Most everyone is probably familiar with the idea of a gap year, which is typically defined as a time where students take a break from studies, usually taken during a transition between different levels of learning—essentially a time between different stages of someone’s life. According to this year’s Annual Construction Survey, 2024 might be considered a gap year for construction in the food and beverage industry. The reason? Well, in case you hadn’t noticed, 2024 is an election year. Because of that, companies are taking a wait-and-see approach to bigger-scale projects in general until after the election.

“Since this is an election year, we are seeing food and beverage clients take longer to make decisions on scope and cost early in design due to economic uncertainty,” says Jamie Bailey, vice president of client strategy with McCownGordon. “Some projects have slowed, and others have been put on hold all together. It is a hurry up and wait scenario in most cases.”

Robb Raney, project director of food & beverage manufacturing with Burns & McDonnell, agrees and adds, “There is a noticeable hesitancy to spend large capital on construction projects. While many projects are being planned and developed, they are not progressing to the construction phase as quickly as they have over the past five years. Supply chain constraints and rising interest rates are significant factors causing delays in construction projects. These challenges are creating uncertainties and increasing costs, making companies more cautious about committing to new projects.”

Pandemic in the Rearview

While the hesitancy to commit to a larger project is due to uncertainty, almost none of that uncertainty has to do with the pandemic. Yes, there are still supply chain issues. Yes, interest rates are high. Yes, inflation is higher than normal. But all of those have plateaued even amid the upcoming changes in governance in the U.S.

“The sharp increase in lead times and material shortages associated with the onset of the COVID-19 pandemic has nearly subsided to pre-pandemic levels,” says Paul Kornman, a senior project manager with Gray who was on the project team for FOOD ENGINEERING’s 2023 Plant of the Year, Clemens Food Group’s Hatfield North facility, which was constructed during the pandemic. “While supply chain constraints, lack of laborers and cost escalation will continue to be areas of concern, they no longer induce panic among project teams and investors the way they have in recent years.

“Electrical gear, associated distribution equipment and other central utility equipment are still experiencing long lead times,” Kornman adds. “This has led Gray and others to emphasize early procurement with customers, as project schedules are at the mercy of the availability of this critical equipment. Despite the challenge of operating with an incomplete picture of the project, teams that can make decisions on sizing electrical components early in the project can dramatically impact the delivery dates. For retrofit projects, rapid discovery of existing utility capacities is vital. The quicker a contractor can be released to procure long lead items, the more successful a project will be.”

Food and beverage manufacturers are still investing in their facilities and operations, even if they’re typically not of the larger variety. “We are still seeing clients investing in their facilities to increase volume, primarily through upgrades to existing lines or new line installations,” says Bailey. “Others are investing in sustainability projects through upgrading utility technology and wastewater treatment. Also, many existing facilities are aging requiring clients to renovate or execute critical infrastructure projects.”

“Manufacturers investing in their facilities to increase volume is a trend we are observing in the industry,” says Raney. “Manufacturers are not only increasing capacity but also making significant investments in sustainability, automation and the replacement of aging assets. They are prioritizing the upgrade of existing infrastructure to enhance operational efficiency. While there has been a decrease in new greenfield projects, there is a notable increase in brownfield projects aimed at expanding capacity within existing facilities. Additionally, manufacturers are focusing more on sustainability initiatives and solutions to address workforce availability, reflecting a broader commitment to long-term operational resilience and environmental responsibility.”

Labor-less Production

The idea of workforce availability has been a common theme for a few years now. It’s definitely one of, if not the most, challenging problems to overcome, including dealing with higher costs. While we may not have seen an overwhelming rush to automate, implementing automation has become a steady constant in food and beverage manufacturing to deal with labor issues.

“The sheer number of people not showing up for shifts and scrambling to staff equipment is forcing owners to invest in automation throughout their facilities to maintain current levels of production,” says Andrew Nelson, VP of business development for ESI Group USA.

Gray Solutions’ Dean Elkins, senior director of robotics & vision, agrees, “Automation can offer a solution to both problems. With more reliable, actionable data streams and automated material handling systems, plant managers can increase produce capacity via enhanced operational efficiency while maintaining or even reducing their labor force.

“As increased labor costs contribute to lower profit margins,” he continues, “manufacturers that invest in automated technology can mitigate the effects of these higher costs. For instance, investments in automated technology can be depreciated over time, and as robotic designs become more robust and refined, maintenance needs are reduced. And while automation can’t lower the cost of raw materials, it can improve accuracy such that scrap and rework rates are reduced, allowing food and beverage processors to gain profit margin at multiple points in the value chain. Operators are using vision systems and optical character recognition to ensure that products are getting put into the right cases, which mitigates potential recalls.”

Packaging and warehousing continue to be areas of focus when it comes to automation. Both offer the best ROI and directly address the labor woes since tasks in those areas tend to be repetitive and physically challenging. Costs for systems have trended downward as more and more players have entered the market with products and services to give purchasers a variety of options.

This also means that areas beyond the packaging lines are starting to make use of automation. One area of note is quality control, which is happening in part because of advances in AI. “Traditionally, vision inspection systems required vision software experts to define specific defects, leading to rigid applications,” says Burns & McDonnell’s Raney. “With machine learning, vision systems can now learn from examples of good or bad parts and make decisions based on this learning, identifying defects they have not previously encountered.”

However, paying so much attention to automating processes can have some negative impacts. A M King’s Business Unit Leader Carl Morse points out that clients tend spend time analyzing the ROI because of the increased costs for construction, which in turn can increase the time it takes for a project to go live. “We have seen that as this gap swells, the overall operational requirements of these facilities rise to support the target metrics,” he says. “This potentially causes an increase in the overall size of the building, therefore a larger investment, but fewer viable locations and end users willing to make that commitment.”

