Mnvalley 5 14 by Free Press Media

Sandy PortnerQuiring (left) and Kelly Murphy own Sisters Bridal & Tux in New Ulm. Photo by John Cross.

Marriage makers

From florists to dress shops, bridal business owners stay atop trends Also in this issue Gerringâ&#x20AC;&#x2122;s Car Wash Dranttel Sales & Service FiveFriendsFood

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F E A T U R E S May 2014 • Volume 6, Issue 8

From burlap country chic to exotic Caribbean destinations, those in the wedding business need to keep up with trends and pay attention to details.

Jean Gansen’s parents started Dranttel Sales and Service on their family farm in 1966. Today the family business has a broad array of services and outdoor products.

Five friends who graduated from Mankato West High School are busy making and selling fresh, nutritious bars under the FiveFriendsFood brand name.

Jeff Johnson started working for Russ Gerring, owner of Gerring’s Car Wash in 1979 and purchased the business in 1995. Today he and his son operate the corner car wash.

MN Valley Business • may 2014 • 5

■ May 2014 • VOLUME 6, ISSUE 8 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Pete Steiner Kent Thiesse Heidi Sampson Heather Thielges PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross PAGE DESIGNER Christina Sankey ADVERTISING Ginny Bergerson MANAGER ADVERTISING sales Jen Wanderscheid Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Denise Zernechel DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6336, or e-mail mankatomag@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................................7 ■ Business and Industry trends.........9 ■ Minnesota Business updates....... 10 ■ Business Commentary................. 12 ■ Construction, real estate trends.. 29 ■ Agriculture Outlook...................... 30 ■ Agribusiness trends..................... 31 ■ Job trends..................................... 32 ■ Retail trends................................. 33 ■ Greater Mankato Growth.............. 34 ■ Greater Mankato Growth Member Activities ....................... 36

6 • may 2014 • MN Valley Business

From the editor

By Joe Spear

Households build the boom town

he greater Mankato area lies on the cusp of what appears to be a significant change in the economic, social and maybe even political landscape. The economic growth of the region has been well documented in Free Press and Minnesota Valley Business reports for the last couple of years. Our report in January showed the area likely to have a record year in building and construction with more than $128 million in projects on the books. That was before the announcement of Mills Fleet Farm locating in Mankato, another multi-million development. Developers are also planning a handful of large apartment complexes. The earlier report also doesn’t count the road projects like Highway 22 roundabouts, the widening of old Highway 14 and the continuing work on a multi-year $70 million plus project on new Highway 14 from Nicollet to Owatonna. It will be a good time to be in the road construction, equipment maintenance or sales business. The region’s population growth has been well documented at 21 percent over the last 10 years, six times the rate of the previous decade. Enrollments at Mankato schools are growing so fast that voters approved another $70 million school bond that will build a new middle school and expand a score of others. Even smaller regional towns like St. Peter and Cleveland are considering building new schools. Jobs will come with the building projects. The Wal-Mart distribution center breaking ground this spring is expected to hire 300 to 500 workers. Those jobs are added into an economy with an unemployment rate around 4 percent, documented as one of the lowest for cities this size in the country. One can see how Mankato is changing economically. The job growth has been solid, the best of many or all metro areas in the state. All of this should bode well for the wedding business, and the closely related “household formation” business. We document trends in the wedding

business in this month’s cover story, but the important fact to remember is that couples getting married spend an average of $22,000 on their weddings. Wedding dresses can be in the thousands of dollars. Then there are hundreds of dollars spent on flowers and food and entertainment. Even more if a destination wedding is considered. The economy benefits when people get married. The married couple forms what the Census Bureau calls a “household.” That then drives the market for appliances, furniture, clothing and even vehicles. Two people acting together as a married household often tend to spend more money than a single household would, not just because there are two of them, but because there are more discussions about “buying stuff.” One needs a new couch, the other a new shotgun. Compromise is struck. The wallets open. These occupiers of households also tend to live next to other households where they have an opportunity to discuss the merits of their buying decisions with their neighbors. Merchants do well in cities where lots of people talk to each other about buying things. Households are the key measure of the growth of an area. And by all measures, the Mankato area seems poised to grow a lot of households. But with household growth, competition will increase. Ever since Mankato became a Metropolitan Statistical Area, it has shown up on the market research radar for national and international companies. Robust household growth will show up as well and the competition for everything from furniture to autos may ramp up. We can see signs of this already occurring. There’s talk of a second WalMart. Seemingly distant franchises are now calling Mankato home and they’re doing well doing business here. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@mankatofreepress.com

Local Business People/Company News

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Key City Insurance honored

Key City Insurance Agency of North Mankato was named to the 2014 Grinnell Mutual Reinsurance Company President’s Club. Key City ranks among the company’s top 50 agencies and 12 farm mutual companies for outstanding achievement in the insurance profession and for superior performance. President’s Club members provide insight on key insurance and business issues to Grinnell Mutual. ■■■

Enventis donates to Open Door

Enventis presented a $3,000 grant to Open Door Health Center in support of staff education and training. Open Door Health Center provides medical, dental and behavioral-health services to patients who often are without insurance or do not have adequate income to pay for health care expenses. ■■■

Schooff earns designation

David Schooff, president of Coldwell Banker Commercial Fisher Group has earned his SIOR designation. The Society of Industrial and Office Realtors is the leading professional commercial and industrial real estate association.

residents. “The Way to Grow” video highlights the city’s livability, education and health care systems and economic success stories. GMG said the seven-minute video came about as they sought to market the community to businesses and people who have never been here. “These types of videos are normally only afforded to large metros, but not anymore” Jonathan Zierdt, GMG president and CEO said in a statement. “This video is a tool that not only GMG but also the entire business community can use to paint the picture of our vibrant economy and culture to those who may have once passed over the region as an ideal place to locate their business or their family”. The video can be found on the Greater Mankato Growth website: greatermankato.com/way-to-grow. ■■■

Sadaka honored by Minn. Housing

Habib Sadaka of American Mortgage & Equity Consultants was named a Minnesota Housing top producing loan officer at the Platinum Level for the first and second half of 2013. The Minnesota Housing Top Producing Loan Officer Program started in 2009 and awards are given out biannually at three different levels: Platinum, Gold and Silver.

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United Prairie officers honored

Millie Rentmeester, Mary Burlingame and Jessica Wheelock of United Prairie Bank were named Minnesota Housing top producing loan officers for the second half of 2013. Rentmeester and Burlingame received Gold level honors and Wheelock received the Silver level. For 40 years, Minnesota Housing has provided access to safe, affordable housing for low- to moderate-income Minnesotans. ■■■

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Swanson earns CPA

Swanson Hinsch & Co. announced that Alexander Swanson has achieved his Certified Public Accountant designation. Swanson is a graduate of Minnesota State University and a senior accountant for Swanson Hinsch. ■■■

AgStar hires Moriarty

Mulligan honored with Realtor award

Century 21 Real Estate recognized Tamara Mulligan of CENTURY 21 Landmark Realtors with the CENTURY 21 Quality Service Producer award. This national award is presented annually to those CENTURY 21 System members who receive a minimum return rate of 30 percent on their post-transaction client satisfaction surveys, with a minimum satisfaction index of 85 percent. Surveys are e-mailed to all customers immediately after the purchase or sale of a home. Mulligan has 23 years of experience in the real estate industry.

Jim Moriarty

AgStar Financial Services has hired Jim Moriarty as vice president and senior director of industry specialists For the past 20 years he has worked in the farm credit system, focusing on dairy lending across the U.S. He holds a Master’s degree in Agricultural Economics from the University of Wisconsin – Madison. He grew up on and is still involved in a family dairy and grain farm in Central Wisconsin.

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GMG releases marketing video

Greater Mankato Growth has unveiled a new video to be used to promote the area to potential businesses and

MN Valley Business • may 2014 • 7

Farmers Elevator, Traverse honored

The Farmers Elevator Company of Traverse was inducted into the Minnesota Grain and Feed Association Century Club. The MGFA, which represents the grain elevator and feed mill industry in Minnesota, established the Century Club several years ago as a means to recognize grain elevators and feed mills that have been in continuous operation for more than 100 years. ■■■

AgStar reports year-end results

AgStar Financial Services reported year-end after-tax earnings of more than $116 million, resulting in $61.7 million in allocated patronage for 2013. AgStar had earning asset growth of 10.4 percent, a $610 million increase over last year’s results. They issued $100 million in preferred stock. The Series A-1 non-cumulative perpetual preferred stock has a fixed dividend rate for ten years at 6.75 percent, after which dividends will accrue at a floating rate. Agstar distributed $24.7 million in earnings to more than 10,400 eligible stockholders. ■■■

KTOE wins broadcast awards

KTOE radio won four awards in the 2012 Minnesota Associated Press Broadcasters News contest. The station won for best news website, spot hard news, feature and best newscast competing against stations with a similar size newsroom. ■■■

Conley, Meixner promoted at Stifel

Stifel announced that Mary Conley and Kenneth Meixner, financial advisors in the firm’s Mankato Private Client Group office, have been promoted to first vice president/ investments. Conley began her career in the financial services industry in 1992 and has been with Stifel since 2009. Meixner began his career in the financial services industry in 1994 and joined Stifel in 2009.

