Berkeley’s Food & Beverage Manufacturing, Wholesale, & Distribution Sector Office of Economic Development Worksession Presentation to the Berkeley City Council May 26, 2015
Agenda • Food System Overview • Why Food Matters • Sector Profile & Findings • Strengths • Challenges • Opportunities • Q & A
Food & beverage Food System Sectors manufacturing, whole- sale & distribution (MWD) are major Production sectors Food System Overview Manufacturing Recycling & Waste Food Service & Wholesale & Consumption Distribution Retail & Purchasing
Identity Food is a celebrated & essential part of Berkeley’s identity & economy Why Food Matters
Local production Local Food System Benefits delivers economic, environmental and public health benefits Why Food Matters Boost local Reduce Increase markets, activate greenhouse gas access to fresh, multiplier effect emissions healthy food
High Volume of Jobs Food is also an important part of Alameda County’s identity & economy Bay Area Food Manufacturing Employment by County, 1990 - 2012 12,000 Why Food Matters 10,000 Alameda Number of Employees 8,000 Contra Costa Marin Napa 6,000 San Francisco San Mateo 4,000 Santa Clara Solano Sonoma 2,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Axis Title
Competitive Advantage Berkeley has a high concentration of food, proportionally Berkeley’s Share of Alameda County’s Total Population and Food & Beverage Firms, 2012 20% Why Food Matters 15% 10% 15% 12% 5% 10% 8% 0% Population Food retail firms Food service firms Food manufacturing firms
Job Creation Food & beverage MWD firms promote blue-collar jobs and economic diversity Why Food Matters
Methodology Mix of quantitative & qualitative methods Sector Profile & Findings Stakeholder Data Set & Business Interviews Media Analysis Surveys
Sector at a Glance Sector Profile & Findings
Sector Composition Food & beverage MWD businesses by type, 2013-2014 Food/Bev Number of Food & Beverage MWD Firms in Berkeley, Sector Profile & Findings Wholesale & 1998 - 2014 45 Distribution 40 Food Mfg Food 21% 35 Manufacturing 30 Beverage 25 Mfg 59% 20 Beverage Food/Bev Manufacturing 15 20% Wholesale 10 5 0 1998 2000 2002 2004 2006 2008 2010 2012 2014
Baked goods & Sector Composition Detail specialty items like coffee, tea, mixes & spices (“other”) are Berkeley Food top categories Manufacturing Firms, 2014 Sector Profile & Findings 100% Animal Processing Dairy Products 90% Fruit & Vegetable 80% Preserving Sugar & 70% Confectionery 60% Other 50% 40% 30% 20% Baked Goods 10% 0%
Sector Composition Detail Breweries & wineries are top categories Berkeley Beverage Manufacturing Firms, 2014 Sector Profile & Findings 100% Non-Alcoholic 90% Distilleries 80% 70% Wineries 60% 50% 40% 30% Breweries 20% 10% 0% 1
Notable Sector Growth Beer, wine, & spirits manufacturing is blossoming! Urbano Cellars Mosswood Distillery Sector Profile & Findings Covenant Winery Eno Wines Donkey & Goat Rare Barrel Mead Kitchen Broc Cellars Hoi Polloi Takara Sake Trumer Pils Fieldwork Brewing
Sector Composition Detail Wine & specialty groceries are top categories Berkeley Food & Beverage Wholesale/Distribution Firms, 2014 Sector Profile & Findings 100% Confectionery 90% Meat General Grocer 80% 70% Other Grocery 60% 50% 40% 30% Wine 20% 10% 0%
Growing # of Firms Since 2011, the number of firms has rocketed up Number of Food & Beverage MWD Firms in Berkeley, 1998 - 2014 Number of Food & Beverage MWD Firms in Berkeley, Sector Profile & Findings 45 1998 - 2014 45 40 Why Food Matters 40 Food Mfg 35 35 Food Mfg 30 30 Beverage 25 Beverage 25 Mfg Mfg 20 20 Food/Bev 15 Food/Bev Wholesale 15 Wholesale 10 10 5 5 0 1998 2000 2002 2004 2006 2008 2010 2012 2014 0 1998 2000 2002 2004 2006 2008 2010 2012 2014
Shrinking Employment Food & beverage manufacturing firms employ fewer workers than before Number of Food & Beverage MWD Employees in Berkeley, 1998 to 2012 Sector Profile & Findings 1000 900 800 700 Food Mfg 600 Loss of 1 large and 1 mid-size brewery. 500 400 Beverage Mfg 300 200 100 Food/Bev Wholesale 0 1998 2000 2002 2004 2006 2008 2010 2012
