Technology, Manufacturing & Lifestyle Products Industry Report
INDUSTRY INSIDERTECHNOLOGY, MANUFACTURING& LIFESTYLE PRODUCTSINDUSTRY REPORT2017
BOARD OFDIRECTORSECONOMIC DEVELOPMENT BOARDPAM CHANTER, CHAIRJORGE ALCAZARTERRI DENTETERRY GARRETTKATHRYN HECHTLINDA KACHIUWAYNE LEACHMICHAEL NICHOLLSMICHAEL TOMASINIBEN STONE, Executive DirectorEDB FOUNDATION SPONSORSPRESENTING LEVELFOUNDATION LEVELPREMIER LEVELEXECUTIVE LEVELAMERICAN AGCREDITNORBARAMERICAN RIVER BANKSONOMA COUNTY ALLIANCECOMCASTSUMMIT STATE BANKGEORGE PETERSEN INSURANCEVANTREO INSURANCEKEEGAN & COPPIN CO.ZAINER RINEHART CLARKEMIDSTATE CONSTRUCTIONMEDIA LEVELSONOMAEDB.ORGPG. 2
CONTENTS4.EXECUTIVE SUMMARY6-8.TECHNOLOGY, MANUFACTURING &LIFESTYLE PRODUCTS: SONOMA COUNTYSONOMAEDB.ORGPG. 3
TECHNOLOGY, MANUFACTURING, AND LIFESTYLE PRODUCTS INDUSTRY INSIDEREXECUTIVE SUMMARYJanuary 2017The Sonoma County Economic Development Board (EDB), in partnership with the Sonoma CountyWorkforce Investment Board (WIB), is pleased to present the Technology, Manufacturing, andLifestyle Products Industry Insiders report. Our research partner, Moody’s Analytics, provided theresearch for this report.HIGHLIGHTSandThespecialtyfoodbeverage manufacturing sectorcontinues to grow at a rapidclip, in terms of both profitsand employment. This growthoccurs as more consumersembrace organic and artisanalfood products locally andacross the nation. For example,sales of organic food andnonfood products have grownnearly three times as fastasconventionalofferingsin the last decade. Robustgrowth in food and beveragemanufacturing lifted overallfactory payrolls to the highestlevel since 2006.Technology firms in thecounty are thriving financially;however, this has not translatedinto a noticeable increase inmanufacturing jobs within thecounty. Many locally basedfirms are adding research anddevelopment staff in the county,but manufacturing positionsare going to lower-cost centersin the U.S. and overseas. Whiletechnology firms’ profits willbenefit from increased demandfor faster internet and wirelessconnection additional growthin high-tech manufacturing inthe county will be negligibleLabor costs make up the largestshare of operating expensesfortechproducersandspecialty food manufacturersalike, and the tightening labormarket foreshadows furtherincreases in operating costs.This will compress profitmargins, which will encouragefirms to look to lower-costsareas or increase investment inautomation. While automationwill reduce the need for newworkers, the robust startupculture and increased accessto Bay Area venture capital willpropel growth.Thank you for your interest in the Economic Development Board’s research. For additional information,questions, comments, or suggestions please contact us at (707) 565-7170 or visitwww.sonomaedb.org.SONOMAEDB.ORGPG. 4
SONOMAEDB.ORGPG. 5
TECHNOLOGY, MANUFACTURING, AND LIFESTYLE PRODUCTS Sonoma CountyRecent Performance. Sonoma County’shigh-tech and specialty manufacturingindustries have reached a fork in the road.While specialty food, beverage and lifestyleproducts manufacturers are expanding swiftly, high-tech manufacturing and tech-relatedprofessional services are flagging. Totalmanufacturing employment and output havestaged a modest comeback as artisanal foodand beverage markers grow their footprintboth locally and nationally, but employmentin high-tech industries has not appreciablygrown over the past six years. Large medicaldevice, electronics and broadband equipment makers retain a sizable presence in thecounty, but their share of total job and output growth has diminished.Consumers are embracing organic andartisanal food products with growing enthusiasm, helping to drive expansion at countyfood and beverage producers. According tothe Organic Trade Association, U.S. sales oforganic foods surged 11% in 2015 to 40billion, or nearly 5% of total domestic foodand beverage sales. Sonoma County farms,dairies, organic meats and food processorshave been quick to seize on this trend andare grabbing shelf space at both local andnational supermarkets. Industry expansionhas spurred additional hiring: Employmentin food and beverage manufacturing has increased by a third over the past four years.Greater spending on outdoor recreationis lifting sales of outdoor sports equipmentand accessories designed in Sonoma County.Meanwhile, increased awareness of ethicallysourced and fair trade practices has bolsteredlocal cosmetics and apparel producers.Though a small share of total employment,apparel manufacturers are expanding quickly,lifting apparel manufacturing payrolls totheir highest point in three decades.County technology firms are thrivingfinancially, but rising