Many of this area’s businesses are based in real estate, agriculture and tourism, but the tri-county region also brims with craft manufacturers. Smaller companies may be less well-known. But they are important, because they help strengthen and diversify the economy.
Big businesses are “very unstable,” said Paul Major, the Telluride Foundation’s executive director. “They get overconcentrated (and lack) diversity, so when commodity prices go down, they’re all standing with their pants around their ankles asking, what happened to our economy here?”
Major says that even when big businesses go bust, niche businesses can still compete.
“(Niche businesses) are not commodified because they’re so specialized,” he said.
In 2011, Chris Fish co-founded Telluride Brewery. The company brews 30 different types of beer in Lawson Hill with 23 full-time employees, all of whom recently gained health insurance benefits.
“In the last election we heard a lot about diversifying our economy and having jobs that aren’t tourist-based,” Fish said. “And we’re the very definition of that.”
“Tourism does contribute to our business,” Fish added. “But beer is pretty recession-proof. And our number one goal is taking care of (our employees) so that they don’t have to leave us.”
Through branding, Fish has turned his company’s isolation into a business advantage.
“The branding we have built around the name Telluride has really given us an advantage in selling around the state,” Fish said. He also cited the exposure that his brand has achieved in partnering with Telski during the winter months. The brewery has served as co-sponsor of the mountain for the past two years, and will for the next five years.
In the winter of 1991, Mick Hill opened the first Steaming Bean coffee shop in Telluride at the base of Lift 7. The following year he opened his flagship shop on main street; the success of that business financed additional shops in Durango and Gunnison. By 2007, he forewent retail in favor of wholesale, and has been roasting whole-bean and ground coffee from his current Lawson Hill location ever since.
Today Hill imports up to 15 different, single-origin beans. From them he produces six blends that are always in stock, for a total of 25 rotating coffee types, along with flavored coffees.
Like Fish, Hill taps into the Telluride name to gain an edge when it comes to branding. He also points to local feedback and support as an advantage — not just from long-time business supporters like Telski and The New Sheridan, but from local consumers.
“If something’s off (with the coffee), people come in and let us know,” Hill said. “And that’s invaluable.”
Mixed-metals artist Lisa Issenberg moved from Ophir to Ridgway in 2006, and launched her custom trophies and engraving company, Kiitella (a Finnish word that means “to thank, praise, applaud”).
Issenberg claims that the region is “only an advantage” to her business because not only does she live the life she loves to live, her business depends on the connections she makes across the outdoor industry with retailers such as Marmot, sporting event organizers like the American Alpine Club, the American Mountain Guide Association and USSA skiing, and various environmental organizations — all of which are simpatico with her mountain spirit.
Patty Denny launched her business, Telluride Truffle, in November 1997. The company is inspired by her love of mountain life; she named each of her core 14 truffles around local mountain themes, like the San Juan Caramel Bar and the best-selling Double Diamond Truffle. Her products are high-end, and appeal to a discerning clientele.
“The population here either has the money to buy them and knows quality,” Denny said, “or they don’t have the money but they know quality.”
In 2014, Bart Larmouth began working as sales manager at Ross Reels, manufacturer of high- quality fishing reels in Montrose. He points to the local riverscape as ideal for product-testing.
“We also have skilled labor here that a lot of people are not aware of,” Larmouth said. “And the city and the council have been very supportive.”
Disadvantages to operating in this region
All seven businessowners agree that — given their firms’ remote locales — shipping and trucking costs are significant.
Although Debbie Cokes says there’s no better place to be than Colorado when it comes to the hemp industry, working from the Western Slope presents challenges to her business, RxCBD, a start-up company in Ridgway that launched when marijuana was legalized in 2012. RxCBD manufactures industrial hemp and CBD-infused products for pets and their people out of a commercial kitchen in Montrose.
“In my industry, the Western Slope and the Front Range are two different universes,” Cokes said. “The major processing of the plant into the oil we use all takes place on the Front Range.”
Cokes also mentions access to laboratory services and employees (especially those with the skill sets she requires), and slow internet speed, as challenges to her business.
Telluride Brewery is one of the highest-altitude breweries in the country; Fish points out that adjusting the brewing process to high altitude lengthens the process.
More important to him, though, is the lack of affordable housing for employees in the Telluride area.
“Hopefully, our new town council will continue to work on affordable housing so we can keep our people here,” he said.
“The whole housing situation is really getting scary,” Denny said, “to the point where I wonder if I can continue in Telluride. I’m seriously thinking of branching out. I’m nervous about the situation. It’s dire.”
Denny also points to off-season as a challenge to her truffle business.
“We are only busy six months of the year,” she explained. “You make money and it evaporates during off-season months.”
During low-season, Denny employs three full-time employees, and as many as nine full-time employees during high season, using college students who “leave naturally.”
“I don’t lay off employees,” she said. “I try to keep them on. So that eats up profit.”
Online business and distribution
KJ Wood Distillers in Ouray produces two whiskeys from 100-percent southern Colorado grains, a gin and vodka.
