Welcome to Louisville, Marketing's Senior Center

City Long Known for Racing and Bourbon Tries to Become Corporate Hub for Aging

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Forget Mall of America. An "experience center" is scheduled to open next year in the heart of downtown Louisville that will serve as a living laboratory where startups and other companies can demonstrate and test new products with a specific set of consumers: those over age 65.

An organization called InnovateLTC is at the forefront of the city's efforts to target this growing market, planning an 18,000-square-foot facility envisioned as an Epcot Center for aging that would draw consumers and industry leaders from across the country. The goal is to create what essentially would be a mall for fashionable and functional senior products, from furniture to cosmetics.

This Louisville building will house an experience center to test products and services for seniors.
This Louisville building will house an experience center to test products and services for seniors.

One section will include a model home, called an "idea house," that will allow entrepreneurs to test and collect data on products aimed at allowing seniors to stay in their homes longer. For instance, the bathroom might include new robotic-tub technology that helps lift seniors out of the bath. Another section will be filled with "eldertainment," such as virtual-reality games that promote fitness, mobility or rehabilitation. One of InnovateLTC's clients is a Dutch company called Vita Care, which is developing "therapeutic motion simulation" systems that use video and vibrating chairs to simulate activities such as motorcycle riding or jet skiing.

The experience center is just one facet of a grand plan to turn this Kentucky city into ground zero for aging care. "If you want to go start a tech company, you go to Silicon Valley. If you want to start a company in this space of lifelong wellness and aging care, you come to Louisville," Mayor Greg Fischer said in an interview, shortly before rushing off to meet Jim Ferguson, whose trip to Louisville from Maine included a personal pitch from the city's highest-ranking elected official. "What do we need to do to get you to move here?" asked Mayor Fischer, moments after greeting Mr. Ferguson, whose company is developing cutting-edge protective headgear targeting the senior market. "We'd love to see you here."

Plenty of like-minded companies have already come. Louisville, best known for bourbon and the Kentucky Derby and as the birthplace of Muhammad Ali, has quietly become a national hub for aging-care companies, thanks to smart municipal branding and a nurturing corporate environment that is redefining Southern hospitality. The city boasts more corporate headquarters in the field than anywhere else in the U.S., accounting for more than 18,000 employees and some $48 billion in revenue, according to city figures. Companies calling Louisville home include insurance giant Humana, Fortune 500 long-term-care hospital operator Kindred Healthcare and Signature Healthcare, which runs long-term-care centers in seven states and moved its headquarters to Louisville from Florida in 2010.

In the coming years, aging baby boomers will begin flooding the senior-care market, creating what some call a "silver tsunami" of demand for everything from assisted-living centers to devices that monitor vital signs remotely as the 78 million-strong generation begins heading into retirement.

An estimated 10,000 baby boomers are turning 65 every day, a pace expected to continue for two decades. Within the next five years, boomers are on pace to control 70% of the disposable income in the U.S., according to Nielsen. And older boomers (born from 1946 to 1955) have an estimated spending power of some $1 trillion, according to a Television Bureau of Advertising presentation cited by InnovateLTC.

Louisville wants to ensure that the next big innovations in aging will spring from this Ohio River city of 602,000 people. At least that is the hope of city leaders like John Reinhart who are taking steps to ensure their town is where the newest products and services are conceived and then marketed not just nationally, but globally. Take, for example, the experience center. "Look at the older person's clothes and shoes and canes and walkers," he said. "Does any of it excite you? No. A lot of the current stuff almost is a stigma."

Vita Care is developing therapeutic motion simulation systems.
Vita Care is developing therapeutic motion simulation systems.

Mr. Reinhart is CEO of InnovateLTC or, as it's properly known, the International Center for Long Term Care Innovation. It is a think tank and business accelerator founded in 2010 with seed funding from Signature Healthcare, the state of Kentucky and an organization called Nucleus, an economic development arm of the University of Louisville Foundation that is building research parks focused on life sciences. In return for fees or a cut of future sales, InnovateLTC clients get access to research, startup funding and the ability to network with key players in the fragmented aging-care market, many of whom operate within city limits. "We can be a matchmaker," said Mr. Reinhart, who is the former chief entrepreneurship officer for Signature. "Come here and we'll give you the gateway of where you need to go."

Louisville's push to become a senior-care leader is based on an economic theory called "clustering." The idea, popularized by Harvard Business School Professor Michael Porter, is that companies and institutions that operate in the same region enjoy competitive advantages, leading to more innovations and an environment that fosters startups. In other words, place still matters, even in the digital age.

That seems especially true in Louisville, which is small enough that corporate leaders routinely rub shoulders and see consumers. "It's nice to bump into your customers socially," said Mary Zappone, CEO of RecoverCare, a national supplier of therapeutic mattresses and bariatric-care equipment and specialty beds to long-term-care hospitals, skilled nursing facilities and other providers. The company in 2009 moved its headquarters to Louisville from Philadelphia, lured by $2.3 million in state tax incentives and access to the city's health-care talent pool.

