Takeaways from a year of publishing in California

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June marks the one-year anniversary for CompanyWeek in California. It’s been a year of exploration, of growth, of learning and listening, and, more than anything, of coming to grips with America’s largest and most diverse statewide manufacturing economy.

Here’s a short list of takeaways after year one:

  • I lost track of the number of conversations I had with manufacturers who first cited how hard it is to do business in California, and, in their next breath, told me they’d never leave or consider moving. California companies have a torrid love/hate relationship with their home state.
  • Open rates of CompanyWeek‘s California e-publication have been comparable to those in Colorado and Utah. Click-through rates on stories are slightly lower. I think it’s an outcome of California’s size — sprawling urban environments and geographic and industrial diversity. Plus, “local” matters more than ever. It’s a dynamic playing out across the business community, notably for us in growth in industries like food and beverage manufacturing. Our goal is to write about companies doing things that should matter to manufacturers across the region. It doesn’t always work that way.
  • For us this means reporting on companies across manufacturing industries. The list of most-popular features in California after a year reflects manufacturer’s interest in other maker companies regardless of industry — a dynamic at work across our publishing footprint. It’s a cross-industry mix of standout companies.

1. Virginia Park Foods, Riverside.

2. Abel Reels, Camarillo, California/Montrose, Colorado

3. Bishop Wisecarver Corporation, Pittsburg

4. Circa of America, San Francisco

5. Häns Swipe, Santa Fe Springs

6. Fender Musical Instruments Corporation, Corona

7. Scale 1:1, Los Angeles

8. Scandic, San Leandro

9. Odor No More, Tustin

10. Rosenblum Cellars, Oakland

  • The list also reflects our main interest today in middle-market companies operating within OEM supply chains, and OEMs committed to domestic production. That’s not to say we won’t be featuring more multinational OEMs like Apple, or automotive OEMs that source globally. But to understand the state of American manufacturing today, look to the companies reinventing what it means to be a true domestic manufacturer. California hosts them in the thousands. Companies within Apple’s $55 billion domestic annual supply-chain spend capture our imagination.

As we get underway in Year Two, we’ll pick up the pace of coverage with more profiles and industry reports. And we’ll bring manufacturers together around funding and financing and to collaborate across industries.

Thanks for supporting our mission along the way.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Food revolution the tip of the iceberg as manufacturing industries innovate

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The Wall Street Journal‘s reporting last week on how big food is struggling to keep pace with innovation underscores the influence of the 100-plus food companies we’ve featured the past four-plus years. It also echoes the message we’ve been trumpeting at the same time: We’re witnessing a full-on food and beverage revolution.

But as much as CompanyWeek‘s food and beverage archive, or a WSJ headline like “Small Brands Are Taking a Thousand Little Bites Out of Campbell’s Business” reflect manufacturing’s new influence and character, production is often downplayed. Brands innovate, the thinking goes. Where, or how, companies choose to manufacture products is a minor detail.

I recently argued how flawed this thinking is with respect to the outdoor industry. The logic falls flat in the food business as well, if for other reasons. Without a new and innovative manufacturing ecosystem, the “thousand bites” taking a toll on Big Food would be a half-dozen, and Campbell’s would still today be the arbiter of innovation in the sector.

But it’s not, because Richard Lappen, Robbie Rech, and Manoj Venugopal and other first-moving production innovators were busy developing a world-class, scalable manufacturing ecosystem. Food brands don’t have the option to offshore production; without enhanced domestic production focused on small companies, we wouldn’t have a revolution in the food sector.

Food innovators are also looking outside the conventional supply chain for new ideas and inspiration. Josh and Christi Skow’s Canyon Bakehouse looked to aerospace innovator NFT Automation for automation solutions in their gluten-free bakery. Jennifer and Jeff Vierling at Durango’s Tailwind Nutrition leaned on Ska Fabricating, progeny of the prolific Ska Brewing, to develop production lines for Tailwind’s line of powdered drink mixes.

