Withering industry returning 

In the past four decades, there has been an exodus of manufacturing jobs as The City courted more cutting-edge industries that promised to yield high-paying jobs, such as high-tech and green businesses.

But the trend away from light industry might be reversing because San Francisco has started to see what some are calling a “mini-boom” in light manufacturing, especially with high-value products such as artisan foods.

Statistics show that since 2003, manufacturers such as wineries, pharmaceutical and pasta companies have sprouted up locally thanks to cheaper and more-available real estate, along with new city zoning that’s paved the way for more light-industrial business.   

Mayor Gavin Newsom’s office is working to woo more manufacturers. Newsom is working with the homegrown SFMade, a networking group of manufacturers, with the goal of expanding the seemingly beleaguered industry, said Todd Rufo, the mayor’s director of business development.

With the help of a $65,000 grant from the Mayor’s Office, Charles Chocolates, originally established in San Francisco in 2004, this week announced it’s moving back to The City from Emeryville with a new manufacturing kitchen and retail store that will serve as a destination for local residents and tourists. The Candy Kitchen will open in January, adding as many as 35 new jobs.

“This is an industry that’s coming back and that’s a sweet spot for us,” Rufo said. “We want to help new light manufacturing grow in The City and keep the ones we’ve got here.”

In the 1990s, only 12 percent of the usable land in San Francisco was industrial, according to city documents. In January 2009, Newsom signed the eastern neighborhoods plan that, among other things, made more room for industrial land, the lack of which has been one of the biggest barriers to growing industrial business.

This sent a message to manufacturing companies that The City wants to revive that industry, said Kate Sofis, executive director of the nonprofit SFMade.

Yet, other challenges remained. Residential and commercial developers have been more apt to pay for expensive land in San Francisco, increasing the competition for industrial companies. That’s why the recession became such a “gift” for the manufacturing industry,
which could afford the more-affordable prices, Sofis said.

Industrial companies are now finding spaces for 80 cents a square foot; in 2006, it was $3 or more, she said.

“There isn’t a lot of new residential development going on, so it’s relieved competition,” Sofis said.

Also, it’s become an untapped opportunity for San Francisco to diversify its work force and offer more jobs for blue-collar workers and people who don’t have college degrees, which comprise 50 percent of residents, said Ted Egan, The City’s chief economist.

In 1969, there were more than 58,300 manufacturing jobs locally. In 2008, that number stood at 13,168, Egan said.

“We have been losing that type of job, and our population is less diverse as a result,” he said. “People are more likely to leave San Francisco if they cannot find a job.”

Branding works wonders for items made in San Francisco

Young manufacturers like Patrick Buckley are relying on local branding as a means for success as they move into the foray of the industry in San Francisco.

The former research scientist launched his first manufacturing company, called dodocase.com, in April.

It uses old book bindings to manufacture iPad cases.

Buckley’s company operates in borrowed space out of Potrero Hill, but with the success of his product, he’s hired an additional 15 workers and is already looking for a permanent site.

Buckley attributes his success to his product’s branding. The fact that he can say the dodo case was made and sold in San Francisco goes a long way with consumers today, Buckley said.

“People are really looking for products and things in their life that represent something,” he said. “There has been a shift to locally grown food and that same mentality is applicable to more than food.

“If you can say this was built here in San Francisco, people really appreciate that.”

In the past decade, The City has seen a new type of manufacturer grow, one that has developed allegiance to the art of branding in The City, said Kate Sofis, executive director for SFMade, a local nonprofit networking group for manufacturers.

“They are hypersensitive to the customer and designing products with aesthetic quality,” Sofis said. “These are the kind of companies that can profit here. They develop a brand allegiance with a consumer base that’s willing to pay more for their product.” — Erin Sherbert

Manufacturing bright spots

Cookie, cracker, pasta    
2003 0   
2009 9

Wineries    
2003 5    
2009 10

Office furniture    
2003 0    
2009 7

Pharmaceuticals    
2003 0    
2009 6

Textile bag, canvas    
2003 0    
2009 4

Losing manufacturing jobs

1969: 58,523
1979: 51,150
1989: 43,415
1999: 33,792
2008: 13,168

Source: San Francisco Controller’s Office

esherbert@sfexaminer.com

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