At the close of 2015, Utah manufacturing is a success story. It’s a narrative of cross-industry diversity, game-changing workforce possibilities, and high-tech momentum. It’s also challenged by the same headwinds facing regional and national manufacturers. The story of the Utah manufacturing renaissance is unfinished.

Utah companies are an impressive cast of characters. We know because we wrote about 70 or so Utah manufacturers across ten or so industry sectors last year. Among all manufacturers we wrote about, in Colorado and elsewhere, Utah’s Storm Bowling was CompanyWeek‘s most-read profile in 2015. This collection of entrepreneurs and established makers and manufacturers are reshaping Utah’s economy and leading a quiet resurgence in U.S. goods-producing prowess.

Much like neighboring Colorado, Utah manufacturing is evolving: food products is the fastest-growing sector, posting a 4.7 percent increase in employment year-over-year, driven by the state’s bellwether industrial producers like Lehi Roller Mills but informed by the leading edge of Utah’s wave of natural and organic makers like ProBar — already a national mover in the uber-competitive healthy snack bar space. Craft makers are certainly a compelling story here — with innovative, burgeoning craft brewing and distilling sectors developing here to slake increasingly local consumer tastes and parallel the momentum in the food sector. As we’ve seen across the West, they go hand in hand.

Utah boasts the region’s most organized lifestyle manufacturing sector, and in the race to attract apparel, ski and snowboard, cycling and outdoor gear manufacturers, well-managed industry- cluster strategies are important. Increasingly, cooperation across Utah’s business, higher-ed and governmental entities is a selling point for entrepreneurs and corporate relocation executives alike.

Workforce issues will continue to test Utah’s manufacturing resurgence. The most prevalent challenge reported by Utah companies in CompanyWeek is finding and nurturing quality employees. Despite the state’s string of wins as nation’s most business-friendly state, manufacturers here will hit a wall; growth in Utah’s high-tech manufacturing sector, most notably, will strain higher education as systemic changes — including more job-shadowing and internship programs — don’t arrive fast-enough to alleviate pain.

The question is how the state will respond, and Utah seems uniquely positioned to make a workforce breakthrough. The combination of world-class universities, close-knit community, and favorable economic development variables leave Utah in the catbird’s seat. The scale of the workforce challenge feels more pronounced in neighboring Colorado; other states seem less focused on people.

But labor is just one component of an evolving supply-chain that will determine how far and how fast Utah’s manufacturing economy can grow. Today, high-tech fabricators and industrial firms looking to replace retiring stalwarts feel the labor pinch most. Elsewhere, natural and organic food companies need more locally produced raw materials. Technology is a catalyst if it’s available, a barrier if not; ask apparel and sewn-product companies making skiwear and outdoor gear. Generally, manufacturers need a more robust supply chain, and that’s an ingredient often lost on those who support business.

For our part, we’ll focus our editorial efforts in 2016 where we left off this year: shining a light on Utah’s growth companies to inspire and inform likeminded companies; profiling more supply-chain companies including contract manufacturers to facilitate meaningful connections that advance business; and advocating policies and public-sector investment that provides a foundation for more U.S.-made goods.

We’ll do so in 2016 without a co-branding partnership with the Utah Manufacturing Association, one that helped us find and write about Utah’s top manufacturers when we launched over a year ago. It’s a good time for CompanyWeek to go its own way as independent media and for UMA to focus on what it does best.

We’re thrilled to have one of Utah’s finest, Alicia Cunningham, leading our editorial efforts. Email Alicia to encourage us to profile your business or help in other ways to continue to showcase Utah’s incredible manufacturing sector.

