Cincinnati region has tools to become a high-tech hub of moving things
Take a moment, as the nation swerves toward the exit ramp of a global health crisis. Add in the transformation of the Cincinnati/Northern Kentucky International Airport into a growing freight hub. Sprinkle in entrepreneurs dedicated to sustainability and healthy living. Anchor it all with our region’s traditional strengths in branding, marketing and big-company influence.
What do you get? To Pete Blackshaw, it’s obvious – an opportunity.
He calls it the “Great SupplyWay,” positioning Greater Cincinnati as a center of supply chain, logistics, advanced manufacturing and e-commerce distribution.
“We’re in this unique window,” said Blackshaw, the fast-thinking, fast-talking visionary who is chief executive officer of Cintrifuse, the local nonprofit incubator and advocate for startup companies. “COVID’s kind of reinvented everything. It’s forced everybody to act like a startup. Everybody’s had to do that to survive. … The whole national debate right now is about infrastructure and renewal.”
He believes the Great SupplyWay is the region’s most promising path to growth and innovation. Even the still-uncertain future of the Brent Spence Bridge is a chance to establish Southwest Ohio and Northern Kentucky as the nation’s premier laboratory for the most basic function: moving stuff from one place to another.
He is not alone. Blackshaw has drawn interest from some of the region’s traditional power structure: executives at Kroger Co. and Procter & Gamble Co., the region’s largest universities, local governments and successful entrepreneurs. The linchpin of the Great SupplyWay is the airport, which has remade itself from a Delta Air Lines passenger hub into a freight center from which giants like DHL and Amazon manage and expand their sprawling distribution networks.
The Great SupplyWay includes three legs of a stool: the “Tech Future of Freight,” focused on efficiently moving goods from one place to another; the “Circular Economy” that reduces waste; and “Food from Seed to Plate,” enhancing the movement and supply of healthy food to consumers all over the country.
Candace McGraw, the airport’s CEO, is a believer. She said the region’s central location and growing status as a transportation hub have given it the infrastructure to capitalize on the moment.
“If we can line it up properly, this can be the key differentiator of this region for decades to come,” McGraw said. “I think the possibilities are endless. I think we have the right entities. I certainly think we have the right energy and zeal. Now, we just need everybody to line up and support this.”
The numbers are there. Cargo tonnage out of CVG has more than doubled since 2013 and is on a record pace this year. A $1.5 billion investment from Amazon is creating a Prime Air hub at the airport. That’s on top of DHL, which operates its North American “superhub” at CVG. Overall, the airport houses the seventh-largest cargo operation in North America.
“In the 10 years I’ve been here, we’ve seen nothing but change and growth,” she said. “Now we have to stop focusing on what we needed yesterday, and focus on what we will need five, 10 years from now. When we talk to companies, we tell them, ‘Come do your testing here. You can scale it up and take it to other airports. We’ll let you try things here.’ ”
Supply lines critical for produce startup
About 45 miles north in Hamilton, innovation is taking shape in the unlikeliest of places – City Hall. City Manager Joshua Smith is there, but so is the headquarters of 80 Acres Farms, the marketer of fresh produce that has the cool-kid-on-the-block flair of the region’s entrepreneurial elite. Literally, the startups have taken over the building.
“Within five minutes of meeting (80 Acres Farms CEO) Mike Zelkind, I’m like, ‘You are coming to Hamilton,’” Smith said. “He can sell anything. My old office is now Mike Zelkind’s office. We’re using the city building as an incubator. I keep squeezing our space. We have more companies, we’ll keep squeezing.”
Imflux, a P&G-related company that makes molding technology, also is growing in Hamilton, and logistics company ODW is among those taking space in the city building.
The star is 80 Acres Farms and its sister company, technology company Infinite Acres. Founded in 2015, 80 Acres operates indoor “vertical farms” near supply lines around the country, compressing the time needed to ship the produce and keeping it fresh all the way to kitchen tables. The farms use 100% renewable energy and no pesticides.
The company secured $160 million in private financing earlier this year, touted by the Cincinnati Business Courier as the largest single raising of capital by a startup in the region’s history. Infinite Acres has launched partnerships with innovators in irrigation systems and online retailing. Tisha Livingston, a co-founder of 80 Acres Farms and CEO of Infinite Acres, said the company has reached profitability in its two largest farms, including the one in Hamilton.
“We are the solution to fresh produce all over the United States,” she said. “For us, it’s really about scale, about getting to enough farms to cover expenses.”
80 Acres Farms could be located anywhere. They could emulate dozens of other promising entrepreneurs here who have followed their funding or the newest technology and relocated to Silicon Valley or Boston or Austin, Texas. But Livingston said 80 Acres Farms is here because it’s home – and Hamilton has worked hard to keep it that way.