CRB’s vice president of food + beverage, Jason Robertson, points out that his company’s recent “Horizons: Digital Age of Food Manufacturing” shows 48% of the 300 firms surveyed plan on increasing their spending on automation because of labor challenges.

“Regarding labor recruitment,” he says, “I find it interesting that many food manufacturers have not made large strides in improving the quality of life within their plants. While they often cite challenges in recruiting and retention, they should recognize that e-commerce facilities offer employees the opportunity to wear shorts and work in more appealing conditions.”

This isn’t to say that some companies aren’t already implementing this method of attracting and retaining employees.

“Employee welfare areas can be designed to be attractive, functional and comfortable. In the past, employers wanted breakrooms and locker rooms to be small and uncomfortable—reducing employee comfort and encouraging them to get back to work,” says A M King’s Tyler Goodwill, a design leader with the firm. “We’re now seeing much larger break rooms and locker rooms, fitted with all amenities imaginable, including natural light/outdoor access and in some cases complimentary food, cooked fresh daily.”

McCownGordon’s Baily adds, “In a tight labor market, employers are increasingly seeing these efforts reap indirect savings to their bottom line and can justify prioritizing worker well-being.”

On the Subject of Food Safety

When it comes to food safety, AEC firms are saying their clients are increasingly having separate areas for raw and finished products created. While this has been a fairly common need with new construction, older facilities are increasingly making zoning adjustments to be more mindful of things like allergen contamination as well.

Water and wastewater treatment facilities and strategies are also being incorporated more frequently. They may require more extensive front-end design studies, but can result in considerable savings in utilities and improved product safety across the lifecycle of the operation, according to Gray’s Elkins.

On the subject of water, A M King’s Goodwill says, “We’ve seen increased interest from our food clients in implementing fully automated trailer washout systems, promoting ample cleaning of semi-trailers between loads.

“In addition, many food companies are required to have and implement a written food safety strategy that includes a recall plan,” he adds. “We’re seeing some food companies ask for a recall room—this is essentially a room to house recalled products in a safe place that will prevent accidental shipping.

“There is also more emphasis on not ‘breaking the cold chain.’ Our clients are asking for colder-than-typical temperatures on their shipping/receiving docks, as well as drive-in docks. In some cases, clients want to refrigerate dry docks that would otherwise be designed and built to handle conventional heating and cooling.”

While the level of hygienic design and PPE depends upon the ISO standard of the room, we see alternative protein manufacturers adopting practices more akin to pharmaceutical or life science applications than they are to traditional meat processing.
— Dean Elkins, Gray Solutions

Alternative Protein: Distinctly Different

Ask 10 people their thoughts on alternative protein and you’ll likely get 10 very different responses. It’s not necessarily a divisive topic, but people do have their opinions on what the future holds for it. However, nearly everyone agrees that the alternative protein market hasn’t had the smoothest sailing recently. Some see that as a sign of alternative protein being a fad, while others see it as the growing pains experienced by any new product segment. These problems may be exacerbated by the fact that there’s a differing opinion regarding how facilities processing alternative protein should be approached. Gray’s Elkins says that, “Alternative protein manufacturing is vastly different from traditional protein manufacturing through virtually every aspect of the process, up to form, fill and seal (FFS).”

“[A]lternative protein manufacturing operations require facilities to maintain higher standards for cleanliness,” he adds. “This requires designers to incorporate ISO clean rooms into facilities, as well as equipment with higher IP ratings and ergonomically designed, washdown-capable machines. While the level of hygienic design and PPE depends upon the ISO standard of the room, we see alternative protein manufacturers adopting practices more akin to pharmaceutical or life science applications than they are to traditional meat processing.”

Finally, according to A M King’s Jon Miller, business development director, both established and startup alternative protein manufacturers are watching their capital expenditures very closely as they move from their initial pilot facilities to commercial-scale projects.

As noted in the article, AI in particular is driving more intelligent smart home devices, and features such as facial recognition, security cameras and self-learning thermostats are making smart homes not only convenient but intuitive and easy to use.
— Robb Raney, Burns & McDonnell

Adding Sustainability

Making facilities or processes more sustainable is one thing that is unquestionably happening throughout the industry. As mentioned earlier with regard to food safety, water is a key focus area for many.

“Carbon footprints, water usage, odor control, wastewater discharge and land disturbance are all items that community members consider as project sites emerge, and their support (or lack thereof) carries more weight as community leaders and corporate leadership collaborate on project decisions,” says Gray’s Kornman.

“We have been working on several projects to reduce water requirements at individual unit operations, installing local polishing and recycling skids for more efficient use of water already in the system, as well as installing primary and secondary treatment systems to reclaim process water onsite,” says Burns & McDonnell’s Raney. “Equipment technology selection has been impacted by this shift in focus—going from liquid cooler systems and evaporative cooling technologies to air-cooled systems. This shift is crucial for industries that are heavily water-dependent and for regions facing water scarcity issues.” He adds there are growing concerns around PFAS, which is also causing manufacturers to look at their wastewater discharge.

While still not as prevalent, onsite renewable energy production is starting to gain traction, which one of the biggest deterrents still being upfront costs. It’s for this reason that partnerships with local utilities are still more popular for green electricity.

As many companies sit in a holding pattern as the political landscape continues to unfold, we’ll see how the industry deals with the aftermath. We’ll be sure to report on our findings next year.