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

Here are seven manufacturing stories we’ll be following closely in 2016:

1. Craft beer’s pivotal year. Two key ingredients of Colorado craft’s successful formula — its specialty sales channel and local ownership — may be tipped over in 2016. How will the sector respond? In November voters will likely decide whether grocery stores and other retail outlets can sell craft beer and wine, a move opposed by much of the craft ecosystem including the state’s network of thriving small liquor stores. The craft sector may have lost an important ally in the debate with the sale of Breckenridge Brewery to Anheuser-Busch, and may lose more. With rumors of a billion-dollar sale of New Belgium swirling, 2016 may be the year that Colorado craft’s united front against ‘big beer’ finally cracks. To what end?

2. Welcome to the (food) revolution. Food brands and manufacturers here are leading a sea change in what we eat and how we grow, make, and distribute our food. Brands flock here to be part of the scene and local companies are targets for takeovers. It’s a poster-child for the new manufacturing economy – entrepreneurial, innovative, ‘Made in America’ — and a model other states emulate. It’s also the fastest-growing manufacturing sector in Colorado. Storylines should be plentiful in 2016.

3. Will McCain’s antics derail one of Colorado’s signature aerospace manufacturers? In a pique over Ukraine, Arizona Senator John McCain led a congressional effort to ban the use of Russian RD-180 rocket engines used by Colorado aerospace manufacturer United Launch Alliance. As the company maneuvered around the politics McCain made it his personal mission to vilify ULA, one of Colorado’s signature companies. Alabama senator Richard Shelby fought back (ULA assembles its launch platforms in Alabama), securing more RD-180s as part of the 2016 federal budget. But is damage done? With dozens of government-funded launches planned in the near future, and ULA competitor SpaceX seemingly more viable than ever, it’s a good bet McCain will do everything he can to undermine ULA. Will Colorado senators, silent to this point, join the battle on behalf of a Colorado manufacturer?

4. Local sourcing: a new supply chain may light a fire under lifestyle manufacturing. Quiet but important grassroots efforts are underway to develop new supply-chain options for lifestyle and consumer brands — like a rural network of cut-and-sew centers. And why not? The region is a magnet for outdoor gear and apparel companies, for smart, visionary entrepreneurs with ambitions to launch and develop lifestyle companies. We seem far away, though, from a world-class supply chain that might actually begin attracting gear, apparel, or other consumer OEMs to Colorado. But small steps are important. And people are starting to get it.

5. What return on taxpayer investments in manufacturing? In addition to the space program, federal taxpayer dollars are flowing into the state to fund other programs designed to benefit manufacturers. Millions have already been spent on workforce development. CAMA’s FourFront initiative will spend $6.6 million in support of defense diversification and innovation. The City of Loveland, Colorado School of Mines, Manufacturer’s Edge and others will be investing taxpayer dollars in support of manufacturing. The initiatives hold promise but more government spending means higher taxes and with business over-regulated as it is, manufacturers reasonably expect to see tangible benefits in 2016 from the spend. (John Tamney’s brilliant Forbes column provides the backdrop.)

6. Pot’s impact on manufacturing. It almost goes without saying, but Denver’s future as a modern urban manufacturing center may hinge on the availability of affordable commercial real estate. Pot grows have radically changed the market. It’s bad form to root for the real estate bubble to burst, so instead, let’s hope the price of marijuana goes the way of oil and crashes, leaving pot businesses less well-heeled and the market less inflationary. It’s actually a good bet. If it happens we’ll remind you we told you so.

7. The rehabilitation of manufacturing’s brand — or not. Last year we chronicled the national debate regarding a U.S. manufacturing ‘renaissance’. By year’s end, the dialogue was less a lively back and forth and more a rout: Most business writers, like Jon Talton of the Seattle Times, had effectively buried the idea of a manufacturing ‘comeback’ in the bottom of a $40 barrel of oil, alongside a strong dollar hammering U.S. exports, or relative to manufacturing employment numbers from circa 2007, before a recession bludgeoned a sector already reeling from a wholesale offshoring of jobs.

To be fair, the reimagining of manufacturing is lost on local media as well; Colorado scribes often can’t identify a manufacturing company when they see one. It’s also hard to be critical of critics when manufacturing’s own advocates lose sight of the issue. ‘Re-branding’ was once a stated objective of manufacturing trade efforts. Today, not so much.

