November/December 2015 by Connect Business Magazine

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NOVEMBER/DECEMBER 2015

Contents

THE MAGAZINE FOR GROWING BUSINESSES IN SOUTHERN MINNESOTA

STAFF & CONTRIBUTORS Publisher: Concept & Design Incorporated

COVER STORY

Editor: Grace Webb Art Director/Staff Photographer: Kris Kathmann

Schell’s Brewery

Advertising Manager: Beth Benzkofer Kozitza

Brothers Jace, Kyle and Franz Marti are preparing to take over one of Minnesota’s best-known breweries and continue a family tradition that stretches more than 150 years.

Contributing Photographers: Art Sidner Contributing Writers: Carlienne Frisch, Stephen Moore

PROFILES

Production: Becky Wagner

4-Seasons Athletics Jeremiah and Jaala Miller juggle their growing business while serving their community and their country.

Circulation: Grace Webb Printing: Corporate Graphics, N. Mankato Mailing: Midwest Mailing, Mankato

Madelia Lumber Company 40 Matt Gunderson uses lessons he learned in the Marine Corps to manage a team of fellow veterans and employees at his lumberyard.

Cover Photo: Kris Kathmann

8,800 for November/December 2015 Published bimonthly

CORRESPONDENCE Send press releases and other correspondence: c/o Editor, Connect Business Magazine P.O. Box 452, Nicollet, MN 56074

WORKFORCE SPECIAL SERIES

Part III – Veterans In The Workforce

CIRCULATION

E-mail: editor@connectbiz.com (please place press releases in email body)

Despite the skills veterans bring to the business world, they still struggle to find jobs.

Web: www.connectbiz.com Phone: 507.232.3463 Fax: 507.232.3373

COLUMNS

Editor’s Letter Grace Notes

ADVERTISING

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IN EVERY ISSUE

Press Releases

Business Trends

Bulletin Board

Hot Startz!

National Opinion

Call: (507) 232-3463

ABOUT CONNECT Locally owned Connect Business Magazine has ‘connected’ southern Minnesota businesses since 1994 through features, interviews, news and advertising. Connect Business Magazine is a publication of Concept & Design Incorporated, a graphic design firm offering print design, web design, illustration and photography. conceptanddesign.com

CONNECT Business Magazine

NOVEMBER/DECEMBER 2015

EDITOR’S LETTER

The Heroes Of Southern Minnesota Heroes come in many forms, but perhaps the easiest to identify is the American service member. Many of these veterans have gone on to start their own businesses, grounded in the same core principles that they refined in the military. Our November issue of Connect honors veteran business owners who have served their country and are now serving their community. First, there’s our cover story featuring the next generation of the Schell’s Brewery family: Jace, Kyle and Franz Marti. Working at the brewery since they were kids, the brothers stand poised to take over leadership once their parents bow out. Along the way, brothers Kyle and Franz Marti have both sacrificed for their country during their time in the Army National Guard. Our second feature stars Jeremiah and Jaala Miller, a husband-wife team that owns and operates 4-Seasons Athletics in Waseca. Besides running their athletic apparel store, Jeremiah has the extra responsibility of serving in the Army National Guard. Somehow, this military family is able to juggle family, business, community and country. Finally, there’s Matt Gunderson, owner of the Madelia Lumber Company. A former Marine, Gunderson uses lessons he learned in the military to steer his business to success and manage a team of fellow veterans and other employees. We thank these veterans and all the other veterans of southern Minnesota for their service, and we hope you enjoy this issue’s selections. An veritas, an nihil,

Grace Webb

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Email: editor@connectbiz.com Fax: 507-232-3373

Blue Earth

Le Sueur

From the Chamber: new members include Blue Earth Area Schools, St. Peter & Paul Catholic Church and Faribault County MOM’s. For the third year in a row, Inc. magazine has named Express Diagnostics Int’l, Inc. (EDI) to its annual Inc. 5000 list of fastestgrowing companies in the U.S.

From the Chamber: MN River Ag Quest Insurance with Tim Lewis is a new member. The City of LeSueur is hosting a “Night on the Town” on November 19. There will be a Christmas boutique in the Valleygreen Square Mall on December 5. The LeSueur Chamber annual business meeting will be held on November 12. McGraw Monument has a new owner, Dan Anderson. The Holiday Lights Parade will be December 4 in downtown Le Sueur and includes fireworks afterwards.

Gaylord From the Chamber: Eunoia Family Resource Center is a new business in town.

Fairmont Incentives for Job Creation SHOVEL VEL READY DY LOTS S

New Ulm Economic Development Corporation

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From the Chamber: new members include Carpet Plus and Jillian Vortherms of American Family Insurance. Partners Funding, Inc. has updated its website, www.partnersfundinginc.com. Sweet Financial Services was recently named to Inc. magazine’s Top 5000 list of fastest-growing private companies in America for the second year in a row. Center for Specialty Care recently became an accredited facility of OsteoArthritis Centers of America. In addition, the center hired Dr. Kevin Kimm as a primary care doctor.

NOVEMBER/DECEMBER 2015

Lake Crystal From the Chamber: newest members include Colonial Life – Agent Andrew Fells, Buss Brothers Productions, LLC (new owners of the Southern MN Home Show), Sisterhood Inspirations Boutique-Brenda Sanderson and The Bank Bar and Grill, under the new ownership of Eric Borg and Paul Wood. The Chamber will be hosting an Agriculture Appreciation Gathering on November 19.

Madelia From the Chamber: two new businesses in town are Fox’s Pizza Den and Lewis Family Drug Store.

Serving Southern Minnesota For Over 50 years

Mankato From Greater Mankato Growth: new members include Evan Taylor Studios, Hardee’s, Big Dog Sports Cafe, Investment Management and Associates, Inc., South Central Minnesota SCORE and Concept & Design Incorporated. Marco, Inc. was recently named North Central Partner of the Year by Microsoft’s US Small & Mid-sized Business (SMB) Champions Club. In addition, the company also assumed responsibility for the copier sales and service previously provided by Crabtree Companies, Inc. Marco was recently recognized as the No. 1 Best Place to Work for 2015 by the Minneapolis/St. Paul Business Journal in the large business category. Marco was also recently named No. 79 on The Channel Company’s 2015 CRN Fast Growth 150 list. In addition, it was named as one of the 100 Best Workplaces for Women by Great Place to Work and . Marco recently hired Robert Saindon as a copier field service technician and Colton Kellen as a technology advisor. Region Nine Development Commission is offering free presentations about Alzheimer’s disease and other related dementias. For more information, visit rndc. org/alzedu or call 507-387-5643. Water’s Edge celebrated its one-year anniversary in August. Ophthalmology Associates of Mankato recently hired Dr. Timothy Kao as a new eye doctor. Coldwell Banker Commercial Fisher Group has named Scott Fee as Community Partnership Consultant, a new role

MANKATO

Pantheon Computer Systems Pantheon Computer Systems was recently named a WatchGuardONE Silver Partner by WatchGuard® Technologies, a global leader in multi-function firewalls.

designed to expand and deepen the real estate company’s ongoing commitment to stewardship of the built environment. Habitat for Humanity of South Central Minnesota recently hired Jeff Devens as the new Habitat ReStore Manager. The Zonta Club of Mankato is hosting its 2015 Fashion Show on November 10 at the Verizon Wireless Civic Center. Visit Mankato recently hired Megan Flanagan as the City Center Partnership Director. Century 21 Landmark Realtors recently hired Carol Ann Parsley at its Mankato office. ISG recently received the Best of B3 Guidelines Award for the Austin National Guard Armory Renovation project. In addition, ISG recently hired Tiffany Olson as Marketing Director. From Community Bank: employee Mike Kunkel was recently awarded a diploma during the 71st annual session of the Graduate School of Banking at the University of Wisconsin-Madison. The school was established to provide bankers with an opportunity for advanced study and research in banking, economics and leadership. North Star Aviation, the exclusive flight training partner with Minnesota State University, Mankato has entered into agreements with Piper Aircraft, based in Vero Beach, Florida to deliver four new aircraft to its flight training fleet. The Martin Luther King, Jr. Commemorative Board is seeking nominations for the annual Pathfinder, Young Pathfinder and Business Pathfinder Awards. The deadline to nominate someone is November 24. AmericInn Hotel & Suites Mankato Conference Center is hosting a Salvation Army winter clothing drive until November 14. For each donation, donors will be entered into a drawing for a free night in a Whirlpool suite. Donations can be dropped off 24 hours a day at AmericInn located at 240 Stadium Road. Junior Achievement of Upper Midwest volunteer Jennifer Spaude was recently chosen from more than 213,000 U.S. volunteers to receive the organization’s award for volunteerism, the Bronze Leadership Award. From Abdo, Eick & Meyers: employees Seth Ferkenstad and Shelby Thorne were

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recently promoted to managers; Aaron Kauffman, Kelsey Bakeberg, Matt Nistler, Molly Granzow, Paul Cecere, Sarah Dirkx, Tyler Petzel and Tyler Stephens were recently promoted to senior accountants; Darren Whipps was promoted to senior business manager; Victoria Holthaus was promoted to client services supervisor; and Chris Follen was promoted to senior client services accountant.

North Mankato Brunton Architects & Engineers opened a second location in the Twin Cities. Label Works recently earned the G7 Master Printer Qualification, which means the company uses the most modern technology, techniques, proofing and press control standards. Capstone, Jordan Sands and Coughlan Companies employees participated in a 5K on September 12 to raise $1,950 for the Blue Earth County Historical Society.

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The Minnesota High Tech Association (MHTA) has named South Central College as a finalist in the Education Technology Award category for the 2015 Tekne Awards, which will be held on November 18.

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Curly Girlz Candy was awarded a 2015 Top of the Pantry “Rookies” award for best newcomer. The award is sponsored by Midwest Pantry in Minneapolis.

NEW ULM

New Ulm Medical Center The New Ulm Medical Center was named to Becker’s Hospital Review’s list of 50 Critical Access Hospitals to Know.

New Ulm Thriveon recently received the CompTIA Managed Services Trustmark, an industry credential that signifies its adherence to best practices for technology service delivery and customer interaction. The New Ulm Medical Center was recently awarded a $366,300 grant from the Minnesota Department of Health and a $275,000 grant from South Country Health Alliance. In addition, the New Ulm Medical Center recently hired OB/GYN Abrea Roark. Gislason & Hunter LLP recently hired Jennifer Lurken, who focuses on Banking and Bankruptcy Law, Employment Law and Business and Commercial Law.

Sleepy Eye Sleepy Eye Public School has been named a 2015 National Blue Ribbon School.

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NOVEMBER/DECEMBER 2015

From the Chamber: Superior Mobility Transportation is a new member. It provides non-emergency medical transportation

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services on a pre-scheduled 24-hour per day, 7-day per week basis. The Chamber will begin its membership drive on December 1. A chance to win a free membership up to $100 discount will be offered. Springfield will host its 30th year of its Nativity Pageant on December 11 and 12 at Riverside Park. It features a 50-voice choir, children’s choir, dancing angels and live manager scene including camels. Admission is free.

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St. James Maria Hidalgo has opened up a new business, Maria’s Serenity.

St. Peter River’s Edge Clinic is in talks to join with Mankato Clinic and possibly move the Daniels Health Center up to the River’s Edge Clinic space.

Waseca From the Chamber: new members include Atha Yoga and Wellness, Realty Executive River Valley, Barden’s Bar, Cedar Valley Services Inc.-SMART Transit, Coldwell Banker Commercial Fisher Group, Pleasant Grove Pizza Farm, Zack’s Customs, Mindful Fork and Junior Achievement of Upper Midwest. New business, Thrifty White Pharmacy, recently opened in downtown Waseca. Amy Watje is the new owner of Current Rays. Scott Roberts is the new director of the Waseca Arts Center. Pantheon Computers, with locations in Waseca, Albert Lea and Faribault, recently added a fourth location in Mankato. Prairie Dental Arts received the Chamber’s Roots award for celebrating over 30 years in business. Cinch Connectivity Solutions, Inc. was named Waseca’s 2015 Business of the Year at the 43rd annual Business and Industry Recognition luncheon. This business has been a part of the Waseca community more than 75 years as part of the original E.F. Johnson business.

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Franz, Kyle and Jace Marti in front of a copper brewing kettle installed in 1889 and used continuously until 2014.

