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2 • SEPTEMBER 2016 • MN Valley Business

F E A T U R E S September 2016 • Volume 8, Issue 12

Home-based businesses offer rewards such as flexibility and a lower overhead cost, but going it alone also brings a variety of challenges.

The Caves of Faribault produce varieties of rich cheese in a series of caves that were first used in the 1800s to store beer for a local brewery.

Joe and Mavis Lamecker started selling campers as a sideline to their New Ulm gas station. Today, Joe’s Camper Sales is a major dealer.

Ron and Terry Saye, owners of Pond Road Market, specialize in a different kind of business concept in that their focus is on occasional/monthly sales.

MN Valley Business • SEPTEMBER 2016 • 3

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SEPTEMBER 2016 • VOLUME 8, ISSUE 12 PUBLISHER John Elchert EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Nell Musolf Heidi Sampson Dean Swanson PHOTOGRAPHERS Pat Christman Bre McGee COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Phil Seibel MANAGER 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....................................5 ■ Business Commentary........................8 ■ Business and Industry trends .........24 ■ Retail trends ....................................25 ■ Agriculture Outlook .........................26 ■ Agribusiness trends.........................27 ■ Construction, real estate trends ....28 ■ Gas trends .......................................29 ■ Stocks ..............................................29 ■ Minnesota Business updates...........30 ■ Job trends ........................................30 ■ Greater Mankato Growth .................32 ■ Greater Mankato Growth Member Activities ...........................34

From the editor

By Joe Spear

People still pursue the entrepreneurial dream

he number of people selfemployed in Minnesota will grow 2.3 percent from 2014 to 2024, according to the Minnesota Depar tment of Employment and Economic Development. That doesn’t seem like a big number or suggest a burst of entrepreneurialism. Still, out of a 3 million-person labor force, some 196,800 are self-employed. That number will grow to about 201,000 in 2024, a gain of 4,500 or about 450 people a year. The risks of being selfemployed and the travails of starting your own business can be a deterrent to many workers who have been seeing wages rise and job opportunities grow slowly but steadily since the 2008 recession. But sometimes entrepreneurs do better when the industries they left behind do better. At least one of the entrepreneurs profiled in our cover feature this month will likely benefit from one of the fastest growing businesses in the next 10 years. Construction employment is expected to grow by 10 percent. Mike Linde, owner of Superior Ceramic Tile & Stone, used to be in the construction business until he set out on his own in 2010. Much of his business comes from people in the construction trades who know his work. There are of course always tradeoffs of going into business for yourself. While running your own business can help people reach the American dream, it also comes fraught with risk. Eight in 10 new businesses will fail within the first 18 months, according to Bloomberg. Trends in new business startups have been less than robust in southern Minnesota recently.

4 • SEPTEMBER 2016 • MN Valley Business

In southwestern Minnesota, an area where Mankato is the biggest regional center, entrepreneurs filed 665 new business filings in the first quarter of 2016, according to a report by the Minnesota Secretary of State and St. Cloud State University. That was down 3.6 percent from the same time last year. New business incorporations numbered 56, down about 10 percent from last year, and new Limited Liability Corporations fell 3.5 percent to 391 filings. Assumed name filings -- one of the first steps in starting a new business – were down 2 percent to 190 in the first quarter. Nonprofits were about even with last year at 28 new filings. The entrepreneurs interviewed for our feature have varying reasons for going into business. For some it was just getting control of their own destiny. For others, their business grew from a hobby to a passion. But they also face the drawbacks of no guaranteed paycheck and costs of health insurance and retirement that has to be built into the price of their products. Naomi Pfeiffer had a passion for gardening and selling unique seed varieties. It turns into a supplemental retirement plan that she’s happy with. “I always had a vision of selling my things when I retired and I knew I had to make money in retirement,” said Pfeiffer of her Lyons Creek Gardens. Linde, of Superior Ceramic Tile & Stone, wanted to move out the home construction business and eventually came to develop a specialty skill with tile. “I worked for Jerry’s Tile in Mankato for nine years and learned a lot about the trade and realized I wanted to do residential

work and work on my own,” Linde said. Alanna Brandel and Jill McAninch expanded their hobby of treasure hunting and repurposing furniture for themselves into a small business selling to others, starting the Rusted Bucket about two years ago. “We both loved doing thing in our homes, working with furniture, colors,” Brandel said. “We love the treasure hunt, looking for things at auctions or shops or farms, McAninch said. “We’re diggers.” Starting your own business may be tough and fraught with risk, but the economy needs entrepreneurs. Every business that exists today started with some entrepreneur’s idea. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow on Twitter @jfspear.

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Local Business People/Company News

Schmidt’s Meats earns honors

Schmidt’s Meat Market, Nicollet, won international recognition at the DFV-AAMP Quality Competition for Sausage and Ham held at the University of Wisconsin-Madison. The competition was the first event of its kind held in the United States. IFFA is the leading international trade fair for processing, packaging and sales in the meat industr y, and hosts an international meat competition every three years in Frankfurt, Germany. The German Butchers’ Association formed a partnership with the American Association of Meat Processors to host the “satellite contest” in the U.S. Schmidt’s Meat Market will be awarded with five gold medals: original summer sausage, jalapeno & cheese summer sausage, bacon-cheddar-ranch

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brats, wieners, bacon. They also earned a bronze medal: Wisconsin style (cranberry & cheddar) summer sausage. To make the event identical to the show in Frankfurt, organizers sent judges from Germany to conduct the competition. All entries were graded on appearance, consistency, smell, and taste. The competition received more than 300 entries from 15 states. Schmidt’s Meat Market was invited by the German Butchers’ Association to attend a ceremony at the IFFA in Frankfurt in May. ■■■

Thriveon techs certified

Thriveon s e r v i c e technicians, Michael Poppler and Josh Dalluge, have a t t a i n e d N e t w o r k + cer tification. Network+ is one of the credentials Michael Poppler administered by CompTIA, the leading IT i n d u s t r y professional organization. Cer tification s i g n i f i e s comprehensive training in troubleshooting Josh Dalluge techniques as well as a solid understanding of the way that computer networks are set up and managed so that they meet security, performance and reliability objectives. Poppler received the A+ certification and has been with Thriveon since 2015. The Network+ credential follows Dalluge’s recent completion of MTA certification from Microsoft. He has been with Thriveon since 2015.

MN Valley Business • SEPTEMBER 2016 • 5 4.95”x4.95”

Mankato Magazine July 2016

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ISG receives honors

ISG was recently named to the 2016 PSMJ Circle of Excellence by PSMJ Resources, Inc., a leading publisher and consultant on the effective management of architecture, engineering, and construction firms. Firms in PSMJ’s Circle of Excellence are selected from the top 20 percent of those that participate in PSMJ’s Financial Performance Benchmark Survey. There were a total of 64 firms chosen from the 319 participants in the survey. PSMJ’s Circle of Excellence is designed to highlight firms that are successfully managed and demonstrate outstanding achievements in profitability, overhead management, cash flow, pr oductivity, business development, staff growth, and turnover. ■■■

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Wesley Otto and Mike Sargent have teamed up to start a social advertising agency, Otto Media Group. While social media is their Wesley Otto specialty, Otto Media is a full service agency. The founders graduated a few years apart from Loyola Catholic School in M a n k a t o . Sargent later graduated from South Central Mike Sargent College with a degree in graphic arts and Otto is currently finishing his degree in marketing from Minnesota State’s College of Business.

Eide Bailly makes promotions

Eide Bailly, a regional CPA and business advisor y firm, has promoted the following individuals: Brock Thaemlitz and Sara Ptacek to senior associate, Andrew Wagner, Devon Soule, and Jenn Faust to manager and Brian Haley, Brooke Forstner, and Sean Finley to senior manager. ■■■

Super Lawyers named

Three attorneys with Farrish Johnson Law Office have been named Super Lawyers for 2016. Scott Kelly, William Partridge and Steven Fink received the honor from Thomson Reuters and recognizes them as being in the top 5 percent of all lawyers in Minnesota. Two attorneys from the firm were also named Rising Stars: Daniel Belig and Joseph Gangi. ■■■

Cousins is recognized

Chris Cousins of Connect Real Estate Group has been awarded the nationally recognized M i l i t a r y Relocation Professional Chris Cousins Cer tification. The National Association of Realtors awards the certification to Realtors who help military personnel, veterans and their families find housing that lets them make the best use of their benefits.

