Transylvania County Economic Development. Cycling and Outdoor Industry Feasibility Study. Brevard College ORG 450

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1 Transylvania County Economic Development Cycling and Outdoor Industry Feasibility Study Brevard College ORG 450

2 Project Document Transylvania County Economic Development: Cycling and Outdoor Industry Feasibility Study April 11, 2014 Management Sponsors NAME PHONE ROLE Mark Burrrows (w) (c) Director of Planning and Economic Development for Transylvania County Project Team NAME PHONE ROLE Caleb Welborn Project Manager Jami Uuttu Team Member Pauli Jussila Team Member Kevin Hamilton Team Member Elyse Santorso Team Member Dillon Brown Team Member Benjamin Noboa Team Member College Sponsor NAME PHONE ROLE Barbara Boerner edu Head of business department Experts Shane Cooper, CEO of DeFeet International Drew Hager, Industry Nine Componentry Thomas Dempsey, CEO of Sylvan Sport Woody Callaway, Partner of Legacy Watersports Wes Dickson, Owner of Sycamore Cycles David Bradford, Owner of Possumdog Productions John Buford, Pisgah Forest Rotary Club and Director of Assault on the Carolinas Joe Wilbanks, Program Coordinator of Transylvania County Economic Opportunity Network David Joyce, President of Brevard College Colin Izzard, General Manager of Carmichael Training Systems Jeff Furman. Guide at Davidson River Outfitters 2

3 Project Document Table of Contents Project team 2 Executive summary 4 Evolution of The Study 5 Research and Benchmarking 6 Bicycle manufacturing in the USA 6 Outdoor industry in Western North Carolina 8 Benchmarking 9 Present Situation Analysis 10 SWOT Analysis 10 Findings 12 Recommendations 13 Appendix A 16 Professional Athletes in Transylcania County Matthew Busche 16 Nicholas Mulally, Brent Bookwater 17 John Murphy 18 Ty Magner, Walker Shaw 19 Appendix B 20 Local Company Research Possumdog productions 21 Sylvan Sport 22 Davidson River Outfitters 23 Hincapie Sportswear, Defeet International 24 Liquid Logic, Industry Nine 25 Appendix C 26 Benchmarking of bike-friendly cities Minneapolis, Minnesota 26 Portland, Oregon 29 Boulder, Colorado 30 Madison, Wisconsin 31 Harrisonburg,Virginia 32 East Burke, Vermont 33 Marquette, Michigan 34 Moab, Utah 35 Tucson, Arizona 36 Whistler, British Colombia 37 3

4 EXECUTIVE SUMMARY The Study Our team of Brevard College senior business students conducted a study for the Transylvania County department of Planning and Economic Development to determine the feasibility of attracting businesses related to the cycling industry to the county, in order to create jobs and investment. Major Findings With virtually no investment, Transylvania County could become both: One of the premier cycling destinations in the world A hub for businesses in the outdoor industry We say virtually no investment, because Transylvania County already has all the necessary resources to achieve this. It already:: Is one of the best places in the world to ride a bicycle Has many features conducive for other outdoor sports Has several outdoor industry businesses Has a prevalent outdoor culture Why this is Significant People who open outdoor businesses look to do so in areas that are well known for outdoor activities, such as cycling. These areas allow them and their employees, who are generally active people, to live the lifestyle they enjoy If Transylvania County becomes a well-known area for outdoor activities it will in turn become a place that outdoor businesses will actively seek to operate in. A local workforce that is savvy to the outdoor industry will naturally develop in parallel Prospective business owners will be confident they will be able to fill necessary posi tions with local workers due to the county s reputation and success The Problem Transylvania County is not a well-known area for outdoor activities, cycling or other It is America s best-kept secret The Solution Make Transylvania County a place that is known nationwide as a hotspot for outdoor culture No major need to create anything new Use and further develop all current available resources 4

