Greater Charlotte Biz 2013.08 August 2013

august 2013

FOOD

The Dynamics of New Biology Agribusiness Crosses Industry Sectors for Increased Efficiency

ENERGY

CLIMATE HEALTH

CLIMATE

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P2EP: The Dynamics of New Biology The Plant Pathways Elucidation Project (P2EP) research at NCRC is exploring plant pathways—the series of chemical reactions in plants that make compounds to survive and adapt to environmental stress such as disease or climate change—to see if these compounds in foods—specifically blueberries, strawberries, oats and broccoli— may be beneficial to human health.

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Circle S Ranch

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Simpson's Eggs

10 FOOD ENERGY

Agribusiness

Circle S Ranch, one of the state’s largest live turkey production farms, does more than just grow turkeys. They grow grain for the feed, mill the feed, make pine shavings for bedding, reprocess animal waste to formulate crop fertilizer, and recycle heating and cooling for turkey houses in a truly self-sustaining fashion.

CLIMATE HEALTH

HEALTH

Agribusiness

CLIMATE

Simpson’s Eggs is a family-run business started by Z.K. Simpson in 1925. Today, third generation Alex Simpson oversees 15 houses totalling 1.2 million laying hens producing 900,000 eggs a day. As the third largest egg producer in North Carolina, Simpson’s provides eggs to customers in the region, surrounding states and internationally.

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Great Scot International

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7th Street Public Market

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ENERGY FOOD

Great Scot International textiles find their way to a diverse sales base including suppliers, manufacturers, retailers, universities, municipalities, and interior designers. The company supplies specialty food products like shortbread, heather honey and beverages, as well as tartan fabrics and apparel, all made in Scotland.

The 7th Street Public Market has an open, urban cool feel creating the perfect backdrop for vendors offering products ranging from organic and local produce to wines and beers, cheeses, fresh meat and fish, teas and spices, chocolates, fresh flowers and baked goods, and several eateries featuring coffee, pizza, sushi or sandwiches.

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o f i n t e re s t …

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Projected Revenue Impact of Proposed Immigration Reform

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FACT: If we amaze our customers, business will grow.

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Should I Sell My Business Now?

august 2013 | greatercharlottebiz.com

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Cybersecurity for Small Businesses: The Loss/Theft of a Mobile Device healthcarebiz Health Insurance Exchanges Are Changing the Dynamic publisher’spost Health Care Changes: Not Such New Ideas After All!

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OF Interest: Accounting, Tax and Consulting Solutions

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Projected Revenue Impact of Proposed Immigration Reform

t appears there could be some political compromise on additional tax revenues after all. In April 2013, the Senate passed the Border Security, Economic Opportunity, and Immigration Modernization Act, which most notably would increase the number of people who are granted legal status. If enacted into law, this bill is estimated to save the federal government nearly $900 billion over the next two decades and also generate an additional $2 billion a year in state revenues.

No matter which side of immigration policy you stand on, the recently released Institute on Taxation and Economic Policy’s (ITEP) Undocumented Immigrants’ State and Local Tax Contributions and the Joint Committee on Taxation/ Congressional Budget Office’s (JCT/CBO) Immigration Bill Expected to Boost Tax Collections helps clarify the budgetary impact of this proposed legislation.

It was widely held that overarching reform would have a great impact on our nation’s economy, as undocumented immigrants currently number 11.2 million and comprise 5 percent of our labor force.

From a dollars-andcents perspective, the question has been: Is this good or bad change? Will its isolated effects put us in the black or the red?

More specifically, will the population’s boost in direct spending for federal benefits (i.e., Social Security, Medicare, Medicaid, refundable tax credits [Earned Income Tax Credit and Child Tax Credit], health care, etc.) outweigh the revenues generated from additional income and payroll taxes?

Although we may not know the answer until such change has occurred, we now have some figures to go on.

Federal Revenue Impact The report from the JCT/CBO estimates the Senate’s bill would decrease the deficit by $197 billion over the next decade and then balloon to an additional $700 billion in savings over the following decade. Although the second decade will see more of the previously undocumented immigrants qualifying for health care and retirement benefits at that point, the projected population rise and related increased revenues will far outweigh them.

The JCT/CBO did not provide any projections for years after 2033 (their standard practice is to only go out 10 years but made an exception due to this bill’s magnitude on these future years).

North and South Carolina Revenue Impact The ITEP’s report extends the proposed immigration reform projections onto the local and state governments.

The report projects that states, in aggregate, will generate an additional $2 billion in revenues annually. States that assess individual income taxes, like North and South Carolina, will clearly benefit the most.

