Dale Schmitt of Mankato Motors.
Cruising Auto sales roaring back The Free Press MEDIA
Also in this issue • BuyFun.com • Jennifer Pfeffer, Pathstone Living • Indulge Salon & Tanning
ImagIne
What We Can Do For Your BUSINESS
Congratulations to
Winners of the 2013 Raw Fusion Shades of Shimmer Award!
Photos courtesy of:
ARCHITECTURE | ENGINEERING |
INTERIORS |
PLANNING
Bright colors! Bright ideas! Corporate Graphics Your Printing Solutions Company
BOLDLY INSPIRING
www.corpgraph.com 800-729-7575
507.388.9811 |
WWW.PAULSENARCHITECTS.COM
507-625-4606 121 E. Main St. Ste 311 Mankato, MN 56001
re spected
lawyers with experience
With a combined 30 years of experience, our women attorneys have the resources to meet your needs in the areas of Personal Injury, Employment Law, Real Estate Law, Business Law, Family Law and Mediation, Construction Law, Civil and Commercial Litigation and Criminal Law.
Smart law. Bold decisions. 127 South Second Street, Mankato MN 56001 • 345-1166 • www.bgklaw.com
4 • june 2013 • MN Valley Business
F E A T U R E S June 2013 • Volume 5, Issue 9
14
Pickups, crossovers hot commodities for dealers
20
Pathstone Living
Jennifer Pfeffer, who has led Ecumen Pathstone Living for 14 years, says they aim to empower and honor residents.
22
Special Focus: Food processing
The food processing sector in southern Minnesota – from soy oil to animal food -- is growing in production, profits and jobs.
24
You can buy (and rent) fun
Tom Fallenstein and his family started renting costumes out of his mom’s home and have grown it into a major national presence.
MN Valley Business • june 2013 • 5
■ June 2013 • VOLUME 5, ISSUE 9 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Pete Steiner Rob Autry Kent Thiesse Marie Wood PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING David Habrat MANAGER ADVERTISING sales Karla Marshall 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 kmarshall@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 ■ Agriculture Outlook...................... 32 ■ Agribusiness trends..................... 33 ■ Job trends..................................... 34 ■ Construction, real estate trends.. 35 ■ Retail trends................................. 36 ■ Greater Mankato Growth.............. 38 ■ Greater Mankato Growth Member Activities ....................... 40
6 • june 2013 • MN Valley Business
From the editor
By Joe Spear
Autos drive economic indicators Listening to car dealers can offer economic insights
O
nce a year we interview local have the maneuverability of cars but car dealers to get a feel for cargo capacity of some trucks seem their business and how to appeal to younger families. consumers are approaching one of And while minivans are still pretty the biggest purchases they will make. popular with a certain segment of But buying a vehicle is also one of buyers, they are not as popular as the most emotional purchases for they once were. People like the some. So car sales can be an indicator crossovers and the SUVs for their of general consumer optimism. space and their four wheel drive. The car business can be an People are buying cars in different interesting economic indicator for a ways now too. They are using the local economy. Vehicles are known in Internet to research pricing, economic parlance as “durable availability and color. goods” an indicator of an item that is Looking forward, some dealers see used over time and is a bigger ticket a trend in the smartphone generation item. that won’t be coveting certain brands It’s also, short of buying a house, of autos like their parents probably one of the biggest investments people did. They may even create a “sharing will make. car” trend. So strong S o, the automobile sales Mankato auto indicate a bigger business appears Vehicles sales tend to number of people to be pretty feel pretty good healthy. With the follow housing and about their job, coming of some the economy the new dealers and construction, two future and are good expansions willing to part of existing sectors that also appear with a significant dealers, there to be doing fairly well amount of cash. appear to be Mankato auto plenty of buyers in the region. sales were up to go around. about 8 percent That bodes from 2011 to well for other 2012, according parts of the to local statistics that track auto Mankato economy as well. Vehicles dealers located in Mankato. That’s sales tend to follow housing and short of the 30 percent growth construction, two sectors that also statewide, but local dealers note that appear to be doing fairly well in the Mankato turned the corner on sales region. before the rest of the state with a The diversified economy tends to good year from 2010 to 2011. keep the boats of auto dealers rising, So what are the Mankato area auto not to mention sales of a lot of other consumers thinking these days? durable goods. Education and Trucks, for one thing, lots of trucks. medical remain large and stable Pickup trucks have always been employers and with the popular in rural areas, but it was announcement of the new Wal-Mart surprising to hear more trucks are distribution center coming on line in bought in Minnesota than cars – 2015, growth will likely continue. MV about 55 percent to 45 percent, according to statewide data from the Joe Spear is executive editor of Minnesota Auto Dealers Association. Minnesota Valley Business. People are also tending to move Contact him at 344-6382 or toward the crossover vehicles local jspear@mankatofreepress.com dealers note. These vehicles that
s s
Local Business People/Company News
■
Mankato Implement merges with Kibble Mankato Implement and Kibble Equipment have merged under the Kibble Equipment KEI name. It creates one of the largest John Deere dealer groups in North America, providing agricultural equipment, parts and service in Albert Lea, Bird Island, Blue Earth, Kiester, Mankato, Minnesota Lake, Montevideo, New Ulm, Nicollet, Redwood Falls, Sleepy Eye and Wabasso.
Elias, Nauman join Jones and Magnus Two attorneys have joined Jones and Magnus, Attorneys at Law. Athena R. Elias has joined the firm as an associate attorney. Elias practices in family law, estate planning and real estate law. Jeremy J. Nauman has joined the firm as an associate attorney. Nauman practices in the areas of real estate law, estate planning and estate preservation, medical assistance planning, conservatorship/guardianship, probate, corporate and business law.
■■■ ■■■ Walser joins I&S Group I&S Group has hired Lori Walser as director of marketing. She was most recently a public affairs and marketing coordinator with Mayo Clinic Health System. ■■■ Albrecht named partner at Eide Bailly Linda Albrecht of Mapleton has been accepted into the partnership of Eide Bailly. She works in the Mankato office. She has more than 20 years of providing consulting services to financial institutions in the areas of regulatory compliance and internal audit.
Several join Eide Bailly Several interns have accepted full-time positions with Eide Bailly. They are Jennifer Rothmeier, Jenna Brekke, Brandon Zabel, Yousef Sarameh, and Baylee Amy. Rothmeier and Sarameh have been hired as tax associates. Brekke and Zabel have been hired as audit associates. Amy has been hired as marketing coordinator. ■■■
■■■ Dziuk honored Sara (Brigger) Dziuk has been named a “40 Under Forty” honoree by the Minneapolis-St. Paul Business Journal. She is director of College Possible Twin Cities, a nonprofit making college admission and success possible for low-income students. She headed the Greater Mankato Convention & Visitors Bureau from 2002-2007.
Clay Thompson
■■■
Mark Dehen Mankato.
Dehen honored by Chiropractic Assoc. Mark Dehen, was presented the John Allenberg Meritorious Award by the Minnesota Chiropractic Association during the MCA¹s annual convention for his significant leadership and service to the chiropractic profession, both locally and nationally. Dehen has practiced in North Mankato for 26 years at the Back to Wellness Clinic. He is also Mayor of the City of North
Galen Reding
Thompson hired at Pioneer Bank Clay Thompson has been hired as Pioneer Bank’s chief lending officer. The bank also has promoted Duane Olenius as the greater Mankato market president, Duane Olenius Galen Reding was promoted to the Mapleton, Elmore and Delavan market president and Matt Chmielewski and Marvin Kimm as senior vice presidents. Thompson comes to the bank from BankTexas in Tyler, Marvin Kimm Texas. He has over 25 years of experience as a bank lender and has a Master’s degree in finance from Indiana University.
Matt Chmielewski
MN Valley Business • june 2013 • 7
■■■ Kato Insurance in President’s Club Midwest Family Mutual Insurance Co. of Minneapolis announced that Kato Insurance Agency, has been named to the President’s Club. This award recognizes outstanding continued service to customers and community and superior performance. This is the sixth consecutive year the Kato Insurance has received this award. The agency is owned by Scott Michaletz. ■■■ Lowis in Circle of Champions Daniel Lowis has qualified for Waddell & Reed’s annual Circle of Champions conference, recognizing the company’s top financial advisors. The conference is conducted each summer by the asset management and financial planning firm, with selection based on an analysis of investments, insurance and financial planning sales generated. ■■■ Hanson joins ProBuild ProBuild Co. has named Morrie Hanson as outside sales representative at the ProBuild Mankato location. Hanson brings over 37 years of industry and management experience with expertise in customers ranging from do-it-yourself customers to custom builders. ■■■ Jones honored by Thrivent Brian E Jones, a financial consultant with Thrivent Financial for Lutherans, has qualified for the Summit Circle conference. Nine percent of Thrivent Financial’s nearly 2,300 financial representatives qualified for this honor. Jones is with Thrivent Financial’s Two Rivers Regional Financial Office, serving Lutherans and their family members in Saint Peter and surrounding communities. ■■■
William LeDuc
LeDuc joins rural managers network William LeDuc with Agri-Realty in Mankato has joined a network of approximately 2,000 agricultural professionals who are members of the American Society of Farm Managers and Rural Appraisers.He joins as an associate member, someone who aims to become a professional or accredited member but has not yet met the requirements. LeDuc has been an appraiser for five years.
Anderson joins Ophthalmology Associates Steve Anderson has joined the practice of Ophthalmology Associates. He is a graduate of the University of Minnesota and has practiced ophthalmology for over 16 years. Anderson specializes in general ophthalmology and cataract and refractive (Lasik) surgery. He is a clinical Steve Anderson instructor in the Department of Ophthalmology at the University of Minnesota and teaches eye surgery at the VA hospital in Minneapolis. ■■■ ReStore honored The Habitat for Humanity ReStore in Mankato received the “Best Practices” award from Habitat for Humanity of MN for outstanding sales growth. Over a two year span, the number of transactions conducted at the ReStore grew 81 percent and the number of donations received grew 53 percent. The Mankato ReStore received the award from among 11 ReStores in Minnesota. ■■■ Hillcrest administrator honored The American College of Health Care Administrators honored Amy Porter, administrator of Hillcrest Health Care Center in Mankato, with the 2013 ACHCA Facility Leadership Award. The areas of excellence the facility exhibits includes three years of performance on the health survey, fire survey, complaint surveys and improvement in the last two quarters of the reported quality measures. ■■■ TBEI earns ISO certification Truck Bodies & Equipment International, Inc. announced that their Lake Crystal facility has achieved ISO 9001:2008 Certification. The facility is home to TBEI’s corporate offices, and manufactures Crysteel, J-Craft and Ox SuperDump products. ISO 9001:2008 is a quality management certification program, and certifies companies in over 170 countries. TBEI Lake Crystal has been certified with a quality management system for the design, manufacture, delivery and servicing of dump truck bodies and hoists. This certification also includes the installation of truck bodies onto chassis for military, state & local governments, as well as private companies. TBEI encompasses five manufacturers of dump truck bodies, hoists and truck & trailer equipment: Crysteel, Rugby, DuraClass, J-Craft and Ox Bodies. ■■■ To submit your company or employee news. e-mail to tkrohn@mankatofreepress.com Put “Business memo” in the subject line. Call or e-mail Associate Editor Tim Krohn at tkrohn@mankatofreepress.com or 344-6383 for questions.
