Charlotte-based OrthoCarolina has positioned itself to provide high-level, cost-conscious service driven by the economics of U.S. health care and the Affordable Care Act.
OrthoCarolina provides a continuum of care: physicians who are specialists in foot and ankle, hand, hip and knee, shoulder and elbow, spine, sports medicine and pediatrics as well as such services as physical therapy, MRI and post-surgical support.
The regional practice has grown to 130 doctors, nearly double since Charlotte Orthopedic Specialists and the Miller Orthopedic Clinic merged in 2005, partly by adding six other practices in the past five years. It employs more than 1,000 people.
That size provides the economies of scale, top-quality staffing and opportunities for innovation that can address inefficiencies in care delivery, says Dr. Dan Murrey, the firm’s CEO.
In particular, OrthoCarolina leverages technology and patient engagement to establish a track record of affordable, successful care that will be vital to success under bundled-payment plans facing the scrutiny of payers and accountable care organizations.
“Orthopedics is sort of on the front end of the experimentation that the Affordable Care Act anticipates,” Murrey says. “We’re mostly in the business of improving quality of life and reducing pain. The treatment of orthopedic problems tends to be pretty episodic. A lot of entities around the country are experimenting with what are called bundled-payment programs.
“We’re building the tools so we’ll be able to do that and go to the public and say ‘This is what you’ll be able to expect from us if you come to us with carpal tunnel syndrome or knee arthritis.’ We want to be more transparent not only about the outcomes, but what the cost of care will be.”
Federal rules aside, cutting costs is crucial for convincing employers to continue providing health benefits, Murrey maintains. Per-capita costs have doubled in the last 10 years, and health care accounts for 18 percent of the GDP.
“We realize that health care costs are a huge problem for the business community. It’s a real drain on businesses to have to pay as much for health care as they currently have to pay, and those costs have gone up dramatically,” Murrey continues.
“What we’re hearing from employers is that they were paying more and more. But without quality outcomes reported, such as return-to-work rates and quality-of-life measures, they didn’t know what they were buying.
“Every year, if they are paying 10 percent more, our fear is that employers will get out of the health care business altogether.
“We felt that for those economic reasons we had to respond. The Affordable Care Act put some structure to it, but these were changes that needed to take place anyway, regardless of whether the Affordable Care Act passed or not. It was becoming unsustainable for the economy and for the businesses.”
Benefits of Scale
OrthoCarolina’s growth in recent years enables it to make the investments necessary to address these problems.
“We’ve increased our size and our footprint to as far as two hours from Charlotte,” Murrey says. “Our overhead has progressively gone down as we’ve grown. One way it’s happened is that for medical practices, there’s a lot of capital investment, especially in information technology and electronic medical records.
“I think we have a real opportunity, having the concentration of orthopedic specialists we have and the volume of patients we have. We can devote time to enhancing protocols.”
OrthoCarolina’s scale enables it to keep legal, human resources and IT support in-house, saving more costs, and its numerous locations keep talented specialists busy full-time, enhancing patient care.
“We have subspecialty centers,” Murrey explains, such as concentrations of surgeons for hip and knee replacement, spinal surgery and hand surgery. “That probably has a greater benefit from the patient care standpoint, for patients to get the benefit of all the people in that subspecialty rather than an individual doctor if they have a challenging or controversial case.”
The firm has used electronic records for more than a decade now, which avoids the needless duplication of services, and adopted a data analytics tool five years ago to reduce costs.
“We’ve done some things to really try to drive down the cost of care for patients,” Murrey says. Among other things, OrthoCarolina has opened five orthopedic urgent care centers so that patients can avoid emergency room visits when they need help at night or on a weekend.
“They’re seen for the cost of an office visit rather than emergency room charge,” he says. “People know if they’ve injured an extremity. They can generally decide for themselves to go to an orthopedics facility.”
As the soaring cost of health care has generated increased cost-shifting to patients, they have become more engaged in their own care, Murrey acknowledges, and OrthoCarolina has elevated efforts to assure patient satisfaction.
“Patients historically have not paid for their own health care,” Murrey says. “Now, as people are experiencing higher copays, higher deductibles, they’re getting more involved in the pricing decisions. I think that’s been a positive thing. It’s forced everybody to be responsive. Physicians want to be responsive to their patients. The cost of care is now a part of satisfying patients that previously was not a big part of the equation.
Quality Care Experience
“We’ve done a fair amount of work in trying to standardize what we do and report the outcomes. Currently we use a database that allows people to input their health information directly into their medical record through an email link or an iPad in the office. We’re now starting to add to that, to add modules to educate them about their disease process or the surgical procedure they’re contemplating. We can report out what their progress has been.”
Several years ago an internal, cross-functional process improvement team started looking at patient complaints, both solicited and unsolicited, to generate improvements.
“We processed all that information and mapped out the care experience so we could see where the breakdowns were,” Murrey explains. “We’ve since expanded that program to include patients and their families. Over the summer, we shadowed over 500 office visits, care experience and surgeries with patients to get their take on what was good and what wasn’t good.
“We’re taking all the data we accumulated over the summer and creating action teams that will include not only our staff but also some of those patients to find solutions that will be preferred solutions for them. Those are the kinds of things we need to be doing—looking at the world through our patients’ eyes. The patients will tell us what they need.”
Transparent pricing in bundled care is a key to bending the cost curve in a field where even physicians sometimes don’t know the cost of service until it appears on the bill.
Murrey says now, “You know what the price is up front. There aren’t these surprises and bills that come for months and months afterwards. The provider makes sure you get exactly what you need, not more or different.
“We have to be a lot more intentional about the entire episode of care—not just what we do as surgeons, but all the other things you might interact with during your surgical episode.”
Consumers have found pricing of medical procedures is so arbitrary that “medical tourism” is growing—Americans going abroad for procedures like knee and hip replacements at a fraction of what the cost in the United States.
“There’s no question that the costs of implants are way too high,” Murrey says. “We’re working to try to reduce those costs as well. We believe that there’s a lot of opportunity to reduce supply costs and implant costs in orthopedics. The incentives haven’t been set up to do that. What we like about this new way of pricing is it forces everybody to take a hard look at the added value.
“Spending more does not always generate better quality. Even though we spend more than any other country, our life expectancy is not as high as dozens of other countries. We’re probably not getting value for all we’re paying. We’re trying to do what we can to figure that out and advocate for patients.”
The goal, Murrey says, is a care experience that starts when the patient calls. The practice provides the appropriate and necessary care for the person’s needs and circumstances, a navigator helps guide the patient through the process, the physicians’ track records and the costs are transparent, the patients get progress reports, and the practice engages the patients to help improve the system.
“I think if we offered that package of improvements to people, they would be excited to have it,” he says.
The Anatomy of the Practice
OrthoCarolina’s prides itself as being one of the nation’s most comprehensive orthopedic practices. It provides advanced specialty care and general orthopedics, supported by physical medicine and rehabilitation, physical therapy, advanced imaging, an occupational medicine program and orthopedic urgent care centers.
The origins of the practice are well-storied. For more than 80 years the predecessor groups of OrthoCarolina have provided quality orthopedic care to patients in the Charlotte region.
In the 1920s, Dr John Stuart Gaul, grandfather to the current Dr. Gaul III, pioneered an orthopedic practice rehabilitating wounded soldiers from WWI, and earning a General Washington Offices Award of Merit for his dedication. Nearby, Dr. Oscar Lee Miller was also starting a practice that would grow to become the Miller Orthopedic Clinic.
During the ’40s, prior to the development of the polio vaccine, Drs. Miller and Gaul worked to manage and treat the effects of polio throughout North Carolina, and share the knowledge and techniques with others, locally and internationally. Both practices continued to grow through the ’50s, and in 1955 a third orthopedic group, the Charlotte Orthopedic Clinic, was established resulting in 17 orthopedic surgeons in Charlotte and the surrounding communities.
The ensuing decades saw expansion of the practices with residency programs as well as the first surgeries at the Orthopedic Hospital of Charlotte. The expansion continued into the ’90s as the practices strengthened ties with community hospitals, while simultaneously striving to remain independent.
In 1993, Gaul Orthopedic merged with Charlotte Orthopedic Clinic to form Charlotte Orthopedic Specialists (COS), and late in 2004 the Miller and COS practices merged to form the present day practice.
Murrey expects that OrthoCarolina will continue to grow, through alliances as well as expansion and acquisitions, so that people in more communities can enjoy the advantages.
“What we’ve been able to achieve is to bring some of these procedural advantages or technological improvements to a lot of communities that didn’t previously have them or wouldn’t have been able to afford them,” he says.
“I think there are other opportunities to do that. The groups that have invested in infrastructure and have the kinds of governance that allows them to do those things make good partners as we work through this pretty massive transformation that health care is going to go through in the next decade.
“If we can figure it out together and get a solution that works, others shouldn’t have to struggle through it on their own. I think we’ll continue to grow. I think we’ll see more groups coming together,” Murrey affirms.
The shift from fee-for-service to new care models, including implementation of the Affordable Care Act, will take time but offers promising possibilities, he points out.
“We were not incentivizing the things that are desirable,” Murrey says. “This gives us an opportunity to create some changes in the system that ultimately could benefit the people. It’ll take a generation to figure this all out and make the changes that are necessary, but I think all in all it’s going to move us in a direction that’s going to make us more responsive to patient needs. At least we have the opportunity to do that.
“I think it’s incumbent on the physicians in the community to lead that process. If we don’t take a leadership role in doing it, we’re letting our patients down. We’re intent on being leaders in that.”
Over the last 30 years, turkey production has evolved from a primarily holiday-oriented business into a year-round product, thanks to an increasing consumer awareness of nutrition and a variety of new processed turkey products like deli meats and ground turkey. According to the National Turkey Federation, total domestic production has increased 110 percent since 1970 to almost 250 million birds every year.
Turkey offers more nutritional benefits than other meats, and its relatively mild flavor makes it also easy to use across recipes and easy to substitute for other meats in recipes.
Compared to chicken, beef or pork, turkey offers more protein per portion, as well as the amino acid required for complete protein usage. Just one serving of turkey provides 65 percent of the recommended daily intake of protein. Also by comparison, turkey is richer in calcium, lower in calories, lower in fat, lower in cholesterol (also less saturated fat and a better ratio of polyunsaturated to saturated fats) and lower in sodium.
North Carolina is the nation’s second largest turkey-producing state, raising over 32 million birds annually, trailing only Minnesota’s 46 million. One of the state’s largest vertical integrators in turkey production —Circle S Ranch—is based just down the road from Charlotte in rural Union County, just south of Monroe.
A Circle of Family
It was 1947. Oren Starnes had come back from the war (WWII) and had a desire to make a difference, no matter how small, to alleviate the hunger he had witnessed. Staying true to his farming roots in Union County, he and his new wife Helen started in business to produce eggs commercially. By 1960, they had established wholesale and retail egg routes in addition to selling eggs directly.
In the mid-60s, they decided to become an independent turkey grower raising around 27,000 turkeys annually. In the early ’70s, Oren’s son Sam decided that he wanted to become part of the family farm business. So in 1972, Oren officially incorporated the business as Circle S Ranch, based on the acronym of his and his son’s initials, SOS.
Now the second generation owner, Sam works just about a mile up the road from where he grew up on the family farm. Sam had finished high school in 1969 and enrolled in Wingate College, but because he had a low number in the draft lottery, he went ahead and enlisted. It was after his return from a tour in Vietnam that he joined the family’s turkey business.
“At that time, we were growing about 250,000 birds annually,” recalls Sam. “We had 600 to 700 acres, and we were also growing up to 700 head of beef cattle.”
“In those days,” Sam continues, “after spending their first eight weeks or so in heated brooder houses, the birds were moved outside in April onto a fenced-in range until they were ready to go to market.”
It worried Sam that outdoors the turkeys were vulnerable to wild animals and subject to diseases like cholera. It also meant that the business was seasonal, since North Carolina winters precluded the birds from staying outdoors from December through March. So, after a short brush-up at NC State to learn the latest in poultry production, Sam decided to build houses to bring the turkeys inside.
Circle S Ranch began construction on 18 new turkey houses in 1973, and soon it was transporting a load of turkeys to market every day.
Sam also knew that about 70 percent of the cost of producing a turkey is the cost of the feed. So to gain more control over feed costs, Circle S formed a co-op with a couple other farmers in the 1970s and purchased the Monroe feed mill that had been supplying their feed. By the mid-1990s, the co-op had grown the mill from 30,000 tons to over 300,000 tons a year.