It’s the tip of the iceberg. Manufacturing innovations will drive product and brand development in countless other ways, much of it current technology and processes bleeding across vertical markets. Call it Supply Chain 4.0, a new ecosystem where production innovations developed by brewers and distillers, wine and beverage brands, food, edibles, and the variety of consumer brands and OEMs in the region are shared across industries, refined, and delivered back by a more capable supply chain.

Today manufacturers need to know how other companies are utilizing new workforce options like apprenticeships; how equipment innovation is facilitating new, low-tolerance fabricating onshore, across multiple industries; the promise of direct-to-consumer models in apparel and consumer goods that enable brands to cut costs, dollars that can be poured back into design, domestic sourcing, or production; and myriad other innovations transportable across vertical markets and industries silos.

The lessons of Small Food, where creativity and the will to challenge conventional wisdom have combined with production innovations to vault the regional sector to national renown, aren’t isolated. As we bring companies together from across industries to explore the possibilities, we’ll report on the seismic outcomes.

Stay tuned.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.

The numbers behind manufacturing’s comeback are stunning. Do they add up to a more resilient sector?

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Manufacturing’s comeback is a hot national topic. It’s also a contrast to the post-recession narrative, when manufacturing had lost hundreds of thousands of jobs and was declared dead and buried.

Today the numbers tell a different story:

  • Four years ago, pundits cited sub-50 PMI levels (Purchasing Managers’ Index, a measure of manufacturing health) as evidence that manufacturing was dead. Today the PMI hovers around 60, and the overall economy grew for the 107th consecutive month. The economy goes as manufacturing goes.
  • New data measures the power of manufacturing’s multiplier effect and the widening impact of the manufacturing supply chain. Brian Lewandowski and Michael Hansen’s CompanyWeek column outlined that Colorado manufacturing activity “supports a total of 441,000 jobs in the state, and contributes approximately $47 billion to state GDP.” It’s powerful stuff. The state’s top employment sector — trade, transportation, and utilities — supports about 470,000 jobs. Almost as many are touched by manufacturing.
  • Harry Moser’s Reshoring Initiative, an early mover in forecasting a return of American manufacturing, just released its 2017 data report, and the numbers are again eye opening. The press release reads, “Including upward revisions of 67,000 jobs in prior years, the total number of manufacturing jobs brought to the U.S. from offshore is over 576,000 since the .. manufacturing employment low of 2010. The 171,000 reshoring and FDI jobs announced equal 90 percent of the 189,000 total manufacturing jobs added in 2017.” The release adds, “Combined reshoring and FDI jobs were up 122 percent compared to unrevised 2016 totals and 52 percent compared to revised 2016 totals.” If Moser’s right, U.S. firms are repatriating jobs. It means the economics of manufacturing in America is compelling brands to make things here for the first time in decades.
  • OEDIT’s Luis Benitez uses the term “connected economies” to describe cross-sector collaboration, and it’s an apt description of what’s happening today, companies discovering shared interests and opportunities across the industry silos that have defined them. For example, brands in natural products and outdoor industries are realizing they have a lot in common — including customers. And they’re collaborating to advance their shared interests. It’s a big opportunity: consumers spend $887 billion annually on outdoor recreation, and another $190 billion or so on natural products. As technology, processes, people, and best practices bleed across industries, the outcomes will be seismic, as in a $1T opportuntity in this example alone. It’s the tip of the iceberg.
  • The renewed influence of the sector was on full display at two regional events this April — the Colorado Manufacturing Awards and the Northern Colorado Manufacturing Partnership trade show and expo — NOCOM. Both were harbingers of things to come, showcasing the state as a manufacturing laboratory and an engine of innovation and growth.

Does all of this translate into a more resilient sector? The answer is less clear.

Manufacturers cite workforce challenges as a barrier to growth. Can it stop sector development cold?

