Why Chicago is the nation’s capital of food and beverage manufacturing
CHICAGO — In 1891, entrepreneur William Wrigley moved to Chicago to go into business for himself.
Just like today, Chicago was a place of great opportunity. It was where the population centers of the eastern United States met the open plains of the West. Chicago was the hub of all domestic transportation and shipping with canals connecting the city to the Mississippi River and railroads tying the city to Detroit, Cleveland, Cincinnati, New Orleans, Kansas City and Omaha.
America’s Second City became the key point for all sorts of goods to move throughout the United States. People came for the opportunities it presented, and farmers took advantage of its good transportation options.
“Chicago became like this: if you imagine the neck of a funnel, everything getting funneled into the central spot where it could be shipped east,” John Coupland, a food science professor at Penn State and former president of IFT, told Food Dive.
While many things have changed in about 130 years, Chicago’s place of prominence in the food industry has not. It’s still the home base for many global companies, which tout its location, population and character of innovation as their reasons for being there.
According to Alan Reed, executive director of industry group Chicagoland Food and Beverage Network, there are about 4,500 food and beverage companies in the metro area today. Together, the two industries employ about 130,000 people in Chicago, and that’s strictly for manufacturing, distribution and marketing. It doesn’t count those who work in agriculture, food retail or restaurants and foodservice.
Locations of select food and beverage companies in the Chicago metro area
And while Wrigley (now owned by Mars, which has had its own presence in the Windy City for almost 90 years) is still based in Chicago, many other food and beverage companies now call it home.
Mondelez, which spun off from Kraft in 2012, has been based in the Chicago suburb of Deerfield since the split. It’s moving to downtown Chicago’s trendy West Loop neighborhood next year. Conagra Brands uprooted its headquarters from Omaha, Nebraska and moved into the downtown Merchandise Mart building in 2016. Barry Callebaut made its American headquarters here. And while other food giants have their main headquarters elsewhere, companies such as Tyson Foods, MillerCoors, Kellogg and PepsiCo have large offices in the area.
Reed told Food Dive that part of Chicago’s appeal still is its accessibility. After all, Chicago is an easy drive from much of the Midwest. It’s a transportation hub where railroads, roads and airlines converge. According to the Federal Aviation Administration, Chicago’s O’Hare Airport is the nation’s busiest. The city is near great food science programs at prominent universities, and it’s a good place for hardworking and well-educated people to live.
Chicago has “the Midwestern sensibility. So they try out things here,” Reed said. “We’re sort of urban enough and suburban enough and rural enough to sort of be an interesting cross section. ...This is one of those places where if it makes it here, it’s probably going to make it in most places, or ... it’s a big enough idea to go national.”
“There’s so much incredible innovation that’s come out of here. I think Chicago has been pretty quiet. It’s been a very quiet and humble success.”
CEO, The Hatchery
The benefits of having a Chicago-based headquarters are apparent. Fast food giant McDonald’s moved its headquarters to the Windy City’s trendy Fulton Market district last year, and Crain’s Chicago Business reported it’s starting to pay off. The company reported in a press release it has received a “sizeable increase” in job applications — nearly 200,000 since the move.
“We are now attracting diverse top talent from all over the world from other top employers,” Joshua Secrest, McDonald’s senior director of global talent attraction, said in a press release. “Our move to Chicago is consistently cited as a major reason for consideration from our recent hires.”
CPG companies are also singing Chicago’s praises. Several companies told Food Dive they wouldn’t think of locating anywhere else. Natalie Shmulk, CEO of Chicago-based food incubator The Hatchery, told Food Dive the business community, the talented people and the Windy City’s energy are the secrets to its success.
“There’s just so much that’s flourishing here. And I think that’s where having access to all of these resources makes it so much easier for food businesses to launch and grow here,” Shmulk said. “And then, in addition, there’s a lot of smart investments. There’s so much incredible innovation that’s come out of here.”
Food Dive spoke to several companies that call Chicago home — and how the Windy City is vital for their present and future.
The legacy: Mars and Wrigley
It’s impossible to think of food companies in Chicago without thinking of Wrigley. After all, the confectionery giant’s rise is a Windy City legend. The company name is synonymous with chewing gum brands like Doublemint, Juicy Fruit and Big Red. Today, Wrigley employs more than 1,750 people in offices and factories in the Chicago area.