Pretty soon they would be needing additional capacity. At the same time, Sam knew they would get a better freight rate if they could increase tonnage on their distribution.
“We were limited to 15 car trains and we needed 65 to 90 car trains to get a better freight rate,” explains Sam. “So in 1996, I bought a piece of land in Richburg, S.C., and began building a new feed mill. It opened in 1998 and we closed the Monroe co-op. Today we make over 500,000 tons of feed annually, and still supply feed for Simpson’s Eggs, one of the original co-op members.”
Oren Starnes passed away in 1987, but the family tradition continues as Sam’s two sons—Chad and Travis—now work alongside their father in the business. Both have been working on the farm since they were kids.
Chad, 39, oversees the feed mill and transportation operations, and is also involved in the administrative functions. Travis, 36, manages over 6,000 acres of corn, wheat and soybean crops, the company’s land clearing division, the Circle S Grain Elevator, and helps Chad manage the company-owned turkey farms. Sam, at 62, remains active in the business and is directly responsible for all grain purchasing.
“Having Travis and me here has afforded Dad the opportunity to grow the business and make decisions that he may not have been able to make if he didn’t have us here,” says Chad. “We understand the whole concept of Circle S and where we are going in the future.”
“I’ve got things now to where I can go on vacation and not worry about it,” Sam sums it up.
Growing Healthy Turkeys
The basic process of growing turkeys has changed very little over the last 40 years. Circle S buys the baby turkeys (called “poults”) from a variety of hatcheries, with most coming from eastern North Carolina and Virginia when they are only a day old.
The poults start out in a brood farm. Brooder houses average 20,000 to 25,000 square feet with about one square foot per bird. At about six weeks of age, the poults are transported by truck to a finishing farm, and over the next two weeks, the brooder house is cleaned, disinfected, and new bedding is delivered for the next flock. This eight-week cycle repeats itself about six or seven times a year.
Finishing farm houses also average about 25,000 square feet in size, but offer three to four square feet of space per bird. The birds stay there until they are ready for market at about 19 to 20 weeks of age. The 16-week finishing farm cycle also includes two weeks allocated to cleaning, allowing for three to four flocks every year.
Circle S sells to two primary meat processors—one in Harrisonburg, Va., and another in Newberry, S.C. Most of the birds they produce are male tom turkeys that are usually made into deli meats or other cooked and processed products. Smaller hens may be sold as whole birds and may wind up on your table at Thanksgiving.
Today, Circle S Ranch has 36 company-owned houses located within a short drive of their southern Union County base of operations. They also work with over 130 contract growers spread around York, Cherokee, Chester, Newberry, Lancaster, Chesterfield, and Kershaw counties in South Carolina, and Union, Anson, and Stanley counties in North Carolina.
Circle S Ranch and its network of growers produce over 350 million pounds of live turkeys every year. This represents about 8 million toms at 40-plus pounds each and about 1.5 million hens weighing less than 20 pounds each.
Some of the contract growers operate as brood farms, while others serve as finishing farms. Keeping the brood farms separate from the finishing farms helps prevent the spread of diseases that can endanger a flock. All of the Circle S company-owned houses are finishing houses.
Each contract grower furnishes the house and the labor to operate it, while Circle S Ranch furnishes the rest—the poults, the bedding, supplies, and the feed. Circle S also provides truck transportation from the brood farm to the finishing farm and from the finishing farm to market.
“We supply all the birds and we own them the entire time,” says Sam. “Our growers own their houses, but they use our procedures and grow the birds to our exact specifications.”
It also takes a large trucking operation to transport the poults and feed. Circle S Ranch operates about 60 tractor-trailer rigs, and many of the firm’s 142 employees are drivers and mechanics for the trucking fleet.
“We deliver over 400 loads of feed every five days, we deliver 33 to 38 loads of turkeys to the processing plants every night, and we have six trucks that move over 200,000 poults a week from the brood farm to the finishing farm,” Sam ticks off on his fingers.
A Self-Sustaining Operation
Circle S Ranch does more than just grow turkeys. They grow grain for the feed, mill the feed, make pine shavings for the turkey bedding, reprocess animal waste to formulate crop fertilizer, and recycle heating and cooling for turkey houses in a truly self-sustaining fashion.
The Circle S Shavings plant in Pageland, S.C., buys pine trees, debarks them (selling the bark for mulch), and makes pine shavings to use as bedding. Circle S and their growers use over 50 tractor-trailer loads of shavings each week.
The Circle S row crop operation farms close to 6,000 acres of wheat, corn and soybeans on land they own or lease in the area. They rotate their fields between the three crops, and the vast majority of that production is used as turkey feed.
“We sow wheat in the fall and harvest it in June,” explains Sam. “We plant soybeans right behind it that will come off in October or November. Then we’ll plant that same field back with corn the next March or April. When that corn comes off around September, we’ll sow wheat back into the corn stubble, and the cycle starts all over.”
“All our corn ends up at the feed mill to be made into turkey rations,” adds Travis. “About half of our wheat also goes into turkey feed, and the other half ends up as milling wheat for bread products. We sell our soybeans to ADM in Kershaw, S.C., and then we turn around and buy the processed soybean meal back to go into our feed mill.”
While the row crops help feed the flocks, the turkeys reciprocate by helping the crops grow. The litter from the houses, made up of shavings and associated turkey droppings, is recycled onto the fields as a nutrient-rich, organic fertilizer.
“Except for some liquid nitrogen that we add to some of the corn and wheat, turkey litter is the only fertilizer we use,” says Travis. “We can send samples off, get an analysis, and then take a soil sample to know exactly how much litter we need to use to grow a crop. We are so much more accurate with it today than we’ve ever been.”
Science and New Technology
While the basic process of growing turkeys hasn’t changed much in 40 years, the science and technology behind it certainly has. In the early 1970s, a fully-grown tom turkey might have weighed in at about 20 pounds. But today, that same 20-week-old bird would likely tip the scales at over 40 pounds. In addition to improvements in housing and production, big changes have been made in feeding and in the genetic selection of the flocks.
Many older finishing houses have curtain sidewalls to promote natural airflow through the house, but newer houses are being built with closed sidewalls and ventilation systems to better control inside temperatures.
“In summer, we can pull the air in through a cooling cell with running water and we can drop the temperature 10 to 15 degrees from the outside,” explains Sam. “In winter, we can control temperature by using the poults’ own body heat and pulling in the outside air and circulating it with fans. The system will do its best to keep the temperature at whatever we set.”
“The technology that’s available now for a turkey house would blow your mind compared to 30 years ago,” adds Chad. “I’m tied electronically into my farms and there are alarms that will call me on my phone and let me know exactly what’s going wrong.”
The biggest changes, though, have been in the genetic selection of the flocks. Sam says that there are really only two main breeds of turkey left, and the various hatcheries will take their stock from the same grandparent stocks and then do their own selection to produce and hatch the eggs.
“We know the genetic stock each flock comes from and we keep track of that from the time they come in until we ship them out,” he says. “When I started, a bird that weighed 20 pounds at 20 weeks of age might have required four pounds of feed to produce one pound of meat. Today, that same 20-week-old bird might weigh as much as 45 pounds, but we would have only needed two-and-a-half pounds of feed to produce that pound of meat.”
“We also have a nutritionist on retainer that formulates feeds for us,” he continues. “It’s a corn and soybean based diet. We feed them a certain number of calories each day, and they go through about eight different diets, starting out at about 30 percent protein and finishing up around 16 percent or 17 percent.”
The row crop operation has also seen big changes as GPS technology and equipment automation allows planting and fertilizer applications to be considerably more accurate than in the past. Rows are aligned perfectly with no overlap and no inefficient gaps.
While many things have changed over the years, one thing that hasn’t changed at Circle S Ranch is the concept of a family farm passed down from generation to generation. While some say the family farm is dying, at Circle S Ranch, the tradition is certainly still alive and well.
Photo By Fenix Fotography www.fenixfoto.com
Photo By Fenix Fotography www.fenixfoto.com
Under the header of “Not Your Father’s Biology,” the National Research Council (NRC) issued a report entitled A New Biology for the 21st Century. In it, the writers coined the term “New Biology” to describe the dynamic needed for the life sciences to address some of our nation’s most pressing problems—in loss of ecosystem services, alternatives to fossil fuels, and individualized health care.
The writers see this New Biology initiative as a sea change: “Biological research is in the midst of a revolutionary change due to the integration of powerful technologies along with new concepts and methods derived from inclusion of physical sciences, mathematics, computational sciences, and engineering. As never before, advances in biological sciences hold tremendous promise for surmounting many of the major challenges confronting the United States and the world.”
The NRC report advocates addressing our nation’s most pressing problems in the areas of food, climate, energy and health—sectors that in their larger aspects represent 50 percent of the U.S. economy. It makes clear the need for biologists to reach across the hierarchy of science allying themselves with physicists, chemists, computer scientists, engineers and mathematicians in multi-disciplinary teams to solve the most urgent multi-disciplinary problems.
The NRC anticipates that lines between disciplines will be blurred; physicists and mathematicians will study cell structures and living systems while biologists develop data mining programs and design homes. As you’ll see in a case study discussed later, Dr. Cory Brouwer of the P2EP Project at the North Carolina Research Center has already made the leap with one foot in genomics and the other in bioinformatics.
Businesses are unknowing practitioners of the New Biology as they increasingly cross industry sectors seeking more scientific and efficient methods of operation to produce food for the global marketplace. For example, in the agribusiness sector, Circle S Ranch in Union County uses ecologically friendly, sustainable operations in raising live poultry. Similarly, Simpson’s Eggs subscribes to science-based farming methods designed to ensure hen welfare. These companies are profiled in companion agribusiness profiles in the magazine.
Food: Plant Pathways and Plant Genomics
Plant pathways and plant genomics are expected to be leading players in the biology of the future. Americans may not realize the extent of the world’s food shortages. The Food and Agriculture Organization of the United Nations estimated that 923 million people were undernourished in 2007, the most current data for the NRC report. The New Biology promises the world faster growing, less expensive and more nutritious sustainable plants.
Genes of these super-efficient plants will be identified through quantitative trait mapping. Using what the NRC report calls genetically informed breeding, the genetic sequence of millions of plants can be determined from seeds and seedlings, not after their full life-cycle rotation.
Biologists are now considering breeding plants with an alternative photosynthesis pathway. Dry climate plants are less efficient in turning carbon dioxide into carbohydrates. If they were bred with a more conventional photosynthesis pathway, the adaptation could increase photosynthesis rates in most of the world’s food crops.
Within genomics is the sub-specialty of metagenomics or environmental genomics. Its purview includes temperature, moisture, light, viruses, bacteria, insects, fungi, birds and other factors. Studying plant-insect or plant-bacteria interactions could prove beneficial to crop yields. There is much to learn from these associations.
“Ninety-five percent of all bacteria on earth are invisible to us,” says UNC Charlotte’s Lawrence Mays, chair of UNC Charlotte’s Department of Bioinformatics and Genomics. “That’s because we can’t culture them in a petri dish.” But genomic scientists can extract DNA from bacteria samples and examine their genetic profile. The field has built up a sizable library of its bacteria findings.
Climate: Major Environmental Issues
The New Biology faces two major environmental issues: diagnosis and treatment. No single federal agency, scientific community or philanthropic foundation can develop a comprehensive set of tools to diagnose our ecosystem. At present there are eight federal agencies and departments that monitor our air, water, forests, soil and carbon dioxide levels. Even with that level of scrutiny there are mismatched datasets that make it difficult to detect trends or make comparisons.
In regard to treating at-risk ecosystems, the NRC report does not quibble: “We do not currently have the tools needed to manage the biosphere.” There has been some progress in removing carbon from the atmosphere and in the growing subfield of restoration, but here the New Biology is in its early stages.
Long-term and effective measurement and repair of our natural resources will require the combined efforts of biologists, engineers (civil, environmental and systems), mathematicians, modelers and computational scientists.
Energy: Biofuel Alternatives
Most of the worldwide increase in energy demand is coming from rapidly developing economies like India and China. Three-quarters of their needs are met with fossil fuels. Worries about fossil fuel depletion and pollution are longstanding.