8 • may 2014 • MN Valley Business

■

Business and Industry Trends

Energy

Summer gas prices: $3.57

During the April-through-September summer driving season this year, regular gasoline retail prices are forecast to average $3.57 per gallon according to the Energy Information Administration. The projected monthly national average should fall from $3.66 per gallon in May to $3.46 in September. Gasoline prices are expected to average $3.45 in 2014 and $3.37 in 2015, compared with $3.51 in 2013.

Oil prices stay flat

The North Sea Brent crude oil spot price in March averaged near $110 per barrel for the ninth consecutive month, while West Texas Intermediate crude oil prices remained flat near $101. New pipeline capacity from the Midwest into the Gulf Coast helped reduce inventories at the Cushing, Oklahoma, storage hub to 27 million barrels by the end of March, the lowest level since November 2009.

Natural gas prices rising

Natural gas working inventories on March 28, 2014, were 0.82 trillion cubic feet, 52 percent below the level at the same time a year ago and 55 percent below the fiveyear average. Henry Hub natural gas spot prices were volatile over the past few months, increasing from $3.95 per million British thermal units on Jan. 10 to a high of $8.15 on Feb. 10, before falling back to $4.61 on Feb. 27, and then bouncing back up to $7.98 on March 4. EIA expects that the Henry Hub natural gas spot price, which averaged $3.73 in 2013, will average $4.44 in 2014 and $4.11 in 2015.

Liquid fuel use up

Total U.S. liquid fuels consumption rose by an estimated 400,000 barrels per day or 2.1 percent in 2013. Motor gasoline consumption grew by 90,000 barrels per day or 1.1 percent, the largest increase since 2006. Stronger-than-expected growth in highway travel during the second half of 2013 contributed to that increase. Distillate fuel consumption increased by 2.5 percent, reflecting colder weather and domestic economic growth. Projected total liquid fuels consumption remains flat in 2014. Motor gasoline consumption remains largely unchanged as the recent strong growth in highway travel slows and continued improvements in new-vehicle fuel economy boost overall fuel efficiency growth.

Economy

GPA estimated upwards

The U.S. Bureau of Economic Analysis revised the fourth quarter 2013 gross domestic product estimate upwards, now showing growth at an annual rate of 2.6 percent, compared to the 2.4 percent growth of the previous estimate. Consumption expenditures (primarily due to increases in health care spending and utilities) and corporate profits came in higher than the previous fourth quarter 2013 estimate. BEA also reported that real personal consumption expenditures rose 0.2 percent from January to February, exceeding the 0.1 percent rise from December to January. Real disposable personal income rose 0.3 percent from January to February. New orders for durable goods rose 2.2 percent over the same time period, reversing declines in the two previous months according to the U.S. Census Bureau. The gain was driven primarily by transportation goods, with a more modest a 0.2 percent monthly gain for other orders. Finally, the U.S. Department of Housing and Urban Development reported that sales of new single-family houses in February were 3.3 percent below the January level, and 1.1 percent below the February 2013 estimate.

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MN Valley Business • may 2014 • 9

Minnesota Business Updates

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■ Brown Printing sold for $100 million Waseca’s largest employer, Brown Printing, is being sold by its German-based owner to Wisconsin-based Quad/ Graphics. Quad/Graphics will pay $100 million for Brown. Brown expects to generate about $350 million in revenues during fiscal year 2014, according to a press release from the two companies. Brown Printing was founded in Waseca by the late Wayne “Bumps” Brown in 1949. Today the 775,000-squarefoot facility employs about 750 non-union workers. A Brown spokeswoman said the company does not expect the sale to affect the number of employees at the plant. The sale also includes two other Brown facilities, one in Illinois that employs 550 and one in Pennsylvania that employs 500. Since 1979, Brown has been owned by Gruner Jahr AG & Co. of Hamburg, Germany. Quad/Graphics was founded by the late Harry Quadracci in 1971 in Sussex, Wis., where it remains headquartered. The international company has 25,000 employees.

■ Analysts wary of Best Buy After a surprisingly good year last year, Best Buy still faces many potential problems according to Wall Street analysts. After seeing its stocks rise, analysts see revenue and earnings per share declining by about 7 percent this quarter. They say that rather than bouncing back, Best Buy is just now bottoming out. While Best Buy may be selling smartphones and tablets, the new devices of today feed a digital system that Best Buy is not set up to profit from. And Best Buy is not growing in sales and analysts are expecting flat revenue growth in the year ahead.

■ ADM aims to up GrainCorp investment Archer Daniels Midland says that over time it will increase its investment in Australian grain company GrainCorp. ADM currently owns 20 per cent of GrainCorp. Last November, the federal government ruled against ADM’s planned acquisition of the entire

company. In response, ADM says it plans to raise its investment to 24.9 per cent to encourage the company to “demonstrate its commitment to the Australian grains industry”.

10 • may 2014 • MN Valley Business

■ General Growth CEO gets big pay bump Sandeep Mathrani, CEO of Chicago-based mall giant General Growth Properties, received a huge pay boost during his third full year on the job. Mathrani’s total compensation for 2013 topped $22.1 million, according to a proxy statement the real estate investment trust filed with the Securities and Exchange Commission. That compares to $4.2 million in 2012. Mathrani’s package included $17.3 million in stock options. The CEO received two separate option awards, one for 2012 performance and one for his performance last year. He did not receive any stock options in 2012. Mathrani took over leadership of General Growth in January 2011, just after it emerged from Chapter 11 bankruptcy protection. The company said Mathrani accomplished each of nine different objectives, including boosting occupancy across the firm’s portfolio to 92 percent and refinancing $3 billion in mortgages, in 2013. General Growth shares, including dividends, returned 2.59 percent in 2013.

■ Xcel ordered to improve Monticello A top U.S. Nuclear R e g u l a t o r y Commission official said Xcel Energy’s Monticello nuclear power plant needs to improve its “degraded” performance in light of a serious lapse discovered last year in the reactor’s flood-response plans. “It is imperative that the licensee identify the depth and breadth of their performance issues and take corrective action,” Cynthia Pederson, the NRC’s regional administrator, said in an interview with the Star Tribune. Pederson said Monticello remains a safe nuclear reactor, but there were “multiple examples of inadequate procedures or use of procedures.’’ The NRC inspectors faulted the Monticello plant, which is on the banks of the Mississippi River, for being unprepared for worst-case flooding.

■ China takes on U.S. ag giants The Cofco Corporation, a huge Chinese state-owned foodstuffs conglomerate, will pay $1.5 billion for a majority stake in the Noble Group’s agriculture business. The deal with the Noble Group, a major commodities trader based in Hong Kong, is the second such deal in two months for Cofco, which is going increasingly global in its quest to meet China’s demands for food security amid a shortage of arable land at home. It is viewed as a move to fill demand now supplied by U.S. agribusiness giants, including several based in Minnesota. With a growing and more affluent population, worsening

soil and water pollution and more people living in cities, China will face increasing pressure to meet its food needs domestically. China intends to spend heavily in coming years to buy overseas food businesses.

■ Former BB exec launches disposal site Leo Raudys, a former Best Buy executive has started a website to help companies get rid of their old computers and other electronics. According to the Minneapolis/St. Paul Business Journal, the site, Riduvit.com, connects companies with preselected e-waste vendors who compete for the business of wiping clean and recycling old computers, monitors, servers, TVs, mobile devices and point-of-sale systems. He said he started the site after talking with many company executives who were frustrated about the process and unsure if they are paying fair prices for the work. “If you’re a business looking to get rid of the stuff responsibly and cost effectively, it’s really, really hard to do,” he told the Business Journal.

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MN Valley Business • may 2014 • 11

■

Business Commentary

By Heather Thielges

Marriage and money: Make plans before the ‘I do’

ongratulations! You’ve found the one you want to spend the rest of your life with, and you’re getting married. There is no question an abundant supply of resources is available to help you plan every aspect of your special day—from the invitations all the way to the honeymoon—many with handy checklists and timelines. I’m sure there is an app to help keep you focused, on task and on budget, with periodic reminders and a countdown to the big day. One area that couples often overlook in the planning process is the financial aspect of their union. I know, finances aren’t as exciting and thrilling as planning the bachelor/bachelorette party, or planning that once in a lifetime trip to an exotic romantic location. However, finances are consistently cited as one of the leading strains on the marital relationship. Understanding the details of each other’s financial lives and how they will mesh together before the “I dos” have been exchanged may reduce stress, prevent complications later in the marriage, maybe even extend the honeymoon phase! Here are some guidelines you can use to help navigate the financial aspects of getting married. Assets Cash Decide if bank accounts will be retained as separately owned accounts or if they will be combined to form a joint account. • Separate accounts require some additional decisions be made - who will be responsible for paying the jointly incurred expenses such as rent, mortgage payments, utilities, etc.? How will the other individual reimburse their share? • Joint accounts can add a level of simplicity to the finances - fewer accounts to track and balance monthly; one account for paying expenses. Tangible Property Tangible property (homes, cars, recreational vehicles, etc.) owned individually prior to the marriage can remain titled to the individual, or it can be changed to joint ownership. This decision is largely dependent on the value each party brings to the union and the type of assets. For example, an asset that has been passed down through generations of a family and is intended to stay within that family, or an ownership interest in a family business, may have ownership restrictions making joint ownership with a spouse not possible. It is also important even in a Separate Property state (as opposed to Community Property states such as Minnesota), to understand how the use of assets and earnings from an asset during your marriage may be viewed as a joint marital asset despite being titled individually.