“We are intertwined with Chicago’s history,” Allyson Park, Mars Wrigley’s vice president of corporate affairs, told Food Dive. “As the city has had success, so too the company has had success.”
In 1891, Wrigley came to Chicago with just $32 in his pocket to make his way in business. He sold soaps and powders, giving away a couple free sticks of chewing gum to each customer. Wrigley stuck with the gum, and solidified Chicago’s position as the nation’s candy capital by introducing the company’s signature Juicy Fruit and Spearmint flavors at the World’s Fair in 1893.
As Wrigley grew, the company opened factories throughout the Chicago area. It also built its iconic former headquarters, a skyscraper on the city’s Magnificent Mile, which opened in 1920. The company now has its global headquarters on the city’s Goose Island.
The other candy scion behind what is now Mars Wrigley, Frank C. Mars, started his confectionery empire in Minneapolis. And while Mars’ home base stayed there, the company also came to Chicago. Mars’ first chocolate factory in Chicago opened in 1929. It became where Snickers bars were manufactured when the bar launched in 1930. The plant is still operational today, with some fourth-generation associates working there, Park said.
As a large international company, Mars Wrigley has several worldwide offices, but Chicago is its global headquarters. Park said Chicago is an attractive city to people around the world. In terms of population, it’s the third largest city in the United States, according to World Population Review. Eighty nations have consulates in Chicago, and Park said more than 25 nationalities are represented at Mars Wrigley’s Chicago base.
While Chicago is a great draw for international business, Park said the type of people who are drawn to the city — well educated, excited and innovative — help bring great talent to Mars Wrigley.
“Chicago matters,” Park said. “It’s a place where we want to grow, and we see it growing.”
Through the years, the company has had a hand in many of Chicago’s major civic projects. Most recently, the Wrigley Foundation contributed $5 million to the city’s Millennium Park. Employees also are encouraged to volunteer in the city, Park said, especially focusing on cleaning the local waterways and helping those less fortunate.
The city’s deep history in the food industry also makes it a place that Mars Wrigley sees as part of its future, Park said. With startups and legacy companies both making it their home, the industry community is vibrant. While there is competition, there is also a lot of collaboration.
And even though it’s difficult to think about Chicago without Mars Wrigley, Park said it’s also impossible to think about Mars Wrigley without Chicago.
By the numbers
Mars Wrigley employees in offices and factories in the Chicago area
nationalities represented at Mars Wrigley’s Chicago base
“William Wrigley decided to go to Chicago. Who knows what would have happened if he went elsewhere?” she said.
Deepening roots: Mondelez
In 2012, global snack giant Mondelez International was spun off as its own company.
Since Kraft’s headquarters had been in the Chicago suburbs, Mondelez moved there too. Its headquarters is in an office park in Deerfield, about 10 miles away from Kraft’s former main office.
“It never felt very permanent,” Russell Dyer, Mondelez’s vice president, chief of communications and government affairs, told Food Dive. “I think (it was,) you know, being in an office park when you’re a Fortune 150 company. It never really felt ours.”
While Mondelez is still based in that office park today, it’s looking toward Chicago for its future. The company is moving into a new headquarters in the Fulton Market neighborhood in April. The trendy area is a showplace for Chicago’s culinary scene, with the buzziest restaurants opening there. It’s also the hippest place for corporate offices. Mondelez’s new neighbors will include offices of Google and McDonald’s.
Mondelez has a 15-year lease at its new headquarters, so it’s making the long-term commitment to Chicago. It was obvious to everyone that Mondelez needed a new home, Dyer said. But the location for its corporate headquarters was not so apparent. While the company’s ancestral home is nearby, there are many locations where it would make sense for Mondelez to put its global headquarters. After all, he said, the company earns 80% of its revenue outside of the United States, meaning many global locations were also in the running.
“A big part of our growth strategy as a company is about becoming more consumer-centric,” Dyer said. “Being in a vibrant area of the Fulton Market neighborhood really brings the consumer to the forefront of ... the culture of the company. And that’s something that we’re really excited about.”