domestic and international sales have translated into few newmanufacturing jobs in the county itself.And though locally based firms are addingresearch and development staff, most newpositions will be located in lower-cost centers in the U.S. and overseas. For example,Keysight Technologies will create severalhundred high-paying software developmentjobs in Atlanta, where it will benefit fromsynergies with the University of Georgiaand lower-cost laboratory and office space.Similarly, Medtronic will add research staff inEurope and Latin America, but few new jobsMOODY’S ANALYTICS / December 2016 will be created at its regional headquarters inSanta Rosa.Sonoma County’s telecommunicationsand biotech companies are faring well, butrecent expansion has done little to lift overalltech payrolls. Broadband equipment makerCalix has introduced a flurry of new productsover the past year, cementing its status as apreeminent provider of copper and fiber-opticnetwork solutions. Meanwhile, rising sales ofSonoma Pharmaceutical’s proprietary woundtreatment products have propelled four successive quarters of revenue growth. However,these industries employ fewer workers thanlocal electronics and medical device firms,and they have given rise to few net new establishments in the past three years.Macro drivers. The U.S. economy isadvancing steadfastly in the face of globalheadwinds and greater policy uncertainty inthe aftermath of the U.S. presidential election. The incoming administration’s protectionist stance and pledge to take a hard lineon immigration will curtail the economy’slong-run growth potential, but the extentof the blow will rest on how forcefully thesepolicies are implemented. Despite these constraints, the economy’s fundamentals remainstrong, and Moody’s Analytics expects theeconomy to strengthen in 2017 as the dragfrom low energy prices fades and businessequipment spending rebounds.The labor market is marching toward fullemployment and is adding jobs at nearlytwice the rate necessary to absorb the increase in the working population. Though thepace of job additions will begin to cool nextyear as the pool of idle workers thins, robustjob and wage gains will clear the path forthe Federal Reserve to resume its tighteningof monetary policy. Sturdy household balance sheets will ease the transition to higherinterest rates. Household debt burdens areat their lowest in nearly three decades, andfaster wage growth will clear space in consumers’ budgets for discretionary purchases,including food and beverages as well as outdoor sporting goods and apparel.Business spending on capital equipmentand intellectual property will end its prolonged lull as stronger wage gains promptfirms to invest in labor-saving technologies.Though investment in software and IT equipment has faltered over the course of thecurrent business cycle, this will change as thelabor market tightens. Increased outlays forsoftware, IT and networking equipment willdeliver a much-needed boost to county electronics and broadband equipment makers.Venture capital flows to Sonoma Countyhave slowed over the past year, mirroring thenational trend. However, demand for seedfunding will pick up as more organic and artisanal foods producers seek to expand nationally. Though IT and medical device firms havetraditionally attracted the highest share ofventure funds, more county food producersare seeking startup financing. Access to plentiful startup financing in the Bay Area and inthe county itself will enable local producersto better compete on the national stage.Industry drivers. Consumers are growingincreasingly health-conscious, and demandfor organic and artisanal goods will strengthen further in coming years, to the benefit ofSonoma’s producers. Though organic produce, dairy, meat and snack foods tend to bemore expensive than conventional offerings,organic purchases are on the rise across income levels. According to the Organic TradeAssociation, eight in 10 shoppers purchasedorganic food products at least once in thepast year, a marked increase from the startof the decade. Sonoma County’s large constellation of food and beverage makers willbenefit from a broader consumer base asmore supermarkets stock their shelves withorganic and artisanal goods.Increased leisure spending and greaterconsumer concern for fair trade practices willplay into the hands of the county’s outdoorequipment and apparel makers. Thoughoutdoor equipment giant CamelBak carriesout most of its production overseas, greaterspending on outdoor recreation and equipment will support design and product development teams within the county. Meanwhile,rising demand for ethically sourced clothingwill bolster organic apparel producers such asIndigenous and Farm Fresh Clothing.Sonoma County’s technology firms willbenefit from increased demand for faster internet and wireless connection speeds, whichwill drive revenue growth at electronic testing and broadband equipment makers. Withthe race to develop 5G connection speedsalready under way, sales of Keysight Technologies’ market-leading signal analyzersand oscilloscopes will accelerate. As smartdevices such as watches, intelligent homeappliances, and self-driving automobilesbecome available to mainstream consumers,demand for broadband and electronic testingequipment will strengthen further.6
