out of the ground and before they end up on the grocery store shelf.