In the News
Business NC: A Year Of Discoveries: Online Groceries, The Beige Book And The Round Bank Branch
I have learned a lot of things over the past year, writing columns for Business North Carolina and Daily Digest newsletters. Here are 10 of those things. My life has been one long Continuing Education program taught by everyone I interview. I am grateful for their patience.
I discovered the convenience and quirks of online grocery shopping. Since mid-March, my wife and I have been doing it this way, and we are not going back. If a lot of folks do this, a $700 billion industry will be stood on its head. Think about how much energy is spent at headquarters deciding how far in the back of the store to display the milk. And how to staff the checkout. If grocery stores are going to become just warehouses, they can put Wegmans in empty underground parking garages.
The online process is still working out kinks. The items online don’t always match the shelves. So when the Instacart person starts shopping, you get texts about problems in the yogurt supply chain. Grocery stores were not built for real-time inventory updates down to individual boxes of Cap’n Crunch, so there is work to be done.
Closing the skills gap
I learned about myFutureNC, which is trying to raise the educational levels of North Carolinians.
As many blue-collar jobs went away in recent decades, they were replaced by jobs that require more education. Organizations have been working on this skills gap for decades.
What impressed me about myFutureNC was its very detailed analysis of the reasons that folks don’t make it through college. It looked at every county, and developed a strategy to improve on the most important metrics that influence college-going.
So, for example, if you want to get more high school graduates to enroll in a degree or certificate program, you have to help them get financial aid. Which means they have to fill out the FAFSA, the Free Application for Federal Student Aid. And if you can bump your county’s FAFSA rate up 10 or 20 percentage points, that should increase the number of your kids who go to college. In the case of Bertie County, that would mean getting around 40 more high school seniors to fill out FAFSA to hit the state’s 80% goal.
First Citizens’ architecture
I had driven on Six Forks Road by the round First Citizens branch for years. Every time I was in Raleigh’s North Hills, I would look at the building and wonder what’s the deal. The answer was a creative partnership that started on Six Forks more than two decades ago. British architect Ptolemy Dean was hired by then-chairman Lewis R. “Snow” Holding to design the bank’s new branches as it expanded across the country, and North Hills was the first. I learned that Holding, who passed away in 2009, was “much more than his Harvard MBA,” according to a 2019 First Citizens book about the distinctive branches. “He was a student of art and history, a collector of antiques, a patron of arts organizations and an enthusiast for great architecture.”
I also learned that Dean, who would design more than two dozen First Citizens buildings in 11 states, was more than just an architect. He appeared on BBC shows on building restorations and he has served as the 19th Surveyor of the Fabric of Westminster Abbey, responsible for overseeing new construction and restoration at this historic church/wedding venue.
State Fair shutdown
When the State Fair was canceled because of the pandemic, news stories mentioned that it was also suspended during World War II. That made me curious, which led me down the rabbit hole of history where I met Joseph Eastman. He was the director of the Office of Defense Transportation. His job was to make sure the country’s transport system gave top priority to the war industry.
In the spring and summer of 1942, all over the country, states like North Carolina were preparing their annual fall fairs. Eastman saw this and realized that millions of Americans would be driving to those fairs, many of them long distances. That would use up tires. Rubber was scarce because the Japanese now controlled most of the world’s supply. Eastman put the word out asking that fairs be canceled. The next North Carolina state fair was in 1946.
How the Beige Book happens
The Beige Book is a report on regional economic conditions put out by the Federal Reserve, the central bank. The Fed has 12 regional banks that each have a section in the book; we are in the Richmond Fed region. The book comes out eight times a year. I wanted to learn how this comes together, so I talked to the guy at the Richmond Fed in charge of our part, Joe Mengedoth. They gather intelligence from a couple hundred business people for each new book. Some of you may be sources. Even though the information is anecdotal, it is more up-to-date than a lot of the quantitative data the Fed has when it meets. That was my big takeaway, that the insights from regular folks – real estate brokers, car dealers and trucking executives – influence monetary policy. Here’s the December book.