5 EVOLUTION OF THE STUDY Conducted Kickoff Meeting During the Spring 2014 semester, Mark Burrows, Director of Planning and Economic Development for Transylvania County, asked members of the Strategic Planning & Policy Making class to conduct a study to determine the feasibility of attracting businesses related to the cycling industry to Transylvania County. During a kickoff meeting with Caleb Welborn on January 17th, Mark Burrows gave the primary goals of the project: Come up with a comprehensive plan for Transylvania County to implement in order to: o Create jobs and investment in the county through businesses related to the cycling industry π The county is especially interested in manufacturing o Attract sponsors to support: π The Assault on the Carolinas (AOTC) charity bike ride π The Brevard College cycling team Created Schedule for Primary Deliverable Objectives During a follow-up meeting with Mark Burrows on January 24th, the project team created a schedule for the primary deliverable objectives: January 25 February 14: Market research and benchmarking February 24: Progress report February 15 February 28: Recommendations and planning March 1 March 14: Compare companies March 15 March 28: How to market March 29 April 1: Rough draft of full plan April 2 April 13: Tweak plan/create presentation April 14: Present to county commissioners 5

6 MARKET RESEARCH AND BENCHMARKING Bicycle Manufacturing in the United States In order to identify opportunities, we researched general information on the bicycle manufacturing industry in the US. It is important to realize that this is specific to manufacturing bicycles themselves; it does not include related products. Major findings Bringing bicycle manufacturing to Transylvania County may be difficult due to projected 0% annualized growth in manufacturing establishments o However π Some independent builders will shut down and others will open π Many independent builders want to be in a bike-friendly area with a strong cycling culture othere is a possibility of bringing in an independent builder πif Transylvania County is a place they want to be A bike-friendly area with a strong cycling culture While it may not be feasible to specifically target bringing in bicycle manufacturing to the county, it is feasible to target bringing in other types of businesses within the cycling industry and the outdoor industry as a whole. Industry details Industry Overview o Businesses: 42 o Revenue: $872.2m o Profit: $106.4m o Exports: $76.0m o Annual growth (08-13): 0.3% o Annual growth (13-18): 0.9% π Industry Details o Highly influenced by the prosperity of US consumers o Low level of market share concentration o Cheap imports have been challenging the industry o Domestic producers have been responding by closing facilities or relocating facilities abroad to compete o Bicycles targeted at high-income consumers have actually experienced growth 6

7 MARKET RESEARCH AND BENCHMARKING Domestic industry mostly composed of small, independent workshops and builders Independent Builders o New entrants are typically serious cyclists themselves o Avg. operator has a relatively small staff and produces a small number of frames or completed bikes each year πsome outsource materials shaping to machine shops or other contract facilities o Medium barriers to entry π Moderate level of capital intensity π Computer-aided design (CAD) software and fabrication machinery π Competition with established brand names in a limited market π Compete on quality, performance, reputation and innovation Top Regions o #1: West Coast π 37.3% of industry establishments π 7.1% share of US population π Strong road bike culture in California π Popularity of cycling in cities like Portland π Home to a number of small-scale producers o #2: Great Lakes π 15.1% of industry establishments π 14.9% share of US population Trek s domestic facilities are located in Whitewater, WI o #3: Southeast π 13.9% of establishments π 25.4% share of US population Warmer climate allows for year-round cycling Industry Outlook oslight resurgence expected through 2018 by focusing on high-quality products othe number of establishments is expected to stay flat (0.0% annualized growth) osome small-batch workshops will close and other startups will open in cities with strong cycling cultures opotential for more rapid growth will be hampered as firms continue offshore pro duction to reduce costs oenvironmental concerns will lead to increased investment in bicycle-related in frastructure π Greater accessibility will boost demand for bicycles Source: Samadi, N. (2013). IBISWorld Industry Report 0D4357. Bicycle Manufacturing in the US. Retrieved January 2014 from 7

8 MARKET RESEARCH AND BENCHMARKING The Outdoor Industry in Western North Carolina Because we found that it would not be feasible to specifically target bicycle manufacturers, we decided to widen our scope to include other businesses in the cycling industry and the outdoor industry as a whole. We researched several cycling and outdoor businesses in Western North Carolina and contacted them to discover the reasons they operate in this area, and the benefits and disadvantages that have arisen due to operating here. Major findings Common factors Benefits Many owners chose to open their business in WNC due to the outdoor/active lifestyle it allows The others opened their business here because they were already in the area. WNC has many options for outdoor activities othis helps keep satisfaction high among employees Disadvantages Some feel it is difficult to find qualified and/or reliable employees, specifically in WNC For the research and questionnaire form, and more detailed profiles of each company, see Appendix B. 8