Maybe. It’s a multi-faceted challenge. Re-training a new manufacturing workforce to meet the needs of a modern sector is challenge one.

Affordable housing is a close second. I’ve written how Naturally Bay Area, formed to model Naturally Boulder’s success, might incubate and accelerate companies only to see them move for lack of manufacturing infrastructure and employees.

Even as business finds a way, economic developers still lack a playbook, a blueprint, to guide the development of the manufacturing supply chain. What are the ingredients for success, and for which industries? Build it and they will come, but how to determine what’s lacking? Today the regional manufacturing supply chain is more spotty than complete.

Cohesive, pro-manufacturing public policy is as elusive. Do tariffs serve the collective interests of manufacturers? How will immigrant-reliant industries like food and ag manage growth with fewer employees? Tax cuts are great. Trillion-dollar deficits increase uncertainty.

Benitez’s “connected economies” are still unconnected, largely.

But the next exponential leap in industry development — and resiliency — will occur when brands are clustered with their means of production and with others outside their current sphere of influence, companies that share common opportunities and challenges.

Exhibit A: How powerful would Colorado’s outdoor industry be if it were better aligned with regional manufacturers building its toys and with the state’s tourism juggernaut? We’ll dig deeper into the concept in the coming months.

In the end the American West has the upper hand. Net in-migration and positive outcomes of well-funded workforce initiatives will rebuild the talent pipeline. Industries will get connected.

Until then, the revolution is being televised. Don’t miss it.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Why natural products and outdoor industry companies are collaborating to advance their interests.

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Barriers to a sustained and broad-based U.S. manufacturing comeback are well documented, but what opportunities should local and regional businesses and planners be focusing on? What industries or market openings best fit the attributes of local economies?

There are also opportunities leading manufacturers across industry boundaries to partner with companies that have similar customers and values. Business leaders should take note.

One area of considerable promise is the intersection between outdoor industry and natural products — calling cards of the economies of the American West. Think about it: Consumers of healthy food and beverages are often the same people leading active outdoor lifestyles.

Alissa Sears is co-founder of AdVenturesAcademy and VP growth & strategy at Christie & Co, a communications firm focused on companies across the natural products, outdoor, and sustainable agriculture industries. At Outdoor Retailer’s Summer Market in Denver this July, she’s organizing an event to showcase businesses operating at the intersection of these dynamic industries to like-minded investors.

“We have focused on the intersection of outdoor and natural products because of the inherent consumer alignments and shared values,” says Sears, “but it’s also about unrealized efficiencies. As retail continues to evolve, oscillating between e-commerce and brick and mortar, we’ve seen increased interest in natural products companies seeking to differentiate through being where their consumers live and play — camping, on hikes, in climbing gyms, or wherever their lifestyle choices take them.”

Sears sees retailers getting in the game as well, as does anyone who’s walked past the wall of energy bars and natural good products at an REI checkout. “Outdoor retailers are also looking for ways to increase frequency of customer visits, provide education around ‘clean fuel’ for their customers, and find other ways to add to their shopping experience,” says Sears. “Food, beverage, nutrition, and personal care have increasingly been seen as opportunities to achieve those goals.”

In the vernacular of these newly connecting industries, retailers are new “experiential channels,” according to Zach DeAngelo, partner at the brand management firm Rodeo CPG. For retailers, according to DeAngelo, Sears’ “clean fuel” is “a natural extension and opportunity to deepen customer engagement and experiential education.”

Heady stuff, and it’s not only product manufacturers and their distribution channels that are evolving. Investors are taking note, according to Sears. “We’ve also seen investors who have traditionally focused on one sector or the other realize the alignments and crossover opportunities,” she says. “They’re already a critical part of the growth ecosystem, and here, they also have the ability to help shape these emerging opportunities, with funds to expedite growth, guidance around prioritizing growth strategies, and the experience and wisdom of knowing when to say no. They are key growth partners and it’s essential to ensure alignment to best overcome the inherent challenges of growth together.”