Louisville's health-care roots date back to the launch of Humana in 1961, which began as a single nursing home founded by two lawyers in town. The company expanded rapidly, exiting and entering different businesses, and today is one of the nation's largest health-insurance companies. Humana's presence spawned a host of health-related business in Louisville, such as Chrysalis Ventures, which manages a roughly $400 million health-care and technology investment fund targeting early-stage companies.

But it wasn't until 2006 when city leaders noticed it was becoming a national aging-care hub. The impetus was a detailed study by the Louisville Health Enterprises Network -- a nonprofit alliance of 188 companies -- that revealed the city's emerging presence in long-term care.

At the time, Louisville was better known globally for fast food, booze and "The Hot Brown," an open-faced turkey, bacon and cheese sandwich that was created here and is seemingly served everywhere in town. Yum Brands, which owns KFC, Taco Bell and Pizza Hut, is headquartered here, as is Papa John's and liquor giant Brown-Forman. Also, shipping company UPS keeps its international air hub in Louisville, making logistics a key cluster.

Louisville's efforts to grow the cluster seem to include nearly every major institution in town. Last year, the chamber of commerce, known as Greater Louisville, created the position of economic development director for lifelong wellness & aging care, whose job is to help local companies expand, while drawing new businesses to town. Kelly Armstrong, who holds the job, routinely visits national aging-care conferences to spread the word about Louisville. And when prospective companies visit, she shepherds them around town, connecting them to key leaders.

Aging care has also been incorporated into the city's efforts to rebrand itself as the "Possibility City." For instance, when local companies seek to lure top executive talent to town, they often use marketing materials assembled by the Greater Louisville Community Branding Project, a public-private partnership that includes Greater Louisville. One example: a gift box labeled "Give Louisville a Shot" that comes with a shot glass, one or two bottles of Kentucky-made bourbon, such as Maker's Mark, and a reminder that "we're a city that 's ever-youthful, but we have more aging-care-company headquarters than anywhere else in the world."

"Perceptions of Louisville were not negative" but there was a basic lack of awareness nationally, said Ceci Conway, a former marketing executive for Yum who is the project manager for the Greater Louisville Community Branding Project. "We have an opportunity to help define the city's identity."

And what better way to do that than with a cable-TV channel, which Mr. Reinhart envisions one day broadcasting continuously from the InnovateLTC experience center. While that might be far off, the center in the short term is seeking corporate sponsorships for the experience center.

The search for such a friendly entrepreneurial environment was partly what led Signature Healthcare to town back in 2010 -- along with a $4 million tax-incentive package. The company conducted a national search, considering Orlando and Nashville before picking Louisville, where "we are very fortunate to land a lot of new senior team executives right in our backyard from other companies," said CEO Joe Steier, who was born and raised in Louisville.

InnovateLTC's John Reinhart, Mayor Greg Fischer and Nucleus President-CEO Vickie Yates Brown.
InnovateLTC's John Reinhart, Mayor Greg Fischer and Nucleus President-CEO Vickie Yates Brown.

As a co-founder of InnovateLTC, the company is helping to start an angel fund with other companies in town to spur senior-care technology. "Most provider companies don't really have time to study innovation," Mr. Steier said. And "with all the Medicare and Medicaid cuts, it's hard to make all the bets yourself, so we wanted to find a vehicle where we could bet collectively and make investments together."

This is the kind of energy that lured Mr. Ferguson to visit Louisville from Maine. An electrical engineer by trade and youth soccer coach in his spare time, he originally conceived his headgear technology as a way to protect his young players who were afraid of doing headers. He began looking at the senior market after talking to a doctor friend who specializes in geriatric medicine and fall prevention. "He said forget about soccer, my patients need this," Mr. Ferguson recalled.

Mr. Ferguson's company, Alba-Technic, holds a patent on a combination of "smart molecules" that can make headgear that is thin yet super strong, allowing for fashionable hats such as visors or baseball caps that seniors can wear and not feel stigmatized, he said. During his recent trip, he toured the city with his wife, who is Alba-Technic's CEO. They met with key city leaders, including the mayor, and several aging-care executives in town who are potential customers. He even squeezed in a visit to Churchill Downs.

On one of his final nights in town, he was treated to dinner at a restaurant in the city's trendy NuLu district, where he ordered a pork chop and Kentucky-made Woodford Reserve bourbon. By that time, he would later explain, he had already made up his mind to move part of his business to Louisville, where Alba-Technic will set up a division to focus on the commercialization of its products. "The climate is so much more favorable than other places we've seen," he said, noting that roughly 50% of the company's potential corporate buyers are within 50 miles.

Mr. Ferguson is also considering another significant move. Born in Scotland, he is a long-time Scotch drinker. But he is contemplating a permanent switch to bourbon, proving that he really is giving Louisville a shot.

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