Arizona manufacturing is having a moment. And like every state grabbing for a piece of America’s industrial comeback, leaders here are grappling with one challenge above all others: workforce.

Last week manufacturing and education leaders convened in Phoenix at the Arizona Manufacturing Summit to assess the current state of manufacturing employment and forecast the path ahead. Speakers at the event, co-presented by the Greater Phoenix Economic Council and Arizona Manufacturers Council, expressed high confidence that Arizona is poised to succeed where other states are struggling.

I helped moderate the discussion, that from industry included representatives from Intel, Taiwan Semiconductor Manufacturing Company (TSMC), VB Cosmetics, Heitek Automation, and Latham Industries. Educators from Arizona State University, Maricopa Community College System, Grand Canyon University, and Arizona’s K-12 ecosystem spoke to Arizona’s talent pipeline.

Arizona Commerce Authority Senior Vice President Allison Grigg helped establish an employment baseline, citing “more than 330,000 manufacturing jobs in Arizona across more than 5,400 companies.”

Standardized data from the Federal Reserve and U.S. Department of Labor, tied to NAICS industry codes and used across all states, pegs Arizona manufacturing direct employment at just over 192,000 jobs.

Regardless of the source, Arizona manufacturing employment has been on a tear: Economic Innovation Group’s (EIG) analysis of U.S. Department of Labor data estimates that just five states – Texas, Florida, Georgia, Utah, and Arizona – have accounted for over half of all U.S. manufacturing jobs added since 2019, including 16,797 jobs in Arizona alone.

The nuance of manufacturing employment is that sector jobs ebb and flow across different industries and Arizona is benefitting greatly from its industrial mix. On a national level, EIG estimates that “the transportation and food manufacturing industries have accounted for the lion’s share of job growth in the manufacturing sector post-pandemic; these were also the two leading industries for job growth within manufacturing after the Great Recession.”

In fact, Arizona’s legacy “transportation” companies have fueled the local boom: Honeywell Aerospace, Boeing, Northrup Grumman, and General Dynamics are top-10 manufacturing employers in Arizona (the feds’ NAICS designation includes aerospace in a broad NAICS Transportation classification).

All great, but the biggest reason for optimism here is Arizona’s burgeoning “computer & electronics manufacturing” (more NAICS) opportunity, i.e. semiconductor manufacturing. It’s also the source of the state’s biggest manufacturing employment challenge.

Consider first that more jobs have been lost in America’s computer and electronics manufacturing ecosystem than any other since 2000 – EIG estimates that “Despite the recent uptick…there remain 39 percent fewer jobs in computer & electronics manufacturing than in the year 2000.”

Arizona, Texas and other semiconductor outposts are in a position to reverse the trend. Grigg estimated that Arizona would add 18,000 or so manufacturing jobs by 2030. Many of these will be at Intel and TSMC and Amkor, and at hundreds of suppliers in the regional semiconductor supply chain.

There will be setbacks along the way. Intel’s Angela Creedon, speaking at the Summit, conveyed the challenge of announcing layoffs in Arizona at the same time the company is poised to receive a heavy dose of CHIPS-related subsidies – to undergird workforce development, in part. Intel has preliminarily qualified for $8.5 billion in grants under the CHIPS Act. The optics are, well, challenging.

Yet Intel is already Arizona’s top manufacturing employer – and given TSMC’s growth plans in the desert, more “computer & electronics manufacturing” jobs will add to an already dynamic manufacturing ecosystem. To wit, LinkedIn counts 10,783 current job openings at Arizona manufacturing companies.

Not all positions are production-focused, and educators at the Summit were hyperfocused on the evolving-skills mix. And for good reason. The make-up of the manufacturing workforce is changing. A study by Georgetown University’s Center on Education and the Workforce estimates that the percentage of manufacturing workers with bachelor’s degrees hit roughly 30 percent in 2016 compared with 8 percent in 1970. And a 2022 NAM (National Association of Manufacturing)-involved study found that nearly half of the manufacturing job openings that year, around 1.2 million, required at least a bachelor’s degree.

