Mnvalley 2 18 by Free Press Media

The Definitive Business Journal for the Greater Minnesota River Valley Februar y 2018

Brian Maciej of Lime Valley Advertising. Photo by Pat Christman

Getting attention Navigating a multitude of marketing options Also in this issue • THE CAPITOL ROOM IN ST. PETER • INDIA PALACE • ASSOCIATED FINISHING

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Considerations When Utilizing Electronic Signatures

s commerce is becoming more and more dependent upon technology, many companies are considering ways to move from paper-based transactions to transactions conducted solely by electronic means. If you operate or do business with such a company, one important thing to be aware of is the law surrounding the validity of electronic signatures.

key encryption and third-party certifying authorities; e-mailed text or digitized images; passwords; personal identification numbers; biometrics such as voice prints and the like. The key is that the electronic signature represents the intent of the person to sign the record and the logical association of that electronic signature with the record.

First, all parties to a transaction must consent to the use of electronic records and electronic signatures instead of paper documents and traditional signatures. Whether consent exists will depend upon the specific facts and circumstances of the transaction in question, but generally speaking, consent may be expressly stated or implied from the circumstances.

Finally, procedures must be used to ensure the integrity and security of electronic documents (i.e. who sent or may have altered it?) and electronic signatures (i.e. does it belong to that one particular person?). This “attribution” of an electronic signature to a specific person may be established through firsthand observations or by utilizing certain security procedures. Such security procedures include, for example, unique login ID’s and password-protected access.

Second, any form of an electronic signature is sufficient to form a valid agreement. The “signature” can take a number of forms, including public-

Key Considerations:

1. Establishment of intent of the parties to be bound by electronic signatures 2. Establish responsibility to a particular individual or representative of the company 3. Maintain a record of the signature 4. Secure storage and access processes 5. Provide an audit trail which identifies the signatory, the document that was signed, when it was signed, including date, time and sequencing of events. 6. Make electronically signed documents inalterable 7. Ensure that there is a credible custodian of the records Finally – consider contracting with a third-party vendor that specializes in electronic signatures (for example, DocuSign) and can assist you with implementing the process.

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F E A T U R E S Februar y 2018 • Volume 10, Issue 5

Businesses have a dizzying array of ways to market themselves, from traditional print and broadcast outlets to fast changing digital and social media platforms.

Dan Dinsmore and his wife Emily acquired the old St. Peter armory and transformed it into the Capitol Room, a place for weddings, events and community gatherings.

John Kapsner and Ted Schreyer, owners of Associated Finishing, provide a wide variety of specialized coatings for everything from farm machinery to small electronics.

India Palace has provided Mankato’s only Indian cuisine for a few years and the family, which owns restaurants in other cities, recently opened a liquor store locally.

MN Valley Business • FEBRUARY 2018 • 3

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FEBRUARY 2018 • VOLUME 10, ISSUE 5

By Joe Spear

PUBLISHER Steve Jameson EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Harvey Mackay Dan Greenwood James Figy PHOTOGRAPHERS Pat Christman Jackson Forderer COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Jordan Greer-Friesz Sales Josh Zimmerman Marianne Carlson Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Justin Niles DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6364, or e-mail advertising@mankatofreepress.com. MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street Mankato MN 56001.

■ Local Business memos/ Company news.....................................5 ■ Business Commentary.........................8 ■ Business and Industry trends..........20 ■ Retail trends.....................................21 ■ Agriculture Outlook..........................22 ■ Agribusiness trends..........................23 ■ Construction, real estate trends.....24 ■ Gas trends........................................25 ■ Stocks...............................................25 ■ Minnesota Business updates............26 ■ Job trends.........................................26 ■ Schmidt Foundation.........................28 ■ Greater Mankato Growth..................30 ■ Greater Mankato Growth Member Activities ............................32

From the editor

Marketing challenges business in the new age digital world

hile it seems like most of the marketing world has been shouting the praises of digital communication for years, it was refreshing to hear some local experts talk about the value of print, hard copy and the use of color and art that can be seen and, more importantly, felt. The experts in this month’s issue point out the world of marketing is more complex and confusing in this digital age, but point to the printed communication as maybe even more effective than digital in some cases, though without the hype. Of course, that’s an easy side to be on given Free Press Media still takes in the bulk of its revenue from the printed product. Still, digital communication plays an extremely important role in whatever you might be marketing, whether that be a newspaper, magazine or clothing. It provides reach and engagement, increasingly important principles for gaining and keeping loyal customers. The experts say that digital can be flashy and something new, but print advertising is also reshaping itself in positive ways that are valuable. “We love print because there is so much more you can do with the color now,” says Brian Maciej, president of Lime Valley Advertising. He says print can deliver a tactile feel while digital is colder. People also interact with print advertising differently, says Stacey Straka, of the PresenceMaker marketing firm in Mankato. “People want an experience with print. It has to be visually appealing, engaging and tactile. With print you have bright color, different paper, embellishments,” she says.

4 • FEBRUARY 2018 • MN Valley Business

Digital and social media marketing offer some benefits but also pitfalls. Maciej says businesses can put up a Facebook page and think they’re good to go but tend to get sloppy with it and not manage it, and that ends up hurting their brand rather than helping it. Maciej doesn’t see the social media as the primary vehicle for direct sales, but rather building your brand and reputation. Straka sees it as a quick way to develop rapport with customers or potential customers. Publishers, including Free Press Media, now have to offer a much wider variety of advertising products than ever before given the need to stay connected to customers in the digital world. Websites were a given and have reached a sophisticated level of development after coming into their own about 10 or 15 years ago. Video also has become a big part of news and magazine websites in the last five years. New, easy-to-use tools allow content providers to take news or feature video and have it on their website, Facebook page and Twitter almost instantaneously. Publishers also are benefitting from the analytical tools now available to measure audience reach, reader clickthroughs and engagements. There is no doubt that this has been a huge benefit acquired mostly at no or low cost to publishers. But outside forces continue to challenge publishers and their advertising customers. Facebook and Google take about 60 percent of digital advertising dollars in the United States, according to a report in Fortune. They do that in part by allowing publishers to use their platform free in order to gain access to those publishers’ loyal

customers. And we should point out Facebook is really not free. Publishers give up their audiences and their attention spans in exchange for reaching and engaging with their audience more through their Facebook pages. And while Facebook had its brand tarnished by unwittingly allowing fake news to proliferate on its platform, its business does not seem to be any worse off as a result. In fact, Facebook began a kind of kumbaya program with publishers in an effort to ease their criticism of fake news but also to assure that Facebook revenue streams continue in a healthy way via the generosity of publishers who provide their audiences. And Warren Buffet, the Omaha gent, who bought 28 newspaper for $344 million about five years ago, sees the challenge of digital, arguing only The New York Times, The Wall Street Journal and The Washington Post have their futures “assured” because their digital business models work. Makes us all wonder if we shouldn’t take another look at print.

Local Business People/ Company News

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ISG buys firm

Mankato-based ISG has acquired architecture and interior design firm, StruXture Architects based in Waterloo, Iowa. StruXture has an extensive portfolio in the education, government, healthcare, and civic and culture markets. ■■■

Waletich driver honored

Mike Stratton, a driver for Waletich Corp. in Kasota, was honored by the N a t i o n a l Association of Small Trucking Companies as a Driver of the Year. Mike Stratton Stratton has driven for Waletich for 13 years and has been a professional driver

Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow on Twitter @jfspear.

for 35 years. He has accumulated 4 million accident free miles. ■■■

Moll elected to board

The Board of Directors of Citizens Community Bancorp, the parent of CCFBank, elected James Moll to the board as a Class I Director and the Board of Directors of CCFBank. Moll ser ved as the Chief Financial Officer of Wells Financial Corp. and its subsidiary, Wells Federal Bank from 1995 to 2016 and served as the CEO and President of Wells from 2015 until August of 2017 when the sale of Wells to Citizens was completed. He holds a B.A. in economics from St. John’s University, Collegeville, and a B.S. in accounting from Minnesota State University. Moll lives in Wells. ■■■

Profinium donates $24,000

Read us online!

Profinium employees and members of their board of directors donated more than $24,000 to their Achieving Dreams Together campaign, aimed at helping people during pivotal moments in their lives. Profinium partnered with Radio Mankato, KOWZ in Owatonna and KBEW in Blue Earth to promote the program, asking for nominations from the public. Out of 190 nominations, 21 people were chosen for help. ■■■

DEVOTED OUTDOORSMAN Bill Douglass, Mankato Water Resources Expert

Bill specializes in managing environmental reviews as well as hydrologic modeling and stormwater design and management services in both urban and agricultural areas. As an avid hunter and fisherman, clean water is important to him. We take pride in our work. We live here too.

