MSU’s Food Processing and Innovation Center: An economic driver for Michigan
Approximately 750 food manufacturers in Michigan generate nearly $15 billion of annual economic activity and support 41,000 jobs. While Michigan has a strong food processing sector, it ranks relatively low – 19th in the nation. Michigan State University (MSU) recently held a groundbreaking event on Friday, May 19 for its newest project, a $5.4 million Food Processing Innovation Center (FPIC), which has the potential to drive significant economic development in food and agriculture for the Lansing region and around the state.
“The FPIC is designed to be Michigan’s leading independent, commercial development, processing, packaging and research facility. It will provide a real-time production environment for the creation of new competitive food products serving the needs of both existing food businesses and large scale startups in Michigan and throughout the Great Lakes region,” said Tom Lyons, director of the MSU Product Center.
The FPIC will be a fully licensed FDA/USDA certified food processing facility which can produce full-scale, medium sized production runs for retail markets. According to Lyons, there are other food product testing facilities connected to universities around the country, but the FPIC is not only going to be a testing facility, it’s going to allow companies to make product and sell that product in the market.
“That’s a tremendous hedge against risk because they can test markets before they have to fully commit to them, and they can also recoup the costs of operating out of the FPIC. It’s that feature in particular that makes the FPIC so unique and makes it so ingenious as a concept,” added Lyons.
The FPIC will be a leasable facility with unique processing capabilities. The project targets stage 2, mid-sized companies valued at $5 to $15 million that are looking for that next level of sophistication to be able to stay competitive and move their businesses forward. MSU found there to be about 635 companies in the state of Michigan that this facility would appeal to.
“What we’ve designed, this facility to be, is a place for companies to come and play with all of the components, play with all the setup, play with all the lines, lease it from a 3 to 7-day opportunity, make product lines and sell it in the marketplace. When they go back to their facilities, they have all the tools and all the resources and all the validation they need so they can confidently move forward in expanding their own operations,” said Matt Birbeck, senior project director of the FPIC.
Facility leases will operate on a 3 to 21-day agreement, but Birbeck says most companies will use a 3 to 7-day lease, but this will depend on the project and requirements of the company. Each agreement or company can use the FPIC three times per year so not to monopolize the FPIC. Last June, MSU held an open house to highlight the FPIC and engage Industry. To validate usage, they asked how likely it would be that they would use the FPIC in the first two years of operation.
“Industry came back to us with ‘letters of Intent’ for a total of 241 days in the first two years from 11 companies. Based on the FPIC being at maximum capacity at 200 days/year, we can determine that in the first two years we have 50 percent already tentatively committed,” added Birbeck.
Bringing the FPIC to fruition took many years of planning and design and involved multiple groups including MSU’s expertise, private and public sector agencies, architects and engineers. The FPIC will operate under the MSU Product Center and will have access to a full range of management and marketing assistance, to round out the development of new products and processes initiated in the facility.
The project is primarily funded through the U.S. Department of Commerce’s Economic Development Administration, the Michigan Economic Development Corporation, the Michigan Department of Agriculture and Rural Development and MSU.
During the groundbreaking event, Brent Forsberg of T.A. Forsberg, Inc., a leading mid-Michigan commercial and residential development firm, gave a $100,000 check to the MSU Product Center for the FPIC. The FPIC will be the cornerstone for the future development of land adjacent to the property that T.A. Forsberg has envisioned for the Michigan Food Innovation District.
About five years ago, when originally looking at this business park, T.A. Forsberg, Inc. began exploring development options with a focus on aggregating true value and attracting new businesses to the region. This was when they discovered an unmet need in the food and agricultural industry.
“We realized the amount of food deserts that are around the greater Lansing area and also the amount of production that goes on in this region for agriculture that gets shipped out to other areas and doesn’t get processed and have value ad here,” said Brent. “We found a report online by Dr. Chris Peterson, MSU professor of Agricultural, Food and Resource Economics. We reached out to him with some questions about the food district paper that some of his students did and two days later a group from MSU showed up with a one sheeter at our office about the project. It was right then that we realized we had something that would be a true value for the tri-county area, the state and the entire region.”
The FPIC, located at 3361 Hulett Road in Okemos, is slated to be completed by mid-December 2017. Grand Rapids-based architectural and engineering firm Dan Vos Construction designed the new center and Detroit-based DeMaria Construction was assigned as general contractor.