Paul van Hamond is founder and CEO of Expressed Juice, an organic, cold-pressed juice company based in Miami-Dade. His production is in Allapattah, his biodegradable bottles are made in North Miami, the labels are created in Hialeah and he has purchased much of his manufacturing equipment in Doral. Most of the produce used in the juices – depending on the season – is locally sourced, too. Now that’s local.
Van Hamond sells the juices to hotels around Florida and to cruise lines, among other clients, and he also exports to the Caribbean. He distributes them through his own distribution company, The Drinks Company, which also distributes other drinks such as Kombucha, nitro-infused coffee and non-alcoholic sparkling cider. Van Hamond recently launched a line of juices for mixing with alcohol, called Mixology Maker, that he hopes to take national. For now, though, Expressed Juice, with 11 employees, is enjoying 40%+ annual growth.
Paul van Hamond is a small manufacturer in Miami-Dade, part of a sector that has had its ups and downs but is again on the upswing. Miami-Dade’s manufacturing sector doesn’t get the coverage of some of the other areas of the economy, but it is no less important. This sector connects Miami’s economy to national and international markets and significantly impacts the area’s economy.
MAKE IT MIAMI REPORT
According to a new report, the sector has increased 14.5% from 2012 to 2017. That’s growth of about 5,000 jobs, from 35,738 workers in 2012 to more than 40,800. It’s growing faster than Fulton County, Ga., which includes Atlanta; Harris County, Texas, which includes Houston; and King County, Wash., home of Seattle. The 72-page report, Make it Miami: Report on South Florida’s Manufacturing Sector 2019, is a collaboration of FIU’s Jorge M. Pérez Metropolitan Center and the Florida SBDC at FIU, the small business development center within the FIU College of Business. The report was funded by Citi Community Development.
Here are a few more significant findings from the report:
- Small but mighty. While manufacturing is not among the top employers in Miami-Dade, with only 4.1 percent of private workers employed in this sector, it contributes an economic output of $17.6 billion annually – almost 7 percent of the county’s economy overall.
- The multiplier effect. Manufacturing connects with other sectors in South Florida through a multiplier effect. For every job gained or lost in manufacturing, as many as two to three jobs in other segments of the economy may also be gained or lost.
- Stronger wages. Manufacturing creates high-paying, high-skill jobs, with many employees earning above the county’s median wage. A third work in “advanced industries,” characterized by technology, R&D and STEM (science, technology, engineering, and math) workers, where more than 13,000 earn an average of $57,000. In some sub-sectors, like pharmaceutical and medical manufacturing, average wages are over $92,000.
“Miami has a small but important cluster of advanced manufacturers with significant value to Miami’s economy. They help diversify Miami’s economic landscape and their continued growth is essential for boosting the county’s and region’s economic resilience,” the report said.
SURVEY SAYS …
Yet, the Make It Miami study found that nearly a third of current Miami-Dade manufacturers have considered relocating out of the county due to the cost of doing business, the need for access to new markets and customers, high insurance costs, a lack of tax incentives, and the need for a more qualified labor pool. Nearly one in six have already made plans to do so, according to a survey included in the report.
The good news is more than 70% of the 98 firms that responded to the survey said they expected their sales to increase over the next year, and more than 60% plan to increase wages and capital expenditures. A little less than half – 47% – plan to hire.
Respondents were also asked about challenges. About 80% said attracting and retaining employees was the most significant challenge, followed by increased raw material costs. Conversely, only a third saw weak global growth or slower export sales as a challenge.
For van Hamond, attracting capital was the largest challenge in the early stages of his business. Now banks will talk to him, but it wasn’t that way in the beginning. He also said he wishes there was less red tape to starting and growing a business. Still, van Hamond says, he’s not going anywhere.
Florida, and specifically South Florida, is a health-conscious community, a growing economy and a good place to grow a manufacturing business, he says. “South Florida is home for us… there are a lot of opportunities here. We are negotiating with new hotels and new cruise lines that are launching – there is always something going on.”
In light of these challenges and the findings in the report, the Metropolitan Center and SBDC at FIU recommended a series of strategies and initiatives, such as creating a Miami-Dade Manufacturer’s Resource Guide and collaborating with Miami-Dade Beacon Council to encourage local public officials to explore incentives, particularly in advanced manufacturing.