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Navitor adds equipment

Navitor Specialty Products in Nor th Mankato has has purchased four new state-of-theart presses. The Canon Arizona 6170, the company’s new UV flatbed press, has 42 heads with an additional white ink option. This press prints as large as 8’X10’, doubling the size of the company’s other machines. The Esko Kongsberg C64, NSP’s new 10’x10’ cutter, is three

MN Valley Business • FEBRUARY 2018 • 5

times as fast as the company’s existing cutters. The HP 570’s are two additional flexible media presses entering NSP’s production floor. These 64” latex printers use HP Eco Guard certified ink that meets a range of environmental and human health criteria. ■■■

Abels named president

Cor y Abels has been named Community Bank President – Greater Mankato Area for CCFBank. Abels has been with CCFBank since March, 2016, Cory Abels when he joined the company as the St. Peter Market President. Although he will continue to serve the St. Peter market, his role will be based primarily out of the Mankato CCFBank office location on St. Andrews Drive

Alms joins True Real Estate

Greta Alms, b r o k e r associate/ Realtor, has joined True Real Estate at their M a n k a t o location. Alms received her real estate Greta Alms license in 2005. She grew up in Lake Crystal but has lived across Minnesota and the world. Alms is a graduate of the University of Minnesota, Morris.

Profinium’s trust accounts, as well as facilitating and overseeing programs for current and prospective clients. He was most recently employed as a founder and partner at Knutson, Casey, Koberoski + Abed. ■■■

MinnStar makes hire, promotion

■■■

Profinium names Abed VP

Wade Abed II

Profinium, has appointed Wade Abed II Vice President, Trust. He is responsible for administering and developing e f f e c t i v e strategies for

Aaron Loken

Scott Nelsen

MinnStar Bank hired Aaron Loken as S e n i o r Commercial Lender. He is in the Mankato office, at 201 Poplar Street. He has over 15 years of banking experience. He is from the St. Peter area and a graduate of Minnesota State University. The bank also

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promoted Scott Nelsen to Lake Crystal Market Manager. He has been with MinnStar for three years as a Commercial Lender in the Mankato office and is now in the Lake Crystal office. MinnStar Bank is a locally owned bank with $127 million in assets in 2 locations. ■■■

Mathiowetz gets Hwy 14 project

A $31.4 million contract for the Hwy 14/15 New Ulm Gateway project was awarded to The Mathiowetz Constr uction Company of Sleepy Eye. The project team will include 24 Minnesota and local contractors and another 10 material suppliers. Lunda Construction Company will be building the bridges, C.S. McCrossan will provide concrete work, Central Specialties will provide the asphalt paving. Local contractor, M.R. Paving & Excavating will provide watermain and underground services along with Southern Minnesota Construction’s Quarry providing materials. Tree clearing and river set up work is starting this winter but the project will not have traffic impacts until the spring.

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■

Business Commentary

By Harvey Mackay

The traits of a highly successful sales rep I

’ve been a salesman all my life, and I’ve been hiring sales reps for nearly as long. So I think I know a thing to two about sales. Recently a friend asked me to identify the traits of a sales superstar. Here’s my recipe:

CONTRACTORS ARE THE NEW “GO-TOS” Business owners reported an increase in hiring in all categories of workers over the past six months, with the greatest growth in one-time project or gig workers (37%).

During the last 6 months, did the total number of workers in your firm increase, decrease, or stay the same? 13%

22%

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Hungr y fighter

If I had to name only three traits that make a great sales representative, they would be: 1) hungry fighter, 2) hungry fighter and 3) hungry fighter. That’s how much I think of this trait. Every good salesperson I’ve ever encountered is driven. They have a strong work ethic and a high energy level. They work harder and longer than their peers. When the economy is poor, they are still out there pounding the pavement or making calls.

altitude. 90 percent of success is mental. You can alter your life by altering your mind. In tough economies like today, it may not be your fault for being down, but it is certainly your fault for not getting up. You have to be a believer to be an achiever.

Likability

Tell the truth

Know your product

You never get a second chance to make a good first impression. Are you neat and well groomed? Underdressed or overdressed?

I’ve always believed that telling the truth is the best policy. In business, especially today, it’s a must. A few years back, the Forum Corporation of Boston, Mass., studied 341 salespeople from 11 different companies in five different industries. Their purpose was to determine what separated the top producers from the average producers. When the study was finished, the results were startling. It was not skill, knowledge or charisma that divided the pack. The difference came down to one trait: honesty. When customers trust salespeople, they buy from them!

Positive attitude

Your attitude, not your aptitude, will determine your

Full Time Employee

Part Time Employee

Part Time Contractors

Temp Help

Decrease

Strong sales reps know their products backward and forward. They also know their competitors’ products and are prepared to point out the differences.

Be prepared

I still remember my old Boy Scout motto: “Be prepared.” Well, it’s true. It takes a lot of unspectacular preparation to produce spectacular results.

Reputation

You can’t buy a good reputation … you must earn it. If you don’t have a positive reputation, it will be difficult to be successful in whatever you do.

8 • FEBRUARY 2018 • MN Valley Business

No Change

Gig Work

Increase

I have never known anyone to buy from someone they don’t like. Are you genuine? Pleasant? Easy to talk with?

Good first impression

Set goals

Goals should be measurable, identifiable, obtainable, specific and in writing. Winners set goals; losers make excuses. Remember the Italian proverb: “You never climb higher than the ladder you select.” Goals give you more than a reason to get up in the morning; they are an incentive to keep you going all day. Most important, goals need to be realistic: beyond your grasp but within your reach and in the foreseeable future.

Ser vice mentality

I’ve often said the sale begins when the customer says yes. Good salespeople make sure the job gets done on time – and done right. There’s one thing no business has enough of: customers. Take care of the customers you’ve got, and they’ll take care of you. You must have a fanatical attention to detail!

Great listener

You can’t learn anything with your mouth open. For many people, good listening means, “I talk, you listen.” Listening is a two-way process. Yes, you need to be heard. You also need to hear the other person’s ideas, questions and objections. If you talk at people instead of with them, they’re not buying in – they’re caving in. Believe it or not, being a good listener is more important in sales then being a good talker.

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Sense of humor

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Thirst for self-improvement

You don’t go to school once for a lifetime. You are in school all your life. Good salespeople are constantly working to become better. They take courses, read books, listen to audiotapes and inhale everything they can to improve. We live in the information age so it’s easy to take every opportunity to learn and grow at any hour of the day. Remember, the largest room in the world is the room for improvement.

“I am very excited to be working at First National Bank Minnesota. I look forward to continuing to serve my clients in a community bank setting.”

Mackay’s Moral:

A salesperson tells, a good salesperson explains, and a great salesperson demonstrates.

Harvey Mackay is a Minnesota businessman, author and syndicated columnist. He has authored seven New York Times bestselling books

MN Valley Business • FEBRUARY 2018 • 9

Brian Maciej of Lime Valley Advertising.

Too many choices? Marketing options don’t have to overwhelm

By Tim Krohn | Photos by Pat Christman

or business owners or marketing managers looking to get their products or services noticed, these can be confusing times. “I think people are particularly challenged right now by how fragmented the marketing opportunities are,” said Stacey Straka of PresenceMaker in Mankato. “They wonder where to put their advertising dollars. It’s hard to get a handle on all the touch points people

are getting information from.” Brian Maciej, president of Lime Valley Advertising, said the job of agencies like his is to help business clients make sense of what can seem an overwhelming media mix. “If you go through it with someone, you really can start narrowing that strategy. And you have to because we don’t have any companies come in and say, ‘We have an unlimited marketing

Cover Story

10 • FEBRUARY 2018 • MN Valley Business

Stacey Straka of PresenceMaker. budget and we want to be everywhere.’ You create a campaign that’s on point for them and their audience.”

Finding your way

Some of the clients who come to PresenceMaker or Lime Valley are the owners of small businesses while others are marketing directors at a business. Either way they’re looking for help in where to get the most from their marketing budget. “We’ve been around for 30 years,” Maciej said. “We’ve seen media channels change dramatically. What hasn’t changed is a business is going to budget a certain amount of their sales budget for marketing, but that amount hasn’t changed much to meet all the new channels out there.” Maciej said there are four broad marketing and advertising categories: traditional media, digital media, social media and experiential. “Traditional is print, newspapers, broadcast, direct mail and there are billboard and indoor and directory

advertising.” he said. On the digital side are options such as web advertising, Google AdWords, and geofencing, a location-based digital marketing tool. “In social media there’s Instagram, Facebook, Snapchat and on and on,” Maciej said. “Experiential is often overlooked. It’s your trade shows, but it’s also presentations to clubs, the Chamber, all those things that are face to face.” He said that with new clients they work first to narrow the focus on where money should be spent. “Depending on their market or service, you can quickly eliminate or emphasize some of those four areas and then it becomes more analytic rather than emotional. “You look at the demographics and who their prospects are and who they want their prospects to be,” Maciej said. “Some businesses may go outside their normal client base and we might introduce some media

MN Valley Business • FEBRUARY 2018 • 11

Stacey Straka of PresenceMaker with senior brand designer Lindsey Curtis. models that are different than what a company is used to.”