8 • june 2013 • MN Valley Business
■
Business and Industry Trends
Employment
GDP below expectations
Current economic indicators have been mixed. The U.S. Bureau of Economic Analysis reported that real gross domestic product increased at an annual rate of 2.5 percent in the first quarter of 2013 compared to the fourth quarter of 2012. This was well above the 0.4-percent growth in the final quarter of 2012, but below theexpectations of many forecasters. Consumer spending and residential investment showed strong gains, while net exports and government expenditures showed quarterly reductions.
Unemployment claims down
The Department of Labor also reported that initial unemployment insurance claims dropped by 18,000 in the week ending April 27, 2013 to 324,000 (on a seasonally adjusted basis), down from 371,000 at the same time in 2012. Total nonfarm payroll employment increased by 165,000 in April, near the average employment growth of 169,000 per month over the last 12months.
Manufacturing orders fell
The Census Bureau reported that new orders for manufactured durable goods fell 5.7 percent from February to March, following a 4.3-percent increase from January to February. Industrial production rose by 0.4 percent in March after having increased 1.1 percent in February according to the Federal Reserve.
■■■
Energy
Gas to average $3.52
Falling crude oil prices contributed to a decline in the regular gasoline retail price from a year-to-date high of $3.78 per gallon on February 25 to $3.52 per gallon on April 29. The federal Energy Information Administration expects the regular gasoline price will average $3.53 per gallon over the summer (April through September), down 10 cents per gallon from last month’s estimate. The annual average regular gasoline retail price is projected to decline from$3.63 per gallon in 2012 to $3.50 per gallon in 2013 and to $3.39 per gallon in 2014. Energy price forecasts are highly uncertain, and the current values of futures and options contracts suggest that prices could differ significantly from the projected levels.
Crude stays above $100 a barrel
After increasing to $119 per barrel in early February 2013,the Brent crude oil spot price fell to a low of $97 per barrel in mid-April 2013 and then recovered to $105 per barrel on May 3. EIA expects that the Brent crude oil spot price will average $104 per barrel over the second half of 2013 and $101 per barrel in 2014. The projected discount of West Texas Intermediate (WTI) crude oil to Brent, which increased to a monthly average of more than $20 per barrel in February 2013, fell to below $9 per barrel in April. EIA expects the discount to increase in the near term and average $13 per barrel in 2013 and $9 per barrel in 2014.
Natural gas stocks down
Natural gas working inventories ended April 2013 at an estimated 1.82 trillion cubic feet (Tcf), about 0.80 Tcf below the level at the same time a year ago and 0.13 Tcf below the five-year average (200812). EIA expects the Henry Hub natural gas spot price, which averaged $2.75 per million British thermal units(MMBtu)in 2012, will average $3.80 per MMBtu in 2013 and $4 per MMBtu in 2014, about 27 cents per MMBtu and 40 cents per MMBtu higher than forecast in last month’s STEO,respectively. The projected increasing cost of natural gas relative to coal contributes to higher levels of electricity generation from coal. The share of total generation fueled by coal is forecast to increase from37.4 percent in 2012 to 40.1 percent in 2013. Conversely,the share of generation fueled by natural gas declinesfrom30.4 percent in 2012 to 27.8 percent in 2013.
Renewable energy grows
EIA projects renewable energy consumption for power and heat generation to increase by 3.3 percent in 2013. While hydropower declines by 2.2 percent, non-hydropower renewables grow by an average of 7.1 percent in 2013. In 2014, the growth in renewables consumption for power and heat generation is projected to continue at a rate of 4.4 percent, as a 1.8 percent increase in Hydropower is combined with a 6.0-percent increase in non-hydropower renewables. EIA currently estimates that wind capacity will increase by 7 percent this year to nearly 63,000 megawatts, and reach almost 73,000megawattsin 2014. However, electricity generation from wind is projected to increase by 19 percent in 2013, as capacity that came on line at the end of 2012 is available for the entire year in 2013. Wind-powered generation is projected to grow by 8 percent in 2014. EIA expects continued robust growth in the generation of solar energy, both from central-station and distributed capacity, although the total amount remains a small share of total U.S. generation.
MN Valley Business • june 2013 • 9
Minnesota Business Updates
■
■ Buffet big on ag
■ Target partners with Facebook
“Warren is in the House” went Buffett’s first tweet ever. And so he is, in the farmhouse. Two of his most recent buys for the portfolio are Archer Daniels Midland Company and Deere & Company. Buffett seems to have a nostalgic turn to the portfolio of an iconic America with newspapers and trains and now two famous agriculture stocks, according to the Motley Fool. But Buffet is not so whimsical to buy dying businesses, all these have reinvented themselves for the 21st century. That American agriculture trade is now a global trade and it is agribusiness, not family farms, he’s investing in. ADM, a Dividend Aristocrat having raised the yield for 37 years, must appeal to Buffet’s heavily dividend weighted portfolio. Since he bought much lower at $27 per share, he’s earning more than the current 2.2 percent yield and the P/E was lower than the current 16.13 ttm. The forward P/E is 11.24 and the PEG is 1.59. Had you bought with Warren you would have a 20 percent gain. But Warren never buys because something is a Dividend Aristocrat. Maybe he liked the potential of the deal with GrainCorp, the Australian version of ADM, which was solidified on May1. CEO Patricia Woertz said the buy will help them move into Middle Eastern, African, and Asian markets where demand for protein is growing exponentially.
In collaboration with social media network Facebook, Target launched “Cartwheel”—a new website that allows customers to earn savings and share information with Facebook friends about deals that they redeem. Individuals log in to the website through their Facebook accounts using a computer, tablet, or mobile device and gain access to discounts on a wide variety of items available at Target. After users select deals that they wish to redeem (up to 10 to start), they have the option to either print the Cartwheel barcode—which is needed to apply the discount upon purchase—or present it at the register using a mobile device. The deals users select then appear on their Facebook news feeds, thus allowing their Facebook friends to see what they’re buying, although they are able to adjust privacy settings to limit who sees the information. Twin Cities Business reported that the Cartwheel team consists of 35 to 40 employees, all of whom work in Target’s offices. By collaborating with Facebook, Target aims to highlight the social experience of shopping and draw customers to its stores instead of losing them to competitors’ websites.
■ Best Buy exits Europe Best Buy is selling its 50 percent stake in a joint venture with Europe’s biggest independent mobile phone retailer Carphone Warehouse Group PLC back to its European partner for about 500 million pounds (or $775 million). The move is the latest sign the world’s largest consumer electronics chain is scaling back its overseas ambitions to focus on its mainstay U.S. business, which faces cut-throat competition from the likes of Wal-Mart andAmazon.com. The deal will strengthen Best Buy’s balance sheet, simplify its business and improve its return on invested capital, CEO Hubert Joly said in a statement. Best Buy bought 50 percent of Carphone’s retail operations for about $2.1 billion in 2008 to tap the British firm’s expertise in mobile phones and to act as a springboard for expansion across Europe. While Best Buy was able to use Carphone’s proficiency to boost its U.S. mobile phone business, the plans for a chain of European megastores fell apart due to weak consumer spending, low brand recognition and competition from local chains. Ultimately, in 2011, Best Buy scrapped plans for the chain of European megastores and decided to focus on Carphone’s existing smaller format stores there.
10 • june 2013 • MN Valley Business
■ Johnson has higher second quarter Johnson Outdoors announced higher second quarter and year-todate revenue and earnings. Sales increased 3 percent to $132.1 million during the second fiscal quarter ended March 29, 2013. Second quarter net income grew 23 percent to $8.9 million, a $1.7 million improvement year-over-year. Fiscal year-to-date revenue grew 5 percent to $219.4 million and net earnings increased 112 percent to $9.2 million during the fiscal first six-months. “Growth in North America and Northern Europe more than offset declines in challenging markets across Southern Europe this year. Marine Electronics remains our primary growth engine with an 11 percent jump in sales and significant growth in operating profit year-to-date,” said Helen Johnson-Leipold, Chairman & CEO. “Ensuring a better balance of profit contribution across Johnson Outdoors’ portfolio is a key focus of our new threeyear Value Plus strategic plan. Comprehensive efforts are underway to reinvigorate and build momentum in watercraft and camping, and deliver innovation in core life-support categories in diving, against that goal.”
