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 Feature Industry Articles 
Monday, July 29 2019
Putting Down Roots In the Ag Industry

By Mark R. Smith, Contributing Writer, Expansion Solutions Magazine

Site selection professionals and their clients who are working to locate a growing agriculture-based business know making that major move dictates understanding a few facts before key decisions are made.

Since an agriculture businesses might need land, and lots of it − or at least be in a market with a multitude of farms − they’ll see that land is cheaper in less-densely populated areas, for a reason: perhaps the lack a strong workforce and relatively few educational opportunities, or connectivity problems and a lack of amenities in a given locales. Or a combination thereof.

Then comes the more recent but growing issue of climate change, which can work for or against a company.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:11 am   |  Permalink   |  Email
Monday, July 29 2019
Locating High Technology Operations

By Dennis J. Donovan, Wadley Donovan Gutshaw Consulting (WDGC)

This article addresses location dynamics within the high technology sector. The term high-tech is rather amorphous. Broadly speaking it can apply to any industry wherein advanced technology (such as Industry 4.0) is widely utilized. To provide a pragmatic framework for illuminating site selection strategy and trends we will adopt a more nuanced definition of high technology. Essentially high tech embraces a group of industries characterized by a rapid pace of innovation. These industries typically involve a high concentration of workers in STEM fields (science, technology, engineering, and mathematics). For purposes of this article high-technology industries include the following:

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 05:55 am   |  Permalink   |  Email
Monday, July 29 2019
Recent and Emerging Trends in Forestry and Lumber

By Jim Damicis, Senior Vice President, Camoin Associates

To understand economies and industry sectors related to forestry and lumber it is important to first understand the significance of forests to the U.S. economy. Forests after all are where wood comes from. “Global forestry issues are of considerable significance to the United States, which has five percent of the Earth’s population and consumes an estimated 28 percent of the Earth’s industrial wood products. Although domestic timber inventory is only 10 percent of the Earth’s total, 96 percent of U.S. consumption of industrial wood comes from domestic supplies.1” In the U.S., the majority of the forests are privately owned with an estimated 58 percent of forest acreage owned privately by corporations or individuals; however, ownership patterns are quite diverse with public forests dominant in the West and private forests dominant in the East. Private industrial forest ownership is concentrated in the South, Pacific, Northwest, upper Lake States, and northern New England2.

Source:  U.S. Forest Service- www.fs.fed.us/sites/default/files/forest-ownership-map.png

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 02:22 am   |  Permalink   |  Email
Sunday, July 28 2019
It's Not Your Dad's Logistics Anymore

By Michael D. White, author and freelance writer

Confined to non-descript, drab buildings clustered in unappealing urban backwaters, warehouse and distribution operations once considered a straight-forward and relatively simple activity involving nothing more complicated than a hand truck or a forklift have evolved into petri dishes for new technologies that have revolutionized the task of moving a product from Point A to Point B economically and efficiently in the least amount of time.   

According to a recent study of the distribution/warehouse sector commissioned by the Deloitte Center for Financial Services, the demand for distribution centers and other industrial real estate is expected to grow by 850 million square feet from 2019 to 2023, to 14.8 billion square feet, compared with demand growth of 870 million square feet from 2014 to 2018.

Deloitte said availability of warehouse space is likely to rise to 10.3 percent by 2023, compared with seven percent in 2018, as changes in the way people shop have reshaped distribution networks with retailers and logistics providers racing to compete with Amazon, open distribution warehouses and sprawling online fulfillment centers, strategically sited near major population centers and transportation hubs.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 03:33 pm   |  Permalink   |  Email
Sunday, July 28 2019
Solar: A Prime Opportunity for Commercial and Industrial Real Estate

By Dan Whitten, Vice President of Communications, Solar Energy Industries Association

Prominent announcements from companies such as Apple, Walmart and Target of installing solar on their facilities has made the rest of the commercial and industrial sector take notice. And the message is that, in many places, solar is now a cheaper way to power buildings than the alternatives. That’s why we are seeing broad investment from companies large and small.

Solar has grown by leaps and bounds  in the last decade. Initially a solution for select homeowners, and later a low-cost option for utility-scale projects, solar energy is now coming to a commercial facility near you. And if you look closely enough at the opportunities, it may very well be a solution for your own company. 

