Industry Snapshot: Food Manufacturing & Wholesale


Get the industry data and financing solutions to make 2018 a success.

In each edition of our Business eNewsletter this year, we’ll be highlighting a different industry to bring you useful data and research. In our January edition, we’re providing a snapshot of food manufacturing and wholesale – an industry we’re proud to serve through both our bank and leasing company.

As a seasonal industry, your food wholesale or manufacturing business may have ended the year on a busy note. But, how optimistic should you feel about 2018?

Here are the latest industry indicators, including data on growth opportunities and potential challenges. Plus, learn how our experienced team of Commercial Banking advisors can help you prepare for another successful year.

2018 Food Manufacturing & Wholesale Forecast

While food manufacturers and wholesalers will face challenges due to the rising cost of fuel and commodity prices, both areas should expect growth in the coming years.

This is no surprise to Shawn Sackman, Merchants Bank Commercial & Ag Lender in Onalaska, “[t]he businesses we serve have always done an outstanding job of meeting customer demands, while still being innovative in a tight industry.”

Predicted Growth between 2017 and 2021

Growth for your industry depends on both food consumption and population growth.

So, what do the numbers say? According to data from Hoovers and First Research:

  • Revenue for US food manufacturers is forecast to grow at an annual compounded rate of 4%, based on changes in physical volume and unit prices.
Food manufacturing growth graph

From Hoover’s/D&B subsidiary First Research. Revenue (in current dollars) for US food manufacturers is forecast to grow at an annual compounded rate of 4% between 2017 and 2021, based on changes in physical volume and unit prices. Data Published: September 2017.

  • Domestic demand for food, an indicator for food wholesalers, is forecast to grow at an annual compounded rate of 3%.
Food wholesalers growth trend graph

From Hoover’s/D&B subsidiary First Research. Domestic demand for food, an indicator for wholesalers, is forecast to grow at an annual compounded rate of 3% between 2017 and 2021. Data Published: September 2017.

Key Industry Indicators

In addition, these indicators provide a more comprehensive picture. This data can help you determine areas of potential progress or risk for the coming months and years depending on your specific products.

Food Demand:

  • US retail sales for food and beverage stores increased 2.2% in the first ten months of 2017 compared to the same period in 2016.
  • Total US wholesale sales of nondurable goods rose 4.7% in September 2017 compared to the same period in 2016.
  • US retail sales for food services and drinking places increased 2.8% in the first ten months of 2017 compared to the same period in 2016.

Food Distribution: US tourism spending for food services and drinking places increased 3.2% in the second quarter of 2017 compared to the same period in 2016.

Food Manufacturing Demand: US nondurable goods manufacturers’ shipments of food products rose 5.3% year-to-date in September 2017 compared to the same period in 2016.

Product Values: The consumer price index for food rose 1.3% in October 2017 compared to the same month in 2016.

Industry Competition

Several large companies, including Sysco, McLane, Nestle S.A. and COFCO, dominate the industry when it comes to sales and output. But, small businesses still make up 68% of food manufacturing* in the United States.

As a small sausage producer in La Crosse, WI, Bakalars Sausage Company has seen many changes to the industry in their 53 years of business. “Over the past several years, the industry has gotten tighter with smaller producers getting out of the business,” said Mike Bakalars, Owner. “I’m proud to say that we’re one of the survivors and through a lot of hard work our business has doubled over the past 15 years.”

So how can you differentiate yourself from other businesses in the industry? According to Hoover’s research, here are your best opportunities to stand out in a competitive market:

Product Mix – Food manufacturers typically have one or two extremely successful products or brands, in addition to a mix of specialty items. Identify which of your products constantly produces income and which products may become less popular as consumer tastes change.

For Bakalars, this means a mix of 35 different products overall, including the Schweigert sausage brand and specialty products. “We were fortunate to acquire Schweigerts several years ago. As the official hot dog of the Minnesota Twins and Vikings, it’s been a very stable product line for us while we continue to produce other specialty sausage with smaller demand,” said Mike.

