This Center would maximize technical support and research and development efforts for the Vermont food industry and would provide assistance to / 11 / small and large food companies. The Center would be home to a laboratory research and development facility, which would support product formulation efforts, product testing, education/training of food processing personnel, research development work and the development of novel products or novel ingredient uses, and would be a major source of technical assistance when problem situations arise. Such centers are already in existence in a number of other states. The New York State Department of Agriculture and Markets recently contributed $9 million to construction of a pilot plant facility on the Cornell University campus. New York State has also established a Food Science Center on the Cornell Geneva campus. Washington State, University of Nebraska, the University of Wisconsin, Michigan State and others have established centers.
Background
Vermont is currently home to a number of highly successful food companies, and the future for development of a significant food processing sector in Vermont appears bright. The specialty food sector of the Vermont agricultural enterprise has been a steady and significant source of economic growth over the past ten years. According to data published by the Vermont Department of Employment and Training, employment in the food products sector showed an annual average growth rate of 4.2 percent between 1980 and 1990. Within the manufacturing sector, no other Vermont industry posted this rate of increase, and for most sectors decreases were recorded during this period.
More than 44,500 jobs and approximately $1 billion annually are derived from Vermont's agricultural enterprise. Agriculture in Vermont is dominated by dairying, which accounts for approximately 83 percent of Vermont's agricultural income. Vermont already produces more than 50 percent of the milk in New England, and the percentage of that production continues to increase. When viewed as a commodity, milk prices continue to decline, creating instability within the agricultural community. When viewed as a material for processing for value added, there exists a significant economic incentive for the State of Vermont.
Agricultural diversification beyond dairy products is also an emerging opportunity for the Vermont food products industry. Food processing as an industry has a six-fold multiplier. Thus, for every one job created in milk processing, six others are created to facilitate transportation needs, distribution, packaging, etc. Food processing should therefore be viewed as a significant potential source of jobs and a stimulus to economic development in Vermont
Examples of highly successful food enterprises which exist in Vermont include Ben and Jerry's, Inc., Wyeth Nutritionals, International Cheese, Cabot Cooperative Creamery, Kraft, Van Houten Chocolate, Rhino Foods, and numerous others. Below these major players are a tier of smaller companies which produce a variety of specialty food products.
/ 12 / In order to remain competitive, all of these companies require access to technology. The current food processing regulatory environment has mandated changes in labeling, in finished product specifications, and in the qualifications of workers engaged in food processing. At present, the State of Vermont offers little to no assistance to food companies in either directly providing and/or linking access to technology. Further, for specialty foods producers working with nondairy, non-meat commodity products, the State of Vermont currently provides no inspection of facilities, has no product regulations, and provides no technical assistance. In spite of great support from the state Department of Agriculture related to marketing assistance, specialty food producers are forced to acquire needed technical and scientific information on a haphazard basis. Many specialty food firms are of such a small size and scale that access to scientific knowledge and laboratory testing is cost prohibitory.
The Small Business Development Center at Washington State University conducted a study of 200 firms in order to assess the needs of food processors. Respondents indicated product testing, nutrient analysis, assistance with federal and state regulations and assistance with marketing and advertising as the most frequently requested types of assistance. When asked to define problems facing the food industry, government regulations, consumer concerns, environmental concerns and food safety were identified as leading problems. The needs articulated by food processors in Washington state are identical to those of Vermont food processors.
The University of Vermont has received major funding from the National Dairy Promotion and Research Board to create the Northeast Dairy Foods Research Center (NEDFRC). The mission of this center is to conduct basic research leading to development of new dairy products and new methods of dairy processing, and to provide the dairy industry with assistance on food safety and quality assurance issues. The center receives requests on a daily basis from specialty food producers in Vermont for information on technical matters ranging from new produce formulation to product testing requirements. Food safety concerns are the most frequently articulated inquiries to the center. Because of funding restrictions, the Dairy Center can only respond to requests which relate to dairy products. Since the specialty foods industry in Vermont includes meat products, fruits and vegetables and other non-dairy foods, the majority of requests for assistance cannot be met, even though the center has knowledgeable personnel who have the background and qualifications, as well as equipment and laboratory facilities to respond to such needs.
The proposal to create a Center for Food Science at the University of Vermont will provide research assistance, technical assistance, education and training and regulatory assistance designed to increase the economic viability of Vermont food processors.