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 01:44 pm   |  Permalink   |  Email
Sunday, July 28 2019
Workforce Development: Finding Talent in Today's Hyper-Competitive Labor Shortage

By Chris Engle, Vice President, Avalanche Consulting

This article discusses the realities and response to the labor environment seen across the U.S. today. Companies can sharpen their toolkit in evaluating labor markets and finding a current and future workforce. Educators can better understand the needs of companies, particularly in hard-to-fill positions requiring technical or specialized skills. Economic and workforce developers can deploy new attention to the development of talent from within their communities in addition to attracting workers. Collectively, we can all learn how a high-performing economy must be continually supplied with a labor force that is dynamic, responsive, and innovative despite the challenges brought on by technology, demographic change, and uncertainty.

First, let’s take a closer look at today’s labor environment. We have written several articles in recent years about the declining unemployment rate and its impact on industries. Today’s unemployment rate now stands at 3.6 percent, the lowest registered rate in 50 years. We now consistently hear across every part of the country and economy, from highly skilled industries to entry level hospitality, that employers can’t find the workers they need. The low unemployment rate is a function of labor participation, i.e. the number of people seeking work.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:11 am   |  Permalink   |  Email
Monday, June 03 2019
Call Center Location Trend Report 2019

By  King R. White, CEO, Site Selection Group, LLC

Introduction

As companies seek to find the optimal location for their call center operations, understanding historic growth trends can help to develop onshore, nearshore and offshore location strategies. In 2018, Site Selection Group identified 310 new and expanding call center projects that created 145,847 jobs as well as 107 call center projects involving 21,966 jobs that were downsizing or closing their facilities. By analyzing this data, Site Selection Group has identified regional location trends that are summarized in this report. 

The call center industry continues to expand globally as companies seek the optimal balance of labor availability, labor costs, geopolitical stability and business climate. The Call Center Location Trend Report provides an analysis of global location trends to help you understand the onshore, nearshore and offshore geographies that might be the best location for your next call center. 

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 01:31 pm   |  Permalink   |  Email
Monday, June 03 2019
The Transforming World of Science and Technology Parks

By Don Holbrook, Site Location Advisor

The original concept of Science and Technology parks has been going through a frantic evolution just like the field of technology and knowledge-based products and services that underpin the entire foundation of this area of economic development.

We as individuals are becoming ubiquitously interconnected to everything – work, friends, family and our entire activity and consumption based agenda, whether for our career, relaxation and entertainment or just daily choices in lifestyle through our preferred networks of information suppliers. Science and Technology Parks are also evolving away from simply places for place-based investment that marries academic culture to corporate culture. These locales have traditionally been tasked with assisting innovation and high tech entrepreneurs with federal policies so that funding can be achieved by overcoming barriers to compliance regulations. According to Brian Darmody, Associate Vice President of Research and Economic Development, for the University of Maryland’s technology development initiative, “Entrepreneurs tend to be non-compliant people, which is why they are innovators.” 

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:22 am   |  Permalink   |  Email
Monday, June 03 2019
The Nation's Steel Arteries

By Michael D. White, author and freelance writer

Now spanning a staggering total of more than 140,000 miles of trackage, the network of steel veins and capillaries crisscross the U.S. connecting 49 of the country’s 50 states with each other, as well as Canada and Mexico, carrying the very life’s blood of its vast and complex economy, and, in turn, linking virtually every point in the nation with deep-water ports on four coasts and, thence, with markets and suppliers across the globe. 

According to the Washington, D.C.-headquartered American Association of Railroads (AAR), U.S. freight railroads annually carry nearly 54 tons of freight per American—a staggeringly vast assortment of goods from bananas, steel wire, and automobiles to soybeans, sporting goods and home appliances.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:16 am   |  Permalink   |  Email
Monday, June 03 2019
Ports Large and Small Initiating Workforce Development Programs

By Aaron Ellis, APR, Fellow PRSA, Public Affairs Director, American Association of Port Authorities

Seaports, large and small, are developing programs to introduce their community’s youth, together with new and transitioning job seekers, to the diverse, technology-focused and family-sustaining career opportunities available in the maritime and seaport environment. 

A just-released economic impacts analysis of the U.S. coastal port system by Martin Associates (Lancaster, Pennsylvania), cites the average annual salary for those employed at America’s seaports has risen to $62,800 from $53,723 just five years ago. The number of jobs that seaport activities support also jumped from 23.3 million to 30.8 million in the same time frame. 

The Port of Los Angeles, America’s largest-volume container port, cites numerous reasons why it has chosen to focus time and resources on creating a world-class workforce development program.  