12 • may 2014 • MN Valley Business

Prenuptial agreements are not at the top of the list of romantic things to do before you get married, but they could save your financial future. Prenuptials are generally useful when one or both parties have substantial premarital assets, an expected inheritance, family wealth or a business. Debts Premarital debts generally remain the responsibility of the individual borrower even after marriage. While you may not be financially responsible for your spouse’s debt, poor credit or heavy debt load will definitely have an impact on future decisions such as purchasing a new home or having children. Taxes Marital status is determined at the end of the calendar year. If you were married as of December 31, you are considered married for the entire year. When completing your tax return, your filing status will be Married Filing Jointly (MFJ) or Married Filing Separately (MFS). MFJ filing status calculates tax based on the net of the combined income and deductions of both parties whereas the MFS filing status calculates tax based on the net of the income and deductions of each party separately. In most circumstances, the MFJ status results in a lower overall tax. Your accountant will be able to run an analysis to determine which filing status is more advantageous. Other tax changes after the marriage certificate is inked: • Standard deduction doubles – For 2014, the standard deduction for a single taxpayer is $6,200 and married filing joint taxpayers is $12,400 • Tax Brackets double – For 2014, the 25% tax bracket for a single taxpayer is $36,900 - $89,350; for married filing joint taxpayers, the 25% tax bracket is $73,800 $148,850 • Home Sale exclusion doubles from $250,000 for a single taxpayer to $500,000 for married taxpayers. Similar to the process you go through when merging your living space (i.e., whose couch reigns supreme) meshing your financial lives can be challenging. Be prepared, and leverage the expertise of an accountant to help navigate the union of your monies. Being prepared and clear on your financial situations will help ensure you’re starting your future on solid ground. MV Heather Thielges, CPA, CVA is a Partner at Eide Bailly LLP specializing in business and individual tax consulting and compliance, business valuations, and litigation support.

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Minnesota Wedding Shop staff, from left to right: General Manager Brittney Anderson, Kelli Kral, Cheryl Klages and Heather Tyree.

Matrimonial marketplace Pinterest drives wedding trends

By Tim Krohn | Photos by John Cross

hose in the wedding business have always been driven by the changing trends in everything from invitations and flowers to bridal gowns and table centerpieces. But never have so many hot trends been so instantly available to bridesto-be, all thanks to the Internet. “Pinterest has had the biggest effect on the industry,” said Kathy Van Tol of Hilltop Florist and Greenhouse in

Mankato. “It’s visual and they have a whole wedding section so people see what they want,” she said of the website where users create and share collections of visual images for everything from recipes to planning trips and weddings. “The Midwest used to be a little slower in seeing changing trends but with Pinterest and a global world it’s

Cover Story

14 • may 2014 • MN Valley Business

Beading is in demand this season; Brittney Anderson has been busy stocking dresses and accessories. moving faster,” Van Tol said. A visit to Pinterest’s wedding section shows hundreds of potential hairstyles, possible bouquets, cake toppers, guest favors and exotic wedding destinations. Tammy Lillo, at the Travel & Cruise Center, said more couples are turning to destination weddings. “It’s been a steady trend. The last few years it’s been a big thing,” she said. “A lot of people are opting for that destination wedding rather than the traditional one and then having a reception when they get back.” Rich Draheim, who owns the New Ulm Event Center and just opened Minnesota Wedding Shop in New Ulm, said that while brides have easy access to trends in the virtual world, they still want to see and touch bridal gowns. “Brides want to see them and try them on. Dresses look different on different body types and they need to try them on to know,” said Draheim, who is also a Realtor and owner of Westwood Marina on Lake Washington. Kelly Murphy, a long-time bridal shop worker and partowner of Sisters Bridal & Tux in New Ulm, said that keeping up with trends requires attention to on-line and magazine fashions as well as going to trade shows to see what’s predicted to be hot. “We go to market in Chicago or Las Vegas. You see all the latest things there and we keep up by seeing what clients are asking for,” Murphy said. “Things don’t change drastically year to year, it’s more subtle.” In some areas, however, basic needs overrule hot trends. Bill Vistad, owner of A-Z Rental in Mankato, said most of his wedding business is geared toward the unflashy necessities such as tables, chairs, and PA systems. But he, too, is affected by trends such as more outdoor weddings. “We rent the portable dance floors and the big tents. The entertainment has moved toward the DJs - we rent the sound systems.” Bridal gowns still the focus After the proposal and maybe ring shopping, most brides’ attention turns to the bridal gown, the star of the show come wedding day. One of the oldest shops around, Sisters Bridal & Tux

has been a mainstay in New Ulm for 40 years under different owners and names. That kind of longevity is rare in the industry. “It’s really a demanding business,” said Murphy, who owns the shop with her sister, Sandy Portner-Quiring. “This is our second home. I think people may just get burned out doing this a long time.” At the upstart Minnesota Wedding Shop in New Ulm, Draheim thinks the new bridal shop, located inside the New Ulm Event Center, will dovetail well with the center’s venue as a wedding reception site. (The center also hosts a variety of corporate and private events.) And he’s hoping they can offer a large dress variety and level of service that will set them apart. “We’re aiming to pamper the customers a little more,” with things such as non-alcoholic champagne, a snack bar and a photo area where staff can snap photos of brides and post them to social media. Draheim, who’s more comfortable selling real estate and overseeing Westwood, won’t be working in the shop. “I’m not a fashion guy. Brittney has taste.” That would be Brittney Anderson, who is the general manager of the event center and who oversees the bridal shop. Minnesota Wedding stocks dresses from petite to size 32 (the average dress size in the United States is 14 and about size 16 in southern Minnesota). Bridal dresses in the shop range from $800 to $3,800. Anderson spent the winter ordering stock and attending a Chicago wedding market to catch up on bridal trends for the coming fall. “The hot things are heavy beading and capelets, which are jeweled and beaded shawls almost that goes over the shoulder,” Anderson said. The shop, which is hosting a grand opening and trunk show on May 17, also carries everything from veils, jewelry, tux rentals, in-house alterations and other accessories and has about 100 bridal gowns and 70 different bridesmaid dresses on hand. “We’re trying to make it a one-stop shop,” Anderson said.” Murphy and her sister bought Sisters Bridal & Tux a decade ago and Murphy had worked in the store for the

MN Valley Business • may 2014 • 15

Sisters Sandy Portner-Quiring (left) and Kelly Murphy are long-time bridal shop owners previous owners. While a full-service bridal and accessories shop, the sisters also sell suits and do lots of work for prom-goers. Murphy said dashes of color on trim and sashes were big in bridal gowns, but that’s given way to pale pinks, country chic and burlap. Yes burlap. “Country chic is very big. People are making their own center pieces with Mason jars, having little patches of burlap on accessories, country boots on bridesmaids. For the guys, the trend has been toward more tailored tuxes. “It used to be a more boxy look a few years ago, now they want them more fitted,” Murphy said. “The Michael Kors tuxes are big now.” Murphy said most brides spend between $499 and $1,799 on a bridal gown, with the average at about $1,200. “I’ve done this for 14 years. The prices have gone up and what people are willing to pay has gone up. Even five years ago we were thinking, can we sell a $1,000 dress?” People decide what they want for a gown and they will cut their budgets in other ways if they have to to pay for it.” Flower power A conversation about flower trends with Van Tol at Hilltop Florist quickly turns to burlap as well. “We’ve seen the burlap and country look for a while,” Van Tol said. “But now it’s moving more toward Victorian/classical. “We work hard to keep up with the trends, for the regular store and for weddings. Our wholesalers have classes we go to on what’s new and on the mechanics of how to put (arrangements) together,” Van Tol said. Those mechanics have also gotten more complex, going from simple corsages to complex body flower jewelry with beads and bling. “Weddings are really specialized and require somebody that’s experienced. We pride ourselves on that. The mechanics are important, you don’t want it to fall apart.”

