2012 MANUFACTURING TRENDS SURVEYF O O D & B E V E R A G E • C O N C E P T T O D E L I V E R Y • P R E S E N T T O F U T U R E

D espite lingering overall economic un-certainty, food & beverage processors apparently have come off a pretty good

year. Those with plant operations responsi-bility remain cautiously optimistic for their prospects for profits and growth for the new year, according to Food Processing’s 2012 Manufacturing Trends Survey.

That optimism is tempered by what may turn out to be a structural shift as consolida-tion and outsourcing give rise to greater un-coupling of brand owners and the plants that

produce their products. Capital expenditures, automation, energy

and sustainability issues continue to make gains, albeit with mixed messages as to the rate of growth. Still, the overall picture for 2012 is healthy, given the challenges processors face and factors beyond the industry’s control – such as rising commodity costs, government regulations and worldwide financial uncer-tainty in this increasingly global business.

The big question may be: Can we beat 2011?

Processors can’t get a

break from uncertain

markets, rising costs

and changing safety

standards, but they

continue to grow and

keep optimism high.By Bob Sperber, Plant Operations Editor

Can ProductionThis Year Top 2011?

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2012 AND BEYOND: THREE TRENDS THAT WILL REDEFINE THE FOOD AND BEVERAGE INDUSTRYBy Dexter Manning, National Food and Beverage Practice Leader, Grant Thornton LLP

Our first question on the survey, “What are your manufacturing priorities for 2012?” (Fig-ure 1) saw not a single change in the order from last year – but some tiny movements up and down within the 10 priorities. Food safety, of course, remains Job One; cost control remained about even with last year’s votes; sourcing & materials garnered a few more first-place votes and a gain in its average score; labor concerns nearly doubled its first-place votes; environmen-tal concerns rose, too.

Only 4 percent saw a pay cut in their factories last year; 41 percent think salaries will increase this year. Other top-line results:

• 45 percent say their companies are growing.• 23 percent expect plant expansion.• Less than 6 percent expect a decrease in

production.

FIGURE 1Manufacturing priorities for 2012

Rating average

First-Place Votes

Food safety 8.2 53%

Cost control 7.6 30%

Inspection/certifications 6.3 21%

Automation 5.5 13%

Labor (recruiting, training, turnover, reductions) 6.3 13%

Sourcing & materials 6.7 13%

Energy issues (sourcing, cost) 6.2 12%

Environmental concerns 5.9 11%

Water issues 4.9 11%

Consolidation challenges 4.7 5.5%

When survey respondents were asked to rank their top priorities for 2012, it is not surprising that the most frequent top priorities are food

safety (53%) and cost control (30%). Food safety has al-ways been essential, and with the sweeping changes of the Food Safety Modernization Act of 2011, these will continue to be a major focus. But, as Yogi Berra aptly put it: “You can observe a lot by just watching.” Based on this approach to market research, I believe there are three trends that will redefine the food and beverage industry over the next decade.

Trend 1: Sustainability matters to consumers and manufacturersEnvironmental/sustainability issues are a top concern for 11%, up from 8.5% last year. And, more than one-third (36%) of companies say their company’s green initia-tives for 2012 are becoming more important than they were in 2011.

A few examples of this focus on sustainability in-clude Coke and Pepsi’s competitive efforts to produce a completely plant-based bottle. Coke has said that they expect to replace all plastic bottles with 30% plant-

based plastic by 2020. Pepsi wants to do it faster.1

Target announced plans in 2011 to sell only sustain-able seafood in their stores by 2015. Retail giants Wal-mart, Safeway, Whole Foods and several other retailers have said they are also moving to sustainable seafood.

What is driving this push on the part of companies? A McKinsey survey found that cutting costs is now the top reason for companies to address sustainability, be-hind corporate reputation, the former top reason. While corporate reputation and idealism might be the driving forces for some companies, most have found that cost reduction and sustainability are compatible.