Before we proceed, it is important to keep in mind that undocumented immigrants in the United States already pay taxes—$10.6 billion in 2010 alone. This tax revenue is comprised of: sales and excise taxes (just over $8 billion) on goods and services like clothing, utilities and gasoline; property taxes ($1.2 billion) either directly as homeowners or indirectly as renters; and income taxes ($1.2 billion—half of undocumented immigrants are already compliant with income taxes).

What do these findings mean to our states? In North Carolina, undocumented immigrants paid an estimated $253,127,000 in state and local taxes for 2010. Under the Senate bill, this figure is projected to become $336,607,000 (a 33 percent increase). In South Carolina, undocumented immigrants paid an estimated $33,445,000 for 2010 and are projected to pay $40,717,000 (a 22 percent increase) as a result of the proposed reform.

It is necessary to highlight that unlike the JCT/CBO’s federal report, ITEP’s state report focuses on revenues without netting them against additional costs. However, much of state and local government’s costs associated with these undocumented immigrants are already being incurred through public education and population-based services such as police, fire, highways, parks, etc.

A final note is that the ITEP’s reported figures have already taken into account the partial offset by immigrants who would now be eligible for states who have permanent Earned Income Tax Credits (EITC) in place. The EITC is a refundable tax credit for working taxpayers with low income. As North Carolina’s EITC expires in 2013 and South Carolina does not provide for such a credit, their revenues are shown at gross proceeds.

At the time of publication, it is uncertain what provisions will become law, if any. However, based on these two reports, it appears that proposed immigration reform’s feared prognosis of becoming a system ‘drain’ is in error. In fact, reform as currently proposed, would shrink deficits and provide additional resources to governmental units. Skeptics caution how accurate these figures are, whether there will be compliance problems, and how these changes will ripple 20 years down the road. Time will tell.

Contributed by

Huskes

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Content contributed by Potter & Company, a local certified public accounting firm offering core services of audit, tax, business consulting and financial analysis.

Content written by Dan Huskes, CPA. For more information, contact him or John Kapelar, CPA, Partner, at 704-283-8189 or visit www.GoToPotter.com. greatercharlottebiz.com | august 2013

OF Interest: Beyond Marketing

FACT: Contributed by

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If we amaze our customers, business will grow.

f this is true (and it is), why doesn’t every business make delivering amazing service a top priority? The answer is simple but, if a company has been sinking resources in the wrong areas, potentially costly. To grow business exponentially, the chief investment must be in the company culture and the people—the right people—we hire to support it.

Emphasis on Culture Dream of the perfect work environment. How do you feel throughout your workday? What are your coworkers like? How’s the environment? Structured or more relaxed? Whatever the answer to these questions, this is what culture is about.

The concept and importance of corporate culture is something that many companies are just now grasping. We spend so much time at work, shouldn’t it be enjoyable? Meaningful?

Rewarding? We are more productive when we are happy, and business leaders are seeing the light. Providing a fulfilling work environment is not just for trail-blazing entrepreneurial companies; it’s for every company.

Once the corporate culture has been established, the next step is ensuring the right people are in place to support the vision—from the top slice of the organizational chart to the very last layer. This is critical.

Customer Service is Passionate

La Barrie

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When hiring, how much significance should be placed on work experience versus personality? Would it be fair to suggest that passionate people are hungry to learn and to please both their employers and customers? If greater emphasis were placed on personality first and experience a close second, the work environment—and bottom line—would shift in a positive direction.

Consider Mark Sanborn’s viewpoint in his book The Fred Factor: “Uninspired people rarely do inspired work. Passionate people in an organization are different. They do ordinary things extraordinarily well.” Sanborn emphasizes that “Customers don’t have relationships with organizations; they form relationships with individuals. Passionate employees, whether they are salespeople, technicians or service reps, constantly show their commitment to customers. They do this by demonstrating their passion about what they do.”

august 2013 | greatercharlottebiz.com

To illustrate how this theory works in practice, let’s take a look at the Zappos.com business model.

Zappos.com, the online shoe store, saw over a billion dollars in gross sales in 2009. How does a company that practices nontraditional marketing methods move so much product? Their secret to success is no secret at all; they proudly and openly share their ideas. In fact, the company annually holds a multiday conference called Zappos Insights focused on culture and customer service training.

Their corporate culture and hiring practices are so intentional and specific, it is said that it is easier to get into Harvard than to work in the Zappos call center. They would prefer a position to remain open for months than to hire the wrong person.

Skill set takes a secondary role to personality and how it will affect and complement the company’s culture. When walking through the halls of Zappos, employee enthusiasm and energy is palpable because the right people are working together with a common purpose—“delivering wow through service.”

Their dedication to extraordinary service has allowed Zappos to set a wave in motion. The Zappos customer is delighted, amazed and inspired and willingly becomes part of a word-ofmouth machine.

