Rick Weddle: Welcome to “Site Selection Matters,” where we take a close look at the art and science of site selection decision-making. I am your host, Rick Weddle, President of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners, and corporate decision-makers to provide you with deep insight into the best and next practices in our profession.

In this episode, we have as our guest, Jerry Szatan with Szatan & Associates, a Chicago-based location strategy, site selection, and economic development consulting firm. Today Jerry will talk with us about current and future food industry trends. More specifically, we’ll talk with Jerry about factors shaping food processing site selection and the overall impact of COVID-19 on site selection in the food industry. Join me as we welcome Jerry Szatan to “Site Selection Matters.”

Jerry, we’ve been on a long period of economic expansion. Now with the onset of the COVID-19 pandemic, and given that our economy is going into a contracting phase, what do you see the outlook for food projects now?

Jerry Szatan: There’s a two-part answer. In terms of output, I think that food processors will continue to hum along. In some cases, there’ll probably be increased demand for the products for things like canned goods and other shelf-stable or product. If you take a look at the Great Recession, the Federal Reserve puts out data on capacity utilization and food production essentially stayed stable throughout the recession. Maybe it was down a percentage point or two, whereas other industries like computer peripherals, for example, just plunged. So, I think production will stay stable and perhaps increase in certain products. However, site selection becomes a different sort of thing. I think that new facility decisions for the time being as everybody tries to scramble to maintain current production, I think new facility decisions are likely to be on the back-burner.

Rick: That’s interesting. The point is obviously food is food and we have to eat. I mean, right now a lot of us are having to get food delivered to our house, whether it’s a takeout from restaurants or just ordering food deliveries. Do you see that kind of just-in-time delivery requirement to changing anything specific to the food distribution business?

Jerry: Yeah, I think it will. That’s an interesting development. I was reading just the other day that one of the meal kit companies was hiring significantly just as our grocery stores. There was a company in Chicago called Peapod who was pioneer in food delivery. I think it was in February, so it wasn’t due so much to the COVID-19, but it was due to changes in the industry, they announced that they were closing up their Chicago operations. And their model had been that you would place your order one day and you would get your delivery the next. That model became uncompetitive, I suppose, when people started getting used to placing your orders with Amazon through Whole Foods and getting your deliveries in two hours. So, I think that desire for convenience on the part of consumers will continue. One longer-term impact of COVID-19 may be that there just be maybe more interest in meal preparation kits, cooking at home and so on. But convenience and speed of delivery will count, I think, in at-home food delivery, just as it does in…increasingly in other aspects of e-commerce.

Rick: And I think it’s too early to tel