US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Automation Spurred by the COVID-19 Pandemic: Investments in Meat Processing & Beyond

We first discussed the trend of pandemic-related increases in manufacturing automation in 2020. At the time, meat processing – an industry that has long considered automation inferior to human activity due to inexact cuts and too much waste – was only just considering it and looking into how they could make it happen.

However, machinery innovations through the use of artificial intelligence, sensors, and cameras are resulting in machinery that is both increasingly better performing and less expensive. To that point, recently Tyson Foods announced plans to invest $1.3 billion to automate parts of its production lines over the next three years.

The need to implement automation has been spurred by a variety of challenges:

  • worker protection – particularly the need to space workers out amid high infection rates
  • the need to continue operating when outbreaks occur
  • labor shortages as it becomes difficult to find sufficient staffing for all necessary shifts
  • high demand as restaurants reopened this year and consumer grocery spending remains at elevated levels

Tyson Foods stated that they expected automation will allow them to increase production volumes, produce more reliability, and reduce costs over time. The company expects to automate roles that are more difficult to do and where worker turnover is high.

This is a trend that continues to spread across a variety of other industries as well. For instance, Amazon has invested in robots to help fill orders in warehouses and smart machinery that makes right-sized custom boxes for each individual shipment.

The benefits of investments in automation in this era include:

  • hedging against hiring challenges, when not enough of the right kind of workers available
  • reducing the cost of production in a country or region with high labor rates to become more competitive with other areas as more manufacturers are diversifying their supply chains
  • increasing worker safety, not only in terms of keeping workers spaced out for pandemic productions, but also potentially reducing human involvement in tasks more prone to worker injury, whether repetitive or traumatic
  • improving efficiency as sensor-driven machinery can quickly make customize operations, including shipping container selections for fulfillment firms

Freedonia analysts continue to track the automation trend throughout our coverage areas, searching for key impacts and opportunities for growth.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Food Processing Machinery, Global Packaging Machinery, and Meat, Poultry & Seafood Packaging. Freedonia Custom Research is also available for questions requiring tailored market intelligence.