Managing water resources is another challenge. While Pennsylvania's abundant water supply is a competitive advantage, that resource is not limitless. The food processing industry uses more than 10 billion gallons of water each year, and as firms and populations grow, water quality will become a major issue. In the food processing industry, about two-thirds of the firms use municipal water sources, and the quality of that water is crucial when it is a product ingredient. Most processors today are not taking the state's water for granted but are making an effort to either recycle or conserve it. For instance, the Classic Caramel Company in York used 87,000 gallons of water for an eight-hour shift in 1987. Today, thanks to an intensive recycling effort, the plant uses 3,200 gallons per shift.

Waste management, including wastewater and solid waste disposal, is yet another large hurdle for many companies. According to Dunn, in the future more firms will have to take on the expense of treating their own wastewater. Some big corporations, such as Tyson Foods, already have installed expensive treatment facilities. Large firms that once sent food processing and packaging wastes to landfills are now finding uses for these by-products. Meatpacking operations can market by-products from blood, bones, and fat. Moyer Packing, for example, has a rendering operation that produces animal feed ingredients, grease, and tallow. "Processing solid waste solves a lot of problems for companies that otherwise would have to dispose of it or pay to have it hauled away, and adds to the bottom line." Dunn says. "But smaller firms that can't afford to install treatment systems or invest in new technology are at a disadvantage."

A lack of qualified employees also may impede industry growth. While the state's long manufacturing history has provided a reservoir of highly motivated laborers with a keen work ethic, many businesses foresee a shortfall in qualified workers with the necessary technical skills. A 1992 report on the food processing industry compiled by Dunn reveals that many workers seeking manufacturing jobs are deficient in basic math, English, and communication skills. "Our young people must be educated to deal with changes in the workplace, but about 30 percent of those who begin college don't finish," says Robert Lukas, president of Classic Caramel. "Young people who lack a college education are looking for high-paying manufacturing jobs, and those are long gone. We probably need to be offering a technical education at some colleges."

Penn State's food science department provides technical education through its respected short courses on ice cream and chocolate manufacturing, sensory analysis, pastuerization, sanitation, and processing control. "Perhaps our most important outreach role is supporting small- or medium-sized companies, many of which do not have research and development programs but may be able to apply findings from our faculty's independent research," says Donald Thompson, who heads the department. He emphasizes, however, that the university's role is not to conduct proprietary research for individual companies. In most cases, Penn State's food scientists do research applicable to an entire segment of an industry, and they may have highly specialized expertise useful to certain businesses within that industry.

Of course, Penn State's biggest contribution to the industry is its steady stream of knowledgeable graduates. The food science program has approximately 120 undergraduates and about 48 graduate students. Thompson explains that more companies will need college-educated experts in areas such as food safety or product quality to remain competitive and comply with federal and state regulations. "Keeping companies on the cutting edge of technology is very important for the growth of an industry," he says.

In Pennsylvania, companies both large and small have succeeded by turning the state's bountiful agricultural products into foods that appeal to the largest concentration of consumers in the country. If this economic engine is to thrive in the 21st century, companies must be efficient manufacturers and able marketers. Clearly, the sheer volume of competition in nearly every segment of the state's food processing industry has made Pennsylvania a model for economic development. In addition, the commonwealth's commitment to bring in new manufacturers and help existing firms to expand indicates that the state once known for Big Steel is now ready for a new era of economic growth. "Food processing is being done in all parts of our state," Dunn says. "It's in urban areas and in rural communities where there are no other industries. Food processing will be Pennsylvania's great economic strength in the future."

Faculty referenced in this article are Donald Thompson, associate professor and head of food science, and James Dunn, professor of agricultural economics.