Competing with Chain Distribution – Larger companies, like Wal-Mart, have benefitted from owning the entire process from purchasing to operations. Small wholesalers should consider the cost and time-saving benefits of controlling the entire production process. For example, Bakalars produces, packages and ships their entire product line from their headquarters in La Crosse, WI.

How Merchants Bank Can Help

As a community bank, we work hard to help local businesses – like Bakalars – succeed with the expertise and financial resources you need. We believe that when businesses in our communities thrive, everyone benefits. Merchants is proud to serve many in the food industry from producers to manufacturers to wholesalers, across our footprint.

“We’ve had a longtime partnership with Merchants – since 2003. Their bankers understand how our industry works, and so they understand the banking services we need to be successful,” said Mike Bakalars. “As an industry, we can be seasonal, so they have helped us with understanding and meeting our cash flow needs.”

In addition traditional financing in the form of business loans and lines of credit, we also offer services in the areas of cash management and security.

“In order to make the most of your accounts receivable and payable, we help your company understand how various types of transactions function – which is especially important in the food industry. Each transaction type is unique,” said Becky Herrmann, Cash Management Specialist at Merchants Bank in Onalaska. “Another key is knowing how to protect your funds with the best monitoring and management tools. Our Cash Management team is here to advise you on the solutions that fit your business and answer your questions.”

To learn more about how our Commercial Bankers and Cash Management Specialists can work with your business, contact your local expert.

Additional Resources:



** You will be linking to another website not owned or operated by Merchants Bank, NA. Merchants Bank, NA is not responsible for the availability or content of this website and does not represent either the linked website or you, should you enter into a transaction. We encourage you to review their privacy and security policies which may differ from Merchants Bank, NA.

Our Top 4 Reasons to Use Floor Plan Financing


If your business manages equipment or vehicle inventory – from cars to power sports, to manufactured homes to implement dealers or other types of floor plans – you know how complicated inventory management can get.

Our efficient and easy floor plan financing system helps you take care of it all from paying off and buying units to inventory management and more.

“We’ve been impressed with the convenience of the floor plan financing system from Merchants Bank. In a matter of a click, I can access balance, payment and payoff information when I need it. Everything we need to manage our inventory is at our fingertips.” – Randy Stevens, Partner at Adamson Motors, Inc.

So, how can floor plan financing benefit your business? Here are our top reasons:

Easy Access to Your Line of Credit
Access to your line of credit when you need it – even from your office. We provide same day funding to our floor plan clients.* Plus, we offer competitive rates and flexible terms tailored to your business.

Increase Efficiencies in Inventory Management
Our floor plan system provides robust reports and data to help you see the whole picture, including turn time of inventory, interest expense and more. Plus, you’ll receive curtailment notifications. 

“We’re proud to offer a floor plan system that rivals what is offered at larger corporate banks,” said Dan Massett, President for Merchants Bank’s Central Region. “It’s easier than ever to access the information you need at your fingertips.”

Better Understand Costs
Tracking your costs, including interest, is easy with our system.

Simple and Intuitive System
You’ll find that our floor plan financing system is user-friendly and tasks you’d like to complete are just a click away, including:

  • Easy process for paying off and buying units.
  • Draft payments and submit directly to the manufacturer on your behalf when you add inventory

“We’re here to help make things easier with a best in class floor plan system and financing options tailored to your business,” continued Massett. “It’s truly important to us at Merchants to get to know your business and find solutions that will help you be successful.”

To learn more about our customized floor plan financing and how it can benefit equipment or vehicle inventory management for your business, visit our website or contact your local Merchants Bank Commercial Banker.


*Same day funding available if initiated prior to Merchants Bank cut-off time.

5 New Year’s Resolutions for Your Business Finances


The new year can mean many things for your business. What will the next 12 months look like? Do you have goals for your business and how you plan to get there? Now is the time to review your past financial performance and make plans for 2018.

With this in mind, we’ve put together five financial New Year’s resolutions to help your business make this one of the best years yet.

1. Review Last Year’s Financial Highlights

How did your business perform in 2017? At the most basic level, you should review your business income, expenses, profit and sales.

In addition, ask yourself these questions:

  • How do these numbers compare to last year? Are they better or worse and by how much?
  • Do these numbers align with my business projections for 2017? Why or why not? Are there new income or expenses that should be accounted for in 2018?
  • In what area(s) of my business did I see the most growth?
  • What lessons can I learn from my 2017 business data?

