Food and Beverage Dominates Manufacturing Industry

Explosion in breweries, wineries and distilleries a boost for local economy, including agriculture

By Molly Priddy
Flathead Lake Brewing Company. Beacon File Photo

The biggest shift in manufacturing in the Flathead Valley doesn’t have much to do with bending metal or microchips or lumber, but rather vending beverages and microbrews and lager.

Wineries, breweries, and distilleries represent the major increases in the Flathead’s manufacturing sector this year, according to the Kalispell Chamber of Commerce and the University of Montana’s Bureau of Business and Economic Research (BBER).

“Food and beverage manufacturing is one of the hottest sectors we’re seeing right now,” said Joe Unterreiner, president of the Kalispell chamber.

The chamber recently finished its annual Manufacturing Month, which ran from Sept. 20 to Oct. 20. During the month, the chamber hosted tours of various manufacturing businesses throughout the valley, from firearms producer Proof Research in Columbia Falls to Flathead Lake Brewing Co. in Bigfork.

Throughout the tours of the various breweries and distilleries, Unterreiner said guests were presented with one of the biggest trends in manufacturing right now: connecting manufacturing to agribusiness.

The local-food movement continues to gain momentum across America and Montana, and it is bleeding into the manufacturing of food and beverages, he said. More people are looking for locally sourced items, he said, like culled Flathead cherries made into a drink at Glacier Distilling Co.

“Fertilizer from (dairy farm) Kalispell Kreamery is going to fertilize Glacier Hops Ranch, and the hops are being sent to local breweries,” Unterreiner said. “It’s a trend that we’re very much part of nationally. That area is a really unique blend of locally sourced product movement in the agribusiness industry.”

According to a study from the BBER that came out in August, beer production in Montana has increased by 87 percent since 2010, or roughly 13 percent per year. That momentum doesn’t seem to be slowing, the study said, with production having grown by 15 percent in 2015. From 2010 to 2015, sales increased by 111 percent and employment by 204 percent; expenditures increased by 140 percent and payrolls by 154 percent.

The study concluded that this equates to 1,044 additional permanent, year-round jobs in Montana, as well as more than $33 million in personal income in Montana households. Of those jobs, more than 700 were in the manufacturing aspect of the breweries.

Also, in 2014 and 2015, nearly 36 percent of agricultural purchases for making beer were from producers within the state, totaling $1.4 million in expenditures in 2014 and $1.6 million in 2015.

Unterreiner said the fervor for local beer spills into restaurants as well, where their own local dishes receive special attention.

“It’s authentic, it’s locally made, you believe it’s going to be fresh, it’s not mass produced,” he said. “It’s really exciting to see happening out there.”

The wood products industry continues to suffer in the Flathead, with the closure of Weyerhaeuser’s plants in Columbia Falls. There’s also a continual supply issue.

“It’s tougher than ever to access timber off of federal lands in the area,” Unterreiner said.

The housing market is rebounding, which helps that sector, but the strong dollar continues to affect exports, he said.

The firearms industry, which served as a buoyant force during and immediately following the recession, is in flux, Unterreiner said, with mergers and consolidations.

“We’ve seen a lot of movement in that industry in the last five years,” he said.

Precise machining remains a skill in high demand, and employers are still trying to fill good, well-paying manufacturing jobs. Unterreiner said businesses have reported working well with Flathead Valley Community College on the manufacturing trade programs, but workers are still scarce.

Manufacturing Month also involved tours for students, so they could see the entire range of the sector, not just the machining aspects. The Flathead Manufacturing Alliance was also part of the month; the group started four years ago as a way to focus on issues affecting the whole industry, not just pieces.

Mike Nye of Applied Materials is serving as chairperson for the group, and said it has been an effective tool.

“I think the big key is it gives us a focused group that can advocate for manufacturers,” he said. “We’ve got another legislative session coming up this winter — I’m sure some of us will wind up going down to testify. Instead of just one business going, we can have a little more pull, the perception of a larger body of businesses.”

Worker shortage continues to plague most manufacturers, Nye said, and other challenges for the industry include transportation. Unterreiner said the chamber is working on issues that affect nearly all industries in the Flathead, and transportation, especially by air, is in the crosshairs.

But it’s been a banner year for food-and-beverage manufacturing, a sector that Unterreiner said will likely continue to perform well.

“It’s a hot industry right now,” he said.

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