BRINGING IT HOME Building lithium batteries in Oregon UNPACKING CO-PACKING Small food manufacturers look for space to grow November/December 2023 | OregonBusiness.com THE MANUFACTURING ISSUE Unbroken Thread Pendleton Woolen Mills looks to the future
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⁄Contents⁄ November/December 2023 FEATURES 26 The New Weave Cover Story This year the Bishop family — which owns Pendleton Woolen Mills — celebrates 160 years of weaving in Oregon. What’s next for the storied manufacturer? 36 The Nearer Shore Powin Energy’s Joseph Lu wants to bring lithium-battery manufacturing — an industry mostly concentrated in China — to Oregon. REGULARS 06 Editor’s Letter 08 Newsfeed 14 Tactics Scott Hamlin, founder and CEO of Looptworks, on the company’s next move 18 Spotlight Contract manufacturing is the best option for many smallscale food manufacturers. But the lack of small- and medium-size co-packing spaces makes it challenging for producers to scale. 42 Powerlist Banks ranked by Oregon deposits 50 Storyteller-in-Chief Ben Quach, founder of QB Fabrication & Welding, reflects on the importance of persistence when building a small business. 52 Downtime Live, work and play with Jaime Eder, director of workforce development and community engagement at Visit Central Oregon. 54 Policy Brief Ruwan Jayaweera, a principal at PAE, and Ed Herrera, senior associate at Bric Architecture, write about the need for diversifying architecture and design. Follow @OregonBusiness for breaking news, blogs and commentary. Subscribe to our weekly e-newsletter featuring the best of OregonBusiness.com, plus articles from our print publication. To sign up, go to OregonBusiness.com. 18 BRAND STORIES 10 Comcast Direct Robust internet service helps ensure that Aim High’s behavioral technicians have the tools they need. 34 Western Oregon University Institution tailors its resources and services to the diverse needs of each student. 44 Oregon Cultural Trust Community-based approach has supported decades of positive change. BRINGING IT HOME Building lithium batteries in Oregon UNPACKING CO-PACKING Small food manufacturers look for space to grow November/December 2023 | OregonBusiness.com THE MANUFACTURING ISSUE Unbroken Thread Pendleton Woolen Mills looks to the future COVER PHOTO: Jason E. Kaplan JASON E. KAPLAN CHECK OUT THESE EXCLUSIVES (AND MORE) ON OREGONBUSINESS.COM n Two OSU-Led Industry Clusters Designated ‘Tech Hubs’ by the Department of Commerce — The mass timber and microfluidics industry groups will now compete for $500 million in grants to spur American technological competitiveness. n Horizon Air to Resume Seasonal Service Between Redmond Municipal Airport and Portland International Airport Nov. 29 — The airline will resume seasonal 45-minute flight service between November and April. n Portland Community College Launches Mobile Welding Outreach & Skills Training Center — The collaboration five years in the making began as an idea hatched by a professor to bring welding training to tribal communities. n Portland Office Vacancies Reach Historic Highs — Kidder Mathews senior VP says the commercial real estate market is adapting to reduced demand. 100 BEST NEWS Never Miss a 100 Best Survey! Find out how satisfied your employees are with their jobs through our anonymous and confidential surveys. Visit OregonBusiness.com/100BestNotify and sign up to receive information about how to register for future 100 Best surveys. 4
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⁄From the Editor⁄ Oregon Made WHEN I’M NOT WORKING (or hiking, or playing with my unusually needy cats) I’m making something. The older I get, the more drawn I am to creative hobbies that don’t have me hunched over a keyboard or staring at a computer screen; concrete tasks like sewing, knitting or cooking win the day. Normally my work for Oregon Business doesn’t match so neatly to my personal obsessions, but everything I personally contributed to this issue had to do with either food or fabric. For “The New Weave” (p. 26), I toured Pendleton Woolen Mills’ Washougal, Wash., facility and spoke to several people inside and outside of the company about Pendleton’s unusual history as well as its unique status as one of just a handful of companies that still mill wool in the United States. And during this issue’s Tactics interview with Looptworks founder Scott Hamlin, I learned that in November the company is opening a facility that will do what Hamlin has been trying to do since he started the company in 2009: to not just repurpose waste fabrics but fully recycle them — or, as he puts it, “turn a T-shirt back into a T-shirt.” For “More Cooks in the Kitchen” (p. 18), I spoke to several small food and beverage business owners and discovered that while Oregonians take great pride in having a variety of great, locally made food products available to us, the state’s manufacturing environment makes it difficult to scale at a reasonable pace. That’s driven some makers out of state, or even out of business. But I also learned that the state is studying the problem and working toward a solution. There is, of course, more to manufacturing than food and textiles. For “The Nearer Shore” (p. 36), Sander Gusinow spoke to serial entrepreneur Joseph Lu about his plans to open a lithium-battery factory in Oregon. At first blush, it’s a surprising move, given that the majority of lithium-battery manufacturing sites are situated in China. But Lu — and others who observe the industry—say China’s days as “the world’s factory” are numbered, and reshoring is the future. How Lu’s new venture will turn out remains to be seen, but it’s exciting — and inspiring — to learn about the wide variety of things that are made in Oregon, and to see that so many industry observers are hopeful about the state’s future as a manufacturing center. VOLUME 46 ⁄ NUMBER 10 OREGON BUSINESS (ISSN 02798190) is published 10 times per year, monthly except Jul/Aug and Nov/Dec issues, by MEDIAmerica Inc. at 12570 S.W. 69th Ave., Suite 102, Portland OR 97223. Subscription inquiries should be directed to 503-445-8811. Subscription