Our story is that manufacturing employment has returned to pre-recession levels in places like Colorado and Utah and that jobs are being created in a sector reinventing itself with technology and driven by consumer and business trends that today favor more locally produced goods. High-tech fabricators in aerospace and biomedical and food and beverage manufacturers will blaze a way forward. The future’s bright.

We’ll stick to it in 2016.

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

We write often of Colorado’s powerful craft food and beverage sector, but last week’s news of Pinnacle Foods acquisition of Boulder Brands for nearly a billion dollars was an eye-opener.

The $975 million price tag, including $265 million in debt, is 29X net earnings (EBITDA), a staggering multiple, especially for a company that’s struggled lately to maintain sales ‘velocity’ for some of its brands. In early summer, when Boulder Brands announced that Stephen Hughes, the company’s CEO, would be leaving, analysts assumed the worst, at least in the short term. TheStreet’s David Peltier said this:

“You certainly don’t want to step in and try to buy Boulder, where the previous CEO left on a sour note. It will likely take a few months to find a permanent replacement, the core Smart Balance brand is not performing well and the steam has come out of the expected growth of its gluten-free brands. . . . The company is no longer a growth story and even though the stock has fallen 36% so far this year, at north of 20X expected full-year earnings, it isn’t cheap enough yet to attract value investors.”

Right. So why the huge deal?

Certainly Pinnacle covets a newer more progressive portfolio, featuring more gluten-free, natural, and organic brands. Boulder’s the national epicenter for innovation and brand development in the sector, so on one level it’s no surprise for those paying attention.

“The conventional players understand they have to evolve or get left behind,” says Ross Shell, CEO of Boulder-based Red Idea Partners, a venture firm focused on early-stage natural food companies. “The valuations on these transactions may seem high, but these deals are based far more around future growth expectations. The hope is that the growth potential plays out handsomely over time to justify the valuation,” he explains.

But a billion dollars worth of healthy burritos and gluten-free spreads? Wow. Are we seeing Colorado’s influential sector reach a tipping point, where the quiet innovation that’s been ongoing here suddenly translates into a string of mergers and acquisitions with heady valuations like the Boulder Brands deal?

Bill Capsalis, president of influential trade group Naturally Boulder, doesn’t go that far but agrees with the premise. “We can expect to see more of this type of activity in the near future,” he says. “This investment validates what we’ve known for a long time – that there’s a food revolution going on.”

It’s also a very active M&A market; deal-makers describe it as ‘frothy’. And while 30X deals are the exception, today it’s a seller’s market for companies with a healthy balance sheet, regardless of sector.

Frothy or not it’s a good guess that Colorado’s transcendent food sector is set to reap the benefits of at least a decade of incredible creativity and entrepreneurship. And craft beer may be next.

Of course, the big difference is that no major brand from Colorado’s first movers has yet to be fully acquired. Oskar Blues created a stir several months back by divesting a controlling interest, but details remain very closely guarded. The community is so tight that the fear of blowback from ‘selling out’ remains a barrier. For many, the tie that binds craft brewers to loyal customers is local ownership.

But consider the multiples that may be in play. Last year a Wall Street Journal article theorized that craft-beer makers are worth roughly $1,000 per barrel of annual production, a number as gaudy as 30X EBITDA. And that was a year ago. The craft beer movement has accelerated at least as fast as the natural and organic trend — and the big craft beer brands arguably carry more weight than those in food.

Is New Belgium a billion-dollar brand? At $1,000 per barrel, it will reach that threshold this year. At that rate, Colorado’s beer landscape is also littered with $50 million and $100 million craft brands, from Oskar Blues to Odell to Left Hand to Breckenridge to Great Divide.

But as much as AB or Molson Coors would like to emulate Pinnacle Foods, we’ll likely be waiting a good spell to find out.

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