Consumers too are concerned about sustainability and environmental concerns. Younger shoppers in their 20s and 30s are especially likely to fork out a premium for food and drink products boasting a low carbon foot-print score.

Trend 2: Technology continues tochange food and beverage purchases As companies have embraced technology to reduce costs and become more efficient, consumers are using

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1 William Neuman, “The Race to Greener Bottles Could Be Long”, New York Times ( Dec. 16, 2011). http://www.nytimes.com/2011/12/16/business/energy-environment/coca-cola-and-pepsico-race-for-greener-bottles.html

2 Phil Lempert Supermarket Guri, “Top Ten Food Trends 2012” (Dec. 5, 2011). http://www.supermarketguru.com/index.cfm/go/sg.viewArticle/articleId/2636

FIGURE 3How do you feel going into 2012?

technology in greater numbers to find deals, information and coupons and to express their buying preferences via social media. Look for quick response codes to ap-pear on food packaging in the near future, and apps that allow users to select the ingredients they want to avoid, which are flagged by a warning system, and cus-tomize calorie and other nutrient parameters. Soon, the ingredient’s origins, the use of pesticides and genetic modifications, are also likely to be featured.

Trend 3: Changing demographics means new expectationsThere are vast demographic changes unfolding among consumers that will undoubtedly have many ripple ef-fects for food and beverage processors. The first wave of baby boomers reached retirement age in 2010, and the roughly 76 million baby boomers control 52% of the total $706 billion spend on groceries2. The baby boomer generation is expected to have a longer av-erage lifespan and, as a result, these consumers are becoming more interested in food and beverages that

offer health, wellness and nostalgia. At the same time, millennials, age 16 to 30, are

estimated to number about 78 million in the U.S. and are also a growing portion of buyers. Millennials are very interested in where and how their food is pro-duced and are very adept at using their mobile devic-es to find information. Generally, they don’t like to be advertised to, but rather they prefer to be advertised “with” – for example, using cause marketing. Millen-nials are more likely to pay a premium for food and beverages when they feel the companies producing these goods are environmentally responsible.

The ethnic population in the U.S. is also surging. As the nation’s demographics continue to shift, the food giants are scrambling to figure out how to mainstream ethnic foods.

The message here is not to lose sight of the dra-matic demographic changes happening around us. In order to succeed and grow, companies need to know their target markets much better than in the past and communicate with those customers in effective ways.

• 63 percent say they’re optimistic going into the new year – that’s less than the 66 percent of optimists in both 2010 and 2011, but way above the 44 percent in 2009.

Processors volunteered write-in statements, as well. There were multiple comments that placed maintenance high on the priority list, in large part because the discipline serves to maximize asset health and lifecycle costs, thereby conserv-ing or delaying capital expenditures. Others cited cost and budgetary constraints; capacity management and utilization; managing staff as plants close or are consolidated; and maintain-ing product quality.

By the way, the survey was taken between Nov. 14 and Dec. 20, 2011. We had 205 responses, and all should have been food & beverage processors with plant operations responsibilities.

FIGURE 2Given the state of the economy, are your company or plant’s “green” initiatives for 2012...

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BUILDING PRODUCTION CAPACITY THROUGH M&ABy Brian Basil, Director of Corporate Finance, Grant Thornton LLP

Growth is on the horizon for food and beverage manufacturers. According to survey findings, three quarters (75%) of respondents expect to

increase their plant production or at least keep it con-sistent with 2011. More than one in five (23%) expect to expand their production or number of plant facilities in 2012. At the same time, M&A activity among food and beverage companies continued to improve in 2011, nearing the volume totals of 2007, with 326 reported deals in the U.S. This marks the third consecutive year of M&A volume improvement in the food and beverage industry.