Upper Midwest adds staff

Two people have joined Upper Midwest Management. Terri Jensen, Accredited Land Consultant, has joined as vice president of real estate/appraisal operations. Terri Jensen Jensen is one of only 12 who have earned the ALC designation through Realtors Land Institute. She is currently f u l f i l l i n g a four-year commitment to national RLI as Andrew McCarthy immediate past president. Andrew McCarthy joins the farm management team. He is a 2015 graduate of Iowa State University with a degree in Agricultural Business. Upper Midwest provides landowner ser vices in farm management, real estate and appraisal through offices located in New Ulm, Olivia, Faribault, and New Hope and serving clients in south and north central Minnesota and northern Iowa. ■■■

Ellegard joins Connect

Kerri Ellegard has joined Connect Real Estate Group as their newest Realtor. Ellegard resides in Minnesota Lake. She moved to the area when she was 9. She has a degree in business management administration.

Cornish named Ecumen director

Shelly Cornish has been promoted to campus director at Ecumen Pathstone Living in Mankato. Cornish has been at Pathstone for eight years and with Ecumen for more than 11 years. She started her career as operations director at Ecumen Oaks & Pines in Hutchinson in 2005, became housing manager at Ecumen LeCenter in 2007 and joined Pathstone as housing director in 2008. Along with her current role managing housing at Pathstone, she will take on additional operational responsibilities. Cornish is a graduate of Minnesota State University. Ecumen, which was voted best senior living community in Mankato by readers of Mankato Magazine for the second year, recently received Ecumen’s Gold Standard Award for Excellence and Leadership, which is based on consistently exceeding financial goals, and ranking high in customer service and employee satisfaction. ■■■

Halbur joins Gislason

Attorney Rick Halbur has joined Gislason & Hunter in its New Ulm office. Halbur focuses his practice on banking law, commercial litigation, employment law, agriculture law and estate planning. Halbur received his Juris Doctor of Law from the University of Minnesota Law School in 2013. He received a Bachelor of Arts Degree from the University of St. Thomas in 2010. ■■■

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Prins named VP at First National

Jade Prins has been named vice president of business development at First National Bank of Waseca. Prins joins the bank with over 18 years of experience in the areas of retail, mortgage, commercial, agricultural, business development and management.

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Dean earns designation

Terry Dean, Realtor for Upper Midwest Management Corp. has earned the Accredited Land Consultant designation through Realtors Land Institute. Dean becomes the 12th ALC in the state of Minnesota. The designation is given to those who achieve the highest levels of education, experience, and professionalism.

Prins named VP at First National

MN Valley Business • SEPTEMBER 2016 • 7

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Business Commentary

By Dean Swanson

Using the balance sheet to manage your business

EO’s, how can you use a balance sheet to manage your business? First, look at your current and fixed assets. Current assets are those that can be converted into cash within the next 12 months and include: • Cash in the bank: Keeping track of cash and projecting what it will be in one to four weeks lets you know if you have sufficient funds to make payroll, pay your bills and pay yourself. • Accounts receivable: You made the sale and incurred the cost of providing the product or service and are now waiting to be paid. Use your balance sheet to track if customers are paying on time or if you need to call and remind them payment is due. If you know that customers are late on payments, you might consider holding off on subsequent sales. Some companies encourage

prompt payment by offering a discount. The listing of when payments are due is called an accounts receivable aging statement. A financial ratio to help manage accounts receivable is called days’ sales outstanding. • Inventor y: If your business has inventory, you need to ensure you can meet projected sales and not have too much left over. A manufacturing business might have three levels of inventory, each of which needs to be managed — raw material, in process, and finished product — while a retail clothing business needs to track inventory by style and size. A financial ratio to help manage inventory is called inventory turnover. Fixed assets will be around for more than 12 months and include:

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• Vehicles, equipment and buildings: You need to track these for insurance purposes and probably depreciate the expense for tax purposes. Now, look at your liability accounts The first three types of liabilities are known as current liabilities, as they are usually due within the next 12 months. • Accounts payable: Having vendors that allow you to pay on credit is wonderful. Track these obligations, and make sure you pay on time. If that’s not possible, contact the vendor, and let them know when you will make payment. Vendors often provide discounts for prompt payment, so if you have the funds, do not miss the payment date. Purchases charged to your credit card are included in this section. • Taxes: Keep track of sales tax collected from customers. This is not your money; you are the tax collecting agent for the government. Payroll taxes withheld from employee paychecks are also not your money. If you are using a payroll service (highly recommended), they should be handling this for you. Some jurisdictions collect personal property and real property taxes, and depending on your form of legal organization (e.g., sole proprietorship, LLC, corporation), you may also have company state and federal income tax obligations.

• Loans: If you have any loans in which payments are due within the next 12 months, they are listed here. Do not miss any payment dates, as in some cases, this might cause your loan to go into default. • Long-term loans: This includes mortgages where payment is due in more than 12 months. A financial ratio that combines current assets and current liabilities is called “current ratio” (current assets divided by current liabilities). The ratio should be greater than 1, which demonstrates you have the financial resources to pay your bills. Finally, look at your net worth Besides the personal satisfaction of knowing you are worth more each year, bank loans often have stipulations that net worth must be kept at a certain level, so you need to track your net worth to ensure you’re not in default. Key lessons The balance sheet is one of the primary financial statements that can be used to manage your business on both a long-term and daily basis. While you may delegate the preparation of the balance sheet to an accountant or bookkeeper, it represents your business, so you should understand how to read it and use it. Dean L. Swanson, Southeast Minnesota SCORE, is a volunteer SCORE mentor and regional vice president.

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MN Valley Business • SEPTEMBER 2016 • 9

Happy

Mike Linde created this custom-made backsplash in a Mankato home.

at home

Home businesses offer freedoms, challenges

By Tim Krohn | Photos by Pat Christman

or some it’s the way to realize the dream of owning and operating their own business without some of the major costs of starting up. For others it grows slowly out of a passion that turns into a business opportunity. Home-based businesses can give

the entrepreneur a chance to dip their toes into the water without leasing office or store space. Some of the efforts will fail, others will produce a small but decent side income, and others will be big successes that either remain homebased or turn into a more traditional operation.

Cover Story

10 • SEPTEMBER 2016 • MN Valley Business

For Naomi Pfeiffer, a homebased produce business grew from her passion and from a need for a little extra money later in life. “I always had a vision of selling my things when I retired and I knew I had to make money in retirement,” said Pfeiffer of her Lyons Creek Gardens. For Mike Linde, Superior Ceramic Tile & Stone grew out of years of experience and a desire to be his own boss. “I started doing home construction for a company for one year and realized I didn’t want to do that. “I worked for Jerry’s Tile in Mankato for nine years and learned a lot about the trade and realized I wanted to do residential work and work on my own,” Linde said. Alanna Brandel and Jill McAninch always had an artistic bent, decorating their homes and searching for treasures. After years of repurposing furniture for themselves, family and friends, they started Rustic Bucket two years ago. “We both loved doing thing in our homes, working with furniture, colors,” Brandel said. “We love the treasure hunt, looking for things at auctions or shops or farms, McAninch said. “We’re diggers.” Those working from home enjoy benefits such as flexible work hours and increased tax benefits and write-offs. But they also face disadvantages such as a lack of fringe benefits and family lifestyle challenges. And for most who do it, it’s a gratifying way to chase a dream on their own terms.

The tile man

Linde is a skilled installer of ceramic and other tile and stone, and he has an obvious passion for creating custom showers, backsplashes and other work that make him and the customer proud. He has no regrets about starting his own business — he hopes to be doing it for another 30 years. “I think anyone who has the opportunity to start a business should. It’s rewarding and the more you put into it, the more reward there is.”

