How Minnesota became a heavyweight in the bicycle industry

Minnesota's bike culture is a big reason why the state is on top of any bicycling list that matters.

The culture's helped cultivate a healthy manufacturing and assembly hub here for bikes and bike parts, putting the state at the center of that global specialty business.

The local players say it's why they can't imagine going anywhere else.

"We pretty much find everything we need here in the Twin Cities," says Eric Hawkins, CEO of St. Paul-based Park Tool, the world leader in bike tools in part to the great manufacturing support in the St Paul area.

"I know other manufacturers in the bike industry  -- specifically, let’s say they are in North Carolina -- they have to ship a product 300 miles to get the kind of plating they want. Or they are bringing in parts from Ohio because they are the only ones that can do that."

Park makes about about 300 parts, roughly 75 percent start in Minnesota. The process to make some of those parts requires they be sent out to their manufacturing facility up to six times. Being able to send it somewhere close is a huge competitive edge.

"Obviously there is a lot of industry here," Hawkins adds. "These guys will specialize in stamping, or machine parts or plating. We do a lot of types of plating. Chrome plating, brass, we've done some copper and so on. There is a supplier in town for everything. And we have a choice of four of five of those." He says the same goes for injection molded plastics.

MPR's Molly Bloom got a behind-the-scenes look at Park Tool's operation. Check out her video:

Strong demand in Minnesota

Park Tool's roots trace back to the 1960s in a Schwinn shop in St Paul's Hazel Park neighborhood. By 1977, the shop had opened 3 locations and sold more bikes than any Schwinn store in the country. It seemed like Minnesotans couldn't get enough of their bikes.

Photo by Mo Riza via Flickr

While the bikes were flying out the door, shop mechanics were also making bike stands and other tools to make their life easier. They found a good market for those tools with other bike shops. Fifty years later, Park Tool is no longer in the Schwinn business, but it's the global leader in bike repair tools.

Need-driven makers

Just as Park Tool was born out of bike shop repair necessity, another Minnesota bike industry giant Quality Bicycle Products grew as it discovered unmet needs. Bloomington-based QBP is keenly attuned to bike culture. It is a company run pretty much by bike geeks.

QBP distributes parts to 5,000 independent retailers and the company also has various bike brands that serve a range of niche riders.

QBP CEO Steve Flagg explains how the process has worked for his company:

We noticed bike commuting was growing. So we created brands tailored to that. Or, the fat bike phenomenon. We created the fat bike – we started calling it a snow bike but we realized it worked in the summer as well. ... We sell thousands of them. It’s a good example of working toward finding the need of the customer and creating jobs as well.

Flagg encourages employees to commute by bike. He estimates that the company saved $170,000 in health care costs over three years and more than $300,000 in employee productivity annually. Commuting also has the benefit of keeping employees close to the product and lifestyle at the center of their business.

Could it be done elsewhere?

"The people in Minnesota are great for employees," Park Tool's Hawkins says. "It really is a different work ethic here than in other parts of the country. It really is."

But Hawkins is concerned about the tax climate.

When the Legislature was considering taxing business services he worried about the implications for his company. But the local manufacturing based and the quality of employees would be hard to match elsewhere.

QBP's Flagg says he can't imagine his company being based anywhere else. He echoes Hawkins' view on the labor pool.

"Minnesota has a great work ethic, fabulous employees. The educational resources here are rich. There’s a great bicycle culture here. First and foremost we’re a bike company and it’s easy for us to find passionate cyclists with amazing backgrounds. We can tap these professions that we can utilize. That’s an advantage for us being in Minnesota."

A resilient industry

Overall, manufacturing has been in decline across Minnesota for the past 20 years. But not for the bike industry. The business is growing worldwide.

Flagg said QBP saw growth, albeit mild during the recent recession. “In tough times," he says, "people turn to low cost transportation.”

Consistent growth lets QBP focus on reinvesting in infrastructure. “We haven't taken a lot out of the company and spent it on frivolous things," he says. "We’re always looking to the next 4-5 years. We used to be very happy building 3,000 a year – but today we’re going to hit 70,000 with only a few extra employees.” And the products that are made “are better quality and lower cost.”

Hawkins says Park Tool also saw growth during the recession "because we are on the maintenance side of a green industry." The company, he says, continues to "innovate at a frenetic pace," averaging almost 20 products per year for the last 8 years.

Duluth Bike to Work Day 2013, by outsideduluth via MPR News Flickr pool

Minneapolis is the most bike-friendly city in the U.S., and the bike friendliness doesn't end at the city limits. It extends across the state fueling tourism, transit and a bike industry.

The Twin Cities bike system is the envy of many cites around the world tracing the rivers, urban core and extending into many suburbs. The world class routes appeal to tourists and helps commuters get where they need to be year round. Bike trails are among the first routes to get plowed after snow blankets the metro area.

Duluth is banking on world class mountain biking trails to shore up its images as an outdoor adventure town. Rochester touts 85 miles of biking trails in the city. Explore Minnesota details the biking opportunities around the state in a biking guide offering an impressive account of the various trails across the state.

A University of Minnesota study estimates that trail-riding bicyclists spent $481 million annually while recreating, creating 5,880 jobs, most of them in the service industry. That amounts to roughly $40.6 million in state and local taxes.

Molly Bloom contributed reporting to this post

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