Consistently delivering stellar service requires a strategy. The heart of a company must beat for the people, not the bottom line.

The focus must be on treating all stakeholders well, customers and employees. Establish and foster a vision-based culture, hire and nurture the right people and customers will feel it. They will be amazed, and your business will grow.

Content contributed by Beyond Marketing, a company bringing success to its clients by combining five-star service systems with powerful marketing. Services offered include Web design, brand development, service workshops and public speaking engagements. For more information contact James La Barrie at 704-268-9338 or visit www.amazethecustomer.com.

OF Interest: Transforming the Business of Law to Meet the Needs of Business

Should I Sell My Business Now?

Overcoming Common Objections: Part One

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ne of the biggest obstacles in exiting your business is overcoming your objections, many of which tend to be based on misunderstanding the “facts.”

The objections that tend to hold back owners from selling their businesses are usually based upon some combination of the following perspectives: “The business isn’t worth enough to meet my financial needs.” “The employees (or customers) will leave when they discover I’m trying to sell.” “I will be required to work years for a new owner.” “The sale process will take too long and cost too much.” “Given the tax bite on sale proceeds, it makes more sense to stay, enjoy the cash flow and get paid over time.” “What will I do after I sell and leave the business? This business is my life!”

Today, let’s look at the first two objections that can create roadblocks for your timeline of cashing out of your business today and moving on to the next stage of your life.

The Business Isn’t Worth Enough To Meet My Financial Needs You can’t know whether your business is “worth enough” unless you know what it is worth in the current marketplace and what value is needed in order to meet your financial needs.

That’s why obtaining a valuation range for your company based upon current market conditions can be very important.

Use a transaction advisor, preferably an investment banker (for companies with a likely value of more than $5 million), or other transaction intermediary (for smaller businesses) familiar with what your business can fetch in the merger and acquisition (M&A) marketplace.

It is important to not simply depend on the historical valuation performed by your accountant or the “rule of thumb” used in your industry, both of which tend to rely on what has happened, not on what businesses are selling for in today’s market, and tend to overlook the importance of current deal activity levels.

To illustrate this point, let’s look at Sam Reed (not his real name), a business owner who was thinking about selling his business a number of years ago—near the last peak in the M&A cycle.

When Sam Reed started thinking about selling his business, he asked his CPA for an estimate of value. After some investigation of

“historical” valuation multiples, the CPA ventured an estimate of $16 million. The owner needed significantly more than that just to pay off business debt.

Although inclined to give up the idea of selling, at least temporarily, Sam asked his attorney what he thought his business was worth. The attorney’s response was, “I have no idea. You need to work with someone who knows what your type of business is selling for in today’s marketplace.”

At that point, Sam hired an investment banking firm to answer the question of what his business was worth in the current market. The firm returned with a baseline (or minimum value) sale price estimate of almost $25 million for Sam’s business.

With that information, Sam chose to proceed with a sale and eventually sold his company for more than $34 million. The final purchase price reflected the additional “promoted value” which was the result of back and forth negotiations with three different strategic buyers.

The point of this story is that to determine the value of your business, in today’s marketplace, ask an experienced professional who makes a living working in that market.

Contributed by

The Employees (Or Customers) Will Leave When They Discover I’m Trying To Sell While this is a legitimate concern, when properly handled, no one should find out about the sale process until you inform them, especially given the required Confidentiality Agreement.

Typically, a potential buyer does not even set foot in your business until you have made a tentative decision to sell the business to that buyer.

When conducted by experienced professionals, the sale of a business is highly confidential, and the likelihood of anyone discovering you are selling your business before you inform the public is minimal.

If either of these common perspectives resonates with you, then it may be time to contact an experienced exit planning professional for a further explanation of how to overcome these objections. He or she can help guide you through the process of reviewing all of the factors associated with exiting your business, while addressing all of your personal and business objectives.

Article presented by Robert Norris, founder and managing partner of Wishart Norris law firm, a member of Business Enterprise Institute’s International Network of Exit Planning Professionals. © 2013 Business Enterprise Institute, Inc. Reprinted with permission. Wishart Norris law firm partners with owners of closely-held businesses to provide comprehensive legal services in all areas of business, tax, estate planning, exit planning, succession planning, purchases and sales of businesses, real estate, family law, and litigation. For more information, contact Robert Norris at 704-3640010 or Robert.Norris@wnhplaw.com or visit www.WNHPLaw.com.

