Around this time last year, I was invited to Omaha by our partners at Union Pacific to tour their headquarters and their famed Harriman Dispatch Center (HDC), the central command station which monitors the movement of more than 850 trains and over 35,000 miles of track across the United States. Originally a freight depot, the Harriman Dispatch Center was built over 100 years ago. The central command functions are built inside a bunker on the inside of the original brick structure, with over a foot of reinforced concrete walls, a necessary protection against potential tornados or other natural disasters to assure seamless 24-hour operations of rail traffic nationwide. Because of its history, the dispatch center also houses an incredible collection of Union Pacific memorabilia illustrating the company’s rich history in the United States and the impact they have had on the landscape of America.
As we toured the building, an old stage coach, marked with Union Pacific’s logo on the side, caught my attention and I had to ask about its relevance and place in history. It was explained that in the early 1900’s, as National Parks started to become designated, Union Pacific was a big part of transporting tourists to these areas, such as Yellowstone. However, at the time there did not exist the required “last mile” infrastructure into the parks. So Union Pacific utilized stage coaches, like the one I was looking at, to carry tourists into the parks. As it turns out, the railroads have been ardent supporters of National Parks even before the Park Service was formally established in 1916. Not only that, but the railroads took a lead role in promoting National Parks to the general public.
As a bit of a history buff, but a practitioner of economic development, I found the discussion fascinating, specifically given our large rail presence and history in Doña Ana County, combined with the region’s new National Monument designations. It raised questions in my mind. How do we utilize our National Monuments and our outdoor spaces in general to create an economic development opportunity, beyond tourism events alone?
This past month at the first Outdoor Economics Conference in Las Cruces, MVEDA was not only able to help bring this historical perspective to the audience, but we started to publicly discuss strategies and trends that we have identified over the last year, since that memorable tour of the Harriman Dispatch Center, as to how we can begin to grow industry and manufacturing based around our outdoor spaces. Before I dive into that however, let me first discuss some observations I have made throughout my professional career on the outdoor recreational market space.
For much of the 90’s and part of the early 2000’s, I lived and worked in Southern California. By that time, outdoor brands such as Van’s, Quiksilver, O’Neill, and Patagonia were already legendary, but new “lifestyle” outdoor brands such as Hurley and Skechers, which would grow to be just as ubiquitous, were just getting started. The common denominator within all these companies was unimpeded access to an active outdoor environment which became their canvas for research and development and, of course, a culture of entrepreneurialism. During those years I did some consulting for a dotcom start-up focused on providing content, services and products to the surf, skate, and snowboard enthusiast. This was my first introduction to seeing firsthand the dedication of these “lifestyle” consumers and the loyalty to these brands. On any given work morning, if the sea swells were strong, the company’s large office complex would be void of employees who were out chasing waves.
Fast forward to 2018, this “lifestyle” brand loyalty was on full display at two Outdoor Retailer Expos I recently attended. The most recent, held in Denver, where over 600,000 outdoor enthusiasts, from consumers to retail buyers, attended to see the newest product developments ranging from shoes to skis to snowboards to kayaks to tents to anything under the sky you can imagine. Literally, every square inch of usable space at the Colorado Convention Center, including hallways, were packed with exhibitors ranging from manufacturers to retailers and other content providers, both start-up and mature brands. New sub-sectors of the industry were emerging as well. For example, the obstacle course race (OCR) industry, hardly a blip on the radar a decade ago, is now a multi-billion dollar a year industry with both new companies and major brands serving it.
As with every new trade show we attend, it is critical to try to understand how we formulate a message of opportunity that is meaningful to the companies we are dealing with and is furthermore a message that resonates with them amongst the sheer chaos of such a massive show. Why would they move to or expand to Las Cruces for manufacturing and future product development?
One of the trends we noticed very quickly was that many of the companies we spoke to, companies with strong and reputable brand identities, and were producing their product overseas, primarily in China. We discussed their desire to build their brand identity with “Made in the USA” or “Assembled in the USA” labeling. All were interested and many were at the beginning stages of developing strategies, but all were faced with the same concerns, the rising costs of production with such a strategy and how that might impact their buyers and of course their bottom lines.
Now this is what makes our region especially unique as we pursue manufacturing opportunities for such companies. As we discussed our geographic region, and as they began to understand our proximity to the vast manufacturing found just on the other side of the border, an awareness that the company could have the best of both worlds began to emerge; potential lower cost production supply inputs found in Mexico combined with final assembly in Doña Ana County could possibly get them to a consumer-friendly price point and possibly a designation of “Made in the USA” or “Assembled in the USA” markings.
Now this strategy is one we will continue to pursue with larger, established outdoor brands. But there is a different challenge for the entrepreneur or smaller companies. Reason being is that China makes it very easy to go from concept to engineering to mass production with one phone call. Plus, they are more inclined to take on small production runs as needed. These are business supply and infrastructure improvements we will need to have in place to compete for this market segment. And of course, access to angel and venture capital funding will always be critical for younger companies.
Suffice it to say that building economic development strategies based around our outdoor spaces provide tremendous opportunities. We have a vast outdoor landscape for entrepreneurs, and similar to the surf industry in California where entrepreneurs developed product lines in the natural environment, our outdoor spaces too can become testing grounds for future “lifestyle” product development. As a region, companies in this segment who locate in Las Cruces and Doña Ana County have access to a variety of supply chain and lower cost, value added, production inputs, and potentially the ability to pursue “Made in the USA” strategies, which is an ever growing demand by their “lifestyle” consumers. Not too many alternative locations can claim to offer the same competitive production advantages while still allowing a brand to stay close to its “lifestyle” outdoor roots.
Davin Lopez is the President/CEO of the Mesilla Valley Economic Development Alliance (MVEDA), one of the leading economic development agencies in New Mexico. MVEDA provides local businesses and those considering relocating and expanding in the New Mexico Borderplex area with the information, tools and resources they need to succeed.
