Food and Beverage
In world food processing and its significance for public policy and management purposes, an economic analysis of the relationship between scale and productivity was done.
With the changing global agri-food environment and future demand opportunities, scale in food processing is a factor that allows participating firms to compete successfully.
Large scale processing drives large scale demand for agricultural products, which in turn leads to growth of markets along the whole value chain and allows firms to satisfy both domestic and export markets.
The results of the study show the following:
- In rural areas food processors are significantly smaller in scale than their US counterparts. On average, food processing facilities have half the number of employees and less than half the sales revenue of US facilities.
- Larger facilities are more productive – value added per employee for establishments at the 75th percentile is twice the level for the median establishment. To the extent Canadian establishments have not achieved scale; this hurts the industry’s overall productivity.
- firms noted the following regarding scale and productivity:
- Operating plants at a competitive/efficient scale is fundamental
- Firm scale allows for the overhead of enhance marketing, HR, and R&D
- The perishable nature of the product and transportation cost relative to the size/concentration of the local market limits plant scale.
- Custom-fabricated large specialized drilling equipment, available for projects anywhere in the world
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At KPI our specialists can help your team evaluate these factors and tailor a program specific to your organizations’ goals.
KPI has the expertise to help you drive results by developing and implementing innovative strategies, improving operations while reducing the risk.