MN Valley Business • june 2013 • 11
■
Business Commentary
By Rob Autry
Forcasting through fog — manufacturers’ views mixed
M
innesota manufacturers’ longstanding confidence in the future of their firms is offset this year by a range of issues impeding their business planning and forecasting abilities. Over two weeks in March, we conducted our fifth annual poll of 400 manufacturing executives from a diverse crosssection of Minnesota companies and locations. Here are this year’s findings. Tempered confidence Since our first survey in 2008, executives have remained confident in the future of their own companies, with 82 percent of respondents reporting confidence this year. This high confidence level is identical to 2012 data, and spreads across companies of all sizes, locations and revenues. However, manufacturers appear to be less economically hopeful than they were two years ago, when respondents showed a marked return to optimism emerging from the recession. When asked whether they anticipate an economic expansion, a flat economy or a recession, 15 percent of executives say they expect a recession this year, up from 10 percent in 2012 and 9 percent in 2011. Things also appear slightly less rosy when it comes to manufacturers’ projections for their own companies. The percentage of executives who believe they will see an increase in their gross revenues this year has dropped to 41 percent, down from 47 percent in 2012 and 51 percent in 2011. About one in three (32 percent) and one in four (28 percent) manufacturers projected increases in profitability and capital expenditures, respectively. These numbers remain closely in line with last year’s survey results. Healthcare headaches For the fifth year in a row, the cost of healthcare coverage continues to be the top concern among all manufacturing executives. Not only
does it remain the most important issue overall, but it’s also important to note that that percentage is almost identical to what it was last year, dropping just one point from 68 percent in 2012 to 67 percent this year. Health care has also increased in importance as a workforce recruitment factor, with 54 percent of executives listing it as an important tool for attracting new workers to their firms. This is a 4-point increase from 2012, and a 15-point increase from our first survey in 2008, when 39 percent of manufacturing executives considered it an important recruitment factor. The second-most important (and closely tied) factor, a competitive benefits package, has also seen an up-tick, rising from 22 percent in 2012 to 27 percent this year. In a new poll question this year, we learned that executives expect this problem to get worse before it gets better. A staggering 54 percent of respondents said they expect their healthcare costs to increase “a lot” in the next two to three years. An additional 15 percent expect their healthcare costs to increase a little. In total, this means nearly seven in 10 executives (69 percent) expect a bumpy road when it comes to healthcare costs over the next few years. This majority is observed across companies of all sizes and revenues. Health care has company Though the cost of health care retains its status as the most important concern among manufacturing executives, a second issue has risen to tie it for the first time in the poll’s history. Fully 67 percent of executives cite uncertainty in Washington surrounding the budget and taxes as a concern for their firms. One key contributor to this statistic is manufacturers’ lack of confidence that Washington can find consensus on a budget and tax plan. About half (48 percent) say they have no confidence at all, and more
12 • june 2013 • MN Valley Business
than three out of four (78 percent) have little or no confidence that Congress and the president can reach an agreement and take action. As a result, manufacturers are finding it very difficult to plan ahead in their businesses. Seventy-three percent said this uncertainty would have at least some impact on their business’s ability to plan ahead, and 42 percent anticipated it would have either a great deal of impact or a lot of impact. Still hiring Over the past few years, manufacturers’ concern over the ability to attract and retain qualified workers has grown considerably. In 2011, only 14 percent of manufacturing executives listed it as a concern. But in 2012, that number jumped to 31 percent, and remains steady at 30 percent in 2013. Concern about the lack of qualified workers has also become more widespread, with 24 percent of executives listing it as a concern in 2013, up from 20 percent in 2012 and 14 percent in 2010. These executives have good reason to be concerned. This year, 60 percent said it was difficult to attract qualified candidates for their firms’ open positions, up from 40 percent in 2010. Interestingly, this difficulty is especially prevalent among firms with higher revenues and more employees. Seventy-one percent of firms with more than $5 million in revenue say finding qualified candidates is difficult. That number jumps to 73 percent among firms with between $1 and $5 million in revenue, and firms that employ more than 50 people. MV Rob Autry is a managing partner of Public Opinion Strategies, a national political and public affairs survey research firm based in Alexandria, Va.
Providing Excellent Service in: • Janitorial Services • Window Washing • Carpet Cleaning • Water, Fire & Smoke • Hard Floor Care Restoration
• Family Owned Since 1973 • Insured & Bonded
MN Valley Business • june 2013 • 13
Todd Snell says the Internet continues to transform the automobile industry.
Pedal to the metal Car dealers seeing steady growth
By Tim Krohn | Photos by John Cross and Pat Christman 14 • june 2013 • MN Valley Business
T
he Internet revolutionized the way vehicles are sold, with consumers easily narrowing the model of car or truck they want and knowing exactly what the lowest price around is. But Todd Snell, of Snell Motors in Mankato, said online resources have moved in directions he never anticipated. “We just had someone fly in from Atlanta, Georgia, who bought a fairly common used car from us. That’s happening more and more than I can believe. People come from California and other states.” He thinks the phenomenon is driven by a few things. “In this case, we just happened to have the color and the miles (on the vehicle) that they wanted and the price. And I think it’s almost become a hunt for people. We pick them up at the airport in Minneapolis and drive them down here and they see a new area. It’s just the whole experience they like,” Snell said. And Internet advertising is changing other shopping patterns. Mankato dealers always drew strong business from southwest Minnesota and northern Iowa thanks to Internet advertising and those residents’ penchant for shopping in Mankato. “Now we’re drawing more customers from the metro and north of the metro than we are from Northern Iowa. It’s all because of the Internet,” said Snell, who sits on the board of the National Automobile Dealers Association. How dealers advertise online has also changed. With more websites reluctant to take photouploads for fear of viruses and with consumers more dependent on video, dealers are turning to YouTube for marketing. “We do a thorough video walk-around of vehicles and upload them to YouTube for people to watch. I think it builds trust and confidence in the vehicle and the dealer,” Snell said.
local dealers didn’t see as big a jump in sales last year as the state average. Mankato dealers posted gains of 8 percent from 2011 to 2012, according to Mankato sales tax figures. Local dealers say their sales numbers rebounded earlier and stronger than in many other areas of the state, accounting for a slower growth rate last year. “Business just keeps getting better each year,” said Kerry Lindsay, general manager of Luther Honda in Mankato. “Since Luther came here in ’08, it’s been up and up each year in all aspects.” Ben Heintz of Heintz Toyota said the start of 2013 is staying strong. “The first quarter is about even with last year. We’re back to the ’06 levels of sales – that’s the bellwether year. “It’s normalized, is what I like to say. Growth-wise anyone you talk to is positive,” Heintz said. Kip Lager of Lager’s of Mankato said that after a couple of years of strong sales growth, local dealers are seeing a nice, steady sales rate. “We haven’t had any major swings,” Lager said “The pickup business keeps improving -- the Ram pickup is our top seller. We’re also selling a lot of the Jeep brand because they improved their models. Wrangler sales are way up.” Ragy Elshaboury of Kia of Mankato echoed other dealers in noting that sales are improved in part because there are plenty of vehicles available. Several brands had difficulty in getting a good supply of vehicles the past couple of years for a variety of reasons – including recalls and tsunami damage that crippled Japanese output. “The supply is definitely coming back. We’re getting more models that we couldn’t keep in stock last year,” Elshaboury said of the South Korean-made Kia. “More selection for customers helps.” And, Elshaboury said more people are becoming aware of the Kia brand since the dealership opened in Mankato a few years ago. “The biggest part of our business is Mankato and North Mankato, but we’re seeing a lot more people who live farther out. They’re becoming more aware of the Kia brand and they’re checking them out and purchasing them.” Dale Schmitt of Mankato Motors has overseen big growth since taking over from Clements at the start of 2009. “We had 48 employees when I took over. We have 83 now and we’re planning on growing more – across the
Cover Story
Strong sales continue
Scott Lambert, executive vice president of the Minnesota Automobile Dealers Association, said 2012 sales were strong with a 30 percent increase from the previous year. The state registered a total of 196,295 new vehicles in 2012, up from 151,589 the previous year. “We definitely had a rebound year. We were the first industry into this recession so we’re bound to be the first out of it. Our industry tends to follow the housing industry, which is creeping back.” Mankato’s vehicle sales continue to be robust, although
MN Valley Business • june 2013 • 15
Kerry Lindsay is general manager of Mankato Honda board, sales and service.” “The economy and the car business are much better and people are a lot more optimistic. As an employer it makes you more optimistic and you want to grow your business,” Schmitt said.
Pickups, crossovers rule
Pickups reign in Minnesota, particularly in rural Minnesota, accounting for more vehicle sales in the state than cars. “We’re a truck state,” said Lambert of the state association. “We buy more trucks than cars – 55-to-45 percent. “That’s held true pre-recession, during the recession and coming out.” Local dealers say being in the heart of farm country where farmers saw record profits last year has boosted full-size pickup sales even more, with some farmers buying two or three new pickups. “The Silverado pickup is the number one seller,” said Schmitt. “They’re coming out with a new Silverado so that’s exciting for us.” Heintz said their Tundra and Tacoma pickups are selling well. “We don’t do the volume Chevy, Ford and Dodge do. That’s their bread-and-butter, but the Toyota pickups do well.” Perhaps the hottest growth area for all dealers is the small SUV or crossover vehicles, which are replacing the minivan. “The small SUV is definitely the hottest segment,” Elshaboury said. “The minivan (market) is softer. You have a change in demographics. You have younger families who have kids and they’re going to the SUV. They don’t want to be a soccer mom and they’re pretending the minivan never existed.” Lindsay said the crossover and smaller sport utility vehicles have taken over all other models as the top sellers. “People like them. They like the price and they’re all-
16 • june 2013 • MN Valley Business
Ragy Elshaboury says area people are becoming more aware of the Kia brand. wheel-drive.” But there remains a niche for the storied minivan, said Lager. “Chrysler is still number one in minivans, but the minivan market overall nationwide is shrinking. It’s shrinking some here but people are coming back because of the versatility of them, the gas mileage. They’re hard to beat when you have a family and there’re a lot of retired people that like them. They won’t ever go away but there are fewer people getting them,” Lager said. Snell, who follows national trends closely as part of his role on the national association, said dealers across the country are moving crossovers in a big way. “People with sedans are trading in their cars for the crossover, they can carry an antique or a barrel or whatever in them, they like that.” He said manufacturers are also beginning to build more luxury crossovers as well as some small luxury cars. “There still isn’t a lot of luxury smaller vehicles but there are more now,” Snell said. “I talked to a dealer in California who said big vehicles went out there 12 years ago. That trend is getting here now, except for the pickups.”
More dependable
While all local dealers say their service bays are busier than ever, the type of work done is different from the past. “There’s so much less warranty work done now,” said Heintz. “Basically, we do a lot of lubricant, swapping our fluids and rotating tires. They’re making cars so maintenance-free and using stainless steel and things there are just a lot less repairs. He said that not only leads to fewer headaches for car owners, but drives them to care for their vehicles better. “With the lightened maintenance load people are taking better care of their cars because it’s not costing so much.” Lindsay has seen a similar shift. “There’s not much
Kip Lager of Lager’s of Mankato. repair work, there’s maintenance work. You just don’t see big, expensive repair bills anymore unless it’s maybe electronic-based problems. They’re just so much better. You used to change oil at 2,000 miles, now you’re seeing 6,000 mile changes.” Still, Snell said that because people have been hanging onto their cars longer because of the recession, repair work is on an uptick. “The fleet on the road is just under 11 years old on average. A few years ago it was 10 years and we thought that was high. People are a little reluctant to replace those vehicles but we think that will change at some point.”
More dealerships coming?
While Mankato continues to be recognized as a regional hub, the likelihood of new dealerships coming to town anytime soon remains a challenge. “There are plenty of mainstream brands that aren’t represented here,” Heintz said. “Mazda, Subaru, Hyundai. As Mankato grows the market potential for those brands grow, too” Still, Heintz and other dealers say starting a dealership takes a huge investment. And manufacturers are very reluctant to allow an existing dealer to add another brand to their offerings. “Generally they want a dealer to represent one brand 100 percent. They
want a new facility built to their specifications and that’s all on the dealer, so the investment gets big,” Heintz said. Lager said there is one type of dealership that Mankato won’t be seeing – the high-end dealer. “Lexus, Mercedes, BMW, Fiat – I don’t see those coming here. The luxury and near-luxury (manufacturers) they don’t have an interest in the secondary market because they don’t pull the volume they need.”