2. Set New Goals
Goal setting does not have to be complicated, especially now that you’ve taken the time to review key numbers from 2017.

It’s as simple as writing down 2 or 3 things you’d like to see your business achieve this year. It could be a goal to reduce expenses in a certain area, to produce a new product or hire additional expertise.

The most important part about goal setting is to be specific so you can measure your success throughout the year. Attaching time frames, numbers, steps it will take to meet your goal and other details can help you know if you’re on track or not.

Once you’ve established your 2018 goals, here’s a fun way to keep them top of mind from the SCORE business blog.

By clicking above you will be linking to another website not owned or operated by Merchants Bank, NA. Merchants Bank, NA is not responsible for the availability or content of this website and does not represent either the linked website or you, should you enter into a transaction. We encourage you to review their privacy and security policies which may differ from Merchants Bank, NA.

3. Update Software and Processes

Payroll and other business processes can be affected by the change to a new year. Make sure your systems are up-to-date and ready for 2018. It’s also a great time to review your security protocol and procedures, especially if your business collects personal information from your customers.

4. Check in With Your Business Team
Catch up with your accountant, tax advisor, lawyer and banker at the beginning of the new year. Communication between you and your team of expert advisors can be crucial to your business’s success. After all, they want your business to succeed just as much as you do.

“During this time of the year, I like to check in with my business customers and see how they felt about 2017 performance and what’s on tap for 2018,” said Mike Swanson, Commercial Banking Officer in Hastings. “For example, what went well for them in 2017 and what didn’t? Are there any new opportunities or internal changes coming? It’s about keeping the lines of communication open, so I can provide the best solutions going forward.”

As you share your business plans for 2018, your team can also provide updates on things that may affect your business. For example, there may be new taxes or loan programs, changes to business laws and much more.

5. Celebrate Small Successes

We’ve saved this resolution for last, but it’s certainly one of the most important – you deserve to celebrate your business’s successes. Being a small business owner can feel like a never-ending job, so take a minute to give yourself (and your team) some kudos. Celebrating small successes are the steps to celebrating larger ones!

Our team of Commercial & Ag Bankers and Cash Management Specialists are ready to talk about your business plans for 2018. Visit our website to meet our local experts.

Behind the Scenes with Our Credit Team


Startup Stock Photos

If you’ve worked with Merchants on a loan for your business, you know our Commercial Bankers have a team of people assisting them in the loan process. You may have even heard them mention a Credit Analyst, who would review your financial information.

Our Credit Analyst team plays an important part in the loan approval process. So we’re giving you a behind the scenes look at their role and what kind of expertise they bring to our commercial banking team.

How is a Credit Analyst involved in my application for a business loan?
Our team of 11 Credit Analysts assist in determining your credit worthiness and ability to pay back a loan. Upon application, your financial information is given to a Credit Analyst, who reviews all the details and provides a credit presentation to your Commercial Banker.

“Our job is to assess repayment ability of credit obligations and determine overall financial risk. This information helps the Commercial Banker decide on next steps,” said Chris Duellman, SBA Lending and Credit Underwriting Manager. “Our ultimate goal is to help the borrower gain loan approval, but we also need to identify potential risks – that’s why we review so many details about the business and business owners. We look at the full picture to create our report to the Commercial Banker.”

In some instances, you may also meet with one of our Credit Analysts and a Commercial Banker to collect your financial information. A face-to-face conversation is sometimes the best approach to obtaining all the details needed to gain a full understanding of your business.

What expertise does a Credit Analyst bring to the business banking team?
Most of our Credit Analysts have an accounting or finance degree and/or related job experience. In addition, they are well-trained on all different types of credit to be able to fully assess your business’s situation. Day in and day out, they work with the financial details of businesses of every size and industry – their incredible depth of knowledge is an asset to you, your Banker and the entire commercial banking team.

Because Merchants Bank provides many loans for agricultural businesses and farms, three of our Credit Analysts specifically concentrate on ag requests. Having grown up on farms or worked on farms, these Credit Analysts provide an additional level of expertise and insight when reviewing an ag loan.

