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Sources: Emsi and Texas Comptroller of Public Accounts
Food and Beverage and Tobacco Product ManufacturingNAICS 311-312 Overview
Subsector Snapshot | Printable (PDF)
Introduction
The food manufacturing (NAICS 311) and beverage and tobacco product manufacturing (NAICS 312) subsectors include businesses providing a variety of products such as meats, specialty foods, baked goods, packaged fruits and vegetables, teas, coffees, beers and wines. Food manufacturing also includes the refiners of raw food materials such as rice, flour, corn and sugar.
Due to its size and regional diversity, Texas produces a wide variety of food and beverage products, including beef in the High Plains, poultry in Upper East Texas, rice in the Southeast and tortillas in the South region.
Fast Facts
- Food and beverage and tobacco product manufacturing provided about 105,450 direct jobs in 2016, as well as another 63,800 indirect jobs.
- The subsector’s GDP totaled $15.1 billion in 2015.
- Annual wages in the subsector averaged about $56,200 in 2016.
- Subsector exports were valued at nearly $5.5 billion in 2016.
Long-Term Employment Trends
Texas food manufacturing employment rose by 8 percent from 1990 through 2017, seeing modest but stable growth. Employment in the beverage and tobacco products subsector, by contrast, rose by 30 percent in the same period, and by 47 percent from 2010 to 2017 (Exhibit 1). The recent rise was led mostly by gains at breweries and wineries.
Subsector Trends
The inflation-adjusted gross domestic product (GDP) of Texas’ food and beverage and tobacco manufacturing subsector rose by 15 percent from 1997 to 2015, with volatility along the way. During this period, the U.S. subsector’s gross product rose by 12 percent (Exhibit 2).
Exhibit 1: Food and Beverage and Tobacco Product Manufacturing Percent Change in Employment in Texas, 1990 to 2017 (Indexed to 1990)
| Year | Food Manufacturing | Beverage and Tobacco Product Manufacturing |
|---|---|---|
| 1990 | 0% | 0% |
| 1991 | 1% | 0% |
| 1992 | 1% | 0% |
| 1993 | 1% | -2% |
| 1994 | 3% | -4% |
| 1995 | 6% | -5% |
| 1996 | 6% | -6% |
| 1997 | 6% | -4% |
| 1998 | 6% | -2% |
| 1999 | 6% | -3% |
| 2000 | 8% | -7% |
| 2001 | 8% | -11% |
| 2002 | 7% | -13% |
| 2003 | 5% | -16% |
| 2004 | 6% | -19% |
| 2005 | 5% | -17% |
| 2006 | 5% | -13% |
| 2007 | 3% | -11% |
| 2008 | 2% | -9% |
| 2009 | 2% | -10% |
| 2010 | 3% | -12% |
| 2011 | 1% | -11% |
| 2012 | -1% | -7% |
| 2013 | -3% | -3% |
| 2014 | -2% | 1% |
| 2015 | 1% | 9% |
| 2016 | 5% | 20% |
| 2017 | 8% | 30% |
Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts
Exhibit 2: Food and Beverage and Tobacco Product Manufacturing, Percent Change in Real GDP, U.S. vs. Texas, 1997 to 2015 (Indexed to 1997)
| Year | U.S. | Texas |
|---|---|---|
| 1997 | 0.0% | 0.0% |
| 1998 | 0.0% | 1.3% |
| 1999 | 3.2% | -1.2% |
| 2000 | 2.4% | -3.5% |
| 2001 | 4.2% | -2.0% |
| 2002 | -1.0% | 1.6% |
| 2003 | 2.2% | 5.1% |
| 2004 | 4.0% | 18.0% |
| 2005 | 3.5% | 13.2% |
| 2006 | 15.0% | 26.7% |
| 2007 | 15.3% | 18.7% |
| 2008 | 9.9% | 10.3% |
| 2009 | 18.6% | 17.5% |
| 2010 | 13.8% | 3.7% |
| 2011 | 10.0% | 1.9% |
| 2012 | 8.2% | -2.8% |
| 2013 | 9.2% | 0.9% |
| 2014 | 9.1% | 0.8% |
| 2015 | 12.0% | 15.0% |
Sources: U.S. Bureau of Economic Analysis and Texas Comptroller of Public Accounts
Subsector and Industry Concentration in Texas
One method to measure a subsector’s regional strength is the location quotient (LQ), a ratio of the subsector’s share of employment in a region to its share of employment in the U.S. as a whole; the higher the LQ value, the more “concentrated” the industry. LQ values often are used to identify regional strengths and inform economic development and investment decisions.
A high LQ can identify a regional industry that enjoys a competitive advantage compared to other regions; an LQ below 1.00 can indicate competitive weakness. A regional LQ of at least 1.25 (meaning the subsector’s regional share of total employment is 25 percent greater than in the U.S.) can indicate an exporting subsector and the presence of a regional “industry cluster,” a group of interrelated firms providing related products or services and sharing similar needs for workers and suppliers.