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 10:23 am   |  Permalink   |  Email
Monday, June 03 2019
Food and Beverage Processing Trends in 2019

By Jay Garner, CEcD, President, Garner Economics LLC

Much is changing in the food and beverage (F&B) processing sector. Yet, much has stayed the same from previous years. What’s changing and why? First, consumer preferences always dictate how food manufacturers create new products, which often times results in new production facilities, or at the very least, a shift in production lines (which is a significant equipment expense). And with millennials and Generation Z consumers driving much of the product changes, expect even more product evolution for healthier, better-for-you foods.

But first, let’s go through the numbers. Nearly two million people across the United States work in the F&B sectors, according to the Bureau of Labor Statistics. Combined from both sectors (food processing and beverage processing), there are about 43,000 companies that are defined as F&B facilities in the United States (this does not include cold storage establishments). California leads the way with nearly 6,500 facilities employing more than 220,000 workers, followed by New York, Texas, Illinois, Florida, Washington, Pennsylvania, Oregon, New Jersey and Michigan rounding out the top 10. Growth in the F&B sector is rising more rapidly in beverages, but with continued changes to a healthier diet, evidence is pointing to new growth in the food sector.  

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 09:52 am   |  Permalink   |  Email
Monday, June 03 2019
Life Science's Changing Landscape and the Rise of the Underdogs

By Mackenzie Hastings, Business Development Manager, InSyBio, InSyBio.com; Angelos Angelou, Founder & CEO, AngelouEconomics, AngelouEconomics.com

It is no surprise we are seeing a renewed investment in the Life Sciences industry along with an accelerated growth plan. Tech has been slowly creeping its way into the circle for years and has enabled – through AI and machine learning – the fast-tracked optimization of analysis and the exponential expansion of application areas in both pharma and biotech.

Although many look to foresee the future and divine the most profitable answers, the trend of innovation through technology has been the steady, safe route and those who search without tunnel vision are likely to find treasure in the many upcoming disruptors to the industry and more importantly, the cities that entice them.

You might ask “Are start-ups really becoming so powerful?” and “Is this shift in the industry truly significant?” The short answer is yes, although for multiple dynamic reasons. Innovation is, in essence, a new method or idea so it is only fitting that the upper hand on that front lie in the young companies fighting for a niche advantage in the market and that the underdog cities in which they choose to establish be technologically noteworthy themselves. They must foster environments for innovation and collaboration while also offering competitive benefits when it comes to quality of life and how far the investment money can propel these companies toward profitability.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 09:25 am   |  Permalink   |  Email
Thursday, May 02 2019
Food and Beverage Processing Trends In 2019: So Much is Changing - So Much Has Stayed the Same

By Jay Garner, CEcD, President, Garner Economics LLC

Much is changing in the food and beverage (F&B) processing sector. Yet, much has stayed the same from previous years. What’s changing and why? First, consumer preferences always dictate how food manufacturers create new products, which often times results in new production facilities, or at the very least, a shift in production lines (which is a significant equipment expense). And with millennials and Generation Z consumers driving much of the product changes, expect even more product evolution for healthier, better-for-you foods.

But first, let’s go through the numbers. Nearly two million people across the United States work in the F&B sectors, according to the Bureau of Labor Statistics. Combined from both sectors (food processing and beverage processing), there are about 43,000 companies that are defined as F&B facilities in the United States (this does not include cold storage establishments). California leads the way with nearly 6,500 facilities employing more than 220,000 workers, followed by New York, Texas, Illinois, Florida, Washington, Pennsylvania, Oregon, New Jersey and Michigan rounding out the top 10. Growth in the F&B sector is rising more rapidly in beverages, but with continued changes to a healthier diet, evidence is pointing to new growth in the food sector.

What’s Not Changed?

