Rochester Chamber Top 100 success means local economic health

Jim Memmott | Democrat and Chronicle

Show Caption Hide Caption Rochester Chamber Top 100 Find out who topped this year's list.

All things considered, the Rochester-area economy is doing well. Just ask Tim White.

He’s got the numbers to support this conclusion, including the fact that more than 200 companies applied to be considered for the Greater Rochester Chamber of Commerce’s 2018 Top 100 list, up from 160 the year before.

“That’s a pretty good sign that more companies are doing better,” says White, the managing partner of the upstate New York office of KPMG LLP, the accounting firm that analyzes and confirms company revenue figures for the annual Top 100 list.

Other indicators, too, point to a robust local economy. The report for August from the state’s Labor Department showed unemployment at 4.2 percent here, down from 5 percent the year before and 9 percent in January 2010.

And the area added 6,300 non-farm jobs year over year. Not a huge gain, but another good sign nonetheless.

All in all, it was a good year for Rochester business. There has been growth, both in jobs and in earnings, and it would seem that the area has turned the corner as it transforms itself from a region that depended upon mega-employers like the Eastman Kodak Co. to a region where smaller companies add up to a collective strength.

But a good economy also creates its own complications.

The construction sector is doing well, but that has brought a shortage of qualified workers. Houses are selling quickly, but demand still seems to be outpacing supply.

Rochester manufacturers who depend on global suppliers are worried about the impact of recently imposed tariffs on imported goods. And poverty in the city of Rochester continues to be a concern, with the overall poverty rate being the 12th highest in the U.S. and the childhood poverty rate the third highest.

As the former mayor of Rochester and lieutenant governor of New York, Robert Duffy, the Chamber’s president and CEO, is keenly aware of the city’s troubles. But he takes heart from the growth numbers reported by area companies and by employment figures.

“Our economy has never been nor ever will be perfect, but I believe we’re on an upward trajectory,” Duffy says. “We have a lot of pronounced strengths.”

Success celebrated

To qualify for the Chamber’s Top 100, a company must have a minimum of $1 million in annual sales. The list does not rank companies by number of employees or overall revenue. Rather it measures percentage of revenue growth over the last three years.

“The Top 100 is a celebration of success,” Duffy says. “These aren’t the biggest companies — these are the fastest-growing companies. Every one of these companies is doing well. They are turning a profit and bringing money back into the region.”

This year’s list was topped by Avani Technology Solutions, a fast-growing company started here in 2008 that has steadily moved up the list since 2014, when it was ranked at No. 46.

Twenty other technology companies made the Top 100, a reflection of that sector’s importance to the local economy.

“I am absolutely blown away by the global markets they serve,” Duffy says.

He’s also impressed by the number of technology workers and entrepreneurs who have been turned out by the Rochester Institute of Technology, the University of Rochester and other area colleges. (The colleges are, of course, major employers, but as nonprofit institutions, they don’t show up in the Top 100 list.)

The tech companies that are starting here or relocating here are taking advantage of the workforce and the available and affordable factory and office space left behind by companies that have downsized or left, Duffy says.

“I chafe at the inference that we’re a rust-belt economy,” Duffy says. “We are no longer a company town of a Kodak or a Xerox. We’re a town of many companies. Some people don’t realize we’re in the midst of a transformation.”

Digital prowess

Mason Digital LLC of Penfield reflects a transformation in marketing, the movement toward connecting companies and customers via cellphones, computers and social media.

Timothy J. Mason, the president and CEO, created Mason Digital in 2014 as a sister company to Mason Marketing, an advertising agency that already existed.

The beauty of digital advertising, Mason stresses, is that it can target potential customers with precision. If you’re looking to reach, say, millennials in Poughkeepsie who are desperately seeking a Prius, digital can find them.

The digital side of the business grew about 54 percent last year, Mason said, a growth reflected in Mason Digital’s move from 67th to 47th on the Top 100 list.

But, as with other industries, nothing can be taken for granted.

“The first thing that worries us on the overall marketing side is that the first thing companies cut when the economy slows down is their marketing budget,” Mason says. Beyond that, a lot of Mason Digital’s data comes from Facebook and Google. If those companies pull data back, Mason Digital doesn’t have all the information it needs.

Sharing the wealth

Surmotech LLC, a Victor company that assembles printed circuit boards and other products, is ranked at 19 on the Top 100 list, up from 50th last year. The company added at least 10 employees this last year and has enjoyed strong sales, says Susan Horne, president and CEO.

When Horne and Jeff Thaler, the company’s CFO, purchased Surmotech in November 2013, the company had 21 employees. Now it has 65. And they’re always on the lookout for new workers, Horne adds.

“Skilled labor is becoming more difficult to find, and retaining skilled labor is becoming more difficult. Everyone is looking for the same people,” she says.

She adds: “We came here because we wanted to enjoy the last years of our careers and have people come to work and not have to worry about losing their jobs at the end of the day. We said, ‘Stick with us and as soon as we make money, we’ll share the money.’”

The money has come in, and employees are receiving bonuses, Horne said. But she worries about the new tariffs that are being imposed on imported components — fees that Surmotech must absorb or pass along to customers.

Her company purchases products that are made in China, and there aren’t U.S manufacturers to turn to, Horne said.

Sellers’ market continues

The real estate market has always been a bellwether for the local economy, and the past year has been a good year for that sector, one that has favored sellers, says Jim White. He’s the owner of Empire Realty Group, which has offices in Webster, Dansville, Lakeville, Rochester and Pittsford and was No. 62 on the Top 100 list.

“There are more buyers than inventory,” says White, who formed Empire in 2012. “It was pretty much that way last year, but it was even more this year. It has made it exciting and challenging, depending on what side of the deal you’re on.”

For buyers, “it’s pretty much survival of the fittest,” he says. People are showing up with cash to buy homes, and they are often willing to pay over the list price.

The haves are shutting out the have-nots, he adds, noting that there are many people who continue to rent because they can’t meet the upfront costs of buying a home.

Income indicator

Rohrbach Brewing Company is No. 77 on the list, an indicator that the craft beer revolution is alive and well in Rochester and that people have disposable income.

Founded in 1991, Rohrbach was out there almost alone for several years, but it has been joined by a growing number of small breweries and brew houses. All of this indicates a strong economy, just as it reflects the state’s efforts on behalf of the craft beer industry.

John Urlaub, Rohrbach’s founder and CEO, welcomes other brewers, but he says there’s a downside to growth in the industry.

“The population (of beer drinkers) is not going up,” he says. “So we just keep dividing the pie.”

And, as has been well-reported, the craft-beer drinker is far from brand loyal, so brewers must constantly come up with new brews.

That means Rohrbach’s classics (Scotch Ale, Highland Lager) must welcome the newcomers (Pineapple Wheat; Glitter Gloom; I Came, I Mowed, I Kicked Grass cream ale, etc.)

Looking at everything in the local economy — from the strong craft beer market to the rise in the tech sector to housing sales and low unemployment figures — Duffy finds plenty of reason to cheer.

“It’s getting better by the day,” he says. “My mother always said, ‘Count your blessings.’ We have many.”

More on Rochester Chamber Top 100

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Success means local economic health

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Companies new to the Rochester Top 100 list share their stories of growth

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How Wegmans and other Top 100 companies stay successful generation after generation