I quipped to Binil Starly, School Director at ASU’s School of Manufacturing Systems & Networking and Summit speaker, that a decade ago, ASU wouldn’t have bothered to attend. Starly smiled like the cat that ate the canary. Today, ASU is leaning into manufacturing with a $200 million investment in its southeast Mesa Polytechnic campus in the form of a 100,000 sq. ft. advanced manufacturing center. Intel hires more ASU grads than from any .edu outpost. Grand Canyon University’s new Dean of the College of Engineering and Technology, Paul Lambert, spoke passionately at the Summit about GCU’s investment in manufacturing. He’s a qualified source – an ex-Air Force pilot and retired Boeing executive. Things have changed. And if other states have been slow to benefit from university involvement – and planning – that’s not the case here.

But if university grads are key to manufacturing’s future, today, companies here and elsewhere continue to rely on human capital from the trade and vocational pipeline. In Arizona, the primary talent engine is the Maricopa County Community College system (MCC). Speaking at the Summit, Daniel Barajas, chief officer of Workforce & Economic Development Strategy for MCC, described a system working overtime to fill Arizona’s growing demand for talent – via a network of colleges and programs that today is highly integrated with industry – not only semico’s, where CHIPS-funded development programs will in part unfold through MCC – but Arizona’s stable of established manufacturers.

Here then, is the rub. Today, manufacturers like Latham Industries and VB Cosmetics and Heitek Automation (represented at the Summit by Tracy Latham, Bob Acheson, and Dan Heitek) and a hundred others, are competing with Intel and TSMC for the same talent. The technicians, operators, welders, and dozens of other trade grads that Barajas’ MCC (and Tucson’s Pima Community College system) are churning out continue to be the workforce lifeline for Arizona manufacturing, as important the university system is becoming. All educators here have a secure place in Arizona’s future manufacturing economy; the journey there will be messy, and competitive.

But this orchestra of talent all seems to be headed in the same direction here, where in other states, not so much. Arizona’s tight geography also helps; Phoenix and Tucson are competitive but fuel nearly adjacent manufacturing ecosystems. Other synergies are developing organically: Phoenix’s West Valley is becoming a transportation and logistics hub for the entire state. Chandler and Mesa and points in SE Phoenix are expanding in the manufacturing game.

NAM forecasts nearly 4 million new U.S. manufacturing jobs in the coming decade. Arizona’s ambition is to compete for a growing share. If workforce is a differentiator – and it is today – AZ will be a key cog in America’s neo-industrial future.

Bart Taylor is a Moss Adams BDE and founder and former publisher of the AZ MFG REPORT. Reach him @ bart.taylor@mossadams.com

 

Arizona Manufacturing Summit | October 23, 2024 | Phoenix, Arizona

Speakers/Panelists

Economic Development

• Allison Grigg, Senior Vice President, Arizona Commerce Authority

Industry

• Angela Creedon, Arizona Public Affairs Manager, Intel
• Pearl Chang Esau, Founder, Shan Strategies
• Dan Heiling, CEO, Heitek Automation
• Robert Acheson, CEO, VB Cosmetics
• Tracy Latham, CEO, Latham Industries

Education

• Binil Starly, School of Manufacturing Systems & Networking, Arizona State University
• Paul Lambert, Dean, College of Engineering and Technology, Grand Canyon University
• Tracy Rexroat, CTE Curriculum Connection, National CTE Advisory Council
• Daniel Barajas, Chief Officer of Workforce & Economic Development Strategy, Maricopa Community Colleges

Presented by:

• Greater Phoenix Economic Council
• Arizona Chamber of Commerce & Industry
  • Arizona Manufacturers Council
  • AZ MEP

Sponsored by:

• JPM CHASE
• Moss Adams
• Lockton
• Keyser

America’s craft brewers would have been forgiven earlier this month for looking awry at a recurring headline in the Wall St. Journal: Why the Recession Still Isn’t Here might continue to describe macro conditions, but for much of the local suds industry, a deep downturn — a beer recession — has been a harsh reality for some time.