  1. Food safety is of paramount importance to the health of consumers, and the financial health of F&B companies. The Food Safety Modernization Act (FSMA) was signed into law in 2011 and gives the FDA authority to regulate the way foods are grown, harvested and processed. The law grants the FDA a number of new powers, including mandatory recall authority. The law was prompted after many reported incidents of foodborne illnesses during the first decade of the 2000’s and was largely crafted by members of the Grocery Manufacturers Association. Tainted food has cost the food industry billions of dollars in recalls, lost sales and legal expenses.
  2. Health and wellness foods. Though this trend began in the first part of the 2000’s, it continues to transform and evolve - significantly. Though all age demographics are causing this, including an aging baby boomer population that is health conscious, the millennial and Generation Z age groups are driving the push. Companies like Hershey and General Foods have announced plans to expand their portfolios to appeal to younger consumers who want healthier snacks. Probiotics are attractive to food companies and are making their way into a variety of foods, not just yogurt. Again, not new since the trend has been around for at least 10 years, but clearly adapting and evolving.
  3. Beverages. Sugar is the devil and conventional sugar soft drinks have been on a downward spiral with sales for several years. There is an  increased and still growing demand for energy drinks and beverages infused with nutraceuticals, e.g. vitamin water, green teas and fruit drinks. This has an impact on product lines and beverage processing facilities as companies either re-tool the lines or build new facilities.
  4. Sustainability first got its legs in the 1990’s with environmental activists as a way for the populous to understand how what we eat, how it’s grown and packaged, have an effect on the environment. Over time and through significant media attention sustainability has garnered over the years, shoppers have been willing to pay more for sustainable practices as a way to feel they are helping the environment. Many large F&B companies, including Walmart, have announced sustainability efforts from processing to packaging. Compostable packaging is getting more shelf space, which means that this packaging sub-sector offers promise for economic development practitioners looking for new target industry opportunities.

What’s New or on the Horizon?

  1. Cannabis. Yes, weed. The Farm Bill of 2018 legalizes the cultivation of hemp, a plant in the cannabis family. Derivatives of hemp such as CBD (cannabinoid), is known as an aid for relaxation, anxiety and pain. It is no longer illegal, but the FDA still prohibits food and beverage products with CBD ingredients from crossing state lines. As soon as that prohibition ends, and it will eventually, there will be a rush for companies to incorporate ingredients of CBD into food products. Marijuana is now legal in 33 states and the District of Columbia. Industry watchers and government lobbyists believe it will receive full federal legalization by 2021. That also depends on elections.
  2. Mergers and acquisitions (M&A) are new and old. During the Great Recession of 2009, many mid to small sized F&B companies were bought out by larger companies, or they went out of business. With the hot economy we are now experiencing, M&A activity is at a feverish pace.  Companies like Conagra, General Mills, Campbell Soup, Coca-Cola, and Nutella have all made recent acquisitions. Those that were sold or acquired include Blue Buffalo Pet Foods, Pinnacle Foods, Snyders/Lance, Costa Coffee, and on and on.  These acquisitions may mean that new product lines are being considered and new locations. Any time there is an M&A, it opens the possible door for a new location for an F&B facility. Economic developers, take note!
  3. Plant-based meat is a new phenomenon. The days of the veggie burger are gone. This new process and science combine aminos, minerals, lipids and water and give it a meat texture and taste. Hamburger chains have latched on to it, including White Castle. Fish is next. New product lines equal new locations. Check out The Beyond Burger by Beyond Meat at your favorite grocer.

What About Cold Storage Facilities (Refrigerated Storage)?
Cold storage units are not technically part of the food and beverage family and have a different NAICS (North American Industry Classification System) code (49312). But cold storage facilities are an integral and necessary part of the F&B supply chain. At the end of 2018, cold storage facilities employed 56,000 people with over 1,600 businesses in the U.S. Wages for this industry are over $2.6bn and annual revenue is in excess of $5.9bn. Is there any wonder why economic developers, communities and electric utility providers don’t have these companies on their radar as a targeted industry sector? A “typical” new cold storage facility investment may have a capital outlay of over $60mm and 50-75 jobs. In a very tight labor market, this type of project is ideal for communities.

Site Selection Requirements: What does all of this mean for your community and economic development professionals working to attract F&B and cold storage facilities to a locality? New trends, processes and products typically mean new opportunities. Often a new product line could mean a new facility, based on an existing facility’s footprint. So, what are the key factors needed in attracting F&B companies?

  • Water and wastewater treatment capacity. Simply put, no water, no project. Water is the most important ingredient in the site selection process for F&B companies. If it’s not used as an ingredient, it is always used for sanitation. Having excess water capacity of 500,000 MGD is a start.
  • Low or competitive energy rates. F&B companies and cold storage facilities are big users of energy. Having competitive electric and gas rates are important.
  • Access to four-lane roads. An interstate location will trump a non-interstate location. Four-lane access roads will always trump two-lane roads. Gas and diesel are big components of energy costs, and accessibility has a direct impact on operating costs.
  • “No product – No Project.” Shovel ready sites are needed for speed to market.  An existing USDA/FDA grade building is a benefit, depending on the size, but hard to find. Eighty-five percent of all new F&B site searches start with a desire to find an existing facility. It’s rare that one is found, so those searches turn into a greenfield project.
  • A workforce within a 45-minute drive time of those key occupations that F&B companies consider necessary is a  benefit. Talent is always important.