Old Biology reminds us that the world’s first fuel was plant material, now referred to as biomass. The challenge for New Biology is to find plants that produce the most biomass with the least input of fertilizer and water and the least impact on the land needed to grow food. Corn accounts for most of the biofuel produced in the United States.
“In parts of the American Midwest, 100 percent of the corn crop is used to make ethanol,” says Brouwer.
The New Biology regards corn as a first generation biofuel. Second generation biofuels with higher alcohol content are now within reach. Crops in line to take away corn’s crown are sugarcane, sweet sorghum, switchgrass and miscanthus. Agricultural and forestry byproducts are also in the race.
Health: The Big Question
Present day health and medical decisions are often based on probabilities. We abstain from high calorie, high cholesterol foods because of the high probability of heart disease. Probabilities are derived from populations and apply to some, not all, people. Understanding how an individual’s unique set of genes and an equally unique environmental history relate to the person’s health risk, disease susceptibility and response to treatment “is a challenge well beyond current capabilities,” according to the NRC report. In other words, neither genomics nor the New Biology is presently in a position to answer the smoker/athlete question.
New variables have been found that make the question even more complex. Altitude, diet, exercise, exposure to sunlight and chemicals, as well as air- and surface-borne viruses and bacteria all influence the connection between our genes and our traits. New Biologists now think that the genes of each microbe that lives and works inside us also influence our development. Few of those connections have been studied.
Despite the sheer complexity of this vast web of interconnections, genomic scientists have made progress. They have identified large numbers of human and microbial genetic variations and environmental factors that are associated with specific diseases. However, association or correlation does not mean causation.
Causation will inevitably follow and genomics will move us from treatments based on statistical probabilities to treatments based on each individual’s specific circumstances. Individualized medicine and individualized nutrition are on the horizon. Experiments using fruit flies, Arabidopsis, mice, sea urchins and other model organisms will uncover networks, systems and pathways that are similar to humans. The journey of a thousand miles begins with a few genomic baby steps.
The gap between research and application in biology and medicine is extraordinarily long. We are dazzled by advances in technology and frustrated by decades of tiny steps in biology.
Yet the tortoise slogs forward. Scientists once thought that one gene mutation caused one cancer. They now follow a finite number of pathways from genes to disease. The Plant Pathways Elucidation Project and other collaborations emphasize nutrition and disease prevention, not crop productivity. The humble Arabidopsis is doing its part to move society from treatment by probabilities to individualized medicine.
Case Study: NCRC’s P2EP Project Fuses Plant Science With Human Health
The NRC report writers make clear that plant pathways and plant genomics are expected to be leading players in the New Biology. Genomics is the study of genetics and biology.
Genomics examines the interplay of genes with each other, the environment and human lifestyle factors. Genetics, on the other hand, looks at specific genes and traits and how they are passed between generations. Genomics may be able one day to unravel why a cigarette smoker who abhors exercise and overindulges lives to be 90, while a non-smoking health-conscious marathon runner dies at age 40 of a heart attack. By including variables such as diet, exercise and smoking under its research umbrella, genomics may one day be able to prevent cancer and heart disease.
Genomic scientists moved closer to cancer prevention when they discovered that a wide array of genetic mutations grew and developed into the same cancer in different patients. Different mutations, different people, the same cancer and a finite number of pathways between genetic glitch and disease. That discovery had immense practical significance.
“Rather than designing dozens of drugs to target dozens of mutations, drug developers could focus their attention on just two or three biological pathways,” suggests the National Human Genome Research Institute. “Patients could then receive the one or two drugs most likely to work for them based on the pathways affected in their particular tumors.”
That personalized approach to better health is one of the factors motivating Dr. Cory Brouwer and his team at the North Carolina Research Campus in Kannapolis. Brouwer is an associate professor of bioinformatics and genomics at the University of North Carolina at Charlotte (UNCC) and part of the P2EP leadership team. His current interest concerns pathways in plants, and the labs at the North Carolina Research Campus proved ideal for this type of research. Brouwer’s mission is to learn how plants can produce better nutrients.
Brouwer envisions a personalized nutrition. “It should come as no surprise that our nutritional needs are different from person to person because of our genetics,” he said. “We may someday sit down with a nutrition consultant who informs us that, based on the sequence of our genome, we need to be eating veggies with vitamins X, Y and Z and probably none of M, N and O. All vitamin supplements would become My-One-A-Day.”
Brouwer hopes to achieve that goal through the Plant Pathways Elucidation Project or P2EP (pronounced “Pep”). The $1.5 million, four-year collaboration was launched this summer. Participating are UNC Charlotte’s Bioinformatics Services Division, North Carolina State University’s Plants for Human Health Institute and UNC General Administration. Industry leaders include the David H. Murdock Research Institute, Dole Nutrition Research Laboratory, General Mills and the N.C. Research Campus.
The program addresses the overarching theme of “plant pathways” which are a series of chemical reactions in plants that help them to make the compounds they need to survive and adapt to environmental stressors such as disease or climate change. Each chemical reaction forms a part of a “pathway” to the formation of a specific compound, because it’s the natural path a molecule takes when changing from one form to another.
Ultimately, the pathway leads to a new product like an amino acid, phytochemical or a type of fiber. Having been created to help a plant survive its own health risks, these newly formed compounds are often beneficial to human health when consumed. A primary goal of the P2EP program is to identify and map plant pathways in food crops—that is, decode the steps taken to produce the beneficial compounds—and better understand how they function. The P2EP project will conduct research on four foods—blueberries, strawberries, oats and broccoli—and mine data to generate a research knowledge base.
“We’re mainly interested in metabolic pathways for this project,” says Brouwer. “These are a series of chemical reactions that occur within the cells. We elucidate the pathway by identifying the specific enzymes and chemical reactions that the plant is using to produce compounds important to nutrition.”
Presently little is known about plant pathways. It’s surprising that neither nutrition nor edible plants have been the main focus of plant science research. Factors that affect plant yield like disease and drought resistance have always topped the research agendas, not nutrition.
The flowering weed, Arabidopsis, has been the model organism for genomic research, not the four P2EP plants. Like the fruit fly of biological research, Arabidopsis is small and grows quickly. It also has a small number of genes and was the first plant to have its genome sequenced. Despite its fame, Arabidopsis is inedible.
Tools for Agribusiness
Missing from previous plant genomic research have been the tools needed to produce nutritious fruits and vegetables. “Genomic sequencing is of no use to plant breeders until we connect those sequences to traits and markers that fruit and vegetable breeders can use,” Brouwer points up.
Of the four plants studied in P2EP, oats may be America’s most neglected crop. Although it is the vital ingredient in cholesterol-lowering oatmeal and General Mills’ Cheerios, oats are no longer produced in the United States. They are raised only as a rotational crop in Canada. Corn and soybeans dominate U.S. agriculture.
Beyond identifying and mapping plant pathways in food crops—decoding the steps taken to produce the beneficial compounds and understand how they function—the project is already producing terabytes in a knowledge base which Brouwer says will require “bioinformatics expertise and high performance computing to do the analysis that will lead to new and exciting discoveries.”
Generating a knowledge base dedicated to plant pathways research from around the world first requires compiling the data to populate it, and that’s what Brouwer’s project is accomplishing. “The knowledge discovered within this project will be made available online to the public and the scientific community,” he says.
“The Plant Pathways Elucidation Project represents the way big science can solve big problems for society—collaborations across disciplines involving industry and academia,” concludes Brouwer.
Mary Ann Lila, director of the North Carolina State University’s Plants for Human Health Institute at the North Carolina Research Campus and a member of the P2EP leadership team, sums it up: “By answering the questions of how, why and what healthy plant compounds are produced, we’ll be able to advance scientific research, create opportunities for industry and consumers, and ultimately enhance human health.”
There’s a lot happening uptown. The outline of the BB&T Ballpark continues to reshape the skyline of Third Ward, and nearby Romare Bearden Park is expected to open at the end of the month.
Charlotte center city continues to be a leading Southeast business hub with the more recent additions of Chiquita Brands, Chobani, Tire Intelligence and Heels.com.
Uptown is quite the center for higher education featuring colleges and universities, home-grown and satellite campuses, as well as schools of law, nursing, health sciences, divinity, and hospitality.
In the past year center city added more than 350,000 square feet of new office space, and $300 million in residential projects are currently in progress.
In the heart of all this dynamic growth is 7th Street Public Market. Located in First Ward between College Street and Brevard, 7th Street Public Market is carving out its own unique role in uptown.
Exposed pipes, industrial lighting and concrete floors give the 13,589-square-foot 7th Street Public Market an open, urban cool feel and creates the perfect backdrop for its 18 vendors who offer products ranging from organic and local produce to wines and beers, cheeses, specialty salts, vegan body products, fresh meat and fish, teas and spices, chocolates, fresh flowers and baked goods.
The Market also hosts several eateries where customers can enjoy coffee, pizza, sushi or sandwiches made from artisan breads baked on site.
A Place for Everyone
Adjacent to the current last station of the light rail, the 7th Street Public Market is a natural stopping place for commuters to grab an early morning cup of coffee or pick up healthy snacks. Mike Restaino, 7th Street Public Market’s executive director, attests to the many different groups of people that transition through the Market daily.
“During the weekdays, the early crowd consists of ‘grab and go’ professionals,” Restaino explains, “but by midmorning I see a huge influx of either families, or mothers and their girlfriends with babies. It’s a large, open space so families feel comfortable bringing in strollers, and it’s near ImaginOn so people come here before or after their ImaginOn visit and kids love to sit outside, have a treat and watch the trains come in.
“Then there’s the lunch crowd of uptown workers, and in the afternoon we get another family crowd. At night, it’s the people from work again or residents from First or Fourth Ward who want to come to a location where they can just relax and eat with their friends.
“It’s also turning into a destination for business meetings,” Restaino adds. “One businesswoman, who does recruiting for a local bank, conducts all her business interviews here at the Market.”
7th Street Public Market continues to grow; 2013 revenues are up roughly 70 percent over 2012, and two new vendors came aboard this past year. Restaino comments that all of the Market vendors are either hiring or expanding.
“Some businesses like Not Just Coffee are now expanding to two other locations, and because of its phenomenal success, barChocolate has recently hired both chefs and accountants.” Affirms Restaino. “We’re getting the sense here in the Market that we are ready to give back to the community in the form of an economic engine.”
And giving back is key because 7th Street Public Market is a market with a mission.
A Place for Wellness
“7th Street Public Market is a nonprofit,” explains Restaino. “We’re a 501(c)(3) whose primary mission is to support wellness and healthcare by supporting local farmers and food vendors and artisans to promote better eating.
“Buying local, eating local and educating people about how they can use the fruits, vegetables, meats and other products available at the Market can lead to a better, healthier lifestyle.”
The Market’s mission fits well with the goals and businesses of its founding sponsor, Blue Cross and Blue Shield of North Carolina, and its presenting sponsor, Carolinas Medical Center.
Ellison Clary, director of Charlotte Community Relations for founding sponsor Blue Cross and Blue Shield of North Carolina, agrees: “Blue Cross Blue Shield was looking to play a major sponsor in something like this Market because we’re all about healthy lifestyles, life improvement and fighting obesity. The Market does all three.”
One of the 20 stations for Charlotte B-cycle, the largest urban bike share program in the Southeast, is outside the Market. Blue Cross and Blue Shield of North Carolina provided the grant for the program.
“In the future there’s going to be a park across the street from the Market,” Clary continues. “The park, the bike share program, and the Market—all of these make perfect sense for us.”
7th Street Public Market has 14 supporting sponsors: Allen Tate, Bank of America, Blue Cross and Blue Shield of North Carolina, Carolinas HealthCare System, Charlotte Center City Partners, Compass Group, Conder Flag, Foundation for the Carolinas, Grant Thornton, Johnson & Wales University, OrthoCarolina, Parker Poe Adams & Bernstein, Rodgers Builders, and Winstead Attorneys.
Supporting sponsors are active in the Market’s fundraising Farm to Fork Dinner Series. Restaino explains, “We have four dinners a year where businesses can bring associates and clients or solicit business. They can give them a special night out that’s different from a steakhouse or restaurant.
“The Market is a very different environment and as you can imagine, the food is wonderful. It’s a positive, high energy kind of experience and guests realize they’re doing something good to support the Market.”
Outside parties have also discovered the Market as a unique venue. “We’ve hosted the Latin American Chamber of Commerce’s Tapas Night and in July, the French American Chamber of Commerce held their Bastille Day celebration here.
