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GOURMET NEWS MARCH 2017 www.gourmetnews.com NEWS & NOTES 6 KeHE Continued from PAGE 1 horizon, Barnholt is optimistic. He noted that this year's Summer Selling Show is the largest the company has ever had, with 900 customers for 1,200 buying entities on the floor and a significant uptick in sales this year. "Yesterday, our sales were up about 20 percent from the year before, so we know sales are happening," he said. Of the other trends that Barnholt believes will be most important to grocery retailers this year, the first on the list is the Ameri- can economy. Central to that discussion are the uncertainties associated with a new Presidential administration, but market in- dicators provide reason for optimism, ac- cording to Barnholt. "The factors in the very early days seem positive because busi- ness thinks favorably of what's going to happen in Washington," he said. China's economy has improved over last year and the country is registering a grow- ing Gross Domestic Product, he noted – "and that's a good thing." In the United States, dissatisfaction with unemployment rates was probably an issue that helped to elect Donald Trump, he said, and those vot- ers are looking to the new administration to do something about them. Although the unemployment rate is at 4.7 percent, that doesn't reflect the people who aren't looking for work, and the effective unemployment rate is more like 9.2 percent. "We think that's headed in the right direction," Barn- holt said. "Let's see that number get better." Economists believe that investment cap- ital is flowing back into the economy and will help create new jobs, and that the Fed- eral Reserve Bank will respond with at least two hikes in interest rates this year, accord- ing to Barnholt. "This is business feeling good about what's happening in the econ- omy," he said. "Consumer confidence is at a 15-year high. There is job growth. The economic prospects have put people in a good mood." Barnholt noted that the housing sector of the economy is showing signs of recovery, which will put more people back to work and give them discretionary income to spend at retail, propelling growth in the American GDP that's expected to continue over the next few years. "The new un- known will sort itself out over the coming months and maybe the year," he said. "Businesses are very confident; consumers are confident. The economy from almost every angle looks good." Other factors affecting the retail grocery market include America's changing demo- graphics, with Baby Boomers aging and younger Millennial shoppers who are shop- ping very differently from their elders and with increasing ethnic diversity among American consumers. "Diversity factors have impacted the way we eat. The flavor profiles, the numbers of products we have to have in the stores and the way we curate those products have changed," he said. He noted that those changing demographics are also reflected in greater demand for fresh products in the grocery store. Consumers are also expressing greater demands for knowledge about the foods they're buying, and they've gone from wanting to know everything about the food itself to wanting to know everything about the company that's producing the food. "They are literally willing to put their money where their mouth is," he said. "There are people who think it's all about the environment, and they're going to buy for that. They want to know about the foot- print and what that's doing to the society around it. More and more are coming in this direction." If consumers can't find that information on the product's label, they'll demand it in other ways, going so far as to ask legislators to regulate around their concerns if they don't feel that food producers are comply- ing voluntarily, according to Barnholt. "You need to know that the entire food market is going to move in this direction, whether they want to or whether it's legislated," he said. "Trust is going to be what drives how consumers buy food, what they buy and where they buy it. This is going to be one of the biggest issues as we go forward." Barnholt believes that, with its acquisi- tions of smaller specialty distributors over the past few years, including its most recent acquisition of Monterrey, KeHE is well po- sitioned to help retailers navigate the trends shaping the grocery industry. "The facts are that our industry and us as an industry – we're trying to figure out how we're going to serve this marketplace with the products it wants and do it economically and to meet the expectations that our consumers are demanding of us," he said. "We have retail- ers asking us to do more for less, and we've got retailers telling us that they want us to carry all 30,000 SKUs. At the end of the day, the only thing that really matters is, does the item get on the shelf and does it sell?" GN Olympia Provisions Continued from PAGE 1 other criteria, that his product was free of artificial additives, that the meat came from animals raised according to the standards of the Animal Welfare Approved organiza- tion and that the people who raised and harvested the animals and who made the product in his plant were all paid fair com- pensation for their work. All of that's a fit for how he's al- ways run his busi- ness, he says. Cairo is the son of a first-genera- tion immigrant from Greece, born in Salt Lake City, Utah, into a family that valued hard work and good food raised on a small farm where they preserved their fruit, made a little alcohol and cured meat for the winter. "My father was the typical Greek man," Cairo says. The family also owned two Greek-Amer- ican restaurants, and by the time he was 17 years old, Cairo figured he'd learned all they had to teach