Norris

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greatercharlottebiz.com | august 2013

OF Interest: Delivering Vision and Security

Cybersecurity for Small Businesses:

The Loss/Theft of a Mobile Device PART FOUR OF FOUR

Contributed by

Snyder

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f you have lost a wallet, misplaced a purse, or had your briefcase stolen, you quickly realize your vulnerability when an unauthorized person has access to your smartphone, laptop or tablet. Information such as business and personal contacts, financial records, emails, intellectual property, and electronic account credentials are just the tip of the iceberg for a thief or hacker that can gain physical access to your mobile device.

In addition, physical access to your Internet-enabled device allows someone to gain administrative control of your social media sites, Wi-Fi network, home security system, and other Internet services. What is not readily evident is that the data stored on your mobile device provides all the information necessary to build a profile of you, your colleagues, family and friends.

What would such a profile include?

Well, that depends on how you use your mobile device. Let’s consider one source of information stored within your mobile device—Internet/wireless access points. If you leave your Wi-Fi enabled or use social media frequently on your mobile device, a significant amount of information can be retrieved including the places you visit, how often you visit, and the routes you use.

This data is easily retrieved from the history of wireless routers that automatically associate to your mobile device when you come in proximity to them. Your mobile device continuously scans for available Wi-Fi signals in the same manner that your smart phone continuously “looks” for the strongest signal from local cell towers. When the mobile device finds a stronger signal, it “hops” to it and re-associates by exchanging credentials—including specifics about the device and its owner.

To see this in-action, go to your settings and watch the names of the wireless networks that associate to your device. If you can see a name of a network, your device has exchanged “handshake” information, which is stored in the device memory.

These wireless access points are then readily located using cloud-based databases such as wiggle.net, and now the person with access to your mobile device knows a lot about where you travel, work and visit.

It is also very simple to isolate

august 2013 | greatercharlottebiz.com

dates and times that you visit various places. Photos and videos retrieved from your mobile device provide complementary information to that retrieved from wireless access logs. Metadata is the information embedded in the image file that includes the date, time, location, etc. of the photograph. So when you take a picture or record a video clip and then upload it to a social media site, you are creating a “digital exhaust” that does not dissipate.

Beyond privacy, there are safety issues related to having someone know a lot about you, your habits and lifestyle. When you lose a purse or wallet, the locks on a front door, garage codes, and ATM PINs can all be easily replaced or changed. Lose positive control of your mobile device with your digital ID, and it is not as straightforward. It is far easier to protect information from an unauthorized user than it is to deny use of that information. The following is a list of simple methods for securing your mobile device: 1. Encrypt the Data. Most Android, Windows and iOS devices now come with the ability to encrypt data that is stored on the device and its SD card. A strong encryption method using AES256 will prevent most people from exploiting the device data. It is easy to setup and transparent when you use the device—a simple search of the Help menu will walk you through the setup process. 2. Register your Mobile Device with your Service Provider.

Unless your mobile device is unlocked and roams on multiple networks, your service provider can locate it by its IMEI or MEID. More important is the ability for the service provider to verify your identity without using the mobile device, which allows them to remotely disable it and wipe its memory. 3. Employ anti-phone theft software. The software enables you to remotely contact your mobile device and control many of the functions—there are several of these applications available via search engine query. 4. Activate Remote Wipe. This service is very effective.

Google, for example, provides Google Apps customers with the capability to remotely access their mobile device using a Web browser; deny access to enterprise applications and data, and wipe all data and settings.

With convenience comes vulnerability. Mobile computing provides significant capability for the owner of the device as well as an unauthorized user. Protecting the information contained within that device is critical.

Content contributed by Advanced Mission Systems, LLC, a company specializing in technical surveillance and physical, electronic and cyber security for military, law enforcement, commercial and individual use, including technical support for small business owners in securing mobile computing devices and systems. For more information, contact Jerry Snyder at 980-819-2600 or visit www.amsdv.com.

[healthcarebiz]

Health Insurance Exchanges Are Changing

the

Dynamic

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ne goal of the Affordable Care Act is to increase competition and transparency in the markets for individual and small group insurance, leading to higher quality, more affordable products.

Information on proposed premiums in the individual and small group markets has so far been made available by 11 states.

A July 2013 DHHS ASPE Issue Brief analysis of those states’ proposed rates compared to those estimated by the Congressional Budget Office (CBO) show some very positive results:  The lowest cost silver plan in the individual market in 2014 is, on average, 18 percent less expensive than ASPE’s estimate of 2014 individual market premiums derived from CBO publications;  The lowest cost silver plan available to small employers in 2014 in the six states with available data is estimated to be 18 percent less expensive, on average, than the average premium that small employers would be paying for a pre-Affordable Care Act silver plan trended forward.

The results strongly suggest that greater competition and transparency are leading to substantial benefits for both consumers and employers in these markets. The exchanges are creating a very different dynamic for insurance companies, prompting them to be more aggressive and competitive in their pricing.