Sears accomplishes this by bringing together companies and investors in out-of-the-box environments. When I mention the investor conferences we’ve hosted in Denver the past few years, she smiles — a “been there, done that” nod that was just less than disapproving. But why meet in a conventional venue when the mountains of Ecuador beckon?

“We harness the power of adventure to deepen engagement,” she explains, “bringing together entrepreneurs, investors and industry leaders at this intersection and get them outdoors together through our experiential programming — Colorado backcountry hut trips, surf trips in California, climbing in Ecuador. We know that the best businesses are the ones that do it differently. Push the limits. Make the impossible possible.”

She adds, “Companies are adapting to rapidly shifting terrain, realizing that ‘business as usual’ is no more. They are getting more creative in how they approach growth, exploring new distribution channels, developing collaborative product lines, engaging advisors and investors with cross-sector experience.”

Denver’s not Ecuador, but Sears has something special in mind for the pitch event at Outdoor Retailer. “The Entrepreneur + Investor [Tent]Pitch will go beyond the traditional pitch event to highlight the importance of aligned relationships between entrepreneurs and investors through connecting at a deeper level. We will showcase eight entrepreneur and investor teams at the intersection of outdoor and natural products, bringing together key decision makers from both industries to explore opportunities to align forces and unlock crossover growth opportunities.”

Sears is accepting applications for both companies and investors to participate in the OR pitch event. Contact her here, or drop me a line.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

The Outdoor Industry faces a manufacturing reckoning. How will its leaders respond?

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Is there an industry more challenged by its success than the Outdoor Industry?

Take Nike, a colossus of OI. Phil Knight’s now famous sojourns to Asia to establish a shoe manufacturing beachhead opened the floodgates for American brands to offshore en masse, and boy, have they. Still today, brands of all sizes follow Knight’s Orient Express to ensconse production in thriving, world-class shoe and apparel factories, primarily in China.

The results have been stunning. Chinese factories are so capable that today “the likes of Balenciaga have started manufacturing in the country,” according to GQ. (Did you know that a $700 cross-trainer was even available? Neither did I.) The investments in infrastructure and people have transformed China into an OI manufacturing superpower.

But as business media reports, Nike, Adidas, and others are leaving China in search of cheaper labor in other markets — like Vietnam. It’s part of a modern shell game brands now manage, one precipitated by their own success in creating centers of manufacturing excellence offshore that are, by definition, increasingly expensive to operate. Qualified labor, benefits, advanced technology, and materials — the price of world-class manufacturing — are becoming as pricey in China as they are in Detroit.

After helping transform China into a economic behemoth, sights are now set on other Asian countries where major investments in infrastructure can be offset by lower labor costs. It’s the offshore playbook, out of print and updated for an iPad.

Here’s the rub: Today OI brands are motivated by more than profit. It’s an industry packed full of change agents who are moved to steward public lands, develop “authentic” brands, preserve finite resources, and generally make the business world a more sustainable, friendly place.

How to rationalize, then, the inherent unsustainability of an Asian supply chain? Or rural unemployment and dogged underemployment in states home to the same brands that are investing in jobs and production infrastructure in overseas communities? Or how to justify a lack of credible environmental oversight in countries home to the apparel factories of U.S. OI brands, as the industry wields its considerable power here to punish states for public lands policy?

As uncomfortable OI brands are with this paradox, they’re not showing it. Domestic manufacturing is making a comeback, but in OI circles, the question of where its products are made is largely a back-burner issue. The Industry still operates under a halo of tacit approval that brands must offshore production to stay in business, or, that it’s okay to relegate manufacturing to remote destinations. We’ve embraced the methodology of U.S. brands pouring profits into the development of world-class manufacturing facilities offshore, not here.

Until now.