“It sucks,” deadpanned Eric Wallace, co-founder of Colorado craft first-mover Left Hand Brewing Company. I caught up with Wallace at Left Hand’s sparkling new restaurant and taproom in Denver’s bustling RiNo district, an ironic place to be discussing craft beer’s current struggles. It teases exciting new possibilities.

Yet for Wallace and others who upset convention with brash new ideas, it often begins and ends with beer, and the industry wreckage today has dampened enthusiasm for what lies ahead. Breweries too many to count have shuttered, and some of the industry’s most established operators have backed up. COVID, inflation, and a market flooded with a seemingly endless roster of inventive beers have proved more formidable than Big Beer.

Wallace considers what his own innovation ethos has wrought. “We helped bring this on,” he offers. “We have innovated and pushed the boundaries of beer to a point where not only are our customers and beer drinkers confused, but I’m confused.  It feels a bit like the first shake out back in the late 90’s and early aughts. Lots of beer on the shelves of questionable quality with very short functional shelf life, and lots of gateway inventions leading our customers away from beer, not into beer.  There are so many brands on the shelf that you need good fortune’s help to make a decision on what to actually try, hoping to not get burned.”

 

 

As a result, he sees consolidation as pretty inevitable. “We have an overbuilt brewing environment and until some of the excess capacity is transitioned out of the marketplace, margins will suffer, and brands will perish.”

Fewer brands would certainly refocus consumers. But even if Left Hand’s stellar brands like Milk Stout Nitro and Sawtooth lead a beer comeback, the appetite to diversify, like Left Hand’s RiNo restaurant and bar, is industry-wide and seems here to stay.

Nick Nunns gained a craft foothold with TRVE Brewing Company with a reputation for making great beer but also with a unique brand: TRVE’s connection with Denver’s ‘heavy metal’ scene not only informed the vibe at its downtown location but also its retail presence. Nunns also wasn’t eager to get big, fast.

“Our tap room numbers haven’t changed,” Nunns told me, “We’re certainly seeing a slight decline in wholesale year over year, but it’s nothing I’m panicked about. I think it’s just the downturn of the industry overall. Given my personal experience, I can understand where the consumer is at, having less purchasing power overall,” he added.

Nunns has also kept the brewery in motion. “TRVE has always been a brewery that has done pivot after pivot after pivot. Sour beer took a downturn, so we pivoted, you know, and we started boosting production for the wholesale market of a lot of our clean beers — like IPAs and lagers. We’ve been told we were doing craft lagers before they were cool.”

And for Nunns, it’s no longer just about just making beer. “I was getting a little tired of ‘The Lonely Island of Denver,’ you know, just being so far from literally anywhere else was just starting to feel very restrictive and isolating.”

So, Nunns made the ultimate pivot — and acquired a brewpub in Asheville, North Carolina. He’s from the East Coast originally. “My wife has had ties in Asheville for quite some time, and through the process of us dating long distance, I just started visiting Asheville fairly regularly.”

Like Left Hand, TRVE made the jump into the restaurant business — but half a continent away. “We’ve established a wine list, a cocktail program, thanks to some collaboration with a group of folks who are trying to look into opening their own bar. And we’re doing like, pop up bars, you know, around Asheville. Obviously, our licensing is a little bit more flexible here, doing business as a brewery.”

“We’re really shifting what we’re doing,” he adds, “at least here in North Carolina, into more of an on-premise business model where it’s really just about running a brewpub more than it is about, like, trying to find placements (for beer) in liquor stores and bars and all that stuff because there’s just not as much money left in that anymore.”

 

 

Nunns’ has also outsourced production to New Image Brewing, nearby in Arvada, Colorado. It’s a move that might have been a death-knell for a craft brewers’ reputation a decade ago, but as craft has matured and effectively won its battle with Big Beer, feels like an evolution of sorts.