Mike Linde, of Superior Ceramic Tile & Stone, works on a client’s project. Still, Linde is realistic about the trade-offs of owning your own business and went through times early on that were challenging. After his work for Jerry’s Tile, Linde had all the skills he needed and in 2010 — at the tail end of the Great Recession — headed out on his own. “That was about the worst time to do it. It was pretty scary. I had some jobs lined up but I wasn’t sure after the first two months if I’d have work.” But some homebuilding was starting again and people were putting money into remodeling their homes rather than selling them, providing Linde work, often through stores such as Floor to Ceiling or through contractors who knew his skills and who hire him as a subcontractor to do tiling and stone work. “I’m glad now I did it, but there were some scary times and some money borrowed to get going.” He admits quitting a full-time job and not being sure where your next paycheck may come from is a tough decision. He credits his wife, Amy, for encouraging him to go into business himself and she continues to help with a lot of the book work via Quick Books. Linde does some commercial work — he did the kitchen and bar area in the New Bohemia in Mankato and work on the former Lone Star BBQ in St. Peter that was purchased recently by a Mankato restaurant group — but much of his work is residential.

“I do a lot of custom showers, backsplashes, floors, stone on fireplaces.” He said bigger tiles with glass accents are hot now as are custom showers with benches and things like custom corner shelves. “The work is more detailoriented now. There’s a lot of measuring and cutting.” Linde says being your own boss is nice, but there are drawbacks when you’re a one-man show. “I get texts or calls from early morning to night and weekends. I like the work but I’m not a huge fan of invoices and making estimates. But it’s all part of the job.” He advises people starting their own business to get a handle on bidding a project. “The paperwork and getting the stuff you need all take a while. You have to figure that time into your work.” And he said things like health care, 401(k) and other benefits that you get working for someone else are mostly your responsibility when you’re working on your own. “You have to figure those things into your cost.” But despite the occasional headaches, Linde said the rewards of the job are worth it. “I have a lot of repeat customers. I don’t need a pat on the back but it’s nice to get good comments and for people to want you back. People really appreciate the work that is done.”

MN Valley Business • SEPTEMBER 2016 • 11

Alanna Brandel, left, and Jill McAninch started their Rusted Bucket business a couple of years ago after long repurposing furniture and other items. RESIDENTIAL | CONSUMER | COMMERCIAL | AGRICULTURAL

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The diggers

Brandel and McAninch settled on the name the Rusted Bucket for their business for a simple reason. “We love rusted buckets. It’s something we could do millions of things with,” Brandel said. The women started the business, working out of their garages, a couple of years ago, but have long been taking old furniture and other items and freshening them up for new uses. While they had successful occasional sales out of their garages, they recently have been displaying and selling their work from the Mankato Vintage Market at 1630 North Riverfront (the former Bobber Shop) and from the recently opened Arizona Oil Co. in Old Town. The Vintage Market, which is open the second weekend of the month and contains items from a number of dealers, has given them strong sales and it gives them hope of maybe opening a shop of their own someday. “It’s always on our mind, but we’re happy with the two locations

we’re at,” McAninch said. They said slowly working their way into the business has helped them pick up business tips from other dealers, and they didn’t have to come up with a lot of startup money. Their biggest cost is the old furniture they scour for through auctions, Craigslist, moving sales, estate sales and elsewhere. That cost has risen as more people are “repurposing” old furniture for new uses. “There’s a lot of people doing it, so the thrift stores have raised their prices,” Brandel said. “You have to do more searching to find good stuff. It might be the run-down thrift store on the side of the road,” McAninch said. The two look for solid, sturdy furniture and between their creative minds find ways to repaint it to fit trends. An old farm table may get a more distressed look, while midcentur y modern furniture is dressed up with a like-new paint job. “We like the idea of taking something people were going to

Many of the Rusted Bucket pieces are on display at the Mankato Vintage Market in Mankato. throw away and reuse it,” McAninch said. The counter of the new Arizona Olive Oil store, for example, was ready for destruction before they

got it and refinished it. “Some people rescued it from a burn pile,” Brandel said of the big old buffet they transformed into a store counter.

MN Valley Business • SEPTEMBER 2016 • 13

Naomi Pfeiffer has long tended a large garden for her family and now sells her produce.

The gardener

Pfeiffer and her family moved to acreage on the edge of Lake Crystal in 1979 that was anything but the Garden of Eden. “There were 6-foot-high weeds everywhere. The first thing I did was dig up the garden because I had children and wanted to garden and do canning with the children.” She grew the normal garden fare, from asparagus to rhubarb, but a real passion kicked in five years ago when her daughter gave her some heirloom tomato seeds. “I now have 60 varieties of

heirlooms and 30 kinds of peppers,” she said. “Heirloom tomatoes are special and a lot of people aren’t aware of how good they are.” Lyons Creek Gardens grew from her love of homegrown produce, but Pfeiffer readily admits she’s far more at ease digging in the dirt and making things grow than navigating the business world. “Making a business is new to me.” She faces a challenge many rural business owners face — directing people to her home

business, which is very near Highway 60 on the east edge of Lake Crystal. County zoning ordinances restrict the size and location of signs. While she has regular hours selling produce from her home, she admits the inability to attract drive-by traffic is a barrier. Pfeiffer has done well selling heirloom tomato plants at the farmers’ market early in the year, but she’s not keen on having a regular booth and carting produce in and out of the market all summer and fall. She’s investigating getting into

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Pfeiffer grows 60 varieties of heirloom tomatoes. community supported agriculture in which people buy “shares” and then get a specified amount of produce throughout the season. Pfeiffer has gotten some advice from the Small Business Development Center and is getting help from Minnesota State University to help her boost her marketing through Facebook and other social media. Because her large garden operation was built up over many years, Pfeiffer said she has the advantage of not having to take on debt to get her business up and running. “I’d encourage anyone going into business to really watch what they’re spending and not buy what they want but what they need to get going. I hear too many people going belly up because they went too far in debt, which is too bad.” And she advises anyone considering a home-based business to know how they’re going to market their product or service and determine what their market is. “I’m doing this because I love gardening. But you can’t get into business just because you love it if you can’t sell it.” MV

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Is a home business for you?

here many factors to consider before starting a business in your home. Do you have the personality and business skills to run a business? Does it make sense to operate the business out of your home? How will this business affect the family environment? Is their sufficient demand for your product or service? What price should be charged for your product or ser vice? These and other important questions can be answered by writing a sound business plan.

Operating a home-based business Advantages: • Can start as a part-time business. • More flexible lifestyle and more integrated with the family. • Lower start-up and operating costs. • Cost-savings on child/adult care. • No commuting. • Flexible work hours. • Satisfaction of being own boss. • Increased tax benefits and write-offs. • Outlet for creative/unique talents. • Employment of family members by the business.

Disadvantages: • Space may be cramped, limiting growth potential and family use. • Personal and family lifestyle patterns may be disturbed. • Business and family privacy may be disrupted. • Long work hours and time away from family. • Lack of fringe benefits. • Lack of informal social contacts or opportunities to network. • Stress due to inability to balance family and business needs. Family members and friends may demand more of you when you’re home all day. Business activities may cause problems with neighbors. Discipline is required to establish steady, homework patterns.

Balancing family and business Having the support of your family will help achieve the balance you need for a happy family life and successful business. Here are some suggestions for helping you strike such a balance: • Involve family members, where it makes sense, in developing the business plan, and communicate intentions to all family members. • Maintain a clear distinction between your business life and family life. • Share home responsibilities with other members of the family. • Manage your time effectively by developing good time management skills. • Allow time for family vacations, and limit business hours to specific times of the day and week. • Start your business when your • Children are older or consider operating part-time when they are young. Source: Small Business Administration

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MN Valley Business • SEPTEMBER 2016 • 17

The Cheese Cave plant at the bluffs in Faribault.