For one, there’s a vanguard of companies challenging conventional wisdom, companies that have simply said that offshore production will not be part of corporate or product DNA. CompanyWeek Editor Eric Peterson reminds us of several Colorado-based companies that fit the bill, this week.

Alchemy Bicycle Co. is first on the list and in the alphabet, but Ryan Cannizzaro’s mission and accomplishment is not trivial. Alchemy, like Utah-based ENVE, maker of the wheels mounted on most all of its frames, decided composite frame manufacturing could be established in the U.S. despite Taiwan’s hammer lock on the sector. Today Alchemy is battling for market share against U.S. brands made in Taiwan at the same time it challenges the notion that OI products have to be made offshore.

But it’s consumers who may force OI brands to follow the lead of Alchemy and others. Buyers unerringly force companies to keep their brand promise, and if OI is to live up to the lofty ideas and rhetoric of its spokespeople, the contradictions of its manufacturing strategy may move from back burner to center stage.

We’ll be there to celebrate the shift.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.

Skip tax cuts and invest in industry-specific supply chains to grow manufacturing

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In a Washington Post column last week, economists Jared Bernstein and Somin Park cited the work of Tim Bartik, who outlined what he called the “three habits of highly successful manufacturing-intensive communities,” including:

  • Customized services for small- and medium-sized manufacturers help them to overcome financing and information barriers, improve their technology and product design, and link them up to global supply chains;
  • Infrastructure and land-use investment includes improving the transportation infrastructure and other services associated with a neighborhood’s land to make it more attractive for business development;
  • Life-cycle skill development, including high-quality child care, high-quality preschool, K-12 education, college scholarships, and adult job training. Bartik finds that “better skills for local workers help attract and grow higher-wage jobs.”

The upshot of Bartik’s analysis is that the standard playbook economic developers use to recruit and retain manufacturing companies — usually a mix of tax cuts and business incentives — today lacks in comparison to the benefit of investments in targeted services and strategies. Build a supply chain, and manufacturers will come.

A lesson from the regional markets we report on is that better yet, build an industry-tailored ecosystem.

Here’s why. If today your community lacks a capable base of precision contract manufacturers and engineering and design services, but boasts a rich farm and ag supply chain and concentration of outdoor and lifestyle assets, a deliberate effort to recruit and nurture natural food and craft beverage companies makes more sense than developing an aerospace cluster. Both are manufacturing. Both are increasingly attractive as communities seek more light industry. But one provides a more direct line to a thriving maker economy.

An investment strategy for communities might begin with an assessment of current business assets and capabilities, including:

  • Current number of related industry OEMs and brands
  • Workforce: state of the current employment pool including demographics
  • Sourcing: availability or access to raw materials, technology, design and engineering assets and related industry expertise
  • Manufacturing: availability of related fabrication, forging, assembly, contract manufacturing services, packaging
  • Logistics: shipping, transportation, and related services
  • Educational opportunities in support of industry development
  • Lifestyle and recreation attributes

It follows that cities and communities can then assess how well-matched target industries are to local and regional business assets, whether steps can be take to address supply-chain gaps, or whether a pivot to better-matched manufacturing industries might be a better plan.

How to fill the gaps? Over the next 12 months, CompanyWeek will be active in working with both companies and communities to develop more robust industry blueprints for the development of manufacturing supply chains. We’re certainly not alone in seeking to foster more manufacturing-intensive communities.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Here’s the second wave of 2018 Colorado Manufacturing Awards finalists

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Five years ago, an awards program for Colorado makers and manufactures didn’t exist. Today, selecting finalists for the third annual Colorado Manufacturing Awards is like drinking from a fire hose. So much innovation, entrepreneurship, manufacturing acumen, and market leadership to choose from. Who knew?

We did.

Here’s the second and final wave of finalists for this year’s CMAs. (We published the first group last week.)