Hard marketing efforts
Car manufacturers are releasing more new and refreshed model lines than ever and battling each other for market share as brand loyalty often plays less of a role than it did in the past. “Brand loyalty isn’t as strong as in my dad’s or grandfather’s days,” Snell said. “The Millennials would rather have a smartphone than a car. When I grew up, having a car was the dream. The kids now aren’t necessarily as transportation-driven as their parents were.” He expects to see “car sharing” pop up more around the country to tap into that demographic. On the east and west coasts, companies such as Hertz have lots filled with cars. People sign up and get a swipe card allowing them to pick out the car they want, drive it, drop it back and their credit card is
MN Valley Business • june 2013 • 17
Ben Heintz of Heintz Toyota says vehicle supplies are good after shortages in recent years. charged for the hours they traveled. Lindsay said his Honda brand has enjoyed fairly strong brand loyalty over the years, but said the competition for buyers is fierce. “Manufacturers are just so much more competitive now.” Heintz said that besides manufacturers trying to draw customers with incentives, they are also offering more choices. “Manufacturers have brought a lot of new products to the market.” In the past, when the business was dominated by the Detroit Big Three auto makers, vehicle models often weren’t updated for several years. “All the manufacturers’ lines have been refreshed,” said Schmitt. “They’re doing it more often than they used to – they have to to compete.” Heintz technician Jim Gardner.
18 • june 2013 • MN Valley Business
April sales show shifts in market The big year-over-year sales increases for the U.S. auto market appear to be over, as the industry has successfully climbed out of the hole it fell into in 2009, according to Automobile Magazine. Volume has leveled off at around the 15-million-unit mark. But that placid surface hides plenty of turmoil, as individual automakers, and whole market segments, rise and fall. The biggest market segment, midsize sedans, saw volume jump last year thanks to a host of redesigned models. But that momentum has now stalled. The seemingly unassailable Toyota Camry, for instance, was beaten in April by the Honda Accord (and in March by the Nissan Altima). Meanwhile, the Ford Fusion picked up share and the Hyundai Sonata and VW Passat lost it. One area now seeing rapid growth is the full-size pickup market, aided by a swiftly recovering housing industry. The luxury arena remains healthy, as those consumers are better insulated than the population at large from the still-shaky job market. Overall, there was an annualized selling rate of 14.9 million units in April, a bit below the recent spate of 15-million-unit months but still better than the 14.1-million rate at this time last year.
Member FDIC
We always put you FIRST!
Experienced Lenders p r o v i d i n g
Here are the year-over-year percent change in sales for April: General Motors up 11 percent Ford Motor Company up 18 percent Toyota down 1 percent American Honda up 7 percent Nissan North America up 23 percent Hyundai-Kia up 1 percent Subaru up 25 percent Mazda down 8 percent Jaguar Land Rover up 7 percent Volvo down 8 percent Mitsubishi down 16 percent
customized service for your business!
Top selling nameplates in April: Equal Housing LENDER
Visit us online at www.fnbmn.com
Mankato 507.625.1121
St. Peter 507.931.4000
Gaylord 507.237.5521
1. Ford F-series 59,030 2. Chevrolet Silverado 39,395 3. Honda Accord 33,538 4. Toyota Camry 31,710 5. Dodge Ram 31,409 6. Ford Fusion 26,722 7. Honda CR-V 26,519 8. Honda Civic 26,453 9. Ford Escape 25,826 10. Toyota Corolla/Matrix 24,273
Jennifer Pfeffer has led Pathstone Living for 14 years.
A steady path Pfeffer inspires Pathstone staff By Marie Wood | Photos by John Cross
J
ennifer Pfeffer was in the nursing school at Minnesota State University, Mankato, when a speaker came in to talk about long term care administration. She switched majors to public health and earned her license in long term care administration. That was the beginning of 26 years and counting in the senior services field. “It was truly a calling. I listened,” said Pfeffer of Mankato. For 14 years, Pfeffer has led Ecumen Pathstone Living as executive director. She has led the organization through change and growth including the 2001 assisted living addition, the 2007 construction of the rehabilitation center, lobby, cafe and chapel, as well as a name change. “We’re a not-for-profit so we reinvest back into our people, programs, facilities,” said Pfeffer. In 2012, Pathstone Living celebrated 75 years at Sibley Park. The Pathstone Campus serves over 500 people daily in a spectrum of services including a nursing home, assisted living, rehabilitation, memory care, adult day services, and home services. “Our mission is to serve people where they are. Our goal is to help them along in the journey. We find out what their needs are and tailor our offering to them,” said Pfeffer.
Ecumen, the company that has always owned Pathstone, has a 150-year history in Mankato, serving orphans of the Dakota Conflict in the 1860s. “Our promise at Ecumen can be summed up in three words: innovate, empower and honor,” said Pfeffer. From short term to long term care, Pfeffer believes in providing individualized care to elders and is honored to be part of their journey. “This is their journey. The final decision on how they want to live life is theirs and their family. We work hard to honor that,” said Pfeffer.
Profile
20 • june 2013 • MN Valley Business
Practice As executive director, Pfeffer manages the day-to-day operations and oversees all aspects of care plus the medical equipment store, cafe and catering on the Pathstone campus. She relies on her directors, who are the specialists that run each division. Pfeffer focuses on five domains of practice: care delivery; human resources; environment which includes facility and culture; finances; and leadership/strategic planning. “Everyday I do something in each of these areas,” said Pfeffer. Pfeffer is analyzing these domains of practice as an
Jennifer Pfeffer visits with resident Gerald Michaletz.
Pathstone Living is nestled next to Sibley Park in Mankato
appointed member of the task force of the National Association of Long Term Care Administrator Boards. With a small group of colleagues, Pfeffer is revising the standards for all long term care administrators to encompass the variety of senior services. “The goal is taking these domains of practice and making sure they fit today and the future of how we serve people in senior services,” said Pfeffer. “We want to make sure that students entering the field are ready to lead.” Pfeffer began her career at nursing homes in Janesville and Le Sueur. She helped usher in a transition in senior care from institutions to home-like settings and safe environments. For instance, Pathstone Living’s lobby has couches and a fireplace for visiting. “We want it to feel like a place that’s welcoming. There are destinations here: the murals, history wall, courtyards, cafe and chapel,” said Pfeffer. “We’re a place for living.” Residents have choices at mealtime and dining is a restaurant-style experience. Every morning, residents have open hours to enjoy breakfast in the dining room, where they can have a cappuccino or Diet Coke with their meal if they choose. “We are very regulated because we are serving a vulnerable population. At the same time, we can be creative and contemporary in our service,” said Pfeffer. Running a health care facility also requires heightened disaster and terrorism planning today. Every year they perform an evacuation drill and several fire and tornado drills. Staff members attend regional disaster planning trainings and share the information with co-workers. “We’re proactive in preparing staff for tragic events. We hope they never happen, but they could,” said Pfeffer.
hospitalization or surgery. “When people arrive here, it’s unexpected. Generally it’s their first exposure to care. We hope we make their first time comfortable,” said Pfeffer. After acute episodes, Medicare pays for short-term care for 20 days. That means the majority of long term care payments are private payments. Pfeffer recommends that people talk to their families about their wishes, plan for the future and consider long term care insurance. “People should be ready,” said Pfeffer. “Statistics show that at 65 and greater, people have a one in four chance of receiving care, but over 85, one in two people will require care.” For Pfeffer, the most rewarding aspect of her career is watching her employees grow and learn and seeing them smile, connect with a resident and take ownership in delivering care. “I get jazzed when I see my directors and staff grow. We give them opportunities and you see them bloom and blossom,” said Pfeffer. “That’s so rewarding when we meet the needs of the elderly.” Staff, volunteers and family members make the most of the Sibley Park location by taking residents to the gardens and band shell. Residents can volunteer in the Backpack Food Program and Kids Against Hunger on-site. One resident told Pfeffer, “I’m getting up today to take care of the kids.” “No matter how old you are, you need a reason to get up in the morning. You need purpose,” said Pfeffer. MV
Elder care Margo Isebrand, clinical director of Ecumen Pathstone Living, said Pfeffer brings a strong sense of integrity to Pathstone. “We all aspire to do our best for her. Something about her leadership brings that out. She does it without saying a word. It’s how she models herself,” said Isebrand. Throughout her day, Pfeffer will pour a cup of coffee for a resident or fix an elderly lady’s scarf, said Isebrand. “She’ll always stop to do those things that matter so much to our residents. It’s important to her to make it a good experience for them,” said Isebrand. Many residents are at Pathstone for rehabilitation after
Jennifer Pfeffer Executive director, Pathstone Living Task force, National Association of Long Term Care Administrator Boards Greater Mankato Growth, former board member Greater Mankato Rotary Mankato Family YMCA Board Aging Services of Minnesota MN Valley Business • june 2013 • 21
■
Special Focus: Food processing in
By Marie Wood
T
he food processing sector in southern Minnesota is growing in production, profits and jobs, which has a ripple effect on the local economy, employment and tax revenue as well as the farmers who grow corn, soybeans, vegetables or produce milk, poultry and livestock. Ridley, the largest commercial animal health nutritional business in North America, is headquartered in Mankato and produces Hubbard Feeds here. From July to December 2012, Ridley posted earnings of $20.9 million versus $12.6 million for Steve VanRoekel the same period in 2011. “The growth is due entirely to growth in demand, some of it due to increased demand last summer as a result of the drought,” said Steve VanRoekel, Ridley president and CEO. Ridley employs 100 employees in the two locations. Plant volume and earnings have Mark Davis been consistent for many years and the plant continues to undergo capital improvements. At corporate headquarters, the majority of jobs are professional so the payroll impact in Mankato is significant. Plus Ridley buys corn from local farmers and soybean meal from local ADM and CHS plants. The company traces its roots to the Hubbard Milling Company, established in 1879. “Agriculture always has been, and will continue to be a major economic contributor to our area. Here at Ridley, we fully expect continued growth in the future,” said VanRoekel. At Davisco Foods International headquartered in Le Sueur, Board Chairman Mark Davis has helped grow the St. Peter Creamery, which his father Stanley Davis founded in 1943, into a dairy industry leader. The largest provider to Kraft Cheese, Davisco produces 370 million pounds of cheese a year. Davisco also makes 10 million pounds of whey protein isolates, about 65 percent of the worldwide market. The company has three plants: Le Sueur, South Dakota and Idaho. “Le Sueur is our origin, the seed that started everything else,” said Davis. Davisco recorded $1.04 billion in revenue in 2011 according to the Minneapolis St. Paul Business Journal. Davisco employs 443 people in Minnesota and 90 more in its dairies: Northern Plains and New Sweden. A third dairy is under construction west of Le Sueur. Currently the two dairies provide 15 percent of milk the plant uses. The rest comes from area dairy farms. “We use a lot of local services and buy local product.”
