High costs, new life styles are closing many canneries
Canned fruits and vegetables, once the mainstay of the American diet, have fallen on hard times.Skip to next paragraph
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The nation's canning industry is languishing due to increasing production costs, declining consumer demand, and competition from other food products, such as brightly packaged frozen products and fresh produce.
''The canning industry . . . is in very serious condition,'' said Lee Garoyan , an economist with the University of California cooperative extension service. While the canning industry has been a notably low-profit industry for some time, the cost of utilities, waste disposal, processing materials, and labor have skyrocketed lately.
''The weaker ones are getting out,'' said Lawrence Taber, president of the California League of Food Processors. ''One out of every four or five years is profitable. You can't keep on operating that way indefinitely.''
Del Monte Corporation, the nation's largest canner of fruits and vegetables, has shut down six canneries in the last 18 months. The company, sensing that consumers are drifting away from canned goods in increasing numbers, introduced a new line of canned vegetables in August.
In 1981, Del Monte added Morton frozen foods to its growing list of alternative products, which includes Chun King Chinese foods and frozen Mexican entrees.
''The canning business is definitely a mature industry - it's not growing,'' said Mark Gertsche, manager of external communications for Del Monte. ''Canned food just doesn't fit the life style of today's customer.''
Libby, McNeil & Libby officials have abandoned ownership of most of the company's fruit and vegetable canneries nationwide, opting instead to contract with other companies to process their products.
H. J. Heinz Company spent a record-breaking $240.4 million during fiscal 1982 to ''find new customers,'' according to its annual report to stockholders.
Although consumers are eating out less, they are not using canned foods to supplement their meals at home.
Factors as diverse as changing life styles, the increasing number of two-income households, and the decreasing size of families are contributing to the eroding popularity of canned fruits and vegetables.
''While yesterday's family of six could consume a can of peas in one meal, today's family of 1.7 or 2.1 is not interested in large-quantity side dishes,'' said Larry Hamm, agricultural economist for the US Department of Agriculture's economic research section.
Per capita consumption of canned peaches, pears, apricots, and fruit cocktail also has dropped steadily, Mr. Taber said. Canned fruits, once considered dessert items, are being passed over in favor of fruit pies and other frozen items.
Sales of fresh produce are firming up as well. ''Marketing and distribution have improved so much that people all over the country can get fresh produce regularly,'' Mr. Taber said.
As a result, farmers are turning away from the volatile fruit and vegetable crops, Mr. Hamm said, opting instead to grow low-risk crops like corn and wheat.
The plight of the canning industry is reflected in California, where five fruit canneries closed in the last five years.
California, which produces almost 45 percent of the nation's canned fruits and vegetables, saw cling peach processing plants drop from 22 in 1959 to 10 in 1980. During the same period, pear canneries dropped in number from 15 to 8, according to a white paper prepared for the industry by Mr. Garoyan of the University of California extension service.
''Canners of vegetables in the Pacific Northwest are in trouble, just as the fruit canners are in California,'' as consumption of canned corn, beans, peas, beets, and carrots continues to decline, Mr. Garoyan said.
Canneries not only face stiff competition from American companies, but from European exporters as well.
Canned tomato and tomato-product processors must now fend off competition from lower-priced products from Italy, Spain, Portugal, Israel, and Taiwan, Taber said.
''We're competing with highly-subsidized growers and canners,'' he said. ''They have the latest equipment, the latest technology,'' and the money to make it work.
Despite the problems facing canneries, Taber said he does not forsee ''a drying up and a dying of the industry.''
''In the short run, we're probably going to run into some problems,'' he said. ''But I don't think it's a total disaster. We're going to see a transformation into a whole new era of food processing.''
What will remain at the end of this protracted, and sometimes painful, metamorphosis, Taber said, ''is a strong core of food processors, using new technology and new packaging.''