Last year, we named Fort Collins/Loveland the state’s top manufacturing community, given its compelling mix of manufacturing industries, R&D ecosystem, and effective trade leadership. This year, we invited the NoCo Manufacturing Partnership to help us with the Outstanding Consumer & Lifestyle Brand, in part because they made us look smart. The organization has received national attention for its approach in developing sector support for manufacturing, and the finalists in the category — Denver’s Sarabella Fishing and Knotty Tie, and Grand Junction’s mobile lifestyle brand Vintage Overland — represent the category, and entire state, with distinction.

CAMA, the Colorado Advanced Manufacturing Association, took a different tact and focused on the rich if underpublicized manufacturing community in Colorado Springs to select the three finalists for Outstanding Industrial & Equipment Manufacturer. The finalists are more diverse, with CNC stalwart Diversified Machine Systems, antenna concealment specialist ConcealFab, and the influential fabricator IP Automation, representing Colorado’s deep industrial category from the Springs.

In 2017, Colorado’s brilliant food sector had a distinctive industrial flavor at the CMAs, with bio-specialist MycoTechnology and supply-chain ace Ardent Mills capturing food-related hardware. This year, we invited Colorado Proud, the Colorado Department of Agriculture’s champion for local producers, to help us reconnect with smaller operators with the Small Food Brand of the Year award. It’s a gargantuan task given the innovation coursing through the sector. In fact, in the time it takes us to publish this list, finalists Blue Moon Goodness, Cusa Tea, and The Real Dill may already have outgrown the $2 million in top-line revenue we identified as a small brand threshold.

The Colorado Cleantech Industries Association (CCIA) continues to help companies commercialize and accelerate an array of solutions in the energy economy, at times against an unpredictable public policy backdrop. They also helped us identify three of Colorado’s top cleantech companies for Outstanding Energy & Environmental Manufacturer. Loveland’s Lightning Systems and Denver’s RavenWindow and AMP Robotics are a predictably strong group that again exemplifies the region’s influential cleantech ecosystem.

Aerospace is a regional economic calling card and when paired up with the growing number of electronics manufacturers, many developing solutions for aviation and aerospace OEMs, the award for Outstanding Aerospace & Electronics Manufacturer carries additional weight. This year the Colorado Space Business Roundtable and Manufacturer’s Edge looked across the spectrum of A&E companies to select AMPT, general aviation stalwart Air Comm Corporation, and one of Colorado’s spacecraft stars, Sierra Nevada Corporation’s Space Systems.

If you’re of the opinion that we’ve left some deserving companies off this list, you’re not alone.

As you ponder next year’s list, REGISTER HERE to attend this year’s Colorado Manufacturing Awards event. Miss it, and you’ll miss the best business event on the calendar.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

NAM’s politics shortchange small manufacturers

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Things are good for America’s large manufacturers, says Jay Timmons, CEO of the National Association of Manufacturers (NAM). Timmons borrowed an Olympic metaphor last month to proclaim that manufacturing is “going for the gold,” pleased as he is with the trifecta of regulatory relief, lower tax rates, and a proposed $1.5 trillion infrastructure plan, courtesy of President Trump.

His elation is understandable given the high confidence level of his membership and newfound influence in the White House. Timmons picked sides, and his affection for President Trump is as well documented as his enmity for his predecessor.

But of all the reasons to be enthusiastic about manufacturing, and there are many, government’s stewardship of the manufacturing economy should excite Timmons the least. Sure, it’s NAM’s job to move public policy in favor of manufacturing. Yet NAM’s responsibility is to companies large and small, across diverse industries, and it’s an open question as to whether the vast community of small and middle-market companies are feeling the love. The celebration seems premature.

Today channeling Trump also means: supporting tariffs that may raise materials costs for manufacturers and diminish already thin supply-chain options; abandoning trade agreements altogether; diminished environmental stewardship, important to emerging manufacturing sectors like outdoor industry; uncertainty and confrontation in immigration, healthcare, and the emerging cannabis market; and outright hostility to business defying the NRA.

