Cambridge, MA – In a new report, “Growing Maine’s Food Industry, Growing Maine” released today, researchers from Harvard Kennedy School (HKS) and Harvard Business School highlight Maine’s growing food industry cluster, identifying opportunities for business growth and job creation as well as challenges.
The research team reviewed the industry-wide or “cluster” dimensions of Maine’s agriculture, seafood, and food and beverage processing sectors, looking in particular at those industries that can sell products to regional or national markets and thus have greater opportunities for growth. In addition to a comparative analysis of Maine’s food cluster, the research included an online survey of Maine food industry business leaders, a scan of Maine’s industry support organizations, and profiles of several states and regions that have launched focused efforts to accelerate the growth of their farming and food processing industries.
The project, called the Maine Food Cluster Project, drew on the expertise of Harvard Kennedy School faculty and scholars in developing private and public sector solutions to drive economic development as well as the Harvard Business School Institute for Strategy and Competitiveness’s deep knowledge about clusters and regional economic growth. Funding for the one-year project came from an endowment grant made by the Portland-based Libra Foundation to Harvard Kennedy School in 2000 with the purpose of supporting research on issues of importance to Maine.
The project report concludes that with roughly 50,000 Mainers working in the farming, fishing and aquaculture and food processing industries (including affiliated local food industries such as grocery stores and restaurants), abundant farmland and water, the productive Gulf of Maine as well as access to large Northeastern markets, Maine’s food industry cluster has significant strengths to build upon. Based on its employment specialization, Maine ranks 2nd in the U.S. for its fish and fishing products, 21st for food processing, and 26th for agriculture; in addition, employment in agriculture has been growing briskly in the state.
These strengths are reinforced by positive trends in Maine’s food industries: lobster, scallops, aquaculture, craft beer and natural and organic food have seen sales growth as well as proliferation of new companies. In addition, the report points out, Maine’s growing reputation as a “foodie” destination, the influx of new farmers and growth of farming, and innovation around adding value to agricultural and marine products and lengthening the growing season, underscore positive trends in Maine’s food industry.
The report also cites survey responses from Maine food business leaders highlighting their chief challenges - managing operations, finances and growth, and expanding into new markets. The responses also note challenges in the business environment: supply chain bottlenecks, infrastructure gaps, labor availability and cost, transportation and energy costs, and government regulation. Some producers also cited increased competition supplying local consumers, pointing to an opportunity to help growth-oriented businesses to supply larger markets in the Northeast.
The researchers also looked at Maine’s food cluster support system, which consists of more than 100 organizations working statewide and many more working locally. The report notes that this system lacks a broadly-agreed upon growth strategy for Maine farms, seafood companies and food processors. Two other states, Vermont and Oregon, are profiled as states that have adopted strategies to grow their farm to plate and food manufacturing industries respectively with dramatic results over a period of four-to-five years. For example, since Vermont launched its Farm to Plate Initiative in 2009, the number of food companies has increased by 5.9%, food manufacturing jobs have grown by 34.5% and the agriculture sector has added 4,189 jobs.
The project’s recommendations center on how Maine could organize its industry expertise and resources in support of an action plan focused on strategic growth opportunities for Maine’s farming, seafood and food processing sectors. The report notes the importance of engaging food industry leaders in developing and guiding the growth plan and collaborating with key organizations that make up Maine’s diverse cluster support system to execute it.
The report cautions that although the cluster analysis highlights potential growth opportunities, it is Maine food businesses leaders, food system advocates, investors and others who need to come together and define a growth plan. As examples, the study notes three potential focus areas - scaling up food processing to add more value and boost productivity; working with growth-oriented, mid-sized companies looking to expand their sales to customers outside of Maine; and exploring industry niches where Maine businesses can produce sustainable protein food and beverage products in light of estimates that the world’s demand for protein will double by 2050. The report outlines examples of pragmatic steps that could be taken in these areas, such as holding a funding competition for food processing accelerators to address gaps found in the equipment, facility and resource scale up process from home kitchen to commercial operation.