16 • may 2014 • MN Valley Business

Kathy Van Tol of Hilltop Florist and Greenhouse; Sara Rivet designs an arrangement at Hilltop. Hilltop usually has from one to four weddings on any given weekend and business has spread throughout the year. “It used to be a spring thing but now it’s year around. September and October are very popular.” Van Tol said flower costs for a wedding can range from $200 to $4,000. “The average is from $800 to $1,500, depending on the number of bridesmaids they have and whether they do fresh arrangements for center pieces,” she said. “We work with the couples on the price ranges because it’s very individualized. I had a bride in a few days ago where they’re doing it very simple and going to a Justice of the Peace on Monday morning.” Bridal businesses have seen more interest in creating “guest experiences,” whether it’s hosting themed parties for guests a day or two before the wedding or giving party favors to guests. Some couples even send “care packages” to the hotel rooms of guests who arrive from out of town. “We have sent flowers to the hotel rooms of guests,” Van Tol said. The hottest flower right now is the peony, followed by the hydrangea. Hilltop grows a lot of their own flowers inside their massive greenhouses and try to buy as many as they can from suppliers in the five state area. Still, many have to come from further away, depending on the time of year. “Peonies are available year around but only for a very short time in any place. Sometimes we get them from Alaska, sometimes Chile or Colorado. Hydrangeas, you can get some locally, but usually they come from Holland or California.” Jamaica the spot for beach vows During her 11 years in the travel business, Lillo has seen a steady growth in destination weddings. “The most booked and easiest to do is Jamaica. It’s

absolutely gorgeous, there’s more options for adults-only properties and they have less restrictions and paperwork for the couple.” Lillo said the hassles for the couple getting married in a foreign country include doing some types of blood work tests and in some countries even chest X-rays. “Each country requires they arrive at least 72 hours before the ceremony and some places its five days before. “Brides and grooms find the destination that appeals to them the most and if we’re doing our jobs we give them all the information up front about what they’ll need to do. Sometimes that changes their minds when they find out all the testing and paperwork that needs to be done in some countries,” Lillo said. While the Caribbean is clearly the destination of choice for most, Lillo also has booked weddings in places such as Ireland. They also book some cruise weddings. “People can have the weddings on the ship. But there are limited ports that will allow you to (go ashore to) get married.” She said a few people choose an American destination wedding, but the deals are generally better in the Caribbean. “If you go to do it in Miami you’re going to pay more than, say, Jamaica where they have the all-inclusive resorts and they have a basic package for booking a wedding that’s included in their cost. “For the bride and groom, the basic package at an adults only is about $5,000. But if they want to add more flowers, live entertainment, sit-down dinners, the price can go up to $20,000 to $30,000.” Lillo said the size of the wedding parties that go on destination cruises varies widely. “We have some very small and some with four or five couples and some as large as 80 to 150 guests.” MV

MN Valley Business • may 2014 • 17

Weddings by the number 160 to 170 Average guest list for a Minnesota wedding $22,884 Average cost of a Minnesota wedding September and October most popular months for local weddings 20,050 Number of couples in the United States who will marry this year 28 & 26 Median age of marriage for men and women 1960 Year when first-time marriage ages were 22 for men and 20 for women 5 Percentage decrease in number of adults who were married between 2009 and 2010 Source: The Wedding Report; U.S. Census

Costs by category Bride accessories: $259 to $427 Groom accessories: $136 to $225 Groom suit/tux: $187 to $309 Hair/makeup service: $136 to $225 Headpiece/veil: $243 to $401 Wedding dress: $1,075 to $1,775 Ceremony: $2,345 to $3,873 Ceremony accessories: $152 to $250 Ceremony decorations: $451 to $745 Ceremony location: $528 to $872 Officiate/pastor/priest: $189 to $313 Rehearsal dinner: $1,025 to $1,693 Entertainment: $2,614 to $4,318 Ceremony/reception band: $1,541 to $2,545 Ceremony/reception DJ: $588 to $972

Ceremony/reception musicians: $485 to $801 Flowers: $1,643 to $2,713 Boutonnieres/corsages: $143 to $237 Bride bouquet: $123 to $202 Bridesmaid bouquets: $196 to $323 Ceremony flowers: $351 to $579 Flower girl flowers: $39 to $65 Reception flowers: $791 to $1,307 Gifts and Favors: $825 to $1,363 Gifts for attendant: $382 to $631 Gifts for each other: $308 to $508 Gifts for parents: $135 to $224 Invitations and Stationery: $778 to $1,286 Bridal Shower Invitations: $81 to $134

18 â&#x20AC;˘ may 2014 â&#x20AC;˘ MN Valley Business

Guestbook: $39 to $65

Reception: $12,633 to $20,860

Invitations & reply cards: $345 to $570

Reception beverages/ bartender: $1,790 to $2,956

Personal stationery: $109 to $180 Save the date cards: $133 to $220 Thank you cards: $71 to $117 Jewelry: $4,998 to $8,254 Engagement ring: $3,719 to $6,142

Bride/groom hotel: $225 to $371 Cake: $433 to $715 Cake knife set: $35 to $57 Cake topper: $33 to $55

Her ring: $750 to $1,239

Reception decorations/ centerpieces: $865 to $1,428

His ring: $529 to $873

Favors: $289 to $476

Honeymoon/Planning: $4,071 to $6,723

Reception food service: $6,094 to $10,064

Honeymoon: $2,995 to $4,946

Reception location: $1,982 to $3,273

Bridal consultant/planner: $1,076 to $1,777

Reception rentals: $887 to $1,465

Photographer/ Videographer: $2,836 to $4,683

Transportation: $782 to $1,292

Photographer: $1,642 to $2,712 Videographer: $1,194 to $1,971

Car rental: $244 to $403 Limo rental: $538 to $889 Source: CostofWedding.com

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MN Valley Business • may 2014 • 19

Lee and Jean Gansen and son Nick operate Dranttel Sales and Service in St. Peter.

Dranttel Sales & Service An anchor through the seasons

By Heidi Sampson | Photos by Pat Christman

ean Gansen’s parents, John “Butch” and Carol Dranttel, started Dranttel Sales and Service on their family farm in 1966. Originally, Butch was looking for something more to do during the winter months when farming season was at a lull. At the time, Dranttel Sales and Service was more of a hobby dealership as Butch sold Scorpion snowmobiles out of a machine shed that had been converted into a shop and showroom. Butch expanded his operation at the farm when he took on the Yamaha snowmobile line in 1973. In 1977, Butch enlarged his business to include lawn and garden. ATVs were brought into the industry and business during the early ’80s. In 1981, Butch built their current facility on Old Minnesota Avenue in St. Peter. He expanded to motorcycles in 1982 and in 1983, they took on Alumacraft boats and Mariner outboards. In 1985, Lee Gansen began working for Butch part time for the first couple of years. Lee went full time after

graduation from high school. He would later marry Jean, Butch’s daughter. In 1991, Dranttel Sales and Service added the Yamaha line of outboards. “By adding the outboards, we added one of the premiere motors on the market to our lineup within the store,” Lee said. Around 1995, Dranttel’s gave up the lawn and garden part of their business, as well as the motorcycles. At that time, the company decided to focus more on motor sports, snowmobiles, ATVs, and boats. In 2007, they added Ice Castle fish houses. In 2009, Lee and Jean purchased Dranttel Sales and Service from Jean’s parents. While Lee manages the store’s day-to-day operations, Jean assists with bookkeeping after hours and on weekends. Their focus is still on motor sports and boating. However, Lee and Jean have added Triton Trailers and the Yamaha generator line to their list of available products for customers. Day to Day Operations

Profile

20 • may 2014 • MN Valley Business

Left: Nick does mechanical work, sets up new products, handles computer issues and handles other work at the shop. Right: Lee sorts through the extensive parts inventory at Dranttel’s. Dranttel Sales and Service specializes in varying bringing in children and grandchildren to purchase items products on a seasonal basis. For instance, boat season from us,” Lee said. “We have one family that is in the controls the majority of their business. From boat and fourth generation of doing business with our dealership. outboard motor sales to boat trailers to service work to We’ve got some pretty loyal customers and that really helps winterization needs, Dranttel’s remains assists customers a business to stay strong.” as early as March 1 right up to Thanksgiving. Versatile Teamwork “We do a lot of boat winterization and storage,” Lee Dranttel Sales and Service has three full-time employees, said. “In fact, we have a couple of different storage Lee, Nick and mechanic Bryon Schultz. All three are locations. I’d say we store roughly 45 customer boats a versatile, capable of assisting incoming customers as well year.” as receiving product in the shop. When push comes to ATVs and snowmobiles tend to be the fall and winter shove, Lee’s father-in-law, Butch, can be called in to assist sport choices. ATVs have become a mainstay for hunting, when the business is busy. fishing and farm applications. “Everybody is pretty diverse here,” Lee said. “My “Recent winters have been the time of year that brings technician can help look up parts and assist with sales. the biggest question mark for us,” Lee said. “Winters He’s very knowledgeable with our product lines. He’s not aren’t what they used to be. I’d say that by far, boat season just service. is our busiest time of the year.” My father-in-law taught me that ‘Anybody can sell the Internet Broadens Customer Base stuff. What you need is somebody that can service the Before the Internet, Dranttel Sales and Service had a stuff.’ That doesn’t just mean servicing an item to fix it. I customer base that spread within a 50-mile radius of their mean service that involves being able to sell people oil, operation. Today, thanks to the Internet, their customer getting them the correct parts, the right spark plugs and base has extended across the United States things like that. Sales are important, but the service is (dranttelsalesandservice.com). something we strive to excel at. We want the product to “We have people from North Dakota coming to buy fish run and run right. We also want to assist people correctly houses,” Jean said. “Another man traveled from Kansas to by getting them the right items for their product the first buy an outboard because he saw it on Craigslist. Internet time.” sales have really expanded our customer base.” “If somebody calls us and says parts, we can just say, ‘Go Lee and Jean’s son, Nick, also works within Dranttel ahead,’” Nick said. “We don’t have to transfer the phone to Sales and Service. For his parents, Nick completes a somebody else. That is part of our service. We know what variety of tasks such as mechanical work, setting up new it is we are selling. If we are back there working on the product, assisting with sales and specializing as their product, we know more about what does and doesn’t work computer technician. Nick is responsible for the constant for that particular item.” updating of all new and used products on Dranttel’s Generational Leadership website, as well as creating links to manufacturers. When Lee and Jean purchased Dranttel Sales and “It’s that entire generation that grew up with computers,” Service, Lee had already been managing the store for Jean said. “They aren’t afraid to look online for something about the past 10 years. Today, Nick has expressed an they want and that has opened an entire new avenue for interest in the business as he seeks to learn the ins and business. It used to be that your business was local, but outs of outdoor recreational sports sales and service. now we have the ability to reach a much wider audience “I think for us, we liked the boat portion of it,” Jean said. through the Internet. Nick helps us reach that market “We have always loved to fish but Nick, he loves through listing items on Craigslist, eBay and Facebook. snowmobiling. I think he will bring a different aspect to He also maintains and updates our website.” the business. The younger influence can give the business Although their sales capability has spread, Dranttel’s more life or even add a different dynamic to the existing service remains local. Many of Butch’s original clientele structure, which is important. In business, maintaining are still active customers. the best aspects while changing to meet the needs and “Customers her parents assisted 45 years ago are wants of your customers is the balance to create.” MV