Companies will navigate America’s diverse business and cultural ecosystem to find the state or region that best fits their own operating values. Celebrating public policy that works to lift all of American manufacturing is a meaningful role for NAM, including advocacy for policy initiatives specific to the needs of small manufacturers:

  • Immigration reform, including a long-term resolution of the DREAMer crisis and targeted increases in immigration levels in manufacturing-related sectors
  • Compromise and agreement on healthcare reform that incorporates the best components from bipartisan discussions
  • Reducing — not expanding — import restrictions and tariffs on targeted raw material categories to enhance local and regional supply chains
  • Supply chain engineering to enable communities to recruit and retain manufacturing industry
  • Engagement on global climate-change initiatives
  • Comprehensive cannabis legislative reform including a short path to banking and financial service for industry companies

Becoming just another partisan player in the polarized milieu in Washington, D.C. is a dead end for NAM and the small manufacturers it supports. Time to widen its purview.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Here’s the first wave of finalists for the 2018 Colorado Manufacturing Awards

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With the Olympic Games and Academy Awards providing a worthy backdrop, we’re set to announce finalists in the most important competition of the spring, the Colorado Manufacturing Awards. Gold medals and Oscars have nothing on us.

The 2018 CMAs again recognize outstanding maker and manufacturing businesses across multiple industries, but this year with a meaningful twist. We invited 10 of Colorado’s creative trade and business organizations to help us select worthy finalists within their industry communities. It’s a tip of the cap to their great work, but also a reminder of how manufacturing’s influence spans so many of the region’s key industries.

So here’s a first look at finalists from half the field. We’ll report on the rest next week, as we near the April 5 Colorado Manufacturing Awards gala event, where we’ll announce category winners at The Cable Center at University of Denver.

At some point in the past year, we had no choice but to distinguish Colorado’s brilliant cadre of contract manufacturers with their own category. We reached out to the Rocky Mountain Tooling and Machining Association (RMTMA) to help us identify three finalists, and it’s a predictably strong group. Boulder’s Tecomet, Ft. Collins’ Manes Machine, and standout Arvada aerospace shop Faustson Tool are this year’s deserving finalists for Outstanding Contract Manufacturer.

The Colorado Distillers Guild helped us select three candidates for Outstanding Craft Distiller. Finalists reflect a deep statewide movement that’s positioned Colorado’s sector as a national leader. Carbondale’s Marble Distilling Company, Crested Butte’s Montanya Distillers, and Denver’s standout early-mover Leopold Bros. comprise this powerhouse group.

The region’s craft brewers are a force of nature, today with over 350 companies shaping a regional beer tsunami. With so much innovation, entrepreneurship, and community-building, it’s at once easy yet incredibly difficult to select three — and only three — finalists for Outstanding Craft Brewery. With an assist from the Colorado Brewers Guild, this year’s finalist group includes Longmont’s iconic Left Hand Brewing Company, Divide’s barrel-aged masters Paradox Beer Company, and the upstart artisans at Broomfield’s 4 Noses Brewing.

The State of Colorado has pegged bioscience as a “key industry” and the Colorado Bioscience Association is one of the region’s accomplished trade and business associations. The industry sector is informed by entrepreneurship and great science but also by manufacturing acumen, and finalists this year for Outstanding Bioscience Manufacturer flash all three. As additive manufacturing transforms how surgeons operate, Littleton’s 3D Systems is on its leading edge, and Allison Medical’s story is as compelling as TOLMAR Inc.‘s cancer-treating innovation. The three companies represent Colorado’s bioscience industry with distinction.

Outdoor industry has crashed the national business scene with the force of an avalanche and Colorado’s OI sector is poised to become an epicenter of product innovation and manufacturing. CO Active Colorado, one of the state’s newest trade associations, selected three finalists overcoming the challenges of domestic manufacturing to make and assemble a generation of high-performance gear using local talent, expertise, and grit. Denver’s Meier Skis, Phunkshun Wear, and Alchemy Bicycle Co. fit the Outstanding Outdoor Industry brand.