TECHNOLOGY, MANUFACTURING, AND LIFESTYLE PRODUCTS Sonoma CountyThe outlook for the Affordable Care Act isincreasingly uncertain, but an aging population will sustain demand for advanced medical procedures and new medical equipment.For example, early diagnoses of arterial disease will lift sales of coronary stents producedlocally by Medtronic. Advances in vascular disease treatment will bolster sales of abdominalcatheters produced by Endologix at its SantaRosa plant. Meanwhile, the advent of genebased and other personalized treatments willcreate opportunities for the county’s smallermedical device and biotech firms to flourish.Pricing. Robust consumer demand forartisanal and organic food products will makefor a favorable pricing environment for county producers, although increased competitionwithin the organic foods segment will applyrestraint. Though national apparel makersremain locked in a pricing war, consumers’willingness to pay more for ethically sourcedmaterials will enable county apparel makersto avoid discounting. In contrast, outdoorequipment makers will be hard-pressed topass along price increases since most localfirms rely on foreign production; a strong dollar and fierce competition among sportinggoods retailers will further turn up the heat.Tech firms’ pricing power will be mixed asthe downward trend in semiconductor pricescontinues. Though Keysight Technologiesholds a dominant position in the market forelectronic testing equipment, the strong dollar will give European and Asian competitorsmore leeway to offer lower prices. On theother hand, pricing power for medical devicemakers will hold as hospitals upgrade equipment and increased consumption of healthservices by an aging population sustains demand for new medical devices.Operating expenses. Labor costs makeup the largest share of operating expenses fortech producers and specialty food manufacturers alike, and the tightening labor marketheralds further increases in operating costs.Though the 2001 tech bust swept away muchof the county’s high-tech manufacturingbase, surviving plants are highly automatedand specialize in high-value production. Thiswill shift the focus of cost-containment efforts to R&D, where worker compensationis significantly higher than in emerging techhubs such as San Diego, Atlanta and ProvoUT. Advances in emerging markets haveincreased the feasibility of conducting R&Doverseas. The county’s food and beveragemakers will also face higher labor costs, but lower prices for livestock feed and agricultural commodities will provide relief.Profitability. Rising labor costs will compress margins, though profits for food, beverage and lifestyle products makers will holdfirm. Though competition in the organic foodssegment is heating up, robust demand willdrive revenue growth and preserve countyfirms’ pricing power. According to the U.S.Department of Agriculture, sales of organicproduce, dairy and meat will increase at adouble-digit pace over the next two years, andconsumers’ willingness to pay a premium fororganic and artisanal products will safeguardprofits despite the county’s high business andlabor costs. County tech producers will alsobenefit from robust demand for innovations,but high labor costs will pose an obstacle tothe efficient expansion of R&D. As the labormarket tightens locally and nationwide, countytech firms will set their sights on lower-costlocales to preserve bottom-line growth.Long-term outlook. Consumers acrossthe income spectrum are exhibiting a growingawareness of the environmental and ethicalpractices of the food, beverage and lifestyleproducts they purchase, all of which confers apositive outlook for county producers. SonomaCounty’s renowned quality of life and reputation as a haven for organic and artisanal foodswill help local food and beverage producersgrab shelf space at supermarkets nationwide.Conventional supermarkets, big-box storesand buyers’ clubs now account for a greatershare of organic food sales than do naturalfood stores. While such a distribution