Building up the Little Apple

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Six years ago, Cameron Smith of Cameron Smith Associates decided to open up shop in Minneapolis. After handling hundreds of placements of Wal-Mart supplier teams in Bentonville each year, he was gauging the seemingly unstoppable growth of Target.

So Mr. Smith meticulously researched the vendor market and found a surprising deficit in supplier teams on the ground in Minneapolis. In fact, he was only able to find 12. After placing recruits with more than 20 supplier teams since, his firm estimates that 138 supplier teams are now based in Minneapolis.

Although nowhere near the estimated 1,200 suppliers in Bentonville, it's an influx of first-party vendors into a market that even a decade ago wasn't considered among the top 10 retail markets for brand marketers. Today, Minneapolis is arguably the No. 2 retail center in America if you want to get your product or brand in front of the nation's consumers, especially in this era of retailer power. Minneapolis has an estimated $144 billion in retail sales that originate there.

In response, the big guys are starting to arrive, including Colgate-Palmolive Co., Frito-Lay, Energizer, Unilever, ConAgra, Nestle, Playtex, Del Monte and Mattel.

But unlike Bentonville, it's not just one retailer driving the growth. Target, for now, can claim the largest chunk of sales at $52 billion. Best Buy has sales of $30 billion. And when the $20 billion Minneapolis-based grocery store chain and wholesaler SuperValu completes its takeover of Albertson's, its combined sales will even top those of Target, funneling $62 billion in business through Minneapolis.

"It's just a tremendous amount of business concentrated in one city," said Tom Dowdy, who, as president of Omnicom's National In-Store, a retail-event and field-marketing company, is scouting office space in town. "If you compared them to anyplace else in the country as centers of retail, they are all just one-horse cities."

The buildup of a successful trio of retailers is also driving growth in what was already considered a vibrant creative and agency community. "It really does feed the market," said Michelle Fitzgerald, who has worked for 11 years at Minneapolis-based ad agency Fallon, part of Publicis. Not only does Ms. Fitzgerald see a buildup of supplier placing teams, but the trio of big retailers is spawning growth in small, often one-person marketing and start-up consulting shops.

The region itself is on a growth tear, with the Twin Cities' seven-county metro area adding nearly 130,000 residents from 2000 and 2004 to boost the population to nearly 2.8 million, according to local officials.

Though Mr. Smith admits the Minneapolis buildup is "nowhere close to the Bentonville phenomena," his business has doubled in the market in the last year. "I was up there first, in anticipation of everything happening up there that happened down here," said Mr. Smith. "I'm just tickled to death we got our arms around it early. Minneapolis is definitely a retail powerhouse. It's really happening up there now."
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