By Grace Webb Photo by Kris Kathmann

You could say that New Ulm brothers Jace, Kyle and Franz Marti have beer in their blood. After all, they’re the sixth generation of the August Schell Brewing Company—a family-owned business that stretches back to 1860. And Schell’s has made quite a name for itself in the 150-plus years it’s been around, growing to become the largest family-owned brewery in Minnesota and the second-oldest family-owned brewery in the country. The brewery has 57 full-time employees, 27 part-time employees, and a six-state distributing footprint: Minnesota, North and South Dakota, Iowa, Wisconsin and Pennsylvania. The Schell’s folks make 20 labels of beer between their two brands, Schell’s and Grain Belt (which Ted Marti purchased in 2002), along with brewing 1919 Rootbeer and Buddy’s Sodas for Arneson Distributing. The newest addition is the Noble Star Collection, a line of sour beers that assistant brewmaster Jace Marti has worked tirelessly to perfect. Last year, Schell’s put out roughly 146,000 barrels of beer, and Kyle Marti says production has been increasing by a couple thousand barrels every year. Now, thanks to a recent $2 million expansion project in 2013, the brewery is set to exponentially increase its production. It was into this craft beer empire that the three Marti boys (sons of current Schell’s president Ted Marti) were born. As kids they’d bike to the brewery and play around in the bottle house and the gardens. As they grew older, they started working regular summer hours at Schell’s. While they insist they were never expected to join the family business, they also admit there was never really a question in their minds that they’d all eventually find their way back to New Ulm—though they each took pretty different paths along the way. Both Kyle and Franz Marti joined the military during college, serving in the National Guard and deploying overseas. Kyle is still serving in the Illinois National Guard Special Forces, while Franz was honorably discharged after being wounded in Afghanistan (and receiving the Purple Heart). Meanwhile, Jace headed north to study graphic design in Duluth. Yet, slowly but surely, the family has reunited. Jace arrived first, working on the brewery’s promotional materials and then becoming the assistant brewmaster. Then Franz came back, doing a little bit of everything at the brewery. Finally, Kyle returned, taking up the administrative side of things. Thus began the saga of brothers, a brewery and beer—and, like the Noble Star Collection, it’s only getting better with time. continued >

Brothers Jace, Kyle and Franz Marti are preparing to take over Minnesota’s largest family-owned brewery and continue a family tradition that stretches more than 150 years. NOVEMBER/DECEMBER 2015

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Band Of Brewers

When did you start working at Schell’s? Kyle (laughs): Legally, I don’t know if we can answer that… I started doing miscellaneous stuff when I was 12 or 13. It was basically just chores: cleaning, picking up the trash, painting, washing umbrellas. I actually got fired from that, for giving my mom attitude. I was rehired the next day though. There was never any pressure to help; we just wanted to. Jace: Dad would always find random jobs for us to do: cleaning dark corners and dirty jobs that he wouldn’t give anybody else. When we got older, we started washing kegs and working in the bottle house. Franz: There was always something to clean. Did you have any other jobs growing up, outside of Schell’s? Franz: When I was a kid, my mom said, “You can’t work here until you work somewhere else.” She didn’t want us becoming full-time employees here without seeing our other options. So I got a job at the New Ulm Golf and Country Club. When I went off to college, I worked at Sgt. Preston’s (a now-closed eatery in Minneapolis). Kyle: My mom told me the same thing. Once I left for school, I joined the Army, and I guess that was my “other job.” Jace: Looking back, I probably should have [tried another job]. But I was really eager to start working here. Right or wrong, that’s what happened. I worked for the City of New Ulm when I was in high school as part of their mowing crew, and I worked while I was

Band Of Brewers

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Hobbies: Traveling, visiting breweries, working on his house Favorite Schell’s beverage: Hefeweizen and any of the brewery’s sour beers Favorite non-Schell’s beverage: AugustinerBrau Lagerbier Hell from Munich How his brothers describe him: Forward thinking, stubborn, hard working, artistic

Jace, Kyle and Franz Marti | August Schell Brewing Company

attending university in Duluth. I thought about sticking around there, but I had a good job coming back here, and I was kind of anxious to get going. But I’d definitely tell my kids to do the same thing: Go work somewhere else first. Did you always want to work at Schell’s? Kyle: My parents actually made it a point to say that we didn’t have to come back. They said that over and over again—and they still say it to this day. Still, for me it was always in the plan. I was always going to come back and work here in one fashion or another. Franz: When I got out of the hospital in 2012 and got retired, I spent the whole two days in retirement and then came back to work the next Monday.

Many other businesses are struggling to retain employees, but you’ve got workers who stay for decades. What’s your secret? Kyle: You try to treat your employees the best you can, and that’s usually why they stick around. Franz: Someone once told me that it’s not a bad job if you don’t have more than two bad days in a row. That’s the way I explain the brewing industry. You have your bad days, but you never have multiple consecutive bad days. Jace: Making beer is definitely a benefit of working at the brewery; it’s a lot of people’s dream job. So that makes things a little easier. We’ve had people who have worked here forever, but it seems like lately, we’ve also had people come here and move on. Is it a little bit of that next generation mentality? Probably.

Why did you want to work here? Franz: We’re kind of a big family here. The majority of these guys who work here, we’ve watched as we’ve grown up over the years, and they’ve watched us grow up over the years. For instance, we messed around with our plant manager when he was a regular line worker. We look at our employees as the extension of our own family. This doesn’t happen without them. It’s not a one-man operation by any means. Kyle: There’s very low turnover at the brewery. You’ve got a lot of guys who’ve been here 15 years or more… Some have been here more than 25 years. So you get to know people. You become family. Why wouldn’t you want to work at a place like that?

Take me through your career paths, before you ended up back here. Kyle: I graduated high school in 2003 and then went to Gustavus Adolphus for a year before joining the Army. I had gotten pretty burned out at school—besides studying to be a physical education teacher, I played on the hockey and baseball teams and also participated in ROTC. I had always wanted to go into the Army, so I decided that was a good time to do it. I joined the Army that summer, then came back to Gustavus for a while before getting deployed to Iraq. After finishing up my time overseas, I attended classes at MSU-Mankato for a bit before joining

Getting to know you:

Kyle Marti

Franz Marti

Position in the company: Administrative side of things

Position in the company: “Swiss Army knife”

Position in family: Middle son

Family: Wife Danielle, dog Ginger Hobbies: Playing hockey, guitar, work Favorite Schell’s beverage: Schmaltz’s Alt and Oktoberfest

Position in family: Youngest son Family: Dog Annie Hobbies: Motorcycling, camping, hiking, biking Favorite Schell’s beverage: Goosetown and Deer Brand

Favorite non-Schell’s beverage: A dirty martini

Favorite non-Schell’s beverage: Yuengling or Summit Extra Pale Ale

How his brothers describe him: Knowledgeable, helpful, level-headed, personable, “can talk to anybody.”

How his brothers describe him: Extremely hard working, “the guy who knows how to do it all.”

Band Of Brewers

The Noble Star Collection Jay Weir

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The James R. Weir Insurance Agency has

Schell’s came out with its latest line of specialty beers, the Noble Star collection, in 2013. Based on the Berliner Weisse style, Jace Marti came up with this group of sour beers after studying techniques in Berlin, one of the first cities to perfect sour beer hundreds of years ago. As Jace explains it, “A long time ago, before modern sanitation practices, all beers were more or less sour. You didn’t really know what bacteria was or how to clean things well. You drank beer as fresh as possible because it’d eventually go sour and spoil. But there were a few places that kind of embraced that and let the beer go sour. If you give it enough time, like wine, it kind of rounds out and gets this really wonderful, acidic taste that has a different character. Berlin was one of those

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Jace, Kyle and Franz Marti | August Schell Brewing Company

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cities that embraced sour beer. I was fascinated with the style because of our German heritage, and I wanted to learn as much about it as possible when I was in Berlin.” Jace utilized the brewery’s Depression-era wax-lined cypress tanks (left), which hadn’t been in use since 1991 and which took him a year to recondition by ice-blasting out the wax and repeatedly soaking the surface until the wood swelled to seal up any gaps. “I wanted to implement those tanks and use a part of our history that we weren’t using anymore for something completely different and new for the brewery,” Jace said. “From there, it was a long, slow process. Sour beers… that’s definitely a skill I’m still learning. There aren’t a lot of people who are doing it. It’s kind of a little bit out of your hands. You let the beer tell you when it’s ready.” The beer line includes Starkeller Peach, Cypress Blanc, Dawn of Aurora, Black Forest Cherry, North Country Brunette, Framboise du Nord and Star of the North. NOVEMBER/DECEMBER 2015

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Band Of Brewers

the Illinois National Guard in 2011. They have a Special Forces group down there. My grandpa was in it, and it seemed right for me to join too. That’s been a long road, but it’s been good. Eventually I came back and finished up school, and I’ve been kind of coming and going between the Army and Schell’s ever since. In November of 2016, I’m going to be calling it quits. That’ll be 13 or 14 years of service, and that’s enough for me.

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What about you, Franz? What led you to the military? Franz: After I graduated high school in 2006, I went to culinary school and studied there for two years. Then I ended up joining the National Guard. At that point Kyle was serving in Iraq, and I thought, “That isn’t fair, that I’m sitting back here and he’s getting worked on.” Next thing you know, I was in his old unit. I did that for about a year before transferring to active duty. I got stationed out in Fort Drum in New York before being deployed three months later to Afghanistan in 2009. I finished with the military in 2012 and came back here. Did you ever consider joining the military, Jace? Jace: It’s something that I’ve always had the utmost respect for, but it just wasn’t for me. I was definitely nervous when both Kyle and Franz enlisted because that was just when the [Iraq] war had started. You’re scared for your brothers. And when Franz got hurt… That was nerve-wracking. There wasn’t really much communication; you could only write letters. I know [serving in the military] is something I didn’t do, and probably couldn’t do, not what they did. I’m extremely proud of them. With their military backgrounds, I think that’s a whole different level of training and expertise, and they definitely brought that over here to the brewery. What did you decide to do instead? Jace: I went up to the University of Minnesota-Duluth to study graphic design and graduated in 2006. While I was there, I worked for the Recreational Sports Outdoors Programs, designing their ads and

Jace, Kyle and Franz Marti

posters. When I came back to Schell’s, I worked on redesigning our logos and working on other promotional content from 2006-2010. But now you’re the assistant brewmaster. Jace: I’ve always been interested in brewing. I started home-brewing right out of college, and I wanted to eventually transition into that side of things at the brewery. My favorite part is the creative aspect. It was like my background in design. You’re still being creative; it’s just in a different medium. You’re using raw ingredients instead of a pen and paper. I understand you studied brewing in Germany for nine months in 2011. Jace: I was kind of set on going to the Siebel Institute in Chicago, where my dad learned how to brew, but then I learned about a school in Berlin that offered an English-speaking course and taught how to do lagers. To learn how to make lagers in the country that perfected them… that was my main factor for going there. I thought it’d be the perfect fit for me. The schooling was pretty intense. They tried to cram as much as they could into a short period of time. We traveled a little bit with school, visiting other breweries. We had Easter week off, so some of my classmates and I toured Belgium and dipped into northern France for a day to visit some breweries there. After school, I did an internship just north of Baumberg and then spent a month at a classmate’s brewery in Austria. What were some of the differences you noticed between brewing in the U.S. compared to brewing overseas? Jace: There were different processes. They have the German Beer Purity Law over there, so they’re a little bit bound by only being able to use four ingredients: yeast, water, hops and barley. Certain things we can do here, like water adjustments or even collecting CO2 and reusing it, they can’t do over there. But they just work within those limits. We learned about natural carbonation over there, and we implemented that right away. We tried to take a lot of things

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from there and put in as many things that were practical here as possible. What’s it like working with your whole family here? Franz: It can be a challenge working with family, but at the end of the day, they’re still your family. So we treat each other with respect and move on. Kyle: Sometimes when it’s a family business, decisions that maybe shouldn’t be as hard as they are become a family affair. I think everyone’s pretty passionate about what goes on around here, so when hard decisions need to be made, they’re maybe a little harder than they normally would be. But I think everyone’s got their own niche at the brewery, and it works out nicely. Jace: We see each other every day, so I think our relationship is a little different from a family standpoint just because it’s hard to switch off sometimes, business-

wise. Even when we get together on holidays, we end up talking about the brewery. But at the same time, you can go talk to your brother or parents anytime you want, and have different conversations that you wouldn’t normally have with your boss or coworkers. It’s definitely a good thing that we’re all working together. I think that’s pretty special. It’s a family pride thing. What lessons did you learn working alongside your parents? Kyle: I’d say work ethic. You’re never off the clock, for good, bad or indifferent. My parents work pretty hard—really hard. And they don’t complain about it. That’s the life it is, and you just do it. Franz: If something needs to get done, it’s going to get done. Are you planning on taking over when your father, Ted Marti, retires? Kyle: We’ll see what he says. I think Ted’s

got a few years in him yet at the helm. But I’d definitely be open to it. I think that’s the way all of us feel we want it to go… Franz: We want to keep it in the family. Jace: We definitely want to keep it in the family. Kyle: But not for a few years. I don’t think anybody’s ready for that. Ted’s been at the helm since 1985, and he’s got 30 years under his belt. It’s not something you want to give up just like that. Franz: The man is full of wisdom. He knows more than probably all three of us combined. You just learn as much as you can. What makes a “good” beer good? Kyle: I think it’s all personal preference. It’s like a food. What makes your favorite food? For some people, it’s the hop profile of it. Some people like really hoppy beers. For others, it’s the balance, so that the malt balances out the hop bitterness. For me, it’s a