This deal activity is driven by several factors. Corpo-rate earnings are improving from the lows of the reces-sion, which allows companies to pay down debt and increase cash reserves. And, while earnings are improv-ing, organic growth is still anemic — as demonstrated by historically slow GDP growth. The result is that many businesses are increasing their M&A activity — seeking opportunities to supplement organic growth through acquisitions. These deals are being fueled by abundant cash reserves, as well as aggressive lending from banks and other providers.

Moreover, many companies find that acquiring a company is a more efficient way to increase capacity than building a new facility. This is important for the food manufacturers that expect to increase production during 2012. While some producers may have excess capacity, many will need to increase capacity to meet production requirements.

Building new capacity is fraught with challenges. Many capital projects significantly exceed budget, both in money and time. The longer and more expen-sive the delay, the greater the effect and risk to the business. Once the facility is completed, there can be more challenges to overcome, such as obtaining ap-propriate permits and licenses and hiring an entirely new workforce. Regulators are notorious for delaying permits, and new employees are typically much less efficient than those with experience, which can lead to production delays and inefficiencies once the facil-ity is built.

On the other hand, acquiring a business with open capacity avoids many of these issues. The facility is al-ready built, in-service, has the necessary permits and a seasoned employee base. Thus, a buyer can generate profit from day one, rather than waiting months and facing delays. A buyer can also benefit from expanding the business into new areas, cross-selling new/existing products to new/existing customers, and gaining new production expertise and efficiency.

Of course, buying a company can be a risky ven-ture. The capital outlay can often exceed a green-field plant, and the buyer needs to conduct in-depth due diligence to make sure things are as represented. Pric-ing a transaction can also be tricky, as there are many factors that impact the purchase price. For this reason, both buyers and sellers should use knowledgeable fi-nancial and legal advisers. Doing so can mitigate risk and improve the odds of a successful acquisition.

‘We’re growing’When asked, “How is your company dealing with the economy?” 45 percent said “We’re growing,” in-dicating sustained optimism, just a point over last year’s response. Since the financial meltdown, per-haps driven by optimism or confidence in long-term planning, there’s been a steady uptick in the number of respondents whom have said they expect to make “no great changes,” from 32 percent to 36 percent to 39 percent over the past three years.

In our survey, one-tenth of respondents cited “oth-er” ways of dealing with the economy. These included efficiency improvements, cost and waste reductions,

FIGURE 4How is your company dealing with the economy?

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FIGURE 5For 2012, is your company planning to…

FIGURE 6If you know your company’s capital spending budget for 2012, compared to 2011 is it...

price increases and generally “minding every output” in the face of rising commodity costs.

Some noted the difficulty of finding qualified em-ployees, while another seemed to answer those com-ments by saying: “We are growing with process de-sign and moving toward mechanical automation to increase production.”

On the negative side, expectations of staff reduc-tions are up to 18 percent of respondents vs. last year’s 13 percent, which itself represented a drastic reduction from the prior year’s 34 percent. The other side of that coin: 28 percent expect an increase in hiring, better than last year’s 26 percent.

Now, much like the proverbial “other shoe drop-ping,” comes outsourcing. Last year, 3.6 percent said they would outsource within the U.S. and Canada and another 3.6 percent outside of those boundaries. Today, 6.5 percent of respondents plan to outsource to manufacturers in the U.S. and Can-ada and 5.5 percent will outsource further afield. While staff reductions and more outsourcing could put employees on the streets, it also may be a net neutral for the industry – but with the same work-ers and plants operating as low-cost contract manu-facturers and packers for the brand-owners, who have retrenched to focus on their core competency, marketing.

This view is perhaps bolstered by a 6-point decline in those expecting their companies to expand (23 percent). Nevertheless, 72 percent of respondents’

anticipate that their plants will see a production in-crease in 2012, up roughly 3 percentage points from a year ago.

Shifting from the size of the workforce to its com-pensation, survey-takers remain conservative in their expectations, but have been rewarded for meeting the challenges of the times. In 2009, 35 percent of respondents expected salaries to rise at their plants, and subsequent research showed that salaries rose instead for 45 percent. When asked about 2011, 40 percent expected their facility to increase salaries, and once again, they underestimated: 48 percent of plants increased salaries, according to this year’s re-spondents. 41 percent of this year’s group expects a raise in 2012.