Keeping it simple

Straka said social and other digital media has changed the way people consume advertising, no matter what platform it’s delivered on. Bombarded with a wide variety of messaging, people often spend little time looking at one thing. “Digital commands more simplified messaging.” But even in non-digital forms, advertising has to grab attention quickly. “The long narrative doesn’t usually work. People aren’t going to read a paragraph of copy anymore in an advertisement. Attention spans are shorter,” Straka said.

Digital landscape

Straka said social media like Snapchat, Instagram and Facebook build a direct connection with customers and potential customers. “It builds that personal experience and allows you to do it on a very personal level and interact with them without a big narrative. Maciej said social media may best be used to build brand recognition and brand equity. “It’s often not the best tool to create a direct sale. It doesn’t work well that way,” he said. While social media involve more of a personal

12 • FEBRUARY 2018 • MN Valley Business

interaction, Maciej warns his clients to not fall into the trap of getting too casual. “I think sometimes businesses get kind of sloppy in social media so instead of brands getting stronger, they can erode the brand. Sometimes people think it’s anything goes but you can really erode your brand if you’re not a good brand steward.”

Print advertising in demand

Maciej and Straka say that while digital may be the new kid on the block, print advertising is finding new footing and value. “We love print because there is so much more you can do with the color now,” Maciej said. And he said other forms of media can’t deliver that tactile feel of a print product. Straka said people interact with print products differently. “People want an experience with print. It has to be visually appealing, engaging and tactile. With print you have bright color, different paper, embellishments.” Another form of print — direct mailings — is also valuable, said Maciej, because it can be highly targeted. “You can get USPS Every Door Direct Mail that lets you target by communities or mail carrier routes in a community. It’s very targeted geographically,” he said. “Direct mail isn’t about how many you can send out — it can be 500 if it’s an exact target for your business.”

Emerging trends

Straka and Maciej said one emerging trend is the use of augmented reality in marketing. “It’s like ‘Pokemon Go.’ It’s pushing into destination marketing, service marketing. It lets us dig deeper into a product without reading several paragraphs about it,” Straka said. Augmented reality is used in a variety of ways in marketing. A brick-and-mortar store might have augmented reality tours of a product in their store, allowing customers to look at the product and see its inner mechanics and turn it on. It can be used to allow people to put themselves at some destination and visualize it without actually being there. Or as people walk down the street and look at a billboard on a bus stop, they may be able to use an augmented reality device to make the billboard appear all around them. “That’s going to be huge,” Straka said. She also predicts that live video will grow in use for marketing and advertising. It’s grown dramatically as people use live Facebook video to show what they’re up to, but Straka said that tool will be used more professionally for marketing. MV

MN Valley Business • FEBRUARY 2018 • 13

Megan Bennett and Dan Dinsmore in the Capitol Room.

Community space Capitol Room uncovers history, elegance By Dan Greenwood Photos by Pat Christman

hen Dan Dinsmore and his wife Emily acquired the old St. Peter armory, they knew they were plunging into unchartered territory. The building had been sitting vacant for several years, its history hidden by a drop ceiling at nine feet, carpeting and no windows. When they first saw the interior, it resembled a bland and characterless office space. But behind all of that was a historic building they would uncover. “Before we even signed the lease we started doing some mock ups for a design, rendering as well,” Dinsmore said. “We

knew it was a big project and we decided to jump head first into it. There were trials most definitely. We had a very tight deadline.” The couple had always talked about having an event space around Mankato. “I go to a lot of diverse locations for my job for wedding photography and have always been inspired by some of the spaces that I see all over Minnesota,” Dinsmore said. Dinsmore recalls crawling into the ceiling to show prospective clients the original barrel vaulted ceiling. He knew that the brick, steel and wood structuring

Cover Spotlight

14 • FEBRUARY 2018 • MN Valley Business

would look really beautiful exposed. “During our renovation we were trying to sell the space,” Dinsmore said. “There was a lot of faith people were putting into us to have the space complete and to make sure that it looked beautiful. It was nerve wracking. We walked in day one and didn’t stop working until our first event.” He says a lot of the renovation involved on the job training, and he attributes the success to asking a lot of questions. Dinsmore’s father, a carpenter, had earlier helped him renovate his Old Town Mankato studio. In St. Peter they had to adjust to what they uncovered, planning ahead for the unknowns. With some failures, they had to find another work around. What once was a bland looking office space has transpired into an elegant interior with hints of its past. The structure, built in 1913, served as an armory and community center until the 1980’s. It was added to the National Registr y of historic places in 1997. “I’ve done a couple renovations with some old buildings and you never really know what to expect when you dive into it,” Dinsmore said. “We got pretty lucky that it was all in pretty good shape when we finally did reveal everything.”

Name a nod to histor y

After nearly a year of renovation, the Capitol Room opened to the public last September. The name is a nod to St. Peter’s consideration Top: Bridesmaids’ room. Bottom: Groomsmen’s room. to be the state capitol before St. Paul was ultimately chosen. The wide boulevard passing through legislation, got drunk and played the center of town was built in cards in a hotel room,” Dismore anticipation becoming the capitol. said. “So it was unable to get Visitors get a history lesson with passed to make St. Peter the each room named after historic capitol of Minnesota.” events related to St. Peter. Since opening, the building has The cocktail lounge is called hosted weddings and holiday the Rock Bend Room, the name parties. But Dinsmore wants to of the town before it was renamed transform it into a community St. Peter. The Lillian Suite is space with cocktail hours, dancing named after the first female and yoga classes. Movies will be mayor for St. Peter and in screening regularly by this Minnesota. The Rolette room is summer. They’re already named after the guy responsible scheduled a showing of Prince’s for squandering St. Peter’s chance Purple Rain to commemorate the at becoming the state capitol. musician’s birthday on June 7th. “The story goes that a guy by “We’re very excited to have a the name of Rolette stole the bit of a social hour combined with

some very fun crowd favorites,” Dinsmore explains. “There’s going to be some that are more oriented for adults and there’s going to be some for maybe a Sunday matinee for the kids. Which I think will be great, especially in the frigid tundra that is Minnesota.” Dinsmore says the response so far has been over whelming positive. “It energizes us for the next year to keep improving the space and the experience.” MV

MN Valley Business • FEBRUARY 2018 • 15

Ted Schreyer, left, and John Kapsner own Associated Finishing in Mankato.

Covering it all Company finishes everything from tiny NFL screens to ag equipment

By Dan Greenwood | Photos by Pat Christman

ohn Kapsner and Ted Schreyer knew a long time ago that they would become the owners of Associated Finishing, a Mankato-based powder coating company. In 2009, that dream would become reality. Powder coating protects ever ything from machiner y to household items as an alternative to paint, without the use of solvents. Schreyer says they grind plastic up to the consistency of talcum powder and pump it through a hose. He likens the process to rubbing a balloon and sticking it to a wall. “There’s an electrical charge put on the powder and that makes the powder stick to the grounded part,” explains Schreyer. “So you may have negatively charged powder, a positive ground on your part and the opposites attract so the powder will stick to it. You bake that approximately 400 degrees and then it melts and makes a real hard coating, much harder than typical paints.”

The partnership between Schreyer and Kapsner was sewn in 1988. Kapsner was a banker for Associated Finishing when previous owner Chuck Klammer and Schreyer met with him over lunch. Klammer asked him to join the business full time. “At the end of the conversation I said I would do that on one condition. Someday I would have an opportunity to buy the company,” Kapsner said. “Ted chuckled and he says ‘well that’s why I’m here. Eventually I want to buy the company.’” With that, the three shook hands. When they bought the business in 2009 they had 20 years working together. Kapsner had the financing experience while Schreyer knew the production side. “Our strengths complimented each other and the partnership has worked out real well,” Schreyer said.

Profile

16 • FEBRUARY 2018 • MN Valley Business

Expanding their base

While the company has largely focused on powder coating agricultural machinery, an economic slump in

Dale Taylor hangs parts for painting. Right: Bill Neegaard paints parts in a booth. farming in 2008 meant they would need to expand their customer base because companies such as John Deere, Bobcat and Caterpillar had fewer orders to fill. Since then they’ve expanded to accommodate several industries. The company’s longevity combined with a solid sales and marketing team allowed them to find new clients with relative ease. “Associated finishing has been around since 1954,” Kapsner said. “In the Midwest there’s very few people that don’t know who we are. So then it’s just a matter of targeting the market you need to go to and what our niche is. We star ted identifying some industries we wanted to go after.” When they bought the company in 2009, the military already had large orders for them to fill. “We worked pretty much 24/7 for almost 90 days,” Kapsner said. “Back in Iraq, roadside bombs were going off and wounding our forces. A company developed a kit that attached to those vehicles. They were armor coated. We powder coated all that with chemical agent resistant coatings.” Their client base would also expand to medical and dental equipment, aerospace and computers. They even powder

coat equipment for professional football announcers. “If you watch football on Sunday, you see the head coaches on the sidelines; they have their little microphones and on the end of their microphones there’s a little screen,” Kapsner said. “One of our customers manufactures that and we powder coat those all for the NFL.” Even though Associated Finishing have expanded their clientele, they are preparing for an uptake in manufacturing for agriculture. So much so that they opened a facility in Litchfield. “What we do in Mankato is a lot of small parts, high volume,” Schreyer said. “We have conveyers that are doing thousands of parts at a time. But we didn’t have a good way to do small quantities, large parts.” He says the majority of what they are doing in Mankato fits in your hand. The new facility in Litchfield accommodates the larger farming equipment, along with semi-trailers and dump truck boxes. To do that requires a 12 foot wide by 40 foot long oven. It takes about 20 minutes to complete the heating process. Their workforce is now made up of more than 100 people as they continue to grow and expand. One of the first decisions the new

owners made back in 2009 was to take a collaborative approach with the employees. “Prior to us running the company we were kind of a top/ down management style company,” Kapsner said. “When we bought the company we made the announcement that we were changing to a bottom up (company).” The way they see it, the management works for the people on the floor. They also promote from within and include their employees in decision making. Schreyer says it’s that kind of inclusive work environment that translates to the longevity of employees. Many have worked there for 15 to 20 years and more. It doesn’t hurt that they have firsthand experience with the powder coating process. “It helped that I worked right on the floor, John did too. We’re not afraid to get our fingernails dirty,” Schreyer said. “Our whole management staff is that way too. There are people like me that worked their way through school. John and I are very open with employees that we want everybody to succeed. If we can do well, we’re all going to do well.” MV