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Jace, Kyle and Franz Marti | August Schell Brewing Company

“I don’t think people should get hung up on what [craft beer] means. I think they should drink what they like. If you don’t like something, don’t drink it. If you like it, who cares what anybody else thinks?” balanced beer, one that’s not overly hopped up. It’s a beer that you can sit there and have more than one… or two… or seven. Jace: It’s all in the little things. We try to focus mostly on traditional-style beers, like how they were originally brewed, then adapting those materials and methods to fit within our system. It’s going out try-

ing beers you like and you don’t like, and finding examples you can draw inspiration from. And then you try to come up with something new. Craft beers are seeing a boom in popularity right now. Do you think the industry will ever

become over-saturated? Jace: If you compare breweries to wineries, there are three times as many wineries as breweries in the country, but no one’s talking about saturation point of wineries. It depends on the type of brewery that’s opening up. If your only goal is to sell beer in your own tavern, and that’s it, you can have basically an unlimited number of breweries in business. Then it’s just a bar, and no one says there are too many bars. Kyle: If we haven’t almost reached a saturation point already, I think we’re very close to it. What you see coming now with the term “craft,” it’s hard to even say what that means anymore. The term craft used to mean a specific thing, but now I think it’s been used so much, it’s kind of lost what it means. And people get confused by it. At the end of the day, I don’t think people should get hung up on what an actual term means. I think they should drink what they like. If you don’t like something, don’t

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In 2013, Schell’s began working on a $2 million expansion project estimated to double the brewery’s capacity. The project included the construction of a 1,800 square foot building between its bottle house and cellar area and created a new lab and a new mill. Some time later, Schell’s also purchased 11 acres of land near its original site and built a 12,000 square foot facility, the Star Keller Brewery, to expand production of the Noble Star series. Kyle Marti said they’re still using the current facilities for the Noble Star line but the hope is to soon move production to the new mill to help prevent cross contamination from the yeast. “We just put in 840 barrel tanks over there,” he said. “That’ll increase capacity by about 3,000 barrels a year or so. We still have a little bit of legroom at the brewery, but eventually we’ll outgrow the single-lane road. When we’re running full-tilt, we have a pallet of 42 cases coming off every three and a half minutes. To keep up with that, they have to load the trailer, bring it to the warehouse, unload the trailer, bring back the trailer and do it all over. Right now, we have a truck coming and going every 30 minutes. If we increase capacity any more, the road won’t be able to hold up. The traffic will be too much to handle.” Kyle added that the plan is to offer tours and tastings at the new site, as well as a taproom. “We’re still in the construction phase right now, so nothing has been set in stone,” he said. “We were hoping to get it started this summer, but like most construction projects, they take a little longer than they’re supposed to. So we’re not really sure when it’ll be done.”

Jace, Kyle and Franz Marti | August Schell Brewing Company

drink it. If you like it, who cares what anybody else thinks? If it’s not defined as whatever the cool kids with skateboards are calling it, it doesn’t matter. [The increase in popularity] has been good for everybody. The more popularity craft beer has, the more people get introduced to it. And with that comes more people trying your own brand, so that’s been good. So you don’t think over-saturation will affect your brewery? Jace: Where the saturation point comes into play is in retail shelf space. Bars have added more and more tap lines. You have a lot of space there to play with. But liquor stores, there’s only a finite number of shelves indoors. And that’s where things get ugly, competing for that small amount of space. You have these national brands that typically dominated your shelf space, and you have all these locals opening up. The tendency, for good reason, is to support local and drink local, so now they start chipping away at the national brands, and the national brands don’t want to lose that. From a consumer’s standpoint, it’s great. You have a lot of turnover and cheaper beer. But on the other side of the table, it’s difficult. The big guys can really control a lot of things, good and bad. Kyle: If you go to any liquor store now, and stand in the beer aisle, you’re just overwhelmed by this smorgasbord of beers of different shapes, sizes, colors, everything. It’s confusing for consumers, and I think that when people get confused, they just stick with what they know. It’s so overwhelming and there’s so much out there that people just kind of get tired and go back to their “usual.” But I think [the market] will thin out here eventually. Jace: Right now, there’s a lot of turnover in the brewery industry, especially with craft beer being bought out and merging. It’s a little scary. It’s like history repeating itself. Right after World War II, they call it the consolidation period, where you still had all these small independent regional family-owned breweries, and all of a sudden they started getting bought out and merging, and big guys swallowed up little breweries. We just had this whole craft beer movement because we were down to so few breweries, and now the whole industry blew up and, all of a sudden, breweries are getting bought out and sold again. You have this first generation of craft brewers stepping out, selling their business, getting out of the industry. A lot sell to private equity firms that kind of have that “turn and burn” mentality of, “All right, we spent a lot of money and we have to get it back in a couple years.” I think you’ll see a lot more aggressive pricing and maybe some more dirty tactics like “pay to play.” It’ll be interesting these next couple of years.

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You said it doesn’t matter what label a drink has, but Schell’s fought to correct an article by the Brewers Association in 2012 that stripped the brewery of its “craft” title. Kyle: Meeting that “craft” definition is important because, contrary to what I say, it’s important to a lot of people. And when we got that taken away, it was a black eye for a little while. I think we’re still kind of dealing with the repercussions and aftermath of it, even now. I think people read one article and take that as law—that’s all the truth they need. But that’s in the past. It is what it is. Jace: We kind of got booted from the club. That was a tough time.

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We took offense to it because they singled us out on basically a “do not buy” list. When you have national publications putting out this list of 42 breweries that are not “craft,” it definitely shines a negative light in your direction, which was unfair. We’re a little family-owned brewery. It’s not like we’re this evil empire that’s trying to take over the world. But as for now, whether we’re known as a craft brewery or not, we feel that we are, and that’s all that matters. Kyle: It is important to have that title. At the end of the day, we are making craft beer. Whether the article says we are or not, we’re using all malt for our shelf lines, and we’re traditional; we’ve been using some of the same recipes since 1860. The corn filler that we use in some of our beer is not because we want to be cheap; it’s because that’s the traditional recipe that they first used when they came up with their beer. What makes a “craft” beer craft? Kyle: The biggest thing is that it’s traditional. You can’t be using too much adjunct fillers in place of malt. We meet all those criteria. Just last year, after the back and forth of that article, the powers that be on the Brewers Association board changed the definition of what makes a craft beer, to bring guys like us, Straub and Yuengling into the craft beer category, because we are. Brewers like that have been around forever, and are what paved the way for all these new guys coming in. So it’s only fair. Jace: There’s so much change where the word craft beer doesn’t really mean anything anymore. Make a beer, and if people like it, great. If they don’t, it’s up to you to change it. In 2002, you bought Grain Belt, another traditional Minnesotan beer company. What prompted that decision? Franz: Grain Belt has always been a Minnesota brand. I think Ted Marti saw that and saw the value in that, and didn’t want it to go off to some other bigger brewery that would have produced it out of state and lost the localness of it. It worked out. That was a hell of an investment. Kyle: With the stroke of a pen, we became essentially the largest brewery in Minnesota

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Jace, Kyle and Franz Marti

overnight. We’ve been scrambling to keep up ever since. We’ve been dropping new tanks every summer to catch up. We’re dropping in two more tanks this fall. I think right now our capacity at the brewery is 200,000 barrels a year before we drop in these new tanks. We’re not producing that by any means. Franz: It gets to be a shuffling game. We’re a lager brewery primarily. They take a little longer to make, as opposed to an ale. So the turnaround is a bit longer. The beer sits in a tank about 6-8 weeks, compared to 3-4 weeks for an ale. Kyle: So you run into capacity issues at times, like when we’ve got our Oktoberfest in the tanks. That has to age for an extended period of time. You have only so much capacity when that beer sticks around for 2-3 weeks longer than a normal brew. It ties up everything. You can serve on tap at your brewery, but it doesn’t seem to be a big part of your business model. Kyle: We’re not like most breweries— we’re not open every day. In the summer, we have the beer garden open, and we serve pints and have live music. We have the taproom that people go to after the tours, but we don’t serve pints on the premise right now. Our stance has always been that all the local establishments in town and the surrounding area have been what kept us alive this whole time, so we don’t want to take business from them. We’d rather have people come here, tour the brewery, and have a pint at the end of it, and then we’d like them to go downtown and see New Ulm and share that business with everybody. It doesn’t do us any good to hoard all the business, when we’ve got friends and family out there who have businesses and who have been supporting us forever. That philosophy is getting harder and harder, since more and more people just expect that we’re open. So we’re kind of bucking the system at this point. Have you thought about creating a wider distribution footprint? Jace: We’ve made it a choice that we’re going to keep the territory we’re in. We’re not looking to expand. More and more breweries are going to keep opening up.

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Jace, Kyle and Franz Marti | August Schell Brewing Company

Band Of Brewers

People are going to gravitate towards what’s local. It seems like you’ve had these national brands that have rolled waves across the country and have made these huge breweries, because it was just territory, territory, territory. But they’ve also kind of kick-started local breweries. Why would you want to drink a beer that comes from one of the coasts and traveled halfway across the country when you can have a beer that’s just as good, or even better, that was made right down the street or in your same state? Do you have a lot of competition? Kyle: Competition’s always a struggle. When you’re the biggest brewery, you’re the biggest target. We’ve got a lot of competition coming from both sides. You’ve got all the new guys, the startups, that are screaming for attention. People want to try what’s new, and these guys are all new. And then there’s the heat you’re getting from the bigger guys, like Sierra Nevada and Samuel

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Adams. They’re on the opposite side, where they’re putting out good products as well, but also have the money and advertising to back them up. Everybody’s in competition. Just because you’re a big guy doesn’t mean that you’re invincible. Some brewers are concerned that this year’s poor barley crop will affect their ability to produce beer. Are you worried, too? Kyle: Not as much, because we contract all our barley out. We’ll contract our barley for a couple years at a time. Then again, at the end of the day, if you contract your barley, and there’s no barley… well, everyone’s having a hard time. Without a big yield on the crop, prices will go up. For folks who don’t contract it, it’s going to be tough. They’ve got to fill those contracts first before they open it up to everybody else. To top it off, a lot of farmers are getting out of that production. With corn prices the way they are, there’s more money in corn. The actual

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THE ESSENTIALS

August Schell Brewing Company Phone: 507-354-5528 Address: 1860 Schell’s Road New Ulm, Minnesota Website: schellsbrewery.com Facebook: August Schell Brewing Company

sizes of the fields are getting smaller and smaller, and it’s getting harder and harder to find enough materials. You’re pretty involved in the New Ulm community—and beyond. Tell me about that. Kyle: It all extends back to: We wouldn’t be here if it wasn’t for the community. So you try to do your part to be a good partner. There’s a long, long list of things that we try to do. There’s something every weekend. We’re involved in New Ulm’s Riverblast, the Brown County Fair, Bavarian Blast, Oktoberfest, Bachfest, Santa in the Summer… Throughout our whole footprint, we try to do what we can. Franz: This is where we’re from. My dad’s always been adamant about helping where he could, and that value has continued through the family. Even starting with August Schell, they always seemed to help people who lived in their community. It’s not a very nice community if everyone just sticks to themselves. Jace: We wouldn’t be here without New Ulm. The community supports us, and we try to do the same. I think that’s just good business. It’s especially important in small towns, to get people to stick around instead of heading out for the bright lights. The more we can do to help each other out, I think, it’s better for everybody. If you can make that relationship into something bigger and better, it makes sense. Whether it’s working with Oktoberfest or working with restaurants or working with the city on events… it’s good for everybody. From a beer standpoint, it’s the reason we don’t have our own taproom. It’s out of respect for the bars that carry our products. They’re good to us, so we try to be good to them.

