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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

economy

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)

Percent Change in Employment
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)

Percent Change in Real GDP
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

Jobs and Employment Concentration
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

Jobs and Employment Concentration
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

Jobs, Salaries and Concentration by Industry
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
Sources: Emsi and Texas Comptroller of Public Accounts

Exhibit 6: Largest Job Gains by Industries within Food and Beverage and Tobacco Product Manufacturing in Texas, 2010 to 2016

Change in Employment
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.

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