channelwill bring greater competition from mass-market offerings and store brands, it also presentsan opportunity for county producers to capitalize on a growing consumer base.Ready access to venture capital in theBay Area and in the county itself will be acomparative advantage and will help smallerfirms and startups to expand more quickly.However, increased automation will limitthe need for new workers. While each newfirm will create fewer manufacturing jobs, arobust startup culture will propel growth innew establishments.Balancing the needs of growing food,beverage and lifestyle products industrieswill prove increasingly critical as smaller andmidsize firms expand domestically and internationally. While the industrial vacancy rateremains elevated, larger manufacturing facilities are in short supply. County stakeholderswill need to work closely with local busi-nesses to balance demands for new industrialspace with sustainable practices that preservethe county’s natural bounty.Sonoma County’s tech producers havebenefited less from the broader Bay Area techboom than in neighboring Oakland and Marincounties, and additional growth in high-techmanufacturing and services will be negligible.An aging population globally and the increasing affordability of smart technologies willsustain existing firms, but high business costsand a shortage of new engineering graduateswill curtail growth in high-tech manufacturing and R&D.Upside risks. Rising tourist visits will create upside risk for the county’s food, beverageand lifestyle products producers. As betterwage gains enable visitors to Sonoma’s winecountry to extend their stays, partnershipswith local restaurants and tour operatorscould cultivate new customers while increasing brand recognition and goodwill. Thecounty’s recent vote to join the nation’s largest GMO-free agricultural zone could driveadditional sales of local food and beverageproducts should consumers embrace GMOfree products with the same fervor they haveorganic and artisanal foods.A faster than expected transition to cloudbased business solutions would bolster salesof county broadband and electronic testingequipment. Meanwhile, a larger embrace ofsmart technologies in the U.S. and globallywill increase demand for electronic testingequipment. Finally, as rents in neighboringMarin County rise, spillover from the booming biotech industry could drive growth inhigh-paying life-sciences research jobs.Downside risks. Failure to secure adequate industrial space could cause smallerand midsize firms to expand elsewhere, sapping manufacturing jobs and growth in newestablishments. Higher U.S. interest rateswill increase the return on safe-haven investments, potentially thinning the pool of venture capital funds for consumer products.The return of the ACA’s medical devicetax could hurt the profitability of county producers. The suspension of the ACA’s medicaldevice tax has been a boon for local equipment makers, but is set to expire at the endof 2017. Given intense focus on cutting costs,the return of the tax could mean the loss ofadditional high-tech manufacturing jobs.Jesse RogersDecember 2016MOODY’S ANALYTICS / December 2016
TECHNOLOGY, MANUFACTURING, AND LIFESTYLE PRODUCTS Sonoma CountyFood, Beverage Makers Lift Factory PayrollsOrganic Sales Bolster County ProducersManufacturing employment, ths bil25Food and beverageHigh techApparel60Other2.0Organic nonfood sales, U.S. (L)Organic food sales, U.S. (L)GPO, food and bev. mfg, Sonoma County 1121314150.803 04 05 06 07 08 09 10 11 12 13 14 15 16E16Sources: Organic Trade Association, BEA, Moody’s AnalyticsSources: BLS, Moody’s Analytics21The performance of Sonoma County’s high-tech and specialty manufacturing industries has bifurcated in recent years, with local techproducers benefiting little from the broader Bay Area tech boom. Robust growth in food and beverage manufacturing has hoisted overallfactory payrolls, which stand at their highest level since 2006. However, workers in food manufacturing earn less, on average, than theircounterparts in the local medical device and electronics industries.As a result, each additional manufacturing job will contribute less towage and personal income growth.Consumers’ growing concern for the origin and ethical practices ofthe food, beverage and apparel products they purchase has been aboon for organic goods producers in Sonoma County. Sales of organic food and nonfood products have grown nearly three times asfast as conventional offerings over the past decade. Robust demandfor organic and ethically sourced goods has helped local producersexpand to U.S. and international markets. More county producersare scaling up