BUSINESS TRENDS

LABOR

The ninth district has mixed economic outlook when it comes to economic recovery. The ninth district (which includes Minnesota, Wisconsin, North and South Dakota, Michigan and Montana) is doing just okay, according to the Minneapolis Fedgazette. Fedgazette reported that the district economy saw modest progress throughout 2015, with employment gains seen throughout a number of industries, but still fell short of growth at the national level. In the district, nonfarm employment increased 1.2 percent in May, compared to a year earlier, but U.S. employment grew 2.2 percent. The strongest gains across the district were seen in construction (2.7 percent), manufacturing (1.8 percent) and information and financial services (1.6 percent). However, natural resources and mining decreased 2.1 percent compared to last year. There are many reasons for this. Following the Great Recession, employment growth was stronger in the district than across the country. Since then, other areas have started to catch up to the ninth district as they recover. In addition, the ninth districtâ&#x20AC;&#x2122;s employment was bolstered by energy production in North Dakota from 2010 to 2013, which faltered once oil prices fell again and there was a decrease in drilling activity. Since then, North Dakota has posted job losses over the first five months of 2015 because of oilfield worker layoffs. While there were 197 drilling rigs in the region at the end of September 2014, there were only 77 active drilling rigs by July 2015. Despite this change, the outlook for district employment growth is slightly positive. According to a professional business services survey conducted by Fedgazette, 21 percent of firms expect to increase full-time staff, while only 7 percent expect decreases. At the same time, the districtâ&#x20AC;&#x2122;s unemployment 26

CONNECT Business Magazine

levels are expected to increase slightly by 2016, while the national level is expected to drop below 5 percent. Across the region, the number of housing units authorized has varied. Minnesota is still behind the pace seen before the recession, but it has seen strong gains compared to last year. While the home building market has recovered somewhat from the Great Recession, it is still far below the peak reached in 2004. The Builders Association of the Twin Cities (BATC) estimates that the region needs about 18,000 units a year to meet population growth, but only about 9,000-10,000 units are being built annually. Since population growth is slower than a decade ago, it is unexpected that annual home building levels will quickly return to pre-recession levels. On the manufacturing side of things, activity has slowed somewhat throughout the district. However, the Fedgazette predicts a moderate expansion in Minnesotan manufacturing based on a June survey of purchasing managers released by Creighton University. On the bright side, retail sales increased 1.2 percent in May compared to April, and were 2.7 percent higher than a year ago (not adjusted for inflation), as reported by the Fedgazette. Throughout the district, many retailers have reported gains in sales during the first part of 2015. On the other hand, farmers have been struggling recently, with a decrease in farm income of more than 25 percent. Adding to the difficulty, crop prices remain at relatively low levels. The U.S. Department of Agriculture forecasts that corn, wheat and soybean prices will decrease into 2016, and milk prices have dropped dramatically. However, prices for cattle are

NOVEMBER/DECEMBER 2015

historically high and expected to remain so. The Fedgazette predicts that farmers will see slow income growth at the end of 2015 but quicker growth rates in 2016. Overall job growth has been fairly steady in Minnesota since the end of the recession, but several industries are still facing challenges, according to the Fedgazette. Despite steadily declining unemployment levels, total job figures in most ninth district states have only recently recovered to pre-recession levels. The construction field might have been hit the hardest, with formerly laid off construction workers finding steady jobs in other areas and not returning to fill new gaps in the field. In fact, neither construction nor manufacturing has regained pre-recession job levels. While the construction industry has seen job gains of about 6 percent since the end of the recession, thatâ&#x20AC;&#x2122;s not even half of the 16 percent of construction jobs that were lost during the recession. Other industries still struggling to bounce back to pre-recession levels include the financial activities and information industries, which have actually lost jobs even since the end of the recession. Fedgazette reasons that the information industry is seeing a long-term downward trend because of the fall in demand for printed materials. In central Minnesota alone, jobs fell from 400 to 300 in 2014, with 12 publishing companies closing their doors. The government sector is also facing challenges. Not only is that sector sluggish, it has actually declined by about 1 percent (or 11,000 jobs) since the recession. Even local governments are struggling, with 8,000 local jobs lost within the ninth district since 2009. In Blue Earth County specifically,

BUSINESS TRENDS

county employment has dropped about 5 percent because of reductions in revenue from the state, according to County Administrator Bob Meyer. The picture is not completely bleak. Private industry employment has grown by about 6 percent (or 312,000 jobs) in Minnesota, Montana, South Dakota and Wisconsin combined. One of the few industries that have seen great employment gains is the education and healthcare field, which was already healthy during the recession and continued to grow afterwards. In fact, this industry has created more jobs than any other sector since the recession, adding almost 60,000 health care jobs and 7,000 education jobs since 2007. The natural resources and mining industries have also flourished, not withstanding the small decrease from last year, with 20 percent job growth since 2009—not even including North Dakota’s oil-boom jobs. Experts say many industries, ranging from construction to manufacturing, would expand faster except for labor shortages that continue to plague the state—and the country. Fedgazette explains that there are too few workers coming into the labor pool to sustain large net increases in employment, especially as more Baby Boomers retire. On average, the number of hired workers is about the same as the number of workers leaving their jobs. Because of this, there can’t realistically be a great increase in hiring.

Fedgazette explains that there are too few workers coming into the labor pool to sustain large net increases in employment, especially as more Baby Boomers retire. On average, the number of hired workers is about the same as the number of workers leaving their jobs. When it comes to construction in particular, employers are having a hard time finding qualified workers as the Millennial generation turns away to look for “real careers.” Another factor is the fact that average construction wages have only increased by 2 percent (adjusted for inflation) in Minnesota from 2009 to 2013. In addition, an increasing number of workers are retiring (the average age of a construction worker is over 50). It’s not just the construction industry that is facing this problem though. Minnesota’s manufacturing industry has 5,000 job openings across the state, with employers struggling to fill the positions.

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Much of the problem is due to the state’s slowing population growth. Minnesota’s population aged 16 to 64 years grew by 30,000-50,000 people a year during the 1990s and 2000s, but now the working-age population is growing an average of less than 10,000 a year. Add in the fact that labor force participation rates are also lower than prerecession levels, and it’s a tough problem to fix. One positive result from this workforce shortage, at least for potential employees, could be the possibility of increased wages as employers actively recruit workers— such how the new Wal-Mart distribution center in Mankato offered starting wages of more than $16 an hour for its new hires.

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Jeremiah and Jaala Miller juggle their growing business while serving their community and their country.

By Carlienne A. Frisch Photo by Kris Kathmann

Jeremiah Miller leans forward in the office chair at 4-Seasons Athletics, LLC, in Waseca. His voice grows more intense as he discusses the various aspects of his life: his family, 4-Seasons Athletics, being a licensed agent in his uncle’s insurance company and his mission to help veterans regain stability in their lives. For the record, he and his wife, Jaala (pronounced Jay-Lah), bought 4-Seasons Athletics in August 2013. Their family includes two daughters, Maurela, 17, and Bailey, 14, and two sons, Preston, 10, and Coy, 6. Woven throughout all the threads is Miller’s military career and his commitment to serving his country. Now 38 years old, Miller is a Chief Warrant Officer Two in the Minnesota Army National Guard. He served three years in the U.S. Army Reserves and three in the inactive Ready Reserves. Since 2002, he has been serving in the Guard, including deployments to Iraq and Afghanistan. His commitment to the military is obvious; he even named Coy after a fellow National Guardsman.

The military saga began when he was in high school. As Miller explained, “My high school buddy joined the Army in 1994, when we were juniors, so I did too. My mother signed for me to join. I was in the reserves until 1997 and then took a break. In 2002, one year after 9/11, I thought, ‘I’m already trained, and it would be dumb not to use it,’ so I joined the Guards.” Miller’s first deployment was six months of training in Mississippi before being sent to Tallil Air Force Base in Iraq, where he spent 16 months as a Human Resource Sergeant. “I never saw combat, but we occasionally were under attack by enemy mortars at Tallil,” he said. “I felt safer in Afghanistan, where our base was in the middle of the Desert of Death, and we could see for 50 miles. The only attack was one suicide bomber, quite a ways from me… We’ve gotten into a mess there (in the Middle East), and we have to find a way to fix it. I don’t know what that is, because money, guns and vehicles aren’t helping.” continued > NOVEMBER/DECEMBER 2015

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Beyond The Uniform

Miller’s concern for veterans led to his starting Waseca County’s Beyond the Yellow Ribbon program. The organization is a resource hub–a referral and networking group for veterans and their families, as well as for other members of the community who want to help veterans. Jaala Miller has other memories. She recalled, “Jeremiah left for Iraq when Preston was three weeks old and came back when our son was two years old. I knew before Jeremiah did that he was getting extended for six months because I was listening to a speech by President George W. Bush. I told Jeremiah on Skype, and the others who heard were saying, ‘No, we’re not getting extended.’ They got the official word in Iraq about three days later.” “I think my job in Iraq and Afghanistan was easier than Jaala’s here,” Miller said. “My food, laundry, other things were taken care

of. I just had to do my job, but Jaala had to do everything here.” Like many military families that include a service member with combat area experience, the Millers had difficulties when Miller returned from the Middle East. His wife wiped her eyes as she said, “We knew of many soldiers and a few friends who were divorcing. It took my dad passing away seven years ago to make us realize how important we were to each other.” One of the challenges the couple faced was Miller’s experience with Post Traumatic Stress Disorder. Nearly 100 percent of those who serve in a combat area return with Post Traumatic Stress Disorder, commonly called PTSD, a mental/emotional disorder caused by the stress of warfare. (It also can result from surviving dangerous situations other than warfare.) PTSD has been recognized at least since the Civil War and has been called by various names throughout the past 150 years: soldier’s heart, shell shock, battle fatigue, combat fatigue and combat neurosis. People suffering from PTSD often turn to alcohol or drugs to buffer their pain, and they are at a high risk for suicide. Past generations of veterans didn’t have the assistance available to today’s vets, but many veterans still do not seek out the help they need, according to Miller. “If I were to give any of my military friends advice, it would be to admit they have a problem,” he said. He recommends that anyone close to a veteran have an ACE card, which lists resources that everyone who knows a veteran should have. (“ACE stands for: ‘Ask the veteran about his or her situation, Care about the veteran, then Escort the veteran to assistance listed

Beyond The Uniform

Mr. Waseca What did Jeremiah Miller do to earn the Waseca Chamber of Commerce Community Service Award last year? You could look at the list of his volunteer work, enough to nearly fill a page. He initiated the non-profit Free Flags for Veterans so that every veteran can fly a flag in front of his or her home. He started and is a board member of the Waseca County Beyond the Yellow Ribbon program, a referral and networking group for veterans and their families. There’s also his service on the Waseca Hockey Association Board, the Waseca Chamber of Commerce and the VFW Club Committee; his membership in the American Legion; his service as Waseca Cub Scout Pack 86 treasurer (formerly as the cub master); his membership in Tuscan Lodge #77; his offering of free 30

introductory fitness classes at Anytime Fitness as a certified PIYO instructor--and the list goes on. But the list, however impressive, may be only part of the answer. Last year, he participated in the “Sleigh and Cutter Mr. Waseca” event. The audience saw another side of the man they watched grow up in the community. Wearing sparkly workout gear, Miller did a fitness routine while singing Queen’s “Bohemian Rhapsody.” He needed to do something to get people’s attention, he thought. It worked—he was named Mr. Waseca. Jaala Miller’s list of volunteer activities also is stellar: Team Academy Charter School Board, Downtown District Committee, Waseca Lakefest Committee and the VFW Facilities subcommittee. She also offers a free initial class as a certified “Insanity” instructor at Anytime Fitness and co-hosts a free weekly workout there. As she explained it, “If Jeremiah can’t do these things, he volunteers me for them.”

4-Seasons Athletics | Waseca

on the card,’” he explained.) “The experience can be scary and may need to be simplified,” Miller said. “There are resources. There are small, localized meetings, where veterans can talk with others who have the same feelings. Pride can get in the way of a veteran asking for help. When I came back, I started at the Veterans Administration, where I had a safe place to talk about issues.” Miller’s concern for veterans led to his starting Waseca County’s Beyond the Yellow Ribbon program. The organization is a resource hub–a referral and networking group for veterans and their families, as well as for other members of the community who want to help veterans. (For more information, go to beyondtheyellowribbon.org). Miller also volunteers as a suicide intervention officer for his military unit. He explained, “Soldiers are advised to call if they have thoughts of suicide or know of someone who has. We talk them off the ledge and get help for them. I’ve spent some long nights on the phone, especially during holidays.” Despite his personal struggles and the struggles his family faced together, Miller chose to remain in the National Guard. “I know what needs to be done,” he said. “I know how to do my job. When I came home from deployment, I began doing everything to fill the void. Now I’m trying to focus on the things I can do well.” The Millers’ other priorities are intertwined. Their children’s interest in school and community sports was a factor in the decision to purchase 4-Seasons Athletics, located at the corner of 2nd and State Streets in Waseca’s small business district. The store was opened in 1976 by Tom and Cindy Piche and has grown into a town staple. Miller, who was managing a bar after returning from active duty, saw an opportunity for a more family-oriented lifestyle, so he casually asked the Piches if they were interested in selling. A year later, the Millers became sports equipment entrepreneurs. “I always wanted to own a business and to run a bar,” said Miller, who

Miller, who was managing a bar after returning from active duty, saw an opportunity for a more family-oriented lifestyle, so he casually asked the Piches if they were interested in selling. A year later, the Millers became sports equipment entrepreneurs. earned a two-year business administration degree from Rasmussen College in Mankato. “After I managed Club 57 here in town, I realized that a bar is not conducive to family life. I had a business plan for 4-Seasons Athletics drawn up through a Region Nine Development Commission consultant and got financial planning through the Minnesota State University-Mankato Small Business Development Center. We said a lot of prayers. We believed if it was supposed to happen it would, because everything happens for a reason. I contacted several banks in the area and got a loan from one in Mankato.” One advantage of buying an existing business was the wellestablished relationships with vendors, such as Fame Awards in Owatonna and Brandt Garment Lettering in North Mankato. Another advantage, one that has three decades of experience in the business, is even more priceless. Her name is Jane Bartelt. “Jane knows everything about every sport, about all of the inventory, and she does screen printing in the basement--and so much more,” Miller said. “She keeps us grounded. She knows the business inside

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Beyond The Uniform

and out, so she consults with us on what works and what doesn’t.” Two high school students who work part-time round out the staff, while the Millers’ primary contribution to the business is their tech expertise. “We brought 4-Seasons into the digital age and redesigned the web page,” Miller explained. “Now we get Facebook and text messages on Sundays, like, ‘Can you open the store? My kid needs a mouth guard.’ That customer spent more than $200, including the purchase of cleats and pads. It was awesome.” In addition to featuring products on Facebook, 4-Seasons Athletics benefits from word-of-mouth promotion, print advertising in the Waseca County News and the Good News Magazine, and in radio spots during local radio ad campaigns. The store also sponsors many local sports and organizations, has a table at the local basketball

Beyond The Uniform

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What’s The Score Family? He: Middle of six children. She: Youngest of four, the only girl. I wanted to do everything my brothers did, but better. Favorite subjects in school? He: history and business classes. She: Music, choir, science and school sports. First jobs? He: Hy-Vee deli in Waseca, where I learned customer service, marketing, preparation and presentation. She: Perkins hostess, dealing with a lot of people, then at age 16 the Rainbow Residence, a 16-bed facility, followed by ELM Homes manager at age 18. It takes a special person to do this work. Accomplishment of which most proud? He: Raising a healthy family. The military has shown our children what being an American means. She: My proudest moment is when our children do the right thing by treating others the way they want to be treated. What three words describe you? Both: Positive, caring, energetic.

