Ramstad: Why DigiKey made huge investment in northwestern Minnesota, despite slowing economy

DigiKey seven years ago made a huge bet on staying in Thief River Falls. It built the state’s largest building, adopted new processes and sees no limits to its opportunities.

There are too many patches of woods around this northwestern Minnesota townof 8,800 people to seea dramatic vista of one of the largest buildings in Minnesota.

But that’s OK. The real dramaof DigiKey’s 2.2 million-square-footproduct distribution center — twice the size of the Amazon fulfillment center in Shakopee — is that it’s there at all.

DigiKey confronted Minnesota’s biggest economic challenge — the low rates of population and workforce growth — before other companies and political leaders clued in on them.

A decade ago its leaders, including company founder and Thief River Falls native Ron Stordahl, felt the company was getting too large for the town and seriously considered moving. They examined Des Moines, Omaha and Sioux Falls and other Midwest cities with convenient shipping logistics and more people in the hiring pool.

“It was pretty much a given that it wouldn’t be here,” Dave Doherty, DigiKey’s president, told me as he recalled that time.

Then, in the biggest gamble of its 53-year history, leaders of the privately held company decided in 2018 to stay in Thief River Falls, construct the giant building and create a new way to sort millions of electronic parts for customers all around the globe.

Three years since that building opened, the bet has paid off. DigiKey continues to grow its sales, and its workforce of nearly 3,400 is more productive than ever. Even office workers train in “second skill” tasks to help out in the mega-warehouse.

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