MN Valley Business • FEBRUARY 2018 • 17

Amar Mand and his father Tirlochn Mand.

Spicing up the local flavor India Palace planning fast food locations By James Figy Photos by Pat Christman

hen India Palace decided to expand in 2013, brothers Tirlochn and Parmjit Mand already owned three locations across Minnesota and North Dakota, and their Eden Prairie restaurant had been in business 10 years. However, Mankato seemed to be greatly in need of some Indian cuisine. “In our Eden Prairie location, we had tons of customers coming from Mankato,” said Amar Mand, co-owner and manager of the Mankato location. “That was one of the reasons that we pushed for here.” As India Palace Mankato celebrated three years in business in 2017, the owners also • FEBRUARY 2018 • MN Valley Business

expanded their operation by opening Madison Liquor and offering free delivery from both businesses. The liquor store is housed next door to the restaurant in the Madison Avenue storefront. Running a liquor store is different from running a restaurant, but the owners have experience in both. Amar Mand said his father, Tirlochn, sold beer, wine and spirits in the U.K. “My dad has had a lot of experience in liquor stores from when he used to live in London,” he said. “We owned a liquor store there, and the space just opened up. And we were like, ‘Well, why not? Let’s just give it a shot and see how it goes.’”

Feature

Tirlochn Mand in the family’s liquor store, Madison Liquor.

Family histor y in food

The family moved to the U.S. when Tirlochn Mand’s brother called to say he could use help with his Indian restaurant in central Indiana. They eventually decided to try their luck in Minnesota, where more of their family members were living. The business has been growing ever since. For Amar Mand, it wasn’t always clear that he would follow in the footsteps of his father and uncles. However, he slowly developed a love for working in the restaurant and took on a larger role in 2012 after learning to cook the dishes he grew up enjoying. “When I was a kid I used to eat the chicken tikka (masala) every day. It was my absolute favorite,” he said. “But in 2008, I went vegetarian, so after that, paneer tikka masala is probably my favorite entree and then the malai kofta.” Before India Palace opened in Mankato, another Indian restaurant had just closed in North Mankato. However, the Mands were confident that with

their experience they could make it work. Now, Mand oversees operations in town, while his father keeps tabs on the entire chain. Mand’s uncles run the locations in Fargo and Eden Prairie, and his cousins operate the location in St. Cloud. “Family manages everything,” Mand said. “It’s kind of handy, because you can always trust them.”

Growing the Indian cuisine scene

Going forward, India Palace plans to expand its presence in Mankato by drawing in new customers and adding fast foodstyle locations in River Hills Mall or near Minnesota State University. “By the university, we want to make it more of a ... grab-and-go, because students don’t have that much time. People who come from work for lunch want to grab their food and go,” Mand said. The main challenge is getting people to try Indian food, Mand said, because most folks believe that Indian cuisine is always extremely hot. But his family

hails from northern India where the cuisine is simpler and not spicy, so most of their dishes reflect this regional flavor. “A lot of people have a misconception that it’s always spicy, that there’s too many spices in it or there will be something they don’t like. That’s not true at all,” he said. “We have just about everything on the menu, for everyone from vegetarians to carnivores.” Another misconception is that curry is just a yellow soup. “Curry can be in a tomato base form, in a cream base form, in an onion base form,” Mand said. “It’s not just not one thing. There’s literally hundreds of thousands of different types of curries that you can make.” If new customers try it once, they almost always return. With the success of India Palace and Madison Liquor, Mankato has proven to be a good place to do business, and the owners are excited to continue growing here.

MN Valley Business • FEBRUARY 2018 • 19

■

Business and Industry Trends

Energy Power grid batteries being added quickly

Driven largely by installations over the past three years, the electric power industry has installed about 700 megawatts of utility-scale batteries on the U.S. electric grid. As of October 2017, these batteries made up about 0.06% of U.S. utility-scale generating capacity. Another 22 MW of batteries are planned for the last two months of 2017, with 69 MW more planned for 2018. Batteries, like other energy storage technologies, can serve as both energy suppliers and consumers at different times, creating an unusual combination of cost and revenue streams and making direct comparisons to other generation technologies challenging. The decision to build a new power plant depends in part on its initial construction costs and ongoing operating costs. Although battery projects have a relatively low average construction cost, they are not stand-alone generation sources and must buy electricity supplied by other generators to charge and cover the round-trip efficiency losses experienced during cycles of charging and discharging. Battery costs also depend on technical characteristics such as generating capability, which for energy storage

Mankato

systems can be described in two ways: • Power capacity or rating. Measured in megawatts, this is the maximum instantaneous amount of power that can be produced on a continuous basis and is the usual type of generator capacity discussed • Energy capacity. Measured in megawatthours (MWh), this is the total amount of energy that can be stored or discharged by the battery A battery’s duration is the ratio of its energy capacity to its power capacity. For instance, a battery with a 2 MWh energy capacity and 1 MW power capacity can produce at its maximum power capacity for 2 hours. Actual operation of batteries can vary widely from these specifications. Batteries discharged at lower-thanmaximum rates will yield longer duration times and possibly more energy capacity. Short-duration batteries are designed to provide power for a very short time, usually on the order of minutes to an hour, and are generally less expensive per MW to build. Long-duration batteries can provide power for several hours and are more expensive per MW. On the revenue side, batteries have relatively low capacity factors because of charging durations and cycling limitations for optimal performance. Nevertheless, they can uniquely capture a range of value streams, which can sometimes be combined to improve project economics. Some of the uses for

Vernon Center

Amboy

www.cbfg.net

Serving the communities we call home 20 • FEBRUARY 2018 • MN Valley Business

batteries include: Balancing grid supply and demand, peak shaving and price arbitrage opportunities, storing and smoothing renewable generation, deferring large infrastructure investments and as back-up power.

Retail/Consumer Spending

Record crude production

The Energy Information Administration estimates that U.S. crude oil production averaged 9.7 million barrels per day in November, up 360,000 b/d from the October level. Most of the increase was in the Gulf of Mexico, where production was 290,000 b/d higher than in October. Higher production in November reflected oil production platforms returning to operation after being shut in response to Hurricane Nate. EIA forecasts total U.S. crude oil production to average 9.2 million b/d for all of 2017 and 10.0 million b/d in 2018, which would mark the highest annual average production, surpassing the previous record of 9.6 million b/d set in 1970.

More natural gas

U.S. dry natural gas production is forecast to average 73.5 billion cubic feet per day (Bcf/d) in 2017, a 0.7 Bcf/d increase from the 2016 level. EIA forecasts that natural gas production in 2018 will be 6.1 Bcf/d higher than the 2017 level.

Natural gas price up

In November, the U.S. benchmark Henry Hub natural gas spot price averaged $3.01 per million British thermal units (MMBtu), up nearly 14 cents/ MMBtu from October. Expected growth in natural gas exports and domestic natural gas consumption in 2018 contribute to an increase in EIA’s forecast Henry Hub natural gas spot price from an annual average of $3.01/MMBtu in 2017 to $3.12/MMBtu in 2018

More renewable power

EIA expects the share of total U.S. utility-scale electricity generation from natural gas will average about 32 percent in 2017, down from 34 percent in 2016 as a result of higher natural gas fuel costs and increased generation from renewable energy sources. EIA projects the 2017 share of generation from coal will average 30 percent, about the same as last year. The forecast 2018 generation shares for natural gas and coal remain relatively unchanged from 2017, averaging 32 percent and 31 percent, respectively. Generation from renewable energy sources other than hydropower grows from about 8 percent in 2016 to a forecast share of nearly 10 percent in 2018.

Vehicle Sales Mankato — Number of vehicles sold - 2016 - 2017 1,418 915

1500 1200 900 600 300 0

Source: Sales tax figures, City of Mankato

Sales tax collections Mankato (In thousands)

- 2016 - 2017

Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.