Automation and food safetyOver the past few years of economic uncertainty, roughly 30 percent of respondents have cited au-tomation as one of their three top priorities (this year, 13 percent ranked it first, 7.5 percent rated it second and 9.5 percent placed it third). But it may be more important than the numbers indicate. It serves as a tool to support other high-priority is-sues, such as labor reductions (and labor consisten-

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cy and quality), cost-containment, process efficiency, quality control and regulatory compliance. One respondent replied, when asked how his company is dealing with the economy, “We’re going full blast with automation.”

These figures may be contradictory, but 17 percent report “all or most of the plant” is automated – last year’s number was only 5 percent. But only 8 percent say the “entire production line” is – versus 15 percent last year. Automation in production sections saw a healthy 9 percentage point increase, to 54 percent, while packaging sections dropped

BUILDING A BUSINESS INTELLIGENCE FOUNDATION FOR STRATEGIC DECISION-MAKINGBy Tony Hernandez, National Business Intelligence Solutions Practice Leader, Grant Thornton LLP

Food processors are under more pressure than ever to be efficient, keep customers happy, optimize their supply chains and achieve compliance with

new food safety rules. The ability to make strategic, operational and tactical decisions based on accurate and timely information is crucial. Business intelligence (BI) solutions provide processes and software appli-cations that consolidate and integrate disparate data into easy-to-use executive dashboards, operational scorecards and detailed reports for all types of busi-ness users, that lead to effective decision-making.

Nearly all companies generate vast volumes of valuable data throughout their supply chain, yet ac-cessing this information and collating it effectively can be daunting. Critical data reside in numerous and disparate supply chain systems, many of which are not integrated from a reporting perspective. Fur-thermore, definitions of net sales, inventory or cost of poor quality (COPQ) differ from one plant, division or subsidiary to another. Consequently, many execu-tives cannot rely on their reports to give them the “one version of the truth” they require or provide the insight necessary for their companies to survive and thrive in a fiercely competitive marketplace.

Implementing enterprise BI solutions can lead to valuable qualitative benefits across the supply chain:

• Higher overall quality: When manufacturing per-formance is consistently measured and reported with enough detail to drive accountability, issues

regarding quality can be identified and remedied much earlier.

• Increased productivity: With advanced analytics enabled by BI, manufacturers can identify and assess variances (e.g., price, material usage, la-bor) faster and take stronger actions to optimize productivity.

• Lower costs: With more intelligent sourcing, re-porting and analytics, costs related to production and delivery can be managed more effectively.

Effective BI must be based on the unique needs of each business user group. This requires understand-ing what information leaders need on a regular basis to drive action in their organizations. For example, if the manufacturer’s goal is to reduce external COPQ (ECOPQ) by 30 percent in three years, then the com-pany must design metrics and construct the BI solu-tion to measure quality drivers appropriately.

A culture built on robust BI helps companies react quickly to market and regulatory changes and, more importantly, remain competitive and foster growth. When designed and implemented properly, BI solu-tions offer organizations the ability to make critical decisions and drive action-oriented results based on accurate and timely reporting about their supply chain operations — allowing executives to proactively moni-tor their business, identify trends, detect problems early, and drive action and accountability throughout their organizations.

FIGURE 7What portion of your plant has been automated?

insignificantly to 37 percent.Food safety is the top prior-

ity of most food processors every year. Asked about their level of concern about E. coli, salmo-nella, listeria or other pathogens for the coming year, 21 percent said they are “more concerned – I think more incidents are com-ing,” compared to 18 percent last year. Those who are “less con-cerned” and feel “things are un-der control” are up just a point, to 17 percent. These changes have come at the expense of the perennial, majority “same level of concern – these worries nev-er go away,” which declined 5 points to 62 percent.