These are the essential ingredients that will allow communities to compete effectively in this constantly growing sector.

Food and beverage company executives consider the factors listed below as what’s on their mind most days, and in this order (according to foodprocessing.com, 2016):

  • Food safety
  • Cost control
  • Automation
  • Worker safety
  • Capacity expansion (that’s a direct impact for economic developers)
  • Environmental/sustainability issues
  • Training
  • Sourcing (where is the commodity coming from?)

Understanding what drives these decision makers of food and beverage companies will help economic developers craft the narrative and value proposition for your community. Good hunting!

Sources: Bureau of Labor Statistics; Food Dive; foodprocessing.com; Ibisworld

About the Author:
About Jay Garner: Jay A. Garner, CEcD, CCE is the president and founder of Garner Economics LLC, an economic development and site location consulting firm headquartered in Atlanta, Georgia, with representative offices in North Carolina; Berlin, Germany; and Seoul, Korea. Jay often lectures and provides counsel on creating and implementing proactive global business development strategies and tactics. His firm is also a leader in assisting corporate clients such as Anchor Glass, Academy Sports, Hatfield Quality Meats, Hill’s Pet Foods, Stork Food Systems, Future Pipe Industries, and others in their site selection process.

Garner Economics and Primus Builders have partnered to create one of the most extensive site certification initiatives in the economic development and Food & Beverage sector. Their goal is to help communities prepare for the location of F&B projects, which also helps companies in that industry sector (many of whom are our current clients) understand that a community’s site or building has met Primus/Garner's rigorous review requirements. To learn more about the Primus/Garner Food Site Certification designation, see the link at https://garnereconomics.com/services/food-processing-site-certification.

About Garner Economics LLC:
About Garner Economics LLC: We are data driven strategists helping companies, communities and organizations, large and small, urban and rural, achieve success. The firm offers location advisory analysis, analytical research, industry targeting, strategic planning and organizational assessments with a wealth of expertise to companies, communities, and organizations globally.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:21 am   |  Permalink   |  Email
Tuesday, April 02 2019
Three Macro Trends Driving the Automotive Aftermarket Industry

By Adam Robinson, Director of Marketing & Digital Marketing Consultant at Cerasis

The automotive industry and automotive aftermarket industry has recovered, and as new light vehicle registrations continue to grow, it is important for the aftermarket to be aware of emerging trends happening on the roads today that will affect repair opportunities for years to come. Here are some quick insights into the trends driving the automotive aftermarket industry.

One: The Average Age of Vehicles Continues to Climb—At Least for Now

The increasing age of the vehicle population has been a positive aftermarket trend for a long time, and the trend has accelerated greatly over the past six years. Today, it stands at a record-high 11.3 years for passenger cars and light trucks combined, representing a 14 percent increase since 2007. For the five years prior to the recession, average age rose only four percent.

Some wonder why pickup trucks tend to lag behind cars in average age. Light trucks are more likely to accumulate wear and tear than are passenger cars. Individual owners use them for towing, transporting heavy loads, and off-road fun. Many more pickups are also used in commercial situations and get exposed to high levels of use and abuse.

Over the next several years, however, the rise in average age will slow down again. The market will begin to feel the impact of the 40 percent drop in new registrations when the industry bottomed out at 10.3 million units in 2009. We see average age reaching nearly 11.4 years by 2015, and then the rate of growth will taper off. The acceleration in average age will slow to levels not seen since before the recession. Average age will not reach 11.5 years until 2018—as the vehicle population adjusts to the low number of 2008–12 model year vehicles.

New to five-year-old vehicles will grow 41 percent over the next five years. Six to 11-year-old vehicles will decline 22 percent.

While not an encouraging trend for the aftermarket, there are definite positive signs. The overall vehicle population continues to grow. We see the U.S. light vehicles in operation (VIO) growing by five percent over the next five years—hitting 260 million vehicles by 2018. Vehicles are also lasting longer. Over the next five years, vehicles 12 years and older will increase nearly 12 percent. Vehicle quality continues to improve, people are keeping their vehicles longer, and the scrappage rate continues to decline.