MN Valley Business • may 2014 • 21

Five West High School grads started FiveFriendsFood to market fresh, healthy snack bars. From left to right: Ross Pomeroy, Tom Johnson, Austin Hinkle, Mike Steffan and Will Handke

The bar has been raised: Mankato West grads start FiveFriendsFood By Pete Steiner Photos by Pat Christman and courtesy of FiveFriends

oss Pomeroy simply wanted something better for his clients. As a personal trainer in Madison, Wis., where he went to college, he and the people he trained had tried just about every nutrition and snack bar there was. And nearly everyone was dry, crumbly and unsatisfying. So in his apartment kitchen, Ross began experimenting, finally baking what he’d been searching for: a fresh, nutritious apple-banana-almond bar with much better texture than anything he’d had. And that, as they say, is how it all began.

twin, Will Handke (Will took his mother’s maiden name, Ross took his father’s) came back from Georgetown, they agreed there was a larger market. They were soon joined in their venture by fellow Mankato West High School graduates Austin Hinkle, Mike Steffan and Tom Johnson. Every Monday and Wednesday evening, the five 20-somethings, once called “the nerd herd” at West because of their shared passion for video games, now share a new passion: producing Fresh Bars. They bake up to 3,000 bars a week, enough for 1,000 three-bar packages. The company is called FiveFriendsFood. Two of the five – Will Handke and Tom Johnson – recently were able to sit down at a

Spotlight

•••• About three years ago, when Ross’ identical

22 • may 2014 • MN Valley Business

south Minneapolis coffee house to discuss their company and their vision. Will is the only full-time employee right now, handling sales, ordering, shipping, bookkeeping and marketing, in addition to sharing baking duties. The other four partners all maintain day jobs. While Johnson’s dad was once dean of the Business College at Minnesota State University, a business background isn’t mandatory for becoming an entrepreneur. Handke confesses he studied theology at Georgetown. Asked how that has helped him in this endeavor, he only halfway deadpans: “It taught me how to pray.” •••• During a trip to the Lund’s store on West Lake Street in Minneapolis, it takes some looking to find Fresh Bar. There are dozens of choices – Nature Valley (General Mills), Quaker, Kellogg’s and more – in the snack aisle. Those are the “crumbly ones,” the Friends will tell you, that may have sat in a warehouse for weeks before sitting some more on the grocery shelf. Some contain ingredients commonly shunned by the health-conscious crowd, such as hydrogenated palm oil and BHT preservative. Finally, in the Organic and Natural foods section, there they are in a dairy case, marked 40 cents off at $4.59 for a three-pack. Purchasing the pumpkin-carrot-pecan bars, this reviewer secrets them to the deli area, opens the package and samples. Indeed, they have a much better mouth feel than traditional bars. And what could be wrong with a bar with ingredients that include oats, honey, cinnamon, nutmeg and ginger? Each bar contains 210 calories, 31 grams of carbs, 4 grams of fiber, half-a-day’s

requirement of vitamin A and more. The reviewer scribbles, “would go well with coffee.” •••• At the outset the Five Friends’ goals were not complicated: Create fresh, flavorful bars with no preservatives and better texture. But distribution is always a major challenge. Then 1 1/2 years ago, they got a big break. After some buyers sampled their product and expressed interest, they were able to get into high-end stores such as Lund’s and Byerly’s. At the time, they had given their product a Scandinavian-hybrid name, “Gud Bars,” that sounded a little like a popular candy bar. “Hershey found out about it,” Johnson smiles, and didn’t like that. “BIG CHOCOLATE came after us!” So they changed the name and kept baking. They had found an industrial kitchen facility in Northeast Minneapolis – Kindred Kitchen – that leases space and equipment to startups. That allowed them to put off a big investment. •••• While the Friends do not reveal revenue for the privately held company, one can do some math: If they sell a thousand packages a week at $4.59 retail, they are small players compared to say, mighty General Mills. A recent Star Tribune analysis indicated the Big G might have hit the $100 million mark in sales of Nature Valley Protein bars alone. That said, Handke and Johnson point out, they

MN Valley Business • may 2014 • 23

For now, they’re marketing mostly via instore samplings. Handke and Pomeroy normally do two sampling sessions each per weekend. “Stores like that, it helps them move product,” Handke said. They also use their website, www. fivefriendsfood.com, to build their base. Johnson says, “We get support there from ‘advocates,’ they push it to their friends.” But for now, Handke says, “The No. 1 priority is perfecting the product.” So who is the target audience? Johnson says: “We didn’t just want to say, ‘If you’re a body builder, Fresh Bar!’ You certainly can use it for a workout, but we wanted it for anybody. It’s great for breakfast! We’re finding moms who put them in children’s lunch boxes. If the kid likes it, you’ve got a sale.” Adds Handke, “’Fresh’ is a word everyone can get behind.” Right now, of the four flavors, chocolate-peanut butterbanana is the biggest seller, while the friends’ personal favorite is cherry-pearwalnut. •••• So what’s a baking session like? First the five purchase the ingredients. Oats, for example are bought in bulk from a wholesaler. Fruit, however, which obviously must be fresh, may be bought from a retail store. Arriving at the kitchen, they slip on latex gloves, hairnets, and, for Handke, Pomeroy and Hinkle, beard nets. (The twins are certified food handlers, and Kindred Kitchen has a commercial production license. The Minnesota Department of Agriculture inspects at least once a year.) The five peel their own bananas, cut up other fruit, then toss it into a blender before mixing the ingredients and putting them into the Every Monday and Wednesday evening the five friends bake bars, producing enough for up to oven in baking trays. After the bars come 1,000 three-bar packages each week. out, they are packaged in plastic sealers with a piece of equipment the Five do own, met their sales goal in 2013 and made a profit. But they then slipped into packages printed by a company in want more outlets. “It’s all about volume,” Handke says. Hamel. Each package is stamped with a “use or freeze by” “We want to be mainstream.” That means, he says, “At date. Says Johnson, “We all get along… Baking is fun. some point, we will have to hire. (But) we expect to go You’re hanging out with your friends. It’s work, but your without pay for a time.” bosses are your best friends.” Johnson adds, “We’re all in it for the long haul. We After six hours of baking, Handke puts the Fresh Bars in return the profits to help it grow.” Organized as an LLC, the vehicle trunk and hauls them directly to a Lund’s so far they are financing all their costs through sales. They warehouse. For Kowalski’s and some others, he drives it have not had to borrow money or seek investors, although straight to the individual stores. The bars are sold in more both acknowledge that could happen in the near future. than 40 locations, including the St. Peter Food Co-op. They’re getting to the point where they might need a bigger kitchen, which could require buying new equipment. •••• But for now, they are able to boast that their young company has zero debt. Johnson stresses the group’s Mankato roots: “We love Mankato – go, Scarlets! We’re just Mankato kids trying to •••• make it good.” Like it says on their packages, “The bar has been raised.” MV Marketing presents a big challenge for a startup. Not only can it be costly, it’s tricky to find your target audience.

24 • may 2014 • MN Valley Business

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MN Valley Business • may 2014 • 25

Jeff Johnson with his son Matt, who started working part-time at Gerring’s Car Wash as a teenager.

