Pennsylvania Processors Add Value to Food Products

It's payday, and the grocery list is a long one. Time to stock up. Let's start with a jug of Harner Farm's cider. Into the cart. Those Country Fresh mushrooms look like they've just been picked–I'll get a package to stir fry. Cope's corn, Furman's stewed tomatoes, and Hanover beans, peas, and carrots–that should take care of the vegetables. Oh, and a jar of Musselman's apple-sauce. Into the cart. This Stadium Ham will be good for Sunday dinner, and I'll toss in some Nittany Lion Franks for the kids. Can't forget the Lebanon bologna. Better pick up a loaf of Stroehmann's potato bread for sandwiches. Into the cart. We'll need snacks for the weekend–Snyder's of Berlin barbecue chips for Tom, Utz chips for me, and Bachman's pretzels for Colleen. Don't forget dessert. Everyone likes this Turkey Hill ice cream and Mrs. Smith's custard pie. That should do it!

The shopping cart is full, and all of the products in it have been processed right here in Pennsylvania. Our state has the largest food-processing industry in the Northeast and ranks among the top five in the nation. The biggest segments of the industry are bakery products (18 percent), meats (16 percent), sugar and confections (nearly 16 percent), preserved fruits and vegetables (13 percent), and dairy products (11.5 percent). We have more bakeries than any other state and rank first in production of pretzels, potato chips, chocolate, and other confectioneries. We're second in egg processing, ice cream and yogurt, processed meats, and pet food. In addition, Pennsylvania leads the nation in mushroom production and is among the top 10 in production of milk, cheese, red meat, poultry, grapes, peaches, apples, cherries, pears, tomatoes, snap beans, and sweet corn. "California is perhaps the only other state that has such a diverse mix of industries," says Penn State agricultural economist James Dunn.

Pat Burnley (top) is co-founder of Kitchen Kettle Village, a company based in Intercourse that specializes in relishes, pepper slaw, and jams. The firm caters to the hospitality industry, and its product showroom (bottom) is popular with tourists.

Although the rest of the country may think of Pennsylvania as a Rust Belt relic, dotted with shuttered steel factories, our state has a strong food processing tradition dating back to colonial times, when it was known as the breadbasket of America. Today, we have more than 2,300 food companies, ranging from small businesses that grade and package fresh eggs to large corporations like Hershey Foods, which turns out 30 million chocolate kisses a day. These businesses employ more than 90,000 workers, who earn an average salary of $23,206. According to a 1992 Penn State study of 20 leading industries in the commonwealth, food processing accounts for nearly 9 percent of all manufacturing jobs and ranks third in the creation of new jobs.

Unlike many other states with large manufacturing sectors, Pennsylvania's food industry is not dominated by any one company or product. While there are a few giants like H. J. Heinz Co., a Pittsburgh-based international corporation with a workforce of 40,000 and $6.6 billion in annual sales, most of the state's food processors are mid-sized operations employing fewer than 50 people. This diversity provides a natural buffer for the state's economy during business downturns.

One reason Pennsylvania has attracted and sustained such a diverse food industry is the abundance of low-cost crops supplied by the state's 51,000 farms. The Bachman Co., which has plants in Reading, Ephrata, and Phoenixville, uses millions of bushels of locally grown soft winter wheat each year to make pretzels. Milton Hershey started a caramel company in Lancaster in 1886 to capitalize on the availability of milk from local dairies and later built his chocolate manufacturing plant in the region, in large part for the same reason. Hershey Chocolate North America is still a heavy user of the state's milk–about 1 million pounds per day. On a smaller scale, Kitchen Kettle Village, an Intercourse-based firm that caters to the hospitality industry, makes 65 different products such as relishes, pepper slaw, and tomato jams. "The Amish community plays a vital role in our business equation," explains Bonnie Thaler, quality control manager for the firm. "Our local farmers provide us with high-quality crops, which helps us stand out in the marketplace."

Another plus for the industry is the state's abundant supply of high-quality water. "Historically, food processors have been heavy users of water for washing, cooling, and as an ingredient," says Chris Herr, deputy secretary for regulatory programs in the Pennsylvania Department of Agriculture. "You could build a plant and expect to draw a million gallons a day without a problem." The state's high-quality water is very important to manufacturers like Maier's Bakery, a company specializing in bread products. "Our water is our second most important ingredient," says Ronald Dunkelberger, vice president of operations. "To maintain the quality that differentiates our product, we depend on consistent water quality."

This production line at Iceland Seafood in Harrisburg is manufacturing breaded fish products for school lunches. The company ships its products to all 50 states as well as Puerto Rico, Mexico, Canada, and South America. The firm's customers include Red Lobster, Long John Silver's, and Popeye's.

If the founding fathers of the 13 original colonies were thinking of economic development, they couldn't have picked a better location for food processors than Pennsylvania. "It's called the Keystone State for a very good reason," says Dunn. "We're smack dab in the middle of the largest, wealthiest market in North America." Nearly 25 percent of the nation's population lives in Pennsylvania or its six neighboring states, and four of the five largest markets in the country are within 500 miles of Harrisburg.

To feed such a huge market, companies have to ensure a steady supply and timely delivery of products that often are perishable. Proximity to markets is the main reason why Iceland Seafood Corp., which processes fish into breaded or frozen products, is located in Camp Hill. The company ships to all 50 states as well as to Puerto Rico, Canada, Mexico, and South America. Its products go to national restaurant chains like Popeye's, Long John Silver's, and Red Lobster, in addition to institutional clients, such as schools, hotels, and food service firms. "We're at the crossroads of the world," says Tom Sublett, vice president of operations for the seafood firm. "We can truck fish in from various ports on the Atlantic seaboard and ship our products out at very competitive freight rates. It's our number-one advantage."

- John Wall