The energy of Chicago — and all of the other CPG companies based there — is also key to Mondelez’s new headquarters While many gigantic corporations and global companies are there, it’s also a haven for startups. Businesses like RXBAR maker Chicago Bar Company — which Kellogg acquired in 2017 for $600 million — call the Windy City home. Last year, Mondelez announced its SnackFutures initiative, which invests in innovative food companies seen as the “future of snacking.” It is also one of the many representatives of Big Food partnering with Chicago food business incubator The Hatchery.
Dyer said Chicago has much to offer a legacy food company like Mondelez. It’s a large, bustling global city, he said.
“But there’s also a real culture of innovation and entrepreneurship. And I think Chicago has got that great blend of entrepreneurship ... culture with (digital hub) 1871 and groups like The Hatchery — and a lot of success with similar startups, while also having these tried and true partnerships that come from big companies,” he said. "That’s a really compelling mix, I think, and somewhat unique when you compare it against other cities.”
New home: Conagra
In 2015, Conagra Brands made an announcement that shook the industry: The company was relocating its corporate headquarters from Omaha, Nebraska to Chicago.
Conagra — which has seen many dramatic changes through its 100-year history — was beginning its latest metamorphosis. The company was founded in 1919 through the consolidation of several grain mills in Nebraska. In the 1970s, it started buying food brands, shifting more toward CPGs.
In 2015, CEO Sean Connolly announced Conagra was changing its mission again. The company started concentrating on branded food — which at the time represented 91% of its portfolio.
Charisse Brock, Conagra chief human resources officer, told Food Dive the reasons for the move to Chicago were clear. As a branded-products company, Conagra needed to be where the leading talent for marketing and brand management were located. For years, the company had a small presence in the Chicago suburb of Napierville. They had been looking into moving everything downtown.
“It’s a world-class city — for marketing professionals and brand leaders especially,” Brock said. “We believe we have an attractive culture for these types of professionals. We’ve placed emphasis on new ideas and innovative thinking, especially as we move towards this pure play branded organization. ... And you’re in the city of Chicago. You can’t help but be energized by the city.”
Conagra settled into its new home in Chicago’s Merchandise Mart in June 2016. Conagra has 17,000 square feet of space as an open-concept office. Brock wouldn’t say how long the company’s lease is, but affirmed it has a deep commitment to growing in Chicago for the long run. The company moved 300 people from Omaha, and currently has about 550 employees — including transplants from Nebraska and Naperville.
In September, Conagra announced it would double-down on its commitment to Chicago. It announced a new 40,000 square-foot innovation space devoted to snacking that will open in the first quarter of 2020. The Conagra Brands Center for Food Design will employ 50 people.
Global powerhouse: Barry Callebaut
Barry Callebaut, which is headquartered in Zurich, is the world’s largest chocolate manufacturer. The company makes 2 million metric tons of chocolate a year, which is then sent as an ingredient to the world’s top confectioners.
In 2006, the company decided to establish a home base in the Western Hemisphere, said Jerry Hagedorn, executive vice president for Barry Callebaut USA. The company’s administrative offices were spread out at its factories — not ideal for a company that wants to establish a distinct corporate identity.
Hagedorn told Food Dive Chicago had everything Barry Callebaut wanted.
“It was a natural place to gravitate to. ...The things that make Chicago so great also made it very attractive,” Hagedorn said. “You have a tremendous workforce, you have a vibrant city.”
In addition, all of the other food companies in town — as well as its renowned restaurants — made the move to Chicago attractive to Barry Callebaut, Hagedorn said.
The company opened one of its signature Chocolate Academies in its U.S. headquarters, attracting pastry chefs and candymakers to learn the art of cooking with chocolate. While Barry Callebaut has several of these chocolate academies worldwide, the Chicago academy attracts students from around the globe.
The academy opened in 2008 and has been a showpiece for the last decade, Hagedorn said. During the 2012 NATO Summit in Chicago, the entire Belgian delegation — about 125 people, including then-Prime Minister Elio Di Rupo and former-Illinois Gov. Pat Quinn — came to the chocolate academy for a reception. This allowed the company to show off its American home base.
“In Chicago, you can achieve that,” Hagedorn said. “If you were in New York, you would be competing for that kind of opportunity. You’d be competing for that kind of attention, whereas in Chicago, it’s just, it’s very accessible all around. I wouldn’t want us to be anywhere else for the Americas. It’s just the right place.”
