Food fuels more than just our bodies. In Greater Philadelphia, food-based businesses fuel commercial activity and create jobs for thousands of individuals. Businesses and individuals that participate along the food supply chain comprise what we call the “food economy,” whether they are small businesses or multinationals, corner stores or global shippers.
This assessment builds on definitions in the 2011 report, "Eating Here: Greater Philadelphia's Food Systems Plan," from the Delaware Valley Regional Planning Commission (DVRPC). Drawing from North American Industry Classification Systems (NAICS), the food economy comprises activity within six distinct industry sectors: food production, food processing, food distribution, food retail, food hospitality, and food waste and recovery. Not all businesses fit squarely into one sector. For example, ReAnimator Coffee, a Philadelphia-based coffee company that roasts coffee beans, sells them to businesses and individuals, and operates coffee shops, could be categorized as a processor, retailer, and hospitality business. Though cross-sector business activity like this is common, a sector-based analytical approach allows for comparison and isolation of strengths, weaknesses, opportunities, and challenges within segments of the food economy.
In Greater Philadelphia today, too few people have access to good jobs, too many communities struggle with high rates of poverty and food insecurity, and economic growth is uneven and inequitable. A good food economy provides living wage jobs, strengthens local supply chains, and supports expanded access to health-promoting food. Finding effective ways to encourage and support food-related commerce, particularly good food businesses, can go a long way in driving growth, promoting health, and expanding opportunity in our region.
Good Food for Philadelphia
What is Good Food?
Drawn from research done by Get Healthy Philly and the Philadelphia Food Policy Advisory Council (FPAC), this report defines good food as fitting the following four criteria: health-promoting, locally-oriented, fair, and sustainably-produced. Click on the Good Food criteria below to learn more.
The Economic and Social Ripple Effects of Good Food
Philadelphia has the highest rates of unemployment, poverty, and chronic disease incidence among the 10 largest cities in the United States. But support for good food businesses can create new healthy foods, new jobs, and healthier environments, and can harness the extant and growing demand for their goods and services. Click on the ripple effects of good food below to learn more.
Philly Bread and the Good Food Economy
Businesses in Greater Philadelphia are already bringing good food to the mouths, tables, and pantries of area residents and simultaneously supporting the regional economy. Working in food service and urban agriculture, Pete Merzbacher noticed new trends in food processing: he watched the beer and coffee industries localize and specialize, and became convinced that bread would be the next industry to undergo such a transformation. Driven by a passion for food and a penchant for baking, Merzbacher started his business, Philly Bread, in 2013 with his signature local take on the English muffin: the Philly Muffin. Built around creative financing, inclusive hiring practices, regional procurement, regional sales, and large-scale contracts, the way Philly Bread does business is an approach worth replicating.
Click on the business practices below to learn more about how Philly Bread supports the good food economy.
The Greater Philadelphia Food Economy Today
Greater Philadelphia’s food economy supports 331,000 jobs across 25,000 firms in the 11 counties that constitute Philadelphia’s Metropolitan Statistical Area (MSA).[1],[2] Philadelphia itself is home to 79,000 food-related jobs across 6,500 firms, accounting for nearly 25% of all food-related jobs and firms in the region—a share that is on par with the city’s share of all regional jobs (24%).[3]
[1] Philadelphia’s MSA includes Bucks County, PA; Burlington County, NJ; Camden County, NJ; Cecil County, MD; Chester County, PA; Delaware County, NJ; Gloucester County, NJ; Montgomery County, PA; New Castle County, DE; Philadelphia County, PA; and Salem County, NJ.
[2] U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages, 2018, Raw Data (Washington, D.C.: U.S.
Bureau of Labor Statistics, October 15, 2018).
[3] Ibid.
Food Economy Sector Dashboards
Over the past decade, the increase of food-related jobs and firms, and their percentage within the overall regional economy underscores the food economy’s importance to Greater Philadelphia. However, there is tremendous diversity and variation within each of the food economy sectors. Employment, jobs, firms, and projected job growth differ across sectors. Click on the sector dashboards below to learn more about how each sector fares with respect to jobs, job growth, firms, and wages.