Magic underground Caves of Faribault bring artisan cheese By Nell Musolf

ucked neatly into the sandstone bluffs on the eastern side of Faribault are a group of caves where a little bit of magic takes place yearround. Not hocus pocus kind of magic, but a place where a magic of flavor slowly evolves as milk turns into richly veined blue cheese. “The magic of the caves influences the flavor,” plant manager Jill Ellingson said. “They give our AmaBlu cheese its distinct flavor.” The Caves of Faribault turn out artisan cheeses that include the AmaBlu as well as • SEPTEMBER 2016 • MN Valley Business

AmaGorg, a gorgonzola, cheddar and Gouda, among others. The cheeses are considered to be artisan because they are hand-made by cheesemakers through a process that guarantees not only a delicious product but also a distinctive one. “We follow the same recipe each time but there will be subtle differences in every cheese produced,” Ellingson said. “Each wheel of cheese is touched on average 26 times and hand salted twice. The end product is hand wrapped, not wrapped by a machine.

Cover Spotlight

Top: The caves were first used in the 1850 to store beer. Bottom: As demand increased, the Cheese Cave store was built for retail operations. Each wheel is a little bit unique and different.” Ellingson has been with the Caves of Faribault for five years and said that every year has seen growth.

Rapid growth

“Back in 2008 there were 18 employees. Now we’re up to 52 and we’re still growing. Artisan cheese is one of the fastest growing food trends.” The Caves of Faribault cover seven acres that include two city blocks of caves. The caves were first created in the 1850s and were originally used by the Fleckenstein Brewing Co. to store beer, a practice that was ended by Prohibition. In the 1930s, Felix Frederiksen and his wife were traveling through Minnesota on their way to St. Peter in search of sandstone. When the train the couple was on stopped at the train depot in Faribault, Frederiksen took a walk and came across the abandoned caves and realized that the sandstone he had been seeking was right there. He told his wife that they were staying in Faribault and started the first shop in America to make blue cheese which he named AmaBlue. In the 1990’s, production at the caves was moved to another location. In 2001, the Faribault Dairy Co. (now known as Caves of Faribault) returned to the caves and began production once again. Ellingson said that when the company first opened customers came to the front door at the plant to purchase blue cheese. As demand increased, the company decided to open a separate store to sell its cheeses. The Cheese Cave Factory Store, 318 Central Ave. N., Faribault, sells a variety of cheese, crackers, olives and spreads. The Cheese Cave Factory Store also has an active online presence. “Being a part of the local community has been phenomenal,” Ellingson said. “The community has

Plant Manager Jill Ellingson with the Jeffs’ Select Cheese variety, which recently tied for 3rd place Best of Show at the American Cheese Society. There were more than 1,800 cheeses entered in the contest. really embraced us and that’s wonderful.” The cheesemakers of the Caves of Faribault also get to meet their customers at cheese tastings at grocery stores such as Hy-Vee. “Meeting the people who buy your food, I can’t express how much that connects the dots for us,” Ellingson said. “It means so much to all of us to meet people and hear what they think of our cheese. That’s very important.” Ellingson said that the strong farm to table movement has played a large part in the popularity of Caves of Faribault’s products. “People are very interested in how their food is made, much more so than when I was growing up. They want to know the process and they want to know what is in the food they’re eating and that they’re feeding their family.” Ellingson noted that she is occasionally surprised when younger children sample AmaBlue at cheese tastings. “I know I wouldn’t have tried blue cheese when I was a kid,” she said with a laugh. “But I think that’s a sign of the changing food palates and perhaps also a sign that a lot of parents are exposing their children to different tastes and kinds of food.” The Caves of Faribault’s cheeses have won numerous awards from a wide variety of cheese competitions. Ellingson credits the culture of agriculture for such a positive reception. “The culture of agriculture is hard-working, ethical people with a passion for what they do. Its family oriented and with that kind of attitude it becomes more than a business. We build each other up.” MV

MN Valley Business • SEPTEMBER 2016 • 19

Joe and Mavis Lamecker with their son, Jerry, who is taking over Joe’s Camper Sales.

Bigger and plusher Joe’s Camper Sales grows with market

By Heidi Sampson | Photos by Pat Christman

oe and Mavis Lamecker sold gasoline at their Joe Skelly gas station in downtown New Ulm and in about 1980 started selling campers in the summer as a way of earning some extra cash. But the camper business soon proved to be a solid adventure and with the sale of their gas station complete in the early ’80s they put all their time into Joe’s Camper Sales. In 1996, outgrowing their space downtown, Joe’s Camper Sales purchased some land at their current location, 2417 South Broadway Street, which allowed

for expansion. With the newly acquired land, they built a showroom and service area. Since their initial build, they’ve added to the location twice to meet the demand of those seeking campers. Their son, Jerry Lamecker, grew up at Joe’s Camper Sales. “I’ve been around the business from day one,” Jerry said. “Whether it was a job or not, I was here helping out anyway. I went full-time shortly before they built the new store.”

Profile

20 • SEPTEMBER 2016 • MN Valley Business

“People may start with their first pop-up, then move onto bunks to accommodate kids, then no bunks when the kids leave the house, then grandkids come along and they go back to bunks.” - Joe Lamecker

Campers to fish houses

As of January, Jerry owns 90 percent of the business with his parents owning the rest as they prepare to retire from the business at some point. Joe’s specializes in campers, 5th wheels, fish houses, toppers, cargo trailers, service, repairs and installing hitches. They also have a store selling a large inventory of parts and camper accessories. They also sell Yamaha generators, which customers often buy to use with campers and fish houses. Their sales radius of business is roughly 100 miles, but with the reach of the internet and social media they draw customers from a five state area who see a trailer they like on their website. “I takes pictures of each unit that comes onto the lot,” said Jerry. “We do not use generic pictures of campers to stock our website. What you see is what you get. If the camper is online, it is in our lot. We do this with all new and pre-owned units.” About three years ago, Joe, Mavis and Jerry, transformed one of their outside buildings by insulating and heating it for use as an indoor showroom. It accommodates six to eight, 30- to 40-foot units. With the indoor show room, Joe’s Camper Sales is able to show a variety of camper’s year around, ending what used to be a slowdown during the winter

Top: Jerry Lamecker inside one of the 150 campers in stock at Joe’s Camper Sales. Bottom: Jerry moves a 5th wheel camper on the lot in New Ulm. season. “Campers have come a long way,” said Joe. “They are pretty elite and plush. We have bigger slide outs and more slides outs. Then there is length and 5th wheels. We never used to have very many 5th wheels on hand, now we have around 30 new ones in stock, where we used to maybe have only one. All in all, we have 150 campers in stock.” The business strives to be family orientated and a majority of their business happens through word of mouth. “We’ve had customers come in

who were told by a friend ‘before you buy take a drive to New Ulm.’ We get people who have bought their first camper here, and then over the years, we’ve sold them 8 to 9 trailers,” Joe said. “People may start with their first pop-up, then move onto bunks to accommodate kids, then no bunks when the kids leave the house, then grandkids come along and they go back to bunks. It’s nice to know we are helping people meet their needs as their own families grow, change and expand.” MV

MN Valley Business • SEPTEMBER 2016 • 21

Ron and Terry Saye, owners of Pond Road Market.

Occasional and unique Pond Road Market By Heidi Sampson Photos by Bre McGee

on and Terry Saye, owners of Pond Road Market, specialize in a different kind of business concept in that their focus is on occasional/ monthly sales. That doesn’t mean they aren’t working the rest of the month following a sale, as they spend the time restocking their store with a new supply of products for the next sale. The Sayes had owned Pond Road Antiques in North Mankato for three years, which operated as a full antiques store, open seven days a week. During its operation, Pond Road Antiques was named in the “Best Of”

edition of the Mankato Magazine for two years in a row. Although the business did well a loss of lease forced the couple to close down Pond Road Antiques and they started looking for a new location that could be more permanent. Last winter they looked at the old Thomas Tree Landscaping location, south of Mankato on Highway 22. Unsure if the spot would be a good location during the winter weather they waited on making a decision. When spring came, they happened to be cruising down Highway 22 when they passed the

Feature

22 • SEPTEMBER 2016 • MN Valley Business

Top: The Market puts in new items for each monthly sale. Bottom: The Pond Road Market is located on Highway 22 south of Mankato. potential location a second time. With spring in full bloom, the location didn’t look as foreboding as it had during the winter months and a second viewing proved the location was more than viable. With the purchase of the store on June 1, the two conducted a massive turn-around of the location in terms of remodel and stocking, with their first sale date taking place on July 21.