Supercycle
Brad Schloesser, Dean of Southern Minnesota Center of Agriculture housed at South Central College, understands that agriculture is an economic engine in the Greater Mankato area. SCC is currently striving to meet the demands for graduates in agribusiness service and management. “Having grown up on a family farm and teaching agriculture for 20 years, I know there’s a tremendous amount of opportunity that goes under the radar,” said Schloesser. For instance, ethanol is a 10 percent additive to the vast majority of gasoline sold in the U.S. With 12 ethanol producers in southern Minnesota, production helped drive corn prices to $6.55 per bushel on average in 2012. Before ethanol, corn averaged around $2 a bushel, explained Schloesser. POET Biorefining in Lake Crystal consumes about 20 million bushels of locally-grown corn and produces 56 million gallons of ethanol annually, according to the POET website. The plant also produces Dakota Gold brand livestock feed. POET employs 44 people and enhances the local economy with improved corn prices, value-added markets for farmers and increased local tax revenue. At a recent Ag Symposium at SCC, Dr. David Kohl, professor emeritus at Virginia Tech, presented “Managing in the Great Supercycle.” Since 2003, commodities have been in a supercycle which has brought wealth and profitability to agricultural and rural areas in North America. CHS, the nation’s largest farmer-owned cooperative, operates soybean crushing and refining plants in Mankato and Fairmont, producing soy protein products. In 2012, CHS had its biggest payout ever, $600 million. Minnesota farmers and co-ops received the largest share at $116.3 million. With rising profits come rising costs. Blue Earth County farm owners will see a 44 percent jump in ag land values for taxes payable in 2014. Farmland that now carries an average value of $5,600 per acre will rise to $8,000. For Blue Earth County, that means increased property tax revenues. Growers, producers and processors are competing globally. Profit margins are challenging for dairies and hog producers, because feed costs are high due to drought and ethanol production, explained Schloesser. “That’s why it’s so important for members in agriculture to manage their risk and educate themselves on marketing,” said Schloesser.
Employment
Food manufacturing is the fourth largest industry in South Central Region 9 according to job numbers from the Minnesota Department of Employment and Economic Development (DEED). Region 9 is Blue Earth, Nicollet, Sibley, Le Sueur, Brown, Watonwan, Waseca, Martin and Faribault counties. “Food manufacturing is one essential industry for manufacturing in the region. It’s also one that wasn’t hit as hard during the recession. Layoffs weren’t as deep,” said Brent Pearson, regional labor market analyst for DEED
MV
22 • june 2013 • MN Valley Business
southern Minnesota Community investment
W
hen it comes to charity and community development, agricultural processors are major contributors. • Ridley contributes 1 percent of pretax profits annually to charity, much of it to local organizations. Plus Ridley committed $100,000 for an exhibit on modern agriculture to the Southern Minnesota Children’s Museum. • The late Lowell Andreas of ADM donated $4 million toward the Andreas Cancer Center; $7.5 million to MSU for an arts endowment; and funded Andreas Theatre and Andreas Observatory at MSU. • CHS donated more than $25,000 to Kiwanis Holiday Lights, built the CHS Pergola in Sibley Park, and participates in United Way. • Davisco Foods International contributes in excess of $1 million a year to regional arts and local causes. • Ridley Inc., one of the largest commercial animal feed producers in North America, is headquartered in Mankato, and operates Hubbard Feeds.
• CHS, the nation’s largest farmer-owned cooperative, began operation in Mankato when the company bought Honeymead in the 1960s which Lowell and Dwayne Andreas grew to the largest soybean processing plant in the country. • Archer Daniels Midland (ADM) has a Mankato plant. Lowell and Dwayne Andreas led ADM and grew the company into an international giant with 265 processing plants connecting crops and markets in 75 countries. • The Birds Eye Foods Waseca plant is likely the number 1 processing and packing plant for corn on the cob. The facility process about 20 million pounds of peas and 80 million pounds of corn. Growers from a 45-mile radius supply the vegetables. Birds Eye Foods is the number 1 volume frozen vegetable brand in the U.S. • Green Giant in Le Sueur was founded as the Minnesota Valley Canning Company in 1903. Today Green Giant is owned by General Mills. MV
Labor statistics for the food processing industry • 48 Food/feed manufacturing companies provided 4,729 jobs with an average weekly wage of $732. • In the last two years, 104 jobs have been added to the food manufacturing industry. • Animal production and aquaculture provided 2,233 jobs with an average weekly wage of $671. • Crop production provided 225 jobs with an average weekly wage of $496. Source: DEED, second quarter 2012, South Central Region 9
Agricultural Profile of Blue Earth County • Blue Earth County is ranked second in hog production, with Martin County ranked first among Minnesota counties. • In 2011, agricultural marketing totaled $550 million. • Blue Earth County crop and livestock production is 51 percent crops ($280 million) and 49 percent livestock ($269.5 million). Source: Ag Marketing & Development, MN Department of Agriculture
Blue Earth County:
Blue Earth County Agricultural Marketing th
• Population: 64,384 (Ranks 14 in MN)
$600
• Total employment: 50,666 jobs - Farm employment: 1,008 jobs - Non-farm employment: 49,468 jobs
$550
(Million $)
$500 $450
Blue Earth County Agricultural Rankings: (Among all MN counties):
$400
Trendline
$350 $300
• No. 5 in livestock production - No. 2 in hogs - No. 9 in sheep & lambs
$250 $200 $150
• No. 4 in total agricultural production
$100 $50
• No. 6 in crop production - No. 8 in corn - No. 6 in soybeans
$0
MN Top 10 Counties: Livestock
Blue Earth County Crop & Livestock Marketing $600 $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0
$600
(Million $) Livestock
$400 #5
$300 $200 $100 $0
MN Top 10 Counties: Crops
MN Top 10 Counties: Hogs (1,000 head) 800 700 600 500 400 300 200 100 0
(Million $)
$500
Crops
$500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0
#2
Blue Earth County Crop & Livestock Production (%-share in Ag Marketing)
(Million $)
#6
Blue Earth County Livestock Sectors (%-share in Ag Marketing)
Livestock 49%
Poultry 7%
Dairy 1%
All other 0.5%
Cattle 7% Hogs 85%
Crops 51%
Source: USDA/NASS Prepared by Ag Marketing & Development, Minnesota Department of Agriculture
MN Valley Business • june 2013 • 23
Tom Fallenstein, along with his sisters and mom started renting costumes from his mom’s home in the early 1990s.
You can Buy Fun
Costume business booming in upper North Mankato By Pete Steiner Photos by Pat Christman
A
life-sized figure of glam-rocker Gene Simmons of Kiss, in full costume and makeup, stands ever-ready just outside of CEO Tom Fallenstein’s office. Simmons himself had to approve the casting of his famous curled, over-sized tongue. As we stroll down the hall past another life-sized figure of Spiderman, a 20-something worker, with his shirt tails hanging out over his jeans, zips by on a Razor
scooter to deliver a costume to the shipping department. Yes, there might be cubicles up front and an enormous warehouse in the back, but it’s abundantly clear that BuyFun-dot-com is a different kind of business in more ways than one.
Spotlight
24 • june 2013 • MN Valley Business
In mom’s basement President and CEO Tom Fallenstein says his Mom, Jenice, had been creating costumes for him and his sisters every year when they
Traveling via Razor scooter is a common site at the BuyFun.com headquarters in upper North Mankato. were kids. But already in 1992, Fallenstein, not yet a teenager, had an idea for making some money. They rented out 20 of their costumes. That was the start of something really big. Mom kept making costumes, the siblings would also buy others at garage sales, and soon, Mom’s basement had become their first warehouse. At first it was just a seasonal business to generate extra cash. But within 10 years, Tom, now a computer science major at Minnesota State University with a graphic design minor, had created a website that helped him rent out 800 costumes at Halloween. Long before Boardwalk Empire became a cable hit, Tom recognized the appeal of the Roaring 20’s, creating FlapperCostumes-dot-com and employing his sisters as models. There were zoot suits and slinky, fringed flapper dresses in three colors and four sizes. Tom was pleased with the extra cash for college, but moreover, he was simultaneously “just learning the business.” By 2004, he was pulling in $40,000 a year, “not bad for a college kid.” His challenge to himself: “Let’s see if we can do this full-time.” His mother, who had started it all with her creativity, was not as enthusiastic. She told Tom to “get a real job.” His response? He showed up at her basement “in a suit, for my first day of work.” The move to full-time A video shot just before Halloween in 2005 shows a cluttered kitchen at Jenice’s house. Tom and his sisters had boxes full of costumes everywhere, spilling into the living room. Mom’s kitchen had become their shipping department, and in just one year, business had grown 500 percent. That prompted a move into the former DeGrood’s
(now ECHO foodshelf) building on South Front Street downtown. They called it Costumes Galore, and Jenice was one of the first full-time employees. To this day she remains one of the owners of the family-held company. Tom’s sisters, Julie, Heather, and Lisa, are also partners. Since the move out of Mom’s premises, business has grown by a whopping 1600 percent. Tom is hesitant to reveal exact sales numbers, but suffice it to say, it’s a multimulti-million-dollar business with more than 100 employees. And they are hiring. A recent online posting listed several fulltime openings in accounting and web development. And in just 90 days, they’ll ramp up big-time for Halloween, hiring 1200 temps to take and ship online orders and provide live online customer support. What started as a seasonal venture is now a year-round juggernaut that ships worldwide to more than 200 countries. Mark Bietz, who got to know Fallenstein back in their college days 10 years ago, came on-board in the fall of 2010. As Chief Marketing Officer, he observes that Halloween began evolving from a children’s into an adult holiday back in the ‘90’s. But he notes that costuming in general has gained in popularity for other occasions, including Christmas and St. Patrick’s Day, which rank one and two behind Halloween. Proms and Renaissance Festivals also bring business. While the bulk of the company’s business is domestic, they’ve seen considerable growth recently in the international market. A different work place It’s not just the casual dress code or the scooters zipping around the office and warehouse or the large fabricated Darth Vader head adorning the CEO’s conference table
MN Valley Business • june 2013 • 25
The atmosphere is relaxed and fun at BuyFun.com. that reveals this is not your ordinary workplace. Says Fallenstein, “We’re a unique culture…. Our culture is, ‘we’re a FAMILY.’ ” Bietz says that extends beyond work: We party together, too, hang out together.” The corporate website spells it out: “We need people who are dedicated, passionate… willing to help… anywhere.” Yet one of the core values is, “Every day do something fun and maybe a little goofy that will make [everyone] smile. “Employees are expected to have “a pretty high quirk quotient.” After 90 days, fulltime employees are eligible for benefits such as an open vacation and sick leave policy, and a defined contribution plan that includes health care. Unlike a typical company, the H.R. director has plainly visible tattoos. CEO Fallenstein admits, “We like to hire geeks…. If we see they’re not loving their job, we try to put them in a place where they do.” The company sponsors an annual Gorilla Fun Run to raise money for the local Miracle League program. This past April’s effort raised $30,000. But as in all things, Fallenstein sets big goals: “Next year, we go for the world record. I think its 1,400 [people in gorilla costumes]. We’re gonna bring in the Guinness people.” Dominating online Mark Bietz says, “the online business model is something we feel good at.” In fact, 99-point-nine percent of BuyFun’s business is transacted online, although a couple of computers by the reception desk let you search the inventory and pick up the costume direct, if you wish. Plan on staying awhile: the rows of metal shelving in the warehouse are stacked with 60,000 different costumes.
