Nashville’s artisan manufacturers gain traction with niche approach

Locally made products resonate with savvy consumers

An appetite for products made in the United States — and especially right here in Middle Tennessee — is fueling growth in niche and artisan manufacturing in the area.

Although these local small-scale manufacturers don’t often make headlines for major employment expansions, many are seeing the demand for their products increase rapidly and creating quality jobs, albeit a handful at a time, along the way.

When local chocolate maker Scott Witherow launched Olive and Sinclair in 2009, he produced each week about 90 pounds of the company’s signature “Southern artisan chocolates.” To date this year, Witherow (pictured) and his crew of six employees have been manufacturing 1,200 to 1,500 pounds of hand-wrapped chocolate bars per week. The increase in production has rendered an attendant rise in distribution, with the chocolate bars now available in 48 states, Canada and Singapore.

Some heavy-hitters have taken notice, as Southern Living magazine has named Olive and Sinclair creations “America’s Best Chocolate.”

The growth at Olive and Sinclair has meant more than increased production for Witherow and his team. Not surprisingly, it has resulted in an expansion of physical space. The company launched from a 1,200-square-foot production facility and has since moved to a 3,000-square-foot space on McGavock Street in East Nashville’s popular Riverside Village.

And there’s a third expansion for the chocolatier looming on the horizon. Earlier this year, Witherow purchased a vintage masonry building located at the southwest corner of the 17th and Fatherland streets intersection and once home to an H.G. Hill grocery store. He is in the process of rehabbing the property into a combination production facility and retail storefront.

“We’re going to really reach out to the public and have regular tours,” Witherow said. “Everything will be exposed and you’ll be able to see the chocolate being made.”

Olive and Sinclair’s fast rise highlights the improved business climate for area artisan manufacturers. For example, local artisan candle manufacturer Paddywax Candle Co. saw a 70 percent increase in sales in 2012 and is growing at a similar rate in 2013, according to co-owner Joe Moore.

Moore, a former president and vice chairman of stationary and gift company C.R. Gibson, specializes in partnering with boutique gift-industry manufacturers via DesignWorks, a private equity firm he founded in 2009 after CR Gibson sold to CSS Industries.

Moore says he has seen consumer attitudes shift over the years from being hyper-focused on low prices, which drove many manufacturers overseas in search of cheap production, to an interest in excellence, quality and locale.

“Consumers are looking for companies they can count on for quality,” Moore said. “Being made in the USA is often synonymous with quality and trust.”

Industry experts have been able to quantify anecdotal opinions such as Moore’s.

A recent Boston Consulting Group study showed that more than 80 percent of U.S. consumers say they would pay a premium for American-made goods versus those made in China.

Corporate America is taking notes of the trend as well. In early 2013, Walmart announced it would increase sourcing of U.S. products by $50 billion during the next 10 years. General Electric has pledged to invest $1 billion through 2014 to stimulate U.S.-based manufacturing and jobs.

“Consumers increasingly want to know more about where their products come from, including who they can hold accountable if problems arise,” said Mark Schenkel, associate professor of entrepreneurship at Belmont University. “Clearly, accountability is far greater when the person is someone you know and is more substantially invested in the local community because he or she lives there too.”

Although it may be more expensive to undertake manufacturing in the United States, Moore believes doing so gives Paddywax a leg-up with the discerning consumer.

“We feel that having a U.S. soy blend wax is not only a greener alternative, it’s a competitive advantage,” Moore said. “Given the opportunity, and when there’s not too much of a disparity in pricing, the general consumer prefers a product made in the U.S.”

Moore also prefers basing manufacturing in the United States because he can more effectively monitor production.

“Our product is driven by great design,” Moore said. “All the elements of artistry are important, including the packaging. The quality must remain the same – candle after every candle. Basing manufacturing here allows me to be close to the product and to be very hands-on.”

Paddywax candles are often packaged in theme-based collections and paired with unusually blended scents. For example, the company’s Literary Collection pays homage to classic writers such as Mark Twain, Jane Austen, Leo Tolstoy and Emily Dickinson. The packages for such collections include book-cloth covered boxes and quotes from the authors.

The fragrance of the candles is matched to the authors’ personalities and styles. Twain’s scent is vanilla and tobacco flower and Dickinson’s is lavender and cassis.

Production of Paddywax candles, the prices for which range from $5 to $30, occurs within a 50,000-sqaure-foot factory space in Old Hickory. Distribution is handled from a warehouse space in Lebanon.

On the design theme, Olive and Sinclair’s Witherow says local design in particular is a critical consideration. The company’s design labels and boxes are hand-printed, with much of the artwork provided by Nashville-based graphic artist and letter-press printer expert Bryce McCloud.

Olive and Sinclair’s blends often have a local twist, too. For example, the company offers a chocolate bar that includes cocoa aged in local bourbon barrels.

A fondness for the region spurred Jeff Turner to start National Storm Shelters, a Smyrna-based niche manufacturer. But the idea for the four-year-old company didn’t spring from the area’s culture as much as it did from the local weather.

Turner decided to design and sell locally manufactured tornado shelters after living through the deadly twister that hit Murfreesboro in 2009. Turner’s goal was to build the safest storm shelter on the market, so he settled on an underground steel shelter design that can be installed beneath a garage or carport floor.

“I feel strongly that tornado deaths can be prevented, “Turner said. “I set out to build the Cadillac of storm shelters.

“We’re still in a phase of educating local residents about storm shelters” Turner added. “We believe they will eventually become much more commonplace, which also means there’s a tremendous opportunity for growth.”

Since 2009, National Storm Shelters has grown by 300 percent. The company recently moved from a 17,000-square-foot production facility to a much larger space of 120,000 square feet.

One thing Turner is sure about: He would never want to manufacture his storm shelters overseas.

“Americans are still the No. 1 producers in the world,” he said. “Consumers already care about U.S.-made products, but I think we’re going to care about them even more in coming years.”

Can Olive and Sinclair, Paddywax and National Storm Shelters, all launched in 2009, survive in the long-term?  Jay Millar, director of marketing at United Record Pressing, says yes — as long as they continue to adapt to consumer demands with quality products.

Millar ought to know. United Record Pressing, a 64-year-old Nashville-based vinyl record manufacturer, has survived several decades of varying recording trends, including the rise of CD technology and digital recording. The company is known for pressing for dozens of famous artists from the Everly Brothers and Elvis Presley in the early rock and roll era to artists such as Jack White, Adele and Mumford and Sons in recent years.

“I think it means a lot to people to know that their records are made in the U.S.A. and they were made in the same factory that pressed the first Beatles 7” vinyl record in America 50 years ago,” he said.  “I think it’s a reaction/complement to the sterility yet convenience of digital media.”

URP’s longevity is also a testament to the power of being regarded as a top quality manufacturer in a niche product category, Millar said.

Although vinyl records make up a tiny fraction of all recording, demand within the niche has grown every year for the past 15 years, Millar said. Over 3.2 million units were purchased in 2012, the highest number of sales in 21 years.

It’s all URP can do to keep up with the demand. The company presses over 30 percent of vinyl records made, manufactures 30,000 to 40,000 records a day and operates on a 24-hours-a-day, six-days-a-week production schedule.