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Business Observer Friday, Nov. 20, 2015 6 years ago

Economic Forecast | Tampa Bay

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This is a milestone of sorts for the Business Observer's annual economic forecast issue: It's the second year in a row that cautious optimism isn't the overriding theme of the day.

Bill Olson
President, Olson Family Groves | Agriculture

Company: Olson, a third-generation citrus grower whose grandfather started the business in the 1920s, expects to lose 25% of fruit production due to greening. It's a disease caused from bacteria spread by the Asian citrus psyllid that ruins the taste and appearance of the fruit. “That's just the way it is unless you have a ton of money to fight greening,” Olson says.

Greening and its impact has forced Olson to go from eight full-time employees — plus up to 50 seasonal workers — to one over the last decade. Profits have been cut in half. Olson no longer can afford seasonal workers, so he and his one employee take care of the grove work.

Industry: The USDA's second forecast of the 2015-16 season, released Nov. 10, projects citrus production to reach 74 million boxes. That's a decline of more than 74% since the peak of production less than 20 years ago, when it was at 244 million boxes. “To me, that's not enough product to even be considered an industry anymore,” Olson says.

And with the expense required to fight greening, many small growers such as Olson are either selling to developers or abandoning the property. Says Olson: “There are some promising things in the works, but what we really need is a miracle.”

The closest he will get to that in the short-term is a pair of new fruit varieties, the Tango and Sugar Belle. Both are sweet tangerines and are said to be greening-resistant.

Region: In an effort to help save growers, the federal government, as well as some juice plants and co-ops, created tree programs. These programs offer new trees and removal of infected ones. But requirements are stringent and once the trees are in the ground, there are still maintenance costs. “There's just no way me and other small, family-owned growers can pay for the care for the trees,” Olson says. “It takes twice as much of everything - chemicals, fertilizer and water.”

Many growers have turned to alternative crops such as peaches and blueberries. Olson says planting peaches was an effort to generate revenues, but also to save face as a farmer. “Personally,” he says, “I wanted to grow something I could be proud of again.”

— Anita Todd


Haley Crum Blanton
Vice president of client services, FrankCrum | Human resources

Company: The rollout of the Affordable Care Act has been the biggest challenge for FrankCrum, a professional employer organization and human resources consulting firm. “Being able to act as a consultant to navigate through ACA would be a very valuable skill,” Crum says. The next big thing, says Crum, is developing a solid benefits platform, especially one that will avoid issues with ACA.

Despite the health insurance-related challenges FrankCrum had a strong year in 2015, growing gross revenues 13%. FrankCrum, unlike some of its competitors that only do business in Florida, has a national focus.

Industry: The struggle with ACA is hardly unique to her firm, Crum says. But the same can be said about opportunities to capitalize on that challenge. Currently, the market penetration rate of PEOs is about 5%, she says, and it should be “a lot higher, but it's not an easy sell and it's hard to get people to wrap their brains around it.”

There is a bright side, however. Because keeping up with ACA is the biggest challenge for the industry, it also presents the biggest opportunity for growth, Crum says. “Reaching a penetration rate of about 15% to 20% in the next 10 years doesn't seem far-fetched,” says Crum, “especially with ACA because it's constantly like a sprint.”

Another industry challenge: Florida has a heavy population of PEOs, Crum says, which means competitors know each other well. It makes the region somewhat “cannibalistic” at times, she says.

Region: Courtesy of the rebound in the economy, businesses are hiring again, increasing payrolls and offering incentive plans, Crum says, “which is great.”

From a national perspective, “Tampa is hanging in there,” with other big metro cities FrankCrum is associated with, Crum says. The entire region benefits from the expansion of large companies, such Amazon and Whole Foods, that come to town and hire hundreds of people.

- Steven Benna


David Etheredge
CEO and co-founder, SavvyCard | Technology

Company: Customers, says Etheredge, rave about the capabilities of SavvyCard, a software product that allows users to create their own personal mobile Web application. It's similar to a digital business card with features that include call, text and email buttons; business profiles; and a share component, where SavvyCard can be a landing page in a marketing campaign.