charge is $24.95 per year, $49.95 for two years in the USA. Single copies and back issues available at above address and at selected newsstands. The editor is not responsible for unsolicited manuscripts. Copyright © 2023 by MEDIAmerica Inc. All rights reserved. All material is protected by copyright and must not be reproduced without written permission from the publisher. Printed in Oregon. Periodicals Postage Paid at Portland, OR. POSTMASTER: Send address changes to Oregon Business, 12570 S.W. 69th Ave., Suite 102, Portland OR 97223 EDITORIAL EDITOR Christen McCurdy christenm@oregonbusiness.com ART DIRECTOR Joan McGuire joanm@oregonbusiness.com STAFF WRITER Sander Gusinow sanderg@oregonbusiness.com STAFF PHOTOGRAPHER Jason E. Kaplan jasonk@oregonbusiness.com COPY EDITOR Morgan Stone CONTRIBUTING WRITERS Ruwan Jayaweera, Ed Herrera, Ben Quach PUBLISHING PUBLISHER Courtney Kutzman courtneyk@oregonbusiness.com EVENTS MANAGER Craig Peebles craigp@oregonbusiness.com ACCOUNT EXECUTIVE Evan Morehouse evanm@mediamerica.net ADVERTISING AND PRODUCTION COORDINATOR Greta Hogenstad gretah@mediamerica.net DIGITAL PRODUCTION COORDINATOR Alison Kattleman alisonk@mediamerica.net PRESIDENT AND CEO Andrew A. Insinga CONTROLLER Bill Lee BOARD OF DIRECTORS CHAIRMAN André W. Iseli PRESIDENT Andrew A. Insinga SECRETARY William L. Mainwaring TREASURER Win McCormack 6
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ECONOMY & FINANCE ●On the Job. Oregon added 8,100 jobs in September, according to data from the Oregon Employment Department. The state’s unemployment rate held steady at 3.5%, which is 0.2% below the national average. HEALTH CARE ●Health Care Strikes Continue. More than 1,300 technical, maintenance and laboratory health care workers at PeaceHealth Southwest Medical Center in Vancouver and PeaceHealth St. John Medical Center in Longview, Wash., began a strike against the health care system. POLITICS ●Wagner Cleared. A bipartisan panel composed of four members of the Oregon Legislature dismissed complaints against Senate President Rob Wagner from Republican Sens. Lynn Findley and Cedric Hayden over Wagner’s decision to deny their requests for excused absences while they participated in a legislative walkout. MANUFACTURING ●Chip Shot. The Kotek administration announced awards totaling nearly $240 million to 15 semiconductor-related companies, including $115 million to heavyweight Intel, as part of a state effort to use federal CHIPS Act funds to boost the state’s semiconductor sector. REAL ESTATE ●End of an Era. Deborah Imse, executive director of Multifamily NW, announced she will retire on Jan. 1. Imse led the landlord lobbying group for 23 years. Gary Fisher, who has served as Imse’s deputy executive director since 2022, will succeed her. FARMS & FORESTS ●Bird Flu, Take 2. The Oregon Department of Agriculture and the U.S. Department of Agriculture’s Animal & Plant Health Inspection Service detected the highly pathogenic avian influenza in a noncommercial flock in Union County but said there were no immediate health concerns. ●Rolled Into One. The Oregon Cannabis Association and the Cannabis Industry Alliance of Oregon, Oregon’s two major cannabis trade associations, will merge into the Cannabis Industry Alliance of Oregon following a vote by the boards of both groups. ●Up a Creek. The U.S. Department of Commerce declared a chinook fishery disaster for 2018, 2019 and 2020 after salmon populations declined sharply all three years. The disaster declaration releases financial assistance for fishermen and potentially for other businesses, along with funding to help restore the fishery and protect future chinook runs. ENERGY & ENVIRONMENT ●Gird the Grid. The Confederated Tribes of the Warm Springs, along with regional utilities Portland General Electric and PacifiCorp, received a combined $450 million as part of the federal government’s TRAVEL & TRANSPORTATION ●Traffic Tech. The Oregon Health Authority launched the Oregon Transportation and Safety Classroom, a data dashboard to monitor trends in deaths and hospital visits related to a range of transportation-related injuries. OHA data also show transportation deaths nearly doubled in Oregon from 2010 to 2022. ●Snowbound. Facing a lowered budget and hiring challenges this year, the Oregon Department of Transportation announced it would reduce snow plowing and salting during winter months but would prioritize routes I-5, I-84 and I-205. TOURISM & HOSPITALITY ●Brews Blues. Portland-based Pono Brewing announced it would cease all production. The news comes after the 7-year-old microbrewery shut its original location in the city’s Hollywood District three months ago. ARTS & ENTERTAINMENT ●Curtains. Artists Repertory Theatre in Portland laid off artistic director Jeanette Harrison one year into her tenure and two months after announcing the suspension of its 2023-24 season because of financial woes. EDUCATION ●Long Suspension. The Oregon Board of Education extended its 2020 suspension of reading, writing and mathematics proficiency as a requirement for graduation until at least 2029. The board cited disproportionate numbers of students of color and disabled students in remedial courses as reasons for the continued suspension. Grid Resilience and Innovation Partnerships to fortify the region’s power grid. ●Hit the Gas. The Federal Energy Regulatory Commission issued a certificate to Canada-based TC Energy to upgrade the Gas Transmission Northwest Xpress, a three-state, 1,400-mile-long natural-gas pipeline passing through Idaho, Washington and Oregon, despite opposition from Gov. Tina Kotek and Sens. Ron Wyden and Jeff Merkley, as well as environmental groups. ●Join the Hub. President Biden and Energy Secretary Jennifer Granholm announced Oregon and Washington — as well as six other “Clean Energy Hubs” around the country — would receive roughly $1 billion each to develop low-emissions hydrogen and reduce reliance on fossil fuels. RESTAURANT & RETAIL ●Laced Up. Nike mandated employees return to the office four days per week, expanding on its previous three-day in-person policy. ●Plight Aid. Rite Aid announced it would close its warehouse in Wilsonville next spring, putting 136 workers out of work. The Pennsylvania-based retailer, which filed for Chapter 11 bankruptcy protection in mid-October, will also close 100 stores nationwide, including one in Medford and one in Portland. ⁄Newsfeed⁄ Bird flu has been detected in a noncommercial flock in Union County. SHUTTERSTOCK 8