Cleaning up Gerring’s a full service car wash By Heidi Sampson Photos by Pat Christman

eff Johnson can recall spending hours out by the pump house on his parents’ property cleaning the family’s vehicles as a child. Much to his parent’s surprise, the act of washing a vehicle could entertain him for hours on end. Years later, Jeff’s passion would lead him into a successful career owning a car wash business of his own. On New Year’s Eve day of 1979, Jeff started working for Russ Gerring, owner of Gerring’s Car Wash. At that time, Jeff was in high school and worked on a part-time basis. After learning the ins and outs of the car wash, Russ asked Jeff if he would be interested in becoming the manager in 1982. Jeff readily accepted the challenge. Although Russ died in 1988, Jeff continued his managerial position under the employ of

Russ’ sons. “They approached me with an offer to buy the business in 1995,” Jeff said. “By this point, I had managed the business under the name Gerring’s Car Wash for 12 1/2 years. I figured the people around here knew the car wash by that name. It really just made good sense to keep it.” Over the years, Jeff’s two daughters have worked at the car wash while living at home as teenagers. Jeff’s son, Matt, started working part time when he was 14. Currently, Matt is a full-time employee. “He’s learning the ropes yet,” Jeff said. “I think family gets more extensive training. They hear about work on the way home and at the supper table.”

All In The Family

26 • may 2014 • MN Valley Business

Jeff started working for Russ Gerring in 1979 and went on to buy the business. MVB: What do you enjoy about this line of work? Jeff: It’s been a good business. For me, it is rewarding to see what 10 or even five minutes can do to a vehicle. I enjoy watching a customer feel good that his car is clean. There is something about seeing a clean car leave and the customer smiling. It’s a good feeling. MVB: Gerring’s Car Wash is a full detail service? Jeff: Yes, we are an auto detailing service. We clean inside and out. We want to make the vehicle look as new as possible. The average wait is 20 minutes on a full clean.

MVB: How many people work on any given day? Jeff: Anywhere between four and nine employees, depending upon how busy it is. MVB: Are there times when business is busier than others? Jeff: Potentially, winter is the busier time. This past November and December were very good months for us, but then January and February really slowed down with the deep freeze. Typically speaking, people tend to wash cars a lot more in the winter time because of the snow, grime and salt that can cover a vehicle. Our business is very weather related. When it gets really cold, the wash slows down.

MVB: How many employees do you have? Jeff: We have anywhere between 12 and 15 employees. That includes partMVB: Does below time and full-time zero weather hamper employees. Some of Services such as hand-drying vehicles has kept Gerring’s with a steady customer base. the services you can them have been here offer? between two and six years. I think it’s important to keep Jeff: Below zero weather affects what we can do. However, good employees. it’s just not on the top of people’s lists to wash their cars when it’s negative 5 outside. Also, people who park outside typically don’t think about cleaning their cars on cold days either.

MN Valley Business • may 2014 • 27

MVB: How do you handle the competition? Jeff: I think we are very fortunate to be in our situation. This is a pretty good location and it’s nice to be a part of the downtown area. On the week days, we see a lot of traffic down here. On weekends, people might head more above the hill. When I started, there were maybe three car washes in town. Today, there are many choices available for washing vehicles. In order for us to remain more competitive, once again, we have fuel located on our site for purchase. We got out of it for a while but now, we are back in it. We will even pump the gas for people who receive interior services. Otherwise, it is a self-serve fuel station.

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MVB: What is your approach to customer service? Jeff: We rank our customer service pretty high. My biggest thing is that when someone leaves here, we want them to be happy. We want them to have received great service for a good price. You know, it’s a different kind of customer service here than at an automated wash. My guys know what our car wash can and can’t hit. We have more targeted cleaning here. MVB: How has technology changed or advanced your system? Jeff: The chemicals and our cloth are of a better quality. However, for the wash components themselves, we see a lot of the same stuff. We put a brand new conveyor in this past spring. It’s pretty much the same, maybe a little heavier duty but the elements are the same.

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MVB: What is the best part about owning and running your own business? Jeff: Every business has its ups and downs. Nobody knows what the future holds for any business, but it’s the challenge that holds my attention. Running a successful business takes a lot of hard work, but it’s also knowing where you are at and where you hope to go.

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28 • may 2014 • MN Valley Business

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www.cbfg.net

Construction/Real Estate Residential building permits Mankato 8000

(in thousands)

- 2013 - 2014

- 2013 - 2014 (in thousands)

3000

$220

6000

Residential building permits North Mankato

$918

2000

$496

4000

1000

2000 0

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

- 2013 - 2014

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

- 2013 - 2014

50 J

Source: Realtors Association of Southern Minnesota

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

(in thousands)

- 2013 - 2014

Commercial building permits North Mankato

- 2013 - 2014 (in thousands)

2000

1500

$760

1000

$891

500 M

Source: City of Mankato

— 2013 — 2014

5.5 5.0

4.3%

4.5 4.0

3.4%

3.5 J

Source: Freddie Mac

Source: City of North Mankato

Interest Rates: 30-year fixed-rate mortgage

3.0

100

20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0

Housing starts: Mankato/North Mankato

150

112

200

Source: City of North Mankato

Existing home sales: Mankato region 250

Foreclosures: Third Quarter of 2013 County Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

2012

2013

Percent change

24 11 14 23 12 13 13 11 6

19 6 7 22 6 18 8 7 4

-21% -45% -50% -4% -50% +38% -38% -36% -33%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • may 2014 • 29

■

Agricultural Outlook

By Kent Thiesse

Farm profitability varied widely in 2013

he profitability of farming in 2013 depends on who you ask, where they live, whether they raise primarily crops or livestock, and on their farm management decisions. The South Central, Southwest, Southeast Minnesota Farm Business Management Summary was recently released by the Farm Business Management instructors. This summary includes an analysis of the farm business records from farm businesses of all types and sizes in southern Minnesota. This annual farm business summary is probably one of the best gauges of the profitability and financial health of farm businesses in the region on an annual basis.

Background The average farm size was 678 acres. The top 20 percent net income farms averaged 1,156 acres, while the bottom 20 percent net income farms were also above the average at 730 acres. The average of the farm operators was 49.5 years old, with 22 percent of the farm operators being over 60 years old, 34 percent between 51 and 60 years old, 21 percent between 41 and 50 years old, and 23 percent being 40 years old and under. Fifty five percent of the farm operations were cash crop farms, 16 percent were single entity livestock operations, with the balance being various combinations of crop and livestock enterprises. Twenty one percent of farms were under $250,000 in gross farm sales in 2013; 21 percent were between $250,000 and $500,000 in gross sales; 29 percent were between $500,000 and $1 million in gross sales; and 29 percent were above $1 million in gross sales. In 2013, the average farm business received about 17.2 percent of the net farm Income from government farm program payments. This percentage was 54.7 percent as recently as 2005. The average non-farm Income in 2013 was $33,202, which was down

30 • may 2014 • MN Valley Business

slightly compared to 2012. In 2013, the average farm business spent $1.05 million for farm business operating expenses, capital purchases, and family living expenses. Most of these dollars were spent in local communities across the region, helping support the area’s overall economy.

Farm financial analysis The average farm business had $941,264 in gross farm income in 2013, which was an increase of about 4.5 percent from 2012, and was the highest ever gross income per farm. The average farm operating expenses for 2013 were $665,873, which were up about 11.2 percent compared to 2012 expenses, and again were highest ever average operating expenses per farm. The average net farm income for 2013, after crop and livestock inventory adjustments, capital adjustments, depreciation, etc., was $73,678, which was at the lowest level since 2009. The 2013 net income was a reduction of nearly 73 percent from the record $272,544 in 2012. The 2013 net income was also well below the averages of $199,794 in 2011 and $183,808 in 2010, but was still above the $61,350 net income in 2009. There was large variation in net income in 2013, with top 20 percent profitability farms averaging $315,495, and the low 20 percent profitability farms averaging a negative ($97,243). The average farm business showed a net worth improvement of $105,709 in 2013, which compares to an improvements of $230,548 in 2012. Crop production The average corn yield in 2013 was 170.1 bushels per acre, which was the lowest yield in the past 12 years, and compared to 177.1 bushels per acre in 2012. The average corn yield has exceeded 175 bushels per acre in 10 of the past 12 years. The average soybean yield was 47.1 bushels per acre, which was below the average yield of 50.4 in