9 MARKET RESEARCH AND BENCHMARKING Benchmarking We conducted benchmarking with several cities and towns that are bike-friendly with prominent cycling cultures. As our research showed, these types of areas generally have a higher density of businesses related to the cycling and outdoor industry. Terms: Bike-friendly: A city or town is considered to be bike-friendly if it has policies, practic es and infrastructure in place that make it safe and easy to use a bicycle as a primary form of transportation. The bike-friendliness of a city is usually the result of city plan ning and infrastructure decisions. Cycling culture for our purposes, a city or town with a cycling culture is one that has the infrastructure, support and community for those who take part in cycling as a sport or recreationally, rather than purely for transportation. Although many of these cities are much larger than Transylvania County, it is important for us to understand why they are the best. By determining the reasons they are successful, we will be able to shape Transylvania County based on those reasons at a smaller scale. The cities and towns we benchmarked were: Minneapolis, Minnesota Portland, Oregon Boulder, Colorado Madison, Wisconsin Harrisonburg, Virginia East Burke, Vermont Marquette, Michigan Moab, Utah Park City, Utah Tucson, Arizona Louisville, Kentucky Whistler, Canada Detailed profiles of these cities can be found in Appendix C. Major Findings Common factors Infrastructure ointerconnected bike paths/lanes/greenways obike racks obike share programs omountain bike parks Marketing oestablished brand image osingle tourism website Workers to fill jobs within industry 9

10 PRESENT SITUATION ANALYSIS SWOT Analysis A SWOT analysis is a tool used to examine the strengths, weaknesses, opportunities, and threats of an organization, in this case, Transylvania County. Strengths and weaknesses are internal factors, while opportunities and threats are external factors. We viewed Transylvania Country through the lens of a potential premier cycling destination and hub for the outdoor industry. Major findings Transylvania County: Strengths Is one of the best places in the world to ride a bicycle Has many features conducive for other outdoor sports Has several outdoor industry businesses Has a prevalent outdoor culture Infrastructure (trails, roads, paths, businesses, races/rides) Plan for bike path connectors Plan to revamp Broad Street All rides within riding distance. Don t have to drive to ride. Small enough main area of town to get around easily on a bike Cycling culture growing Outdoor culture Positive press (regionally and nationally) Bike-friendly businesses Professional athletes who use the area for training and off-season residence Local enthusiasts and supporters Temperate climate (better than Colorado) Accessibility: Great Smoky Mountains National Park Strong collegiate cycling program Summer camps Student workforce from college Location brings in outdoor industry people Location keeps employees happy Half tuition for local students Community college, technical degrees 10

11 PRESENT SITUATION ANALYSIS Weaknesses Perception of unreliable, inexperienced local workforce Key components of manufacturing process unavailable or not feasible here 3 separate tourism websites Bad traffic at peak hours (traffic light recalibration?) Unappealing main drag into downtown No centralized information resource Not much information available on cycling in the county Opportunities Program to pair reliable local workers with local companies Local college students Keep college graduates here Centralized information resources (including website) Evolved cycling culture Collaboration between cycling-related businesses Connecting the dots between current resources USA Cycling camp based from BC Cycling camps Bike lanes/paths everywhere Promote commuting and transportation by bicycle Install more bike racks Late night activities/entertainment Threats Talented people leave for bigger cities, bigger companies Cheaper manufacturing in Asia Animosity between cyclists and motorists Tourism without being able to support it, i.e., bad experiences for tourists (this is not a problem at this time, but could become one) 11