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10 BRAND STORY PRODUCED BY THE OREGON BUSINESS MARKETING DEPARTMENT Caption 1 BY JON BELL About 10 years ago, Doug Ownby was looking for somewhere for his then12-year-old daughter, Lindsey, to try out martial arts. She was a bit timid, and Ownby thought it might be helpful to find her a place where she could feel more comfortable and confident. They checked out Aim High, a martial arts studio in Beaverton, and Lindsey took to it right away. “She came into the organization and just fell in love,” Ownby says. But something else happened around then as well: Just two weeks after that introduction, the team at Aim High got Ownby out on the floor doing Taekwondo with his daughter. The two would later test for their black belts together. “I really had no intention. It was the charisma, the energy, the involvement the staff had that encouraged me to participate,” says Ownby, who first began studying martial arts in 2000. “They convinced me to get on the floor. It was life changing.” Fast-forward a few years, and Ownby started volunteering for Aim High as a way to give back. Not long after that, he started working for the nonprofit, and in 2019, he became executive director. Along the way, Aim High had evolved as well. Today, Aim High PDX is the nonprofit umbrella organization not only for the Aim High Academy of Martial Arts, but also for Aim High Impact, an Applied Behavior Analysis clinic serving teens and young adults diagnosed with autism, and Aim High Ascent, an ABA clinic that specializes The (Martial) Art of Making a Difference Aim High PDX taps its core values to help all kinds of kids get ready for life. in early intervention for kids ages 2-7 who have been diagnosed with autism. “The goal has always been to be a resource center for youth and families,” Ownby says. Learning life skills Though it started in 2005 as a martial arts studio, Aim High began to transform in 2016. For a while, the studio had been working with some youths with disabilities and had realized how good martial arts were for their physical and mental health. Around the same time, Dana Donaldson, who worked in an autism clinic in Beaverton, was seeing an increasing need for ABA services for older kids with autism. In many
11 BRAND STORY cases, those kids were aging out of the facility and had nowhere else to go. “We realized that not a lot of clinics were working with middle schoolers and high schoolers with high behaviors,” Ownby says. “There just wasn’t anything like that in the area.” And so, in 2017, Aim High Impact was born. The insurance-based clinic now serves more than 40 youths and young adults with autism diagnoses. The clinic has a one-to-one staff ratio with licensed behavioral technicians who work with clients to help them with language, managing emotions, learning life skills and gaining independence. Robust internet service from Comcast Business helps ensure that Aim High’s behavioral technicians have the tools they need to provide the best treatment possible. “Our staff work one-on-one with our clients,” Ownby says. “Each of them has an iPad they use to take data on the treatment they are providing, so having reliable internet is essential.” Part of the therapy also includes desensitizing youngsters to situations that might be unsettling to them, such as going to a restaurant or a dentist appointment. “A lot of these kids are so impacted by autism that they have not been able to go on a vacation or to a restaurant,” Ownby says. “We hope to work with the kids so their parents can have those experiences with their kiddos.” The success of Aim High Impact allowed Aim High to later launch Aim High Ascent, which specializes in early intervention for kids age 2-7 who have been diagnosed with autism. Like Aim High Impact, Aim High Ascent works closely with kids through ABA therapy to help improve language and social skills and decrease behavioral challenges. The therapy also includes a sensory gym, which provides an important stimulating environment for kids. So how does Aim High’s original foundation – martial arts – tie into all of this? At the core For starters, the Aim High Academy of Martial Arts is one of the largest nonprofit martial arts schools in the Portland metro region. It offers a range of programs, from Warriors for younger students to Taekwondo, kickboxing and the Korean martial art of Tang Soo Do. Ownby says Aim High also has a special black belt program for youngsters who are on track to earn their black belts. The program is about martial arts, for sure, but it also focuses on life skills, bonding, the day-to-day struggles of adolescence, including bullying and anxiety, and other areas that help prepare them for their lives ahead. “It’s not all about punching and kicking,” Ownby says. “It is a very specialized program that we are very, very proud of.” And then there are Aim High’s core values of kindness, integrity and respect. Those permeate the martial arts training programs, but they also course through all of Aim High’s focus areas as well. So the youth involved in Aim High Ascent and Aim High Impact may not be learning the fighting moves that come with martial arts, but they are learning about the importance of Aim High’s core values. “There is a lot of crossover between Impact, Ascent and martial arts,” Ownby says. “We are about community, culture and our core values that spread kindness, integrity and respect. We encompass those in everything we do.” Find out more at aimhighpdx.org. “We are about community, culture and our core values that spread kindness, integrity and respect. We encompass those in everything we do.” DOUG OWNBY, AIM HIGH PDX