How do I benefit from a Credit Analyst reviewing my loan application?
Talking with your Commercial Banker and Credit Analysts can give you more insight into the financial side of your business.

While gathering your financial information, the Credit Analysts may ask questions your business might not have ever considered. Or, the Analysts might even pinpoint some financial areas where your business could make improvements by working with your accountant or in-house finance department. In addition, tapping into the Credit Analyst industry-specific knowledge can be a bonus for your business.

“We’re here to provide an additional level of financial understanding and support to both the business and the Commercial Banker,” said Duellman. “It’s our job as part of the commercial banking team to help our business customers thrive.”

To learn more about business financing options at Merchants Bank, visit our website:

Ransomware and Rip Van Winkle: Don’t Ever, Ever Sleep Again

This can't be right

Security Awareness Week: June 5-9, 2017

By Rodney Nelsestuen, Chief Information Officer

We all know the story of Rip Van Winkle who slept for 20 years and woke to find he’d missed the Revolutionary War and that society had changed dramatically. Today, poor Rip would find that a mere 20-minute nap may be enough to put him out of touch – especially when it comes to security.

This was driven home by the recent global attack of ransomware (aptly named Wannacry) that put hospitals, governments, and businesses on the defensive and interrupted the normal course of business on some estimated 250,000 computers in 150 countries, including the US. This event was one of the first to have a large-scale global reach and one which cost those who were attacked an estimated $3 billion dollars. Moreover, the success of Wannacry and its scale will most certainly result in a massive expansion of the ransomware “business.”

You may wonder why ransomware is suddenly so popular as compared to other types of hacking. Here are three reasons:

The attacker need do nothing and still gets paid.

Ransomware either encrypts files on a computer or blocks access to the files. These programs used to be delivered exclusively in emails as an attachment that a victim would open. While that delivery method is still in use, the more pernicious versions simply roam the internet and when they find an unprotected network or computer, will launch the attack without human intervention.

Stealing personal information and credit card data is still popular, but imagine how much work it is to steal, store, organize, and then find a buyer for that data. In short, the old fashioned methods of theft are a lot of work compared to a ransomware attack that threatens to delete all data on a computer unless the victim pays for the release. Attackers simply sit back and wait for the victim to pay.

Want to go into business? Try ransomware as a service.

Don’t know anything about computers or hacking? No need to worry. You can contract with a hacker and outsource your criminal activity. Organizations offering ransomware services are beginning to take root and will encourage bad actors of all types to try their hand at it.

After all, what do they have to lose? The outsourced service provider does all the work and gets paid a cut of the take, and you merely await your share as the business owner.

If one door is locked, just try another.

The interconnectivity of the internet and businesses across the globe makes it much easier for a ransomware attack to succeed. Can’t get into a corporate network? Try the company’s version of webmail, which can be accessed from any computer in the world. Can’t get a user to click on a link? Then use in-memory malware to deliver the payload. Find it hard to scale your crime? Then hack cloud services and launch attacks against thousands of high value targets at once. In short, ransomware has multiple attack vectors.

So what can I do to protect my business?

There are long-standing processes and tools that companies need as a foundation to stopping ransomware. While the list of approaches is long, let’s focus on three items that will reduce the risk of being hacked or a victim of ransomware:

  1. Whether you run your own technology or outsource it, be sure you know what protections and processes you have in place. Anti-virus software, firewalls, and intrusion detection software with expert alerts, and patching systems and applications are regularly among these basics.More importantly, make sure your security tools are on the most current versions. This may mean having updates almost continuously at times as risk conditions can change dynamically. It’s good to look into new technologies as new threats arise, but remember that the tools you do have may be the best there are if kept up to date.
  2. Layer security across your business. No one single solution will protect you from every attack. Whether physical locks on doors, increasing the sophistication of passwords, using out of band authentication, or segmenting your network with additional firewalls, consider using a layered approach to make it more difficult for bad actors to get through to your valued information. This includes using the security and authentication steps offered by your bank. Most banks will provide tools that allow the business to verify financial transactions before they occur. Unfortunately, too many businesses fail to adopt these solutions and processes.
  3. Train your staff on proper use of the connected world we live in – and keep security awareness in the forefront of employees’ minds. The human threat is twofold: first, people make mistakes and as humans, we always will.Second, there has been a growing threat from insiders who are ‘groomed’ by bad actors to ultimately take part in a crime. While this is an unpleasant topic, it’s something every business owner or manager needs to consider today.