600

$421

500

$447

400 300 200 100 0

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato - 2016 - 2017 70000

$56,967

$51,510

52500 35000 17500 0

Source: City of Mankato

Mankato food and beverage tax - 2016 - 2017 175000 140000

$66,700 $64,186

105000 70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business • FEBRUARY 2018 • 21

■

Agricultural Outlook

By Kent Thiesse

NAFTA negotiations this year will have dramatic effect on ag

he importance of foreign trade and exports to the financial viability of the agriculture industry, as well as other industries, has been well documented in recent months. At the center of this discussion, has been the re-negotiation of the North American Free Trade Agreement between the United States, Canada, and Mexico. The NAFTA re-negotiation discussions stalled late in 2017, but will be resuming again in 2018, and could likely reach a conclusion later this year. The results of the NAFTA negotiations could have a dramatic effect on the U.S. agriculture industry, both in the short-term and for longer term growth and development of the industry. NAFTA is a trilateral trade agreement among the United States, Canada, and Mexico that was originally set up in 1994, which granted the “most favored nation” status to all trading partners. This status gives all participating partners equal treatment in all trade transactions, including the reduction or elimination of tariffs on most imports and exports from the other countries. Some of the tariff reductions and eliminations were phased in over a number of years. Consistent with campaign promises, the Administration of President Trump initiated the NAFTA renegotiation talks during 2017, calling for a “more-fair trade agreement” with Canada and Mexico. The Trump administration has threatened to initiate procedures to withdraw from NAFTA, if there are not meaningful negotiations “to improve and modernize” the NAFTA trade agreement. After several rounds of discussion among the three countries, it does not appear that any agreement to NAFTA revisions will occur

anytime soon, which could increase the potential for a U.S. plan to withdraw from NAFTA. Much of the contention during the negotiations has been on nonagriculture related issues such as the auto and manufacturing industr y, labor and currency issues, and varied trade requirements on certain goods and services. Discussions on agrelated products have focused on dairy products with Canada, fresh produce with Mexico, sugar, and energy production. Critics of NAFTA have pointed to the negative trade balance that the U.S. has with Canada and Mexico. Based on 2015-2016 U.S. Census data, following were the total annual trade figures for all products among the NAFTA trading partners: • U.S. to Canada --- $246 billion • Canada to U.S. --- $255 billion • U.S. to Mexico --- $212 billion • Mexico to U.S. --- $271 billion • Canada to Mexico --- $6 billion • Mexico to Canada --- $14 billion

The U.S. agriculture industry has shown a trade surplus in every year since 1959. In a 5-year period from 2012-2016, U.S. ag expor ts have averaged approximately $140 billion per year, while ag imports over the same period have averaged about $110 billion annually. Ag exports account for nearly 50 percent of utilization of U.S. soybeans, wheat, and rice production, 70 percent of cotton production, and 25 percent of pork production. USDA estimates that that every dollar of ag exports generates $1.27 of economic activity in the United States. USDA also estimates that every $1 billion of agriculture related exports supports approximately 8,000

22 • FEBRUARY 2018 • MN Valley Business

jobs, so based on that estimate, the current total level of ag exports supports over 1 million jobs in the U.S. U.S. agriculture exports to Canada and Mexico have grown in the past 23 years from below $9 billion per year the before the NAFTA agreement to over $38 billion per year in 2016. Trade with Canada and Mexico accounts for about 28 percent of the total U.S. ag exports, as well as 39 percent of the total U.S. ag imports. In 2016, U.S. ag exports to Canada were valued at just over $20 billion, with leading export products being grains and feed, animal products, fruits and vegetables, oilseeds, and horticulture products. U.S. ag exports to Mexico in 2016 totaled nearly $18 billion, with the top export products being animal products, grain and feed, and horticulture products. Mexico is either the largest or second largest export destination for U.S. beef, pork, poultry, wheat, corn, and dairy products. Based on the USDA World Supply and Demand Estimates report in December of 2017, just over 2.2 billion bushels of soybeans, or about 50 percent of the total 2017 U.S. soybean production is expected to be exported during the 2017-18 marketing year, with China being the largest customer for U.S. soybeans. The U.S. accounts for approximately 40 percent of the international corn trade, with Japan being largest importer of U.S. corn, followed by Mexico. USDA is estimating total U.S. corn exports for 2017-18 at just over 1.9 billion bushels, which is about 13 percent of the total U.S. corn production in 2017. U.S. wheat production in 2017 was 1.7 billion bushels, with about 56 percent of that total expected to

be exported to foreign countries. What does U.S. agriculture and the overall U.S. economy have “at-risk”, if the U.S. were to suddenly withdraw from the NAFTA trade agreement? Following are some highlights from a letter that was drafted to officials in the Trump Administration by more than 70 agriculture and trade organizations on the potential risks and impacts of the U.S. withdrawing from NAFTA: • Leaving NAFTA would result in an estimated loss of 50,000 jobs in the food and agriculture industry, as well as a reduction of $13 billion in the annual U.S. GDP, due to ag industry losses. • An Iowa State University study estimated that ending the NAFTA agreement would decrease annual U.S. pork production by about 5 percent, resulting in a negative economic impact of about $1.5 billion. Canada and Mexico account for nearly 40 percent of the export volume for U.S pork products. • Similarly, exports of U.S. beef products to Mexico and Canada totaled approximately $1.7 billion, accounting for about 27 percent of U.S. beef exports in 2016. The U.S. also typically ships more than $1 billion per year in dairy products to Mexico. 8 grain analysts predict that leaving NAFTA would • Most also lower U.S. grain prices in the coming years, which 6 potentially increase the annual cost of government could farm program payments, and other federal farm 4 assistance programs. • Based on a recent report released by the American Farm 2 Bureau Federation, the agriculture economy in many Midwestern States would be hit particularly hard by withdrawing from NAFTA. The study showed that 0 J F Mof A M J to J Canada A S and O Mexico N D in the percentage ag exports 2016 were as follows: Minnesota (48%); Iowa (49%); Nebraska (45%); Wisconsin (52%); both North and South Dakota (73%). All these States would likely suffer serious 8 economic impacts. 100 negotiations, including the current NAFTA Trade 6 negotiations, are often very complex, and usually take 85 years 4to develop. Many times, it is not just economic issues70that are difficult to negotiate with other nations, but also labor, environmental, and social issues that may vary 552 the negotiating countries. It is probably far too among early to predict dire consequences to the U.S. agriculture 400 industry Jfrom F any M renegotiation A M J J ofA trade S Odeals N under D NAFTA, 25 or with any other country. We should also F there M AareMpossibilities J J A forSnewO trade N deals D rememberJ that to be developed between the U.S. and other countries. However, we need to recognize that the agriculture industry, and ultimately farm operators and rural communities, have a lot to gain or lose, depending on the 100 outcome of the current NAFTA negotiations. Most folks in 85 the agriculture industry and leaders in most Midwestern States 70 would like to see NAFTA “tweaked and modernized”, rather than eliminated.

Agriculture/ Agribusiness Corn prices — southern Minnesota 8

Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com

$3.01

Source: USDA

Soybean prices — southern Minnesota

(dollars per bushel)

— 2016 — 2017 8 20 100 16 6 85 $9.45 12 470 8 255 $8.79 4 40 0 0 J F M A M J J A S O N D 25 J F M A M J J A S O N D J F M A M J J A S O N D Source: USDA

Iowa-Minnesota hog prices 20 100 25 16 85 22 12 70 19 8 55 16 4 40 13 0 J F 25 10 J F J F Source: USDA

$69.78

22 19 16

M M M

A M J A M J A M J

Milk prices

J J J

$53.85 A S O N D A S O N D A S O N D

Minimum prices, class 1 milk Dollars per hundredweight

— 2016 — 2017 25 22

$18.68

$15.44 J

20 25 16 22 12 19 8 16 4 13 0 J 10

185 pound carcass, negotiated price, weighted average

— 2016 — 2017

12 8

$3.03

(dollars per bushel)

— 2016 — 2017

Source: USDA. Based on federal milk orders. Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

C. Sankey

MN Valley Business • FEBRUARY 2018 • 23

13 10

Construction/Real Estate Residential building permits Mankato

Commercial building permits Mankato

18000

12000

- 2016 - 2017 (in thousands)

$5,255

13500

10000

$2,968

8000

2000

Source: City of Mankato

Source: City of Mankato Information based on Multiple Listing Service and may not reflect all sales

Existing home sales: Mankato region - 2016 - 2017 (in thousands)

Median home sale price: Mankato region - 2016 - 2017 (in thousands)

250

300

206

240

$165,000

200

192

$161,250

150

180

100

120

0 J

Source: Realtors Association of Southern Minnesota

Source: Realtor Association of Southern Minnesota

Interest Rates: 30-year fixed-rate mortgage

Includes single family homes attached and detached, and town homes and condos

Housing starts: Mankato/North Mankato

— 2016 — 2017

- 2016 - 2017

5.5

5.0

4.5

3.9%

4.0

3.5 3.0

$1,279

4000

4500

$1,028

6000

9000

4.0% O

10 N

Source: Freddie Mac

Source: Cities of Mankato/North Mankato

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24 • FEBRUARY 2018 • MN Valley Business

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Gas Prices

Gas prices-Mankato

— 2017 — 2018

54 43 $2.32

32 21 10 0

$2.29

Gas prices-Minnesota

— 2017 — 2018

5 54 $2.40

43 32

$2.31

21 10

C. Sankey

Source: GasBuddy.com

Stocks of local interest

Dec. 5

Jan. 9

Percent change

Archer Daniels

$40.98

$40.05

-2.3%

Ameriprise

$164.08

$173.92

+6.0%

Best Buy

$61.32

$69.34

+13.0%

Crown Cork & Seal

$59.66

$56.31

-5.6%

Consolidated Comm.