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⁄Tactics⁄ I feel like there’s been a lot more discussion just in the last two, three years about waste in the textile industry and about problems with fast fashion. This is not something that I think people were talking about on the same scale in 2009. How did that awareness come about for you? I was working for an outdoor brand — Royal Robbins, which is named after a real person. I got to meet Royal and really understand the value of what he was trying to put forward in the outdoor industry. He was climbing partners with Yvon Chouinard, who founded Patagonia, and Doug and Susie Tompkins, who founded the North Face and Esprit. They were all climbing partners and really kind of led this industry movement toward environmentalism. Growing up in a not super-economically advanced family, we just didn’t waste stuff, and it was counterintuitive to my values to see a whole industry doing that. That’s kind of what kicked off that conversation, and really got me moving in that direction. I started doing a whole bunch of research and realized that it takes 1,800 gallons of water to make one pair of jeans. You go into your closet, and how many pairs of jeans do you have? It just started to dawn on me that this was an industry that can do so much better. What did things look like in the early days? I said, “OK, the first thing we can do is start to utilize these excess materials and extend the life of them, and then start a conversation within the industry.” We took the excess materials, turned them into new products and started that conversation. That was called upcycling. Our first challenge was educating not only an industry but people who could buy our products about what upcycling was. That concept was something we pioneered in the textile industry and have really started to get that vernacular out there today. It’s more common knowledge [now] and it’s even more common practice, which is great. We need to keep doing that. We first launched this as a direct-to-consumer company on our website, and we had some good success with that and got some publicity. Then brands, including Patagonia and fashion brands, said, “Hey, we’re seeing what you’re doing, and we’re interested. How do we get involved?” How has the pandemic affected Looptworks? We actually did pretty well during the pandemic. We lean into our values as a certified B-Corp, and the first thing we did, as the world was shutting down, was evaluate what we could offer. We said, “Hey, we have a remote workforce by design. We don’t have 100 people in a factory who can’t come into a factory, we have a supply chain that’s set up with dispersed manufacturing. We have materials and we know how to make things.” So we just raised our hand and said, “How can we help?” Before you knew it, we were making PPE, masks and gowns for the hospitals and nursing homes, and then eventually it went to corporations and medical transport and folks like that. They kept us quite busy. We were able to do this with a core group of five people in the workshop every day and then shift that, going out to about 85 different sewing groups that we were working with at the time. Scott Hamlin Comes Full Circle The founder and CEO of Looptworks has been working to find a way to “turn a T-shirt back into a T-shirt” since 2009. A Gresham facility opening this month makes it a reality. INTERVIEW BY CHRISTEN McCURDY WHEN SCOTT HAMLIN STARTED WORKING in the outdoor-apparel industry in 2000, he found an industry that seemed at odds with his values. A native Oregonian who grew up rock climbing and surfing, Hamlin studied journalism and ran track in college. He started working in the apparel industry in 2000 and worked for adidas, Jockey and Royal Robbins before founding Looptworks in 2009. He’d found that the apparel industry was “antiquated and disjointed, with supply chains all over the world” and a “tremendous amount of waste.” It wasn’t just that the garments themselves—or the excess fabric — ended up being landfilled after production. It was also the resources that went into creating the products: the water, the carbon emissions. At first Looptworks partnered with apparel manufacturers to upcycle—that is, to recycle a product in a way that makes it more valuable— waste textiles into new materials like backpacks or wallets. Those were at first sold as directto-consumer products on its website (though now Looptworks only sells through third-party vendors). Its partners have included Southwest Airlines — which provided 43 acres’ worth of leather from its old seats after reupholstering its entire fleet with lighter upholstery—as well as Patagonia and the Portland Trail Blazers. Since then Looptworks’ model has evolved to include downcycling — turning waste textiles into materials like fiber insulation for homes. But from the beginning, Hamlin has been searching for ways to recycle textiles in the same way other materials are recycled: If a glass bottle can be turned back into a glass bottle, why can’t a T-shirt be turned back into a T-shirt? And during his conversation with Oregon Business, Hamlin revealed that he’s found a way to do just that, and will be opening a municipal textile recycling site in Gresham this month. This interview has been edited for space and clarity. 14