The aftermarket must be aware of the potential impact to the type of repairs it will see over the coming years. In general, 6 to 11-year-old vehicles represent more do-it-for-me (DIFM) type repairs. Older vehicles may drive more do-it-yourself (DIY) and routine maintenance, but also require larger powertrain and suspension repairs.

Two: OEM Globalization is Quickly Becoming the New Norm
Growing global vehicle registrations continue to pressure OEMs to accelerate the need for utilizing global platforms and modular architecture. Global new registrations will set a record in 2013 at just over 74 million units. In 2014, the number will be over 77 million. Looking at total global vehicles in operation, the number broke one billion units in 2010. By 2020, the world will stand at 1.3–1.5 billion vehicles.

This rate of growth translates into expanded global production and a need for OEMs to manage costs. They are accelerating the use of global platforms and looking to produce more units per platform. Among the top-12 global manufacturers, the number of platforms will drop from 212 in 2012 to 147 by 2020. As a result, the number of vehicles produced per platform will grow. Across the same 12 OEMs, it will increase 81 percent. OEMs have also been introducing modular architecture. By standardizing the architecture of the engine compartment, underbodies, and driver cockpit, manufacturers achieve greater flexibility and can utilize standardized components.

Fewer platforms, more vehicles per platform, and the increasing use of modular architecture will lead to the use of similar components and the ability to market the same aftermarket product in various regions around the world—a major opportunity for the global aftermarket supplier.

Three: OEM Technology Advances Continue to Provide the Automotive Aftermarket Industry Both Challenges and Opportunity
These advances are coming in several different ways. Gas and Hybrid Cars Continue to increase Market Share. Through August, gas and electric hybrids represent 3.6 percent of all new registrations—an all-time high. Diesels were right behind at 2.9 percent. Electric vehicles, while on the rise, still represent only 0.3 percent. Over the past five years, however, diesel registrations have remained flat while hybrids have increased their share by 64 percent. One reason for this is simply the number of hybrid models now available. The consumer has 45 different hybrid models to choose from today. Between 2008 and 2013, the number of models with diesel engines increased 21 percent while the number of hybrid models increased 125 percent. Because not all makes and models offer these powertrain options in every vehicle and trim level, their popularity may be limited because of the lack of universal availability. Nonetheless, while OEMs are investing in various options, the internal combustion engine remains the leading candidate for clean, efficient propulsion for at least another decade. However, the automotive aftermarket industry must prepare for new technology surrounding this traditional powertrain. There will be increased use of gasoline direct injection and turbochargers. Start-stop capability, cylinder deactivation, and all-wheel drive disconnect are all coming on strong.

OEMs continue to increase the interval between recommended oil changes.

They are using technology—the oil service indicator light—to replace standard recommended maintenance intervals.

While most vehicles on the road have some type of oil service indicator light, the issue is how often OEMs are using the light as the only means of recommended service. Today, 52 million vehicles in the U.S. use the oil service indicator light as the recommendation for when to change the oil. This represents 21 percent of the total VIO and has grown at a compounded annual rate of 14 percent over the past five years. New powertrain technology and the growing use of synthetic oils have extended oil change intervals as well. The average recommended interval for all light vehicles now stands at over 7,500 miles.

What does this mean to the independent aftermarket? Most repair opportunities are discovered during routine maintenance. Oil changes are, by far, the most common service opportunity for vehicles of all ages. This lengthening of intervals has the potential to affect repair opportunities in two ways.

By recognizing these trends early, the aftermarket can innovate and develop ways to communicate with the driver in much the same way the OEMs are planning.

The aftermarket certainly has what it takes to not only adjust to these coming trends, but take advantage of them as well. This industry has always proven its ability to react and innovate in the face of change. Leverage those strengths to their fullest, and the automotive aftermarket industry will continue its legacy of success.

Issues Facing Automotive Aftermarket Industry in 2020
Of the many insights in AASA’s recent landmark study, Automotive Aftermarket Industry Outlook 2020, the biggest issue identified facing aftermarket suppliers – and their ability to survive and thrive in the future – was the lack of a level playing field along the aftermarket value chain. Key findings of Aftermarket Outlook 2020 included that, though the market itself isn’t expected to see radical changes, business and relationships along the value chain have and will continue to change dramatically.

Full service automotive aftermarket suppliers have seen low-cost country competition, incredible concentration among our customers, eroding margins and a shift of power downstream to the channels – as have manufacturers in many other industries in the post-Walmart era. Many aftermarket manufacturers have not responded effectively to these shifts and need to find new ways to create value in order to be able to deal with changed channel partners as peers. The alternative is a decline in relevance and returns for aftermarket suppliers, analogous to the devastation seen among OE suppliers in the last decade.