A new business concept

and exterior decorating. “I enjoy the people,” said Terry. “I also enjoy the hunt of finding just the right piece, from small to large items, for our customers. To hear people say, ‘I never thought of that.’ I guess that’s what we specialize in helping people to rethink how to use items or even repurpose what they already have. “For instance, we sold a donkey saddle that was transformed into a book holder.” MV

When their youngest daughter went away to college, a friend of Terry’s recommended renting a little spot at Earthly Remains. Terry was unsure of whether or not she could find enough items to stock an entire location, let alone have something people might want to buy. As weeks went by without a decision, Ron asked what was holding her back. Terry replied, “what if I don’t make enough to pay the rent,” which was a total of $25 a month. “I’ll pay it,” Ron responded, and the couple was in the antique business. As the two started working to stock their space they began to fall in love with the process of finding unique items. As time went on, the two talked about owning their own location one day. When it came time for Terry to retire from Taylor Corp. after 40 years of service, the opportunity for a potential location opened up in North Mankato, which would become Pond Road Antiques. “It was the scariest thing in the world,” said Terry, “but when you are 62 years old, it’s really now or never.” Now, with Pond Road Market, the couple rents out spaces to dealers. There are 10 dealers, including the Sayes, involved with the stocking of items at the Pond Road Market. The Market features architectural, rusty, industrial antiques, primitives, painted, decorative and many other unique pieces for interior

MN Valley Business • SEPTEMBER 2016 • 23

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The sale of vehicles in Mankato is just slightly ahead of last year, during the first five months of the year. Sales were up 1 percent as auto dealers sold 4,343 vehicles through May, the latest figures available. Last year at that time dealers had sold 4,295.

GDP up 1.2%

The Bureau of Economic Analysis reported that real gross domestic product (GDP) increased at an annual rate of 1.2 percent in the second quarter of 2016. Real GDP grew by 0.8 percent in the first quarter of 2016. The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures and exports. Forecast real GDP growth is 1.9 percent in 2016, the same as forecast in last month’s STEO, and it increases to 2.5 percent in 2017.

Disposable income up

Real disposable income grows by 3.1 percent in 2016 and by 2.6 percent in 2017. Total industrial production falls by 1.5 percent in 2016, but rises by 1.9 percent in 2017. flexibility

For More Information: Call Brandon Beery

507-234-5186 601 1st St E. • Janesville, MN

24 • SEPTEMBER 2016 • MN Valley Business

Employment growing

Projected growth in nonfarm employment averages 1.7 percent in 2016 and 1.3 percent in 2017.

Investments to jump

Forecast private real fixed investment growth is expected to averages 1.9 percent this year but should jump to 5.2 percent for 2017. Real consumption expenditures grow faster than real GDP at 2.8 percent in 2016 and 2.6 percent in 2017.

Imports beat exports

U.S. export growth is 0.9 percent and 3.1 percent for 2016 and 2017, respectively. Meanwhile, import growth is 1.3 percent in 2016 and 4.6 percent in 2017.

Economy

Electric production

The amount of electricity generated using natural gas reached a record high during July, surpassing the previous record set in July 2015, according to the Energy Information Administration. The record natural gas-fired generation was driven by competitive economics compared with coal (despite recent natural gas price increases) and by warmerthan-normal temperatures that boosted overall electricity generation. For 2016, EIA expects natural gas to fuel 34 percent of electricity generation compared with 30 percent for coal. In 2015, natural gas was used to generate slightly less than 33 percent of electricity, and coal was used to generate slightly more than 33 percent of electricity.

Crude falls again

North Sea Brent crude oil spot prices averaged $45/ barrel in July, a $3 decrease from June. This was the first monthly decrease since the Brent price fell to a 12-year low of $31 in January. Brent crude oil prices are forecast to average $42/ barrel in 2016 and $52 in 2017. West Texas Intermediate crude oil prices are forecast to be slightly less than Brent in 2016 and the same as Brent in 2017. Despite the predictions, the EI warned that current values of futures and options contracts suggest high uncertainty in the price outlook.

Summer gas: $2.19

U.S. regular gasoline retail prices this summer (April through September) are forecast to average $2.19 per gallon, 44 cents lower than last summer. Gasoline retail prices are forecast to average $2.06 per gallon in 2016 and $2.26 in 2017.

Crude production lower

U.S. crude oil production averaged 9.4 million barrels per day in 2015. Production is forecast to average 8.7 million barrels per day in 2016 and 8.3 million in 2017. July production fell 0.2 million barrels per day from June to July of this year and 1.1 million barrels a day below the 9.7 million barrel mark reached in April 2015.

Retail/Consumer Spending Vehicle Sales Mankato â&#x20AC;&#x201D; Number of vehicles sold - 2015 - 2016

815 1,000

1200 1000 800 600 400 200 0

Source: Sales tax figures, City of Mankato

Sales tax collections Mankato (In thousands)

- 2015 - 2016 $473

600

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

$405

500 400 300 200 100 0

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato - 2015 - 2016

$54,771 $49,477

70000 52500 35000 17500 0

Source: City of Mankato

Mankato food and beverage tax - 2015 - 2016 175000 140000

$72,100 $62,868

105000 70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business â&#x20AC;˘ SEPTEMBER 2016 â&#x20AC;˘ 25

■

Agricultural Outlook

By Kent Thiesse

Prices, water, Farm Bill hot topics at Farmfest E

ach year many key issues are discussed as part of the various candidate debates and feature forums at Farmfest. The 2016 farm show was held in August in Redwood County. A variety of congressional candidates, along with national and state agricultural leaders and policy makers discussed many of the current key issues affecting farm families and rural communities across Minnesota and the Midwest. Following are some of the main issues that were discussed during Farmfest:

• Farm financial challenges — Whether it was panel members or the farmers attending the event, the current tight margins and low profitability in farming was on everyone’s mind. Profit margins in crop production are at the tightest level in many years, and for many producers are at a negative projected amount for the 2016 crop year. Crop production expenses and land rental rates have remained relatively high for many producers, while crop prices for corn, soybeans and wheat have dropped dramatically in the past couple of years. For farm operators with below average crop yields in 2016, due to weather issues, the financial situation may be even more severe.

Hog producers have been able to show a slight profit margin during much of 2015 and 2016, due to the lower feed costs; however, projected lower market prices in the hog sector in late 2016 will likely create profit challenges for the hog industry as well in the coming months.

• The 2018 Farm Bill — Most farm operators are just beginning to understand the current Farm Bill and farm programs that were implemented beginning with the 2014 crop year, and will be in place through the 2018 crop year. However, many ag policy experts and farm leaders are already beginning to discuss the writing of the next Farm Bill by Congress in 2018. There is a lot of concern over the payment calculations in the current county-based Ag Risk Coverage farm program option, which over 90 percent of the corn and soybean producers in the Upper Midwest are enrolled in for 2014-2018. The ARC-CO payments for a given crop in a crop year can vary widely from county-to-county, due to the payment calculation formula. In addition, the ARC-CO payment levels will likely decline for the 2017 and 2018 crop years, when crop producers could potentially be facing some serious financial challenges.