“I can’t think of many city officials who would give up a whole floor of their office building because they want us to be here, and they are invested in our success,” she said.
Moving stuff around more efficiently
The key to the Great SupplyWay is moving goods, a sector where Greater Cincinnati has natural advantages. Mark Thackeray, director of Global Supply Chain Management programs at Northern Kentucky University, said this is one of only a half-dozen metropolitan areas in the country with access to all four basic modes of transportation: Inland waterway, air, road and rail.
Moving freight is indispensable to virtually everything that Americans do. And it’s growing: According to the American Trucking Associations, freight revenue by truck will increase 36 percent during the current decade, from $879 billion in 2020 to $1.435 trillion in 2031.
Yet there are bottlenecks – just try to cross the Brent Spence Bridge about 4:30 any afternoon. The SupplyWay working group on freight explored concepts including a hyperloop, a low-resistance, high-speed transportation system either below ground or above ground, and an “Expedia of freight,” a transportation management software that could match carriers with loads.
“They’re all big ideas,” Thackeray said. “Do I think they’ll all get traction? I do not. The question is: Are the conditions right? Our belief is, if they’re not, they’re awfully close.”
Also critical to the SupplyWay is the “Circular Economy.” Lisa Ellram, the Rees Distinguished Professor of Supply Chain Management at Miami University, said the idea is to “upscale” any product so you can reuse it to create more value.
“Whatever you put into the marketplace, you want to keep it in the marketplace as long as you can,” Ellram said. “When you do take it out of the marketplace, you reuse it or upscale it, anything to keep it out of the landfill.”
Champion for an idea: ‘He knows everybody’
Blackshaw talks about the Great SupplyWay with a revolutionary zeal, a combination of entrepreneur, civic leader and traveling salesman. It’s not hard to look at the initiative and see parallels to Blackshaw’s career.
“If there’s any thread for me, it’s always been thinking and acting like a startup,” he said.
The California native started first as a policy aide and press secretary for a state senator interested in environmental measures. After four years in the 24/7 gauntlet of politics, he left for Harvard Business School and then the ultimate finishing school, Procter & Gamble in Cincinnati.
Blackshaw thrived at P&G just as the consumer goods goliath was realizing it couldn’t rely on traditional billion-dollar brands to generate the growth the market demanded. He became one of a new breed of marketers looking to the future. Much of his innovation was in interactive marketing, particularly capturing and analyzing data from consumers.
Only four years later, that work took shape in Blackshaw’s first company, Planet Feedback. The online portal quickly became a staple of Cincinnati’s entrepreneurial ecosystem. Eventually, Blackshaw realized the entrepreneur’s dream and exited, merging with another local startup and then selling to giant Nielsen Online.
Several years later, Blackshaw took himself, his wife and three young children to Switzerland to lead digital marketing for Nestle. Three years ago, he reappeared here as CEO of Cintrifuse. He was coming home.
Back in his P&G and Planet Feedback days, Blackshaw was a wunderkind, eager to make his mark on the world. Now at 56, he’s a little grayer and a little more weathered. But he still talks fast, still throws out multiple ideas within the same sentence and still has the spark in his eyes when he talks about the future – even if it’s his own future.
“I don’t look at this as a culmination,” he said. “I probably have at least one more startup in me. I like this challenge. I like the notion of helping an underachiever.”
One of the common themes from many of those working on the various SupplyWay initiatives is the importance of a champion who can connect to the power brokers to find financing, political support and public acceptance. Supporters of the Great SupplyWay say the idea needs someone who is both an insider and an outsider, who can get his calls answered and who never stops pushing.
“Pete hears everything about everything,” said Ellram, the Miami professor. “He’s always putting things together, and he knows everybody.”
Will it work? Timing is on our side
Will the Great SupplyWay work? What makes it any different from the dozens of other economic-development narratives dreamed up by local officials over the past 50 years?
If Blackshaw is right, the answer is clear: Timing. Movements are built on being in the right place at the right moment. The pandemic has elevated freight transportation as a critical piece of the nation’s infrastructure. And the nation’s private sector companies, from startups like 80 Acres Farms to giants like P&G or Kroger, recognize that today’s consumers care about sustainability.
Blackshaw invokes the image of pioneers traveling down the Ohio River and choosing this location to launch a new trade network.
“You’ve almost got this obsession with infrastructure that opens up a lot of opportunities,” he said. “It’s just a golden moment to kind of reinvent ourselves.”
Appeared in the October 2021 print edition of Movers & Makers, Cincinnati.