As the Aftermarket Outlook 2020 study found, aftermarket suppliers face many issues in the next decade. The graphic below captures just some of the many dynamics and change agents at play in the aftermarket industry. These include:

  • the impact of the Internet,
  • manufacturer versus channel brands,
  • OES versus independent repair shops, especially in an era of increasingly complex vehicles, and
  • new regulations, including fuel economy and safety.

The Aftermarket Outlook 2020 study covers each of the issues in more detail. However, as the study progressed, three key trends “popped” as the most important ones facing manufacturer executives:

  1. Parts complexity – The industry is seeing a massive increase in parts complexity, both in the number of vehicles and parts and the technical sophistication of those parts.
  2. Channel consolidation – During the last 10-15 years, channel partners have responded to market pressures and consolidated massively, changing the balance of power in the industry.
  3. Low-cost countries – Low-cost country imports have had a tremendous impact on traditional North American suppliers, eroding the addressable market; conversely, the emerging markets these parts come from represent a tremendous growth opportunity.

As AASA and Booz & Co. discussed these findings at the 2011 AASA VisCon with aftermarket executives, it became clear that there was a single overarching issue that tied the other issues together of most importance to manufacturers: the lack of a level playing field across the aftermarket value chain.

A Winning Aftermarket Aftermarket Industry Model
So what does all of this add up to in the automotive aftermarket industry? What does Aftermarket Outlook 2020 and follow-up analysis in the industry reveal as a winning automotive aftermarket industry model? A summary of key elements is seen in here:

Those in the Automotive aftermarket industry will know they’ve arrived when they experience:

  • Discussions with retailers as equals
  • Improved profits across the aftermarket value chain through value creation, not value migration
  • Halt or reversal of the erosion of full-service suppliers’ market share by low cost country competitors

Achieving these objectives is not only necessary, but possible for the automotive aftermarket industry. 

Bio: Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness - all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:39 am   |  Permalink   |  Email
Tuesday, April 02 2019
Wind Energy Powers Through a Successful 2018

By Celeste Wanner, Senior Analyst, Research and Analytics, American Wind Energy Association

Innovation and Enthusiasm Spur a Year of Significant Wind Gains

2018 was a monumental year for wind power in the United States, with exciting growth, demand from new customers, and continued technological advances. The fourth quarter alone was the third strongest quarter ever for capacity installations with 5,944 megawatts (MW) added, more than all the wind installed in Kansas, the country’s fifth largest wind state. In total, the industry commissioned 7,588 MW of new wind capacity in 2018, bumping the U.S.’s installed capacity to 96,488 MW. More wind deployment and innovations continue to drive costs lower, attracting the attention of new corporate buyers, while new horizons offshore present lucrative opportunities for American businesses.

Among the many innovations making debut appearances in the American market was the introduction of the first four MW land-based wind turbines with orders announced by both Senvion and Vestas. This is nearly twice the capacity of the average turbine installed in 2017. It’s a notable stride in achieving great scale and efficiency by offering developers more options for customizing wind farms to match the unique wind resources of their project site.

As the U.S. wind industry continues to grow and mature, wind increasingly delivers enormous benefits to every state across the country. U.S. wind projects offer low-cost, reliable electricity, new manufacturing and technician jobs, plus millions of dollars in land lease payments and investment in communities nationwide.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:20 am   |  Permalink   |  Email
Tuesday, April 02 2019
Shovel Ready and Certified Sites Add Long-Term Success for Companies

By Lisa A. Bastian, President, Bastian PR

As time slices through 2019, shovel-ready or "certified" site programs of all kinds continue to be key economic development tools fast-tracking the creation (or expansion) of manufacturing or industrial facilities for America's corporate citizens. When done right, these programs don't discriminate by size, but have proven to add long-term value and an attractiveness cachet to both communities large and small.

Typically these sites are certified by either their home states and/or by an outside consulting firm retained by the states and the communities housing the sites. They are prepared and marketed to be either an industrial site ready for a distribution, warehousing or manufacturing or a research/technology park site, suitable for R&D science and technology type organizations and related support companies.