Texas’ statewide 0.70 LQ in food manufacturing and 0.74 LQ in beverage and tobacco products indicate that these subsectors are not highly competitive. A regional assessment of employment concentration is useful, however, as the size of Texas’ economy and workforce can obscure regional industry strengths. Food manufacturing is highly concentrated in the High Plains region, with an LQ nearly four times the national share. The Upper East, Southeast and Central regions also have above-average employment concentrations.
The Alamo (wineries and breweries) and Northwest (soft drink manufacturing) regions have above-average employment concentrations in the beverage and tobacco subsector (Exhibit 3).
Exhibit 3: Food Manufacturing LQ and Employment Levels by Texas Region in 2016
| Region | 2016 Location Quotient |
2016 Jobs |
|---|---|---|
| High Plains | 3.59 | 14,478 |
| Upper East | 1.87 | 8,470 |
| Southeast | 1.39 | 3,995 |
| Central | 1.27 | 6,580 |
| Northwest | 0.83 | 1,913 |
| Alamo | 0.78 | 9,404 |
| Metroplex | 0.60 | 22,457 |
| South | 0.53 | 4,610 |
| Upper Rio Grande | 0.45 | 1,618 |
| West | 0.40 | 1,158 |
| Gulf Coast | 0.38 | 12,118 |
| Capital | 0.28 | 3,026 |
| Texas | 0.70 | 90,176 |
Source: Emsi and Texas Comptroller of Public Accounts
Exhibit 4: Texas Beverage and Tobacco Manufacturing LQ and Employment by Region, 2016
| Region | 2016 Location Quotient |
2016 Jobs |
|---|---|---|
| Alamo | 1.23 | 2,376 |
| Northwest | 1.05 | 385 |
| Upper Rio Grande | 0.95 | 540 |
| Central | 0.93 | 769 |
| Capital | 0.91 | 1,539 |
| Metroplex | 0.78 | 4,668 |
| Upper East | 0.78 | 565 |
| Gulf Coast | 0.66 | 3,354 |
| Southeast | 0.47 | 218 |
| High Plains | 0.40 | 257 |
| South | 0.32 | 449 |
| West | 0.15 | 71 |
| Texas | 0.74 | 15,263 |
Source: Emsi and Texas Comptroller of Public Accounts
Industry Trends in the Food and Beverage and Tobacco Subsectors
Animal slaughtering is the largest food manufacturing industry in Texas (mostly in the High Plains region), followed by poultry processing. Among the largest industries, animal slaughterers, soft drinks makers and tortilla manufacturers have above-average employment concentrations (Exhibit 4).
Beverage manufacturers were among the largest job gainers from 2010 to 2016, including breweries, soft drinks and wineries (Exhibit 5). The beverage and tobacco subsector rose by 36 percent during this period, easily the largest percentage growth among all Texas manufacturing subsectors.
Exhibit 5: Largest Industries within Food and Beverage and Tobacco Product Manufacturing in Texas, 2016
| Description | 2016 Jobs | 2016 Average Salaries | 2016 Location Quotient |
|---|---|---|---|
| Animal Slaughtering (except poultry) | 14,216 | 40,688 | 1.27 |
| Poultry Processing | 13,822 | 32,881 | 0.73 |
| Commercial Bakeries | 8,589 | 45,466 | 0.77 |
| Meat Processed from Carcasses | 8,068 | 41,687 | 0.8 |
| Soft Drink Manufacturing | 7,895 | 57,482 | 1.18 |
| Frozen Specialty Food Manufacturing | 4,521 | 38,186 | 0.95 |
| Retail Bakeries | 4,429 | 24,115 | 0.64 |
| Tortilla Manufacturing | 3,461 | 29,385 | 2.18 |
| Breweries | 3,157 | 67,002 | 0.65 |
Exhibit 6: Largest Job Gains by Industries within Food and Beverage and Tobacco Product Manufacturing in Texas, 2010 to 2016
| Description | Job Change | 2010 to 2016 Percent Change |
|---|---|---|
| Breweries | 1,459 | 86% |
| Retail Bakeries | 1,267 | 40% |
| Soft Drink Manufacturing | 1,119 | 17% |
| Wineries | 767 | 96% |
| Mayonnaise, Dressing and Other Prepared Sauce Manufacturing | 603 | 111% |
| Poultry Processing | 581 | 4% |
Sources: Emsi and Texas Comptroller of Public Accounts
Conclusion
Manufacturing continues to drive output and productivity in the Texas economy, creating jobs paying well above the statewide average. It also contributes significantly to job creation in other industries, particularly in design operations and services.
Texas manufactures a variety of food and beverage products across its diverse regions, as producers respond to local demand and local tastes. Proximity to raw materials and supply networks also are highly important to ensure the freshness of its products.