26 • june 2013 • MN Valley Business
Some are acquired via licensing arrangements – that’s sister Julie’s area of expertise. For example, the company has rights agreements with many sports teams, including the Twins, as well as with rock band Kiss. However, some costumes are created in-house, and the company markets original artist-design t-shirts. Expansion into the lucrative t-shirt market led BuyFun-dot-com – which is really the corporate umbrella name – to purchase the domain name “t-shirts-dot-com.” Amazingly, the domain name “halloweencostumes-dot-com” was still available in 2008, so Fallenstein snapped that up. Bietz points out, one of his goals as CMO is searchengine optimization. Try it yourself: google the term “costumes,” or the phrase “Halloween costumes,” or maybe “Flapper costumes,” and if one of the company’s domains isn’t listed first, it’s likely in the top five or 10. BuyFun also owns the domains “comicbooks-dot-com” and “buytoys-dot-com”, and has marketing arrangements with Amazon and eBay. With business expanding rapidly, BuyFun moved into their new 200,000-square-foot facility on Lookout Drive in upper North Mankato in August of 2011. At 32, CEO Fallenstein can only grin: “It is a big business. But not your typical business model.” The 29-year-old CMO Bietz compares it to a Silicon Valley business model, adding, “Kids don’t have to move to California to get this type of job.” Both are bullish on the future: “The sky’s the limit!” But anyone hoping to work the coming Halloween rush should realize, you will be expected to show up for work dressed in costume. MV
STABILITY BEYOND THE BUILDING QUALITY. LOCAL. CRAFTSMANSHIP.
Graif Building Renovation | Mankato, MN Commercial Construction Construction Management Design-Build Remodeling & Renovations Land & Building Analysis Development
Robert W. Carlstrom Co. Inc.
1901 Excel Drive | Mankato, MN 56001 | Ph: 507-625-2872 | Fx: 507-388-2513 www.rwcarlstrom.com
MN Valley Business • june 2013 • 27
Nick and Tiffany Ward purchased Indulge Salon & Tanning from Tiffany’s aunt, Beth Milbrett.
Indulging their passion Couple takes over salon & tanning spa By Marie Wood Photos by John Cross
W
hen newlyweds Tiffany and Nick Ward purchased Indulge Salon & Tanning from Tiffany’s Aunt, Beth Milbrett, last November, it was more than a smart business decision. Tiffany, salon owner and stylist, is fulfilling her dream. While Nick never imagined that he would be
part-owner in a salon, he likes owning a business and supporting Tiffany in this endeavor. “I wouldn’t have contemplated this without Nick. No way,” said Tiffany. After high school, Tiffany attended the Cosmetology Training Center and began her
All In The Family
28 • June 2013 • MN Valley Business
Hair stylist Courtney Voth trims Rodney Anton’s hair. career as a stylist. Then she studied accounting and became an accounting assistant at Abdo, Eick & Meyers. As a financial analyst for IBM, Nick handles financial statements, budgets and strategic planning. On a miniature scale, he does the same for Indulge. Nick is also a partner in MnTicketGuys.com, a sports ticket reseller. The full-service salon with the Tuscan villa theme does pedicures, manicures, tanning, waxing, facials, massage therapy, make-up and hair cuts, styling and coloring. “When you look good, you feel more confident. To have someone else take care of you, who doesn’t like that?” asked Tiffany. “It makes me happy to know someone left my chair feeling good.” MVB: Why did you buy Indulge? Tiffany: It was always a dream of mine to own a salon – this type of full service and upscale salon. With our backgrounds, it just made sense. MVB: What are your roles in the business? Tiffany: Originally, I was going to do the daily accounting and bookwork, but Nick has been doing 95 percent of it. I do the hands-on operation. It takes a lot of time to have employees, handle phone calls that come in everyday that need to be returned, emails and inventory. Advertising and marketing takes up so much time. We had no idea. MVB: Nick, how involved are you in the business? Nick: More than I was planning to be. Most of it is the daily accounting, tracking sales, profit projections. I look at what can we do now that will help us six months from now. Tiffany is more the day-to-day.
MVB: Nick, what did you see in Indulge that made the salon a good investment? Nick: We spent many nights looking at old financial records until 3, 4 a.m. Going off Tiffany’s knowledge of the salon business and my ability to make strategic changes to lower our costs, we thought we could optimize the profit. Tiffany: There’s a lot of growth potential in the salon, not only cutting costs, but the ability to grow. MVB: Did your Aunt give you any advice on running the salon? Tiffany: She gave us a lot of what worked for her and what didn’t. She gave us ideas for the salon that she hadn’t acted upon yet. She’s our biggest cheerleader. Whenever we tell her an idea for the salon, she gets really excited about it. MVB: What is one of the biggest assets of your salon? Tiffany: The fact that we’ve got tanning in the salon. Nick: It’s tanning, but that you can get all your services done in one place. We’re the only one in the Mankato area that has all the services in one place. MVB: Tiffany, does it feel good to be back in the salon business? Tiffany: I love doing hair. I loved working for the accounting firm, but hair is my passion. Being in the salon environment, that’s home for me. Doing hair, that’s my play time. That’s my fun time. MVB: What is the biggest reward to owning your own business? Tiffany: The biggest reward is I get to see the kids more. We have four kids. The first couple months that was not true. Now, there have been days I pick them up from
MN Valley Business • June 2013 • 29
school. In summer, I hope to take them to day camps and do all the things I couldn’t do before. Nick: I like owning a business in general where you’re actively involved. At IBM, you can get lost in the numbers. If you’re working harder and own a business, you can see the direct payoff. MVB: How do you handle the competition of the Mankato salon market? Tiffany: Our market is a different market than a lot of what’s in the area. Competition is good. You always want a little competition. We have a really good clientele base. Nick: We sell a lot of spa packages to do all the services at one time. Tiffany: The service we provide is above and beyond. I go to other salons to make sure our customer service is the best we can be. MVB: How have your clients reacted to the new ownership? Tiffany: A lot of our customers didn’t even know there were new owners. We wanted it to be seamless. They love the new lobby area and being greeted at the door. All the clients really liked Beth (Milbrett). I think people like us. People have been coming for years and they don’t want to come in and see everything different. All said and done, it’s been a smooth transition. Nick: With any business, there are bumps along the road, but it’s how you react to those bumps. Once you get through one scenario one time, it gets easier. Then you put policies or procedures in place. As we’ve gone on, those are behind us and we have a good view of where we’re going.
30 • June 2013 • MN Valley Business
MVB: What’s coming up for Indulge? Tiffany: We’re getting geared up for the wedding season. Brides call and want to look their best for their wedding day and we make it as easy as we can. We schedule the appointments. We provide a nice little breakfast for them. They have fun and get their hair done. It’s just a normal day for us. I just let them know we can take care of them. MVB: What are the biggest challenges? Nick: Employee relations and hiring the right people. Tiffany: We have a really great team right now. We’re actively looking to add a new stylist. We’re busy. We’re waiting for the right person to walk in the door. It would be easy to lower our standards, but we wouldn’t be doing our business or clients any good. All of our stylists have a good amount of experience. You have to hire someone with great skills as well as the right personality. They have to have a skill set. We do require a minimum of a year outside of school before they work here. The salon still has the Tuscan Villa theme that clients like, but they have opened up the lobby. “I don’t want to lose the feel of the salon. We want to keep it warm and comfortable,” said Tiffany. Nick has noticed that men also appreciate a good haircut. He has heard male tanning customers say it’s the best part of their day. Tiffany calls it to a 15-minute vacation to Mexico. MVB: How have you been able to cut costs? Nick: Accounting fees. We’re doing all the accounting work. Tiffany: We manage the inventory differently. MV
Read us online!
MN Valley Business • June 2013 • 31
■
Agricultural Outlook
By Kent Thiesse
Federal Reserve warns of a farm land bubble
E
arlier this year, the Federal Reserve Bank of Kansas City issued another suggestion that we could be headed for a farm land financial bubble, due to the very rapid increase in farm land values in recent years. The Federal Reserve Bank issued this type of warning statement a couple of years ago, and of course Midwestern farm land values have continued to increase significantly. However, there appear to be some warning signs that this time could be different. Record net farm income in 2011 lead to a 14.5 percent increase in average farm land values from midyear 2011 to mid-year 2012, and average farm land values are likely to increase again by mid-year 2013. The year-to-year increases from 2011 to 2012 were the highest in the Midwestern and Plains States, with Nebraska recording a 35.8 percent increase, followed by North Dakota at 29.6 percent, South Dakota at 24.7 percent, Minnesota at 24.6 percent, and Iowa at 23.7 percent. Based on the annual “Iowa Land Value Survey” conducted by Iowa State University, the average farm land value in Iowa at the end of 2012 was $8,296 per acre, which is an increase of 23.7 percent from a year earlier. Iowa farm land values have nearly doubled in the past three years. Average Iowa farm land values were only $2,287 per acre a decade ago. Southern Minnesota land values have also increased considerably in the past few years, with a majority of sales in the past twelve months for high quality, tillable farm land, being in a range of $8,000 to $10,000 per acre, with numerous sales exceeding that amount. The Federal Reserve Bank raised concerns that farm land values may have risen too fast, based on the rapid increase in commodity prices in recent years, and the very low interest rates to finance real estate. There is concern that a sudden drop in commodity prices, along with an increase in ag real estate interest rates, could result in a major
downward adjustment in land values. Some have suggested that a combination of these factors could cause average land values to drop by as much as one-third. Currently, most people associated with agriculture remain fairly bullish about commodity prices, land values, and the overall agriculture economy. Even with the very strong agriculture economy that currently exists, one wonders how many farm operators are adequately prepared for a rapid drop in grain prices, along with lower farm profits, and potentially higher interest rates. Here are some caution flags to think about with today’s agriculture economy: • The cost of production for corn and soybeans for seed, fertilizer, chemicals, and fuel continues to increase, and is 50-60 percent higher than the cost of production 4-5 years ago. • Land rental rates have also risen quite dramatically in many areas, with increases of 50 percent or more in the past 2-3 years in many locations. • The increased cost of production, combined with the higher land rents in most areas, means that for most producers the break-even price with average yields for corn production is now at $4.50 to $5 per bushel, and $11.50 to $12 per bushel for soybeans. Does the current strong commodity prices and excellent average net farm incomes in recent years, along with the rapid increase in farm land values, automatically mean that we are headed for a repeat of the 1980s farm crisis? Not necessarily, as there are a lot of differences in the financial management of farm operators now, compared to the 1970’s and 1980’s. Many farm operators are in a much sounder financial position today than they were in the early 1980’s, and most ag lenders have taken a much more strategic approach on their lending principles, as compared to a few decades ago. Many farm
32 • June 2013 • MN Valley Business
operators are paying 50 percent or more down on the land parcels that they purchase, and thus are only financing 50 percent or less of the purchase price, as compared to financing 75-80 percent in the 1980s. Even though there is a good chance that ag commodity prices will be lower in the next 2-3 years, and will continue to face significant volatility, prices are not likely to drop to the levels of the late 1990’s and early 2000’s, given the strong world demand for grain that exists. The average farm debt-to-asset ratio in the U.S. has declined considerably in recent years, and is now only 10 percent, which is well below average farm debt levels in the 1980’s. Much of the farm land today is being purchased by well established farmers, who are combining this with other owned and rented land, limiting the overall cash flow impact. Most ag lenders are limiting how much they will borrow on farm land purchases, both in terms of percent of purchase cost, as well as total dollars per acre, which provides some room for a downward adjustment in land values. Farm profitability will likely remain strong in the next few months, especially in the crop sector, which is likely to change later in 2013, if the projected USDA grain prices for the 2013 crop year become a reality. There will likely be continued strong demand and strong prices for Midwest farm land during the next 6-12 months; however, producers, ag lenders, and others connected to the agriculture industry need to heed the warnings issued by Federal Reserve Bank. MV Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com
Agriculture/Agribusiness Corn prices — southern Minnesota 2013
2012
8
Soybean prices — southern Minnesota
(dollars per bushel)
2012
$6.91
$6.07
12
4
$13.67
8
2
4 J
F
M
A
M
J
J
A
S
O
N
0
D
Source: USDA
F
M
A
M
J
J
Milk prices
185 pound carcass, negotiated price, weighted average
2013
2012
110
J
A
S
O
N
D
Source: USDA
Iowa-Minnesota hog prices
Minimum prices, class I milk Dollars per hundredweight
2013
2012
24
$90.57
100
$19.46
22
90
20
80
18 $81.41
70 60
$15.24
16
6
0
2013
20
(dollars per bushel)
J
F
M
A
M
J
J
A
16 S
O
N
14
D
Source: USDA
$17.46
J
F
M
A
M
J
J
A
S
O
N
D
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
there for
you
Look familiar?