2012. The average price of the corn sold in 2013 was $6.30 per bushel, compared to $6.13 in 2012 and $5.68 in 2011. The average price for soybeans sold in 2013 was $13.65 per bushel, compared to $13.26 in 2012 and $11.47 in 2011. The average costs for corn production on cash rented land in 2013 was $5.30 per bushel, compared to $4.80 per bushel in 2012. The average listed costs for soybean production on cash rented land in 2013 was $11.36 per bushel, compared to $10.13 in 2012. The average net return from corn production on cash rented land in 2013 was a negative ($56.56) per acre, which is well below the $343.33 per acre in 2012, the $211.81 per acre in 2011. The average net return from soybean production was $78.07 per acre, which is also well below the $202.20 per acre in 2012. Producers finishing feeder pigs in 2013 showed a negative net return of ($.84) per cwt. of carcass sold, or about ($1.71) per market hog sold, which compares to profit margins of a negative ($1.05) per cwt. in 2012, and a positive $7.57 per cwt. in 2011. The average net return in dairy operations in 2013 was $288.82 per cow, which compares to approximately $290 per cow in 2012, and $524 per cow in 2011. The average net return from beef cattle finishing in 2013 was $15.35 per cwt., or about $201.08 per head produced, and was up from a profit level of $4.40 per cwt. in 2012. The average net return from beef cow/ calf operations in 2013 was $36.61 per cow, down from $88.27 in 2012. Bottom line Overall, crop operations were profitable in 2013; however, average profitability levels were much lower than in recent years, and there was much more variability in 2013. Crop input costs also continued to rise in 2013. Profits in the livestock sector improved somewhat in 2013, due to moderating feed costs and strong

Agriculture/Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2013 — 2014 8 6

— 2013 — 2014 20

$14.23

$4.54

Source: USDA

Iowa-Minnesota hog prices

108

$81.84 F

Source: USDA

$23.65

$19.60

Minimum prices, class 1 milk Dollars per hundredweight

— 2013 — 2014 24

$119.03

Source: USDA

Milk prices

185 pound carcass, negotiated price, weighted average

— 2013 — 2014 120

$14.12

(dollars per bushel)

$6.56

Soybean prices — southern Minnesota

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

market prices. Even though average 2013 net farm incomes were reduced compared to recent years, the overall average financial health of the FBM farm businesses remained very strong in 2013. Complete farm management results are available through the U of M Center for Farm Management FINBIN Program at: http://www.finbin.umn.edu/ MV Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com

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MN Valley Business • may 2014 • 31

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major March Industry ‘13 ‘14 Construction Manufacturing Retail Services Total*

204 198 64 197 663

Percent change ‘13-’14

229 139 45 225 638

+12.3% -29.1% -29.7% +14% -3.8%

Major Industry

March

Construction Manufacturing Retail Services Total*

‘13

‘14

Percent change ‘13-’14

3,823 2,881 1,463 5,932 14,099

4,546 2,708 1,355 5,787 14,396

+18.9% -6% -7.4% -2.4% +2.1%

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.

Local non-farm jobs

Minnesota Local non-farm jobs

- 2013 - 2014

Nine-county Mankato region 123,646

30000 20000

2000

10000

1000

00000

Local number of unemployed

- 2013 - 2014

Nine-county Mankato region 9,087 7,647

10000

Minnesota number of unemployed

- 2013 - 2014

199,406

200000

8000

167,814

150000

6000

100000

4000

50000

2000 0

2,765.1 2,799.6

3000

123,808

- 2013 - 2014

(in thousands)

Mankato/North Mankato Metropolitan statistical area

Unemployment rate Number of non-farm jobs Number of unemployed

2013

2014

5.5% 55,188 3,226

4.4% 56,327 2,599

Source: Minnesota Department of Employment and Economic Development

32 • may 2014 • MN Valley Business

Unemployment rates Counties, state, nation

(includes all of Blue Earth and Nicollet Counties) January

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

January 2013 5.6% 7.7% 7.2% 9.7% 6.5% 5.3% 6.4% 7.4% 7.8% 6.0% 6.6% 8.7%

January 2014 4.5% 6.3% 7.6% 8.6% 6.0% 4.2% 6.1% 6.6% 7.1% 5.1% 5.7% 7.0% C. Sankey

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold - 2012 - 2013 702

1200 1000

(In thousands)

- 2012 - 2013

500

$430.8 $395.3

400

671

800

300

600

200

400

100

200 0

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

Sales tax collections Mankato

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato $41,556

60000

Mankato food and beverage tax

- 2012 - 2013

75000

$52,702

$47,073

50000

Source: Sales tax figures, City of Mankato

$55,169 50000

40000 30000

25000

20000 10000 0

Source: City of Mankato

Gas prices-Mankato — 2013 — 2014

Stocks of local interest

March 17

April 14

Percent change

Archer Daniels

$42.85

$44.23

+3.7

Ameriprise

$109.44

$101.93

-6.7

Best Buy

$25.85

$24.46

-5.4

Crown Cork & Seal

$44.72

$44.93

+0.5

Fastenal

$49.99

$49.85

-0.3

General Growth

$22.28

$23.38

General Mills

$50.58

$51.35

+1.5

HickoryTech

$13.05

$11.80

-9.6

Hutchinson Technology

$3.08

$2.76

-10.4

Itron

$35.58

$33.74

-5.2

Johnson Outdoors

$24.48

$22.65

-7.5

$132.57

$132.83

+0.2

Target

$59.76

$59.49

-0.5

U.S. Bancorp

$42.24

$40.47

-4.2

Wells Financial

$22.95

$23.25

+1.3

$.50

$.57

+14

$30.39

$13.16

+2.5

$3.48

$3.55

2 1 0

Gas prices-Minnesota — 2013 — 2014

$3.52

4 3 $3.48

2 1 0

Winland Xcel

Source: GasBuddy.com C. Sankey

MN Valley Business • may 2014 • 33

Advancing Business for a Stronger Community

Leadership Institute Application Deadline June 1 For more than 30 years the Greater Mankato Leadership Institute has provided cutting-edge professional development with a community focus, and in that time has graduated more than 800 future community leaders. The comprehensive nine-month program consists of 11 day-long sessions from September through May. Each year, the curriculum is updated to ensure graduates are well prepared to serve as leaders in their workplace and our community. We are now taking applications for the 2014-15 Greater Mankato Leadership Institute. For information on the program or to apply online, visit greatermankato.com/leadership-institute.

Congratulations to the 2013-14 Greater Mankato Leadership Institute Graduates

Greater Mankato Growth

Graduates with be honored at a reception on May 21, 2014. Patrick Baker

Greater Mankato Growth

Brian Bibbs

Enventis

Tracy Brovold

Mankato Area Public Schools

John Bulcock

Minnesota State University, Mankato

Jeff Call

MRCI WorkSource

Jennifer Catron

The Occasions Group

Jennifer Ceminsky

South Central College

Nicole Edens

LIV Aveda Salon and Spa

Abbie Olson

Gislason & Hunter, LLP

Dan Ehrke

Short Elliott Hendrickson Inc (SEH)

Mary Oudekerk

504 Corporation

Molly Elder

Blethen, Gage & Krause, PLLP

Amber Power

Minnesota State University, Mankato

Nicole Feltault

Kakeldey & Koberoski

Bryan Pratt

Pratt, Kutzke & Associates LLP

Dain Fisher

Bent River Outfitter

Benjamin Rigdon

Fine Impressions

David Freitag

Wilcon Construction, Inc.

Richard Ringler

Bremer Bank

Jennifer Harguth

Mayo Clinic Health System

Trisha Rosenfeld

Xcel Energy

John Harrenstein

City of North Mankato

Brian Salzle

Enventis

Sandra Hollerich

Kato Engineering

Josh Sherburne

Abdo, Eick & Meyers LLP

Shannon Hoolihan

AgStar

Brett Skilbred

Jordan Sands, LLC

Cheryl Jones

Mankato Clinic

Laura Stevens

Greater Mankato Area United Way

Todd Joyal

Buffalo Wild Wings

Wallace Thomas

Bremer Bank

Kenneth Kuehner

First National Bank Minnesota

Chastity Valvick

Enventis

Paul Lawton

I&S Group, Inc.

Ann Vetter

Vetter Stone

Julianne Leiferman

Schwickert’s Tecta America of Mankato

Lindsey Walker

Mankato Clinic

Jennifer Lurken

Maschka, Riedy & Ries

Don Westphal

Bethany Lutheran College

Nancee Mason

House of Hope, Inc.

Dallas Willman

I&S Group, Inc.

Shannon Nuy

Snell Motors

Angela Ziegler

Eide Bailly LLP

34 May 2014 • MN Valley Business 1 •• JANUARY 2013 • MN Valley Business

The Leadership class poses on the steps of the St. Paul Capitol building during their civic engagment session in March.

Greater Mankato Leadership Institute Team Building Session, September 2013

Talent Development & Retention Greater Mankato Growth recognizes the value of talent

Businesses are increasingly citing the availability of talent as one of the most important factors to locate or grow their business. That’s why Greater Mankato Growth puts a high priority on ensuring our marketplace has a ready supply of talent to meet the needs of today’s employers. Greater Mankato is fortunate to have five higher education institutions, providing businesses with a ready pool of educated talent. 50% of higher education graduates in the area would like to stay here, but we are currently only retaining half of these people. Greater Mankato Growth offers plentiful opportunities to keep these individuals in our marketplace.