One final thought. It would pay most businesses to be connected to an organization that monitors the global threat environment and can keep the business up to date on emerging threats. This external information can then be aligned with your internal IT steps and actions. There are several such organizations and many have very reasonable fees.

The security issues faced by businesses will only be more challenging in the future. Staying up to date on security technology, being vigilant on how users interact with your systems, and having an eye to the emerging threats as they grow are all smart and necessary steps for any business today.

While there are no sure-fire solutions to risk, by taking a multi-faceted approach you’re in the know about the threat environment, and you’ll feel better that you’re managing it in a sound manner. Then you’ll be able to sleep peacefully even with one eye open so as not to miss, as Rip Van Winkle did, the important things in life such as the birth of a nation.

Gina Miller Joins Merchants Bank as Vice President and Commercial Banker


Gina Miller, Commercial Banker

Gina Miller has joined Merchants Bank as a Vice President and Commercial Banker, according to Shawn Sackman, Senior Lending Officer and Senior Vice President for Merchants Bank’s Southeast Region.

“We are excited to have Gina join our team,” Sackman said. “With her experience, ability and connections, as well as our increased presence in the La Crosse area, we know she will contribute to our continued growth.”

Miller had been with the Wells Fargo organization for the past 17 years, most recently as a Business Relationship Manager/Commercial Banker.

“Merchants is a great match for me because it is a community bank that is built on and values the relationships with its customers,” Miller said. “Building and maintaining those relationships has been my goal throughout my career, and I look forward to continuing that career with Merchants as it gains more market share in our area.”

Miller is a graduate of Viterbo University. She is active in the community. She is a member of the Coulee Region Young Professionals, a member of the Women’s Alliance of La Crosse, and a participant in the Chamber of Commerce’s La Crosse Area Community Leadership Program.

Onalaska is one of the fastest growing of all 21 Merchants’ locations. In 2016, Merchants reported record income of $14,154,891. The Onalaska location was one of the leaders in productivity, with nearly $2.2 million in net income.

In addition to Onalaska, Merchants has Minnesota locations in La Crescent, Rushford, Lanesboro, Caledonia, Spring Grove, Winona, St. Charles, Goodview, Rochester, Cannon Falls, Red Wing, Hampton, and the southern Twin Cities metropolitan suburbs of Apple Valley, Cottage Grove, Hastings, Lakeville and Rosemount. Merchants has an additional Wisconsin location in Eau Claire. All banks are FDIC members and equal housing lenders. Loans are subject to approval. Twin Cities-based Merchants Bank Equipment Finance is a division of Merchants Bank, N.A.

Jerad Brown Has Joined Merchants Bank in Rushford and Lanesboro as a Commercial and Ag Banker


Jerad Brown, Commercial & Ag Banker

Area native Jerad Brown has joined Merchants Bank in Rushford and Lanesboro as a Commercial and Ag Banker, according to Ken Graner, President for Merchants Bank in Rushford and Lanesboro.

“Jerad has the right mix of experience, interest and personality to be successful as a banker and, more importantly, to help our customers grow,” Graner said. “His work in credit analysis and his interest and experience in business and ag will be a benefit to the people he serves.”

For the past two years, Brown has worked with Rushford State Bank as a credit analyst, looking at agriculture and commercial loans, including an emphasis on the Farm Service Agency (FSA) guaranty program. A graduate of Rushford-Peterson High School and South Dakota State University, he served as a member of the South Dakota State University Livestock Judging Team. At SDSU, Brown majored in Agriculture Science and had minors in Animal Science and Agriculture Business.

“The people who live here are my neighbors. I know what’s important to them, and I know how important it is for our local economy for our farms and businesses to succeed,” Brown said. “I look forward to putting my knowledge and energy to work for Merchants Bank and our customers.”