4-Seasons Athletics | Waseca

association tournament and may soon have a table of products at local school sports registration events. Another change can be seen in the inventory, which is continually expanding. As Miller explained, “We are slowly adding things like Saucony running shoes and more Under Armour apparel. I didn’t believe in the hype about Under Armour quality until I started wearing it. A customer showed us a picture of an Under Armour backpack, and Jaala researched it and found one in another color. We usually have the ability to find or get whatever a customer wants. If we can’t find it, we will suggest other options. And we would like to continue to grow by adding more fitness and other items.” Custom-printed shirts are popular orders, with requests coming from school teams, bands, community organizations, businesses and family reunion groups (to name a few). Individual customers

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Beyond The Uniform

Healthy Hobbies Customers of 4-Seasons Athletics may notice the healthy image that Jaala Miller projects— which is explained by the fact that she is also the proprietor of a health and fitness business. It has not always been thus. She explained, “Although I had been in tennis, track and hockey while growing up in Owatonna, I had become unhealthy—a smoker and overweight. Six years ago, I slowly started my health and fitness journey by making positive changes. I eventually quit smoking, and, with a lot of hard work and determination, I lost the 100 pounds that I had gained during pregnancies and because of the stress of Jeremiah’s deployment. Now I consult online, in person and over the phone regarding how others can live a healthy lifestyle.” She is a Beachbody coach, a certified Insanity workout instructor and a runner. “We both got into running,” Jeremiah Miller added. “I did my first marathon in 2007 and have run five full marathons and 13 half marathons.” His medals are displayed at the American Family Insurance Agency, where he works with his uncle. His wife’s 16 medals hang on the wall in 4-Seasons’ office. She has run three full marathons and 13 half marathons. Preston recently joined his mother in running 20 miles in one week.

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4-Seasons Athletics | Waseca

Beyond The Uniform

THE ESSENTIALS

4-Seasons Athletics LLC Phone: 507-835-5267 Address: 124 N State Street Waseca, Minnesota Facebook: 4-Seasons Athletics

may be seeking items for their children’s sports or apparel representing their favorite teams. Jaala Miller quotes and helps design the custom orders, and Bartelt does smaller orders of screen printing and many of the Bluejay (Waseca’s high school mascot) apparel items available in the store. In addition to customized clothing, the store offers workout, practice and postgame apparel, as well as a variety of equipment: mouth guards, water bottles, shoes, baseball gloves, and customized plaques and trophies. “We always sell to younger generations as they get into sports,” Miller said. “When Waseca teams are doing well, more people want to join the team, and fans also want more apparel.” With Bartelt’s help, Jaala Miller has taken

on ordering the apparel inventory, while Bartelt still orders the sports equipment– an entirely new ballgame for Jaala yet to learn. Jaala admits to working 50 hours a week, many of them late at night, while her husband fits in 15 hours away during the week for his volunteer work with veterans and selling insurance in an office a block away from 4-Seasons Athletics. “I make Jeremiah do all the things I don’t want to do here,” Jaala Miller said. One of those jobs is building maintenance. Her husband recalled an instance when that handy work paid off in a sale. “When I was painting the wall out front at 11 p.m. one evening, a kid came in and spent $100,” Miller said. “A typical sale is $25 to $50. A lot of the time, if customers come in for one thing, they’ll buy more. Jane

is very good at pointing out our new items.” Jaala Miller also brings a variety of strengths to 4-Seasons: a degree in community social service and experience working with people who have disabilities. While managing a group home, she met Jeremiah, who did maintenance there. He recalls telling his cousin, “Someday I’m going to marry that girl.” His wife added, “At first we were friends. He’s not like other men. He’s not afraid to show his soft side.” Jaala Miller has a very specific goal for 4-Seasons. “We have a lot of supportive customers who don’t want to go out of town,” she said. “We have customer service and quality products at prices you can’t beat. Some items are more expensive in discount stores than they are here. We want to keep the quality of the products and service high while keeping the store open for the community.” Carlienne Frisch writes from Mankato.

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5 YEARS AGO

NOVEMBER/DECEMBER 2010 Wes Clerc, owner of five McDonalds franchises across southern Minnesota, was the main feature in this issue. Profiled companies included Twin Rivers Archery and Outdoors in New Ulm and LJP Enterprises in St. Peter. Great quote from Clerc on what makes a “top notch” McDonalds operator: “[It’s] the focus on the customer. Every day, we have only one opportunity to satisfy and impress customers.” 10 YEARS AGO

NOVEMBER/DECEMBER 2005 Our cover story was Keith Kor of Winnebago-based ethanol co-op Corn Plus. Profiled companies were Healthcare Academy in Henderson and Heartland Boarding Kennels in St. Peter. One good quote from Kor: “We as a society need to consider a couple of different issues. One is our dependence on foreign oil… Also, people need to fully understand the environmental benefits of burning ethanol.” 15 YEARS AGO

NOVEMBER/DECEMBER 2000 Our cover story featured Jeanne Votca Carpenter, senior vice president of Marketing & Business Development at Shandwick International. A secondary story featured Christian Rothe, manager of Public & Investor Relations at HickoryTech. Profiled companies included Upper Midwest Management in New Ulm and Fly Away AgriProducts in Blue Earth. 20 YEARS AGO

NOVEMBER/DECEMBER 1995 This issue didn’t feature a cover person—that didn’t begin until 1996—but focused on the distinctive charm of New Ulm’s specialty shops. An additional article profiled D/F Machine Specialties, Inc. in North Mankato. 35

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GRACE NOTES

Before we get into this issue’s column, I’ll admit that I’m a little biased about the subject of veterans. My father, Bradley Webb, was an officer in the U.S. Marine Corps, serving overseas during the first Gulf War. From the stories he’s told me, Grace A. Webb his time in the miliEditor tary created some of his best memories: landing in a helicopter on an aircraft carrier, exploring the United Arab Emirates with his buddies, earning his commission. He also made some of his worst memories in the service: blowing out his knee and shoulder, dodging missile strikes off the coast of Iraq, missing the birth of his first child. There were the months away from his new wife, the draining hours, the constant danger, the hurry-up-and-wait the military is famous for. Yet, if you asked him, he’d happily tell you he’d do it again in a heartbeat. My dad had already gotten out of the Marines by the time I was a toddler, so I don’t remember my mom’s sleepless nights or any teary goodbyes. Because of this, I can’t say I grew up in a “military family,” per se, but I can tell you that what my dad learned in the military defined his life—and therefore mine, too. My dad is one of those rare people who can truly do whatever he puts his mind to. If he comes across a problem that deters him from his goal, he will find a way around it. His resourcefulness is uncanny, whether he’s repairing a fence on the farm or figuring out a calculus problem. He has an inner resilience—“grit,” as they’d say in old Westerns—that pushes him beyond most people’s quitting points. He is not the biggest man, or the strongest man, or the fastest man, but I have seen him beat 36

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other, more qualified men at some contest just because his will to win outlasts theirs. It’s like he has made up his mind, “I will succeed in this,” and so he does. Of course, my dad has faced his share of roadblocks and detours. His shoulder never did bounce back after the Marines, not even after two rotator cuff surgeries. He’s no stranger to heartache or tough situations. Despite his steely reserve, he has failed in life. But the thing with my dad is—he picks himself up and keeps going. He doesn’t let failure define him. He figures out what he did wrong and he changes it. He is living proof that people can bounce back, if they’re just given a second chance and take it. My dad is one of the hardest workers I’ve ever met. His willingness to work is inspiring. When he finished with the Marines, he took all sorts of odd jobs to support our family, from night shifts at the Post Office to working for a pig farmer. Despite his college education, he wasn’t too proud to take a “menial” job to keep food on our table. But he never treated those jobs like they were just jobs; he threw himself into every position, worked his hardest for every shift. I remember sharing very long nights with him while I was in high school and he was studying for his master’s degree, homeschooling my three little sisters, running a farm and leading the church he pastors. I am convinced he will never retire; he’ll just keel over behind the pulpit one Sunday morning. But more than all this, what stood out to me as I grew up was my father’s unshakeable integrity. To him, right is right and wrong is wrong. He has made sacrifices for these beliefs, but he always reminded me that it was worth it to keep his integrity intact. I can remember several times when we had people over to our home for a night because they didn’t have anywhere else to go. I know my parents paid for bills and posted bail for members of our church congregation. It didn’t matter who saw it; in fact, my dad tried to keep things on the down low. He wasn’t doing this for attention. Through him, I learned what it meant to really live out my convictions. This column isn’t just about my dad. It’s about millions of U.S. veterans who share those same values and who are looking for jobs. According to the House Committee

NOVEMBER/DECEMBER 2015

on Veterans Affairs, there are nearly one million unemployed military veterans in the country. At the same time, the country—and Minnesota—is facing a stifling workforce shortage leaving businesses unable to expand and succeed. There seems to be a win-win solution: Hire veterans to fill those vacancies. Sometimes, businesses hesitate to hire veterans for different reasons: worry that active military members will be uprooted for a deployment, difficulty in translating veterans’ military skills to the civilian sector, fear that veterans will have difficulty readjusting to civilian life. Then there’s the Post Traumatic Stress Disorder (PTSD) stereotype, that says every veteran is a walking time bomb waiting to explode. In a 2010 survey by the Society for Human Resource Management, 46 percent of employers considered PTSD a significant obstacle to hiring veterans. That doesn’t look good for the 20 percent of Iraq war veterans who suffer from the condition, according to the U.S. Department of Veterans Affairs. (Then again, about 7.8 percent of all Americans experience PTSD at some point in their lives, according to the Nebraska Department of Veterans’ Affairs.) But PTSD isn’t nearly as dangerous as Hollywood makes it appear. Instead, the Veterans Administration reports that it’s rare for those struggling with PTSD to lash out against others. In addition, there are many ways to cope with the condition and lead a normal life. Now that we’ve covered some of the reasons employers might hesitate to hire veterans, let’s look at some reasons employers might want to give them another look… 1. Veterans have been trained to go above and beyond. When they are assigned a job, they do it—properly, on time and to the very best of their abilities. They don’t give a half-hearted attempt. They don’t shirk responsibility. If they hit a roadblock, they find a way around it. They are masters of resourcefulness. 2. Veterans are quick learners. They had to learn quickly in the military and be able to adjust and adapt to shifting situations. They’ll bring that ability into the civilian world. It won’t take forever to train them. They’ll catch on fast.

Let us help protect what is important to you. 3. Veterans remain calm and efficient under pressure. No matter how stressful it is dealing with a late deadline or angry customer, it can’t be worse than dodging missiles in the Afghan desert or making a decision that will affect hundreds of fellow soldiers’ lives. 4. Veterans are fantastic team players. The military is built on teamwork and camaraderie. Every branch stresses the need to look out for fellow service members and sacrifice for them if necessary. Veterans have become adept at figuring out team structures, finding their niche and getting to work. 5. Veterans have unflinching integrity. If they say they will do something, they will. They won’t try to cheat their employers. They will do the right thing even if no one is looking. They won’t back down from their convictions. Obviously, veterans are human, too— prone to the same mistakes and character flaws as anyone else. Hiring a veteran doesn’t automatically mean you’ll get a perfect worker. But it does take a special kind of person to sign up to serve his or her country. I think most employers will be more than pleased with veteran employees’ performance. Through this effort, veterans could find good jobs and employers could find good workers. Everybody wins. Thanks again for reading southern Minnesota’s first and only locally owned business magazine, the only one reaching 8,800 business decision makers in nine southern Minnesota counties. See you next issue.