The organizations also recommended raising awareness by organizing and events and developing and communications campaign within the sector. Furthermore, the report recommended addressing talent and skills gaps by creating more training and apprenticeship programs, beginning in the high schools.
READ THE MAKE IT MIAMI REPORT HERE.
A SHORT HISTORY OF MANUFACTURING
Miami-Dade used to have about 160,000 manufacturing jobs – that was in the 1980s when neighborhood’s like Miami’s Wynwood and Allapattah as well as Hialeah and other cities were humming with manufacturing businesses, big and small. Because of the evolving economy, real estate development in traditional manufacturing areas and advances in technology, that’s no longer reality. By 2007, there were just 46,742 jobs and then the recession of 2008-2010 took out another big chunk, to some 35,000 in 2012. However, since 2012 the sector has grown back to more than 40,000 jobs in 2,847 companies in 2017, according to the report.
Today, Miami-Dade’s manufacturing economy is primarily light manufacturers, such as goods sold to consumers and food and beverage products, such as van Hamond’s Expressed Juice. Service companies like MakeMIA Makerspace, EcoTech Visions and Moonlighter Miami Makerspace and accelerators like FIU’s Startup FIU Food have sprung up in recent years to cater to these product makers. The average pay in the local manufacturing sector is $47,815, higher than the county median.
“The manufacturing sector in Miami is primarily composed of establishments that fall in the light-industry category, meaning that they produce small goods that will be sold to household consumers rather than to another manufacturer. Of the 2,847 manufacturing establishments reported by the Florida Department of Economic Opportunity, only 927 are classified in the advanced industry sector,” the report said.
Two Miami-Dade small businesses – GateArms, maker of LED safety light systems, and GovComm, maker of intelligent transportation systems – were highlighted in the Make It Miami report.
Jonathan Brinkman, an engineer, founded GateArms because he noticed a problem in multifamily communities in which cars kept hitting the security gates. Through several technical innovations, he solved the problem by founding GateArms to light up the gates with industrial-quality LED lights and has since expanded the safety product line to commercial garage doors and warehouse loading docks, all fraught with workplace-related accidents. Another product helps direct traffic safely among forklifts and pedestrians, for instance. “We keep busy with customers who come to us and say that’s cool, but I wish you could also do this,” Brinkman said in an interview.
The company, founded in 2008, now operates in a 6,000-square-foot warehouse in Homestead but is outgrowing that and is seeking to move to a 10,000-square-foot warehouse in the North Miami area. Its employee base is growing too; GateArms has 10 full-time employees and 6 sales people.
What’s next for GateArms? “We are a research and development company and have several products we plan to release in the next year or so,” Brinkman said. With that expansion comes hiring, particularly sales and marketing staff. Government contracting is a big part of plans for 2020-2021, and Brinkman plans to seek guidance from SBDC at FIU on that.
With weather-proof cameras and microwave sensors, GovComm’s equipment and software enables real-time communication from roads to transportation management centers. Founded by Craig Waltzer in 2012, GovComm is one of the few qualified intelligent transportation system manufacturers that is certified in Florida. In the report, Waltzer said finding quality personnel to grow has been a challenge.
If there was even more advanced manufacturing in Miami-Dade, such as GovComm, overall wages in the manufacturing sector would be higher. Advanced manufacturing, which also includes pharmaceuticals, medical manufacturing and medical device makers, also has one of the largest economic multipliers of any industry, meaning it can spur more job creation in other sectors.
LEARN MORE AT FREE EVENT THIS MONTH
A free event for manufacturers is coming up. At the 2019 South Florida Manufacturer’s Export Forum, you will learn about financing tools and best practices to help your manufacturing and export business open up new markets.
During the event, 11 am to 3 pm on Oct 17, you will hear from David Glaccum, associate administrator of international trade for the SBA. You will also hear from experts from the SBA, First American Bank and Meridian Finance Group in Miami-Dade about strategies for financing manufacturing exports and mitigating risks. Another panel of experts will address accounting considerations for manufacturers.
There is no registration fee for this event, but registration is required. Register here: go.fiu.edu/export. Both parking and lunch will be provided. For additional questions/concerns, contact Briana Williams at 305-779-9233 or briawill@fiu.edu
Please send GrowBiz topic suggestions and feedback to GrowBiz@FIU.EDU
READ MORE: Exporting? Consider and Export Marketing Plan and other state and federal resources
FURTHER READING: Small Business, Big Impact: Report on Small Business in Miami-Dade County