Many food & Sector Age beverage MWD firms in Berkeley are young, reflecting uptick in new firms Berkeley Food & Beverage MWD Businesses by Age, 2014 Sector Profile & Findings 1 year 14% 2-5 years 36% 6-10 years 16% 10-20 years 17% > 20 years 17% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Sector Geography There are three distinct food & beverage MWD firm clusters west of San Pablo Avenue Sector Profile & Findings Zoning Business Type
Trend: Hubs & Space-Shares Hubs & space-shares boost sector growth and support the evolution of many firms Sector Profile & Findings I just knew that the idea of having an incubation situation with a bunch of similarly minded people was going to be cool. Everybody is doing something a little bit different, so you get exposed to all different aspects of a similar industry. - Craig Boon, owner of Nuthouse Granola, a tenant at Berkeley Kitchens
Business Spotlight Berkeley has two new hub & space-shares, each filling a different niche Sector Profile & Findings • 6 kitchens • 15 kitchens • Hourly rental • Lease for exclusive use • Certified gluten-free & • Some retail on site • In MUR zone organic • In commercial zone • At capacity • Not yet at capacity • Young firms • New firms
Trend: Hybridity Offering retail, tastings, or food service on production site is often essential Of survey respondents… Sector Profile & Findings have a retail space on site have a restaurant or café on site have a tasting room on site
Business Spotlight Fieldwork Brewing exemplifies hybridity, offering service & retail on the production Brew site Sector Profile & Findings tanks Quick- service kitchen Patron bar
Business Spotlight Urbano Cellars & Mead Kitchen exemplify hybridity & space- sharing trends Mead- Sector Profile & Findings making inside, too Wine-making equipment Patron seats (tasting room inside) Wine- barrels
Berkeley’s Attraction The Berkeley “brand” is a major draw, as is being near home and Top Reasons Food & Beverage MWD ideal customers Businesses Locate in Berkeley Brand association of Berkeley and/or San 58% Francisco Bay Area Strengths To be near home 50% To be near customers 33% Availability of appropriate operational/production 25% space To be near freeways and/or other major transportation 25% infrastructure Note: Multiple selections allowed, n=24
The Berkeley Berkeley “Brand” “brand” is an asset that stands for local, seasonal, sustainable & fresh I appreciate the high level of food consciousness in Berkeley. It stands for Strengths health, wellness, and sustainability when it comes to food. - Survey respondent It’s nice to be part of a community where people are aware about food – where they care about it. - Survey respondent
Many survey Ideal Customers respondents reported choosing Berkeley because of its “ideal” customers People in Berkeley are more open to trying new things. - Survey respondent Strengths Berkeleyans value local, healthy food for the whole family – reaching [those] customers is part of our business model. - Survey respondent
Business Spotlight Longtime and new firms alike find ideal customers in Berkeley Strengths Vik’s Distributors Local Greens & Chaat Corner
Challenges Overview Challenges for Berkeley Food & Beverage MWD Businesses High operational 36% space costs Challenges Burdensome regulations 32% or permitting High equipment costs 28% High labor costs 28% Difficulty accessing 20% financing Too few Multiple selections allowed 20% operational spaces n=25
High Space Costs Industrial & warehouse space in Berkeley is among the most expensive in the Average Asking Rate (Per Square Foot) of Industrial East Bay & Warehouse Space in the East Bay, 2014 Q1 $1.20 $1.00 Challenges $0.99 $0.80 Berkeley $0.68 Emeryville $0.60 $0.65 Oakland $0.54 $0.50 Richmond $0.40 $0.37 $0.34 $0.32 $0.20 $0.00 Industrial Warehouse Source: Cornish & Carey Commercial, 2014 Q1
Industrial & Limited Inventory warehouse space is more limited in Berkeley than elsewhere in the Vacancy (Percent of Square Feet) of Industrial East Bay & Warehouse Space in the East Bay, 2014 Q1 Title 12.0% 11.3% 10.0% Challenges 8.9% 8.0% Berkeley Emeryville 6.0% 6.0% Oakland Richmond 4.0% 4.6% 2.9% 2.0% 1.9% 1.8% 0.8% 0.0% Industrial Warehouse Source: Cornish & Carey Commercial, 2014 Q1
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