Next week, we’ll showcase the remaining five industry associations and category finalists: Outstanding Industrial & Equipment, Consumer & Lifestyle, Energy & Environment, Aerospace, and Small Food brands of the year.

REGISTER for the 2018 Colorado Manufacturing Awards event, but don’t wait: The event will sell out.

Launch of Naturally Bay Area a catalyst for CA food brands. But where will they manufacture?

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Last November, we reported that a group in San Francisco was in the process of bringing Naturally Boulder‘s community-building model west, to better organize and accelerate northern California’s natural and organic product ecosystem. Vision became reality January 21 with the sold-out kickoff of Naturally Bay Area at the Winter Fancy Food Show in San Francisco.

Naturally Bay Area is the first “regional affiliate” of a fledgling Naturally Boulder network. On one hand, it’s an acknowledgment of the staggering success of Colorado’s natural food and product community and NB’s community-building methodology. It’s also more proof, if any was needed, of the profound change transforming America’s gargantuan food industry. From Boulder to San Francisco, Brooklyn to Portland, a wave of early-stage brands has captivated both consumers and the industrial brands that, until now, have decided what we eat and how its made and distributed. Today, industry innovation resides squarely in emerging food and product communities throughout the country.

Naturally Bay Area will provide structure and organization to what until now has been a loose ecosystem of brands, service companies, investment partners, and other business mentors. If history repeats, Naturally Bay Area will become a community-building engine, nurturing startups, accelerating promising brands, and enhancing the delivery of key services to natural product entrepreneurs.

Less certain is how brands will manufacture. With a more efficient commercialization of ideas, demand for manufacturing should explode. But within the Bay Area’s technology-driven economy, prospects for a qualified manufacturing workforce are sketchy, and manufacturing infrastructure lacking. Where will Naturally Bay Area members make their products?

The evolution of Colorado’s model suggests that a network of new production resources will develop alongside brands. Powered by technology from food-savvy entrepreneurs like The Food Corridor, it should be much easier for early-stage brands to locate commercial kitchens than it was for companies a decade ago. Brands should be able to escape the limitations of one’s own kitchen earlier and easier.

For later-stage companies, a co-packer that manufactures for multiple brands is often the next destination. Colorado’s network of co-packers has been every bit the catalyst as brands in the development of its natural food play. Will a more capable network of Bay Area co-packers develop to meet demand?

If brands can’t manufacture here they’ll move or sell — to industrial producers with the capability to scale manufacturing and accommodate an influx of new products. It’s the goal of industrial players today to do just that, to innovate through acquisition instead of organic growth. Big Food has waved the white flag: It’s given up on competing with the innovation flashed by early-stage food companies. Today it buys innovation.

Exits are fine, but the goal of Naturally Bay Area and the public/private resources sure to rally in support, is the development of a thousand new brands, employing dozens of employees each, driven by the promise of sustained business and manufacturing support. It’s the promise of the sector in California or Colorado: to incubate middle-market growth companies that cut a wide swath through the economy, not the narrow, top-down ecosystem that consumers and entrepreneurs are abandoning.

Who, then, will rally California’s manufacturing ecosystem? In San Francisco and the Bay Area, the workforce challenge alone is enough to stop development cold. In this tech-centric economy, where will food manufacturing’s new labor force come from? What cities and communities will move to develop facilities and provide incentives for companies to stay and thrive? Where will a new manufacturing workforce find affordable housing?

And as Naturally Boulder evolves to the Bay Area, Los Angeles, and San Diego, are public and private resources ready to rally around manufacturing?

Colorado’s ecosystem has grown organically, without a concerted effort from public officials to juice its development. Given the scale of the manufacturing challenge, California’s natural product innovators may not have that luxury.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.