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BULLETIN BOARD

Any chamber of commerce, convention and visitors bureau, or economic development organization in our reading area—large or small, from Amboy to Winnebago— can post on our free bulletin board. For details, email editor@connectbiz.com.

Blue Earth Cindy Lyon, Blue Earth Chamber/CVB B.E.-utiful Blue Earth kicks off the holidays with the annual “Holiday Sampler Roundabout Town” on November 13. Merchants roundabout the Beltline (Hwy 169) and along the Central Business District “deck their halls” with holiday glitz and glamour! The merriment continues on November 14 when the Jolly Green Giant gets scarfed in the park by Santa, along with kiddie treats. Visit the Blue Earth Business Improvement Committee’s Facebook page for more info.

Fairmont Margaret Dillard, Fairmont Chamber The 25th Annual Glows Parade begins at 6 p.m. on November 20 at Ward Park, winding through Downtown Plaza to Lincoln Park. Come and see the wonderful floats, thousands of lights, appearance of Santa and more. This is an event for all ages!

Gaylord Amy Newsom, Gaylord Chamber The downtown reconstruction project is complete in Gaylord. Thanks to everyone for their patience during our reconstruction for the past two years. Please visit downtown Gaylord this holiday season. The Gaylord Area Chamber of Commerce will be hosting Santa Days on December 12 at the Gaylord Public Library. Bring your children and grandchildren to meet Santa and enjoy cookie decorating, games and treats.

Marlys Vanderwerf, Springfield Chamber

The Springfield Chamber of Commerce Retail Committee will hold its Holiday Open House on November 11. Santa will be handing out treats. Jingle Bell tickets will be available by shopping at Springfield businesses from November 11 to December 17. Thanksgiving weekend customers will receive double tickets. The Jingle Bell ticket drawing for $2,500 worth of prizes will take place on December 17 at the Chamber office.

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The Henderson Chamber is proud to announce that local Shane Boehne took 3rd place at the 2nd Annual Minnesota Sings Competition. The Henderson Chamber will coordinate a “River City Christmas” this holiday season. The Holiday Showcase is December 13 at the Henderson Event Center with many prizes to be given away. The Henderson Baseball Association hosts its Annual Comedy Show Fundraiser January 16. For all things Henderson, check out www.hendersonmn.com.

Lake Crystal Julie Reed, Lake Crystal Chamber You are invited to the “Christmas in Lake Crystal” Celebration on December 5. Activities include a HUGE Holiday Craft and Gift Show at the Lake Crystal Area Recreation Center, Family Scavenger Hunt at Marston Park and the Chamber’s 4th Annual Ugly Sweater Party at The Lakes Sports Bar and Grill. The Light Up Your Christmas Raffle will also take place that evening with chances to win more than $2,500 in cash prizes.

Madelia Karla Angus, Madelia Chamber The Razzle Dazzle Celebration will take place on November 20 and 21. Events and activities include business open houses, Tour of Trees, Parade of Lights with Santa and his reindeer, a Women’s Expo, painting class, spaghetti supper, and a “Sister” concert. Our calendar is full of great events and activities all throughout the year. Experience Madelia at www.visitmadelia.com, visit our Facebook page “Madelia Chamber” or call 507-642-8822.

Mankato Laura Dhuyvetter, RCEF The Regional Center for Entrepreneurial Faciliation is now offering BizPitch, an entrepreneurial feedback tool, free in November and December. Times and locations can be found on our website, www.RCEF.net/bizpitch.

Mankato Jonathan Zierdt, Greater Mankato Growth

Springfield

Henderson Jeff Steinborn, Henderson Chamber

NOVEMBER/DECEMBER 2015

Greater Mankato Growth, Visit Mankato and City Center Partnership will host the Greater Mankato Business Awards & Hall of Fame, Portraits of Success on Nov. 17 at the Verizon Wireless Center. This premier business awards event recognizes and celebrates outstanding businesses, organizations and individuals within the community. For more information and to see a list of award recipients, visit greatermankato.com/business-awards-hall-fame.

Mankato Julie Nelson, Small Business Development Center The Small Business Development Center is offering a free, confidential place to explore new business ideas and connect with others for feedback and support. When entrepreneurs are ready for the next step, SBDC staff will connect them to the resources to make the idea a reality. This resource is offered the second and fourth Tuesdays of each month at Envision Lab in downtown Mankato.

Local Chamber & Economic Development News

Region Nine Nicole Griensewic Mickelson, Development Com. Attend Social Media Breakfast-New Ulm (SMB-NU) on November 20 at the Best Western Plus in New Ulm. SMB-NU brings together social media practitioners and enthusiasts for mornings of sharing and learning about all things social media. Visit smbnewulm.com to register and learn more about this free event. SMB-NU is made possible through support of Region Nine and other local partners.

New Ulm Sarah Warmka, New Ulm CVB New Ulm’s Oktoberfest was ranked among the top Oktoberfest celebrations in the nation by Tripping.com and USA TODAY. The Holiday Shopping Opener will be November 6 and 7 and 13 and 14. The Annual Parade of Lights will take place on November 27. New Ulm Day of Giving, where 10 percent of total sales at participating stores are donated to a local non-profit, is December 3.

Nicollet Alesia Slater, Nicollet Chamber Highway 14 construction is moving right along. The singing group Sister will perform at the Nicollet Public School Theater on November 8. Tickets are available now at Nicollet Mart and Pro Growth Bank and must be purchased in advance. Hometown Holiday is on December 6 at the Nicollet Conservation Club. Please follow all of our happenings at nicollet.org.

St. Peter Ed Lee, St. Peter Chamber The St. Peter Area Chamber of Commerce conducted ribbon cuttings recently to celebrate major investments by First National Bank

Minnesota, Stone’s Throw Gallery, Sam and Abe’s Child Care and Hesse Insurance Agency. The holiday season kickoff is Small Business Saturday on November 28 at the corner of Park Row and Minnesota Avenue.

Sleepy Eye Kurk Kramer, Sleepy Eye EDA Sleepy Eye has a number of economic development activities currently underway. Kibble Equipment continues to build its new dealership and shop along Highway 14 on the east side of town. The city has partnered with Southwest Minnesota Housing Partnership to administer and distribute the $216,000 grant from DEED for downtown commercial rehab. The city also continues to manage the Orchid Inn as an event center, as it plans for a new city-owned event center to be built in 2016 and 2017.

Sleepy Eye Trista Barka, Sleepy Eye Area Chamber Sleepy Eye will have its annual Holiday Kick Off co-sponsored by Sleepy Eye Care Center and the Chamber of Commerce on November 23. Attending families can receive free books and photos with Santa, and a meal will be available to be purchased. Be sure to check out the free LED light display set to music, from Thanksgiving to New Year’s, in Sportsman’s Park presented by Holiday Lights in Motion.

Waseca Kim Foels, Waseca Area Chamber The chamber is leading the initiative ‘Discover Waseca Careers’ in collaboration with Waseca High School and member businesses. Students will tour business sites twice a month, receiving a behindthe-scenes look at local career opportunities in the Waseca business community. Visit our event calendar at www.wasecachamber.com.

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By Grace Webb Photo by Kris Kathmann

Matt Gunderson uses lessons he learned in the United States Marine Corps to manage a team of fellow veterans and employees at Madelia Lumber Company.

Just a quick glance at the outside of the Madelia Lumber Company shows what values drive owner Matt Gunderson’s personal life and business philosophy. Placed right underneath the store’s name is a giant Marine Corps emblem, a testament to Gunderson’s four years in the Marines—as well as the military service of many of his employees. Gunderson joined the Marine Corps when he was 17, spending four years in the infantry of the India Company 3rd Battalion, 5th Marine regiment—the regiment that famously saved the day at the Battle of Belleau Wood during World War I. During his time in the service, he was deployed twice as well as being stationed in California. He never saw any combat action, but the lessons he learned about fortitude, resourcefulness and integrity while in the Marine Corps have followed him throughout the rest of his life—particularly as he took over the Madelia Lumber Company (formerly called Countryside Lumber) in 2012. “When you’re beaten down, dragged out, with no end in sight, you just keep on going,” Gunderson said. “And that’s how it is here some days. You’re dragging and you have nothing left, but you know you have stuff to do, so you just keep on going, keep on moving, improvise, adapt, overcome, move forward. You don’t quit.” This is the attitude that carried Gunderson through his time in the Marine Corps, and it’s the same attitude that has helped his company’s sales to increase every year since he bought the business. continued > NOVEMBER/DECEMBER 2015

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Service Oriented

Gunderson was born in Madelia in 1976. The second of five children, he grew up in a family that had strong ties to the city’s business community: his grandfather had owned the Farmers State Bank and his father owned Madelia’s grocery store until 2008. Gunderson’s father also owned multiple other businesses and managed the local VFW for several years, on top of holding other jobs. In addition, his mother still owns an upholstery and quilt shop. “We’ve helped a number of new busi-

nesses in Madelia over the years with laying the groundwork in getting them started to achieve their goals,” Gunderson said. Going into high school, Gunderson started working at his father’s businesses, helping at the grocery store and rehabbing different buildings his father owned, as well as odd jobs around the community. “I’ve had lots of jobs,” he said. “I’ve done a lot of stuff—I wouldn’t even know how to explain it all.” He added that he learned valuable les-

sons as he worked alongside his father for so many years. “I worked with my father for 25 years,” he said. “He’s been a great help and a mentor to me, letting me bounce things off him in certain situations and giving me the freedom to make decisions on my own. He helped me develop my work ethic. I’ve always worked hard, put in long hours and spent a lot of time doing my best. Often, you have to make sacrifices. Is it worth it? We’ll see.”

“I worked with my father for 25 years,” he said. “He’s been a great help and a mentor to me, letting me bounce things off him in certain situations and giving me the freedom to make decisions on my own. He helped me develop my work ethic.”

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“If you look down the main street of Madelia, everything’s full. We have a lot to offer in a small town, and that’s something to be proud of. It takes everybody to make it work.” During his last year of high school, Gunderson joined the Marine Corps’ Delayed Entry Program, which is a pre-enlistment program that allows 17-year-olds to participate in training with a parent’s permission. According to Gunderson, it was always part of the plan to join the Marine Corps; his father had served in the Marine Corps during the Vietnam War, and he wanted to serve too. Once he graduated high school in 1995, he left for boot camp three days later. Gunderson attended the Marine Corps Recruit Depot in San Diego, California

for boot camp before continuing on to his school of infantry training. Afterwards, he was attached to India Company 3rd Battalion 5th Marines in California and spent two six-month periods overseas with the 31st MEU out of Okinawa, Japan. “It was a hell of a good time,” Gunderson said. “I’d do it again in a heartbeat.” While Gunderson enjoyed his time in the service, he still decided to leave once his four-year commitment was up, to pursue other goals. He came back to Madelia, saying it was the only thing he missed while he was stationed away from home.

“I like the laid-back atmosphere here,” he explained. “I’ve had many people question my decision to come back, but I’ve always enjoyed Madelia and working with my father and being involved in the community.” When Gunderson first came back, he started working at the grocery store again, along with managing his father’s properties. He worked in many departments from the bottom up for several years and then also began taking on side jobs as a licensed contractor. But, in 2012, he learned of the opportunity to buy Countryside Lumber and decided to take it.

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Service Oriented

“I rolled the dice, and I said, ‘Let’s take a shot,’” he joked. “[Former owner] Gary Peterson had passed away and I didn’t want Madelia to be without a local source for building materials. I knew it was important for the community. A lot of the things that I’ve done, or my family has done, haven’t necessarily made any sense, but they were more of the right thing to do. My father and other local business people have always done what they could, as best as they could, to keep Madelia looking the way that it does today. If you look down the main street of Madelia, everything’s full. We have a lot to offer in a small town, and that’s something to be proud of. It takes everybody to make it work.” One of the first things Gunderson did after buying the business was add the Marine Corps emblem to the front of the building. “I’m very proud of my service,” he explained. “I’m proud to be a part of the Marine Corps. Most of the people I’ve served with, to this day, would do it all over again at the drop of a hat.”

Service Oriented

Veteran Service Several of Gunderson’s employees share his military background. His brother, Eric, participated in combat tours of the Persian Gulf, Haiti and Iraq during his time serving in the infantry in the Marine Corps. Kent Petterson also served in the Marine Corps in Aviation Ordinance, while fellow employee Lee Bouma served six years in the Army National Guard. Other employees have close family members who are actively serving or who have served in different branches of the military. According to Gunderson, veterans make some of the best employees, because of the commitment and attention to detail they bring to the job. “Without a doubt, they are the best workers,” he said. “There’s an attention to detail with military people that is not something that you can teach. It’s not something that I can explain to you. It’s just one of those things that you either have it or you don’t. That’s why everything works very well here. I’m very particular, and Eric, Kent and Lee are, too. It’s a mindset.”