Asked if they implemented new food safety measures in the past year, 70 percent answered in the affirmative. That’s not a big drop, but it is 5 percentage points below last year’s response for year 2010. Not unexpectedly, then, the number of respondents who did not increase food safety measures has gone up annually, too: 23 percent in this year’s sur-vey did not do more last year, and 16 percent don’t expect any more programs this year.

Perhaps this is understandable in light of the fact that many programs are ongoing and not technically “new.” Likewise, looking forward to the coming year, 68 percent say they will implement new measures, again,

lower than last year’s 70 percent.Asked to cite specific prac-

tices their facilities implemented in 2011 or will implement in 2012, employee training was by far the most-cited at 72 percent, followed by third-party certifi-cations (49 percent), HACCP planning (47 percent), and sev-eral other practices involving improvements in sanitary design and equipment, pest control, microbial detection systems and the use of outside consulting services. One interesting devel-opment is that this year (for ac-tivity during 2011) third-party certifications overtook HACCP plans for second place.

Paradoxically, certifications under the various schemes of the Global Food Safety Initiative are down. Last year 51 percent of re-spondents were pursuing compli-ance under the Safe Quality Food Initiative; only 40 percent report doing so coming into 2012. Simi-lar drops were recorded in GFSI programs from the British Retail Consortium and FSSC 22000. Only International Food Stan-dard and Dutch HACCP were up. Perhaps most GFSI initial ef-forts were concluded last year – or maybe we diluted the answers a little by this year adding AIB certification (being pursued by 17 percent).

Part and parcel of the need to meet government and mar-

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FIGURE 8Did you implement new food safety measures in 2011?

FIGURE 9Will you implement new food safety measures in 2012?

FIGURE 10Compared to last year at this time, how concerned are you about E. coli, Salmonella, listeria or other pathogens?

ket safety mandates is the need for food tracking and tracing programs, which 78 percent of respondents currently have in place today.

Underlying all forms of plant improvements, from food safety to machinery and automation/information systems, is the need for funding. As reported in our own 2011 Capital Spending Out-look in April 2011 (www.Food-Processing.com/articles/2011/capitalspending.html), capital expenditures were expected to enjoy a very healthy recovery for the second year following “a dis-mal 2009, in which a 15 percent

drop in expenditures reflected the global economic crisis.” The Manufacturing Survey results in-dicate 47 percent of responding companies are increasing bud-gets this year, and 16 percent of them by more than 10 percent. The biggest answers, however, were “about the same” or “I don’t know.” Only 8.2 percent of re-spondents expect a cut.

Asked if the economy led to capital projects being deferred from 2011, 32 percent of respon-dents said their plants did delay some work – a pleasant surprise from last year’s survey, when 45 percent said 2010 projects got

the red light.Energy management projects

gained proverbial steam in this year’s survey, likely for the simul-taneous benefits of environmen-tal sustainability and the reality that they offer a measurable pay-back. While energy management is “not a burning issue right now” for 24 percent of survey-takers, that number represents a three point drop from last year’s sur-vey. 61 percent say they are “tak-ing steps in energy conservation,” up four points from last year. A wide variety of initiatives are be-ing pursued, led by energy audits (34 percent) and followed by re-

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FIGURE 11What are the specific practices your facility has implemented in 2011, or will implement in 2012, for better sanitation and food safety?

FIGURE 12Do you currently have an ingredient / food tracking or tracing program in place?

0% 10% 20% 30% 40% 50% 60% 70%

47%

43%

72%

49%

35%

34%

7%

5%

26%

21%

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Food and beverage companies cite increased regulation as one of their biggest constraints, particularly given the passage of the Food

Safety Modernization Act (FSMA) in January 2011. The FSMA shifts the focus on the United States food supply from contamination response to con-tamination prevention. In fact, companies are reporting seeing more FDA inspectors than ever, despite the fact that most of the provisions of the FSMA have not yet taken effect.