JASON E. KAPLAN What does your operation look like right now in 2023? You’ve caught us in another evolution of our business. The first thing we started out with was what’s called pre-consumer excess: That’s the stuff that gets left over in manufacturing. The second step of that was post-consumer, in which another key partner, Southwest Airlines, came to us and said, “Hey, we just renovated our entire fleet, and we put in new seats so that they would be lighter, so we save on fuel, and we have 43 acres’ worth of leather. Can you do something with this?” Then we evolved into downcycling. The whole goal all along was, “How do you make the T-shirt back into the T-shirt?” We said, “OK, we can take these materials and we can turn them into recycled fiber for the non-woven market” — things like insulation, stuffing, hard fibers. At the same time, we started doing a lot more research and process with circularity and trying to use different technologies, to be able to convert materials back into fiber for spinning, to create yarn so you can make new products today. At this particular moment, our organization looks like a combination of pre- and post-consumer upcycling and downcycling, and we’re in the process right now of building out a new facility that will be the first of its kind: a complete textile circularity facility. Think of a municipal recycling facility for textiles. So that is our next big move. That’s what we’re working on right now, taking possession of a building in November and starting to build out the process from there. Have you figured out a way to turn a T-shirt back into a T-shirt? That’s what our new facility will be doing. We turn it back from a fiber into recycled yarn, and then from the recycled yarn you build a fabric, and from the fabric you build the T-shirt. We won’t house that entire supply chain under one roof, but we will be able to provide the feedstock in certain cases, the yarn for other companies to be able to build that out. You’ve said this is where you were hoping to be 10 years into the company’s existence. Where do you hope to see things head five, 10 years from now? We’re going to need more of these facilities around the country and around the world in order to tackle the problem that’s out there. Here in the U.S., we landfill about 17 million tons of textiles every single year. A lot of those are underutilized; it’s a wasted resource. Less than 1% of those are actually getting converted back into clothing. We look to expand to multiple facilities in order to be able to have a much larger impact on that industry. 15
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⁄Spotlight⁄ More Cooks in the Kitchen Oregonians are proud of the state’s array of small, locally produced food. But small- and medium-batch food manufacturers struggle to find spaces to make and package their products, especially when it’s time to scale up. BY CHRISTEN McCURDY WHEN NIKKI GUERRERO MOVED to Portland in the 2000s, she struggled to find food with the flavors that she grew up eating in Arizona. And in 2008, she decided to start making them herself. At first she made Hot Mama Salsa in the kitchen of a North Portland bar, Albina Green, while it was closed during the day. In exchange for use of the bar’s kitchen, she prepped food for the staff to cook on shift. She sold fresh salsa at Cherry Sprout Market, which was adjacent to the bar, and a couple of farmers markets. Once her daughter was in preschool, she was able to scale up, making wholesale deals with grocers like New Seasons. She’s also expanded her product line to include hot sauces, Mexican chili oils and tortilla chips. Scaling up meant moving out of the kitchen of the bar — which by then had changed hands and been renamed the Red Fox — and into a commissary kitchen in North Portland, then into a shared kitchen space in Portland’s Hollywood neighborhood. And when she spoke to Oregon Business in October, Guerrero was in another phase of expanding. Starting in November, she’s due to take over half of the New Seasons Central Kitchen in Southeast Portland, which the grocery chain opened in 2015 but closed in 2019, and which has sat unused ever since. The other half of the facility will be occupied by Community Co-Pack NW, which has also been helping produce Guerrero’s tortilla chips JASON E. KAPLAN Nikki Guerrero in the kitchen space she will begin using in November for the past year and a half. “It’s much more space than I need, and it’s beautiful, state-of-the-art equipment. So I’m thinking, ‘How can we best utilize that space?’” Guerrero says. “There’s a big need for co-packing in the industry all around,” Guerrero says. “But one of the things that is almost nonexistent is small-scale co-packing, where the owners can be involved in the process, where they can do their own sourcing so that they can be able to use more local produce and ingredients.” “There’s a big need for co-packing in the industry all around. But one of the things that is almost nonexistent is small-scale co-packing, where the owners can be involved in the process, where they can do their own sourcing so that they can be able to use more local produce and ingredients.” NIKKI GUERRERO 18
COURTESY OF MICHAEL KANTER Community Co-Pack is a co-packer and business incubator that works with small, BIPOC-owned food- manufacturing businesses to help them scale. According to Hannah Kullberg, business development director of Community Co-Pack, “co-packing” is a term that can mean a couple of different things. It can refer to simply putting a food product in a package, or repackaging, after it’s manufactured — or it can refer to contract manufacturing, where a company will contract with a manufacturing facility rather than own its own site full-time. While co-packing happens at all levels in manufacturing—and is particularly prevalent in food manufacturing due to the seasonal nature of the product — it’s particularly important for smaller companies that may only need manufacturing space for small batches of products. This summer the Oregon Department of Agriculture launched a survey project to talk to food producers and manufacturers about what they need. The results aren’t final yet, but multiple people who spoke with OB for this story said there is a crying need for more co-packing spaces in the state. “There are these big gaps in the co-packing ecosystem,” says Aidan Currie, founder and CEO of Portland’s Swift Cider, which produces cider in Portland but also offers co-packing space for other companies to produce small batches of beverages. Some of them are just starting out, but Currie has also worked with farmers who aren’t normally in the beverage business, who want to make a limited run of a special-edition beverage. “[Co-packing] allows people to scale that otherwise would have no opportunity to scale,” Currie says. “It also allows people that are already at scale to grow their business before they build the new facility. If you know that eventually