CAB - AN ANALYSIS OF CALIFORNIA'S EXPORTERS OF PROCESSED FOOD PRODUCTS: III. THE CALIFORNIA FOOD PROCESSING INDUSTRY

- Research Publications -

AN ANALYSIS OF CALIFORNIA'S EXPORTERS OF PROCESSED FOOD PRODUCTS
by
John W. Hagen and Dr. Juan C. Batista
III. THE CALIFORNIA FOOD PROCESSING INDUSTRY
CATI Publication #961102
© Copyright November 1996, all rights reserved

This part of the study was included to determine the economic and structural characteristics of the California processed food industry. This taxonomy was done to determine the size and sales of the major sub-sectors of the processed food industry. Five subsections were defined: frozen, canned, beverage, snack, and dried products. These classifications were selected because they were used as the basis for the mail survey part of the study. The number of firms and the sales volume in each sub-section were taken from the "1992 U.S. Census of Manufacturing."

THE FROZEN FOOD INDUSTRY

The frozen food sector is a major part of the food processing industry. This industry consists of frozen fruit, fruit juices, vegetables, potatoes, poultry, and seafood, as well as specialty items such as pizza and like products. The Standard Industrial Classifications for the processed food groups were:

SIC Code Major Product 2037 Frozen fruits and vegetables 2038 Frozen Specialties (not elsewhere classified)

VALUE OF SALES:
U.S. frozen food industry sales in 1992 were $12.6 billion. California frozen food processing firms had sales totaling $1.8 billion for the same period, equal to about 14 percent of the national sales (see Table 1).

TABLE 1. VALUE OF SALES, FROZEN FOODS, UNITED STATES AND CALIFORNIA, 1992
Frozen Food Value of U.S. Sales Value of Calif. Sales Type (million dollars) (million dollars) Frozen fruits, juices and drinks $2,864 $627 Frozen vegetables $4,418 $390 Frozen dinners and like products $5,334 $748 TOTALS: $12,616 $1,765 Source: U.S. Census of Manufacturing

FIRM NUMBERS

About 17 percent of the U.S. frozen food firms are located in California (Table 2). There are abou 106 California firms that manufacture frozen food products. "Wards Dictionary of Manufacturers lists 91 firms while the Thomas Food Industry Register records 93 California firms that freeze fruits, vegetables and specialty items. The U.S. Census of Manufacturers, however, indicates there were 106 California firms processing these products in 1992. The discrepancy in firm numbers appears to be related to classifications of the products processed.

TABLE 2. NUMBER OF FIRMS BY PRODUCT TYPE PRODUCED, UNITED STATES AND CALIFORNIA, 1992.
Frozen No. of U.S. No. of Calif. No. of Calif. Firms as Product Type Processors Processors a Percent of U.S. Firms Frozen Fruit & Vegetables 255 44 17.3 Frozen Specialties 363 62 17.1 TOTALS: 618 106 17.1

THE CANNED FOOD INDUSTRY

The canning industry is one of the oldest processed food industries. California's food canning industry is reported to have started just after 1850. The industry grew rapidly as agriculture developed in the state. The most noticeable change in this indust ry in the last three decades has been the closure of many small canneries and the increase in the size of existing firms.

This industry was assumed to consist of firms producing products with SIC Codes of:

SIC Code Major Products 2032 Canned Specialties 2033 Canned Fruits and Vegetables 2035 Pickles, Sauces and Salad Dressings

VALUE OF SALES

California Canners had 1992 sales of about $2.5 billion. This approximates about 24 percent of the U.S. canned food product sales that year (Table 3).

TABLE 3. VALUE OF SALES, CANNED FOODS, UNITED STATES AND CALIFORNIA, 1992.
Value of U.S. Value of California Processor Sales Processor Sales Product Type (million Dollars) (million Dollars) Canned Dry Beans $1,119.5 $67.7 Canned Specialties N/A $154 Canned Fruits $2,371.9 $1227.5 Canned Vegetables $2,694.4 $474.3 Canned Mushrooms $202.0 $14.5 Canned Vegetable Juices $409.0 $100.7 Catsup and tomato Products $3,671.6 $447.4 TOTAL $10,468.4 $2,486.1 Percent 100 24 Source: U.S. Census of Manufacturing

FIRM NUMBERS:

In 1992, there were an estimated 1,279 U.S. firms that processed these three product groups (Table 4). About 16 percent of these firms are located in California. Clearly the largest number of firms can fruits and vegetables. About 16 percent of these food processors are located in California.

TABLE 4. NUMBER OF FIRMS BY CANNED PRODUCT TYPE, UNITED STATES AND CALIFORNIA.

Calif. Firms Product No. of U.S. No. of Calif. as percent of Type Canners Canners U.S. Firms Canned Specialties 220 31 14 Canned Fruits and Vegetables 683 120 17 Pickles, Sauces and Dressing 376 58 15 TOTALS: 1279 209 16 Source: U.S. Bureau of Census, "1992 Census of Manufacturing"

THE BEVERAGE INDUSTRY

This industry was assumed to consist of those firms included in the following SIC Codes and Titles:

SIC CODE MAJOR PRODUCTS 2082 Malt Beverages 2083 Malt 2084 Wines, Brandy, and Brandy Spirits 2085 Distilled and Blended Liquors 2086 Bottled and Canned Soft Drinks 2087 Flavoring Extracts and Syrups, Not Elsewhere Classified

VALUE OF SALES

California is the United States' main wine producing state; 1992 sales of wines and brandy represented 85 percent of U.S. production (Table 5). On a national basis, bottled and canned soft drinks are the most important processed beverage.