New rules require companies to assess,evaluate, documentWith this change in focus to contamination pre-vention, companies will now be required to assess and evaluate their food safety plans by implement-ing procedures and controls that will prevent and detect potential food safety issues. Companies need to establish, document and monitor controls, with a re-assessment required every three years, at a minimum.

Each company’s documentation must include corrective actions taken in response to issues iden-tified. In short, companies must be able to dem-onstrate very clearly how they remediated controls to address both significant risks and safety issues noted. In addition to preventive measures, verifi-cation procedures must also be performed, which must include both final product and environmental testing.

Know suppliers’ processes and controlsFood safety plans also must include consideration of suppliers. This is important because it will re-quire an understanding of suppliers’ processes and controls for ensuring product safety. Most com-panies claim that they know their suppliers well, but do they know precisely where their suppliers’ ingredients are coming from? Are they aware of what processes suppliers have in place to ensure safe procurement and production?

The FSMA has implications for foreign suppli-ers as well. The FDA has indicated that U.S. com-panies that import or sell foreign products must ensure that foreign suppliers are complying with the FSMA. Written food safety plans will also be required from foreign suppliers.

Companies must remember that they will now be required not only to document and evaluate rigorous

safety processes, but will also have to defend policies, procedures and controls upon FDA inspection.

FDA focus on documentation of controlsOne of the most significant changes to the over-sight of the FDA granted by this legislation is that each company’s written plans, processes, controls and response and remediation procedures will now be a focus of the FDA’s inspections, as all documentation must be made available to the FDA upon request.

Controls are expected to focus on such areas as employee training, supplier controls, plant sanitation, environmental testing and recall plans. While there are no real surprises, this will require a complete assessment of controls, as well as a significant amount of documentation. There is no cookie-cutter approach, in that each company will have to make an assessment based on the factors present at its sites.

Timing of new rules and inspectionsThe FSMA requires that food safety plans be imple-mented within 18 months of enactment (or mid-2012). Consequently, 2012 is a big year for food processors as the law requires them to have docu-mented, formal plans in place. Most companies believe that such policies exist; however, the FSMA requires a re-assessment and formalization of such policies and procedures.

Under the FSMA, the FDA will be required to designate domestic facilities as either high risk or non-high risk. High risk facilities will be required to be inspected every three years, starting within five years of enactment. Non-high risk facilities will have to be inspected every five years, starting seven years after enactment.

Expect more recallsPrior to the enactment of the FSMA, recalls were voluntary. The FDA can now require a recall with “reasonable probability” that food is tainted or mis-branded and could cause serious health risk or death. Consequently, recalls are likely to increase in number. The FDA can also impose civil penalties with failure to comply. Yet, companies are granted the opportunity to recall the products themselves prior to issuing a recall order. If a company fails to do so, the FDA has the authority to issue a formal recall order.

WHAT FOOD PROCESSORS NEED TO KNOWABOUT THE FOOD SAFETY MODERNIZATION ACT By Tony Perazzo, Audit Partner, Grant Thornton LLP

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cycling/redirecting energy (18 percent), negotiating with energy providers (17 percent) and seeking alternate energy sources (16 percent).

Asked how their plants’ “green” ini-tiatives are faring “given the state of the economy,” 36 percent, or roughly the same proportion of respondents, said such projects are becoming more im-portant than they were in the previous year. An interesting difference between last year’s survey and this one is that 19 percent say green projects are either becoming less important or are not im-portant to them, up from 14 percent a year ago.

Overall, the industry remains op-timistic, but with reservations caused by market and regulatory uncertain-ties which threaten that optimism. In open-ended comments, numerous processors suggested a need to shed ad-ditional light on, for example, the un-certainty and practical implementation of standards and regulations. Some survey-takers mentioned environmen-tal issues, while more cited food safety-related issues.