Yet Etheredge says the business, founded in 2010, will only break out nationally in sales with a tipping point in visibility. Etheredge says 2016 will be a big year for that goal: He's currently meeting with several national marketing and public relations firms and hopes to hire one soon. “It's just like anything else,” says Etheredge. “We need our brand and company to be seen as something indispensable.”

Industry: Etheredge, who previously worked in senior management roles at Walt Disney Interactive and Hasbro, says two of the main topics people talk about in the industry are what's not here. Namely, that's a lack of solid senior managers to hire or poach from another firm, and a funding gap for middle-stage tech companies. The hiring side, he says, requires diligence and patience. The funding side goes back to awareness. “Raising the capital can be pretty easy if you are in front of the right people,” he says. “So it's a visibility thing.”

Region: Residential real estate is SavvyCard's first market for sales, so the company has deep connections there. Etheredge says he hears companies in real estate and related industries are doing well, and hiring, which he expects to carry over to 2016. “There is a general sense of well-being with the economy,” he says.

— Mark Gordon


Raphael Perrier
Owner, Kahwa Coffee Roasting | Coffee, retail

Company: Perrier says the St. Petersburg-based retail and wholesale coffee company is “exceeding goals,” ending the year with $3.9 million in revenues. He expects the company to reach $5 million to $6 million in 2016 sales.

Growth expectations stem from several big upcoming deals: a partnership with the NewsLink stands at the Tampa International Airport for brewed coffee and beans; wholesale deals with HSN; and an upcoming order for 35 grocery stores. There's also a retail expansion, with a Westchase store and St. Petersburg drive-thru cafe — the company's seventh and eighth locations — opening in the last few months and a Sarasota location by December. Perrier is also finalizing a franchise deal in Sarasota for four additional locations.

Industry: The coffee industry is booming. Says Perrier: “Just look at Peet's Coffee, buying everybody. Everyone is healthy and doing well.”

Brazil is producing really good coffee, despite the scare about its crops, Perrier says. “The demand is there, the crops are there,” he adds. Coffee prices are the lowest in more than four years, meaning coffee companies have more money to invest in retail or wholesale. “It frees up capital for expansion,” he says.

Region: More coffee companies have entered the Tampa market recently. “Competition is healthy,” says Perrier. “It pushes people to the best — best for the company and also the customers.”

Sometimes Perrier believes there is too much rivalry among the smaller shops, when those businesses should be focused on the No. 1 competitor, Starbucks. He doesn't see the other local coffee companies as having similar business models, because it is rare that a company competes in both the retail and wholesale markets, like Kahwa does.

— Traci McMillan Beach


Brian Manning
CEO, The Carpet Store | Flooring, home services

Company: Manning says the solid economy has been pivotal for The Carpet Store. “It's allowed us to invest more without having the concerns of falling,” he says. The Carpet Store recently opened its fourth location, called Your Flooring Warehouse, in Sarasota and looks to open one more location in the next year.

Getting that new retail location will be a challenge, Manning says, because finding enough space is difficult and there is high competition in strip malls. “They're either old, dying eyesores or new and looking for the big name players,” Manning says of strip malls.

Industry: The biggest obstacle with the flooring industry, Manning says, is the inability to be completely in control. The ups and downs of the industry as a whole are correlated with the housing market. Fortunately for Manning and The Carpet Store, the housing market has improved, and he says sales grew as a result.

The outlook for 2016 and beyond is positive, Manning says, especially if the middle class continues to get stronger. Retailers in the flooring industry, he says, “lost their middle class customers when the economy took a hit in 2008. But as salaries go up again, we should improve.”

Region: Florida as a whole, and specifically the Sarasota and Tampa regions, has a “phenomenal outlook,” Manning says. Aside from the housing market and the rebound in the economy, each region is especially ripe for the retirement community, which is expected to grow considerably, Manning says. The benefit will come in the form of increased stability, which bolsters The Carpet Store's long-term outlook. “I really cannot imagine too many areas that are better to be in,” Manning says.

- Steve Benna

For more data on the Gulf Coast's economy, see our by the numbers charts.

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