you’re going to have the revenue to support a 2-million-unit-peryear facility, then you can go borrow your neighbor’s [facility] until you get there and really hedge your risk a lot on that bench.” For example, Currie says, if a business has just inked a deal to get its product on grocery store shelves, the demand is uncertain. “Everybody hopes for the best, but the reality of it is that demand is its own thing. And so you have to kind of sit there and wait. So a lot of people need this extra capacity in order to make these commitments to these large retailers just in case something starts selling a lot faster,” Currie says. While Guerrero has been able to scale up her business at a pace that worked for her, the lack of co-packing infrastructure has sometimes led small businesses to leave the state as their companies grew — or to close up shop altogether. In 2013 Michael Kanter—a former restaurantcook—startedmakingEliot’sNutButters, a line of flavored nut butters like honey- chipotle peanut butter, spicy Thai peanut butter and pistachio-date almond butter — as well as a classic salted peanut butter. “I stumbled on this idea while eating a bag of spicy cashews,” Kanter tells OB. “I was like, ‘These are great by the handful. Why not make them into some nut butter? I threw them into the food processor, tasted them and thought, ‘This is pretty good.’” By the end of last year, the product was available in 600 stores in 40 states, including Formerly New Seasons Central Kitchen, this kitchen facility will be shared by Guerrero and Community Co-Pack NW. Michael Kanter and his line of nut butters JASON E. KAPLAN 19
Williams Sonoma and Whole Foods, and was one of the most popular nut-butter brands on Amazon. “[The year 2022] was our best sales year to date. We felt like we were trending in the right direction,” Kanter says. But then the company hit what he describes as a run of incredible bad luck. In early 2019, a Wisconsin-based co-packer the company had used on a one-time basis issued a recall for all products made during that production run, leaving Eliot’s with a loss of 15% of that year’s revenue, putting the company in “a precarious position for several years.” In December the Portland-based co-packer the company primarily used was late fulfilling an order. “It was weeks late, and there were no answers,” he says. The order finally arrived in January; the co-packer, according to Kanter, demanded immediate payment for a separate production run they were also running late with. “This was on, like, a Thursday. Then the following Monday, they let me know, ‘Oh, by the way, we’re closing up shop and moving to Colorado,” Kanter says. He declined to name the co-packer but says the facility again demanded payment for a production run, which ran counter to the terms of their previous agreement. And, he says, there was nowhere else he could go to contract for the production of nut butters locally. “We needed to make a quick decision. There just weren’t any good options,” Kanter says. “It just sort of forced me to make the decision that that was a good run for nineplus years. It wasn’t the way we wanted it to go, but it was time to move on from there.” Kanter announced the closure of Eliot’s Nut Butters this March. Not every story ends as grimly as Kanter’s, but that doesn’t mean they’re great news for Oregon manufacturing, either. Raj Vable founded Young Mountain Tea in his Eugene kitchen in 2013. His company works with farmers in India to get them a better price for tea leaves; leaves are dried and fermented there before being shipped to PHOTOS BY JASON E. KAPLAN Aidan Currie, founder and CEO of Portland’s Swift Cider Swift Cider offers co-packing space for other companies to produce small batches of beverages. 20
the United States to be blended, flavored and packaged in tea bags. At first he had his home kitchen certified as a commercial kitchen; then he worked at a shared kitchen space in Springfield. When he sought to scale up, he couldn’t find a co-packing facility in Oregon that worked at the scale he needed and had the right equipment. He ended up moving production to a facility outside Los Angeles and laying off three people; he and his wife have moved to Michigan, where they run the company remotely. “What it comes down to is — I’ll just say what it is — co-packing is not sexy,” says Anna- Rose Adams, director of business development for Carman Ranch. “It is not what people are graduating school for and saying, ‘Yeah, I want to start a food-manufacturing business.’ The cool technology is in lab-grown meat and efficiency. But in terms of meat-and-potatoes co-packing, there’s no incentive for it to exist, really, in a medium scale.” And sometimes food producers will need to drop or change a product line for reasons far less dramatic than the ones described by Vable and Kanter: According to Adams, one co-packer Carman Ranch has worked with has had to suspend production for a while because of staffing issues. So where do the solutions lie? Adams says often food producers find co-packers simply through word of mouth; there isn’t a centralized repository or database for them. A simple website could make it easier to figure out what facilities are able to manufacture or package what types of food, and how to make contact. That’s part of what ODA is trying to accomplish with the survey, says Erick Garman, the agency’s trade-evelopment manager. “What I’m trying to do is pull all those stories together so that we can have a better conversation, so that some of the industry folks can come together with a proposal or an idea to be presented, so that everybody is kind of on the same page of understanding Build skills in the classroom and the c-suite with Linfield’s Front Office Sports - where students partner with regional sport organizations to develop new programs, run media campaigns and make decisions that impact the game, on and off the field. DISCOVER YOUR UNCOMMON Learn more at linfield.edu/business 23-0142 Oregon Business MagazineAd.indd 1 10/12/23 10:55 AM where can we go from here, and what that looks like,” Garman says. Guerrero says Community