/13/ Mission Statement
It will be the mission of the Center for Food Science at the University of Vermont to provide research and development expertise, technical assistance, and basic education about food processing and safety, in support of the Vermont food processing industry. The primary role of the center will be to continue the tradition of excellence in basic food product/process research, which has earned Center faculty national and international recognition for research efforts. Center faculty have already developed innovations through research that have had a national and international impact upon the ways in which food products are produced, tested and preserved.
Transfer of this knowledge to the Vermont food processing industry will place Vermont in an increasingly competitive position. In addition, through workshops, interaction with Center staff and faculty, and basic research, the Center will provide Vermont food processing personnel with access to new technologies and new knowledge. This will serve to strengthen the capability of Vermont's food processing industry and the quality and safety of products produced as well as the knowledge of persons involved in food manufacture.
A state-of-the-art food processing pilot plant, modern laboratories and a knowledgeable staff will support the efforts of the Center. A series of workshops, formal courses, and short courses will provide training to personnel involved in food processing and will ensure a continued supply of qualified personnel for Vermont's food processing industry. Testing on a feefor-service basis and research and development on a contract basis will assist the technical needs of Vermont's food companies, many of which are too small to support in-house activities in this area
Scope of Services Following is a list of services that might be offered by a Vermont Food Science Center:
1. Facility Construction and Renovation -- A facility for the center is currently available on the UVM Campus in the former dairy center at Carrigan Hall. Architectural estimates of renovation costs to this space are between $400,000 and $600,000, consisting of construction costs in the area of $300,000 to $450,000 with the balance for permits, design and some contingency. This facility, when completed, would consist of a pilot plant, laboratories, offices, and teaching/classroom space. It appears that the cost of renovating Carrigan would be significantly less than the cost of constructing a new facility.
2. Operatina Budaet -- An operating budget, comprised of estimated personnel costs and various expenses for the first three years of operation follows: / 15 / A proposed operating budget for the Center, comprised of estimated personnel costs and various expenses for the first three years of operation (in thousands)
Year 1 Year 2 Year 3 Personnel: Director 50 50 55 Technician (lab) 30 30 35 Technician (plant) 30 30 35 Outreach coordinator 40 40 45 Training - AMI HAACP 50 50 Training - staff 25 25 Part time - SBIR/STTR Professional 15 30 SBIR/STTR Staff - P/T10 10 Secretary 20 20 20 170 260 305 Fringe @38% 65 100 115 235 360 420 Materials and supplies Equipment Operating: Operating 50 60 75 Travel 5 10 15 Materials/Supplies 25 25 25 Equipment 50 50 50 130 145 165 TOTAL 365 505 585 Total Resource Needs Before Center Becomes a ÒTub on its Own BottomÓ Facilities $500,000 (mid point of range) Working Capital 50,000 Start up costs 50,000 Initial research funding 50.000 Total $650,000Working capital costs represent funds needed to serve as a base and a reserve to support cash flow on funded activities in which funding lags expenditures.
Start-up costs are one time costs, such as equipment leases, utilities deposits, -office expenditures, organizational expenses, etc. After a relatively short start-up period, it is anticipated that the center will be self-supporting, a "tub on its own bottom."
/ 16 / Funding Strategv
In order to support the efforts of the Center for Food Science, major funding in the form of federal funds will be needed. Because ours is a small state, a strong case could be made for the need for funding assistance. State funding would most likely be needed to match any federal dollars we were successful in securing. Federal-state funds are needed to renovate or construct a facility to house the Center for Food Science.
To sustain Center operations, a number of strategies exist for raising operating funding. Clearly, securing federal funding assistance or major foundation support would best position the Center for future success. In addition to major federal and foundation support, other types of minor support could be sought. Many centers offer memberships to participating companies. Corporate and individual members would contribute an annual fee, which would provide access to Center information as well as potential for membership on a Center Advisory Board. In addition to sustaining memberships from the Vermont food processing industry, the allied industries (transportation, insurance, distribution, packaging sectors) are also potential sources of funds.
Research and development efforts within the Center could be supported through a variety of mechanisms, including contracts with companies and the federal government. There are several federal programs including the USDA Small Business Innovation Research Grants Program (SBIR); the Natick Army Research Labs, which award major research contracts, and the Alternative Agricultural Research and Commercialization Center of USDA.