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Hospitality
Hospitality includes restaurants, hotels, food service contractors, and caterers. It dominates local food-related employment—supporting 68% of all jobs in the food economy within Philadelphia and 59% of all food-related jobs in the region. The hospitality sector is also one of the primary drivers of food-related job growth at both the city and regional levels, though it pays the lowest average wages of all food economy sectors. It is projected to grow faster than all other food economy sectors over the next five years.
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Retail
Retail involves the direct sale of goods to consumers within food and beverage outlets, including online e-commerce platforms. Constituting 21% of city food economy jobs and 25% of regional food economy jobs, retail is one of the largest sources food-related employment in the Philadelphia area. It is also a driver of growth in the city and region, adding over a thousand jobs annually over the past decade. However, regionally it is projected to lose jobs in the next five years, and this sector sees some of the lowest wages across the food economy.
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Waste and Recovery
Waste and recovery includes firms engaged in waste collection, treatment, remediation, and food recovery. While it supports the smallest number of food economy jobs, waste and recovery jobs have grown faster than other sectors and projections anticipate continued growth. Waste and recovery also pays the highest average wages in the food economy.[1]
[1] These numbers do not include public sanitation workers or related occupations in the public sector. The City of Philadelphia posts employee salaries publically, however, and a Laborer in the Streets Department, had a starting salary of $32,688 in 2018, while Waste Collection District Supervisors can earn a base pay between $52,000 and $69,000, depending on years of experience.
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Distribution
Distribution encompasses transportation, logistics, warehousing, and wholesale of food-related goods. Distribution is the third-largest sector in the food economy with respect to employment, and pays the second-highest average wages. While distribution employment in the city dipped in recent years, growth is projected locally and statewide. The 5,502 distribution firms in the region account for nearly ¼ of all firms in the food economy.
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Processing
Processing includes firms that transform raw agricultural products into food products. Employment in this sector is growing regionally, but the city has seen modest annual decline in jobs over the last decade. While it supports fewer jobs than four other food economy sectors, average wages for food processing jobs are higher than many other sectors.
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Production
Production includes firms that grow crops, produce livestock products, or support agriculture. Regional employment in this sector is experiencing modest growth, though average wages are low, and it comprises far fewer firms than other sectors of the food economy.
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Food Economy Findings
Opportunities for Good Food to Grow Greater Philadelphia's Food Economy
Methodology and Data Limitations
This study employs a mixed-methods approach, using local and national quantitative data, surveys, and interviews to illustrate the nuances of food-related business operations and relationships. The quantitative analysis examines wage and labor data from the Bureau of Labor Statistics, tax revenue data from the City of Philadelphia’s Department of Revenue, wage data from PayScale, and firm-level data from ReferenceUSA. These datasets include several limitations. For one, the availability of industry data varies by geography. BLS employment data is not equally available for all industries at all geographies (e.g. national, state, metro, county). To address this variability, this study collected county-level BLS employment data and then aggregated it across the 11 counties that make up the Philadelphia MSA. Additionally, industry-level data for the waste and distribution sectors encompass a large percentage of firms that fall outside of the food economy. For example, distribution includes general warehousing, and rail and freight transportation. As such, this analysis factors in that industry-level data for these sectors is 15% of the total industry.
The qualitative analysis draws from intelligence gathered through 20 interviews with key firms across food economy sectors, focus groups with anchor institutions, and an in-depth survey of 76 food-related businesses. While the quantity of survey responses collected is sufficient to draw some conclusions about food-related business activity in the region, it is not an exhaustive accounting of all opportunities and challenges facing food-related businesses in Greater Philadelphia. As such, this report articulates priority strategies for supporting the region’s food economy and openly acknowledges areas where further study is necessary to better understand specific dynamics and opportunities.