According to The New York Times, premiums in New York are set to fall by at least 50 percent: “Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly.

With federal subsidies, the cost will be even lower.” New Yorkers will be able to choose from 17 different insurance plans when enrolling in coverage in October.

Consumers are seeing lower rates and increased competition among insurance companies in states and marketplaces across the country. In May, California released the rates

that people without employer-sponsored coverage would pay on the new health care marketplace. The costs for a medium coverage plan are far below predictions.

For example, in southern Los Angeles County Health Net is going to charge $242 a month for one of its plans while Blue Shield is charging $287 and Kaiser Permanente $325 for the same coverage. That means that the 5 million uninsured residents of California will now have more access to affordable, higher quality care than is currently available.

The LA Times noted that “For the first time, consumers are in a position to make an informed decision about health insurance,” and “Insurers, meanwhile, are going toe to toe to win customers, keeping prices as low as possible and stepping up quality of service.”

Private insurers vying to sell coverage on Oregon’s health marketplace this October requested to redo their rates after learning that their plans’ premiums were higher than other proposals and would not be competitive in the marketplace. One plan even requested to lower its rates by 15 percent.

In Montana the individual and small group health plans sold on the marketplace will be cheaper and offer better coverage. Without the health law, insurance officials predicted the average premium in 2014 to rise by 10 percent to $290. Instead, the average cost for an individual plan will be $273—about five percent lower than it would have been without the health law’s marketplace. Costs are going down even though insurance companies will have to cover

10 “essential health benefits,” including prescription drug and mental health services, that skimpy individual plans almost never cover.

In the south, residents of Louisiana will soon see lower premiums as well. Recently Louisiana’s largest private health insurer, Blue Cross and Blue Shield of Louisiana, estimated that two-thirds of its customers who buy their own policies will pay the same premiums or less for better coverage under the federal health care overhaul.

Washington is also seeing lower rates. After warning that premiums would go up by 50 to 70 percent under Obamacare, Premera Blue Cross released rates for individual plans that are far lower than current levels. Premera currently offers individual plans for 21-year-old non-smokers at a monthly cost of $325, with a deductible of $1,800. In the exchange, that same person in King County could purchase a similar Premera plan with a lower deductible at a rate of $276—a decrease of 15 percent.

Figure 1:

Comparison of Individual Coverage Lowest Cost Silver Premium Across Markets

Note: Ohio and Virginia have not yet posted premiums for all issuers; the numbers presented here may be higher than the lowest cost 2014 silver premiums when all filings are posted.

Chart compiled from: Congressional Budget Office estimate derived as described in the report. State data from publicly available sources, weighted by RAND COMPARE estimate of enrollment by age in the individual market in 2014.

U.S. average constructed by weighting each state according to its proportion of individual market enrollees per the 2011 Medical Loss Ratio filings.

With 24 million Americans expected to gain coverage through the marketplaces by 2016, this is great news for Americans’ pocketbooks—as well as their health. At a time of significantly escalating health care expenditures, it seems like something is going in the right direction!

Sources: Center for American Progress Action, June17, 2013 Memorandum; U.S. Department of Health and Human Services, ASPE Research Brief, July 2013, ASPE Office of Health Policy; http://aspe.hhs.gov/health/reports/2013/ MarketCompetitionPremiums/rb_premiums.pdf greatercharlottebiz.com | august 2013

“New Biology” describes 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.

FOOD

ENERGY

Click here for more information on the New Biology and Food

CLIMATE HEALTH by pete prunkl

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The Dynamics UHEALTH CLIMATE of New Biology Agribusiness Crosses Industry Sectors for Increased Efficiency

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august 2013 | greatercharlottebiz.com

nder the header of “Not Your Father’s Biology,” the National Research Council (NRC) issued a report entitled A New Biology for the 21st Century1. 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.”

1 A New Biology for the 21st Century, National Research Council (2009), www.national-academies.org; http://books.nap.edu/openbook. php?record_id=12764&page=R1&utm_campaign=Video+annotations&utm_ source=YouTube&utm_medium=video&utm_content=A+New+Biology

ENERGY

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 sciencebased 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

“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.” greatercharlottebiz.com | august 2013

The P2EP 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.

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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: P2EP photos by fenix fotography

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

Cory Brouwer, Ph.D. P2EP Leadership Team, Director of Bioinformatics Services Division, and Associate Professor, UNC Charlotte UNC Charlotte

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.”

Personalized Approach 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.

Click here for P2EP cMap, a web-based application for viewing genetic and comparative maps

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“The Plant Pathways Elucidation Project represents the way big science can solve big problems for society—collaborations across disciplines involving industry and academia.”