“It was really just us reading the room and saying, ‘Why are we struggling in a production facility that’s never really going to be an efficient setup,’ and at the same time, New Image was looking for partners to bring in because they had a building and facility that’s set-up for bringing in more beer, more production. All we needed was tanks,” Nunns explains, “so it was literally just moving some of our equipment over to their location, without us having to cut any corners or affect our recipes or the ethos of how we go about making beer. All of those things are easily maintained.”

Contract production — co-manufacturing — isn’t new to craft. Denver’s Sleeping Giant Brewing Company was a first mover in the space. Founder Matt Osterman has been helping brands manufacture at scale since 2015 and, today, is making beer for brands across the West. But more, he has a growing interest in the beyond-the-beer category. The stainless-steel tanks in Osterman’s Denver factory cater to a diverse, fast-changing beverage market.

Beer was first for Sleeping Giant, and the connection remains strong. “Beer is what our facility is designed for, and that is what our team is built around. Beer is certainly the lifeblood of what we do,” he says.

That said, the beer recession seems to be forcing every operator to reconsider its path. With a slowdown leaving more and more empty stainless-steel in the market, brewers are evaluating new ways to fill ‘em up.

“I mean, it’s been interesting. Or I could make it a bit more dramatic and say that we’ve seen not just other breweries get into the space, but brands that were actually clients or prospective clients of ours that today have become co-packers,” Osterman says. “So, it’s not just the more competitive landscape, it’s that the pool of prospective clients has shrunk and the amount of suppliers has grown. It’s interesting for sure.”

But it’s not more beer that’s capturing the imagination of brewers; after all, there’s already so much beer on the market. Today, it’s ready-to-drink cocktails, a dizzying array of hard teas and kombuchas, spiked seltzers and straight-up canned drinks, and everything in between.

 

 

“A lot of breweries are making things that aren’t traditional craft beer right now, and we’re talking the big kids — like Sierra Nevada, New Belgium, Boston Beer Co. — the ones that have been around for a long time, the ones that are arguably the most successful companies from a business standpoint.” Osterman says.

“Sierra Nevada’s got this whole new innovation production space that they’re doing, and it’s clear that they are leaning into this space and understand that they’re not going to conquer the future with the same things that they’ve done in the past.”

I asked Osterman if he’s leaning in by necessity, given craft beer’s challenges, or simply because opportunity beckons.

“The diversification that we’re doing is intentional,” he answers, “in part because, honestly, it makes us a healthier, more well-rounded company. I continue to believe in the [beer] space, but I think that it would be foolish not to recognize some of the segmenting that’s going on, and some of the diversification that will keep happening, especially the more that we get influenced by Gen Z. The upcoming target demos don’t want the same thing that their predecessors have had.”

Eric Wallace has lived the entire arc of the craft brewing experience. “We survived the first shake out by merging with Tabernash Brewing Company in 1998 — in the old Denargo Market back then — and then starting up our own distribution company (Indian Peaks Distributing) in 1999,” he says. “We had to cut, scrimp, shuck, jive and raise capital to get through it. Today, we’ve now brought on a number of co-packing partners in the distilling, hard kombucha, CBD seltzer, and beer businesses — and will be bringing on others as well. We’re all going to have to find ways to keep our breweries busy and work our way through this next shake out. And it’s easier said than done.”

That may be, but from each setback, craft purveyors have indeed shucked and jived their way to sustained success. It may look different on the other side, less may be more, but there’s little doubt the next craft industry iteration will again fly high.

Bart Taylor is a Moss Adams BDE and contributor to MFG Insider. Reach him at bart.taylor@mossadams.com.

America’s precision machinists are searching for balance. On one hand, the business of contract manufacturing has become a lowest-cost, shortest lead-time proposition (read how, in space procurement).