“It was unbelievable, with jugglers, accordion players and a performer on stilts. For the first two hours, it was open to the public who could buy tickets and try all the French culinary treats like crepes and macaroons and quiches that our vendors had specially prepared.
“At one time that night we had over 300 people here. Every table was full. There was music. It was pure energy. People are beginning to see that the Market can be a tremendously dynamic place.”
Supporting sponsor Charlotte Center City Partners is heavily involved in helping the Market with the dinner series. The organization, whose goal is to facilitate and promote economic and cultural development in Charlotte’s urban core, also provides the Market with assistance in areas of marketing, promotion and operational administration.
“Charlotte Center City Partners has always been invested in the vision of a green market in Center City,” explains Lelia King, Charlotte Center City Partner’s director of communication. “7th Street Public Market is exactly what we need here.”
King cites the growth of 20 to 30 year olds moving into uptown. “People who live here, people who work here and the roughly 11 million visitors to the city annually are all a huge customer base for the Market,” she adds. “It’s the kind of place people want in the city.”
A Place for Growth
7th Street Public Market not only provides a unique experience for its customers, it also provides a unique opportunity for its vendors. Restaino explains, “The second mission of 7th Street Public Market is to be an incubator for new businesses. We work with new businesses to see if they have a viable business plan.
“I’ve also talked with the board recently to see if there are further opportunities, from an educational standpoint, to provide these businesses with information on systems, technology, accounting or insurance. We’ve been brainstorming to see how we could provide these resources to them.
“What’s unique about the Market’s business model is that we are looking for business synergies. Prospective vendors go through a selection process to determine not only their viability but also to determine if they can ‘lift’ the Market. Their business has to fit within the mission of the Market and work well with the other businesses here.
“For example, I didn’t really envision a vegan baker for the Market, but after listening to the customers, I knew that having Novel Sweets here would be an opportunity to service the market and educate the consumer about a different business. The businesses here all have tremendous knowledge about their products that they can share.
“The synergies here are really special. The vendors support each other. Novel Sweets uses ingredients from Salts of the Earth. Homeland Creamery, with their local dairy, supplies the milk used at Not Just Coffee. Local Loaf uses Homeland Creamery products for their baking.
“Not only do these relationships create camaraderie among vendors, but it also helps each other financially. It’s a unique environment that goes back to the business selection process.”
Local Loaf was chosen as a vendor from among 15 applicants. Owner and Executive Chef Adam Spears always had the goal of starting his own business and after graduating from Ohio State and getting his culinary degree from Johnson & Wales University he worked in town with Chef Charles Catering as well as Global Restaurant and Heist Brewery.
When it came time to realize his goal, Spears says the 7th Street Public Market was a natural choice. “When I moved here I started baking breads and traveling to farmers’ markets. I loved selling one-on-one to customers so I purposefully targeted this market for my first business.
“The Market allows me to have a good rent price, a great location and the ability to work with multiple talented vendors to make what I do a success.
“The best thing about the Market is the partnership we have with each other. It’s definitely a community atmosphere.
“There’s a mentality that all of us here are stepping out on our own with everything that we have and putting it forth to give the customer the best opportunity to get not only great foods and products but also a great atmosphere.”
The aspect of community was important to Restaino too, who comes to 7th Street Public Market after more than 40 years in retail with industry successes like Belk Store Services, Goody’s Family Clothing and JC Penney.
“I thought everything within these walls could make a great urban community market. I had a vision of what it could be,” says Restaino.
Restaino, who lives uptown and serves on the board of directors of The Friends of Fourth Ward, The 10th Street Townhome Association and the nonprofit Joedance Film Festival, wanted to make a difference.
Initially, Restaino thought his comprehensive experience in areas like store management, marketing, sourcing, buying, importing, logistics, compliance and store presentation would be the primary tool he would use to grow the Market.
“I talk to the vendors on a daily basis to give them suggestions on visual presentation, assortment mix or inventory control, and some have come to me and asked for input about the right time to expand or advice on what might support their brand.”
But Restaino has found that his people skills have been the most helpful. “The Market has 18 vendors. That translates to 18 different personalities I need to motivate and to make sure we’re all pointed in the same direction. I also have to successfully work within our board and with our sponsors to support our vision for the Market and to be the face of the Market within the community.”
The Market has become a destination place for the community by hosting special events every Saturday like July’s Firefighters’ Pancake Breakfast, the upcoming Cookie Crumble and the season-long Green Market Saturdays with an expanded array of vendors and themes like ice cream, camping or peaches.
“When people learn how the community is benefiting from the Market, I’m hoping that more individuals and businesses might want to become more engaged in the Market, maybe even as sponsors,” says Restaino. “Our hope is that 7th Street Public Market becomes an iconic location in uptown Charlotte.”
Photo by Fenix Fotography www.fenixfoto.com
‘Tis the Scottish way for business people to proceed with caution and to minimize risks, according to Peter Wilson, president of Great Scot International, Inc. Nevertheless, he and his son James are braving the sometimes unpredictable world of importing to bring Scottish products to a welcoming American audience.
According to the 2000 Census Report, some 11 million people claim some heritage connection to Scotland or Ireland. There is a heavy concentration of Scots and Scots-Irish in the Carolinas and neighboring states.
Great Scot International, Inc., based in Charlotte, was started in 1997 and specializes in supplying food products like shortbread, oatcakes, heather honey, candies and beverages (including the iconic Scottish soda, IRN-BRU), as well as tartan (plaid) fabrics and apparel all manufactured in Scotland.
Food items are made from all natural ingredients with no artificial flavoring or coloring. Tartans are woven from pure new wool and non-wool fibers. “We have the largest range of tartan fabric and apparel in the
“There is a vast market out there for Scottish products—lots of people that have a huge passion for all things Scottish, whether it’s the Highland games, music, clothing or food. There are dozens of retailers throughout the U.S. selling Scottish, Irish and Welsh merchandise and we are suppliers to a good majority of these companies.”
Great Scot—Great Products!
With a growth rate of almost 30 percent for the past couple of years, Great Scot International earned $1.1 million in revenue last year. Representing 60 percent of revenue, food products are the larger side of the business.
“The food business counts on repeat sales,” says son James, the company’s vice president. “It’s tough to get a place on the shelf in extremely competitive markets, but once you get it, it’s easier to keep it.
“The tartan business is dependent on the ‘Scottish goods’ vendors we supply across the country. However, there is a growing demand for tartan fabrics from the likes of interior designers and wedding planners. In some cases we have done custom design and weaving. We are always on the lookout for other opportunities outside the Scottish market.”
On the food side, most customers are large-scale distributors supplying stores such as Harris Teeter, Wegman’s and Publix supermarkets.
“Business generally goes through big distributors and works down to small retailers,” explains James. “We also have many independent grocery stores. It’s quite a big market that is growing through word of mouth.”
The company currently markets 15 imported food brands.
The largest customer for the company is Amazon.com, which began doing business with Great Scot International in 2010. “We accept weekly orders from Amazon and currently deliver to nine fulfillment warehouses,” says Peter. “Amazon.com started with us by ordering $200 worth of Nairn’s Oatcakes a week. It now accounts for over $200,000 in revenue per year and currently purchases over 100 SKUs. The Amazon account alone is almost a full time job,” says James.
You may not know the brand IRN-BRU, but it is Scotland’s top selling soda, Scotland being the only country in the world where Coke has not held the No.1 position.
“Latching on to the IRN-BRU product, a $400 million dollar brand in the United Kingdom, was the turning point—it moved us to a different level on the Scottish food side,” acknowledges Peter.
The soda beverage is specially formulated for the U.S. because they use a food colorant in Scotland that is prohibited in the U.S. by the FDA. Great Scot International is the sole supplier of IRN-BRU in the U.S.
Great Scot International textiles find their way to a diverse sales base including suppliers, manufacturers, retailers, universities, municipalities, and interior designers. The company is the
“We just finished up a project where we supplied the tartan fabric for a small piece of a shoe being marketed by a well known women’s clothing store,” reveals James. “Every year there is an interesting high-number job that helps the bottom line,” adds Peter.
“We also do a lot of custom weaving of plaids that are not otherwise commercially available from any mill,” says Peter. He describes a project underway for Winthrop University, which has recently registered a new tartan design. The company has completed work on projects for UNC Greensboro, Furman University, Presbyterian College in Clinton, S.C., and the Department of Homeland Security Office of Field Services’ Honor Pipe Bands. Harley-Davidson is another well-known customer.
Many American states also have their own tartans. Over the years Great Scot has woven The Carolina tartan,
Great Scot International completed a recent project for the Cypress Presbyterian Church in Vass, N.C. Tartans for the names of the founding fathers of the church— Cameron, Johnstone and Keith—were all woven into one pattern.
“Early on I saw the value of going out to the Scottish games with the tartans in tow,” says Peter, proud of his initiative. “It was a simple marketing technique—face-to-face. I’ve worked with several clans who’ve commissioned me to weave designs over the years. Pretty much every state puts on Highland games where you can find upwards of a hundred clans with different names and over 20,000 visitors. It is a very targeted audience.”
In light of the various products Great Scot offers, the company markets its products on the additional retail websites of www.IRN-BRU-usa.com, www.thescottishweaver.com; and www.thescottishgrocer.com.
James clarifies the importing process for Great Scot International: “Suppliers in the U.K. are not always knowledgeable about exporting. We have to make sure that the documentation meets with the correct format and that every item has the correct tariff code.” Containers are not released for shipment without correct documentation.
Great Scot had been using a contract warehouse in New Jersey, but three years ago moved from office premises to their current headquarters so that they could bring in shipping containers directly, says Peter.
As a small part of the business, the company offers a special import service (or co-loading) on their monthly containers as space permits. This works well for U.K. companies who may have only a pallet of product to ship. Cargo is then shipped to its final destination within one-to-two days of receiving. Some customers also load some Great Scot International products with their shipment. The logistics, for now, are handled separately by a company called Compass Imports, but the
Great Scot International pays for its goods in British sterling. Peter explains that the rate of exchange can be challenging when pricing products.
“The trouble is, you can’t keep changing prices on your customers, so you have to look a year ahead and settle on a price and a rate of exchange. With forward planning it is possible to lock-in a rate through purchasing tranches of British sterling for a 90-day window.
“My strategy is, even if the rate looks great at the time, add another 10 percent. Unless there is an astronomical monetary crisis, you should be alright.”
Working with the U.S. Food and Drug Administration (FDA) can also be tricky, according to the Wilsons. With the introduction of the Bioterrorism Act, every overseas food supplier must register with the FDA before they can export anything. The FDA also reserves the right to audit their premises.
Last year, the FDA put a ban on anything that had raspberries in it due to a certain pesticide forbidden in the U.S.
“A representative from the FDA came and witnessed us smashing up the bottles of raspberry preserves,” says Peter. “Our supplier was not aware of the ban and did refund us. Currently we are having an issue with mustards.”
This type of regulation can halt a shipment without consideration of spoilage. The full burden of proof is on the importer, according to Peter and James.
Shipped to America
During the 1970s, Peter was invited to participate in an Environmental Protection Agency program at Clemson University. He went there to be an assistant to a professor, but was also encouraged to enroll in the graduate program for environmental engineering.
There, he met his wife Suzanne, whom he took back to Scotland where she would survive 14 Scottish winters. In
“I thought my future was going to be in my father’s business until he sold out to a new owner,” says Peter. But, in 1993, an opportunity came along for him to take on sales and project management in the U.S. for the business, and he chose Charlotte as a base of operation.
“I knew that I would be traveling and needed an airport that readily offered domestic and international flights. I started with a phone and a fax line in a friend’s garage until I bought a home in the SouthPark area,” remembers Peter.
“But by 1997, I was ready to do my own thing, though. The decision to start my own business was driven by the growing potential of the Internet. So, I began to put together my interests in selling Scottish food products, tartans and giftware online. Working from home I handled all the purchasing, packing and shipping orders through UPS at Office Depot. At the end of the first year, I had barely made $30,000, but it was progressing.”
Slowly but surely he built up the product lines and sales connections, as well as the Internet presence for Great Scot products. Since early 2000 the business has grown more on the wholesale side which now represents about 65 percent of its revenue.
Great Scot was fortunate to hold steady during the downturn in the economy, according to Peter. “We are addressing a niche market with both indulgent food products and ‘heritage’ tartans,” says Peter. “We measure by looking at our customers—most are vendors, and they seemed to survive themselves; sales a bit down but they did okay.”