him, and he needed to light out for formal culinary school. "I wanted to be a fancy-pants chef," he says with a laugh. "I was reading a lot about the Culinary Institute of America." His father argued that what he really needed was a taste of hard work and more practical experience in a restaurant kitchen, and he offered to send him back to Greece where he could really learn how to cook. "I sort of figured that I already knew all that," Cairo says. His father reached out to friends in Greece who might have a place in their kitchens for an apprentice cook who needed a good lesson or two and was re- ferred to a Swiss friend who had a six- month opening for an apprentice. "This area is called the Alpstein, and it's very fa- mous for mountain restaurants," Cairo says. Cairo took the apprenticeship and found himself working for the village jägermeis- ter, the meat cutter to whom the local hunters brought their game for processing. "I really fell in love with hanging out in the restaurant and butchering meat and curing it," Cairo says. "All of these producers were the most amazing people. I fell in love." The six- month appren- ticeship ended, but Cairo's stay in Switzerland didn't. He ended up staying there for five years. M e a n w h i l e , his sister Michelle had moved from Salt Lake City to Portland, Oregon, and she started telling him that he should think about going back to the U.S. His fam- ily needed him, she argued, and Portland wasn't Salt Lake City. Finally, she argued him into coming, at least for a visit. "I was kind of skeptical," he says. "I landed, and she took me right to the Portland farmers market." That visit was the start of a love affair between Cairo and Portland's food culture. Cairo decided quickly that he wanted to be part of America's growing interest in quality foods, and the food movement's ea- gerness to support producers who were making food that aligned with their own ethics. "Within a week, I knew that Amer- ica's so fresh on the food movement," he said. "I was really excited to see all the mi- crobrews and the wine and the cheese.... I just think it's so important that people care about more than just delicious." Michelle was looking at the farmers mar- ket for a stick of high-quality salami, she told him, but she'd been unable to find any- one in the Portland area who was making the sausage she was seeking. "I said, 'Michelle, I make a ton of salami. I can make salami. Let's do this.'" She pointed out that, in the United States, making and selling salami isn't as simple as that – there are regulations that have to be followed, and they're compli- cated. So Cairo got a job in one of Port- land's fancy restaurants, and in his free time, he started studying the U.S. Depart- ment of Agriculture regulations and learn- ing about HACCP requirements that governed the processing and sale of meat. By 2009, he'd learned enough to per- suade his sister that he could succeed in the business, and she provided him with enough money to open Portland's first U S D A - c e r t i f i e d meat-processing facility. "I opened up my first USDA facility next to my first restaurant," he says. He entered those first prod- ucts into the very first Good Food Awards, and when he was named as a multiple winner, he started getting phone calls. Two years later, he opened his second meat processing fa- cility. "We grew out of that place two years ago and opened up our current meat plant with 40,000 square feet," he says. Today, his Olympia Provisions operation employs 180 and includes five restaurants – three fast casual and two full service – and sells at 17 farmers markets a week. "It just becomes a snowball, I suppose," he says. "I think it's a pretty exciting time to be producing." His products are winning praise from con- sumers who care about products that deliver on more than just good taste in a cute pack- age. "They want to support the companies that have the same ideas about the environ- ment that they do," Cairo says, adding that he supports the Good Food Awards require- ments for environmental sustainability and animal welfare. "It's forcing people's hands to do what they say," he says. To that end, he's embarked on a quest to improve the supply chain for quality meat products, so that he can find the humanely raised animals he needs to make his char- cuterie close to home – a project that's more difficult in the western U.S., where the car- rying capacity of the land is less than it is in the better-watered parts of the country, and therefore, there's less infrastructure for raising and processing meat. That's driven Cairo to spend time trying to persuade cat- tle ranchers that their operations will ben- efit if they try something other than the traditional single-species cow-calf opera- tion funneling into a feedlot by introducing pigs into some of their pastures. The pigs would clean out invasive weeds to improve their pastures. Then, they wouldn't have to worry about selling that pork at farmers markets, because he'd take it, he tells them. "Once you can show them a financial plan, pen- cil in that there is a market – it is moving in this direction, then they get interested," he says. Making that work requires scale – a scale that provides a dependable market for those pasture-raised pigs. Cairo sees Olympia Provisions as a key to making it work, first for Oregon and then for Amer- ica. "I'm still a ways away from having it completely fixed in Oregon," he says. "There are great slaughterhouses and pro- ducers – I just think it can still be im- proved.... Hopefully, in my model, the ranchers should be focusing on ranching and putting back into the land and then al- lowing people like myself to move their product.... We created this amazing com- pany that's good for America." GN