The future: Chicago as incubator
Chicago has always had a lot going for it as a food and beverage metropolis. And many of those things will help it retain its powerhouse status in the years to come, people in the industry say.
The talent, enthusiasm and innovation of people coming to Chicago isn’t just impacting established players in food and beverage. Chicago also is a haven for startups.
In 2015, the Industrial Council of Nearwest Chicago, a local incubator, spun off a new venture: The Hatchery. With a custom-built 67,000-square foot building in Chicago’s East Garfield Park neighborhood that officially opened this spring, the incubator is a center for innovation, learning and networking in the food business. The incubator has high-profile partnerships with companies including Kellogg, Conagra, PepsiCo, Ingredion and Mondelez.
The Hatchery has 200 members, 50 of which use its 55 food-grade private production spaces and shared commercial kitchen. Food companies — including Ingredion, Synergy Flavors and Kellogg brand RXBAR — have kitchens in the incubator. Chef Rick Bayless, whose Frontera brand is owned by Conagra, has a large kitchen teaching underserved youth culinary skills so they can work in Chicago’s thriving restaurant scene. And both Big Food and startup leaders are constantly learning from each other at seminars and networking events.
“Chicago, in particular, is pooling all the resources in one place,” Natalie Shmulik, CEO of The Hatchery, told Food Dive. “The way this industry is accelerating, there’s no time to stop and take a breath and figure out what you’re trying to do. You really have to figure it out as you go. And what Chicago is doing is it’s bringing every big CPG organization, investors in the space, experts in the space into one city and ultimately kind of building around each other and finding ways to work together.”
Networking, connecting and improving Chicago as a place for food and beverage companies to do business was behind the founding of the Chicagoland Food and Beverage Network. Grants from the MacArthur Foundation and JPMorganChase helped form the group — which is also backed by the Chicagoland Chamber of Commerce and World Business Chicago — two years ago.
Reed told Food Dive the MacArthur Foundation wanted to invest in an industry that benefits the entire city. They did a study and found that food and beverage was what they were looking for. After all, he said, the industry is vital to everyone. In terms of workers, the industry employs a wide range of people — from factory workers and those who work along the supply chain to highly educated food scientists and executives.
While Chicago is where many food companies are based, he said it’s also home to some of the world’s top marketers, as well as accountants and lawyers who focus their practices on food and beverage. The entire support community also is connected through the group.
“Part of our ongoing mission is let’s find those places where we can do right by industry, we can do right by Chicago, and great things are going to happen.”
Executive director, Chicagoland Food and Beverage Network
“We’re proud that it’s an interesting cross section of the food and beverage industry,” Reed said. “We feel like we’re starting to really hear the voice of what it is industry needs. And while it’s all a little bit different, it’s amazing how much some of those midsize companies have in common with startups, and how much some of those midsize companies have in common with large global CPGs — and really then how different they are.”
One place where companies routinely face the same challenges is in manufacturing. Many food companies have factories near Chicago, and they have had high rates of vacant positions — 30% to 40% is common, Reed said. While unemployment in Chicago on the whole is low, Reed said there are some neighborhoods where the unemployment rate is 60% to 70%. To address this issue, the group is developing a training curriculum that will teach people how to work in food and beverage manufacturing.
“It’s great for the food and beverage industry. ... It’s great for the underserved neighborhoods, great for the people who need the jobs. It makes Chicago a better place,” Reed said. “Part of our ongoing mission is let’s find those places where we can do right by industry, we can do right by Chicago, and great things are going to happen.”
Reed said he expects the food and beverage industry to grow in Chicago. The next five years will see new innovators, ideas and ways to blur the lines between traditional CPG manufacturing and restaurants in the name of convenience. Startups using shared kitchen spaces, new ways to collect and analyze data and incubators and accelerators will transform the food industry as a whole.
And, Reed said, the center of that transformation is guaranteed to happen in Chicago.
“I think that’s probably the most exciting thing — this incredible time of change in the industry. Causing collaboration where, you know, they would all have seen themselves as competitors not so long ago,” Reed said. “...We think that’s sort of the culture that we as an organization want to help to bring about, just because it’s so exciting and it makes it a much more exciting industry to work in.”