Click here for infographic on the Plant Pathways Elucidation Project

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, fouryear 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

 Members of the Plant Pathways Elucidation Project (P2EP) leadership team, including (from L-R) Dr. Eric Jackson, principal scientist with General Mills; Dr. Mary Ann Lila, director of N.C. State University’s Plants for Human Health Institute; Dr. Nicholas Gillitt, director of the Dole Nutrition Research Laboratory; and research staff from Lila’s lab. Photo: Plant Pathways Elucidation Project (P2EP).

august 2013 | greatercharlottebiz.com

a small number of genes and was the first plant to have its genome sequenced.

Despite its fame, Arabidopsis is inedible.

Tools for Agribusiness

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

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

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.”

Pete Prunkl is a Greater Charlotte Biz freelance writer.

Plant Pathways Elucidation Project (P2EP) North Carolina Research Campus 150 Research Campus Drive Kannapolis, N.C. 28081 Phone: 704-250-5764 Principal: Cory R. Brouwer, Ph.D., P2EP Leadership Team, Director of Bioinformatics Services Division, and Associate Professor, UNC Charlotte Project: Multi-university project (over 10 N.C. colleges and universities) teaming up university scientists, industry leaders and college students to explore plant pathways to answer why and how plants, like fruits and vegetables, benefit human health; aims to foster scientific discoveries, provide educational opportunities, and create a vast knowledge base of plant pathways research. www.p2ep.org

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Let’s Talk Circle S Ranch is a New Breed

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Agribusiness

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by jim froneberger

ver 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.

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Applying Science and Sustainability to Turkey Production

photos by fenix fotography

(l to r) Travis Starnes Vice President Samuel O. Starnes Jr. President and CEO S. Chad Starnes Vice President Circle S Ranch, Inc.

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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.

august 2013 | greatercharlottebiz.com

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 fencedin 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

“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.”

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.

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Circle S Ranch, one of the state’s largest live turkey production farms, 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.

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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 companyowned 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

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“The technology that’s available now for a turkey house would blow your mind compared to 30 years ago. 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.” 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

Similar Operations at Minnesota Livestock Farmers: Turkey Production

cooling for turkey houses in a truly selfsustaining 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

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.

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.

Jim Froneberger is a Greater Charlotte Biz freelance writer.

Circle “S” Ranch, Inc. 1604 Circle S Ranch Road Monroe, N.C. 28112 Phone: 704-764-7414 Principals: Samuel O. Starnes Jr., President and CEO; S. Chad Starnes, Vice President; Travis Starnes, Vice President Associated Businesses: Circle S Shavings, LLC (Pageland, S.C.); Circle S Feeds (Richburg, S.C.); Pageland Grain Elevator (Pageland, S.C.) Employees: 142 In Business: 41 Turkeys Raised: Mostly heavy toms that reach weights between 40-50 pounds; main breed is Hybrid, the other is Nicholas Business: Vertical integrator in live turkey production bringing all aspects—including genetics, health and nutrition—under a single management umbrella. www.circle-s-ranch.us

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Agribusiness

by carol gifford

Egg-xactly What the Doctor Ordered Simpson’s Eggs Are Committed to “the Incredible, Edible Egg”

E

ggs are the main source of protein for many people in the world and an important source of protein for U.S. consumers. Producing eggs is a multi-million dollar agribusiness sector, and Simpson’s Eggs in Monroe, the third largest egg producer in North Carolina, is working to meet the demand.

“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.

Spanning Generations

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“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.”

august 2013 | greatercharlottebiz.com

photos by fenix fotography

“We are a family-run business. My greatgrandfather, 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 begin to expand the business.”

Alex Simpson Vice President and General Manager Simpson’s Eggs, Inc.

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Photo provided by Simpson’s Eggs

Production Life Cycle

“In the U.S., the main protein source for most people is meat, 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.”

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.

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august 2013 | greatercharlottebiz.com

“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

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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.

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“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.”

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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.”

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“The taste of the eggs is related to the feed that hens eat. Our feed is specially formulated by a nutritionist to produce the right amount of protein for our birds.”

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according to their customer requirements. Egg prices

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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.

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.

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august 2013 | greatercharlottebiz.com

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.

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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.”

Carol Gifford is a Greater Charlotte Biz freelance writer.

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Simpson’s Eggs, Inc. 5015 E. Highway 218 Monroe, N.C. 28110 Phone: 704-753-1478; 800-726-1330 Principals: Leroy Simpson, President; Alex Simpson, Vice President and General Manager; Jake Simmons, Sales Manager Founded: 1925 by Z.K. Simpson; business still owned and operated by the Simpson family Employees: 48 Customers: Food Lion, Sam’s Club, Compare Foods, Aldi and food service locations in the Carolinas, including other national customers and secondary international markets Business: Commercial egg production. www.simpsonseggs.com

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’Tis the Scottish way for business people to proceed with caution and to minimize risks.