12 FINDINGS Our Findings With virtually no investment, Transylvania County could become both: One of the premier cycling destinations in the world A hub for businesses in the outdoor industry We say virtually no investment, because Transylvania County already has all the necessary resources to achieve this. It already: Is one of the best places in the world to ride a bicycle Has many features conducive for other outdoor sports Has several outdoor industry businesses Has a prevalent outdoor culture The problem People do not know what Transylvania County has to offer There is not a way for anyone to find out everything the county has to offer o The resources are not documented in any one location, and many of them are not documented anywhere o It is America s best-kept secret The solution Make Transylvania County a place that is known nationwide as a hotspot for outdoor culture. Transylvania County has so much to offer to the outdoor industry. The features of the location are some of the best in the country. There is not a major need to create anything new at this point in time. There is a need, however, to use and further develop all of the current available resources. The bottom line If Transylvania County becomes a well-known area for outdoor activities it will in turn become a place that outdoor businesses actively seek to operate in. Implementation We recommend hiring someone full-time to implement this. If this is not possible, it should become part of someone s job description, or elements of it should be delegated into the job descriptions of multiple people. The major steps of implementation are: Document and organize all current resources Develop and execute marketing campaign Repeat continue actively developing current resources and updating marketing 12

13 RECOMMENDATIONS The following provides the processes for some of the major steps of implementation. While this is more than enough to take up a full-time job, our team was able to highlight some examples that provide excellent starting points for the county. Document and organize all current resources Because many of these resources are not recorded anywhere, each will require an intensive initial phase of research and documentation. Following this, it will be much simpler as only updates will be required. External Media There has been much positive press about cycling and the outdoor culture in Transylvania County. Schedule and perform a search at least once a month, preferably more than once a week, for media regarding the outdoor industry in Transylvania County. o Highlight and document all positive coverage o Examples of recent positive press: π #4 on Active s list of The Five Best Mountain Biking Towns π#8 on Singletracks list of The Top Ten Mountain Bike Destinations in North America π Asheville is #1 on The Active Times list of Best Mountain Biking Towns π Pinkbike article, East Bound and Down: Brevard Calling π Velonews: Pisgah Stage Race coverage π Coverage of collegiate nationals π Native Eyewear videos 13

14 RECOMMENDATIONS Professional athletes (in all sports) Document all professional athletes and teams that choose to live, compete or train in Transylvania County. oschedule and perform a search at least once every three months to update this list as needed. Create Team Transylvania, an unofficial team to highlight the presence of athletes that live and/or train here. othis will be used to show the great number and caliber of athletes that choose Transylvania County as their training grounds π Gives Transylvania County credibility and a cool factor oathlete profiles ointerviews owhy they love Transylvania County Schedule and perform a search at least once a month, preferably more than once a week (especially during major events, such as the Tour de France or Tour of California), for media regarding Transylvania County professional athletes. ohighlight and document results and accomplishments ogive previews for major events ogives locals people to cheer for during these events There are many professional cyclists that live and/or train in Transylvania County. Detailed profiles of some of them can be found in Appendix A. Bike trails/paths/routes/rides/races While a small amount of this information has been documented, there are many great bike trails/paths/routes/rides/races in the county that are not easy to find out about. These should be accessible to find out about on the Transylvania County website. Document and highlight the iconic routes and trails in the county o Provide trail updates (which ones are open, closed, etc.) π An example of an online tool to feature a trail on a website: π Post videos of people riding trails in the county o GoPro videos Create a map for bike paths and routes around the downtown area Document and highlight all races, rides, and events in the county 14

15 RECOMMENDATIONS Develop and execute marketing campaign Develop and execute marketing campaign Once the current resources have been documented, the county will have the necessary information to let people know that Transylvania County is a premier cycling destination. Website improvements o Consolidate the three Transylvania County tourism websites into one π This is a primary source of information for prospective business owners and people looking to move to or visit the county Social media Invite companies to film mountain bike videos in the county Highlight history of Tour Dupont Become a certified bike-friendly town Have an article written about the cycling culture within the county o We recommend hiring Park Baker of the Transylvania Times to do this Promote commuting and transportation by bicycle o Add bike racks in key areas so people have a place to lock their bicycles Move forward with the Ecusta Trail Create a program to pair incoming businesses with local workers Platform to match workforce with employers o Pair existing and incoming businesses with qualified and engaged employees Will address concerns prospective business owners may have about workforce 15

16 APPENDIX A Matthew Busche Born: May 9, 1985 Current Team: UCI ProTeam Trek Factory Racing Lives in Brevard, NC and Girona, Spain Cycling Career: th Gran Premio Città di Camaiore 5th Overall Tour of Utah 7th National Time Trial Championships 9th National Road Race Championships nd Overall Tour of Utah 8th Overall USA Pro Cycling Challenge st National Road Race Championships 3rd National Time Trial Championships rd Overall Danmark Rundt 5th National Time Trial Championships 7th National Road Race Championships th National Road Race Championships 9th Overall Univest Grand Prix 16