Great Scot International finances working capital during times of increased buying, such as for the holidays, with a line of credit. The company has not had to obtain any major loans other than personal investment, says Peter.
Four full-time employees, including Peter and James, make up the small staff.
“When you work in this company, you have to be prepared to work outside of a single job description,” confirms Peter.
“My office manager, Becki, has been with me for 10 years and is greatly admired by our customers. When we moved to our warehouse over 3 years ago we hired a young man who has done a great job in running the warehouse and order fulfillment. “We are like a family.” Two other part-time workers handle IT issues and bookkeeping on a contract basis.
Peter says he doesn’t even think of retirement.
“I will be 64 this year and can sing the Beatles song,” he chuckles. “As long as health holds out, I would like to continue.
“I’ve turned a lot over to James. I used to do all the ordering of product; now he does. Becki, too, is in for the long-term,” says Peter. “We’re a team; passionate about what we do.”
Future plans include continued growth and focus on Scottish made goods and becoming America’s No. 1 source for quality tartan fabrics.
Photo by Fenix Fotography www.fenixfoto.com
Eggs are the main source of protein for many people in the world and an important source of protein for
“Eggs laid today will be packaged and in the stores by tomorrow,” says Alex Simpson, vice president and general manager of Simpson’s Eggs.
The production of fresh, safe eggs is a process that has evolved to include several steps in a short period of time, all designed to meet customer demand and satisfy government and industry regulators. Simpson’s Eggs, a family business spanning generations, bears testament to just how much the business of egg production has changed over the years.
“We are a family-run business,” says Simpson. “My great-grandfather, Z.K., started the egg business in 1925 in his backyard. He would drive his Model-T Ford to Charlotte and sell eggs door to door. After returning from WWII, my grandfather, Leroy, started his own flock and began to expand the business.”
Then, the reins were passed to Simpson’s father Richard until his untimely death in a car accident early this year, and now they have passed to Alex, who previously served as production manager. Simpson holds degrees in agriculture and business from N.C. State University.
“While my grandfather satisfied the needs of his customers, my father built this company to what it is today,” attests Simpson.
“In the 1950s, there were about 700 egg producers in North Carolina,” describes Simpson. “Today, that number has been consolidated to four main players who produce 99 percent of the eggs.”
Simpson oversees 15 houses totalling 1.2 million laying hens that produce about 900,000 eggs a day. The Simpson’s Eggs operation, the third largest egg producer in North Carolina, provides eggs to customers in the region, as well as surrounding states and internationally.
“The farm still operates on about 110 acres, the same amount of acreage my great-grandfather started with on his farm,” says Simpson. “It’s hard to believe we can produce that much product in so small an area.”
Eggs are big business because they are the main source of protein for most people, especially those who live in larger countries like India and China.
“In the U.S., the main protein source for most people is meat,” Simpson explains, “but in other countries the main protein source is eggs. Eggs are the cheapest source of protein, and account for 30 percent of the world’s protein.”
According to nutritionists, one egg provides 10 to 13 percent of the daily reference value for protein or as much as one ounce of lean meat, fish or poultry, and egg protein is the highest quality food protein, second only to mother’s milk for human nutrition.
Production Life Cycle
“We focus on quality, but you also have to have quantity to stay in the egg business,” adds Simpson.
In addition to the laying hens, Simpson’s Eggs includes about 320,000 pullets, or chicks, that are up to 16 weeks old, maturing to get ready to lay eggs. Simpson’s uses Hy-Line birds, receiving them when they are about a day old, and feeding them until they are ready to begin laying eggs themselves at 16 to 17 weeks old.
The peak egg production time for hens is between 20 and 26 weeks, when they lay about an egg a day, Simpson says. They continue to lay eggs for about 70 weeks. At about 90 weeks, when they are about 70 percent efficient, they leave the farm to become processed into institutional-type food, used for feeding animals.
“Just like dairy cows are bred for milk production, we breed hens to lay eggs,” explains Simpson.
The company produces both white and brown eggs—the different color eggs come from different color chickens—although there are many fewer brown eggs, based on customer demand.
“Brown and white eggs are exactly the same nutritionally,” affirms Jake Simmons, sales manager and Simpson’s brother-in-law. “Some people prefer brown eggs, but it’s a myth that there’s any difference in nutritional value or taste. It’s all in what they are used to. Lots of people grew up with chickens in their backyards that laid brown eggs.”
“The taste of the eggs is related to the feed that hens eat,” offers Simmons. “Our feed is specially formulated by a nutritionist to produce the right amount of protein for our birds. We use about 275,000 pounds of feed each day for the flock, or about 40 loads each week. The amount of feed each hen eats also helps determine the size of the eggs.”
In the marketplace, consumers mainly want to buy large or extra-large eggs, so most of the egg production is focused on that size.
“Overall the flavor of eggs, even organic eggs, is pretty much the same. I tell people to buy the cheapest eggs you can,” says Simpson. “They all taste good and they’re all safe.”
Delivering Quality Eggs
Simmons, who handles customer clients, started with Simpson’s Eggs in 2002 when he was recruited by Richard Simpson.
“I’m from hog country, the eastern part of the state,” says Simmons. “I’m a big-time sports fan and I thought I would go into sportswriting, like my father, who was a journalist. Richard, who was then running the production business and handling all the sales, wanted a sales manager.
“There’s no one on Earth that I respected more, so I took the job. Richard meant a lot to me. This is a family operation and we’re hands-on. If something breaks down, Alex or I go and handle it. It doesn’t matter what time it is.”
Simpson’s Eggs packs and ships eggs according to their customer requirements. Egg prices are volatile and vary along with demand throughout the year.
“The Southeast has the highest-priced eggs in the country,” says Simpson, “while the Midwest, which has the largest egg producers in the country, has the lowest priced eggs. Still, the price is consistently low, considering the increase in price, over time, for other staples such as milk and bread. Eggs today cost about .90 to $1.70 a dozen, depending on the size and time of year.”
“Egg prices can double and then halve again in just three weeks,” he continues, resulting in egg producers getting stuck with excess product. “If we have some surplus product, we go to our secondary markets. We call and bid on prices with industry traders who ship to other countries such as Hong Kong, Mexico, Germany, Iraq, and China.”
Some of Simpson’s Eggs big customers include Food Lion, Sam’s Club, Compare Foods and Aldi. Depending on the customer requirement, eggs are packaged and delivered to individual stores or warehouses for distribution.
Customers can also request that eggs be packed in plastic foam or pulp (cardboard) cartons. Packaging costs are about 8.5 cents per foam cartons, says Simmons, and more customers request the foam cartons because eggs draw odors and foam does a better job of protecting them.
Safe Quality Eggs
Simpson’s Eggs follow Safe Quality Food (SQF) standards, a global food safety and quality certification and management system with independent certification checks.
Safety is a top priority when it comes to eggs, and both the FDA and the USDA inspect and certify eggs in addition to regular checks of the flocks and annual audits.
Consumers have concerns about salmonella or bacterial infections, but Simpson says that statistically the chances of contracting salmonella from eggs is very low because of regulations in place.
Simpson’s Eggs complies with all safety inspections and other quality standards and industry groups, including the United Egg Producers Board science-based animal welfare guidelines (UEP Certified), whose standards are endorsed by the Food Marketing Institute and the National Council of Chain Restaurants.
Monitoring continues with the henhouses. Simpson’s Eggs farm has 15 houses of white hen layers, two houses of brown hen layers, and four pullet houses where young chicks are raised to be layers. Hens are kept in cages, eight levels to the ceiling, where waste can be separated from the hen and the egg. The high-rise layer houses developed in the 1970s and 1980s as a way to improve egg safety and environmental issues. Air quality is much improved.
The houses are environmentally controlled to keep the temperature at 72 degrees. By using cool cells and a tunnel ventilator, air and water temperatures can be lowered by 20 degrees. In the winter, the birds naturally build up heat and keep the inside temperature warm.
“I can control the temperatures from my computer in my office and from my cell phone,” declares Simpson, although he says that doesn’t stop him from worrying about his hens.
“If there’s a thunderstorm and a lot of lightning, I’ll leave my house to come check on the henhouses. I want to make sure the systems are working and that the alternate generator is running,” Simpson says. “My wife says I go to take care of the hens instead of taking care of my family.”
Egg Production Technology
While some vocal critics suggest that free-range chickens is a better way to raise eggs, Simpson is convinced of the merits of hens producing eggs safely in cages.
“As opposed to having them cage-free,” says Simpson, “statistics show that hens producing eggs in the modern cage system use 15 to 25 percent less feed per egg, and have a smaller carbon footprint.
“We believe we’re doing it right. Hens need to be kept away from the manure that can contaminate the eggs, and from the eggs that could be broken.
“We take better care of our birds by following the certified standards, making sure the hens have enough space, a continual supply of fresh water, and are fed six times a day.”
Currently U.S. egg farmers supply American consumers with 76 billion eggs each year, requiring an efficient production method. Simpson points out that Europe’s recent move to cage-free egg production resulted in a net shortage of eggs, forcing Europe to become the biggest importer of eggs from China (the world’s largest producer) and the U.S.
At Simpson’s Eggs farm, an egg conveyer system transports eggs directly from the henhouses to a warehouse where they are washed and inspected for quality.
“This technology uses six cameras to take pictures of all angles of the eggs as they move on a conveyer belt to go through two washings,” describes Simpson. “The cameras, almost like an ultrasound, are looking at the eggs to ‘see’ spots that could be cracks or evidence of leaks. Eggs that have problems are dumped off the conveyer belt to be added to the leaks in barrel.
“The eggs then move across a scale that weighs them and sorts them by size. Then they are packed in egg cartons according to their size. If everything works correctly, no hand touches the egg until the customer buys it in the grocery store.”
Simpson’s Eggs-tended “Family”
Simpson’s Eggs has 48 employees who help with the production process.
“We’ve got people who’ve been with us for 30 years and different generations of the same family,” says Simpson. “We employ a lot of Hispanic workers and they give me all they’ve got. They get harassed and checked to see if they are legal, and they are. We use E-verify for all our employees. These guys work hard and I consider them part of our family.”
Simpson’s father, Richard, was a leader in the industry, serving as past chairman of the American Egg Board. Through his role in the industry, Richard was invited to the White House to meet President George W. Bush in 2002. He was accompanied by his son Alex as well as the rest of the family. They presented the First Family with a specially designed Easter egg.
Following in his father’s footsteps, Simpson is also an industry leader, serving as a board member of N.C. Egg Association, United Egg Producers, and American Egg Board. Simpson’s Eggs is also a member or affiliated with the N.C. Dept. of Agriculture, the Egg Nutrition Center, and the Egg Safety Center.
The family-run business continues to rely on input from the family.
Simpson’s 88-year-old grandfather, Leroy who is president of the company, visits the farm each day to check out the production process and step in the warehouse to help out, as needed. Simpson’s 86-year-old grandmother, Nell, secretary of the company, prepares a daily handwritten ledger, “double-checking the computer figures,” says Simpson.
“Our worries have all changed since my father Richard passed,” said Simpson. “Everybody steps up, everybody moves on.”
Photo by Fenix Fotography www.fenixfoto.com
Hindsight, though not always 20/20, helps us see more clearly the mass casualties of the undeclared war we’ve found ourselves in with the global economy, leveling the inequalities of wages and production. As we try to resurrect ourselves, and reconstitute our jobs and our businesses from the destruction of the Great Recession, we keep hoping that the worst is behind us.
Not so for college graduates, however, who are experiencing an all-time high in unemployment with no immediate prospects for improvement. Not so for the displaced workers, misfortunes of business failures and layoffs, wondering themselves if they are any longer employable. Not so for the vital industries in this new economy who rue the dearth of qualified workers for positions left unfilled.
We’re not done reeling from the damage, but with the precious resources we have left, it is important to assess the forces at work and put our available resources to the best use possible in negotiating this new terrain. First off—what is this new world of work and how does it work?
How Technology is Destroying Jobs
A recent analysis by two academics summarized in the MIT Technology Review and quoted from herein quite frankly describe the current phenomenon as “How Technology is Destroying Jobs.”1
“Impressive advances in computer technology—from improved industrial robotics to automated translation services—are largely behind the sluggish employment growth of the last 10 to 15 years.