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Meet Peter Wilson at Grandfather Mountain Highland Games

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Shortbread and tea wrapped in tartan —a thriving American business

is 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 ScotsIrish 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 Charlotte region,” says Peter, “and there is one retailer we supply in Mint Hill called Near and Far Scottish.

“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.”

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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.

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photos by fenix fotography

Peter Wilson President Great Scot International, Inc.

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greatercharlottebiz.com | august 2013

“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.”

august 2013 | greatercharlottebiz.com

“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 IRNBRU 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 U.S. distributor for a Scottish tartan textile company which offers over 500 tartan patterns and makes everything from neckties to throws in fine wool. Great Scot also distributes for three other woolen mills in Scotland.

“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 wellknown customer.

“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.”

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.

Importing Challenges 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

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Many American states also have their own tartans. Over the years Great Scot has woven The Carolina tartan, Connecticut, New Hampshire, Mississippi, and Texas Bluebonnet.

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.”

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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.

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“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.”

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 Wilsons plan to take this over in the near future.

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.

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There, he met his wife Suzanne, whom he took back to Scotland where she would survive 14 Scottish winters. In Scotland, Peter worked in his father’s manufacturing business which made equipment for on-line cleaning industrial boilers and heat exchangers that are fired with fossil fuels.

“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

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The company is the U.S. distributor for a Scottish tartan textile company which offers over 500 tartan patterns and makes everything from neckties to throws in fine wool.

Great Scot also distributes for three other woolen mills in Scotland.

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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.

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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.

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

PUT YOUR COMPANY’S

Zenda Douglas is a Greater Charlotte Biz freelance writer.

Great Scot International, Inc. 8041 Arrowridge Blvd. Ste. I Charlotte, N.C. 28273 Phone: 704-535-8955 Principals: Peter Wilson, President; James Wilson, Vice President Founded: 1997 Employees: 4 Revenue: $1.1 million Business: Charlotte-based supplier of Scottish food products and tartan fabrics and apparel; sells to distributors, independent companies and retailers in the U.S. and other countries. www.greatscotintl.com

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by barbara fagan

T

Mike Restaino Executive Director 7th Street Public Market

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here’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.

photos by fenix fotography

Market with a Mission -7th Street Public Market-

Brings Together Fresh Food, Fun, Flavor and Culture to Support Health and Wellness august 2013 | greatercharlottebiz.com

Click here for video

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.

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 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

Link to 7th Street Public Market Vendor Videos

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august 2013 | greatercharlottebiz.com

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

“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.

“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.”

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.”

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greatercharlottebiz.com | august 2013

“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.”

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august 2013 | greatercharlottebiz.com

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 oneon-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 seasonlong 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.”

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WHERE YOU NEED US, WHEN YOU NEED US.

Barbara Fagan is a Greater Charlotte Biz freelance writer.

Charlotte City Market dba

7th Street Public Market 224 E. 7th Street Charlotte, N.C. 28202 Phone: 980-819-6682 Principals: Mike Restaino, Executive Director; David Johnson, Operations Manager; Dr. Dan Murrey, Chair; Peter Reinhart, Vice Chair; Michael Smith, Secretary/Treasurer Established: 2010 (Nonprofit) Mission: To celebrate the regional food culture of the Carolinas, to support local farmers, food producers, and farmers markets, to incubate small food-related businesses, and to increase food access in Charlotte. www.7thstreetpublicmarket.com

Since 1984, TelWare has provided voice, data and video solutions to thousands of business customers across the Carolinas.

Charlotte | Raleigh | Winston-Salem | Asheville | Columbia Greenville | Atlanta | Richmond

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[publisher’spost] PCA

ACA

Health Care Changes: Not Such New Ideas After All!

Rep. Paul Ryan (R) and Sen. Tom Coburn (R) Patients' Choice Act of 2009 (PCA)

Obama (D) Affordable Care Act of 2010 (ACA)

Mandates

No, but automatic enrollment in state exchange plans for uninsured, with opt-out.

Employers and individual mandates.

Medicaid

Limited to disabled, lowincome people.

Expanded to cover people making up to 133% of the poverty line (In states that accept funds).

Preexisting conditions / Guaranteed issue

All plans in state exchanges must be guaranteed issue.

No community rating specified.

Guaranteed issue, community rating; can vary premiums only based on age, family, size, and tobacco usage.

Employer health exemption?

Replace with refundable tax credit: $2,300 per individual, $5,700 per family.

Kept, but new tax imposed on expensive employer plans.