In 2013, owner John Wood began operating his distillery out of an oversized RV garage in Berthoud. Within 14 months, his spirits could be found in almost 300 outlets statewide — which meant he needed to expand his company’s headquarters as soon as possible. In late 2014, he purchased land on Main Street in Ouray. The following year, he broke ground on a new building. In September 2016, he reopened his distillery in Ouray.
Immediately, Wood recognized the challenge of product distribution from a remote place. In Berthoud he had more access to the marketplace. Since moving to Ouray and completing new infrastructure, he has been trying to reestablish relationships with retail outlets.
“That’s the hurdle of being this remote,” Wood said. “There are fewer distributors who come to Ouray. The ones who do come tend to be the larger distributors. And they’ll carry our stuff, but the sales and marketing is up to me and my team. We lose a little bit of revenue margin there because I have to pay a sales force versus relying on the sales force of the distributor.”
Neither spirits nor beer is allowed to be sold online, nor shipped directly to customers in the state of Colorado.
The majority of the beer Fish manufactures is sold outside of town via distributors in Denver with the support of a three-man sales force.
“We do some self-distribution between Montrose and Durango, which accounts for 35 percent of sales, most of which is in Telluride and Mountain Village,” Fish said.
Similarly, 80 percent of the coffee that Hill produces is shipped out of town via UPS to 12 coffee shops, five of which are out of state (accounting for 30 percent of his sales), and to 30 Colorado supermarkets (40 percent of sales). The rest of his business is comprised of hotel sales and mail orders.
Twenty percent of what he produces is local, which he delivers himself, mainly to Placerville, Mountain Village and Telluride. Even though he launched a new website this past summer, online sales account for just 5 percent of his business.
“It’s hard to find customers and keep them online,” Hill said. “It’s easier with the supermarkets because you’ve got a captive audience. But as we all know, brick-and-mortar companies are suffering and some are going online now.”
Like the Steaming Bean, Ross Reels is a wholesale business.
“Ninety-nine percent of our business comes from an independent dealer network throughout the country to whom we distribute,” Larmouth explained. “Retail stores call in orders, and we ship to them. We also drop-ship directly to customers.”
Before Denny opened her retail shop 10 years ago, her truffle business was entirely online. Now just 34 percent of it comes from online and phone orders.
Because Kiitella is all custom-order, none of Issenberg’s business is online; by contrast, 85 percent of RxCBD’s business is sold online to retailers.
Growth, and the future
All seven micro-businesses are growing; for some, the growth has been steady, and for others it’s been whopping.
Since finishing the new building, sales have grown monthly at KJ Wood Distillers; Wood says he plans to focus on “measured revenue growth for the next 2-3 years.”
The Steaming Bean has also been growing steadily for the past 10 years, with sales up by 18-20 percent — double the amount of the firm’s business eight years ago. Two years ago, Hill bought a new roaster, which only operates at 30 percent capacity, but he’s cautious about growth.
“It’s manageable for us,” Hill said. “I don’t want to double in one year. If we keep growing every year, it’s inevitable that we will have to move.”
Issenberg claims her company is also growing.
“When I rebranded as Kiitella, Inc. and decided to focus entirely on awards and recognition, my client list went national (although most clients are in Colorado) and tripled within two years,” she said.
Larmouth reports 40 percent growth at Ross Reels in the last year alone, and he anticipates as much, if not more, this coming year, with sales expanding internationally. Mayfly Outdoors took over Ross Reels in 2014. Along with its sister company, Abel Reels, 11 new products have been introduced within the past three years. Larmouth calls it “incredible.”
Fish claims he’s never entirely been able to keep up with demand for his beer, having doubled production from year to year until last year, when growth became more manageable at 20 percent. In fact, he intends to slow growth to 10 percent next year in order to remain in his current location.
Not surprisingly, given the entrepreneurial spirit behind each of these craft manufacturing businesses, their owners have exciting plans for the future.
Plans for future physical growth at KJ Wood Distillers include a satellite tasting room located elsewhere in Colorado and distribution to the EU. Wood also hopes to invite 12 Western Slope craft spirits distillers to a Spirits Conference in Ouray during the first week or two of March.
Issenberg would like to tap deeper into, and supply awards to, the film-festival world.
Larmouth describes a massive expansion in the works for Ross and Abel Rods, which have acquired 150 acres on the Uncompahgre River corridor, part of an outdoor business park called Colorado Outdoors www.coloradooutdoors.co). They plan to build a new 40,000-square-foot factory — double the size of their current facility — which they hope to move into by early next fall.
Over the years, Telluride Brewery has expanded into six different leases over their tenure in Lawson Hill.
“We’ve hit the wall on what can be done in the current space,” Fish said. “It’s not ideal for a brewery. For the past year and a half, we’ve been working on sealing a deal on building a property from the ground up in a new location in Lawson Hill.”
With sales increasing every month since the company was founded, the greatest challenge for RxCBD is addressing growth strategies based on its remote location in western Colorado.
“We have taken steps to address the need for increased production by working with local economic development groups to explore their interest, and to determine what capacity communities have to host our growing business,” Cokes said. “All indications point to the need to bring in outside strategic partners to assist us. If we want to grow … and be somewhat economically independent over here, and if we want to have affordable housing, and if we want to have jobs, then we’ve got to figure out a way to help keep businesses like mine here.”