How a Caterpillar Changed a City

When Taco Bell  had a new quesadilla with melted pepper jack cheese, reduced-fat sour cream, seasoned meat and lettuce (and still more), they tried it out in Toledo, Ohio.

Where are we going? To an uneven economic recovery.

Choosing a Test Market

We used to ask if a product would “Play in Peoria.” The heart of the U.S. heartland, this downstate Illinois city was where Pampers were tested before we even knew about disposable diapers. McDonald’s asked Peoria try out its McRib sandwich and Anheuser-Busch went there with a new 55-calorie beer.

Marketers liked Peoria because it had the perfect mix. It was the home of an insurance company, more distilleries than you could count, and the heavy equipment maker, Caterpillar Inc. It had affluence and manufacturing. There was racial diversity, a university (with a pretty good basketball team), and a range of incomes. With a profile that could be “replicable” across the U.S., it was an ideal test market.

No more.

Peoria’s manufacturing base is gone. And now, after years of cutbacks, Caterpillar announced its headquarters would move from Peoria to Chicago. One of Peoria’s major employers since 1925, it populated the city’s affluent suburbs, boosted its employment rate and supported countless projects.

Typical of the city’s changes, where Pabst had been, they now have a medical center:

Perhaps though, these graphs say it all:

Manufacturing jobs:

Labor force:

Our Bottom Line: An Uneven Economic Recovery

The statistics show an unemployment rate near all time lows. Yes, GDP growth has been anemic but it has grown. And inflation has been a healthy 2% or less. But behind those statistics are the Peorias of the country:

Looking at the black and orange dots, we could say that we have a geographical divide between clusters of affluence and decline.

From: Brookings

And for that reason, we will no longer ask if “It will play in Peoria.”

My sources and more: The Peoria story is big and little. Ostensibly about one city, it really is about a group of declining regions and, as Quartz points out, two economies in one country. It also is about new test markets here and here.