17 APPENDIX A Nicholas Mulally Born: February 19, 1993 Current Team: Trek World Racing Lives in Hendersonville, NC Cycling Career nd New Zealand National Mt. Hutt 2nd Duryea Downhill 2nd Mountain Creek Spring Classic 1st Plattekill Pro GRT 1st Windham Pro GRT 1st Snowshoe Pro GRT 2nd Super D National Championships Brent Bookwalter Born: February 16, 1984 Current Team: BMC Racing Team Lives in Asheville, NC Cycling Career nd Tour of Qatar 2nd USA Cycling Professional Road TT Championship 2nd USA Cycling Professional Road Race Championship rd USA Cycling Professional Road TT Championship 2011 Part of the Tour de France winning team 17

18 APPENDIX A John Murphy Born: December 15, 1984 Current Team: United Health Care Pro Lives in Horse Shoe, NC Cycling Career nd Tour of Elk Grove. Time Trial 3rd Tour of Elk Grove, Stage 2 3rd Tour of Elk Grove, Overall st Overall Tour of America s Dairyland 2nd Overall Tour of Elk Grove UCI 2.1 2nd Athens Twilight Crit 3rd Overall Speedweek Crit Series 5th Philadelphia International 7th Roswell Criterium 9th Overall Nature Valley 10th Tour of Battenkill UCI th Berlin Pro Race- May 22 6th Lichtevelede 1.1- September 21 13th Tour of Beijing Stage 1 TT 14th Criterium Du Dauphine stage 4 16th Tour of Belgium Prologue 18

19 APPENDIX A Ty Magner Born: May 3, 1991 Current Team: Hincapie Sportswear Development Team Lives in Asheville, NC Cycling Career st Sea Otter Classic 2nd Stage at Redlands Bicycle Classic st U23 Criterium Nationals 2nd U23 Time Trial Nationals 3rd Stage I Tour of Utah st U23 Criterium Nationals 1st Stage 6 Tour of China Walker Shaw Current Team: Specialized USA Gravity Team Lives in Hendersonville, NC Coming to Brevard College next semester Cycling Career 2013 Raced in the men s World Cup in downhill 19

20 APPENDIX B Local Company Research We asked a few local companies these following questions o What made (business) choose to operate in (location)? o Over time, what benefits and disadvantages have arisen for (busi ness) due to operating in (location)? ohow many people are employed at (business)? owhat goods and/or services does (business) produce in-house, and why? owhat goods and/or services does (business) outsource, and why? If the company wasn t located in Transylvania County we added the following message to the . Transylvania County, North Carolina has much to offer for a company in your industry. Not only is it nestled between Pisgah National Forest and Dupont State Forest along the Blue Ridge Parkway, but our already prominent outdoor culture is experiencing significant growth and the county government is dedicated to assisting the expansion of related industries. Would you like me to send you information about business opportunities in our county? 20

