As we gingerly make our way into 2022, American consumers still confront a wide variety of strains on their food options. Food manufacturers continue to struggle to make and deliver enough product to keep grocery store shelves filled. Despite (and often because of) these challenges, the CPG (consumer packaged goods) food industry has been busy coming up with new and delicious solutions to this situation. As a consequence, now is the perfect time to scale up—or start up—your own food enterprise in your own commercial food production space.
CPG PRODUCTION: A HISTORICAL VIEW
The CPG food industry has traditionally been controlled by a handful of national and multi-national food conglomerates. These large enterprises have played a significant role in determining what products are available on the grocery shelf and that have ultimately ended up as the centerpiece of the American diet.
These companies were often insulated against the extremes of the business cycle that challenge most other industries. Since large-scale packaged food production began in the early 1900s, demand for packaged food items has remained relatively stable. We all need to eat. To meet the burgeoning demand of the expanding American public, food manufacturing during much of the 20th century focused on a limited range of generally highly processed foods that maximized shelf stability and simplified taste palates for widespread consumption.
In recent years, the CPG food industry has had to confront the public more than ever, seeing new and delicious opportunities to expand their taste experiences. Consumers have also expressed an increasing appetite for more localized and fresh foods, variety based on ethnic and regional specialties, and a renewed focus on health and weight loss dieting from Whole30 and keto to the many consumers now looking to cut out gluten or animal fats in their diets. In response, production is often being met by smaller and more innovative companies finding ways to feed this complexity of taste and consumer choice.
Before the start of COVID-19, the hot topic in the CPG industry was the transformation of food delivery and sourcing of groceries. With companies like Amazon entering the online grocery market, start-ups and other innovative and creative food manufacturing companies suddenly had access to a wider range of customers than ever before.
But in the COVID-19 pandemic, things changed again, making the coronavirus the latest watershed moment for the food production industry. Consumers are driving product development and innovation and spurring on new companies and expansions by existing CPG companies. All of them are contemplating the kind of food production space or commercial kitchens they need to expand and deliver on these latest, most exciting food trends.
HOW COVID-19 HAS SHAPED THE CONTINUING EVOLUTION OF FOOD CONSUMPTION
COVID-19 has had a transformative (and also tragic) effect on many aspects of American life. Understanding how the pandemic has affected the CPG food industry in particular is complicated and has presented an opportunity to accelerate changes that began well before COVID-19 came to this country. The remainder of this article focuses on what the commercial food production landscape looks like for the rest of 2022.
While at the beginning of the pandemic, many grocery staples became scarce as panic buying produced dramatic shortages of high-demand items. Two years on, many consumers continue to experience supply chain, labor, and other economic stresses and the consequent price increases that come from higher demand and lower production. According to the Bureau of Labor Statistics, demand for CPG food products of all types has risen throughout the pandemic. That demand has diversified beyond the staples as the most acute supply shortages resolved over the last year.
One interesting trend relates to the rise of snack food consumption. According to Food Navigator USA, since the pandemic started, the percentage of Americans eating snacks throughout the day has increased by almost 50%. Because so many more people have been stuck at home, having mid-day smaller portion food options has driven a considerable uptick in sales of snack products.
At the same time, recent food trends also show healthy options gaining stronger purchase amongst the food buying public. Side by side with the increasing enjoyment of more snacks, Americans are also focusing on eating more foods that are considered healthy, lower in fat, with fewer processed or artificial ingredients. Consumers have refocused on a wide variety of plant-based products and categories, looking to reduce unhealthy levels of fats, salts, and sugars and replace them with food choices that are not so heavily processed or reliant on standardized ingredients.
As people have become increasingly willing to spend their grocery dollars on products that cater to their taste for new options and innovative choices, smaller companies have often led the way in revolutionizing the commercial food industry. Start-ups and other more agile and innovative companies often thrive in these times of change. But larger companies have also increased interest in meeting the times by increasing R&D spend and expanding their offerings through acquisition. As consumers continue to look for alternatives to the traditional highly processed, stagnant food options traditionally offered in the grocery store, regional and local CPG companies have stepped up to fill the gap.
To capitalize on this opportunity, companies need to find production space to effectively and efficiently build their business. We know many chefs who have left their 18-hour-a-day restaurant job for the chance to build their own food business based on their long experience in making and developing new tastes and food options. Larger CPG firms need a place to carry out the R&D and pilot production to take advantage of this time of innovation and change. They all need to find a production facility option to make this happen.
To avoid the hefty capital and other costs of planning, designing, and building out their own kitchen, companies both small and large have looked for a production facility solution that is affordable, that allows them to get into business quickly and minimizes start-up costs while also allowing them to produce to the highest food safety and quality standards demanded by today’s food buyers.
A new normal has evolved for the CPG food industry where entrepreneurs have taken the challenges of our present moment to launch new businesses with products that help fill out a local supply chain that is more resilient and responsive to changing demands of consumers. And the key to making this happen is finding your way to the right kitchen and facility solution where companies can develop their business in a community of like-minded chefs and CPG professionals.
WHY CHOOSE AMPED KITCHENS FOR YOUR CPG BUSINESS?
With locations in Los Angeles and Chicago, Amped Kitchens is the best choice for many food entrepreneurs and bigger companies looking for permit-ready production space surrounded by industry-leading amenities and a community of like-minded professionals.
Amped Kitchens offers exclusive, long-term commercial kitchen rentals in a gold-standard facility supported by industry-leading amenities and services. At Amped Kitchens, you will join a robust and growing community of innovative food professionals in a facility that provides exclusive access to the kind of private production space crucial to growing opportunities.
We offer our clients a wide range of dedicated rental options, from 150 sq. ft. starter spaces to 4,500 sq. ft. high volume production spaces. Our kitchens come with a large-capacity utilities infrastructure built to support high-demand production equipment. Amped Kitchens, uniquely in the business, offers a wide variety of on-site features and services to support your food business in fulfilling the most demanding orders. These supports include ample on-site cold, dry, and frozen storage, multiple loading docks, packing rooms, professional staff, and a variety of other amenities that would otherwise only be available to the best-capitalized food manufacturers.
Amped Kitchens is far more than just a basic commercial kitchen or open industrial space. Our facilities have been built out to the specifications of the most demanding health department requirements and the highest levels of food safety and audit regulations from national and international food buyers. Every commercial kitchen rental sets our tenants on a path towards growth and success.
Our mix of gold standard infrastructure and industry-leading amenities is ideal for CPG companies looking to take the next step with their production. Now is the perfect time to scale your food manufacturing operation and take advantage of surging customer demand. Grow your CPG food production faster with Amped Kitchens’ commercial kitchen rentals!