Madelia Lumber Company | Madelia

“I’m very proud of my service,” he explained. “I’m proud to be a part of the Marine Corps. Most of the people I’ve served with, to this day, would do it all over again at the drop of a hat.”

Jennifer G. Lurken

While Gunderson likes to highlight his link to the Marine Corps, he had another reason for displaying the branch’s emblem so prominently. “It was a tactful way of saying, ‘Caution,’” he said. “There’s a saying that the customer is always right, but that’s not completely correct. The customer’s concerns should be listened to, heard and addressed

Service Oriented

Business Challenges Gunderson said one of the biggest challenges his business faces is price comparison to other lumberyards. It can be difficult to compare prices when the quality and grade of the products is different. “If it’s a really good price somewhere else, it’s probably that price for a reason,” he said. “We do the best we can. If we’ve got something to compare our product to, we’ll compare apples to apples. But there’s no such thing as apples to apples anymore. How many varieties of apples are there now? More than 7,500.” It can also be difficult to keep up with all the new trends, especially when Gunderson works with multiple suppliers that offer a wide range of options for building and hardware products. “It’s a daunting task some days,” he said. “I knew it was going to take me 5-10 years to get things running the way I want, and I’m not there yet, so I wouldn’t be able to tell you if I’m doing right or doing wrong. But I’m still here.”

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to the best of our abilities. However, if they enter with expectations beyond our business values and reality, I’m going to interject. I have no problem jumping in the middle. I’m going to be the one that stands up for what I believe is right.” Gunderson admits he may have lost a few customers because of his strong convictions, but he added that sales have continued to increase throughout the last four years—so much that it’s been difficult to keep up. As more and more customers come to his full-service building center, he has started offering more and more products. “We have a philosophy at Madelia Lumber: If a customer comes in looking for a specific product, I will get it for them,” he said. “I will find it. I will do whatever I can to satisfy

“We really offer a little bit of everything and continue to add new products weekly,” he said. “There isn’t something that we have not gone out of our way to find for our customer. We do a lot of custom ordering for different scenarios.”

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our customers’ needs in a timely manner. Our customers’ satisfaction is the most important part of what we do.” Gunderson is currently working on a new showroom to highlight his exterior products, and he recently remodeled most of the store using the products he carries to show their potential. Because Madelia Lumber is a full-service business, customers come in for projects ranging from fixing a lock to building a house—and Gunderson and his employees help every step of the way. While many projects are fairly routine, other customers ask for custom work, often bringing pictures off Pinterest and asking for help recreating them. For example, one year, Gunderson and his employees helped build

NOVEMBER/DECEMBER 2015

Madelia Lumber Company | Madelia

several giant Jenga game sets and custom patio furniture. “If somebody brings in their pictures, and says they want to make something but they need help, we’ll absolutely help,” he said. “We’ve created a number of custom projects for our customers. It’s not like there’s a plan for it or anything, but we figure something out. We’re constantly coming up with different ways to service the customer, generate sales, offer another service… And that’ll continue to expand as we move forward.” Some projects are more stressful than others. When it comes to a new home, commercial or agricultural project, Gunderson said tensions can rise as customers have to make many small and timely decisions. “When you’re working on the larger projects, it’s stressful for people,” he said. “There are a lot of choices and a lot of things that have to be decided on. Sometimes, we just need to reassure them, ‘It’s going to be fine.’ It’s us trying to comfort them a little bit, to help them make their decisions, get them what they want, to make it a little easier for them. We’ve had great success working with the customer on a personal level. We will spend whatever time it takes at any time of the day to make sure that what they want is what they’re going to get.” While many customers hail from Madelia, Gunderson said there’s no limit to the distance that he and his employees will travel for someone. He has suppliers from about five different states, but despite being a lumberyard much of the business’s sales come from other products. There can be days when no lumber is sold. Because of this, it makes even more sense to offer other products, including flooring, tools, doors, hardware, paint and more. In fact, Gunderson estimates that, on a weekly basis, he probably adds 20 new products to his shelves. “We really offer a little bit of everything and continue to add new products weekly,” he said. “There isn’t something that we have not gone out of our way to find for our customer. We do a lot of custom ordering for different scenarios. We’re constantly adding new products, trying to offer everything we can to satisfy our customers.” Another way Gunderson has tried to

THE ESSENTIALS

Madelia Lumber Company Address: 24 Center Avenue North Madelia, Minnesota Phone: 507-642-3201 Web: madelialumber.com Facebook: Madelia Lumber Company

satisfy customers is by keeping his doors open seven days a week, which is uncommon for a small town building center. “It’s just one less reason for our local community to have to drive somewhere else to get something,” he reasoned. “It certainly is a convenience for them. A lot of people tell us, ‘Hey, I’m so glad you’re open on Saturdays and Sundays. Thanks for doing that.’ It’s not that we sell a huge dollar amount, but people seem to appreciate it, and traffic continues to grow. I’m selling a service. I’m doing the best that I can to interpret what the customers want. And service these days, in my opinion, is something that’s very lacking. So we’ve really prided ourselves on doing whatever it takes to provide what the customer wants and needs and do the best we can. And I would say it’s hard to beat our service. It’s hard to beat the commitment that we give to our customers.” Whenever the doors are open, Gunderson is there—putting in more than 70 hours every week. (He said he has taken two or three lunch breaks in the past four years.) Still, he said the work is worth it to meet his customers’ needs. “It’s a commitment,” he acknowledged. “At the end of the day, it’s my responsibility to do whatever it takes to make it work. I make sure the other employees get some time off, since without them, I can’t do what I do. Keeping them happy and satisfied is probably the key. I just oversee everything and make sure it’s all moving forward. Some days it is, some days it’s not. You just deal with it. That’s where the military part comes in. You don’t worry about it. You just move forward. You don’t let the pain bother you; you just look past it. If you look past it, in 10 years, it will be okay.”

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WORKFORCE SERIES

PART III

Grace A. Webb Editor

Veterans In The Workforce

United States service members face many challenges during their time in the military—and many more when trying to transition back to the civilian workforce. Minnesotan veterans are no different. The state is currently home to about 370,000 veterans, according to the U.S. Department of Veterans Affairs, with about 6,900 veterans in the nine-county south central Minnesota area (which includes Blue Earth, Brown, Faribault, Le Sueur, Martin, Nicollet, Sibley, Waseca and Watonwan counties). Two of the most pressing challenges facing veterans are unemployment and homelessness. Whereas veterans faced high levels of unemployment in the early 2000s, their unemployment rate at the end of 2014 had declined to 5 percent (more than a one percent drop from 2013), even lower than the country’s 5.5 percent rate. In Minnesota, the number is even lower—4.9 percent— though it’s markedly higher than the state’s unemployment rate of 3.9 percent. However, the unemployment rate for veterans in the south central region of Minnesota is a disheartening 7.7 percent, according to the MN Department of Employment and Economic Development (DEED), almost double the area’s overall unemployment rate. The unemployment rate is worst for postGulf War veterans, particularly those who served after the 9/11 terrorist attacks. For veterans who served within the past 14 years, the national unemployment rate was 7.2 percent by the end of 2014, with women facing a larger percentage rate (8.5 percent) compared to men (at 6.9 percent), according to the U.S. Bureau of Labor Statistics. Throughout Minnesota, the unemploy-

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ment rate for veterans from this period is 8.8 percent (a significant drop from 14.1 percent in 2013), one of the highest rates in the country. Of course, not all Minnesota veterans are actively looking for jobs at the moment. More than half of Minnesota veterans (183,000) weren’t participating in the state’s labor force at the end of 2014, according to the Bureau of Labor Statistics. Part of this is because veterans are closer to retirement age than not (the Department of Veterans Affairs calculates that the average veteran is 56.8 years old), and the Star Tribune reported in 2014 that about 20,000 of the state’s veterans were indeed retired. (It also mentioned that Minnesota is consistently ranked in the bottom half of states for veterans to retire, but that is the topic of another article.)

In addition to struggles with unemployment, veterans (like many Minnesotans) struggle to find affordable housing. According to the Department of Housing and Urban Development (HUD), about 50,000 veterans are homeless every night—making up 16 percent of the adult homeless population. The numbers are more promising in Minnesota, where only 317 veterans were found to be experiencing homelessness in 2014, according to the MN Department of Veterans Affairs (a drop of 47 percent from 2000). Nationwide, another 1.4 million veterans are considered at risk of homelessness due to poverty, lack of support networks and living conditions in overcrowded or substandard housing, according to the National Coalition for Homeless Veterans. The Center on Budget and Policy Priorities estimates that about 340,000 veterans rely on federal or state rental assistance, while about 900,000 veterans live on food stamps.

Supporting Our Veterans Several organizations across southern Minnesota work to assist veterans looking to return to the workforce and earn a living wage. One of the most notable

A continuing series on Workforce Issues in Southern Minnesota

is the Minnesota Workforce Center, which has locations in Mankato, New Ulm and Fairmont. While the center’s work isn’t only focused on veterans, it does place a priority on helping former service members with whatever they need, be it finding a job or connecting with support networks. According to Field Operations Area Manager Reggie Worlds, who is a veteran himself, the center works with veterans every day. Some veterans come into the center only once, perhaps to learn about what jobs are available in the area, while others can work with center employees for several months and receive more in-depth support. Not everyone comes in looking for a job; the center also helps veterans find emotional, psychological, medical and financial support by connecting them to area partners such as Lutheran Social Services and the Veterans Administration. When it comes to helping veterans find jobs, Worlds said the trick is to figure out how their military experience can translate

to the civilian world. That’s where Katie McNair, with the workforce’s Disabled Veterans Outreach Program, comes in—helping veterans rewrite their military experience into resume bullet-points that H.R. departments can understand. Once employers know how the military experience applies to the civilian world, it’s easier for them to hire qualified veterans—who can make some of the best employees, according to Worlds. “Veterans bring a unique set of skills to the job,” Worlds said. “The military is the best training ground in the world, where service members learn self-discipline and technical training under high-level expectations. These are things employers are looking for: being on time, being dedicated to the job, having a strong work ethic.” Veterans Service Representative Barry Platt said that veterans can find jobs in any industry, though some of the more popular ones have been transportation, food services and manufacturing. He works to connect veterans to businesses that need workers, spread-

ing the word about available opportunities. “We’re trying to find the perfect fit for the veteran and the employer,” he said, adding that businesses across southern Minnesota have been very supportive about hiring veterans. One business that strives to hire veterans is Wal-Mart, which launched a program called “Veterans Welcome Home” in 2013. Through this program, the company offers a job in either Wal-Mart or Sam’s Club to any qualified veteran or spouse of a veteran who has been honorably discharged since Memorial Day 2013. (Originally, the veteran had to have served within the last 12 months, but the time period was pushed back to accommodate more job seekers.) More than 103,000 new veteran employees have been hired since the program started, and the company’s goal is to hire 250,000 veterans by 2020. Wal-Mart’s Senior Director of Military Programs, Gary Profit, said that the program is set up to offer veteran applicants priority when they apply—though the

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WORKFORCE SERIES

attention to detail and work ethic is a large part of why his business is so successful. “Without a doubt, they are the best workers,” he said.

“This is not about establishing quotas. This is about giving people what they’ve earned by virtue of their service. They find opportunity here, and we relish working with them.” ultimate hiring decision is still based on a candidate’s merits. Still, Profit said veterans have no trouble there. “These are very talented people, arguably drawn from the largest diverse talent pool in the world,” he explained. “This is not about establishing quotas. This is about giving people what they’ve earned by virtue of their service. They find opportunity here, and we relish working with them.” There are two tracks for veteran job seekers: a “job” path that is usually seen as temporary work and a “career” path for someone interested in staying longer. So far, more than 9,000 veteran employees have been promoted to managers. Wal-Mart also provides training oppor-

Targeting Veterans’ Skills

tunities for these veterans, including the Veteran Championship Program, which connects new hires to fellow veterans who have more Wal-Mart experience. This sponsorship program helps the new hires ease into their job and become comfortable. In addition to the training opportunities, Wal-Mart is also committed to helping military spouses keep their careers if they’re forced to move because of a relocation. As Worlds mentioned, other business owners are also reaching out to veteran job seekers, especially because of veterans’ reputations as good employees. Matt Gunderson, former Marine and owner of the Madelia Lumber Company, manages a team of almost all veteran employees and says their

Another resource for Minnesota veterans is recent legislation that established a pilot veterans-to-agriculture program at the Southern Minnesota Center of Agriculture at South Central College in North Mankato. The idea behind the bill was to find ways for veterans to take skills they learned in the military, such as fixing diesel engines and using GPS mapping systems, and plug them into the agriculture industry—which has been seeing a shortage of workers lately. Each training session will take four to eight weeks to finish and result in a certificate of completion. Senator Kathy Sheran and Representative Clark Johnson wrote the bill, which requested $750,000 for the next two years ($150,000 in 2016 and $600,000 in 2017) to coordinate the program and organize projects at six other colleges. At the end

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of 2017, the program will be evaluated for success, with SCC looking into how many veterans utilized the program and went on to find jobs in the agriculture industry. “It’s good for rural Minnesota,” Sheran said. “We have lots of needs in agricultural employment, and our veterans have needs because of the high unemployment rate. [This program]… can help move veterans who need work into the ag industry and can help the ag industry fill needs they have.” In addition to the academic training, the program will also include job development programs and outreach to employers.