On the other hand, when provided room to operate, companies are leaning-in to engineering, to design-to-manufacture, to an operating ethos that values quality and acumen and technology and everything that goes into being globally competitive. All things that differentiate American suppliers.

Fortunately, more companies are getting a chance to manufacture a product and not just job-shop a part. Domestic production is in favor, and a new generation of manufacturers is busy reinventing US industry, in a flurry of eye-catching products.

Daniel Hester, founder and CEO of Austin-based American Precision Engineering (APE), leads one of those companies. Hester maneuvered APE into an opportunity to design-and-build the aptly named “Universal Lift System” for one of America’s top VTOL aircraft manufacturers — and the project provided his company an opportunity to do what it does best.

“It was a wheelhouse project for us,” Hester says. “There were a lot of engineering challenges — and we have a lot of experience with lifting attachments and developing lifting equipment and material handling. Engineering and designing a solution and then being able to build it for them is what we do best.

“But we’re also this scrappy and nimble company, and it enabled the customer to cut out the middleman and work directory with us — and that’s no small thing,” Hester says. “Our customer is building VTOL aircraft — they have significant design and manufacturing challenges in their products; they didn’t need an additional challenge to design a lift system and figure out how to build it as well. And that’s where our value came in.”

The lift system, which the Austin Regional Manufacturing Association (ARMA) recognized as the Coolest Product Made in Austin, plays a role both in aircraft assembly — like affixing wings — and with lifting key components like batteries into the fuselage.

“So, the premise with the universal lifting system,” Hester describes, “is a core platform that then has a modular set of tooling that can be used for a variety of manufacturing uses. It’s a mobile platform with a vertical actuator; it opens up a lot of uses, especially in aviation.”

 

 

APE’s prototype was a hit. The company is already working on building several production units.

But as great as the ULS turned out, the subtle way that Hester’s team turned a procurement request into a demonstration of capabilities is an equally compelling outcome. “In the end, it was solving a very complex geometry problem — how can we figure out how to get all this functionality into a very small space from what essentially began as a crayon drawing? To be trusted with that process means everything,” he says,

“Consider the alternative. What we often see is that a customer will design something, give it to us and basically say, ‘how much to make this?’ The cost is often astronomical — and we tell them why. They go back to the drawing board, and they bring something back again. But it’s the same price for a different reason,” he laughs.

“They quite often end up throwing that part ‘over the fence’ (to offshore providers) to shop on price, when the better approach would be to hire a design-to-manufacturer like us. We’re involved from the outset, but then share in the rewards of the value we’re created,” Hester explains. “And when I talk to companies that are like, ‘oh, we send this stuff overseas,’ I’m just like, ‘how do you sleep at night? You’re literally slitting your own throat.’”

This self-defeating behavior, where companies wish there were more capable domestic manufacturing options, only to perpetuate offshore supply chains, is maddening — but also a habit that’s hard to break.

“We have Protolabs and Xometry and Paperless Parts and other companies that are aggregating quotes from so-called ‘independent companies’”, Hester says, “but what it’s doing is putting this massive amount of market pressure on price and not so much on quality. If you’re making something in your garage, that’s great. But I don’t know if it’s good long-term for a business like ours.”

Moreover, “We need, as a country, to build companies and infrastructure to be able to manufacture high-end domestic products at a globally affordable price,” Hester adds.

I’ll finish the thought: an important step is to reimagine procurement, not just production, in a way that enhances rather than diminishes the attributes of America’s new generation of capable machinists. Quality not price, prowess not profits, where community matters.

Hester’s team at American Precision Engineering, and a hundred others like them, offer a path forward.

Bart Taylor is a Moss Adams BDE and founder and former publisher of CompanyWeek manufacturing media. Reach him at bart.taylor@mossadams.com.

Here’s how Primes and the companies that fly can make life easier for suppliers

If “Prime” contractors like SpaceX and Lockheed Martin, along with companies like lunar explorer Ultimate Machines, are the public face of America’s new space economy, contract manufacturers and other suppliers to the industry are the glue. Their parts comprise the systems that fly. Without them, without an industrial base of suppliers, there is no burgeoning space industry.

