February 1, 2011

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Under Cover


Point of Origin

Utah’s Distribution Infrastructure Attracts Outdoor Rec Companies

Gaylen Webb

February 1, 2011

While Utah’s recreational wonderland has attracted outdoor sports enthusiasts for decades, the state has also become a magnet for outdoor product companies. The state’s unparalleled outdoor recreational opportunities, combined with solid distribution channels, lower costs and a business-friendly environment have made Utah the epicenter for outdoor product design, manufacturing and distribution. When Gary Heward and his wife purchased Liberty Mountain, a wholesale distributor and catalog company based in Portland, Ore., in 1997, they knew their location in the Northwest didn’t make much sense from a distribution standpoint. “We are a true distribution company,” says Heward. “We ship outdoor gear and accessories to shops all over the United States, so operating from Portland just wasn’t smart, logistically.” So the Hewards launched a year-long search for a new distribution location that took them from the California coast to Boulder, Colo. At the time, Boulder was the base for outdoor product companies, but the Hewards chose Salt Lake City for Liberty Mountain’s headquarters and Western distribution center. They set up shop here in 1998. “It just made sense to move to Salt Lake City,” he explains. “It costs us less and is faster to ship from here to every major city in the U.S. (other than when we were located in Portland and shipping to Portland or Seattle). Salt Lake is terrific.” Heward notes that other factors, such as lower operating costs, less expensive real estate and a skilled labor force also helped make Salt Lake City the optimum choice. “It’s hard to beat Utah if you are an outdoor enthusiast,” he says. Base of Operations Liberty Mountain isn’t the only Utah outdoor products company enthusiastic about the state. Peter Metcalf, CEO of Black Diamond Equipment Inc., likes to say that “Utah works for Black Diamond.” Two of the many compelling reasons Utah is the place for Black Diamond include the state’s location, logistically, and the company’s easy access to Salt Lake International Airport, according to Mark Ritchie, Black Diamond’s vice president of operations. It also helps that Black Diamond can essentially design and test its outdoor gear in its own backyard. “We really are a great state for outdoor product manufacturing and distribution,” says Riley Cutler, director of the Outdoor Products Cluster in the Governor’s Office of Economic Development (GOED). “We are better than Phoenix, better than Reno and better than Las Vegas.” He says there are primarily three reasons outdoor product companies find Utah so attractive: “People can have their companies here, go skiing early in the morning, put in a full day’s work and then go check on the warehouse in the evening. Can it get any better than that?” Cutler asks. “Logistically, we’ve got a full-service inland port, the Salt Lake City International Airport, rail lines that converge from the east, the west, the north and the south, and a great interstate system. We are a true crossroads for warehousing and distribution.” For its part, the Salt Lake International Airport offers approximately 16 different cargo carriers for handling and shipping airfreight. What’s more, Delta Air Lines offers non-stop service to France and plans to resume its non-stop service to Japan. From a distribution center in Utah, an outdoor product company can ship next-day to many parts of the Western United States and second-day to points as far away as the Mississippi, Western Canada and Mexico. Heward says because of Liberty Mountain’s close proximity to a UPS center, his company is able to have a dedicated UPS trailer parked onsite, which is loaded until nearly 8 p.m. before packages are picked up. The arrangement provides Liberty Mountain with greater responsiveness and flexibility in shipping products, especially since UPS ground is its primary distribution channel; however, the company also utilizes FedEx, the U.S. Postal Service and some drop shipping. “All of the reasons we chose to locate in Utah have proven to be correct,” he adds, “and now that more outdoor companies have come here and the Outdoor Retailer Summer and Winter Shows are located here as well, being in Utah is even more compelling.” The Place to Be Some estimates put Utah’s concentration of outdoor product companies at around 1,000 businesses, and Cutler is leading an effort at GOED to recruit even more by demonstrating how Utah’s strong concentration of outdoor product companies, logistical benefits and other amenities make Utah the place to be for outdoor product manufacturing and distribution. That effort appears to be working. Quality Bicycle Products opened its Western distribution center in Utah in 2009. The company was distributing out of a warehouse in Clearfield while it completed a $5 million, LEED Platinum-certified distribution center in Ogden that it is opening this year. Specialized Bicycle Components, a large international company that moved its Western distribution center to Utah about 12 years ago, opened a new 250,000-square-foot warehouse in Salt Lake City in 2010. The company says the factors that keep the company in Utah include an ideal combination of good lease rates, a well-established carrier support infrastructure that includes modern rail access and container handling facilities, and a workforce that is passionate about outdoor recreation. Jeff Edwards, president and CEO of the Economic Development Corporation of Utah, notes that Specialized Bicycle’s growth and commitment to Utah is indicative of the success Utah is having in attracting, recruiting and retaining outdoor product companies to the state. In 2007 Amer Sports Winter and Outdoor US, a subsidiary of Helsinki, Finland-based Amer Sports Corp., (better known for its brand names Atomic Ski and Salomon) consolidated its U.S. operations in Ogden and opened a 200,000-square-foot warehouse there. A few of the many other companies helping to shape Utah’s outdoor products cluster include businesses such as Rossignol, Petzl, Peregrine, Voile’ Ski Equipment, Scott Sports, Goode Skis, Dale Boots, Dynastar, Nidecker, Lone Peak, Lizard Skins, Black Bottoms, Reynolds Cycling, DFG and Flat Attack. Heward says there is great synergy between Utah’s outdoor product companies. “We may be competitors in some respects, but we may also be suppliers to each other as well.”
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