Despite difficult year, manufacturers dominate the Star Tribune 100 list

Manufacturers dominated the Star Tribune 100 list of public companies, comprising a third of the state's heftiest revenue generators in 2015.

3M and General Mills again graced the top 10 slots, as they have for 25 years of the Star Tribune 100.

And despite disparate headwinds, other Minnesota-based manufacturers ranking in this year's top 25 included Ecolab, Hormel, Valspar, Polaris, Pentair, Medtronic and St. Jude.

Combined, manufacturers produced $80 billion in 2015 sales, down 3 percent. Profits plunged 56 percent to $5.3 billion as Minnesota's multinational producers wrestled mightily with unfavorable currency exchange rates, depressed oil markets, shriveling economies in China and Canada, a cruel bird flu and shifting tastes in food and consumer electronics.

To compare, retailers, restaurants, health insurers and other nonmanufacturing firms increased sales 7.5 percent, while their profits dropped 3 percent.

Recent economic reports from the Creighton University and Enterprise Minnesota showed that Minnesota's industrial firms also struggled with a tight labor market and near-zero unemployment rates. They also suffered from downturns in ore mining and agriculture equipment markets.

In the end, 2015 product orders, delivery lead times, inventories and employment slowed.

Manufacturers here might not have grown like Minnesota companies in other industries, but many bested their industry peers.

"Industrials here are viewed as good performers," said Mark Henneman, president of St. Paul-based Mairs and Power, which invests in Midwestern firms.

"These are industrial companies that are not necessarily performing really well, but they haven't gotten worse," he said. "And some companies that didn't do as well last year have [recently] showed signs of stability. Donaldson and Fastenal, Graco and even Pentair are doing better this year."

But Henneman pointed out that Minnesota will soon lose two longtime corporate heavyweights. Cleveland-based Sherwin-Williams is buying Valspar in an $11 billion deal, while Abbott Laboratories in Chicago is buying St. Jude Medical for $30 billion.

Meanwhile, the state's other big producers are restructuring after a tough year and launching strategies for long-term growth, economists note.

But 3M also dove back into the acquisition market, making its first big buys in eight years, including Capital Safety in a $2.5 billion deal. Officials said the deals should add $660 million in new sales, and are forecasting 7 to 10 percent earnings growth for this year.

General Mills is eliminating sugar, salt and gluten from its products and launching marketing campaigns to reconnect with consumers. It shed the Green Giant vegetable division and added more organics and proteins to its menu.

With all of the changes, General Mills, like its corporate Big Food peers, is trying to slow sales declines caused by changing consumer tastes.