$12.59

$12.38

-1.7%

Fastenal

$53.43

$53.58

+0.3%

General Growth

$23.59

$23.18

-1.7%

General Mills

$57.22

$58.89

+2.9%

Itron

$66.15

$70.25

+6.2%

Johnson Outdoors

$70.50

$61.59

-12.6%

$238.05

$241.00

+1.2%

Target

$61.58

$69.41

+12.7%

U.S. Bancorp

$54.65

$55.99

+2.5%

Winland

$1.35

$1.50

+11.0%

Xcel

$51.02

$46.50

-8.9%

principleD We are dedicated to finding the right commercial property solution for your business. PASSION. INSTINCT. DRIVE IT’S WHAT SEPARATES US FROM THE PACK.

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C. Sankey

MN Valley Business • FEBRUARY 2018 • 25

Minnesota Business Updates

■

Public Record Media reports that DEED says it does not hold the full bid and Greater MSP has a nondisclosure agreement with Amazon. In turn, neither entity provided the document of the bid despite requests made by St. Paul-based nonprofit Public Record Media. Other states were more transparent in their bids.

■ Holiday selling some stores Holiday stores, which in 2017 sold its fuel-and-food business to a larger Canada-based operator of convenience stores, will sell 10 of its Minnesota and Wisconsin outlets, including one in St. Peter, to preserve competition in those markets, under an order approving the transaction by the Federal Trade Commission, according to the Star Tribune. The sale will settle FTC charges that the acquisition of Holiday Companies would violate federal antitrust law. The FTC’s settlement with the Canadian operator “preserves competition in 10 local markets within the Minnesota cities of Aitkin, Hibbing, Minnetonka, Mora, St. Paul, and St. Peter; and Hayward, Siren, and Spooner in Wisconsin.

■ Huge difference in hospital costs Minnesota Health Department researchers found huge price swings at Minnesota hospitals for common medical procedures. For example, the prices paid for a knee replacement ranged from $6,186 to $46,974. Department analysts looked at the charges private health insurers paid for that and three other common procedures over the year ending in June 2015, according to MPR. The low price for a cesarean section baby delivery was $4,693 and the high price was $22,831 — a nearly fivefold difference. Carolyn Pare, CEO of the Minnesota Health Action Group, a coalition of public and private employers who buy health insurance, said businesses need more information on costs so they can better shop for health insurance.

■ How state hid Amazon bid The State of Minnesota has reportedly concealed its bid for Amazon’s second headquarters by outsourcing it to a private business group. According to Public Record Media, Minnesota’s Department of Employment and Economic Development outsourced the process of submitting the proposal to Greater MSP, which is a business promotion nonprofit. The nonprofit, which has representatives of many of the state’s top companies on its board, submitted the bid to Amazon on the state’s behalf.

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major November Industry 2016 2017 Construction Manufacturing Retail Services Total*

705 171 50 194 1,120

Local non-farm jobs Percent change ‘16-’17

655 228 54 204 1,141

2800

-7.1% +33.3% +8.0% +5.2% +1.9%

122000

Construction 122000 122000 Manufacturing Retail 111000 Services 111000 Total*

12,691 3,395 1,215 3,250 20,551

12,356 2,534 1,239 3,181 19,310

2100 1400

111000

700 100000

Minnesota initial unemployment claims November 2016 2017

3500

133000

Services consist of administration, educational, health care and social assistance, food and other miscellaneous services. *Categories don’t equal total because some categories not listed.

Major Industry 133000 133000

- 2016 - 2017 131,308 126,882

Nine-county Mankato region

Minnesota Local non-farm jobs (in thousands)

Percent change ‘16-’17

8000 3500 3500 6000 2800 2800 4000 2100 2100

-2.6% -25.4% +2.0% -2.1% -6.0%

Services consist of administration, educational, health care and social 100000 assistance, food andJ otherF miscellaneous services. M A M J J A S O 100000 J don’t F equal M total A because M Jsome Jcategories A not S listed. O N *Categories

26 • FEBRUARY 2018 • MN Valley Business

- 2016 - 2017 2,986 2,874

2000 1400 1400

700

700 0 J F M A M J J A S O N D 0 J F M A M J J A S O N D J F M A M J J A S O N D

200000 150000 100000 50000 0

■ Cargill cuts ties to oil supplier

■ Tax bill effects on clean energy

Minnesota-based Cargill has suspended business with a major Guatemalan palm oil supplier that has been accused of human rights violations and environmental degradation. Cargill is one of the world’s largest traders of palm oil, which is used in many foods and in cosmetics. The Star Tribune reports Cargill suspended business with the REPSA company. Cargill says it will reassess the relationship if REPSA shows a commitment to improvements.

Clean energy proponents are considering the potential impact of President Trump’s tax overhaul on credits that have until now been used to support and improve renewable energy resources. While the changes that were signed into law last week preserve wind and solar tax credits, it’s unclear if they’ll continue to be effective, Michael Noble, executive director of Fresh Energy, told the Associated Press. “It’s yet to be seen whether renewable energy tax credits are still going to be valuable and help projects get 133000 Noble told Minnesota Public Radio. done,” Gregg Mast is the executive director of Clean Energy Economy Minnesota, a nonprofit that represents clean 122000 energy businesses. Mast said the uncertainty the new tax law creates is not good for business. He said he’s working 111000 with a congressional delegation and business leaders to better understand the impact of the measure on the renewable energy industry and energy efficiency.

■ Minn. named best-run state

Minnesota is the best-run state in the nation, according to a study from USA Today. The study cites Minnesota’s strong fiscal management, low unemployment and poverty rates, above-average median household income, and the state’s nearly perfect credit rating. 100000 J Since ranking 10th in 2012, Minnesota has consistently climbed in the rankings under the same study, including ranking second last year. The study notes that Minnesota’s strong economy and sound fiscal management have allowed the state to save 3500 133000 more 8000 133000— approximately 10 percent of the annual budget 3500 — which is more than most other individual states, and 2800 above the average of all states’ savings, which is 8 2800 6000 122000 2100 122000 The study also cites Minnesota’s near-perfect percent. 2100 credit rating from Moody’s. 4000 1400 111000

111000 100000 J F

J M

M J

J A

J S

A O

1400 2000

S N

O D

8000 6000

3,242 3,925

4000

0 F F

J F M A M M A M J J M A M J J

J A A

J S S

A S O N O N D O N D

80,545 96,182

100000 50000 J

1400 700 0

100000 50000

0 0 J F JM

F M A M AJ FA M

M MJ

J JA

J JS

A AO

S N S

O D O

N N

D D

(includes all of Blue Earth and Nicollet Counties) 200000 150000

November

100000

0 F

150000

700 2000 J

2100

200000

J M

F M A A M J

M J

J A

2016

2017

2.5% 58,835 1,519

1.9% 60,489 1,160

J S

A O

S N

O D

Unemployment rates Counties, state, nation County/area

- 2016 - 2017

150000

Unemployment rate Number of non-farm jobs 50000 50000 Number of unemployed

100000

200000

2800

Mankato/North Mankato Metropolitan statistical area

150000

2000

700 0 J 0 J

D 0

200000

Minnesota number of unemployed

- 2016 - 2017

Nine-county Mankato region

4000 2100

Employment/Unemployment

F M A A M J

Local number of unemployed 8000 3500 6000 2800

1400

700

100000

3500

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan Minneapolis/St. Paul Minnesota U.S.