A program started by GMG, the Greater Mankato Young Professionals, gives individuals in the early stages of their career (age 21-39) an opportunity to learn, socialize and participate in community service projects with others in their age group. Greater Mankato Growth surveyed their Young Professionals Group after three years and found that almost 80% were still with the same company they

Another program that helps connect business professionals of all ages with their community is the Greater Mankato Leadership Institute, which for more than 30 years has provided cutting edge professional development with a community focus. GMG also offers opportunities for members to get together and make connections with others in the business community throughout their career on a regular basis, through events such as Business After Hours and Before Hours. GMG gathers the community’s top leaders every couple of years to form a Greater Mankato Leadership Delegation to work with one another, as they study the best practices from other U.S. Communities through Inter-City Leadership Visits. Greater Mankato Growth recently released the new marketplace video, Greater Mankato:The Way to Grow, in an effort to position the community as a destination for business at a national level but to also provide to businesses as a means of recruiting new talent and businesses to the area. Combined, these efforts will help ensure a talent continuum in Greater Mankato that is robust and able to meet the needs of employers in our region for years to come.

MN Valley Business • May 2014 • 35

Greater Mankato Growth

Once individuals start working with an employer in our community, it’s important we retain this talent. If a company loses an employee within the first three years, depending on the industry, it can cost them as much as $25,000 - $100,000. This includes: lost productivity, development costs, hiring and re-hiring costs, etc. But studies show employees who are not only engaged in their company, but also have a sense of place in their community, are more likely to stay.

started the program with.

Songs on the Lawn Every Thursday in June Mark your calendars and be sure to join us every Thursday in June from 11 a.m. - 1 p.m. for Songs on the Lawn presented by Xcel Energy! The event takes place in front of the Mankato Intergovernmental Center (10 Civice Center Plaza) and features music from local artists as well as food from area restaurants. Grab a friend and join in the fun! Learn more and view the full schedule at greatermankato.com/songs-lawn.

Cavalier Calls on the Newest Greater Mankato Growth Members

NuStar Realty 422 Park Lane, Mankato nustarmankato.com

Sunshine Stimulus

Greater Mankato Growth

It’s a time of year virtually every Minnesotan looks forward to and savors. Summertime is also heartily welcomed by many Greater Mankato businesses. As the weather warms up, so does business in Greater Mankato. Lazy Days of summer? Not in Greater Mankato, where summer means a healthy infusion of dollars into the community. While the benefit to hospitality businesses is obvious, the increased summer activity benefits others as well. Businesses like restaurants and hotels are customers to other area businesses from whom they get their supplies. And employees of businesses that experience a summertime upturn also stimulate our economy through their spending. Greater Mankato Growth (GMG), along with Visit Mankato, is committed to helping businesses capitalize on the opportunities this time of year presents. Annual events such as Songs on the Lawn (put on by GMG) and the

Mankato Marathon (put on by Visit Mankato) give businesses an opportunity to connect with consumers. Of course, there are many other summertime events in Greater Mankato, from Vikings Training Camp to Ribfest. For information on ALL summertime events, a large number of residents and visitors turn to our community-wide events calendar greatermankatoevents. com, which enables businesses and organizations to post their events for free. This site is also linked to from GMG’s and Visit Mankato’s websites, greatermankato.com and visitmankatomn.com, as well as many other local businesses websites. For information on other ways you can promote your business during the summer months, contact GMG at 507.385.6640. We look forward to helping you find ways to make your business shine during the summertime.

36 May 2014 • MN Valley Business 1 •• JANUARY 2013 • MN Valley Business

ProBuild 1631 Stadium Road, Mankato probuild.com

Region Nine Development Commission 10 Civic Center Plaza, Suite 3, Mankato rndc.org

Walgreens Front Street, Madison Avenue and North Mankato locations walgreens.com

2014 Business After & Before Hours

7:30 - 9:00 a.m.

5:00 - 7:00 p.m. May 6 June 3 July 1

MRCI WorkSource Bolton & Menk, Inc. Pioneer Bank

2014 Business After Hours Sponsored by:

March Business After Hours hosted by Snell Motors

May 21 June 18 July 16

Mayo Clinic Health System Willow Brook Senior Cooperative Hilton Garden Inn

2014 Business Before Hours Sponsored by:

March Business Before Hours hosted by Sam’s Club

Greater Mankato Growth 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 • May 2014 • 37

Growth in Greater Mankato 30th ANNIVERSARY

NEW BUSINESSES

Planet Fitness 1859 Adams Street, Mankato

Ecig CRIB 1730 Madison Avenue, Mankato

Prosthetic Laboratories of Mankato 1400 Madison Avenue, Suite 330, Mankato RENOVATION

NEW LOCATION

Daisey’s Soul Food & Buffet 410 South Front Street, Mankato

Ignition Fitness & Sports 100 Sibley Parkway, Mankato

Electric Beach Mankato Tanning Salon 2104 Hoffmann Road, Mankato

Greater Mankato Growth

Promote Your Membership in Greater Mankato Growth There are a number of ways we help you promote your membership in Greater Mankato Growth –from the member window cling and plaque you display at your business to the GMG Member Logo next to your listing in the online business directory. We also encourage you to use this Member Logo on your web site, brochures, advertising, proposals, vehicles and more (download the logo at greatermankato.com/promote-your-participationgmg). Why promote your membership in GMG? It’s good for business! According to a study by the Shapiro Group and Market Street Services, consumers are: • 63% more likely to purchase from a small business that is a chamber member • 43% are more likely to purchase from an insurance company that is a chamber member • 40% are more likely to eat at a restaurant franchise that is a chamber member

38 May 2014 • MN Valley Business 1 •• JANUARY 2013 • MN Valley Business

Of course, you know GMG is much more than a chamber. As an integrated chamber of commerce and economic development organization, we are able to provide comprehensive programs and activities in eight key areas: Existing Business Support, New Business Growth, Business Promotion, Talent Development, Public Affairs, Community Marketing,Visitor Attraction & Servicing and Civic Engagement. Your membership in GMG helps make this important work possible. Please let your customers know about this commitment to Advancing Business for a Stronger Community, by continuing to promote your membership with GMG.

Spinning, pedaling, riding Mankato Riding into Bike Month Part 2 of a 2 part Series

By Anna Thill, Certified Destination Management Executive (CDME), Visit Mankato President May is National Bike Month which promotes the benefits of biking and encourage the use of bikes as a regular mode of transportation. To prep for Bike Month, last month you read about how beneficial biking is to our personal health and for the overall health of the community. I promised to share with you what efforts our community is taking to make life a bit easier for bicyclists. There is a local group of bicycle enthusiasts that have banned together to form The Greater Mankato Bike and Walk Advocates (GMBWA). Their mission is to “help Mankato become a Bicycle Friendly Community by advocating, educating, and encouraging people to use their bicycles while improving their health, reducing congestion and pollution and making Greater Mankato a better, more livable community.” They are working to increase amenities for cyclists and to make the roads safer. They are responsible for the annual River Ramble scheduled for October 5, 2014. The River Ramble is a music-filled ride through Greater Mankato and unveils the beauty of southern Minnesota and the Minnesota River Valley. Riders enjoy 12, 26 or 42 miles of beautiful bicycling routes. Mankato River Ramble proceeds go to support the efforts of the Greater Mankato Bike & Walk Advocates.

There are a lot of ways to integrate into the local biking community starting with more than 13 free events during Bike Week, May 11 – 17. These events span all different types of riders from road and trail bikers to BMX to mountain bikers. For a listing of events, go to Visit Mankato’s website, visitmankatomn.com. There are a number of beautiful bike trails throughout the community.Visit Mankato has established a biking map that shows the trail system and suggested loops based on the distance and experience one is seeking. The newest trails in our area are for mountain bikers. For information area trails including new construction or improvements, go to Visit Mankato’s website. Mankato-North Mankato has achieved bronze status as a bicycle friendly community. In an effort to climb toward a higher status, city staff and biking enthusiasts will be meeting with a consultant in June to look at our bike friendliness and provide pointers on what can be improved. As our trail system is a major part of our community’s tourism brand, it is important to Visit Mankato that our community continue to improve the experience bicyclers can have locally. If you have any feedback or want to get involved, please feel free to contact me at athill@ visitmankato.com or 507.385.6664.

GMBWA has also been the spark behind the new Rack & Roll Program to get additional bike parking in the community. This month, new bike racks will be installed on Riverfront Drive and Belgrade Avenue and in Jackson Park. with more coming on Front Street this summer. The program will continue to expand throughout the Visit Mankato is an affiliate of Greater Mankato Growth (GMG), operated as an LLC under GMG.Visit Mankato is dedicated to the important work of attracting and servicing visitors, conventions, events and tournaments in Greater Mankato.

MN Valley Business • May 2014 • 39

Greater Mankato Growth

We are lucky to have a group like this in the community who can identify barriers and issues for bicyclists based on their expertise, and they are willing to lend a helping hand to improve the biking experience for residents and visitors alike. The GMBWA volunteers have been instrumental in work behind the scenes to get trail signage on the Minnesota River Trail from Sibley Park to the Sakatah Trail. More trail signage is expected as the City of Mankato plans comprehensive updates to street infrastructure.

community as sponsors are identified for the racks.Visit Mankato can be contacted to learn how your business can sponsor a bike rack.

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