Is your kitchen sink full of FREE Drinkware? 83% of customers can identify you from a promotional product.
Find everything but the kitchen sink
@paragondelivers.com PROMOTIONAL PRODUCTS WORK!
Tom Evensvold
Steve Olson
Mark David Thompson Monson
Many have trusted MinnStar Bank’s personal service to help them build and grow their businesses—and we can do the same for you.
Downtown Mankato 507-625-6816 Lake Crystal 507-726-2137
BUSINESS BANKING www.minnstarbank.com Member FDIC
MN Valley Business • June 2013 • 33
Employment/Unemployment Initial unemployment claims
Minnesota initial unemployment claims
Nine-county Mankato region
Major industry
’12
April ’13
Percent change ’12-’13
Construction Manufacturing Retail Services Total*
158 273 46 200 677
226 206 55 194 681
+4.3% -24.5% +19.6% -3% +.6%
2012
2013
2000
110000
1000
M
A
M
J
J
A
Local number of unemployed
S
O
N
2012
D
2013
Nine-county Mankato region 6,631 7,088 10000
3,313 2,919 1,563 5,572 13,367
3,773 2,982 1,438 5,729 13,922
+13.9% +2.2% -8% +2.8% +4.2%
0
J
F
2012
2013
2,950.6 2,818.6
M
A
M
J
J
A
S
O
N
D
Minnesota number of unemployed 2012
154,766 159,773
200000
8000
2013
150000
6000
100000
4000
50000
2000 0
Percent change ’12-’13
(in thousands)
120000
F
’13
Minnesota non-farm jobs 3000
J
’12
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.
Nine-county Mankato region 125,921 125,458 130000
100000
April
Construction Manufacturing Retail Services Total*
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
Major industry
J
F
M
A
M
J
J
A
S
O
N
April
2012
Unemployment rate
4.4%
4.3%
55,625
55,888
2,533
2,481
2013
Source: Minnesota Department of Employment and Economic Development
34 • June 2013 • MN Valley Business
J
F
M
County/area
(includes all of Blue Earth and Nicollet Counties)
Number of unemployed
0
A
Unemployment rates
Mankato/North Mankato Metropolitan statistical area
Number of non-farm jobs
D
Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan Minneapolis/St. Paul Minnesota U.S.
M
J
J
A
S
O
N
D
Counties, state, nation April 2012 April 2013 4.3% 5.4% 6.2% 6.8% 5.0% 4.4% 4.9% 5.4% 5.8% 5.2% 5.3% 7.7%
4.4% 5.7% 6.4% 8.0% 5.2% 4.0% 5.4% 6.2% 6.2% 4.9% 5.4% 7.1% C. Sankey
Construction/Real Estate Residential building permits Mankato $4,672.2 $2,391.8
8000
(in thousands)
2012
2013
6000
Residential building permits North Mankato $2,138.1 $1,882.7
3000
2012
(in thousands)
2013
2000
4000 1000
2000 0
J
F
M
A
M
J
J
A
S
O
N
Source: City of Mankato
2012
Information based on Multiple Listing Service and may not reflect all sales
2013
250
128 149
200
M
A
M
J
J
A
S
O
N
D
Housing starts: Mankato/North Mankato 2012
Includes single family homes attached and detached, and townhomes and condos
2013
40
17 15
20
100
10
50 J
F
M
A
M
J
J
A
S
O
N
D
Commercial building permits Mankato $291.8 $634.5
0
J
F
M
A
M
J
J
A
S
O
N
D
Source: Cities of Mankato/North Mankato
Source: Realtors Association of Southern Minnesota
(in thousands)
2012
2013
Commercial building permits North Mankato $0 $1,317.5
2000
2013 (in thousands)
2012
1500 1000 500 J
F
M
A
M
J
J
A
S
O
N
D
2012
County
2013 4.0%
5.0 4.5 4.0 3.4%
3.5 J
F
M
Source: Freddie Mac
J
F
Foreclosures:
Interest rates: 30-year fixed-rate mortgage 5.5
0
M
A
M
J
J
A
S
O
N
D
Source: City of North Mankato
Source: City of Mankato
3.0
F
30
150
7000 6000 5000 4000 3000 2000 1000 0
J
Source: City of North Mankato
Existing home sales: Mankato region
0
0
D
A
M
J
J
A
S
O
N
D
Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan
Year End report 2011 2012 174 67 32 129 43 59 57 50 24
126 37 46 98 42 49 58 57 17
Percent change -28% -45% -44% -24% -2% -17% +2% +14% -29%
Source: Minnesota Foreclosure Partners Council C. Sankey
MN Valley Business • June 2013 • 35
Retail/Consumer Spending Vehicle sales
Mankato — Number of vehicles sold 1,180 2012 2013 775
1200 1000
Sales tax collections
Mankato 2012 2013
(In thousands) 500
$338.8 $315.7
400
800
Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.
300
600 400
200
200
100
0
J
F
M
A
M
J
J
A
S
O
N
0
D
Source: Sales tax figures, City of Mankato
Lodging tax collections $31,704 $29,225
50000
J
F
M
A
M
J
J
A
S
O
N
D
Source: Sales tax figures, City of Mankato
Mankato/North Mankato 2012 2013
Mankato food and beverage tax $47,885 $49,563
75000
2012
2013
40000 50000
30000 20000
25000
10000 0
J
F
M
A
M
J
J
A
S
O
N
Source: City of Mankato
D
0
J
F
M
A
M
J
J
A
S
O
N
D
Source: City of Mankato C. Sankey
Stocks of local interest
Gas prices-Mankato 2013
2012
$5.00 $4.00 $3.00
$3.61 $4.29
$2.00 $1.00 0
J
F
M
A
M
J
J
A
S
O
N
D
Gas prices-Minnesota 2013
2012
5
April 12
May 20
Percent change
Archer Daniels
$32.12
$34.50
+7.4%
Ameriprise
$73.74
$81.67
+10.8%
Best Buy
$23.96
$25.68
+7.2%
Crown Cork & Seal
$40.40
$44.01
+9.0%
Fastenal
$48.99
$51.54
+5.2%
General Growth
$21.01
$23.00
+9.5%
General Mills
$49.28
$49.14
-0.3%
HickoryTech
$10.12
$10.60
+4.7%
Hutchinson Technology
$2.88
$5.69
+97.6%
Itron
$45.79
$43.45
-5.1%
Johnson Outdoors
$23.28
$24.12
+3.6%
4
3M
$107.03
$118.89
+11.1%
3
Target
$69.19
$70.90
+2.5%
U.S. Bancorp
$33.77
$35.27
+4.4%
Wells Financial
$19.65
$19.80
+0.8%
Winland
$0.66
$0.74
+12.1%
$30.63
$30.12
-1.7%
$4.27
$3.63
2 1 0
J
F
M
A
M
J
J
A
S
Source: GasBuddy.com
36 • June 2013 • MN Valley Business
O
N
D
C. Sankey
Xcel
C. Sankey
COMPLETE SERVICE, COMPLETE SATISFACTION. Add value to your building and years to its life by choosing Schwickert’s. Since 1906, we have been providing our clients with exceptional value and complete peace of mind. • • • • • • • • •
Design/Build HVAC Environment Solutions 24-7 Service and Maintenance Mechanical Plumbing Roofing Waterproofing Architectural Metals
Professional resources to help grow your business AUTOMOTIVE Jerry’s Body Shop, Inc. 1671 Madison Avenue Mankato, MN 56001 507-388-4895 www.asashop.org/member/jerrys
MEDICAL Mankato Clinic 1809 Adams Street Mankato, MN 56001 507-385-4075 www.mankatoclinic.com
For information on including your service to this directory, please contact 330 Poplar Street, Mankato, MN | 888-724-9421| schwickerts.com
507-344-6390
Advancing Business for a Stronger Community
Greater Mankato’s Retail Strength
The River Hills Mall serves shoppers from throughout southern Minnesota and northern Iowa
untapped opportunity for retailers of $81 million. In addition the Primary Retail Trade Area has a Marketp Potential Index (MPI) as greater or greater than the national average in 72 of 138 total categories including those in following table. It’s figures like these that have driven many new retail and food/drink establishments to continue to start up and grow in Greater Mankato. And with their success, comes vitality for our marketplace. For more information on what Greater Mankato has going for it as a Retail Center, visit greatermankato.com/retail.