21 APPENDIX B Possumdog Productions, Cedar Mountain, NC Possumdog Productions designs and prints t-shirts for niche markets. A large portion of our screen-printing is done for the outdoor recreation industry, primarily whitewater rafting outfitters, nationwide. We also design and print our own children s t-shirt line that sells in boutiques and department stores, nationwide. We do some custom screen-printing, but that is only for a handful of local businesses in TC, who were instrumental in getting us started. We ve kept them as loyal customers. Our process is one in which we identify a niche market. We design a t-shirt line. We sell those shirts wholesale to retailers. In addition, we do dye sublimation printing on performance wear and other items, like coffee mugs. Moving forward, we will be expanding into other realms. I m not entirely ready to reveal the next stage, yet. But, I will say that it will include retail and an expanded line of products. I chose to return to TC because of this is the best place in the United States to mountain bike. Period. I chose the Cedar Mountain area because I found a piece of property that was in close proximity to Dupont State Forest. I can basically ride out of my shop and in less than a mile, ride perfect trails. The road biking was also a major consideration, as well. My shop had been located in downtown Brevard, but I relocated to my current location so that I could save money (since it is on my property, now, I don t pay rent). I have the kind of business where I don t need to be in-town. As we move forward, and expand, my next shop will be on a similar rural piece of property, that I own, that has access to Dupont or the Pisgah, where myself, or my employees can ride into the forest. EMPLOYEES. It is very difficult to find reliable employees in Transylvania county. When my shop was located in downtown Brevard, I was offering $10 to $15 an hour, with some benefits. I could not find anyone who was reliable. Now that my shop is located on my property, next to my home, who I select as an employee is even more crucial, since they will be in contact with my family. For this reason, I have decided to not hire anyone, currently. I outsource any jobs that are too large for just me to produce. When I expand, I will be hiring employees. But, again, I anticipate that process to be difficult. The culture that I am planning to build around my company is one where employees are healthy, attracting people who ride, kayak and climb. I m not interested in hiring unhealthy, non-riders. This is a self-imposed limitation, but one that, though it may complicate the hiring process even more, will ultimately pay off in the end. When I was in the downtown location, I did not have this self-imposed limitation. And still, it was nearly impossible to find reliable, positive, sober people to work. We produce almost all of our screen-printed items ourselves. Any order over 1,000 we outsource to a contract printer. We try to keep that outsourced printing in western North Carolina, as much as possible. But some of our contract printers are located in Los Angeles and the northern part of West Virginia. Our cut and sew facility is located in Morgantown, where Opportunity Threads makes many of our custom garments. Still, we try to print as much as possible, here. We would produce more, here, however there is the problem of finding reliable workers. Possum Dog currently has 2 employees 21

22 APPENDIX B Sylvan sports Number of employees: 10 Sylvan sports creates new age campers in house, in Transylvania county and they are committed to create a manufacturing base here in Transylvania county SylvanSport chose to operate in Transylvania County due to the founder s personal enjoyment of life and lifestyle in this county. That was also assisted with a financial grant from the Transylvania Partnership for Economic Development. The company is now in Brevard, due to the need for factory space that exists in a small number of locations within the county. Benefits: Proximity to outdoor recreation / Ability to recruit outdoor-minded individuals / Vacation destination for customers purchasing our products. / Quality of life for employees / Education system. Disadvantages: limited available workforce / challenging internet connectivity / high cost of living / high cost of transportation here. Sylvan Sports are forced to outsource Media services and various components of production because they are not available within the county. 22

23 APPENDIX B Davidson River Outfitters, Pisgah Forest, NC Kevin Howell, the owner, has been guiding in WNC since the 1980s and is the son of a nationally known fly tier and fisherman. He started managing DRO in After the death of his father in 1998, he took over operations at his father s store, which was a custom tackle shop. In 2000, he purchased DRO and combined the operations of the two businesses. Industry ofly-fishing outfitter business. They guide clients on both public and private water so most of their business is dedicated to providing a service. Goods owithin their store they sell products that are tailored directly to fly-fishing. This includes apparel; fly tying equipment, Rods, Reels, Waders, Wading Boots, Flies o Most of the goods they sell are produced or manufactured by another company. o Some of the flies they sell are made on site as they are custom designs by the employees or owner. Number of Employees o 7 guides o People who also work part time just in the shop πtheir business is definitely seasonal and the odds of them having an extra hand or two during the summer time is almost certain Davidson river outfitters chose to do business in Transylvania county because the accessibility to the water in Brevard was a top factor in choosing the location for DRO. Biggest Advantage for DRO is operating right beside the Davidson River. Gives them great access to water for guiding as compared to other Fly Shops say located in Asheville who have to drive to Brevard or other places to access water and take clients. He never really gave me a disadvantage for the business in regards to the location it s in. Their busiest months run from April to October. During which they have more part time employees to facilitate the influx of business. During the winter months they only have a few full time people working at the shop due to the lack of guided trips which may only be 10 a month in December as compared to 100 in a month like April or May. So there isn t really a straight answer to this question, other than the full time people which I would be surprised if its more than 10 They do not produce anything in house. The only aspect of the business that would come close to producing internally is the creation of custom fly patterns by owner and some of the employees. But these patterns are then sold to major makers and in turn are made in bulk for distribution so they don t actually make them after they create them. 23

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