The livestock sector is not faring The Dairy Margin Protection any better from a profitability Program has also not been as standpoint. Dairy farmers have effective as anticipated to help been dealing with very low milk dairy producers offset the current prices for the past couple of years, which has resulted in negative low profit margins, again primarily profit margins for many producers. due to the established payment formulas. There has also been Cattle feedlot operators have also concern regarding the reduced faced negative margins at most level of maximum Conservation times during the past year or so. 26 • SEPTEMBER 2016 • MN Valley Business

Reserve Program (CRP) acres allowed under the current Farm Bill, compared to previous Farm Bills. This comes at a time when land owner interest for enrollment in the CRP program is quite high in many areas. There has been some movement in Congress to separate the Food and Nutrition Title, which funds the “Supplemental Nutrition Assistance Program” (SNAP), from the Commodity Title when the next Farm Bill is written. The SNAP program, which utilizes approximately 70-80 percent of the funds expended under the Farm Bill, has been a way to engage both urban and rural members of Congress on the importance of this legislation. For many decades Farm Bills have contained both the Commodity and Nutrition Titles. Experienced ag policy experts warn that funding for ag commodity programs could become much more difficult in the future, if the farm programs and SNAP programs are separated by Congress. • Crop Insurance — Many farm operators are concerned about the future of the Federal Crop Insurance program, which is probably the best risk management tool that crop producers have available to them. The federal government currently covers approximately 60 percent of the premium cost paid by farmers for most common levels of crop insurance coverage. Crop insurance has been a “financial life-saver” in recent years for crop producers in many areas of the U.S. that have suffered crop losses due to natural disasters and poor crop growing conditions.

Some non-ag groups are pushing to have the federal subsidy for crop insurance either greatly reduced or eliminated. This could result in crop insurance becoming too expensive for some producers, and lead to crop financing issues with ag lenders. Others have pushed to eliminate the larger farm operators from the subsidized crop insurance coverage. If these producers drop out of the crop insurance program, it may limit the number of private companies offering Federal crop insurance coverage in the future. • Future Trends for Renewable Energy — Many farm operators, agriculture and rural community leaders, as well as investors in renewable energy plants, are concerned about future government policies related to the development and use of renewable energy, especially for ethanol and biodiesel. Many States in the Upper Midwest have a very strong and well established corn-based ethanol industry, which utilizes over 35 percent of the corn produced each year in the United States. There has also been a growing biodiesel industry in the U.S. that utilizes a significant amount of soybeans each year. In addition, these renewable energy plants have become cornerstones in rural communities by providing jobs, adding to the local tax base, and enhancing the overall economic vitality of the communities. Even with all the economic, environmental, and community benefits of renewable energy, many special interest groups are calling for reductions or elimination of the Federal Renewable Fuel Standards (RFS), and other measures that would hurt the current renewable fuels industry. This could also limit research and development for future growth and enhancement of renewable energy in the U.S. • Ag Water Quality Issues — It seems that everywhere you turn these days, ag water quality issues are on the forefront. In Minnesota, a new buffer law was passed by the State Legislature in 2015 and signed into law, and later updated by the 2016 State Legislature. The 2016 update clarifies that the buffer law only affects public ditches, streams, etc., and not private ditches and waterways. The Minnesota Department of Natural Resources has completed the mapping of the ditches requiring buffers. The mapping and other details on the new Minnesota law are available through local Soil and Water Conservation District offices, or through the Minnesota Board of Soil and Water Resources. The federal authority under the Clean Water Act provision known as the “Waters of the United States” (WOTUS) also has farm operators across the nation concerned. Many agricultural leaders fear that the Federal Environmental Protection Agency will use perceived WOTUS authority to invoke practices and requirements on private farm land, which could alter crop production practices and livestock grazing methods. The WOTUS issue is likely to be debated in Congress and challenged in the Federal Courts many times in the coming years.

Agriculture/ Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2015 — 2016

$3.28

6 4 2

$2.84

Source: USDA

Soybean prices — southern Minnesota

(dollars per bushel)

— 2015 — 2016

20 16

$9.29

12 8

$9.27

4 0

Source: USDA

Iowa-Minnesota hog prices

185 pound carcass, negotiated price, weighted average

— 2015 — 2016

100 90

$77.10

80 70 60 50

$64.67 J

Source: USDA

Milk prices

Minimum prices, class 1 milk Dollars per hundredweight

— 2015 — 2016 25 22

$17.10

19 16

$15.50

13 10

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 • SEPTEMBER 2016 • 27

Construction/Real Estate Residential building permits Mankato

Residential building permits North Mankato

18000

4000

- 2015 - 2016 (in thousands)

$6,608 $11,559

13500 9000

2000

4500

1000

$452 $542

3000

Source: City of Mankato

Source: City of North Mankato

Information based on Multiple Listing Service and may not reflect all sales

Existing home sales: Mankato region - 2015 - 2016

238 288

300

Median home sale price: Mankato region - 2015 - 2016 (in thousands)

250

$151,450 $212,754

200

240

150

180

100

120

60 0

Source: Realtors Association of Southern Minnesota

4.0%

3.5 A

20 10

3.4% M

4.0

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

4.5

Source: Freddie Mac

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

Commercial building permits North Mankato

- 2015 - 2016 (in thousands)

12000

- 2015 - 2016 (in thousands) $202 4000 $1,211

$7,403

10000

3000

$3,429

8000

2000

6000 4000

1000

2000 0

- 2015 - 2016

5.0

Housing starts: Mankato/North Mankato

— 2015 — 2016 5.5

Source: Realtor Association of Southern Minnesota

Interest Rates: 30-year fixed-rate mortgage

3.0

Source: City of Mankato

28 • SEPTEMBER 2016 • MN Valley Business

Source: City of North Mankato

C. Sankey

Many ag organizations are providing information to producers to improve best management practices on their farms for crop livestock production, which will enhance water quality. The Minnesota Depar tment of Agriculture has implemented the “Minnesota Agriculture Water Certification Program” to help address ag water quality issues on the farm. For more details on the water quality certification program, go to the MDA web site at: mda. state.mn.us. Another excellent resource for ag water quality is the Minnesota Agriculture Water Resource Center web site at: http://mawrc.org/ MV

Gas Prices Gas prices-Mankato

— 2015 — 2016

5 4 $2.69

3 2

$1.97

1 0

Gas prices-Minnesota

— 2015 — 2016

5 4

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

$2.73

3 2

$2.06

1 0

Stocks of local interest Archer Daniels Ameriprise Best Buy Crown Cork & Seal Consolidated Comm. Fastenal General Growth General Mills Hutchinson Technology Itron Johnson Outdoors 3M Target U.S. Bancorp Wells Financial Winland Xcel

D C. Sankey

Source: GasBuddy.com

July 11

Aug. 9

Percent change

$43.34

$44.38 $96.26 $33.56

+2.4% +2.3% +5.1%

$53.72 $25.72 $42.48 $30.94 $70.93 $1.51 $43.27 $28.60 $178.39 $72.61 $42.83 $36.92 $2.20 $42.65

+2.5% -8.8% -4.6% +0.5% -0.4% -55.3% -1.5% +4.4% -0.3% -0.5% +5.2% +6.4% +4.8% -2.6%

$94.11 $31.94 $52.42 $28.21 $44.54 $30.80 $71.24 $3.38 $43.92 $27.40 $179.00 $73.01 $40.73 $34.70 $2.10 $43.77

C. Sankey

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MN Valley Business • SEPTEMBER 2016 • 29

Minnesota Business Updates

■

■ 3M sales, profits dip 3M Co. said its second-quarter sales and profit dipped slightly amid currency swings and a continued sagging performance from its electronics and industrial businesses. Executives narrowed their forecast for full year 2016. 3M’s profit fell about 1 percent to $1.29 billion, or $2.08 per share, a penny higher than the average forecast of Wall Street analysts. Sales went down 0.3 percent to $7.66 billion, which was below analysts’ consensus forecast of $7.71 billion. The effect of foreign currency translations reduced total sales by 1.5 percent, the company said. Excluding currency impacts, two of 3M’s five key businesses saw sales fall. Electronics/energy fell 9.1 percent while industrial fell 1.4 percent.