Greater Mankato Growth
One of the strengths of Greater Mankato’s economy is its industry diversification. And while the region’s largest industry sectors, manufacturing, ag, education and health care, get much of the attention in our region yet another critical also has a significant impact (accounting for 8% of our economy ) – Retail. The role and reason for a strong retail presence in a community can be viewed in many different ways – with a markedly “what came first the chicken or the egg?” dynamic. On the one hand, retail businesses are on the receiving end of growth in other sectors. When businesses grow and increase their employees, they provide more consumers for retail businesses. But retail businesses can also be the driver of growth. In addition to attracting consumers to our regional center, retail businesses can also help define our area’s economic vitality to businesses and residents - existing and potential. Having many of the retailers and restaurants that you’d expect to see in a metropolitan, along with a wide array of local shops, sends a message about our community’s size and sophistication. So, the answer to the chicken and egg question (does retail growth drive growth in other industries or visa versa) has to be - both. Retailers both promote and benefit from growth in our overall community. Fortunately for Greater Mankato, retailers have found a lot to like here. Retail and food/drink sales grew from $908 million in 2000 to more than $1.6 billion in 2010 – a 77% increase. And the future potential for the marketplace looks strong as well, with the demand drawing from the region’s 4,000 square mile Primary Retail Trade Area estimated at $1.79 billion, compared with a supply of $1.70 billion, creating a net
Source: ESRI Business Analyst Online. Compiled by Greater Mankato Growth.
Chamber of Commerce and Economic Development
507.385.6640 • greatermankato.com 38 • June January 20132013 • MN • MN Valley Valley Business Business
growth
in Greater Mankato Greater Mankato Songs on the Lawn presented by Xcel Energy is celebrating its 10th year, with the same fun flavor that has made it such a popular annual event. This annual summer tradition takes place every Thursday in June from 11 am – 1 pm in Civic Center plaza in front of Mankato’s Intergovernmental Center. Admission is free, as is parking the Civic Center and Cherry Street Ramps. Songs on the Lawn gives co-workers, friends and families from all around the region an opportunity to gather in the City Center to enjoy live music from area bands. This year’s line-up includes The Bitterroot Band on June 6, The DW3 on June 13, The Pickup Boys on June 20 and The Frye on June 27. Attendees can also purchase lunch and snacks sold by a variety of local vendors, including Angie’s Kettle Corn, Buffalo Wild Wings, Culver’s Frozen Custard, Dino’s Gourmet Pizzeria, Hy-Vee, Neighbor’s Italian Bistro, Number 4 American Bar & Kitchen, Olives, Pub 500, Sodexo, Tavern on the Avenue and The Loose Moose Saloon. Greater Mankato Growth is able to put on Songs on the Lawn each year, thanks to the generous support of the sponsors below. Special thanks also to the Verizon Wireless Center, City of Mankato, City of North Mankato, Mankato Family YMCA, Children’s Museum of Southern Minnesota, Red Door Creative and Waste Management of Southern MN.
New Business Lucky Bucket 530 South Front Street, Mankato
Groundbreaking Peter Pan Preschool and Childcare 2195 Rolling Green Lane, North Mankato
New Location Billings and Company, Inc. 530 North Riverfront Drive, Suite 120, Mankato
New Location Homestead Realty LLC – Mankato 1600 Madison Avenue, Suite 112, Mankato
Sponsored by:
MEMBERS of RADIO Manakto
Grand Reopening 101 Main Restaurant 101 Main Street, Mankato
MN Valley Business • JUNE 2013 • 39
Greater Mankato Growth
Presented by:
Member Activities Business After & Before Hours
5:00 - 7:00 p.m.
Greater Mankato Growth
June 4 July 2 August 6
Mayo Clinic Health System Specialty Clinic Abdo, Eick and Meyers, LLP I&S Group
7:30 - 9:00 a.m. June 19 Corporate Graphics Commercial July 17 Mankato Family YMCA August 21 Laurels Edge Assisted Living
2013 Business After Hours Sponsored by
2013 Business Before Hours Sponsored by
April Business After Hours hosted by Minnesota State University, Mankato – Intercollegiate Athletics
April Business Before Hours at Mankato Ford – Quick Lane Tire & Auto
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.
40 • June 2013 • MN Valley Business
Cavalier Calls on our
Newest Members
ezIT, LLC 151 Saint Andrews Court, Suite 610, Mankato myezit.net
Jordan Sands, LLC 1710 Roe Crest Drive, North Mankato jordansands.com
Melaleuca – Work at Home United yourfamilyfuture.biz
The Boulder Tap House 291 Saint Andrews Drive, Mankato bouldertaphouse.com
Unimin Corporation 121 Saint Andrews Court unimin.com
For information on the benefits of becoming a member of Greater Mankato Growth, visit greatermankato.com/ membership or contact Member Relations Director Karen Toft at 507.385.6643 or ktoft@greatermankato.com. MN Valley Business • june 2013 • 41
Greater Mankato Growth
Creative Ad Solutions, Inc. 340 Pierce Avenue, North Mankato casiteam.com
July 8 Mankato Golf Club
2 Tournaments this Year! To accommodate the growing demand to golf in this event, we have expanded it by adding a New Morning 9-hole Tournament to go along with the traditional Afternoon 18-hole Tournament. Morning 9-hole Scramble Tournament (80 golfer capacity) Continental Breakfast & Registration 7:30 am Shotgun Start 8:30 am Buffet Lunch and Awards 11:30 am __________________________________ Afternoon 18-hole Scramble Tournament (80 golfer capacity)
Buffet Lunch & Registration Shotgun Start Social Dinner & Awards
11:30 am 12:30 pm 6:00 pm 6:30 pm
Greater Mankato Growth
Each year Greater Mankato on the Green sells out, so sign up to have your key clients and best employees right away. Or you can ask to be put on a team with other business representatives you would like to get to know better. Get more information and to sign up at: greatermankato.com/greater-mankato-green.
Presented by:
42 • june 2013 • MN Valley Business
September 4 Minnesota State University, Mankato
Sign up Today Each year the Greater Mankato Campus & Community Fair gives area college students a chance to learn about the opportunities available to them on campus and in the community. Businesses and non-profit organizations have found this event effective in letting students know about the products and services they provide, as well as recruiting volunteers and employees. Minnesota State University, Mankato will be including this event as part of its activities welcoming students back to campus and anticipates more than 2,000 students participating! To get the most out of this event, now is the time to sign up and plan for your booth. For more details on this unique opportunity to reach students, visit greatermankato.com/campus-community-fair.
Mankato Arts & Culture Fun By Maxime Kot, Visit Mankato Intern
Local business owner, Jason Reinhart, enjoying the CityArt Walking Sculpture Tour
Visit Mankato, LLC, the local Convention & Visitors Bureau, is a Limited Liability Corporation of Greater Mankato Growth, Inc.Visit Mankato leads the development of the visitor economy in Mankato by actively promoting Mankato as a premier destination for conventions, tournaments and tourism.These activities bring a steady flow of visitors and business activity to Mankato that benefits local residents and future visitors.The work of Visit Mankato helps strengthen the hospitality industry which provides jobs, a diverse tax base and amenities for everyone to enjoy. visitmankatomn.com
MN Valley Business • june 2013 • 43
Greater Mankato Growth
One of the Greater Mankato’s best assets is its cultural getaway opportunities. Filled with a unique combination of wellness, historic, artistic and cultural qualities; the city provides multiple fun annual events for cultural enthusiasts throughout the year. In light of this year’s National Travel and Tourism’s focus on family destinations, the upcoming spring and summer events definitely highlight the city’s ability to cater to cultural family adventures. For those who are enthralled by art, the CityArt Walking Sculpture Tour is a captivating tour that covers over 30 artistic sculptures spread around the city centers of Mankato and North Mankato. This annual tour is never the same as the sculptures vary from year to year. With each sculpture comes an interesting story behind the artistic form. Onlookers can earn all about them from knowledgeable tour guides or link to the website and new audio tour. All of the sculptures are for sale and you can vote for your favorite piece allowing for the artists to stand a chance to win awards. Get the children involved in the fun filled scavenger hunt for kids where children can learn about historical architecture while being involved in an exciting game. Another great family event to partake in would be Arts by the River on June 9 and 10. This festival has it all with fine arts, live music performances, food and beverage vendors as well as children’s activities. There will be various forms of fine arts; pottery, sculptures, jewelry, silkscreen printmaking and many more. You never know what kind of new art form you may discover in this enriching festival. Greater Mankato Growth puts on Songs on the Lawn (see page 39 for details) every Thursday in June where families, friends and co-workers can enjoy time together during their lunch break. Solstice is a wonderful event a purpose of bringing the community together in support of local charities. Support this event on June 15 and 16 at Riverfront Park by being a part of an exhilarating combination of arts, crafts, food and music. Bring the kids, friends, lawn chairs or a picnic rug and enjoy or partake in the weekend activities. For those who want to literally feel the music, the 21st Annual Thunder of Drums will be held on July 1 at the
Blakeslee Field at MSU, Mankato. This not-to-miss invigorating event features some of the most talented and competitive drum corps from across the nation. The performances will be filled with dancing, acrobatic acts and outstanding music. Come cheer on the students who spend their summer touring the country as they compete to achieve top honors for their drum corps. For a tasty treat, attend Mankato’s famous 16th annual Ribfest from August 1 – 4. Get your fingers sticky with the juiciest, most tantalizing award winning ribs. “Ribbers” from all around the country show off their famous rib recipes at this meat heaven event. Wash them down with ice cold beverages while enjoying live musical performances. Whether it be music, food, arts, crafts or fun activities, Greater Mankato provides all of that and more for those who seek to broaden their horizons with a cultural getaway.
Linda Albrecht, Principal
Women Making a Difference! Congratulations to our newest Principal, Linda Albrecht. Linda has more than 20 years of experience providing consulting services to financial institutions in the areas of regulatory compliance and internal audit. She is a member of the Independent Community Bankers of America and Minnesota Bankers Association. Congratulations, Linda!
507.387.6031 | www.eidebailly.com
44 • June 2013 • MN Valley Business
Better Site Design
GN
EL
LE
E OF D SI
NCE
YEARS 40
EXC
The site upon which your facility is built is often seen as simply a place to park. However, at I&S Group we see it as the first opportunity you have to convey the values of your company to your client. A well designed and beautiful site conveys a sense of the care and attention to detail you put into your product or service. At I&S, our team of landscape architects, engineers, and architects understand this. We strive to design a cost effective site that provides efficient access and parking while expressing the personality of the client and reflecting the values of the setting. Find out more about the advantages of I&S at www.is-grp.com.
WWW.IS-GRP.COM "3$)*5&$54 t &/(*/&&34 t 1-"//&34 t -"/% 4637&:034 t 4$*&/5*454
GROUP One firm - start to finish ™