Co-Pack NW will lease the other half of her new facility, and will offer manufacturing space to other, smaller manufacturers looking to start out, experiment or scale up. She also believes that — in part due to the rising cost of real estate — policymakers should take a more serious look at supporting co-packing in a sustainable way. “I do think that one of the reasons that it’s almost nonexistent is because it’s pretty hard to make that model work as a viable for-profit business,” Guerrero says of small- and medium-scale co-packers. “We’re really hoping that we can form this partnership and leverage it as a community resource and really look into how can we create a resource in the areas of shared ingredient buying, shared packaging, shared distribution, so that it can be a benefit to many small businesses in the community. And in doing that, we’re hoping that we can leverage some buy-in by the state or the city or something to offset the cost of getting that up and running.” “We’re pretty lucky to be in this state that has so much support for food entrepreneurs,” Garman says. “We’re just here to make it better.” “We’re really hoping that we can form this partnership and leverage it as a community resource. ” NIKKI GUERRERO 21
Call to Justice THE EDUCATION ISSUE $4.99 September 2020| OregonBusiness.com UNIVERSITY CHALLENGE COVID-19 Exposes Financial Frailty LANE COUNTY CONNECTOR Micah Elconin Fashions a Food Hub BACK TO SCHOOL Why Lin eld Uni Shuns Online Classes Businesses Face Racial Reckoning July/August 2020| OregonBusiness.com THE HEALTH CARE ISSUE ELDER CARE Nursing homes reexamine approach to services BUYING LOCAL Small farmers reap bene ts of supply-chain breakdown HOPE FOR HOSPITALITY McMenamin brothers plot future for pub chain Digital Doctor Telemedicine has transformed health care. But is it here to stay? Dr. Elizabeth Powers, Winding Waters page 33 July/August 2022| OregonBusiness.com THE HEALTH CARE ISSUE IS BALA BACK ON ITS FEET? Footwear startup tries a heel-turn WHO CARES? Oregon’s caregiver shortage spirals ON CALL Nurses join the gig economy plus A Rebirthed Tradition More Oregonians seek midwife care $4.99 May 2019| OregonBusiness.com TSUNAMI THREAT *][QVM[[M[ LQ ٺ MZ WV PW_ \W XZMXIZM A BAD REP +WUKI[\ PMIL [MMS[ JZIVL ZMLW PEOPLE BUSINESS ;\I\M TMVLMZ [MMS[ P]UIV \W]KP / / Broadband gives life to rural economies, but not all can get connected GOT DATA? Natasha Allen, welding instructor November / December 2021| OregonBusiness.com The New Face of Manufacturing Can a new training center remake the industry? ALWAYS HUSTLING College athletes cash in PLAYING DEFENSE Can Oregon become a big defense-industry player? Plus THE MANUFACTURING ISSUE Prime The Manufacturing Issue BIG CHEESE The cream rises to the top in Oregon’s artisanal cheese industry GRÖN IN OREGON A cannabis company goes global THE CHIPS ARE IN Making room for the semiconductor industry A FOUNDATIONAL SHIFT OCF’s new director $4.99 November/December 2022| OregonBusiness.com February 2020| OregonBusiness.com THE PROFESSIONAL SERVICES ISSUE BEEFING UP BOOKKEEPING Accountants turn their hand to advising KEEPING IT LOCAL Why consultants are working less and ying fewer miles ROBO LAW How AI is changing the face of the legal profession The Great Disruption May 2020| OregonBusiness.com HILLSBORO’S DATA CENTER BOOM Big Tax Breaks But Few Jobs PORTLAND’S NEW TECH WAVE Growth Pressures Sector’s Identity ADDICTION IN THE WORKPLACE The Cost of Not Helping Employees Coronavirus Pandemic Forces Adaptability and Innovation 2023 March 2023| OregonBusiness.com WHAT’S UP DOWNTOWN? Developers rehab the upper floors of Oregon main streets THE TIMBERS’ NEXT PLAY CEO Heather Davis kicks off her new role plus The Real Estate and Retail Issue When Every Day Is a Great Day at Work July/August 2019| OregonBusiness.com The leaders retooling the next generation of coordinated care organizations State Health ERIC HUNTER CEO, CAREOREGON LAST ACTS /ZMMV J]ZQIT[ ÆW]ZQ[P BRAIN WAVES 6M_ TQNM NWZ WTL LZ]O[ OPEN SIGNAL <M[\QVO I]\WVWUW][ JZWILJIVL / / of Are you in? Of course you are. Subscribe Today. Get your All-Access Pass to OB Prime when you subscribe to Oregon Business. ■ 10 issues (one year) of Oregon Business print edition, plus the digital edition of Oregon Business, readable on any device ■ Special monthly emails that may include bonus story content, event discounts, special research stories, and/or additional photos. OregonBusiness.com/subscribe $4.99 June 2019| OregonBusiness.com The Brave New World of Green Businesses redefine the mantle of sustainability LOADED UP Electric grid gets a revamp CAP AND TRADE An investor’s perspective BEYOND RECYCLING Three portraits from the 100 Best / / PLUS EXCLUSIVE: Intel CTO on the future of tech February 2021| OregonBusiness.com THE PROFESSIONAL SERVICES ISSUE Scotty Fenters, farmer FACING DROUGHT Searching for Solutions in the Klamath Basin BETTING ON THE FUTURE Port of Portland rethinks growth plans COLLABORATIVE SPACES New era of of ce design RUSH TO THE SCREEN Digital marketing dominates ad spend WHAT’S NEXT FOR COLUMBIA RIVER PORTS? Also RECLAIMING WILLAMETTE FALLS Tribes make new plans for site PIPE DREAMS Irrigation gets a makeover $4.99 January 2022| OregonBusiness.com P OB2 W0O 2OE R2K Little Loans, Big Results What microfinance is doing for Oregon entrepreneurs April 2023| OregonBusiness.com MONEY IN THE BANK How consumer banks are dealing with increased interest rates MAKE IT WORK Staffing trends in 2023 plus THE FINANCE ISSUE March 2022| OregonBusiness.com THE REAL ESTATE AND RETAIL ISSUE FINDING HOME Rural housing prices spiral upward AT THE CENTER What’s next for downtown Portland? Celebrating 2022’s 100 Best Companies to Work For in Oregon