The food economy includes an unknown but significant amount of informal economic activity—that is, businesses that are cash- or barter-based or otherwise not traceable by traditional tools for gathering economic data. For example, unlicensed produce brokers, or “jobbers,” distribute food from farms or wholesale markets to small food businesses in the city, like produce markets or corner stores; however, a lack of reliable data and formal research limits understanding of the overall economic impacts of these transactions. Similarly, it is difficult to measure the economic contributions of undocumented immigrants who work “off the books” on farms, and in restaurants and hotels. Though the food economy relies on their labor and skills, the informal nature of their employment, as well as current federal attitudes toward immigration status, make it difficult to quantify the scale and impact undocumented immigrants’ participation in the food economy.
Other forms of informal employment and earnings are similarly hard to measure. “Off the books” wages and unreported cash gratuities in the hospitality sector make it difficult to accurately measure economic impact. Urban agriculture is also part of an informal food economy, whether demand substitution, where gardeners and farmers supplement or substitute their own or their neighbors’ food needs by giving away produce, or via employment in small-scale urban agriculture not captured in formal employment data. Also, as many Philadelphia urban farms are part of nonprofits, farm labor may be categorized in the quantitative datasets as nonprofit labor. While this analysis briefly addresses some of these gaps, these topics would benefit from further study.
Acknowledgments
The City of Philadelphia Department of Public Health Division of Chronic Disease and Injury Prevention and the Economy League of Greater Philadelphia would like to thank members of the Food Economy Assessment steering committee and project team for their input and guidance throughout this study. Members’ broad expertise, ability to facilitate important information-gathering connections, and perspective across a wide set of issues were critical to developing the analysis and strategic framework for this report. Thank you to the dozens of individuals who made time to fill out the survey and the key stakeholders and firms that took the time for interviews. Thanks to the Reading Terminal Market, the Mid-Atlantic Regional Cooperative, Fernando Suarez Business Advisors, and the Greater Hispanic Chamber of Commerce and Oscar Calle-Palomeque for assisting with survey collection. The Economy League would also like to thank Sydney Goldstein of Urban Spatial and Danielle Dong of JacobsWyper Architects for assistance with spatial analysis; Spencer DeRoos and Carmen Esposito for their contributions to literature review and background research; the team at Untuck for their graphic design expertise; and Thaddeus Woody for his insight on the status of relevant federal legislation.
This report is funded through the Centers for Disease Control and Prevention’s Sodium Reduction in Communities Program Grant.
Steering Committee
Jennifer Crowther – Vice President, Product and Resource Development, PIDC
Jonathan Deutsch – Professor, Center for Food and Hospitality Management and Department of Nutrition Science, Drexel University
Megan Bucknum Ferrigno – Professor, School of Earth and Environment, Rowan University
Benjamin Fileccia – President, Philadelphia Restaurant and Hotel Alliance
Molly Hartman – Program Director, Healthy Food Financing Initiative, Reinvestment Fund
Alison Hastings - Manager, Office of Communications and Engagement, Delaware Valley Regional Planning Commission
Beth McGinsky – Director of Data and Evaluations, The Enterprise Center
Donna Leuchten Nuccio – Director, Healthy Food Access, Lending & Investments, Reinvestment Fund
Ashley Richards – City Planner, Planning Division, Philadelphia City Planning Commission
Anna Shipp – Executive Director, Sustainable Business Network of Greater Philadelphia
Jonathan Snyder – Director, Business Financial Resources, Office of Neighborhood Economic Development, Department of Commerce
Project Team
Jennifer Aquilante – Food Policy Coordinator, Get Healthy Philly, Philadelphia Department of Public Health
Hannah Chatterjee – Food Policy Advisory Council Manager, Office of Sustainability, City of Philadelphia
Ben Logue – Get Healthy Philly, Philadelphia Department of Public Health
Molly Riordan – Good Food Purchasing Coordinator, Get Healthy Philly, Philadelphia Department of Public Health
Mohona Siddique – Economy League of Greater Philadelphia
Nick Frontino – Economy League of Greater Philadelphia
John Taylor – Economy League of Greater Philadelphia
Amanda Wagner –Nutrition & Physical Activity Program Manager, Get Healthy Philly, Philadelphia Department of Public Health
Executive Summary Graphic Design Team
Amy Saal - Untuck
John Saal - Untuck
Julie Rado - Untuck