“Even more ominous for workers, the MIT academics foresee dismal prospects for many types of jobs as these powerful new technologies are increasingly adopted not only in manufacturing, clerical, and retail work but in professions such as law, financial services, education, and medicine.
“They believe that rapid technological change has been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the United States. And, they suspect, something similar is happening in other technologically advanced countries.”
For the most damning piece of evidence, they point to productivity—the amount of economic value created for a given unit of input, such as an hour of labor—as a crucial indicator of growth and wealth creation and progress.
“For years after World War II, the two lines closely tracked each other, with increases in jobs corresponding to increases in productivity…As businesses generated more value from their workers, the country as a whole became richer, which fueled more economic activity and created even more jobs.
“Then, beginning in 2000, the lines diverge; productivity continues to rise robustly, but employment suddenly wilts. By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation.” The MIT academics call it the “great decoupling,” concluding that technology is behind both the healthy growth in productivity and the weak growth in jobs.
“It’s a startling assertion because it threatens the faith that many economists place in technological progress. They assert that technology boosts productivity and makes societies wealthier, but they think that it can also have a dark side: technological progress is eliminating the need for many types of jobs and leaving the typical worker worse off than before.”
They add to it the fact that median income is failing to rise even as the gross domestic product soars.
“It’s the great paradox of our era. Productivity is at record levels, innovation has never been faster, and yet at the same time, we have a falling median income and we have fewer jobs. People are falling behind because technology is advancing so fast and our skills and organizations aren’t keeping up.”
In addition to the automation of manufacturing, the academics point to a less dramatic change, but one with a potentially far larger impact on employment that is taking place in clerical work and professional services. “Technologies like the Web, artificial intelligence, big data, and improved analytics…are automating many routine tasks. Countless traditional white-collar jobs, such as many in the post office and in customer service, have disappeared.
And, they say, “‘Digital versions of human intelligence’ are increasingly replacing even those jobs once thought to require people. It will change every profession in ways we have barely seen yet.”
Some academics and economists have doubts that technology could account for such an abrupt change in total employment, but they do agree that computer technologies are changing the types of jobs available, replacing jobs which typically provided middle-class pay while at the same time creating higher-paying jobs requiring creativity and problem-solving skills, often aided by computers. Meanwhile, low-skill jobs demand has increased for others doing service work that is nearly impossible to automate.
David Autor, an economist at MIT, says, those changes are resulting in a “‘polarization of the workforce’ and a ‘hollowing out’ of the middle class—something that has been happening in numerous industrialized countries for the last several decades.”
Some argue that even if today’s digital technologies are holding down job creation, history suggests that it is most likely a temporary, albeit painful, shock; as workers adjust their skills and entrepreneurs create opportunities based on the new technologies, the number of jobs will rebound. The question, then, is whether today’s computing technologies will be different, be “disruptive,” creating long-term involuntary unemployment.
Not everyone agrees with the MIT academics’ conclusions—“particularly the contention that the impact of recent technological change could be different from anything seen before. But it’s hard to ignore their warning that technology is widening the income gap between the tech-savvy and everyone else. And even if the economy is only going through a transition similar to those it’s endured before, it is an extremely painful one for many workers, and that will have to be addressed somehow.”
Lawrence Katz, a Harvard economist, has shown that the United States prospered in the early 1900s in large part because secondary education became accessible to many people at a time when employment in agriculture was drying up. The result, at least through the 1980s, was an increase in educated workers who found jobs in the industrial sectors, boosting incomes and reducing inequality. That would suggest that a possible route to recovery may be investing more in the training and education of workers.
Recession Accelerating Need for Postsecondary Education
Another powerhouse of education and workforce analysis, Georgetown University’s Center on Education in the Workforce, has released a comprehensive analysis of the jobs front in its report Help Wanted: Projections of Jobs and Education Requirements Through 2018. The report maintains that the recession is accelerating the shift to jobs requiring postsecondary education.
The purpose of the report was to provide a detailed forecast of jobs and their education requirements because they believe that the ability of individuals to connect education, training and careers has become key to employability and to attaining and maintaining middle class status, and that in spite of its growing importance, our ability to match education alternatives with career options is woefully underdeveloped.
Quoting liberally: “These are the wrong times for inadequate information on jobs and skill requirements. Not only is the United States climbing out of the worst downturn since the Great Depression, it has transformed from an industrial to a services economy, with all of the pain and upheaval that accompanies such change. Educational and career planning need to catch up and adjust to this new reality.”
“[P]ostsecondary education and training is critical to helping our nation’s workers navigate this transformation successfully.” Education is a gateway to further training and greater earning potential.
“One key to understanding this issue is an appreciation of the overall landscape of postsecondary education and training. College is only one piece of the puzzle. In fact, colleges and universities represent only 35 percent of the entire postsecondary education and training system. The rest consists of on-the-job training, formal employer-provided education programs, military training, apprenticeships, and a variety of other programs.
“Still, the role of colleges and universities is vital. Among other things, higher education acts as an important gateway to other parts of the postsecondary learning system. Postsecondary education provides entry to the jobs offering the most employer-provided training, plus access to the most powerful, flexible workplace technology. This is reflected in the positive correlation between employer-provided training and employee education levels. College graduates are almost twice as likely as high school graduates to receive formal training from their employers.”
Matching Skills to Jobs: Critical Skill Assessment
We develop our workforce in a number of ways by helping both individuals and organizations to identify and cultivate their abilities and competencies. Tests and assessments are often key tools in achieving this important goal.
One such tool is the ACT WorkKeys job skill assessment used by professional associations, businesses, and government agencies to measure workplace skills of employees and job applicants, helping employers select, hire, train, develop, and retain a high-performance workforce to increase global competitiveness, and assisting individuals in developing successful career pathways.
This ACT WorkKeys series of tests measures foundational and soft skills and offers specialized assessments to target institutional needs. ACT has one of the largest, most robust occupational profiles databases available. It contains more than 19,000 job titles, ranging from white-collar professional to blue-collar technical positions, that have been profiled and extensively researched to identify the essential skills and skill levels for employee selection, hiring, and training.
ACT, Inc. has also developed a World-of-Work Map (see front cover), an empirically based system for summarizing and displaying basic similarities and differences between occupations.
To help individuals navigate among hundreds of occupations, the World-of-Work Map organizes 555 occupations into 26 groups of similar occupations (career areas). The Map serves as a visual bridge, linking people (via career assessment results) to personally relevant occupations. Used together with the ACT Interest Inventory, the World-of-Work Map can help people see the connections between the work world and the activities they like to do. Find more information at: www.act.org/wwm.
What Conclusions Can Be Drawn?
The Carolinas in particular have suffered shocking losses in the manufacturing sector, ranking second only to Michigan. In fact, according to the Information Technology and Innovation Foundation (ITIF), during the period between 2000 and 2012, North Carolina lost 43.5 percent of its manufacturing jobs, while Michigan lost 46.7 percent. South Carolina ranked 10th losing 37.7 percent.
The ITIF discovered that the American manufacturing decline has actually been worse during the last five years than during the Great Depression. Their numbers show a 30.9 percent decline in manufacturing employment during the years 1929-1933 compared to a 33.1 percent manufacturing job loss in the recent decline. Approximately 7 of 10 jobs have been lost in apparel; 6 of 10 in textiles; and 5 of 10 in furniture.
Postsecondary education and training is critical to helping workers navigate this transformation successfully. In fact, if anything, this recession is accelerating the shift to jobs requiring postsecondary education. Since 1973, the number of jobs that require at least some college has more than tripled, while those requiring a high school diploma or less have flatlined.
We have to do more to bring industry and education together—it is the chemistry of this collaboration that will keep expanding the job opportunities and the economy. If we can stimulate an active and exciting relationship between area businesses and educational resources, we can add substantial value that will propel us through these cataclysmic times.
1 David Rotman, MIT Technology Review Magazine, July/August 2013
2 Georgetown University Center on Education in the Workforce, Help Wanted: Projections of Jobs and Education Requirements Through 2018
To say that Ken Andujar has a natural affinity for building is an understatement.
“When I was nine years old, I used to go into the woods and build two-story forts. I’ve always been able to use my hands in ways that I didn’t need to learn from other people,” says Andujar, owner of Andujar Construction, Inc. “Construction just made sense to me from day one.”
Andujar has taken his talent and put it together with a “Never say no” mantra to build a multi-million dollar commercial construction business that has successfully weathered the economic storms that have impacted the building industry over the past several years.
Designing a Business
Based in Charlotte, Andujar Construction is a full-service design+build commercial contracting company offering services ranging from feasibility studies, design adaptation analysis, extensive value engineering through the complete building experience.
The company is licensed to work in North Carolina, South Carolina, Virginia, Georgia, Tennessee and Arkansas, and will soon be licensed in Alabama. Since 1994, it has focused primarily on office, medical, restaurant and retail buildings, although Andujar emphasizes that he doesn’t like to be pigeon-holed into one niche.
“We’ve done hundreds of office builds and upfits—all types. I love to do base building work and also to build out the interiors. A building is a building is a building—sticks, bricks, concrete, electrical and mechanical, whether the sign on the outside is medical or retail.”
Examples of completed works include Colony Professional Center, The Arbors, Baxter Place, multiple Auto Bell locations, over 15 daycare facilities and over 200,000 square feet of retail space.
The company manages each phase of a building project so that there is one point of contact and one point of accountability, according to Andujar: “We aim for a higher level of project delivery by having a unified professional team in charge of all phases of development.”
“The typical method of an owner hiring an architect to design a project according to the owner’s wish list is flawed,” maintains Andujar. “This approach can cause budget overruns and take valuable time redesigning the project around cost cuts.”
Instead, Andujar starts with a budget and then prepares a preliminary design in-house. “When the owner and the budget are in sync, then we contract with an architect,” says Andujar. “People should go in asking what they can get for a certain amount of money versus requesting a design of what they want without knowing the cost.”
Andujar explains that the average person won’t know the huge variance in cost of materials or that paint is cheaper than wall-coverings; carpet less expensive than hardwood floors and has a secondary value in absorbing sound. Bricks can cost $200 per thousand or $500 per thousand.
“Most people think that things are cheaper than they are,” explains Andujar. “In a commercial setting, the most expensive aspects are the exterior elevations: cast stone, brick or EFIS (exterior finishing insulation system or stucco). There are many ways to build: wood, light gauge steel, structural steel or structural concrete. Everything is done on an economy of scale.”
Andujar is also critical of the competitive “bid and build” system that is prevalent. “When owners are trying to get a quality project but are always using low-bid contractors and sub-contractors, well, that is a flawed approach and is a risky choice for the owners,” says Andujar.
“It’s far better to use a design+build contractor who will use sub-contractors with whom they work regularly and have long-term relationships.”
Often, the low-bid contractors and subcontractors can submit a low bid because they have little overhead but they may not have the financial fortitude to complete projects or may have difficulty meeting warranty expectations, according to Andujar. “The design+build approach allows us to pursue design quality while controlling costs and schedules.”
Ken Andujar is the sole owner of Andujar Construction but is joined by his brother Anthony who serves as senior project manager and helps to run the business. Fifteen other employees make up the staff which includes a controller, estimators, field superintendents, project managers and office staff. Many of these employees have been with the company for 20 years or more.
Building a Business
Andujar was raised in Bergen County, New Jersey, just outside of New York City. He graduated from Kutztown University in Pennsylvania with a degree in business administration, but soon after found himself working for a master carpenter.
“I always put myself in environments where building was taking place—where I could work with my hands,” he says.
In 1985, he moved to Charlotte after visiting his mother who had moved here previously. “I loved it from the start,” says Andujar. “It was lots quieter and less congested. I was young and it was easy to meet and get to know people. Within months I felt like I had lived here all my life.”
His first job in Charlotte was as a mason laborer and was short-lived. He then worked with a pool and deck builder, gaining experience. Andujar wanted more and, in 1989, he started his own business called Woodtech Builders.
“It was the end of the savings and loan crisis, banks were shutting down, rates were high but I didn’t know any better. I had been doing consumer building (under $30,000) so I was operating under the radar, with no license needed.” His former boss became his first client as he built decks and swimming pools.
Then, this client asked him to build a garage. “I never said no to anything,” remembers Andujar. “I built that garage and then built 75 more.”
This work led to home remodels and then building entire houses through the early 1990s. “I did all the carpentry and masonry myself,” says Andujar, adding, “I’m primarily self-taught.”