locally, creating positive externalities for the local realestate, transportation and distribution industries. Giving Food and Lifestyle Startups a LiftSeed Funding Rediscovers the Consumer mil, venture capital placements, California, 4-qtr MAEstablishments, #, food, beverage, apparel mfg*, 2010Q1 100900160Consumer goods800700Medical device600Electronics, networking,and telecommunications500SonomaSanta BarbaraSacramentoMontereySanta Cruz150140130400120300110200*4-qtr MA100100900101112131415091610111213141516Sources: BLS, Moody’s AnalyticsSources: PwC, Moody’s Analytics43After chasing firms in the software, medical device and networkingand electronics industries, venture capital has embraced innovatorsin the consumer goods segment. Venture capital outlays to consumer goods startups, including food and beverage makers, have tripledin recent years and surpass all categories save software. This has created opportunities for local food producers to expand. For example,Healdsburg-based New Barn, a producer of organic nondairy milksand creams, will utilize new seed funding to supply alternative dairyproducts to Whole Foods cafés.MOODY’S ANALYTICS / December 2016 Breakneck sales of organic and ethically sourced food, beverage andapparel have spurred a surge in new-business formations across thestate. New-business formations in Sonoma County have kept pacewith those in other California counties known for organic farmingpractices and quality of life. In the long run, balancing food, beverage and apparel producers’ need for adequate industrial space withefforts to preserve the county’s natural beauty will prove critical,especially as firms expand to meet demand from markets across theU.S. and overseas.8
SONOMAEDB.ORG707 - 565 - 7170141 STONY CIRCLE, STE. 110, SANTA ROSA, CA 95401
local cosmetics and apparel producers. Though a small share of total employment, apparel manufacturers are expanding quickly, lifting apparel manufacturing payrolls to their highest point in three decades. County technology
Live a Wellness Lifestyle dōTERRA’s Wellness Lifestyle Pyramid illustrates how wellness is a combination of lifestyle and healthcare. When lifestyle is the focus, health is naturally achieved and maintained. Your daily habits make all the difference. As you live these principles and use dōTERRA’s powerful products, featured in the Daily
16. The time period for the Healthy Lifestyle Goal will be from July 1, 2020 – May 15, 2021. Healthy Lifestyle Portfolio 17. A Healthy Lifestyle Portfolio will be developed to document the competitor’s specific goal and efforts to practice a healthier lifestyle through exercise, nutrition, and/or avoiding risky behaviors. 18.
Thank you for your purchase of a Bose LIFESTYLE DVD home entertainment system. It will serve as the center of your home theater, providing superior audio performance for music and movies. There are four different systems, the LIFESTYLE 18 Series II, LIFESTYLE 28 Series II, LIFESTYLE 38, and th
Greenstone CL. A Commentary on Lifestyle Medicine Strategies for Risk Factor Reduction, Prevention, and Treatment of Coronary Artery Disease. Am J Lifestyle Med 2007; 1: 91-94 B. COMPARISON WITH OTHER NONTRADITIONAL TYPES OF MEDICINE Lifestyle Medicine is based on the recognition of the central role of lifestyle in many chronic disease
take the lifestyle option every time. Lifestyle is a dividend of prosperity. It is the Australian penchant for living in a small town beyond the metropolitan fringe and commuting back into town for work. Or, ultimate lifestyle, working locally. Or ultimate ultimate lifestyle, working in a city-funded job but from home. Oh what pure Australian .
Value Migration Unleashed by Technology E - commerce Amazon, Flipkart . 9 . Value migration due to Lifestyle Changes Transportation Indigo . 10 . Value migration due to Lifestyle Changes Apparel Page, Arvind . 11 . Value migration due to Lifestyle Changes Diagnostics Dr. Lal, SRL . 12 . Value migration due to Lifestyle Changes Multiplex PVR . 13
Advanced Manufacturing is the combination of information, technology and people, to add value to a manufacturing business or sector.Closely related to ideas such as Smart Manufacturing, Industry 4.0, and Industrial Digitalisation, Advanced Manufacturing builds on the agile, flexible and computer integrated manufacturing of the last 20 years.
RFID technology is widely used in the manufacturing industry [5]. RFID technology significantly facilitates horizontal, vertical and end-to-end integration, which is the core objective of Industry 4.0 and digital transformation. „ENGINEERING TECHNOLOGIES IN MANUFACTURING OF WELDED CONSTRUCTIONS AND PRODUCTS, SBW 2019" .
