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Capital Projects and Labor Shortages

This week I came across two articles which really piqued my interest, for the simple reason that the two topics they address are clearly connected. Both of these pieces were from the Food Manufacturing website. The first piece pointed out that new food and beverage facility projects announced in July were the highest they’ve been all year at 72 new projects. This included new construction, expansions, new processing and warehouse facilities, and renovations and equipment upgrades. Additionally, this comes after an exceptionally strong June which indicates continued growing demand in these areas.

The second piece is about Tyson Foods and its labor shortage with its CEO pointing out that it takes six days to complete five days-worth of work thanks to absenteeism that on any given day hovers around 10%. While the obvious culprit is COVID’s Delta variant, there are clearly other factors involved. Baby boomers started retiring ten years ago, and for the next ten years we will continue to watch 10,000 more retire every day. On top of that, I think the pandemic has given employees a chance to step back and ask if this is the type of work they wish to continue doing. That’s not just workers in the food industry, but all over, which is a tremendous challenge when you are trying to get product out the door. But as a friend who works in HR recently told me, it’s an employees’ market out there.

So how are these two articles connected?

It’s pretty simple actually. Food processors are well aware of the challenges they face every day to ensure that they have sufficient labor to produce their product. Despite rising wages and other incentives for workers, they are still facing constant competition with other companies and other industries who are also looking to secure their own workforce. One obvious way to do that is to automate production where possible to produce the same amount with fewer people. These projects that were announced in July had much to do with this. In addition, if you talk with any of the design-build firms or OEMs that are members of FPSA, they report significant backlogs of work, thanks in large part to this issue. Food manufacturers see increased automation as the ticket to maintaining production.

That is why the program at this year’s Process Expo will feature a panel (Robotics & Automation: Ensuring Business Continuity Today and Tomorrow in the Food and Beverage Industry) on Thursday, November 4th with the goal of helping processors better understand how best to replace or supplement legacy equipment as one solution to their workforce issues. And while we are very proud of the expertise on this panel, there is a host of other automation solutions on the Process Expo show floor with hundred of equipment suppliers showing the latest innovations in processing and packaging for the food and beverage industry. Registration for the November 2-5 show is now open and you can begin searching for these automation opportunities today.

Don’t delay. Remember, with each day that goes by we’re losing 10,000 baby boomers in our workforce and a countless number of younger workers who are being poached by other industries. Here’s one way to address that today. See you in Chicago!

Andy Drennan
Senior Vice President