While factors vary, in general shovel-ready properties are promoted as land that has had its planning, surveys, zoning, title work, soil analysis, public infrastructure engineering and related work completed before becoming officially certified. Environmental clearance is especially vital to this process. Before that can be achieved, usually studies are conducted to focus on archeological, geotechnical, endangered species, wetlands, historical and/or other related environmental concerns.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 11:08 am   |  Permalink   |  Email
Tuesday, April 02 2019
Reframing Retail as a Community Asset, Not a Liability

By Alexandra Tranmer, Project Manager, Camoin Associates

The transformation of the retail industry continues into 2019. Beta-testing drone deliveries, cashier-less grocery stores and sampling new paint colors through augmented reality are just a few of the strategies that retailers are using to expand their market share and reach their coveted consumers. Yet, beyond using tactics like experiential retail and re-evaluating consumers’ purchasing preferences, retailers, and perhaps community builders at large, continue to grapple with how the right retail mix can be leveraged as a complementary asset to residents and other businesses. Although Credit Suisse predicted that 20-25 percdnt of U.S. malls will close between 2017-2022, the demand for retail as an amenity that contributes to the development and competitiveness of other markets is strong. While retail is certainly still a challenging sector for small business operators, chances for success are greatly improved when retail is integrated into the fabric of our commutes, daily lives and work patterns. This article will explore how retail is positioned as a critical component of development in large metro areas and smaller cities, and the role of the economic developer in coordinating the multi-disciplinary teams that are necessary to lay the groundwork for retail success. 

Yes, retail remains in a transformative state. Yes, eCommerce has redefined the public’s expectations of how and where they can purchase everyday goods. Ecommerce sales however only comprise about 10 percent of total retail sales. The 2018 3rd Quarter U.S. Retail Sales report from the U.S. Census reports that total retail sales reached $1,340.2 billion, an increase of 0.9 percent from the 2nd quarter of 2018.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 09:19 am   |  Permalink   |  Email
Tuesday, April 02 2019
A Retrospect and Forward-Thinking Overview of Freight & Transportation Trends in 2019

By Adam Robinson, Director of Marketing & Digital Marketing Consultant at Cerasis

Understanding the state of overall supply chain management is a massive undertaking. It involves countless hours of research, continuous review of leading supply chain experts, consideration of technologies, capabilities from around the globe and much more. The internet is an invaluable resource for shippers and carriers, especially those of smaller size, looking to make a splash in the global supply chain. Unfortunately, the path to understanding this behemoth of information is riddled with rabbit holes, thorns, and even sharp objects. Instead of trying to make sense of the lot by yourself, we’ve taken the initiative to put together these freight and transportation trends to know and use in making supply chain management decisions throughout the coming year.

In this article, we’ll take a closer look at the end of 2018 and move forward into 2019 with general trends affecting the freight and transportation industry. 

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 09:13 am   |  Permalink   |  Email
Monday, April 01 2019
Aerospace and Defense: A Billion Here, A Billion There

By Michael D. White, author and freelance writer

Like industrial fraternal twins, the aerospace/defense industries are related, yet, as the name suggests, serve two separate and distinct markets − aerospace, which largely comprises the production, sale, and service of commercial aircraft, and defense, which supplies the nation with the military land, sea and air systems critical for its well being. 

Falling in the narrow crack between the two are the space vehicles, mainly satellites and drones, utilized for both military and commercial use. 

A&D is the leading net exporting industry in the U.S., generating a net trade surplus of $86 billion in 2017, according to the Virginia-based Aerospace Industries Association. 

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 01:49 pm   |  Permalink   |  Email
Monday, April 01 2019
The Workplace Reimagined: Autonomous Vehicles Poised to Reshape U.S. Office Market by 2030

By Mike Consol, Editor, Real Assets Adviser

By disrupting the way employees commute to work, autonomous vehicles are expected to fundamentally reshape the U.S. office market by 2030, according to a report from CBRE. Most significant, the primacy of commercial real estate’s traditional decision drivers—geographic location and access to talent—may decrease as the importance placed on the workplace experience and building amenities grows.

Based on extensive and proprietary research, including interviews with leading experts in the autonomous-vehicle space, CBRE’s report predicts autonomous vehicles could account for between 11 percent and 27 percent of vehicle miles traveled by 2030. Factors considered in CBRE’s analysis include the rate at which the cost per mile for self-driving cars decreases compared with personal cars, the time it takes to develop software capable of navigating both inclement weather and complex urban roadway layouts, and advances in vehicle manufacturing capacity.

Posted by: Nicole@ExpansionSolutionsMagazine.com AT 08:40 am   |  Permalink   |  Email
 

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