■ Target’s small-store focus In an effort to increase market penetration and comply with local zoning regulations, Target is focusing on a smaller-footprint store format that can squeeze into strip malls and city streets. The retailer operates several so-called flexible urban formats, including TargetExpress, its newest, and at about 20,000 square feet, its smallest. It also has CityTarget, which can range from 80,000 to 160,000 square feet. By comparison, the big-box flagships range from an

average of about 116,000 square feet for the general merchandise stores to 177,000 square feet for SuperTargets. Over the next two years all but two of the company’s 21 planned store openings will be less than 50,000 square feet in size. The buildout comes after Walmart ended its plans for its own small-format Express shops.

■ Fastenal profits slip Fasternal reported a 6.3 percent drop in profit for the second quarter despite revenue witnessing a modest growth of 1.2 percent as expenses increased more than the expected levels. As a result, its earnings and revenue missed the expectations. Fasternal said that it earned $131.52 million or 45 cents a share for the second quarter, which was down from $140.36 million or 45 cents a share in the yearago quarter. The company’s revenue grew marginally to $1.01 billion from $0.998 billion in the previous year quarter. Its cost of sales and operation expenses grew by 3.42 percent and 5.78 percent respectively thus impacting its quarterly results.

■ Target boost private labels Grocery at Target is a $20 billion business. But it doesn’t drive a lot of traffic. Those who buy groceries at

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major July Industry ‘15 ‘16 Construction Manufacturing Retail Services Total*

66 306 38 188 598

Local non-farm jobs Percent change ‘14-’15

100 172 46 125 393

+66.7% -43.8% +21.0% -33.5% -34.3%

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.

Minnesota initial unemployment claims Major Industry Construction Manufacturing Retail Services Total*

July

- 2015 - 2016

Nine-county Mankato region 126,490 133000

127,259

122000 111000 100000

Minnesota Local non-farm jobs

‘15

‘16

Percent change ‘14-’15

1,875 2,459 992 4,333 9,659

2,144 3,268 931 3,675 10,018

+14.3% +32.9% -6.1% -15.2% +3.7%

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.

30 • SEPTEMBER 2016 • MN Valley Business

(in thousands)

- 2015 - 2016

2,917 2,929

3000 2000 1000 0

Target stores usually have come to purchase something else. “Today they shop for food while they’re at Target, and we want them to think of us more at the forefront of their minds,” Amanda Irish, vice president of Owned Brand Food and Essentials for Target told Marketplace. org. Irish said Target’s strategy for spiffing up grocery includes strengthening its three private-label food brands. They provide a kind of value ladder, with some of the least expensive items housed in Market Pantry, and the more expensive “wellness” items found under Simply Balanced. Private-label brands generally cost less than the big name-brands that manufacturers price higher to recuperate costs like advertising. Irish said her team is trying to offer private-label products that are special — not just knock-offs of the name brands. Some of the more novel products include spicy maple bourbon pickles or spicy Bloody Mary trail mix.

■ Small business uptick Small business owners showed a modest uptick in optimism in a recent survey released by Wells Fargo. The bank’s Small Business Index, which measures owners’ sentiment, rose 4 points to 68 from 64 in the previous survey released during the second quarter. The index was 67 at the beginning of this year. The latest survey questioned 603 owners in July. Owners had a slightly more upbeat assessment of

their companies’ current financial situation as well as their expectations for how business will be a year from now. However, they also had a slightly more pessimistic view of what their revenue will look like over the next year. And 21 percent of the owners said they expected the number of jobs at their companies to increase over the next year, a tad lower than the 23 percent who forecast an increase in jobs in the second-quarter survey. The results are in line with other recent surveys and reports that show owners, while not ebullient, are also not feeling as pessimistic as they did several years ago.

■ Mayo Clinic No. 1 The Mayo Clinic took the top spot on U.S. News & World Report’s annual hospital rankings, after being ranked No. 2 last year. Mayo beat out the Cleveland Clinic and Massachusetts General Hospital, which finished No. 2 and No. 3. “We are honored to be recognized in this way, as it reflects the tremendous work of our staff every day in caring for our patients and their families,” Dr. John Noseworthy, president and CEO of Mayo Clinic, said in a statement. “This ranking is a testament to the dedication and excellence of all of our Mayo Clinic staff.” This year’s list compared nearly 5,000 medical centers in 25 specialties. Mayo ranked No. 1 in eight of the 16 adult specialties: diabetes and endocrinology; gastroenterology and GI surgery; geriatrics; gynecology; nephrology; neurology and neurosurgery; pulmonology; and urology. The hospital ranked No. 2 in three specialties: cardiology and heart surgery; ear, nose and throat; and orthopedics. They came in third for cancer.

Employment/Unemployment Local number of unemployed

- 2015 - 2016

Nine-county Mankato region

(includes all of Blue Earth and Nicollet Counties)

8000

4,754 5,256

6000

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

4000 2000 0

Mankato/North Mankato Metropolitan statistical area

2015

2016

3.1% 56,728 1,833

3.4% 57,246 2,043

Unemployment rates Counties, state, nation Minnesota number of unemployed

- 2015 - 2016

200000

119,620 121,352

150000 100000 50000 0

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

June 2015 3.2% 4.1% 4.7% 4.1% 4.6% 3.0% 4.0% 4.2% 4.5% 3.6% 3.8% 5.5%

June 2016 3.6% 4.2% 4.3% 4.0% 5.2% 3.1% 3.9% 4.3% 5.1% 3.7% 4.0% 5.1%

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

MN Valley Business • SEPTEMBER 2016 • 31

Election Information Headquarters By: Patrick Baker, Director of Government and Institutional Affairs

ith all the talk of Donald Trump, Hillary Clinton and the presidential race, it’s easy to forget that there will be many important state and local races that voters will need to cast their ballots on this November. Congressman Tim Walz is running for reelection against challenger Jim Hagedorn. Every seat in the Minnesota State Legislature is up for election. And just about every city, county and township will have elections for mayor, council members, commissioners and supervisors on the ballot. Greater Mankato Growth is your election headquarters. From information on how to register to vote, polling times and locations and information on candidates, Greater Mankato Growth has all the information you’ll need to cast an informed ballot at: greatermankato.com/vote.

Mankato Growth will be offering our community two key resources beginning in the month of October. 1. We’ll be hosting candidate forums for key races in our area so that voters can get a chance to learn from the candidates directly just where they stand on the issues. 2. Greater Mankato Growth will release online profiles of the candidates running for election in key races in our region on our website. These online profiles will include biographical information, as well as the candidate’s responses to a questionnaire that will enable voters to gauge a candidate’s perspective on characteristics that are essential for effective public servants and that will represent the area well in areas not only impacting business, but the overall vitality of the region at large. Remember to get out and exercise your right to vote this November 8!

Greater Mankato Growth

To ensure that voters have ample opportunity to get to know the candidates on this year’s ballot, Greater

Thank you to all who attended the 2016 Business Reception with the Vikings! And special thanks to our generous sponsor:

32 • SEPTEMBER 2016 • MN Valley Business

Nominate a Deserving Business or Professional Presenting Sponsor:

Your opportunity is NOW. Nominate a deserving business or professional for the Greater Mankato Business Awards & Hall of Fame. The 2016 event will be held on Tuesday, November 15 and is a time where Greater Mankato Growth, Visit Mankato and City Center Partnership honor outstanding businesses, professionals and organizations within the Greater Mankato community. Nominations will be accepted until September 20.

For more nomination forms, details and to see past recipients visit: greatermankato.com/hall-fame.

TAKE A TOUR

Thursday, October 6, 2016 10 am - 5 pm

Presenting Sponsor:

MN Valley Business • SEPTEMBER 2016 • 33

Greater Mankato Growth

greatermankato.com/tour-manufacturing

Each year the South Central Tour of Manufacturing Partnership presents the Tour of Manufacturing as part of Minnesota Manufacturers Week. The event is similar to a “Parade of Homes” - with community members able to stop by any participating manufacturer throughout the day to take a tour, learn about the business and what is manufactured, as well as the career opportunities available now and in the future. There is no charge to attend.

