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Food industry
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The food industry is the complex, global collective of diverse businesses that together supply much of the food energy consumed by the world population. Only subsistence farmers, those who survive on what they grow, can be considered outside of the scope of the modern food industry.
The food industry includes:
Overview
Definitions
Food industry is not a formally defined term; however, it is usually used in a broadly inclusive way to cover all aspects of food production and sale.
Discussion
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Encyclopedia
The food industry is the complex, global collective of diverse businesses that together supply much of the food energy consumed by the world population. Only subsistence farmers, those who survive on what they grow, can be considered outside of the scope of the modern food industry.
The food industry includes:
- Regulation: local, regional, national and international rules and regulations for food production and sale, including food quality and food safety, and industry lobbying activities
- Education: academic, vocational, consultancy
- Research and development: food technology
- Financial services insurance, credit
- Manufacturing: agrichemicals, seed, farm machinery and supplies, agricultural construction, etc.
- Agriculture: raising of crops and livestock, seafood
- Food processing: preparation of fresh products for market, manufacture of prepared food products
- Marketing: promotion of generic products (e.g. milk board), new products, public opinion, through advertising, packaging, public relations, etc
- Wholesale and distribution: warehousing, transportation, logistics
- Retail: supermarket chains and independent food stores, direct-to-consumer, restaurant, food services
Overview
Definitions
Food industry is not a formally defined term; however, it is usually used in a broadly inclusive way to cover all aspects of food production and sale. The Food Standards Agency, a government body in the UK, describes it thus:
- "...the whole food industry – from farming and food production, packaging and distribution, to retail and catering."
The Economic Research Service of the USDA uses the term food system to describe the same thing:
- "The U.S. food system is a complex network of farmers and the industries that link to them. Those links include makers of farm equipment and chemicals as well as firms that provide services to agribusinesses, such as providers of transportation and financial services. The system also includes the food marketing industries that link farms to consumers, and which include food and fiber processors, wholesalers, retailers, and foodservice establishments.".
Industry size
Processed food sales worldwide are approximately US$3.2 trillion (2004).
In the U.S., consumers spend approximately US$1 trillion annually for food, or nearly 10 percent of the Gross Domestic Product (GDP). Over 16.5 million people are employed in the food industry.
Agriculture
Agriculture is the process of producing food, feed, fiber and other desired products by the cultivation of certain plants and the raising of domesticated animals (livestock). The practice of agriculture is also known as "farming", while scientists, inventors and others devoted to improving farming methods and implements are also said to be engaged in agriculture. More people in the world are involved in agriculture as their primary economic activity than in any other, yet it only accounts for four percent of the world's GDP.
Food processing
Food processing is the methods and techniques used to transform raw ingredients into food for human consumption. Food processing takes clean, harvested or slaughtered and butchered components and uses them to produce marketable food products.there are several different ways in which food can be produced.
One Off Production
This method is used when customers make an order for something to be made to their own specifications, for example a wedding cake. The making of One Off Products could take days depending on how intricate the design is and also the ability of the chef making the product.
Batch Production
This method is used when the size of the market for a product is not clear, and where there is a range within a product line. A certain number of the same goods will be produced to make up a batch or run, for example at Greg’s Bakery they will bake 1 certain number of chicken bakes. This method involves estimating the amount of customers that will want to buy that product.
Mass production
This method is used when there is a mass market for a large number of identical products, for example, chocolate bars, ready meals and canned food. The product passes from one stage of production to another along a production line.
Just In Time
This method of production is mainly used in sandwich bars such as Subway, it is when all the components of the product are there and the customer chooses what they want in their product and it is made for them fresh in front of them.
Wholesale and distribution
A vast global transportation network is required by the food industry in order to connect its numerous parts. These include suppliers, manufacturers, warehousing, retailers and the end consumers. There are also those companies that, during the food processing process, add vitamins, minerals, and other necessary requrements usually lost during preparation. Wholesale markets for fresh food products have tended to decline in importance in OECD countries as well as in Latin America and some Asian countries as a result of the growth of supermarkets, which procure directly from farmers or through preferred suppliers, rather than going through markets.
The constant and uninterrupted flow of product from distribution centers to store locations is a critical link in food industry operations. Distribution centers run more efficiently, throughput can be increased, costs can be lowered, and manpower better utilized if the proper steps are taken when setting up a material handling system in a warehouse. (1)
(1) http://www.groceryheadquarters.com/articles/2009-01-01/Boosting-efficiency-at-the-DC
Retail
With populations around the world concentrating in urban areas, food buying is increasingly removed from all aspects food production. This is a relatively recent development, taking place mainly over the last 50 years. The supermarket is a defining retail element of the food industry, where tens of thousands of products are gathered in one location, in continuous, year-round supply.
Food preparation is another area where change in recent decades has been dramatic. Today, two food industry sectors are in apparent competition for the retail food dollar. The grocery industry sell fresh and largely raw products for consumers to use as ingredients in home cooking. The food service industry offers prepared food, either as finished products, or as partially prepared components for final "assembly".
Foodservice
Food industry technologies
Sophisticated technologies define modern food production. They include many areas. Agricultural machinery, originally led by the tractor, has practically eliminated human labor in many areas of production. Biotechnology is driving much change, in areas as diverse as agrichemicals, plant breeding and food processing. Many other areas of technology are also involved, to the point where it is hard to find an area that does not have a direct impact on the food industry. Computer technology is also a central force, with computer networks and specialized software providing the support infrastructure to allow global movement of the myriad components involved.
Marketing
As consumers grow increasingly removed from food production, the role of product creation, advertising, publicity become the primary vehicles for information about food. With processed food as the dominant category, marketers have almost infinite possibilities in product creation.
Regulation
Labour and education
Until the last 100 years, agriculture was labor intensive. Farming was a common occupation. Food production flowed from millions of farms. Farmers, largely trained from generation to generation, carried on the family business. That situation has changed dramatically. In North America, over 50% of the population were farm families only a few decades ago; now, that figure is around 1-2%, and some 80% of the population lives in cities. The food industry as a complex whole requires an incredibly wide range of skills. Several hundred occupation types exist within the food industry.
Research and development
Research in agricultural and food processing technologies happens in great part in university research environments. Projects are often funded by companies from the food industry. There is therefore a direct relationship between the academic and commercial sectors, as far as scientific research.
Prominent Food Companies
- Nestlé is the world's largest food and beverage company. Kraft Foods is the largest U.S. based food and beverage company. Unilever is an Anglo-Dutch company that owns many of the world's consumer product brands in foods and beverages.
- DuPont and Monsanto are the leading producers of pesticide, seeds, and other farming products.
- Both Archer Daniels Midland and Cargill process grain into animal feed and a diverse group of products. ADM also provides agricultural storage and transportation services, while Cargill operates a finance wing.
- Bunge is a global soybean exporter and is also involved in food processing, grain trading, and fertilizer.
- Tyson Foods is the world’s largest processor and marketer of chicken and the largest beef exporter from the United States. Smithfield Foods is the world's largest pork processor and hog producer.
- Sysco Corporation, mainly catering to North America and Canada, is one of the world's largest food distributors.
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