Logistics is king
Along with everyone else, I spent much of the past year learning about supply chains, particularly for things like masks and ventilators. We learned that in a health emergency, a global supply chain can break down when countries decide they want to keep all their masks, and the federal government needed to prepare better for a pandemic. What I also learned is that an N.C. State professor, Rob Handfield, said this in a report 10 years ago that hardly anyone read. He was commissioned to write the report after the 2009 H1N1 flu outbreak.
Handfield was among a group of logistics experts brought in earlier this year to examine the problems with the Strategic National Stockpile and their findings were published in the Harvard Business Review in September. They are a template for how to get the federal government ready for next time.
I also learned how masks are made, talking to a Mount Airy startup.
The Furniture Academy
What I found out from Bill McBrayer is that there is still a custom upholstered furniture industry in North Carolina that needs workers. McBrayer joined with other executives in the Hickory area to start a furniture academy at Catawba Valley Community College. Because so many jobs had been lost to imports, mainly in wood furniture, young people were steering clear of the industry. That created problems finding workers with upholstering skills. The academy was started to address this labor shortage. You can make a decent living in upholstery. McBrayer hired a young man as a temp five years ago, unloading containers. He was then trained in upholstery. Today he makes around $79,000 a year.
McBrayer, an executive with one of the academy’s five founding companies and vice chair of the state’s community colleges board, laid out the five key elements needed to start one up. If you’re interested, read this.
The sweet potato success story
There’s a fair amount of serendipity in finding things to write about. I have found two because of Michelle Grainger. I first met her when I was doing a story in 2018 about Research Triangle Park, and she was using an office in an old IBM building that had been rehabbed into the Frontier. She was working for the Center for Innovation Management Studies, which I then wrote about. I checked in with her earlier this year and learned she is now executive director of the North Carolina Sweet Potato Commission. And she said there’s a pretty good story in NC sweet potatoes. She was right.
North Carolina is the leading sweet potato producer in the country largely because of a variety that was developed by N.C. State researchers, called the Covington. An innovative way of storing sweet potatoes was also developed at N.C. State. A bunch of agri-businesses used this research to plant North Carolina’s sweet potato flag in Europe. The state’s farms export $150 million in sweet potatoes a year, versus $1 million 20 years ago.
I understood better what it means to have a big ag research university like N.C. State standing behind North Carolina’s farmers.
The electric co-ops
I learned about electric co-operatives because I was interested in the problems that rural areas in North Carolina have getting high-speed internet connections. This led me to the State Broadband Office, and the director of the office told me about an electric co-op in northeastern North Carolina, Roanoke Electric, that was rolling out broadband for its customers. That, in turn, made me curious about electric co-ops.
What I found out, as a city boy, is what anyone who has grown up or lives in rural North Carolina already knows. When I thought of power companies, I thought of giant utilities like Duke Energy owned by investors. But in rural areas, the power company is likely to be one of the co-ops that were started up beginning in the 1930s by farmers and rural merchants with the assistance of the New Deal’s Rural Electrification Administration.
Some 2.5 million North Carolinians get their power through the co-ops, which operate in 93 of the state’s 100 counties. The co-ops serve 45% of the state’s land area. Much of the power comes from Duke’s Catawba Nuclear Station near Charlotte, through the North Carolina Electric Membership Corporation.
Small business wisdom
I get lots of emails from various organizations every day, and actually read them, looking for ideas. One day in late August, I got my daily email from the Burke County Chamber of Commerce. It encouraged folks whose companies had been beaten down by the pandemic to call the Small Business Center at Western Piedmont Community College for free counseling.
That led me to Suzanne Wallace, director of the center, who ran the one at Mitchell Community College in Statesville before coming to Morganton. Wallace told me that she has probably talked to a thousand people wanting to start up small businesses over the years. One reason she knows what she’s talking about, besides an MBA, is that she helped run a restaurant in Cullowhee for a couple of years.
Small business centers around North Carolina helped start nearly 700 businesses in 2019, with 2,800 new jobs. They also helped save another 1,100 jobs. The network cost around $6.5 million, so less than $1,700 a job. So, the main thing I learned was that small business advice and support is a cost-efficient economic development tool.