Working On Education For veterans who want to return to school after leaving the service, many area colleges offer their support. At South Central College, veterans are able to receive technical credit for military experience as part of a program growing across all schools within the Minnesota State Colleges and Universities (MnSCU) system. While SCC has only been working within this program for six months, it is already in the top three colleges for the number of courses that are aligned to receive credit for experience. In addition, MnSCU has set up an online portal where veterans can look up what credits they will receive where for their experience, helping them choose the best school for them. “We’ve very purposeful in the things we create so that veterans are taken care of,” said Deann Schloesser, veteran liaison, VA Certifying Official and Assistant Registrar at SCC. “We’re not ‘giving’ them anything. They’ve already earned it. We’re just recognizing and respecting that.” SCC also works with David Schrader, a southeast regional coordinator for the MN Department of Veterans Affairs. Schrader splits office hours between SCC and Minnesota State University, Mankato, as well as working with other parts of the region. He helps students figure out their benefits, including the Minnesota G.I. Bill, which recently was expanded beyond post-9/11 veterans to any veteran in Minnesota who has served and meets certain qualifications. Veterans at SCC will also be able to participate in the new “Learn. Work. Earn.” program that SCC is working to create through the Minnesota Advanced

Manufacturing Partnership (MNAMP), a MnSCU consortium of 12 colleges and two Centers of Excellence. SCC led the way in securing a $15 million federal grant, which helped set up a structure for advanced manufacturing training with standardized core curriculum and employer-driven apprenticeships. Participating students can simultaneously earn industry-recognized credentials at a MnSCU school while working for an employer, and veterans are one of four targeted groups within the program. Other area colleges and universities also have support systems in place for veteran students. Minnesota State University, Mankato is home to the Veterans Resource Center, which connects students to different partners, such as the Minnesota Assistance Council for Veterans, as well as working with them to prepare for the job market once they graduate. Schrader said the center is so well used, he’s trying to set up outside activities so that more veterans can have access to the support offered through it. He also hopes to create a career mentoring program that would link student veterans to veterans who have found positions in the same career field. “Our goal is to be a space where veterans can go to let their guard down,” Schrader said. “If you provide a way for veterans to connect with each other, they’re going to help each other.” Sean Eastling is a student veteran at MSU in his last year of study. He joined the National Guard nine years ago, deployed for a year to Kosovo in 2007 and plans to stay in for a full 20-year career. However, he also recently began working at Northwestern Mutual and will work there full-time once he graduates. Eastling said it can be difficult for veterans to transition back into civilian life, especially if they’ve been deployed, since they lose the routine of military life. He said resuming college classes was a challenge, since he was jumping into college at a different stage of life and with a different perspective than most of his fellow students. To ease that transition, he turned to the Veterans Resource Center, which he said helped him greatly during his time at MSU. “It’s a support thing,” he said. “If you’re there, and you’ve got a question, you’ll find the answer in a day or two.”

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Body Art Protein, LLC When Tommy Inkrott became director of strength and conditioning at Minnesota State University, Mankato in 2009, he began to hear the same question over and over from his student athletes: “What’s the best protein supplement to use?” While Inkrott tried to explain the basics of protein to these athletes, they’d often still come back to the gym with something overpriced or low in quality. “It’s not really about brand name,” he explained. “It’s about the quality of the product and being able to trust the company. It was kind of frustrating seeing students [pick poor supplements].” Finally, Inkrott decided to just start making his own protein supplement that they could use. He started working on his product in late 2013 and opened his supplement business, Body Art Protein, earlier this year. Inkrott grew up in Ohio, playing football and basketball during high school. He attended college at Bowling Green State University and studied athletic training. After graduating in 2006, he came to MSU to earn a master’s degree in cardiac rehab and ended up starting a career there. When Inkrott decided to start his own supplement business in 2013, he came up with a whey supplement formula that included extra leucine, an amino acid that stimulates muscle growth and recovery. The supplement, which only has 120 calories, can be put in milk or water and tastes like chocolate milk.

From there, Inkrott partnered with his brother, Mark, and worked with All American Foods to produce the powder. In January, he placed his first order, though his website wasn’t up and running until May. He has no physical store, but his product is available in several area locations, including Kato Crossfit, Mankato Coffeehouse and Ideal Weight To B. He said he hopes to also offer his product in grocery stores and gyms in the future. “As of the last couple weeks, it’s picked up,” he said. “The word is starting to get out.” BODY ART PROTEIN, LLC Telephone: (419) 796-9366 Website: bodyartprotein.com

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MANKATO St. Andrews Drive 507.385.4444 & Madison Ave 507.625.1551 VERNON CENTER 507.549.3679 I AMBOY 507.674.3300

NOVEMBER/DECEMBER 2015

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MANKATO

Very New or Re-formed Businesses or Professionals New To Our Reading Area

NORTH MANKATO

Tech Connect Plus

ART SIDNER

Nathan Stolt has strayed a bit far from the plans he made as an undergrad. The New Ulm native started out studying illustration at MSU-Mankato, but all that changed when he purchased his first computer in 1994: an Apple Performa 550. He ended up taking the whole thing apart and putting it back together to figure out how it worked. “It slowly snowballed into something that I ended up finding I had a real passion for,” Stolt said. That passion grew so much that he dropped his studies to focus on teaching himself how to repair computers. He was most interested in Apple products, eventually becoming an Apple Certified Macintosh Technician. He joined the Mac support team at the Taylor Corporation in 2004, where he stayed for another nine years. By 2012, Stolt decided it was time for him to open his own business. He and business partner Angie Schimek started Tech Connect Plus that year, offering computer repair and setup services. Stolt said his business stands out because the focus is on Mac computers instead of PCs (though he does offer repair services for PCs). With the nearest Apple store more than an hour away, Stolt quickly built up a grateful customer base. At first, Stolt worked out of his home, then out of a “closet-sized” office in the Greater Mankato Growth building. However, as his customer base grew, he began offering more

services, such as helping find buyers for people who wanted to sell their Mac computers. At this point, Stolt realized he needed more space so he could cut out the middleman work and just sell refurbished Mac computers on his own. “It became pretty obvious that it’s hard to have people come into your little closet,” he said. In July, Tech Connect Plus moved into a new building space on Commerce Drive. So far, business is good. In fact, Stolt said there have been times when he’s run out of product. “It just goes to show that we’re on the right track,” he said. “It’s been steadily growing, and we can’t ask for much more than that.” TECH CONNECT PLUS Address: 1754 Commerce Drive, Suite 104 Telephone: (507) 317-0581 Web: techconnectplus.com

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NOVEMBER/DECEMBER 2015

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Very New or Re-formed Businesses or Professionals New To Our Reading Area

GAYLORD

Judy Lindemeier Judy Lindemeier has always had a knack for houses. She has been in real estate for more than 20 years, first as a general contractor and then as a licensed real estate agent. Recently, she opened an office in Gaylord, starting a partnership with real estate company Better Homes and Gardens. Lindemeier grew up in Cologne and worked as general manager of an eye care center in Waconia for some time before deciding to pursue her true passion—real estate. “The housing industry was calling me,” she said. Lindemeier explained that she had bought and sold several properties herself, often renovating and remodeling old houses. At first, she started doing the same thing as a general contractor, where she would fix up homes and then move them to a new location—remodeling everything from plumbing to windows. Usually, these jobs took two to three months to complete. Eventually she was required by state to earn a real estate license. Once she had her license, she decided to start selling real estate. Lindemeier set up an office in Waconia but eventually decided to find a new market, settling in Gaylord. She spent more than a year remodeling an old café before opening this spring. She also entered a partnership with Better Homes and Gardens, which acts as her broker. She calls her office a “one

stop shop,” where people can talk to a lender about finance options, obtain a title, find a house and anything else necessary throughout the process. In her free time, Lindemeier sits on Gaylord’s housing committee to find ways to bring more affordable housing to the city. Her goal is to construct some one-level twin homes in Gaylord. “It’d be really nice for Gaylord’s community to have a neighborhood for first-time homebuyers, with reasonable housing,” she said. “It’d be a great asset for the whole community.” JUDY LINDEMEIER Address: 325 Main Avenue Telephone: (952) 994-0993 Website: allseasons.bhgre.com/agents

To be considered for one of three spots in the January Hot Startz!, email the editor at editor@connectbiz.com. Businesses considered must have started—or changed greatly in form—within one year of our publishing date. Professionals chosen must be new to our reading area.

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NOVEMBER/DECEMBER 2015

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HOT STARTZ!

NATIONAL OPINION

Nearly 1,000 people move from blue states to red states every day. Here’s why. The so-called “progressives” love to talk about how their policies will create a worker’s paradise, but then why is it that day after day, month after month, year after year, people are fleeing liberal blue states for conservative red states? The new Census data on where we live and where we moved to in 2014 shows that the top seven states with the biggest percentage increase in in-migration from other states are in order: North Dakota, Nevada, South Carolina, Colorado, Florida, Arizona, and Texas. All of these states are red, except Colorado, which is purple. Meanwhile, the leading exodus states of the continental states in percentage terms were Alaska, New York, Illinois, Connecticut, New Mexico, New Jersey, and Kansas. All of these states are blue, except Alaska and Kansas. The latest Rich States, Poor States document (which I co-author), published by ALEC, the state legislative organization, finds that nearly 1,000 people each day on net are leaving blue states and entering red states. This migration is changing the economic center of gravity in America—moving it relentlessly to the South and West. Travis Brown, the author of the indispensable book “How Money Walks,” shows that two of the leading factors behind this movement of human capital are 1) whether a state has a right to work law (half of the states do) and 2) how high the top income tax rate is in the state. Nine states have no income tax today, and they are creating twice the pace of jobs as are high-income tax states. Data from the Internal Revenue Service (IRS) show a similar trend. Each year the IRS issues a migration data report that examines how many tax filers (and dependents) in the year changed their residency and how much income was transported from one state to another. The numbers for the most recent year (tax filing year 2013)

are gigantic and put the lie to the claim that interstate migration is too small to matter in terms of the wealth and economic opportunity in one state versus another. In 2013, Florida gained $8.2 billion in adjusted gross income from out-of-staters. Texas gained $5.9 billion—in one year. Five of the seven states with the biggest gains in income have no income tax at all: Florida, Texas, Arizona, Washington, and Nevada. New York was again the big loser, with another 112,236 tax filers leaving and taking $5.2 billion with them. (So much for those TV ads trying to lure businesses into America’s 2nd highest taxed state with temporary tax breaks.) Illinois lost nearly 67,000 tax filers and $3.7 billion of income it can no longer tax.

into the once-Golden State. It’s a good bet these California refugees didn’t leave for more sunshine or better weather. And if warm weather is what is attracting Stephen Moore people to the South— and surely there is some truth to that— why did the coldest state outside Alaska, North Dakota, have the biggest population gain in percentage terms in the most recent year? The answer is that workers went to get jobs created by the Bakken Shale oil and gas boom. By the way, California is one of the oil- and gas-richest states in the nation, but

They are leaving states with high minimum wages, pro-union work rules, high taxes on the rich, generous welfare benefits, expansive regulations to “help” workers, green energy policies, etc. People are voting with their feet against these liberal policies. I’ve never met a Democrat who could come up with even a semi-plausible explanation for why families and businesses are hightailing it out of blue states. They are leaving states with high minimum wages, pro-union work rules, high taxes on the rich, generous welfare benefits, expansive regulations to “help” workers, green energy policies, etc. People are voting with their feet against these liberal policies. When I debated Paul Krugman this summer, I confronted him with this reality. His lame explanation for the steady migration from liberal North to conservative South was that “air conditioning” has made the South more livable. Americans are evidently moving because of the weather. There are two glaring problems with this theory: California and North Dakota. In the last decade ending in 2013, 1.4 million more Americans left California than moved

its “green” politicians are regulating that industry out of businesses. So much for caring about working-class Americans. The latest Census and IRS data merely confirm what Americans can see every day with their own two eyes. Red states are a magnet. There’s a downside to this for sure. Conservatives have a legitimate gripe that as blue-staters come into their prosperous red states, they try to turn them blue. That’s happened in New Hampshire, where Massachusetts transplants vote for the left-wing policies they just fled. But the underlying trend is unmistakable: Liberal blue states are economic dinosaurs. Will they change their ways before they go the way of Detroit and become extinct? Stephen Moore, who formerly wrote on the economy and public policy for The Wall Street Journal, is a distinguished visiting fellow for the Project for Economic Growth at The Heritage Foundation. This piece was originally published in the Daily Signal.

NOVEMBER/DECEMBER 2015

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