TABLE 5. VALUE OF SALES, BEVERAGE MANUFACTURERS, UNITED STATES AND CALIFORNIA, 1992.
BEVERAGE TYPE VALUE OF U.S. VALUE OF PROCESSORS CA PROCESSOR SALES SALES (million Dollars) (million Dollars) Malt Beverages $17,340 N/A Wines, Brandy & Brandy Spirits $4,301 $3,664.3 Distilled & Blended Liquors $3,394 N/A Bottled & Canned Soft Drinks $25,417 $2,879.0 Flavors, Extracts & Syrups $6,911 $672.0 Source: U.S. Census of Manufacturers, 1992 N/A= Not disclosed because of limited firms manufacturing these products.

California soft drink and flavoring manufacturers reported 1992 sales as shown in Table 6. Clearly the carbonated beverages are the most important product group.

TABLE 6. VALUE OF SALES BY BEVERAGE TYPE, CALIFORNIA, 1992.

BEVERAGE TYPES VALUE OF SALES (millions of dollars) Bottled Carbonated Soft Drinks $712.3 Canned Carbonated Soft Drinks $1,272.2 Soft Drink Flavoring Syrup (Bulk) $125.9 Non-Carbonated Soft Drinks $451.9 Flavoring Extracts-Emulsions $51.4 Liquid Beverage Bases Not for Soft Drinks $7.6 Liquid Beverage Bases for Soft Drinks $295.2 Other Flavoring Agents $327.1 TOTAL $3,243.6 Source: U.S. Census of Manufacturers, 1992.

FIRM NUMBERS

The number of California firms manufacturing alcoholic and non-alcoholic beverages was estimated to be 25 percent of all U.S. beverage manufactures (Table 7). A problem was encountered in the data because many firms have numerous plants. Thus, the number of California wineries is less than often reported by the industry. These data, however, were taken from the 1992 Census of Manufacturing.

TABLE 7. NUMBER OF FIRMS BY BEVERAGE PRODUCED, UNITED STATES AND CALIFORNIA, 1992

Beverage Type No. of U.S. No. of Calif. Calif. Beverage Beverage firms as a Processors Processors percent of U.S. firms Malt Beverages 194 35 18 Wines, Brandy and Brandy Spirits 553 329 60 Distilled and Blended Liquor 65 5 8 Bottled and Canned Soft Drinks 926 97 11 Flavorings, Extracts Syrups 300 47 16 TOTALS 2038 513 25 Source: U.S. Census - 1992 Census of Manufacturers

THE SNACK FOOD INDUSTRY:

Snack foods are considered to be those foods consumed as not a part of a regular meal. For the purposes of this study, snack foods are assumed to be the confectionery-sweet snacks and salty snacks.

The industry was assumed to consist of those firms included in the following SIC Codes and Titles:

SIC CODES MAJOR PRODUCTS 2064 Candy and Confectionery Products and Chewing Gum 2066 Chocolate and Cocoa Products 2068 Salted and Roasted Nuts and Seeds 2096 Potato Chips and Similar Snacks

VALUE OF SALES

In 1992, U.S. snack manufactures produced more than $23 billion of product. It is believed California snack producers manufacture about 10 percent of the U.S. supply (Table 8).

TABLE 8. VALUE OF SALES, SNACK FOOD MANUFACTURES, UNITED STATES AND CALIFORNIA, 1992.

Value of U.S. Value of Calif. Processor Sales Processor Sales Snack Type (Million Dollars) (Million Dollars) Candy and Confectionery Products and Chewing Gum $10,207 $730 Chocolate and Cocoa Products $3,106 $496 Salted and Roasted Nuts and Seeds $2,834 N/A Potato Chips and Similar Products $7,325 $733 N/A = Data not Disclosed Source: U.S. Bureau of Census, "1992 Census of Manufacturers"

FIRM NUMBERS

With the exception of salted nuts and seeds, California's share of the nation's snack food processors is fairly evenly distributed by product category (Table 9). Overall, California firms account for 12 percent of U.S. snack food processors.

TABLE 9. NUMBER OF FIRMS BY SNACK TYPE MANUFACTURED, UNITED STATES AND CALIFORNIA, 1992.

No. of U.S. No. of Calif. Calif. Firms Snack Snack as a Percent Snack Type Processors Processors of U.S. Firms Candy-Confectionery Products and Chewing Gum 759 80 11 Chocolate and Cocoa Products 156 22 14 Salted and Roasted Nuts and Seeds 112 23 21 Potato Chips and Similar Products 409 54 13 TOTALS 1,436 179 12 SOURCE: "1992 Census of Manufacturing"

DEHYDRATED FRUITS AND VEGETABLES:

This industry is made up of establishments primarily engaged in sun drying or artificially dehydrating agricultural products. The dehydrated food products were considered in this study because of the importance of this food group to California agriculture. This product classification includes such food items as raisins, prunes, garlic powder, dehydrated onions, and various soup mixes.

This industry was assumed to consist of firms processing products in the Standard Industrial Code 2034 (Dehydrated Fruits, Vegetables, and Soups).

VALUE OF SALES

The U.S. dehydrated fruit and vegetable industry represents about a $2.9 billion industry (Table 10). California produced about 53.2 percent of this 1992 output.

TABLE 10. VALUE OF DEHYDRATED FRUIT AND VEGETABLE INDUSTRY, UNITED STATES AND CALIFORNIA, MILLIONS OF DOLLARS, 1992

Value of Value of California U.S. Sales California as a Percent Sales of U.S. $2,853.1 $1,518.7 53.2 Source: 1992 Census of Manufacturers

NUMBER OF FIRMS

There were 155 U.S. firms producing dehydrated fruits and vegetables in 1992. Of these 74 firms were located in California. This represents 47.7 percent of the U.S. dehydrated food processors.

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