One respondent sees a need for more detail on FSMA rules, including costs of compliance and third-party audit requirements. He also called for more cost-benefit data on GFSI compliance as allocations in audit time have “sig-nificantly increased.” Another said he’d like more research on regulatory concerns, taxes, fees, labor costs, pes-ticides and international differences. One would like to see more and better reporting by all processors to the FDA,

Energy management continues to be a burning issue for some food and beverage companies, albeit slightly less so than a year ago. Only 36 percent of respondents report

that their plants’ green initiatives are more important than they were in the previous year.

Sustainability is important to most food processors. More than six in 10 (61%) say they are taking steps toward energy conservation. This commitment to sustainability is also being fostered by federal and state governments, which are expand-ing tax credits, incentives and grant programs for companies that are going green. As such, there is a strong payback for companies’ green investments.

Both energy providers and state governments are driving forces in providing green incentives and grant programs. For example, New York offers local businesses the ability to buy low-cost power based on a commitment to maximize energy efficiency, job retention and creation, capital investment com-mitments and other factors through the ReCharge New York Power Program. This statewide economic development power program for qualified businesses and not-for-profit corporations is designed to retain and create jobs through allocations of low-cost power. Participating New York businesses can save up to 20 percent in electricity costs. The ReCharge New York Power Program offers an award period of seven years and is backed by a dedicated block of sustainable hydropower. The program is available to qualified companies and not-for-profit organiza-tions.

Although survey respondents report they are pursuing a wide variety of green initiatives, energy audits are the most wide-spread, at 34%. Less than 18 percent report that their plants are negotiating with energy providers.

The Tennessee Valley Authority (TVA) and TVA distributors of-fer a competitive utility savings opportunity for businesses in their service territory that are investing in a new or existing facility. Ma-jor states within the TVA service territory include Georgia, Ken-tucky, Tennessee, North Carolina, Virginia, Alabama and Missis-sippi. The TVA Valley Investment Initiative is an incentive program that reduces a business’ monthly power bill by five to 10 percent for an award period of up to five years. The award is based on an energy efficiency commitment, job creation and retention, capital investment commitments, average wages paid and the business’ load factor.

Presently, both federal and state governments offer numer-ous tax credits and incentives for businesses making capital in-vestments in going green. For food processors looking to grow their business, now is a great time to invest in capital projects, since there are numerous tax credits and incentives available that can offset costs and improve return on investment.

ENERGY MANAGEMENT IS A BURNING ISSUE: CREDITS AND INCENTIVES FOR GOING GREEN By Crystall Williams, J.D., LL.M., State and Local Tax, Grant Thornton LLP

but at the same time, reduced costs, and a separation of the agency’s food and drug functions.

Others called for more investiga-tion of broad cost-containment issues across the board, while others cited “people” issues. Like the processor who said: “We have a lot of experienced employees retiring and have concerns about a reduction in the knowledge/experience level of those employees filling in the openings.” And another, who noted that processors need to make their employees trust their pri-mary issue, because “fear is the black hole the machinery falls into.”

That’s in line with the age-old need to combat the “FUD” factor of fear, uncertainty and doubt. Which is ex-actly what the industry is struggling to keep at bay as it enters another tough but hopeful year of growth.

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FIGURE 13How are you approaching energy management?

FIGURE 15What is the dominant end product of your facility?

FIGURE 14How many employees at your facility?

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Dexter ManningAudit PartnerNational Food andBeverage Practice LeaderT 404.475.0061E Dexter.Manning@us.gt.com

Tony PerazzoAudit PartnerT 415.365.5446E Tony.Perazzo@us.gt.com

Brian BasilDirector of Corporate FinanceT 248.233.6930E Brian.Basil@us.gt.com

Tony HernandezNational Business IntelligenceSolutions Practice LeaderT 215.701.8870E Tony.Hernandez@us.gt.com

Crystall Williams, J.D., LL.MState and Local TaxT 312.602.8457E Crystall.Williams@us.gt.com

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