RIBBON CUTTING

NEW LOCATION

Chesley Skate Park 161 Jaycee Court Mankato

Edward Jones - Kenneth Klooster 1660 Commerce Drive, Suite 2 North Mankato

NEW LOCATION

NEW BUSINESS

Kitchenmaster, Klooster & Begalka, CPAs 1660 Commerce Drive North Mankato

Southeastern Minnesota Oral & Maxillofacial Surgery 1410 Madison Avenue Mankato

Kitchen, Baths and More 704 Parkway Avenue Eagle Lake

BluEarth Agribusiness Strategies Mankato bluearthagstrategy.com

Regus 100 Warren Street, Suite 300 Mankato regus.com

Covered Bridge Furniture 500 Raintree Road, Suite 10 Mankato coveredbridgefurniture.com

Greater Mankato Growth

Growth in Greater Mankato

Cavaliers Javens Electric, Inc. 59170 Madison Avenue Mankato javenselectric.com

Cavalier Calls on the Newest Greater Mankato Growth Members

34 â&#x20AC;˘ SEPTEMBER 2016 â&#x20AC;˘ MN Valley Business

Midwest Dental 530 West Pleasant Street Mankato midwest-dental.com

Your Local Resource for Information Regarding the

Sales Tax Extension in Mankato & North Mankato Top Things to Know • •

GROWING A GREATER MANKATO

facebook.com/katosalestax #katosalestax

• •

This is an extension of an existing sales tax - not a new tax It will support improvements to critical infrastructure & development of existing & new regional recreation facilities Each project that would use sales tax dollars will be separately reviewed & approved by the City Council with opportunity for public input VOTE on November 8, 2016

Where to vote: greatermankato.com/vote Sales tax extension information and proposed projects details: salestax.greatermankato.com

5:00 - 7:00 pm e e er c o er ove er ece er

eri on ire e ven en er o er P an i a i e ai

2016 Business After Hours Sponsored by:

e e er c o er ove er ece er

a ar i ri ion en er er en e or a o inic ea e c oo i er o o re a e en ra Pacific Province

2016 Business Before Hours Sponsored by:

July Business Before Hours hosted by the City of Madison Lake

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 • SEPTEMBER 2016 • 35

Greater Mankato Growth

July Business After Hours hosted by August Schell’s Brewing Company at Pub 500

7:30 - 9:00 am

MANKATO MARATHON Registration is OPEN! October 15 & 16, 2016 mankatomarathon.com There’s a race for every runner—a full marathon, relay, half, 10K, 5K, KidsK, Toddler Trot, Diaper Dash & My Bold Walk. The Mankato Marathon is a certified course, making it a Boston Marathon qualifier. Register now and join more than 4,500 runners at the Top Rated Marathon worth traveling to in Minnesota!

Greater Mankato Growth

Kick

c k e y Night

For more information contact Chris Willaert at 507.385.6663 or cwillaert@visitmankatomn.com

ve r ic k S

o e as

nce again, the City Center Partnership will team up with Minnesota State University Maverick Hockey to present Hockey Night in the City Center on Saturday, October 8. Hockey Night is a fan-friendly celebration featuring live music, kids’ activities and the highly-anticipated mechanical bull! There’s also great food and drink available. The festivities start at 4:30 pm and continue right up to the puck drop. This year, Hockey Night is going to be extra exciting as it’s in conjunction with the homecoming game against Michigan Tech. The party is held at Civic Center Plaza, which was recently redesigned with events like Hockey Night in mind – the space features a permanent stage and

36 • SEPTEMBER 2016 • MN Valley Business

abundance of space for vendors, games and the bounce house, as well as hundreds of fans. While you’re visiting Hockey Night be sure to stop by the City Center Partnership table and enter to win the athletics suite (12 people) for the Friday, February 17, 2017 game against Northern Michigan. Over the past few years, Maverick Hockey has increased its City Center presence and commitment. In 2015, the Verizon Wireless Center truly became the home for Minnesota State Hockey with both the men’s and women’s programs moving full-time to new facilities built on the west side of the building. In addition to locker room facilities and offices, the Verizon Wireless Center also features a new weight room, athletic training and equipment facilities, and player and alumni lounge areas. Minnesota State hockey players are training, studying and playing in the City Center, bringing energy and excitement to downtown. All are welcome to join in the fun on Hockey Night! Saturday, October 8, 2016 from 4:30 - 7 pm, at Civic Center Plaza. Sponsored by Rosengren Kohlmeyer & Hagen Law Office Chtd.

Calculating Economic Impact & Unrealized Potential

By: Chris Willaert, Sports Commission Director and Anna Thill, President

esearch by the National Association of Sports Commissions has shown that the average return on investment in sporting events is $50 for every $1 invested. Seeing this return locally, the Mankato Sports Commission seeks opportunities to bring as many quality competitive events to the community in order to further drive the sporting economy. This of course implies the need to measure the impact events have on the economy in order to know if we are moving the needle toward that goal. This measurement is also powerful for cities in general as they seek to understand where to invest in infrastructure that will help the sporting economy grow.

The community is seeing significant benefits of youth sporting events all summer long and that is because facilities for summer sports are in great shape. Currently, the community fields at Rosa Parks have six fields being used by our local organizations for baseball and are considered among the best in the state at the youth level. The fields are a major reason why people travel here to play a weekend tournament. Caswell Park is one of the premier softball complexes in the upper Midwest and allows our Mankato Peppers to draw teams in a similar fashion. Caswell North does the same for soccer.

Thankfully, a sophisticated tool has been developed that includes extensive research by an Oxford Economics Company and that is customizable per destination. The Mankato Sports Commission recently subscribed to this tool called the DMAI Event Impact Calculator provided through Destination Marketing Association International (DMAI). This tool is credible as it produces impact analysis based on the latest survey and economic data available meaning it takes into account specific spending per sport, ages, type of tournament, etc. It is localized based on inputs specific to our destination. It factors in local numbers such as the cost of hotel rooms, the local option sales tax, hotel/lodging tax and food/beverage tax. And it is comprehensive as the calculator measures the direct impact of events on businesses, employment, income and taxes. Especially interesting is that with this calculator, we can break down approximately how much is being spent locally on retail, lodging, food and more.

Conservative estimates are at $12 million from the summer youth events that the Sports Commission tracks. However, there is a lot of room to grow in the winter months. Estimations put the current economic value of a sampling of youth sports including hockey, basketball, swimming and wrestling at $3.6 million. However, if these sports had the indoor facilities they need to grow, potential economic impact is estimated at $14 million annually. At least $10 million in economic impact is left on the table every year just from those sports’ tournament potential. That doesn’t include collegiate and adult opportunities, state tournaments or other events that could produce high economic value.

Knowledge is power. The Mankato Sports Commission is happy to calculate the impact of current or potential sporting events for the community. If interested, please contact Chris Willaert, Sports Commission Director, at cwillaert@visitmankatomn.com or 507.385.6663.

MN Valley Business • SEPTEMBER 2016 • 37

Greater Mankato Growth

The true economic impact of any event will vary based on numerous factors, but to provide a simple example, consider an eight-team youth baseball tournament hosted by the Mankato Area Youth Baseball Association (MAYBA). Based on the total number of players, the number of players staying in hotels and the average length of stay, according to the Event Impact Calculator the average MAYBA tournament has an estimated economic impact of approximately $124,000. Take that multiplied by 12 tournaments, and MAYBA is producing an economic impact of $1.5 million through their annual tournaments, not including any state tournaments they host like this year’s 11AA MSF state baseball tournament, which had an estimated economic impact of more than $600,000.

The Sports Commission and Greater Mankato Growth, Inc. are working with stakeholders to extend the local option sales tax as one mechanism to fund expansion and development of indoor facilities that will allow the sporting economy to grow. In addition, the Sports Commission is positioned to bring events to those facilities once ready and to assist local sporting groups as they host their own tournaments. The DMAI Event Impact Calculator will empower our stakeholders to make strategic investments in particular events with a high return for this community.

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