Newly released study, commissioned by Speaker Quinn and conducted by the Pratt Center, reveals three key recommendations to optimize and expand the distribution of locally-manufactured artisanal food and beverage products in order to grow the sector

New York, NY – Today, City Council Speaker Christine C. Quinn and Pratt Center for Community Development (“Pratt Center”) Executive Director Adam Friedman released a new report titled, “Distribution Challenges and Opportunities for NYC’s Small, Specialty Food & Beverage Manufacturers,” which examines how New York City can strengthen its specialty food and beverage manufacturing sector and grow employment. In the past year alone, almost 40 new food and beverage manufacturers were established in the city, for a total of 1,097 firms in 2012. While the number of firms has increased and continues to grow, small companies face specific distribution challenges that can hinder their growth.

The Pratt Center interviewed more than 25 food industry stakeholders for this report, including manufacturers, distributors, brokers, buyers and food experts to determine the types of distribution challenges that small businesses face as well as ways to address them. The report puts forth recommendations to help small food and beverage companies better distribute their products, cut costs and expand their markets, and also offers suggestions for government and policymakers to assist in this effort. This assessment is a crucial step toward growing the local food and beverage manufacturing sector through increasing exports and targeting markets with a high demand for New York City products. Speaker Quinn first announced the idea for this study in a speech before the Association for a Better New York in 2011.

“This report shows there’s a big appetite for economic growth in our local food and beverage manufacturing industry,” said Speaker Quinn. “These businesses have re-energized this sector of our economy and have served as a bright spot throughout the recession. With over 1,000 firms, this industry is poised for even more growth and our report will help businesses, city officials and policymakers identify ways to help these local businesses sell more products and expand. I’m excited to have partnered with the Pratt Center for this study and look forward to implementing many of its recommendations to further unlock the economic potential of our local food economy.”

“New York City is a great place for food entrepreneurs to launch a new business, but it is a tough place to move those new products to markets, across town or around the world. A critical next step for economic growth is for food entrepreneurs to transition from distributing their products themselves to working with other food companies and distributors to get onto more shelves. It is critical to help food manufacturers overcome the special challenges they face, and do it in ways that are efficient, sustainable and scalable,” said Adam Friedman, Director of the Pratt Center for Community Development.

The study found that there is a strong need for the City to intervene with strategies to support the growth of young firms into mid-sized companies that can employ a larger workforce. Specific recommendations include:
• Creating a Specialty Food Industry Development Corporation to address sector-wide challenges and opportunities by delivering educational, marketing, exporting and cooperative services.
• Increasing financial assistance, education and investment connections tailored to companies transitioning to third party distribution such as a modified Food Manufacturers loan program available for smaller firms.
• Promoting land use policies and real estate development projects that bolster the city’s food distribution infrastructure, such as a co-packing facility that would allow smaller manufacturers to scale up their output to fill larger orders while keeping production in New York City.

“This report will help us improve the specialty food industry in New York City,” said Economic Development Committee Chair Karen Koslowitz. “We have a wonderfully diverse food sector that has been a strongpoint for our city’s economy during tough times. It is crucial to provide this sector with the tools it needs to further its growth and ability to export throughout the country and abroad. Thank Speaker Quinn and the Pratt Center for their leadership in this effort to support our local food makers.”

“Food manufacturers are in one of the fastest growing industrial sectors in New York City,” said Small Business Committee Chair Diana Reyna. “With this report as a guide, food manufacturers will be able to develop more sustainable, efficient methods of distribution. I applaud the Speaker and the Pratt Center for their efforts to support such a vital segment of this city’s economy.”

“The food manufacturing industry in New York City, and Brooklyn in particular, has seen unprecedented growth in recent years. As demand for locally-made food products increases, so does the need for businesses to find efficient means of distribution to wider markets. I want to thank Speaker Quinn and Pratt Center for not only recognizing the success of this industry, but also working to identify ways for the City to support their continued growth,” said Council Member Steve Levin.

Speaker Quinn has long recognized the food and beverage industry as a strong generator of economic activity in New York City, representing a fast-growing sector in the manufacturing world. This $5 billion industry employs over 15,000 workers in the city and, through several initiatives launched as part of Speaker Quinn’s comprehensive FoodWorks blueprint, the Speaker and City Council have sought to reduce the barriers that can make it difficult for food entrepreneurs to start, sustain and grow their business within New York City.

Pratt Center is a department of the Pratt Institute and provides professional services to build a more equitable and sustainable city.

###