November 2016

November 2017

2.6% 3.3% 4.0% 4.0% 3.3% 2.4% 3.4% 3.5% 3.9% 3.3% 3.4% 4.4%

2.0% 2.4% 3.0% 3.5% 2.6% 1.7% 2.3% 2.9% 3.2% 2.4% 2.6% 3.9%

Source: Minnesota Department of Employment and Economic Development C. Sankey

initial•unemployment MN Minnesota Valley Business FEBRUARY 2018 claims • 27

Sponsored by the Carl & Verna Schmidt Foundation

A recession warning signal is flashing; investors carr y on By The Associated Press

ne of Wall Street’s traditional warning signs for a recession is flashing yellow, and nobody seems to care. The signal lies within the bond market, where Treasurys maturing in a couple years have been paying nearly as much in interest as bonds that take a decade to mature. The gap between the two is usually much wider. Market watchers call this phenomenon a “flattening yield curve,” and it’s often been a harbinger of slowing economic growth, if not a recession. Earlier this month, a 10-year Treasur y was offering just 0.53 percentage points more in yield than a two-year Treasury. The last time the spread was so thin was in October 2007. Two months later, the Great Recession began. “The curve normally is the ultimate crystal ball portending recession,” said Rich Taylor, client portfolio manager at American Century Investments. “It tells us what the economy will do. And a curve this flat would suggest we have an impending recession.” Yet Taylor and most of Wall Street say that technical factors are making the yield curve a less reliable indicator this time around, and they don’t see a recession looming on the horizon, at least not in 2018. Even Federal Reserve chair Janet Yellen echoed the sentiment last week. Why do so many believe this time is different? Taylor said the curve is “flattening for different reasons.” With the economy expanding and unemployment low, the Fed has raised short-term rates three times, after doing so just twice in the prior 10 years combined. The yield on the two-year Treasury has climbed to nearly 1.85 percent, up from from 1.25 percent at the end of 2016.

28 • FEBRUARY 2018 • MN Valley Business

But longer-term interest rates, which the Fed has less control over, have not followed suit. The 10-year Treasury yield is close to where it ended last year, at 2.50 percent compared with 2.47 percent. If the trend continues and short-term rates go higher than long-term rates, it would create what market watchers call an “inverted yield cur ve.” That would be a flashing red light on the warning system because it can indicate the bond market is expecting weak economic growth. A rule of thumb says a recession would follow in about a year, and an inverted yield cur ve preceded each of the last seven recessions, according to the Cleveland Fed. By Stan Choe Longer-term rates have been stuck in place for a number of reasons. Modest wage growth in the U.S. hasn’t been enough to spark inflation, which remains stubbornly low. Foreign buyers have jumped into 10-year Treasurys because bonds overseas are paying nearly nothing in interest, and in many cases actually have negative yields. That keeps a lid on rates and in turn makes the U.S. Treasury yield curve flatter than it would otherwise be. “The flattening of the yield curve today is going to have a different impact on growth and corporate health than it has in the past,” Browne said. “We don’t think that even an inversion of the yield curve, while it certainly would make headlines and people would raise eyebrows, would have the same impact in this cycle as it would historically.” Of course, if Wall Street is underestimating the predictive power of the yield curve this time around, it may be a while before investors are able to tell. Economists don’t even say a recession has begun until months after its start. MV

Sponsored by the Carl & Verna Schmidt Foundation

Tech is taking over our lives, and

our 401(k) By Stan Choe | Associated Press

s technology takes over more of people’s daily lives, it’s also taking over ever-bigger chunks of their retirement accounts. Surging prices for technology stocks around the world mean the industry is making up a larger proportion of global markets. In the United States, Apple, Google’s parent company and other tech companies account for nearly 24 percent of the Standard & Poor’s 500 index. A decade ago, they made up less than 17 percent of S& P 500 index funds. The makeover is even more dramatic overseas, where ascendant companies like China’s Tencent and Alibaba have quickly stormed into the ranks of the world’s largest. As a result, investing in many stock funds has increasingly become a bet on technology companies. That could be reassuring for investors given how tech companies have been able to deliver big profit growth for years, even when global economic growth was only middling. But it’s also a concern for skeptics who see tech stocks as overly pricey and primed for a pullback. The worries came into starker relief in recent weeks, after tech stocks tumbled more than the rest of the market. To see how the tech takeover is changing investing, consider mutual funds and exchangetraded funds that focus on stocks from emerging markets. These kinds of funds offer access to growth in China and other developing economies. A decade ago, these funds were dominated by hulking telecoms, energy companies and the commodity producers that feasted on fast growth in construction and factory activity. The shift toward technology stocks and away from oldeconomy companies is a result of the rise of emerging markets’ middle classes, which are increasingly going online and also benefiting from the world’s voracious demand for technology, said Patricia Ribeiro, senior portfolio manager at the American Century Emerging Markets fund and the American Centur y Emerging Markets

Small Cap fund. “It’s a sign of the times,” she said. “In the emerging space, it’s a story about the consumer.” Ribeiro has 33 percent of her Emerging Markets fund invested in technology stocks, more than any other sector. Some of her recent acquisitions include Momo, a Chinese dating app, and AAC Technologies, a Chinese supplier for Apple. A decade ago, the portion devoted to tech was just 12 percent. The fund has ranked in the top 8 percent of its category for returns over the last five years, according to Morningstar. In the United States, tech stocks in the S& P 500 doubled the gain of the index through the year’s first 11 months. A slump in the sector in recent weeks reminded investors that tech stocks are historically prone to price swings and expensive of late, based on several measures of value. Still, technology companies are in the midst of reshaping several industries, from retail to media, and proponents see even more growth ahead. Ken Allen, portfolio manager at the T. Rowe Price Science & Technology fund, calls it “being on the right side of change.” Plus, the pace of adoption is accelerating. It took Microsoft’s Windows nearly 26 years to get to 1 billion users. For Google’s Android operating system, it took less than six years. A big difference between tech companies of today and the last time the industr y was such a dominant force in the market during the late 1990s is how much profit they’re making. Tech companies are not only making money, they’re delivering some of the strongest gains as customers continue to snap up iPhones and click on ads in Facebook. Tech stocks in the S& P 500 reported 21 percent growth in earnings per share last quarter, triple the rate of the overall index. MV

MN Valley Business • FEBRUARY 2018 • 29

MORE THAN MARKETING. Aligning your business with Greater Mankato Growth through our menu of marketing opportunities positions you to reach more than 1000 businesses and thousands of people in the Greater Mankato region. Whether an ad in the eNewsletter or a top level sponsor - we offer a variety of opportunities to fit all types of businesses. Your investment not only helps to advance your business but also supports our many facets of work, from hosting high profile events to linking businesses with critical resources and information (to name a few).

@ @@ @@ @

MEMBER ENEWS ADVERTISING Promote your business and special offers in the Member-2Member section of GMG eNews.

MEMBER MAILING LIST Purchase an up-to-date list with mailing addresses of all current member businesses or representatives.

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ONLINE BUSINESS DIRECTORY LISTINGS & ADS Greater Mankato Online Business Directory is featured throughout our website.

Greater Mankato Growth

online online online coupons coupons coupons visitors visitorsvisitors ONLINE COUPONS MEMBER NEWS guide guide guide Reach the audience you want Post your business news releases, online

online with electronic coupons coupons and offers! Also featured on Visit Mankato website.

visitors visitors visitors guide guide guide

employee news and/or recognitions as well as articles or other news featuring your business on greatermankato.com!

visitors guide

MEMBER REFERRAL CREDIT Refer a new business and receive $I00 off your next year’s membership. Business must mention your referral.

TO SIGN UP FOR ANY OPPORTUNITY PLEASE VISIT:

greatermankato.com/marketing VISITORS GUIDE 25,000 Guides to Visiting and Living in Greater Mankato are published for 2018 and distributed to visitors and relocating residents.

30 • FEBRUARY 2018 • MN Valley Business

Not a Greater Mankato Growth Member? Join Today! Contact Karen Toft at ktoft@greatermankato.com or 507.386.6643

SAVE THE DATE Greater Mankato Growth, Inc.

ANNUAL MEETING Join Greater Mankato Growth, Visit Mankato, City Center Partnership and GreenSeam as we proudly share our accomplishments of 2017 as well as our goals for 2018 and celebrate our 150th anniversary at this years Annual Meeting.

March 8, 2018 11:30 am - 1:00 pm Minnesota State University, Mankato Centennial Student Union Ballroom

The Greater Mankato Young Professionals program gives professionals ages 21-40 an opportunity to engage with one another while focusing on learning, socializing and community engagement.

• • • • •

Monthly social events Monthly professional development sessions Access to mentoring opportunities Networking luncheons Opportunities to serve on committees

24 + EVENTS PER YEAR

JOIN TODAY Annual participation in the program is just $25/month for Greater Mankato Growth members, Engaged level or higher, and includes all activities and events. Copper through Diamond level members may also receive credits towards the program fee.

MN Valley Business • FEBRUARY 2018 • 31

Greater Mankato Growth

ANNUAL PARTICIPATION INCLUDES

RIBBON CUTTING

EXPANSION PROJECT

River Hills Pet Hospital 340 Saint Andrews Drive, Mankato

Mayo Clinic Health System 1025 Marsh Street, Mankato

Cavalier Calls on the Newest Greater Mankato Growth Members

Bronzers Tanning & Boutique 201 North Victory Drive, Suite 327, Mankato facebook.com/Bronzerstanningandboutique

Engage Consulting P.O. Box 1191, Mankato engagecommunityleadership.com

Inspire Health & Wellness 1615 North Riverfront Drive, Mankato inspirehealthcoach.us

Mankato Area Home Checkers 22000 510th Avenue, Lake Crystal mahomecheckers.com

Office Depot 2020 Adams Street, Mankato officedepot.com

Growth in Greater Mankato

Greater Mankato Growth

Cavaliers

As part of the Greater Mankato Growth Talent Initiative, GMG is publishing a guest blog series highlighting the programs, tools and resources that are available in our marketplace. This series can serve as a catalog or library for businesses to address workforce issues.