In 1994, Andujar was asked to build an office building, so he obtained his unlimited general contractor license and highway license at the same time. With this accomplished, he started doing commercial work and has never returned to residential work.
He quickly learned two things: There was a real need among owners for general contractors to manage their building projects from design through construction; and it is unwise to attempt to self-perform the construction work.
“Basically, a contractor should be a middle man to sub out work,” says Andujar. “It’s a simple philosophy: You can’t ever have enough work or enough people to have that balance where you can make money out of it [self-performing]. It’s better to use other people’s resources for skilled labor.”
Andujar continues, “Every year got better and better. A commercial broker in Charlotte gave me an opportunity to build several small office buildings over in Crown Pointe. That launched my commercial career.”
Andujar Construction earned $4.5 million in 2004; $30 million by 2006.
Maintaining the Business
Relatively unscathed by the recession in 2008, 2009 and 2010, Andujar felt its impact towards the end of 2011 and 2012 when work really slowed down and margins dropped.
“Up to that point we were sustained by projects in the pipeline and development work,” says Andujar. “After that, we weathered it by cutting back on overhead.”
Andujar reports that 2013 has been much better and that the industry is hiring again. “We haven’t hired in years but are beginning to now.” With earnings above target, Andujar estimates revenue this year at around $15 million.
But he worries that the improved economic picture won’t last long.
“Estimates are that there will be a recession in 2016, worse than we’ve ever had. Everyday I hear about the next recession due to the U.S. spending and printing money we don’t have,” says Andujar. “Anytime things get to an elevated peak like the .coms and the housing market, they have to come crashing down. The trigger will be when we can’t borrow money anymore; when our national credit rating is downgraded.”
Andujar’s plan to survive includes maintaining great relationships, banking as much cash as possible, and engaging in a diversity of work, for instance, service industries. “When people can’t buy new, they will maintain what they have.”
“People have a misunderstanding of contractors—think contractors are in it to make a lot of change orders and a lot of money. The truth is that construction is not a very lucrative business—but if you do it right, you can make a fair profit,” says Andujar. Contractor earnings are based on a percentage of building costs plus management fees. In other industries, a fair profit is 25 to 40 percent. In construction, it is 5 percent, according to Andujar.
Andujar Construction is LEED certified and has completed several green projects in the Charlotte region. “The good aspect of LEED is the energy envelope that you have to design in—much more efficient—and the methods of disposal for waste and recyclable material,” says Andujar.
“A downside is that often you are required to use methods and materials that you would use anyway but they cost more than they should because suppliers take advantage of the fact that they are required and charge more, driving up building costs. Many people in the private sector (as opposed to public or institutional building) do not see the value of it,” says Andujar.
Charlotte is business friendly and has a good business environment but the building industry is cliquish, according to Andujar. “Even though I’ve been doing it for 20 years, it’s still who you know. Some people know me and will work with me without thinking about it. With others that don’t know me, I have to prove myself everyday.”
Andujar finds Mecklenburg County to be one of the more difficult building environments. “It’s difficult to get permits, but you can’t fault the municipality because growth is so rapid and so huge, they have to be careful and avoid mistakes.”
Committed to helping children who are underprivileged, orphans, dealing with cancer or the incarceration of parents, Andujar supports several organizations that provide care or services to these groups.
He has been a board member with the Scott Hannon Memorial Foundation for the past five years. Hannon was a fraternity brother to Andujar’s brother and did a lot of work with youth charities before he died in an automobile accident 22 years ago. Established to further Hannon’s work, the organization now hosts a golf tournament each year. The tournament raised $250,000 last year and has raised $1.7 million since inception of the tournament and other charitable giving.
The Foundation has partnered with Clemson University’s Youth Learning Institute and The Cliffs in Greenville, S.C.; the latter has donated 18 acres for the development of the Scott Hannon Camp in the foothills outside of Greenville. Two dormitory cabins have been constructed and work on the activities center has begun. The beautiful camp with its 100-foot waterfall welcomes children from all over North and South Carolina.
Andujar lives in Charlotte with his wife of 22 years and their twin sons, age 11. With a four-handicap, Andujar considers himself to be a pretty good golfer and spends a fair amount of time at the Carmel Country Club. He and his family also enjoy being in the Charleston area where he likes to fish off-shore.
Work and pleasure unite when he is in his woodshop in the back of his office. “This is the way I stay hands on,” says Andujar who has built all of his kids’ beds along with other furniture and helps friends with their projects. “Once I stopped doing residential building, it became more difficult to be hands on with work projects; with commercial, it’s impossible to both self-perform and manage projects.”
Nevertheless, with his never-say-no philosophy, it would be hard to predict what Andujar may get his hands on.
Photo: Fenix Fotography www.fenixfoto.com
Finding a job is still tough in North Carolina. The state’s May unemployment rate was 8.8 percent, slightly improved from earlier in the year, but still higher than the national unemployment rate of 7.6 percent. Unemployment rates in North Carolina have been consistently higher than the national average during the Great Recession and its recovery.
For workers with low skills or spotty work histories, finding employment can be very frustrating. One avenue to full-time employment is temporary work, and Latin Labor Staffing excels in finding temporary work opportunities that can often provide a regular employment record and lead to full-time employment.
Irma Garcia lost her job when she had to take time off to care for her sick baby. She was not sure how to get back into the workforce until a friend suggested she contact Latin Labor Staffing.
Garcia, who lives in Charlotte, was placed in a temporary position with GiftTree, a company based in the state of Washington that recently located a packing warehouse in Charlotte.
“I started working there in September,” says Garcia. “I was working one shift, filling baskets and putting together towers. It was a good job and I had steady work.
“In March, I got a full-time job with GiftTree. Now, I’m doing set-ups,” beams Garcia, who credits her new job to her work with Latin Labor Staffing.
“To find a job, you got to know the companies really well, and I didn’t know any,” she continues. “I really like them [Latin Labor Staffing] and I enjoyed working with them. They helped me get this job.”
All Who Want to Work
Latin Labor Staffing offers staffing services in the Charlotte region for companies who need immediate help to fill labor needs. With offices in Charlotte, Gastonia, and Fort Mill, Latin Labor Staffing provides temporary workers to fill the production, manufacturing, and light industrial needs of companies in the metro Charlotte area. It also has an Atlanta office.
“Oscar Covarrubias and Ray Hosseini started the company in 2005 as a staffing agency,” explains Ruben Arce, operations manager of the Charlotte office located on South Boulevard.
“At that time, with a booming construction market, we would get calls from companies asking us for ‘Latin’ workers. So, we took advantage of that opportunity and coined the name, ‘Latin Labor Staffing.’”
“We employ anyone who wants to work,” contributes Frank Colunga, senior account manager, who adds that employees must be legally able to work in the U.S. “Latin, Asian, African-American—any ethnicity is welcome.”
The concept is simple. Employers contact Latin Labor Staffing with their needs. Latin Labor Staffing consults its database of employees and links its employees to a new temporary job.
“What makes Latin Labor different from other employment agencies is our ‘personal touch,’” says Oscar Covarrubias, owner and president. “We give 120 percent to whatever we do.”
The company employs around 850 people. With the growth of light industrial companies and business opportunities, Latin Labor Staffing has expanded its employee base and maintains a robust database of about 158,000 potential employees in the Carolinas.
In the Charlotte region, Latin Labor Staffing has its employees segmented by zip code. It can contact about 60,000 potential employees through text message in just one zip code.
Most employees come to the company through referrals. While Latin Labor Staffing advertises in ethnic channels such as Hispanic and Asian newspapers, Colunga says most people find out about the staffing company from friends.
“We discourage applying online,” says Colunga. “We want people to come in and talk to us while they fill out an application. This gives us the chance to find out more about them—their skills and their needs. Our goal is to put people at ease—to get them to tell us their story.
“That’s the secret of recruiting—understanding a person’s attitude. It’s gut and instinct and 25 percent of it is guesswork,” Colunga says, who adds that Latin Labor Staffing’s in-house recruiters are former plant managers and supervisors who understand the skills and attitudes needed by their client companies. “We take a brand-new person with limited skills and start them off at the lower-skilled jobs and see if the company can train them for other positions.”
Fulfilling All Needs
With a database of roughly 50-50 men and women, most between the ages of 20 to 35, Colunga says Latin Labor Staffing is able to screen candidates for appropriate job placements. Some may need translators, others may need help filling out documents, and others may need rides to the job.
“We know that many of our employees can’t work in the summer because their children are off from school,” points out Arce. “Others may only be able to work the third shift. Whatever their needs, we want to become part of their strategy.”
That might include driving employees to work. Latin Labor Staffing started out driving employees in cars and then vans to worksites. It became such a popular service that the company now uses 66-passenger buses to take people to work.
“We can deliver the employees for an entire shift in one bus,” says Colunga. “We can get them all to work on time, and improve the quality of their life by making sure that the other parent can have a vehicle at home for transporting children or other needs.”
“They may need help with banking and guidance on how to deposit their paychecks,” says Colunga. “We’ll even take checks out to the worksite to make weekly payrolls. We’ve even delivered overtime checks for less than $30. It may be the difference between paying for food or their rent that month,” he points out
“These are the proving ground jobs,” says Arce. “It’s a temporary work position with a company in which you can prove how well you can work. Many of these jobs can lead to permanent positions with the company.”
Latin Labor Staffing also offers benefits to its employees and intends to include the Affordable Care Act as part of its benefit package.
“We’re looking forward to being able to offer employees health insurance that includes health education, wellness programs, and preventative health visits,” says Colunga. “We can keep our employees healthy and help prevent turnover. Not only will it be a help to us, but we can help out other companies by assisting them as they work to implement the requirements of the new law.”
With an in-depth understanding of their employees and skill levels, Latin Labor Staffing is able to seek out and meet the needs of local companies, says Covarrubias.
Companies contact Latin Labor Staffing for assistance, and Latin Labor Staffing reaches out to new companies to offer assistance in staffing. Currently, Latin Labor Staffing works regularly with companies between 100 to 300 employees and approximately 30 companies that regularly use between 8 to 150 employees.
The first step is to learn the company business and what its job needs are. Arce says he learns his customer’s business so that he can get to know and analyze if the company is a good fit for Latin Labor Staffing’s employees.
“We find out the skills needed and how to operate the equipment, so we can provide on-the-job training to our employees,” says Arce. “First, we might go over the information at our office. We explain what’s expected and the business climate.”
Freirich Foods, Inc., a meat processing plant in Salisbury, has used Latin Labor Staffing for its staffing needs for the past three years, according to CFO Doug Sokolowsk.
“Latin Labor Staffing helps fill our seasonal labor needs. We add a second shift at our manufacturing facility for two months every winter and rely on them to recruit and provide the 40 to 50 people that we need for this short period of time,” says Sokolowski. “They have a track record of successfully recruiting a productive temporary labor force and also an excellent track record of following all employment regulations and laws.”
Sokolowski says that Latin Labor Staffing is “hands-on in the training process and safety training, and that is important in the food manufacturing industry.”
“They have been successful at providing repeat experienced and trained workers for each annual season,” adds Sokolowski. “This is important to us because training employees is an investment and we experience a savings when the same workers return the following year.”
All Response Team
Latin Labor Staffing’s success in working with local companies also comes from its accessibility in the employment process.
“Our hours are 6 a.m. to 6 p.m., Monday through Friday, and we are open on Saturday,” says Arce. “Our account managers provide a lot of personal attention; we’re all involved in the customer service end. We work until we get the job done; we stay late and we work on weekends. We stay until the order is filled.”
Latin Labor Staffing’s work with GiftTree, the transplant company from Washington State, is a prime example. It included the provision of staffing to ramp up to begin employment and then staffing to provide employees to do the work.
Latin Labor Staffing worked to set-up the company’s warehouse in October to fill orders for the upcoming Christmas season. In just 30 days, its employees helped set up shelving and rooms to bring in a workforce of 158 people to fill orders for the holiday rush season, relates Colunga. He says Latin Labor Staffing also consulted on pay rates, hours and shifts for the company.
Wendi Estrada from GiftTree says the company began working with Latin Labor Staffing in June 2012, and picked the company because “its managers came out to visit, had competitive pricing, and they seemed like they would fit our needs.
“We were new to the area and decided to give them a try,” Estrada says. “Latin Labor Staffing has very good service. They are very responsive to filling our staffing needs, many which are last minute. During the holidays when the amount of temps grew, they came on site and brought a time clock and badges to help simplify the process of tracking hours.”