New subsidies?

Tax credit above, plus assistance for lowincome people buying private insurance.

Tax credits for people with income between 100-400% of poverty rate with exchange health care.

New revenue?

None (besides from conversion to credit).

Medicare tax increase & capital income surtax; fee on providers; expensive plan excise tax; medical device tax; branded drug tax; raise floor on medical expense deduction.

Exchanges

State-level exchanges.

State-level exchanges for individual and small group coverage.

Cost containment

Medicare means-test; accountable care organizations (ACOs); malpractice reform; <Medicare premiums for healthy behavior.

Medicare cuts; IPAB to find Medicare savings; accountable care organizations (ACOs); cut reimbursement to bad hospitals; tries valuebased purchasing and bundling.

Standard benefit package?

Yes. Exchange care has to be as comprehensive as Congressional plans.

Yes. All exchange plans must provide "Essential Health Benefits" as set by agency rules.

John P. Galles Publisher

Source: The Washington Post Wonkblog, Dylan Matthews, http://www. washingtonpost.com/blogs/wonkblog/wp/2013/07/25/republicans-had-aplan-to-replace-obamacare-it-looked-a-lot-like-obamacare/

august 2013 | greatercharlottebiz.com

R

epublicans in the U.S. House of Representatives have now voted 40 times to repeal the Affordable Care Act of 2010 (ACA), although they have not yet put forth an alternative. They say they aren’t opposed to the idea of universal health care; they just think that the Obama administration and their allies in Congress went about it the wrong way. They’d repeal the bill and replace it with something better.

While the passage of time and the strength of their indecision alone probably make this a moot point, it is interesting to note just how much the text of what was once called the Patient’s Choice Act (PCA), assembled in 2009 by Sen. Tom Coburn and Rep. Paul Ryan, the two most influential Congressional Republicans on the issue, conforms in principal to the ACA as enacted.

Significantly, here’s how the PCA would have worked: 1. States would open health insurance exchanges where individuals and small businesses could buy insurance.

2. Insurance plans on the exchanges would have to provide a base level of coverage set by the federal government.

3. Insurers could not turn down customers because of pre-existing conditions.

4. Individuals and families would get a refundable tax credit to pay for insurance.

5. That tax credit would be funded by a limitation of the tax exemption for employer provided coverage.

Those provisions accurately describe both the PCA and the ACA. That isn’t a coincidence. According to an analysis by The Washington Post, “The ACA bears a heavy resemblance to basically every real universal healthcare plan that Republican legislators have proposed in the past half century.”

There are plenty of differences, of course.

The ACA expands Medicaid and the PCA restricts Medicaid to low-income disabled people, while the rest are moved to private insurance. The ACA cuts Medicare provider

payments and the PCA means-tests premiums. The ACA has mandates; the PCA auto-enrolls people in state exchanges, more of a soft mandate.

Much of the frustration with the ACA is its interpretation and implementation; the reality is that any law trying to reshape nearly 20 percent of our GDP will not likely be smoothly implemented. Our history demonstrates that implementation takes time and many adjustments; both Medicaid and Medicare have taken many years to implement and each has been adapted frequently since they were adopted in 1965.

The task is multiplied many times over when the responsible agency, the Department of Health and Human Services (DHHS), must set up the bureaucracy to administer the act and accommodate those states choosing to participate with and create their own health care exchanges.

Yet while the main portion of the ACA will not go into effect until 2014, the American public has become well aware of the new requirements being applied to all coverage: 1. Elimination of pre-existing conditions— benefits can no longer be denied; 2. End of lifetime limits on coverage; 3. Coverage for young adults on parents insurance up to the age of 26; 4. Plain language benefits information; 5. Covered preventative care for adults, women and children; 6. Coverage for your choice of doctors; 7. Holding insurance plans to be accountable: If they don’t spend at least 80 cents of every premium dollar on actual health care, they must refund the difference.

Although the DHHS announced the delay in implementing the employer mandate for one year, the individual mandate to obtain health care coverage is still in place. The good news is that in the states with newly-created state-sponsored health exchanges, the proposed rates for individual coverage are uniformly lower than estimated, allowing individuals better coverage at a lesser rate.

tt o l ar

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Ch n i up o r G g n i SEPT rk o w Next et 13 N Meeting r e 2013 mi e r P The Call For More Information

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2013 SPEAKER LINEUP Dr. Derek Raghavan

The Hood Hargett Breakfast Club is a ‘category exclusive’

Internationally-Renowned Cancer Researcher, Medical Oncologist and President of Levine Cancer Institute

Sept. 13, 2013

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The goal of these events:

Kyle Maynard Motivational Speaker, Author, Entrepreneur and Athlete

Oct. 11, 2013

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