VISIT THE GMG BLOG AT GREATERMANKATOBLOG.COM A CHAMBER OF COMMERCE AND ECONOMIC DEVELOPMENT ORGANIZATION

LET’S GET SOCIAL • CONNECT WITH US! @greatermankatogrowth

@greatermankato

@greatermankatogrowth

32 • FEBRUARY 2018 • MN Valley Business

Greater Mankato Growth

@gmgmankato

5:00 - 7:00 pm January 9 February 6 March 6 April 3 May 1 June 5 July 10 August 7 September 4 October 2 November 6 December 4

River Hills Hotel Hillcrest Rehabilitation Center Open Door Health Center Gislason & Hunter Prime Your Business Farrish Johnson Law Office Presidio Maschka, Riedy, Ries & Frentz Law Firm Stifel Prime Your Business Children’s Museum of Southern Minnesota J. Longs for Men

7:30 - 9:00 am January 17 February 21 March 21 April 18 May 16 June 20 July 18 August 15 September 19 October 17 November 14 December 19

JP Fitness Minnesota State University, Mankato Strategic Partnership Center Alpha Media Mankato Mayo Clinic Health System Mankato Golf Club Cambria Gallery - River Hills Mall iSpace Environments LIV Aveda Salon & Spa Minneopa Golf Club MRCI Affinity Plus Federal Credit Union Nesbit Agency

2018 Business After Hours Sponsored by:

November Business After Hours hosted by Mayo Clinic Health System

December Business Before Hours hosted by Laurels Peak Rehabilitation Center

Business After and Business Before Hours gives representatives from GMG member businesses at the Engaged Level or higher an opportunity to get together with one another to exchange ideas and learn about each other’s businesses. For more information on these and other member events, visit greatermankato.com/events.

MN Valley Business • FEBRUARY 2018 • 33

Greater Mankato Growth

December Business After Hours hosted by Courtyard by Marriott, Mankato

November Business Before Hours hosted by Old Main Village

WHAT DOES LEISURE TRAVEL MARKETING LOOK LIKE in 2018? By: Carrie Kijenski, Marketing and Communications Director

isit Mankato is taking a different focus with its 2018 marketing strategies for leisure travel. This year, we will be promoting Greater Semi-annual Winter Packages Mankato through Seasonal Campaign seasonal campaigns to drive traffic during specific time frames, in addition to a other areas of focus.

Greater Mankato Growth

The seasonal campaigns will focus on three main areas: semi-annual winter packages, spring/summer packages and Gather in the GreenSeam, which takes place in September and October. For each seasonal campaign, there are three primary categories based on our community assets and the brand experience we are trying to promote. We promote ourselves as an adventure destination, being on the water and trail system, as being family-friendly and as rich in arts and culture. Within each of these categories, we will focus on specific target markets including girlfriend getaways, men and male college students, families, moms with kids and millennial. Each category might have a few different targeted segments that are a specific fit. For instance, the category of adventure might focus on the target markets of girls’ getaway, men and male college students, and family fun. Through the use of a variety of marketing channels, we are able to do specific targeting to these predetermined markets. We are becoming Gather in the GreenSeam aware of new tools Seasonal Campaign that can help us reach these markets. Google can help find similar audiences while Facebook can help us look at who is getting our e-newsletter and target the same type of audience. Then with the help of analytics, we can determine which methods are performing the best and make decisions on how we need to alter our campaigns.

34 • FEBRUARY 2018 • MN Valley Business

Another focus will be public relations and earned media. This includes bringing more travel writers to town, working with Explore Minnesota Tourism and building those relationships and being able to get on the itineraries of influencers they are sending around the area. Influencers’ word of mouth comes across as authentic and organic, therefore making it more effective. Visit Mankato is currently developing a formal process for working with travel writers and has already brought two to Mankato in the last couple months. The articles and blogs that have been written have proven success in driving traffic to the business and attractions mentioned. For a list of the articles and blogs visit visitgreatermankato.com/press/news-archive/. In addition to the other marketing strategies, Visit Mankato consistently promotes our events and brand assets via social media on a daily basis. Events are Learning at the Children’s often the first point Museum of Southern Minnesota of entry into our community in which we can get a bounce-back visit. Visit Mankato promotes many major events like Ribfest, River Ramble, Mankato Marathon and Kiwanis Holiday Lights. While people are in town, we are providing information to get them to explore and hopefully capture a return visit. Strategies are consistently evolving so we are keeping an eye on the future to make sure we are conducive to change. While our brand isn’t changing, Mankato Marathon the way people want to receive information and are influenced is constantly evolving so we need to be nimble and implement strategies that are most effective.

On Saturday, November 25, 2017, hundreds of shoppers supported local businesses during Shop Small in the City Center promotion. More than 40 City Center businesses participated in this year’s passport program. Small Business Saturday is a national promotion to recognize and support the small businesses that creative vibrancy in local economies.

Whimsy and Weathered

Vagabond Village

The Jewelry Bench by Mary

MN Valley Business • FEBRUARY 2018 • 35

Greater Mankato Growth

Julee’s Jewelry

» C OME JU DGE

for Yourself.

GOLFERS FROM AROUND THE WORLD COME TO CHALLENGE THE JUDGE and the two other golf courses in Prattville at RTJ Capitol Hill. Bring your clubs and come take on Judge hole number 1, voted the favorite hole on the Trail. Complete your day in luxury at the Marriott and enjoy dining, firepits and guest rooms overlooking the Senator golf course. With the Marriott’s 20,000 square feet of meeting space, 96 guest rooms and luxurious Presidential Cottage combined with three world-class golf courses, business and pleasure can definitely interact in Prattville.

THE ROBERT TRENT JONES GOLF TRAIL AT CAPITOL HILL offers three magnificent 18-hole championship golf courses. The Marriott Prattville is part of the Resort Collection on Alabama’s Robert Trent Jones Golf Trail. Visit www.rtjgolf.com or call 800.949.4444 to learn more.

Recently, Mankato has seen a rise in the number of entrepreneurial activity and start-ups. Seeing a need, the Minnesota State University, Mankato College of Business Center for Innovation & Entrepreneurship at sought to convene and bring 1MC to the community. Bringing the event to life, more than 12 business and community leaders serve on the 1MC Community Organizations group. The group launched the first event in November 2017 at the CIE. The CIE serves as an ideal space to nurture and bring out innovative thinking and ideas; paired with its location in downtown Mankato, its surrounded by locally owned businesses fueled by creative owners and operators, adding to the synergistic energy of the event. “If you want to create an ecosystem of innovation, this is a key ingredient. There’s a lot of things that communities should have in place for entrepreneurs to thrive, from philanthropic thinking to mentors and even an attractive geography where entrepreneurs want to live. You also need to have an incubator or a hub to connect everyone. Here, in Mankato, we are creating this ecosystem for

entrepreneurs. We want to encourage individuals to step up and take their lives into their own hands by starting a business, and we want them to do that here,” said Flannery. 1MC acts as a magnet, helping connect thousands of creators, doers and dreamers. It creates aspiration and ambition. The movement begins to connect us with communities that are also supporting entrepreneurs. “It puts Mankato in the same frame as other bustling entrepreneurial communities like Boulder and Charlottesville. It’s all part of a learning culture,” she said. One might have heard of the ripple effect, and that is what a movement such as 1MC places in any community it’s in. “It presents limitless possibilities, but you have to show up to be able to hear it and see it, and to see the contribution. Take this one step, become part of the movement, do it often, and it will snowball,” Flannery added. “1MC is open to the public and is no cost to attend, did we mention free coffee? My hope is that people across the community show up to witness and grow along with their peers” stated Flannery. 1MC takes place every first Wednesday of every month, from 8:30 – 9:30 a.m. at the CIE, 424 North Riverfront Drive, Mankato. Learn more or apply to present at 1millioncups.com/mankato.

MN Valley Business • FEBRUARY 2018 • 37

Minnesota State University, Mankato College of Business

Based on the notion that entrepreneurs discover solutions and network over a million cups of coffee, the Kauffman Foundation brought to life the 1 Million Cups program starting in Kansas City in 2012. What started as a small gathering in Kansas City, grew into a movement of more than 100 locations nation-wide. 1MC is a nonprofit program created to give aspiring entrepreneurs, or anyone with a business idea, a space to pitch that their vision. At the end of every presentation, the entrepreneur engages in an open panel with the audience, getting real feedback and connecting with vital resources to take their ideas to the next level.

HAND OR WRIST ISSUES?

Don’t let arthritis, carpal tunnel or a fracture limit your potential. Regain functionality in your hand or wrist by visiting our orthopedic experts in Mankato.

Mayo Clinic Health System in Mankato Call 1-877-412-7575 to schedule an appointment. mayoclinichealthsystem.org

MN Valley Business • FEBRUARY 2018 • 38

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