LANSING — Michigan food entrepreneurs would be able to take their idea and turn it into frozen meals on the shelves of local grocery stores using a proposed mock production line.
Companies across the state would be able to test any food product from start to finish at the line managed by the Michigan State University Product Center, an organization that aims to help entrepreneurs develop successful food and farm products.
Proponents hope to generate an additional $300 million to $400 million in sales and 1,000 jobs annually if the center proposed near Lansing reaches around 20 clients per year.
“Essentially, companies would be able to experiment with new processes and products by setting up an entire food-processing line running from input all the way to the packaged good,” said Chris Peterson, director of the product center. “They would be able to sell the finished product into test markets to see if it is successful.”
MSU officials have completed a feasibility study and business plan for the $5.25 million facility, Peterson said.
The Michigan Economic Development Corp. has committed $1 million and the Economic Development Agency, a federal program in the U.S. Department of Commerce, has committed $2.5 million, he said.
The MSU Product Center is asking the university and food industry businesses to fund the remaining $1.75 million. It may also go to the legislature for some of the final funding if needed, Peterson said.
The advantage of such a center is that, if the test market goes well, businesses then could duplicate the mock production line in the real world right away, Peterson said.
“We are the first facility in America that will allow companies to sell products made in the product center,” said Matt Birbeck, business development strategist at the product center.
The Michigan Farm Bureau supports the facility.
“We see this as a key component to expanding Michigan’s economy,” said Bob Boehm, manager of the bureau’s commodity and marketing department. “We are very supportive of product centers because good food processing adds value to the raw commodity that our farmers grow.”
Businesses would have access to a workspace, food-processing equipment and training from the product development center and Michigan State’s School of Packaging, according to the plan overview.
It is meant to help companies expand their products, Birbeck said. For example, if a restaurant was asked by a supermarket to produce meals to go, experimentation could take place there.
The service is aimed at helping those companies that fall between large corporations and small businesses.
“Large firms have their own scale-up opportunities, and small businesses have innovation kitchens, but middle-sized businesses don’t have facilities available to them to take on that kind of growth,” Peterson said.
The only option for mid-sized companies that want to stay competitive is to invest in costly expansions without knowing if the market is there.
“It is perfect for companies who want to expand production into other areas that they might not have necessary equipment or expertise for,” said Evan Smith, chief of operations for Cherry Capital Foods, a food distributor in Traverse City that specializes in Michigan products.
“We have been very active in encouraging it and offering our support,” Smith said.
The food distributor has a similar product center in Traverse City where food processors can lease spaces.
“For the one in Traverse City, we really only offer infrastructure for producers to run their business,” Smith said. “The one in Okemos is more of a system where you come in, test the concept, prove the product and move out.”
Ideally, the facility will be up and running by spring 2015, Birbeck said.
Large food businesses in the state have their own private scale-up pilot facilities, but this would be the only one of its kind for medium-sized businesses.
Product centers like the one in Traverse City are more common and are used in North Carolina and Pennsylvania.