But in key areas — like national defense — it’s an industrial base already in crisis. The National Defense Logistics Agency (NDIA) estimates that the defense industrial base has declined by over 40 percent in the last decade — over 17,000 small businesses in the past five years alone.

There’s no mystery as to why. Government contracting — Department of Defense contracting — is notoriously hard. Fewer entrepreneurs are launching manufacturing companies. And for a new generation of business leaders passionate about manufacturing, other opportunities beckon.

Including space.

But the “space base” is already showing signs of strain. Turns out that space procurement is its own animal. Volumes are lower than traditional aerospace contracts — orders are smaller. Money is also tighter — there’s more upstart commercial work. Turnaround times are truncated. Uncertainty is the rule.

Even its most successful operators are wary. Hernan Ricaurte, principle of Ricaurte Precision Inc. (RPI) and a growing supplier to the space industry, told me, “Working with space companies requires us to be agile given the NPI (new product introduction) to production requirements and tight schedules. It’s an industry,” Ricaurte says, “that’s not for the faint of heart.”

Justin Quinn’s Focused on Machining was an early entry, perched within Colorado’s space-friendly Front Range. “I mean, for a shop like ours, capacity is always the issue.

But it’s not with this type of business. It’s not long-term capacity. In fact, they don’t want to know what you’re doing two months from now. They want to know what you’re doing in the next two weeks,” he laughs. “Parts manufacturing isn’t a two-week proposition. So, that’s where we see the hang up now,” Quinn adds, ” there’s just not a lot of time to react.”

 

 

Quinn’s persevering, as is Mike Sneddon, CEO of SG Aerospace and also a space-industry supplier with clear-eyed views of the ecosystem. I asked Sneddon how he’d launch a contract space manufacturer today. “The only thing you would do is consider it a secondary business or a subsidiary of a current company,” he says. “There’s just no way that you could sustain these [company] conditions in any type of a business model, at least in a business that lasts.”

Sneddon speaks from an enviable position. SG Aerospace was invited to be a supplier to Artemis — NASA’s ambitious program to land the first woman and first person of color on the Moon, explore the lunar surface, and lay the groundwork for sending astronauts to Mars. SG has unique talents. “We do a lot of titanium and stainless — hard metals,” Sneddon says, “that kind of gets us in the door.”

Space is a means to an end for Sneddon, where it’s less than 5 percent of his current business. “Space is by far the hardest. We were trying to use space as a stepping stone into different opportunities, to be able to say ‘Hey, we’ve tackled space, and we’re good at it.'” His Artemis work should validate his approach.

All of this to say that the space industry would do well to avoid the pitfalls that plague procurement in defense-related aerospace and aviation, to attract, not repel, the quality suppliers it needs. Both Quinn and Sneddon have suggestions.

“I think SpaceX has kind of hurt the industry a little bit, as they have this ‘I need everything tomorrow’ kind of mentality,” Quinn says. “It’s becoming the kind of industry that if you say, ‘I can’t get to that right now,’ they won’t hesitate to go down the road and find someone that can. I’m not sure that’s in the industry’s best interest.”

Sneddon sees it similarly. “We understand the need to do good, solid work, and demonstrate we’re passionate about the industry,” he says. “But once you’re in, and you’ve proved yourself, the primes need to [provide some certainty], to establish a time frame and say, ‘OK, give us everything you have for two years, and we’ll set aside work to keep you guys busy and successful.

“It’s already happening with some government contracting, where specific contracts set aside work to keep suppliers engaged and motivated — but still required to meet their commitments,” Sneddon adds. “It’s not a freebie. Just make sure you support suppliers while we make space work for us. Or else many will go under.”

Space missions are hard enough. But in the industry’s rush to be first, highest, and farthest, once again, the uber-important industrial base is now vulnerable. Those that fly, and grab the headlines, would do well to ensure the “space base” prospers.