Overall, Estrada says, Latin Labor Staffing employees are hard working, friendly, and perhaps the highest compliment, “help us achieve our goals as a company.”
“I also appreciate the fact that they listen to our feedback and really strive to send us employees well suited to our needs,” continues Estrada.
“Every one of our employees has someone from our company go with him or her to the first day of work. It doesn’t matter if the start time is 5 a.m. or 12 p.m., we take them and introduce them to the job,” says Colunga. “We show the employee how to get to the job, what door to use, how to clock in, how to do the job, and where to go for breaks and lunch.
“We want to make it an easy transition for them into the company,” he says. “Companies appreciate our effort, and it’s key for our employees to be successful.”
“Light industrial work is growing in the Carolinas,” maintains Arce. “According to the Chamber of Commerce, manufacturing, assembly, and product assembly work is increasing. A recent study by the Urban Land Institute predicted that Charlotte will be transformed by 2050 by new businesses in light industrial and factory work, and subsequent changes in workforce development and transportation.
“Companies will be seeking a trained and skilled workforce, offering even more opportunities for Latin Labor Staffing. Whatever the need, we will be ready to meet it,” affirms Arce.
“Our success comes from knowing our industry,” says Covarrubias. “Flexibility in the workplace is the key. We will provide staffing for our customers based on the skill sets needed by both the companies and meeting the needs of our employees.”
According to Covarrubias, 30 to 40 percent of his employees get permanent jobs through their temporary work with Latin Labor Staffing.
“It’s not about keeping a person as a temporary employee forever,” says Covarrubias. “Most companies have a period, usually 30 to 90 days, when they will review work performance, offer them jobs and raise salaries. One of our recent clients hired 90 percent of our employees.
“If we can help our employees find temporary jobs that lead to full-time positions, we’ve done our job.”
Photo: Fenix Fotography www.fenixfoto.com
When you listen to Charlotte developer Peter A. Pappas talk, it doesn’t take long to understand why he’s been so successful in the Charlotte real estate market. He absolutely loves what he does.
“I really enjoy real estate,” beams Pappas. “It’s not just my career. It’s my hobby and it’s my passion. I don’t feel like I’m going to work. I’m just going to do something I love doing every day.”
Over the last 25 years, Pappas has been at the center of some of the most transformative real estate projects in the Charlotte region—Phillips Place, Birkdale Village, Metropolitan, and now Sharon Square—all innovative developments that have changed the way area residents live, work, dine and shop.
Guided by two of the most influential real estate developers in Charlotte history—Johnny Harris and Smoky Bissell—Pappas learned the trade from the best and has continued to expand the boundaries with his own firm, Pappas Properties, and a new venture announced in May, Terwilliger Pappas Multifamily Partners.
Mixing It Up
A native of Charlotte, Peter Pappas joined The Bissell Companies in 1984, shortly after graduating from N.C. State University. Working for Bissell during a key period in Charlotte’s growth exposed Pappas to the full breadth of the real estate business, from marketing to land development.
“I had two terrific mentors in Smoky Bissell and Johnny Harris,” says Pappas. “It was the best of both worlds. Johnny was a tremendous marketer and advocate for Charlotte, and Smoky taught me the fundamentals of the development business, the numbers, and the financing. His instincts were outstanding, so he knew the right thing to do, and he knew when to do it.”
In 1991, Johnny Harris saw an opportunity to focus on corporate services, property management, and development. So Pappas joined with Harris, Pat Clayton, and Ben Trotter to form The Harris Group. A few years later, the Harris team had the opportunity to develop an exceptional piece of real estate owned by the Phillips family on Fairview Road near SouthPark.
“I called on Tom Phillips, who was a family friend, and suggested that when they were ready to do something with that property, The Harris Group wanted a chance to do something special there,” recalls Pappas.
“Tom called me one day and said they were ready to evaluate options, so I spent the better part of 12 months going around the country looking at different multi-use and mixed-used projects like Country Club Plaza in Kansas City, Reston Town Center outside of D.C., Lake Forest outside of Chicago, and Mizner Park in Boca Raton,” he continues.
Reston Town Center and Mizner Park were newer projects that particularly intrigued Pappas. Both included retail space situated along a main street, with housing and offices located above the retail. To him, this was the ideal concept for the Phillips property, but at the time, Charlotte had no suburban mixed-use zoning that seemed to allow residential to be located atop retail space.
“We showed Planning Director Martin Crampton our vision for the property and said we weren’t sure if there was a zoning category that would allow mixed-used development in the suburbs,” explains Pappas. “They [the planning staff] actually wrote a text amendment to the CC zoning category for Phillips Place.
“It was an exciting project for us because not only was it new in terms of mixing uses, but it also created a framework where we could go out and talk to some tenants who were not yet in the Charlotte market. The Harris Group was able to secure early commitments from Dean & DeLuca and The Palm, which helped make the project very successful.”
The Harris Group’s success with Phillips Place got Pappas even more interested in the trend toward mixed-use development. So in 1999, he decided to go out on his own to pursue those types of projects, and Pappas Properties was born.
National Recognition with Birkdale Village
As Pappas was transitioning out of Harris, he and Johnny Harris had already begun working with Allen Tate on a building adjacent to Phillips Place featuring high-end retail shops, office space for the Tate headquarters, and penthouse condominiums. He brought that project along with him into his new firm, as well as a golf course community located near Huntersville on which The Harris Group had begun development. That community was called Birkdale, and its residents were clamoring for more retail options in northern Mecklenburg.
Almost immediately, the opportunity emerged to buy what Pappas felt was the premier development site in the Huntersville/Cornelius market, located on Sam Furr Road near Interstate 77, just across from the Birkdale community. Developing the site to its potential was a larger project than the new firm could undertake alone, so the Crosland Group came on board as a joint venture partner.
Combining Pappas’s experience with Phillips Place and Crosland’s extensive retail connections, the result was Birkdale Village, a mixed-use project with retail, office and residential. Like Phillips Place, the project included a multitude of smaller shops and restaurants organized around a main street and village “Green,” with apartments located above the retail. But unlike Phillips Place, the new development also featured larger retailers like Barnes and Noble and Dick’s Sporting Goods.
“Birkdale Village appealed to a different demographic than Phillips Place,” explains Pappas. “The public realm at Birkdale Village was the Green, and the interactive fountain in the center of the project became a great gathering spot for families. We organized the restaurants around the Green with outdoor seating, and the project met the needs of that area very well.”
Pappas and Crosland earned recognition for Birkdale Village’s mixed-use community including an International Design and Development Award from the International Council of Shopping Centers as one of nine developments around the world recognizing “outstanding shopping center projects that have successfully solved many different problems and can truly be held up as examples of what can be accomplished with a lot of hard work and creativity.”
Birkdale Village was also honored by the National Association of Home Builders with its Pillars of the Industry Award as the best mixed-use development in America, It was also an international finalist for the Urban Land Institute’s prestigious Award for Excellence.
Adding Metropolitan Value
In 2001, the Midtown Square Mall property between Kings Drive and Kenilworth came on the market. The Rouse Company owned the mall itself, and the Episcopal Diocese owned the land. Home Depot was interested in the site for an Expo Design Center, so Pappas worked out a partnership with Home Depot to redevelop the site into a new mixed-use development called Metropolitan.
For many years, city and county leaders had envisioned a park and greenway along Little Sugar Creek between Freedom Park and CPCC. The creek had been capped over for decades to create surface parking for the old mall, but Pappas saw an opportunity to help leaders realize the vision by uncapping the creek and incorporating the greenway into the redevelopment plan. Over the next few years, Pappas worked closely with the city and county to create a project that would be an asset to the larger community.
“Our vision at Pappas Properties is to create places and build communities that add value to the cities that we work in,” says Pappas. “We’ve always said that any project that we undertake would need to check that box or we wouldn’t do it.”
It took several years to get the existing mall leases terminated, negotiate public participation in the parking decks, insure the greenway was going to be built, and get the surrounding public infrastructure improved. The mall was demolished, Colonial Properties Trust and Collett & Associates entered the partnership and helped secure Target as a second anchor, and the project broke ground in 2006. Target and Home Depot opened in 2007, but the 101 residential units came to market just as housing was falling off of a cliff.
“We were very fortunate to get the retail and office space stabilized very quickly with a good tenant mix and a great collection of restaurants and other merchants,” says Pappas. “It took us a while to move through the housing because of the economy, but all of the residential condominiums are now sold, and the office and retail was sold to JP Morgan in February of this year.”
Another Pappas project, Charlotte Cotton Mills, is a mixed-use complex located near Fifth Street and Graham in uptown Charlotte. It was developed in conjunction with the Historic Landmarks Commission and Crescent Resources to save two historic cotton mills and build high-density apartments behind the old mills.
In addition, Pappas is developing Berewick, a suburban master-planned community in southwest Mecklenburg near Lake Wylie featuring first-time move-up housing. He also hopes to break ground within 18 months on a transit-oriented residential development at the Scaleybark Station on the Lynx Blue Line.
Sharon Square and Terwilliger
In 2008, Pappas, Allen Tate, and four other limited partners acquired a prime piece of property in SouthPark at Sharon Road and Fairview for future development as a mixed-use project. Since 2008 wasn’t the best time to break ground on a new project, the team was patient, waiting for the right anchor tenants to come forward. Whole Foods emerged as that anchor, and in August 2012, they opened their first Charlotte store on the Fairview Road side of the property.
As soon as Whole Foods opened in August, Pappas and Tate broke ground for the apartment units, which will also feature 21,000 square feet of restaurant and retail space on the street level. On the Sharon Road frontage, steel framing is now rising on SouthPark’s first new Class A office building since 2007. By the second quarter of 2014, the new 100,000 square foot building will house Sun Trust Bank’s regional headquarters. Pappas sees Sharon Square as a very walkable mixed-use environment, featuring restaurants with outdoor seating, small boutiques, and other retailers.
Pappas also sees more people choosing to rent rather than own, as they make a lifestyle choice to spend their time and money traveling or socializing with the friends rather than maintaining a home. In response to that trend, Pappas has recently announced Terwilliger Pappas Multifamily Partners with former Trammel Crow Residential CEO J. Ronald Terwilliger. The partnership will develop multifamily projects in the Southeast’s fastest growing markets.
Terwilliger Pappas is currently underway with construction on Crabtree Village, a 292-unit apartment community adjacent to the Crabtree Valley Mall in Raleigh. In Charlotte, they are developing 239 luxury units that are a part of Sharon Square. The partnership also has two sites under contract in Atlanta, has begun to explore opportunities in the Nashville market, and hopes to acquire additional sites in Charlotte and Raleigh.
Southeastern Growth Opportunities
Pappas sees good things ahead for the Charlotte real estate market as the economy continues its recovery from the recession. He says Charlotte’s well-coordinated economic development efforts that have landed new employers like Chiquita and MetLife are getting results.
“Charlotte’s enjoying strong job growth, and I think that’s why we’re seeing such positive indicators on the housing front,” explains Pappas. “The for-sale housing market is improving, and the apartment market is very active. In retail, specialty retail and infill retail are beginning to improve. We have not seen a lot of new retail development in the suburbs yet, but retail follows the rooftops, so now that housing starts are picking up dramatically, I think you will soon see more activity in the suburbs.”
“The infill markets have had a lot of activity recently,” he continues. “Young people are leasing apartments along the transit line, and there is high quality development for empty nesters that want to stay in the neighborhood but don’t want to continue to maintain a large home. But we’re also seeing good communities develop in the areas around the outer belt for families who need more space and seek different amenities. So you really have both types of offerings in this market. I think that is very healthy for Charlotte.”
“In about four months we’ve put together a really strong team,” says Pappas. “Terwilliger Pappas is going to be synergistic with Pappas Properties. As we find mixed-use sites, our team at Pappas will work on the retail and the office, and Terwilliger Pappas will work on the apartments. We’ll also be able to pursue standalone multi-family opportunities in all of these markets.”
“It’s a great opportunity to be involved in a community as exciting as Charlotte,” concludes Pappas. “As the past chair of the Charlotte Chamber, I love Charlotte, and I really enjoy seeing all of these very positive things happening in our community. Charlotte has a tremendous amount to offer, and we’re excited to be a part of that. We want to make sure that whatever we do here is an asset to this community.”
Photo: Fenix Fotography www.fenixfoto.com