BY CHRISTEN McCURDY PHOTOS BY JASON E. KAPLAN T here are pieces of Oregon history on movie screens this fall. Killers of the Flower Moon, the much-anticipated Martin Scorsese epic that hit theaters at the end of October, tells the story of a series of murders committed in the Osage Nation in the 1920s after oil was found on tribal land. A New York Times story from the period describes the Osage as the richest people in the world. For the famously exacting Scorsese and his production team, showing viewers how the Osage lived before white neighbors conspired to strip them of their wealth meant learning everything they possibly could about how they lived at that moment in time. “They got everything right, including the food that [the Osage] ate, the china that they liked,” Barry Friedman tells Oregon Business, noting a scene in which characters are eating grape dumplings off Spode china, which was extremely popular in the Osage Nation in those years. “They really did their homework.” Part of that homework involved a call to Friedman himself. He’s the author of two books on Native American trade blankets — Chasing Rainbows and Still Chasing Rainbows — and he likely owns the largest collection of trade blankets in the world. The film’s producers reached out to Friedman both for consultation on which types of blankets would have been most popular with the 1920s Osage and to source vintage blankets themselves. In all he sold 60 blankets for the production. Producers also reached out to THE NEW WEAVE Pendleton Woolen Mills is one of Oregon’s oldest and best-known manufacturers. What’s next for the brand? 26
Pendleton Woolen Mills to recreate a blanket popular during the period — the archival Serape blanket — down to even re-creating labels that were in use during that point in the company’s history but which have long since been discontinued. And in addition to the Serape, the film includes dozens of Pendleton blankets from Friedman’s collection. It’s not the first time Pendleton products have made a splash in popular culture. The company’s downtown headquarters includes a small museum dedicated to the history of the brand, including stills from the 1998 Coen Brothers cult classic The Big Lebowski, for which actor Jeff Bridges largely dressed himself (though he has said the Pendleton cardigan he wore in the film was provided by the costume department — but he kept it after the production ended). And in the 1960s, a fledgling rock band called itself the Pendletones in homage to the wool shirts that were popular among surfers who needed to stay warm on chilly mornings and evenings coming to and from the beach. The band quickly rebranded as the Beach Boys, but the shirts they wore in early publicity photos are still produced by the company. Pendleton isn’t Oregon’s largest manufacturer, but it might be the best-known Oregon brand. It’s been in business as Pendleton Woolen Mills for 114 years and is run by a family that, this year, celebrates 160 years of weaving wool in Oregon. “We’re not owned by venture capitalists, where you swing for the fences, and if you get a homer, great, and if you strike out, too bad. We’re not trying to be a tenbagger,” says CEO John Bishop, referring to an investment that returns 10 times its purchase price. “We’re just trying to grow our business profitably over time.” Pendleton CEO John Bishop at the company’s flagship store in downtown Portland 27
The early history of Pendleton Woolen Mills is really two histories. First, there is the story of the Bishop family’s involvement in the textile industry. John Bishop’s great-great-grandfather, Thomas Kay, emigrated to Oregon in 1863 from England, where he’d worked in mills. As Bishop tells it, Kay “bounced around” the Willamette Valley working in various mills — many of which were profitable but short-lived because they were subject to fire — before finally opening his own, the Thomas Kay Woolen Mill in Salem, in 1889. After he died in 1900, Kay’s daughter Fannie—and her husband C.P. Bishop, who owned a clothing store in Salem — took the reins of the company. Then there is the history of the Pendleton Woolen Mill, which opened in 1896 in the town of the same name, with funding from local financiers. That mill shuttered in 1907 amid a financial panic, but civic leaders campaigned to reopen it. That was partly because they were worried about jobs leaving the area but also because it made sense to weave wool in the area, where so much raw wool was being produced. According to Bobbie Conner, executive director of the Tamastslikt Cultural Institute, there are “far more sheep than cows, more sheep than people,” in Eastern Oregon — as many as 3 million. According to Friedman, the original Pendleton mill started out scouring and cleaning raw wool but, by the end of the 19th century, decided to start making blankets to sell to Native Americans at trading posts. Conner dates the advent of trading posts — and the wool trade blanket — in the Northwest to the early 19th century, when fur traders with the Hudson Bay Company started exploring the interior Northwest. “The trading post represented an important change in technology. One of those changes was a fabric, because we wore buckskin, smoked hides, brain-tanned hides, rawhide in our outerwear, as well,” says Conner, who is a member of the Confederated Tribes of Umatilla and whose ancestry is Cayuse, Umatilla and Nez Perce. But “there was something very, very important” for tribes in wool trade blankets, she says, because they were durable and colorful. “We have a 200-year relationship with wool.” According to Friedman, in 1890 the U.S. government licensed traders to set up businesses on reservations — “sort of like a convenience store”—to trade food products like sugar and coffee as well as durable goods and tobacco, and Native people would purchase products with whatever they had available to trade. That included blankets, which Indigenous people wore as robes or shawls. During the late 19th century and the first few decades of the 20th century, there were numerous American companies that made blankets specifically to be sold at trading posts. But Pendleton was the only one that specifically went into business for that purpose. That continued after the Bishop family took over—and well after most other trade-blanket manufacturers went under in the 1930s. Pendleton CEO John Bishop views photos about the company’s history at its Portland headquarters. 28
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