How to find the ideal food production site
Do you plan to invest in the agrifood industry? Choosing the ideal location is essential to the success of your project.
More than for other sectors, the food industry imposes logistics constraints, in terms of accessibility for suppliers and proximity of target markets. The production site also needs to meet specific requirements in terms of floorspace, utilities, etc.
Depending on demand and the nature of your orders, a poor choice of location can be fatal for development.
How do you find the ideal site? What location criteria should be taken into account for an agri-food project?
Based on our experience in supporting agribusiness projects, we detail the complete methodology for choosing the best solution.
Define the location criteria for your agri-food project
The first step toward finding your location is identifying a region that meets your needs. Choosing the ideal location requires research into two categories of criteria: financial and qualitative.
Financial criteria are used to estimate the operating costs of the project. They include:
- salary levels
- real estate costs
- utility costs
- logistic costs
- national and local taxation
- financial incentives
Qualitative criteria are the key success (or risk) factors that determine the success and durability of the project:
- the general regional context
- recruitment potential and training supply
- infrastructure quality
- ecosystem and innovation potential
- quality of life
- international openness
Deciding factors for agrifood projects
Not all criteria will have the same weight in your location research. It is up to you to weigh and prioritize them according to your needs and the specific features of your project.
To help you assess your location, we provide a qualitative analysis table. It will help you select the ideal region.
Some criteria are critical in the food industry.
1. Logistics and goods transport capacities
Supply chain optimization is a major challenge for food industry players. Not only is it key to profitability, but it also addresses the regulatory and community challenge of reducing the industry’s energy and environmental impact.
Obviously, the choice of location is essential. The site should ideally be close to:
- Raw materials
- An ecosystem of partners and service providers
- Its target catchment area
- Distribution networks
- Transport infrastructures (freeways, roads, ports, rail infrastructure, etc.)
To choose the right site, you therefore first need to outline your ideal supply chain process.
In particular, “last mile logistics“, i.e. the final stage of the delivery process, has a major influence on costs. The boom in new distribution methods (drive-through, home delivery, e-commerce) has made the last mile more complex. This trend is reflected by an increase in the number of flows and has also led to the development of urban logistics platforms.
Want to find out more about the logistics of the future and e-commerce in Hauts-de-France?Replay the webinar that we co-hosted with Business France DACH “The Future of Logistics and E-commerce in Europe – A Case for Northern France”
Moreover, in the case of products with short delivery time requirements, it is vital to:
- optimize your distances
- reduce the supply time ahead of the last mile
- set quantified targets for the delivery process
Before choosing your site, you can estimate these different factors for each of the targeted sites. But this assumes that, from the very first phase, you have already checked the quality of the motorway infrastructure, the possible presence of urban logistics platforms and the logistics route between your warehouse and your delivery points.
2. Labor needs
In the agrifood industry, finding the right talent is essential. Recruitment projects primarily concern production and packaging operators, but also sales and service roles, not forgetting maintenance, which is essential for increasingly automated production and packaging lines.
“In the Valenciennes region, employees are willing and available, but not necessarily qualified in the bakery trades. As far as know-how is concerned, we undertake to train them in our workshops, with our methods, so that they are versatile, both on the workstations and on the machines. This also inspires loyalty.”
Abdelhadi Gallaf, Plant Director – Barilla Onnaing
From this point of view, it is important to anticipate your recruitment needs accurately. You can choose a region that has:
- labor available near the site
- training organizations for qualified employees in the agrifood industry
Agency workers are also frequently used to respond to fluctuations in volume and seasonality in the sector. It therefore makes sense to choose a region where temporary work is well developed and where shift work is very common.
“We have a line that is the lifeblood of the plant and that runs 24/7. It is only stopped three days a year: December 25, January 1 and May 1. The other lines can run in 3×8 or 4×8, 5/7 days.”
Abdelhadi Gallaf, Plant Director – Barilla Onnaing
3. A site tailored to the food industry
The agrifood industry often requires a lot of floor space. You must therefore find a region that offers sufficiently large premises (land or building) while still optimizing the logistical distances as mentioned above.
Moreover, the site will have to feature all the conditions necessary for optimal logistics: accessibility, loading/unloading bays, etc.
Utilities are also a criterion to consider. AFI projects generally have significant water, electricity and gas requirements. It is important to choose an area with guaranteed supply and waste treatment (primarily water) and also to estimate the cost of utilities for your target areas.
Work with local partners to find your ideal site
You have listed and weighted your location criteria using our qualitative analysis grid. By applying this grid to your target destinations, you can now narrow your options. At the end of this step, you are left with a shortlist of regions that you can study in greater depth to find the ideal site.
To do so, it is important to be supported by local partners and in particular by economic development agencies. Drawing up location specifications can form the basis of an optimal collaboration. The specifications help you detail your needs for each of the criteria you have defined.
In this document, you can detail your expectations regarding:
- the general environment of the site
- your HR needs
- features of the land and the building
Using this shared document, local partners will be able to propose a selection of sites offering the best possible match. You can then refine your choice and plan visits to potential sites to make your final decision.
There are several specific considerations when choosing a production site in the agrifood industry.
Logistics issues are particularly important. From this point of view, a bad choice of site is immediately reflected in terms of costs and customer dissatisfaction. Access to a qualified, available and flexible workforce is also a key to success. Lastly, the selected site will also have to meet specific requirements in terms of floor area, accessibility and utilities.
To be sure of making the right choice, your choice of site must therefore be methodical. You can organize your research into 3 stages:
- location study based on a qualitative analysis grid
- drawing up location specifications
- working with local partners and site selection
Planning to find a location for an agrifood business? Find out about all the trends and opportunities in the French market in our comprehensive guide to the agrifood industry in France.