Bart Taylor is a BDE with Moss Adams and founder and former publisher of CompanyWeek manufacturing media. Reach him at bart.taylor@mossadams.com. 

Takeaways from the first Colorado Food & Beverage Co-Manufacturing Summit

Aerospace gets the headlines, but more Coloradoans work at food companies than in any other manufacturing industry in the state – over 26,000 employees and another 10,000 or so in beverage businesses. As long ago as 2013, growth in this powerhouse sector convinced me that America’s newfound love affair with locally made products would extend to other industries.

Manufacturing innovation in the form of industry-savvy co-packers was a catalyst then and remains so today. Co-packers manufacture for multiple brands, providing hard-to-develop production expertise — and scale — as they also free up customer leadership to focus on products, on sales and marketing – on business.

But as capable as the co-manufacturing (the new term for co-packing) ecosystem has become, it’s also become difficult for smaller, entrepreneurial companies to find right-sized solutions. In some ways, industry success has begotten a less accommodating co-manufacturing ecosystem.

It’s nothing the industry can’t solve, and to that end, I recently worked with Naturally Boulder to host the first Colorado Food & Beverage Co-Manufacturing Summit. Here are some of the takeaways from the panel discussion with co-manufacturers and food brands – for nearly 200 attendees:

By way of challenges in the food industry, there are plenty. It’s been a perfect storm of post-pandemic uncertainty, inflation-induced interest rates hikes, and a fast-changing wholesale and distribution landscape.

As a result, capital is much harder to come by. More brands are competing for limited space on grocery store shelves and freezers. And as panelist Lee Gray, a food-industry attorney, pointed out, consumer class-action lawsuits are more prevalent than ever: there’s no shortage of aggrieved consumers (and lawyers) suing for alleged false or misleading labels.

Macro-industry challenges have been amplified by operational headwinds. Though Colorado’s sector is 27th nationally in total food-related jobs, average wages in Colorado’s sector rank 12th nationally. And food inspectors, from the FDA for example, have shaken off the COVID malaise and are active once again.

This means the industry is more risk-averse today than in previous years. Co-manufacturers are more selective in the brands they choose to work with.

That said, brands can trust that familiar attributes will always open doors. An “ideal client” as described by the co-man panelists would be one with an experienced management team, transparency, a willingness to collaborate, mutual respect — and of course, resources and capital.

Panelists also encouraged brands to develop a direct-to-consumer channel, focus on products that are more shelf stable, stay flexible (be ready to pivot), reinvent yourself when necessary, and let go of old business practices that no longer serve you.

Product trends shape any conversation between a brand and co-manufacturer, and panelists agreed on several: Gluten-free and clean ingredients here to stay – in fact, engineered meat products are challenged today because of their complex makeup. Better-for-you low-sugar products will continue to grow in popularity. Keto is a sustaining trend (for now, with some reservations), as are simple and short ingredient lists, including ingredients for gut-and-brain health.

Other takeaways from the Summit will inform go-forward efforts to develop a transparent and accessible regional co-manufacturing ecosystem. Beverage co-manufacturing is on the rise – in fact, we’ll convene a bev-specific summit this spring. Colorado Proud – the popular marketing program from the CO Department of Agriculture – is developing a new digital co-manufacturing directory. (Brands and co-mans: I’ll connect you with Colorado Proud to ensure you’re listed).

More next time.

Bart Taylor is a Moss Adams BDE and founder and former publisher of CompanyWeek manufacturing media. Reach him at bart.taylor@mossadams.com. 

 

Panelists at the first Colorado Food & Beverage Co-Manufacturing Summit:

Bart Taylor, Moss Adams

Lee Gray, Gray Bugos & Schroeder, LLC

Alex Cioth, Founder & CEO, Claremont Foods

Zora Tabin, Chairwoman, Wild Zora Foods

Chris Lehn, Founder & Owner, Made4U Foods

Benjamin Frohlishstein, Co-founder, Cappello’s