Regional Report: Southwest Colorado

Southwest Colorado conjures images of Durango or Telluride for the skier types. Economic development leaders and local business executives don’t mind those associations, as long as they bring recognition to the lesser-populated portion of the state. In the nine closest counties, the total year-round population is roughly 107,000, about one-sixth that of El Paso County, the state’s most populous.

Still, this beautiful region, including the San Juan Mountain range, is home to a wide variety of businesses and internationally known products, despite the lack of rail service or interstate highway. The area includes creative and artistic businesses covering anything from music to model trains, entrepreneurial efforts supported by two business accelerators, subsidiary offices of technology companies, nutrition and beverage companies, a strong representation of outdoor product manufacturers, and growing companies serving the natural resources industry.

Sure, the area depends on tourism and oil and gas extraction, but business leaders say any company can thrive if its people are clever, the operation is well-financed and well-managed. Southwest Colorado faces business challenges common to rural regions, ranging from employee recruitment and retention to transportation logistics.

Overcoming Rural Challenges

Tom Barney, CEO of Osprey Packs, believes the common thread for successful regional businesses is a certain amount “scrappiness.” For example, since Osprey has manufacturing contracts in Vietnam and a design studio in California, the company uses remote-controlled servo cameras to keep an eye on
its new packs.

Rocky Mountain Chocolate employs its own fleet of eight temperature-controlled 18-wheelers and nine full-time drivers to deliver products across 41 states. For efficiency and cost savings, fleet drivers backhaul ingredients and packaging. They also transport medium-sized loads for local companies, such as batches of beer, coffee or Durango Soda Company’s Zuberfizz and CocoFizz.

Two years ago the LaPlata County Economic Development Alliance created a local “trailing spouse” program to help recruit and retain quality employees in two-income families. Spouse resumes are distributed for consideration to some 150 companies.

Tuffy Security Products, located south of Cortez, carefully plans its typical twice-weekly shipments of 30,000 to 40,000 pounds of steel from Denver so that supplies are well-stocked before winter driving season.

Product diversity abounds

SoundTraxx, based in Durango, designs and produces digital sound systems for model railroads and is building a new 20,000-square-foot manufacturing facility for a June move. Hiring engineers is one challenge for the 25-year-old company, according to owner Nancy Workman, so sales shows double as recruitment opportunities.

This spring, Freenotes Harmony Park in Durango — a producer of outdoor musical instruments – will double its manufacturing space. First established in a musician’s garage, Freenotes now sells its song-making machines from Australia to Peru.

Originally motivated by a break-in to his Jeep on the Front Range, the founder of Tuffy Security Products now employs 26 staffers who engineer, test and manufacture steel security containers for recreational and professional vehicles. The pick-proof products are used by agencies from the Border Patrol to the Secret Service and are shipped around the world.

Tech companies on the rise include AMPT, a rocket engine test company in Durango, and Airborne Media Group, whose Audioair application, allows remote listening of muted TV screens on personal devices.

Economic experts point to growing natural resource service companies, such Ecosphere Environmental Services, or Geocosm, which conducts research and modeling for the petroleum industry. Pagosa Verde, based in Pagosa Springs, is completing exploratory drilling to determine the extent of geothermal resources for a $26 million renewable energy power plant in Archuleta County and has five other geothermal projects in development in the state.

Alpacka Raft in Mancos sells hand-made, light-weight, packable rafts mailed to adventure junkies around the world. Top sales come from Europe, New Zealand, Australia and Norway, plus as far flung as Antarctica.

“We don’t need to be in an urban center. I don’t feel like I’m missing anything,” said Alpacka founder Sheri Tingey. “There are no advantages that we would have, aside from better access to qualified sewing machine repairmen.”

Southwest success

Top business success stories from 2014 out of Durango, the most populated city in the region with roughly 17,000 residents, came from Zuke’s All Natural Dog and Cat Treats, sold to Nestlé Purina PetCare in January, and Mercury Payment Systems, sold for $1.65 billion in May to a Cincinnati firm.

Based out of southwestern Colorado since 1990, Osprey Packs has grown into one of the largest technical backpack companies in the world, with products sold in 62 countries. The company will shift some operations – opening a 108,000-square-foot distribution center closer to rail service in Ogden, Utah, in April – but a net 85 employees will remain in the Cortez headquarters.

Rocky Mountain Chocolate Factory in Durango has 150 employees at its 53,000-square-foot factory and has expanded to 366 retail and franchise locations across the world including in Saudi Arabia, Japan, South Korea and a recent agreement in the Philippines.

Playing up Southwestern charm

This laid-back, outdoor-oriented region often attracts “urban refugees,” according to Ed Morlan, Region 9 Economic Development District’s director, those looking for a family-friendly atmosphere, minimal traffic and low crime rates. Company leaders leverage the area’s natural assets when recruiting and seek out employees who value lifestyle as much, if not more than career.

“We sell the remoteness and the outdoor lifestyle to employees and the authenticity of the products to customers,” Barney said. Regional companies are “led by people who do not crave the assets of the Front Range; they like a big small town.”

Osprey promotes lunchtime mountain bike rides and created asset-based compensation with five vacation days for group outings, volunteering, powder days or stress-free days.