Crystal Ball City

October 2017 | view this story as a .pdf

Where will the next year take us? Our oracle takes us behind the numbers to show us the Dark Horses and Shooting  Stars at the heart of Maine’s business trends.

By Colin W. Sargent

Oct17-Dark-Horses-Shooting-StarsEvan Livada knows where the bodies are buried even while he worships his home state. He follows our industries with great industry, and his insight is often instantaneous. His crystal ball has proven uncannnily clear. Case in point: Before the mortgage crisis hit, he warned our readers to “watch out for that sub-prime slime” [“The Maine 100,” October 2007].

Portland Monthly: What 100-year-old businesses seem the ‘youngest’ and most flexible this year?

Evan Livada: L.L. Bean started by making the first Bean Boot. Now they can’t fill the orders. There’s a whole year worth of backlog.

Is that a recurring miscalculation?   

Hardly. All you need is a new celebrity to be seen wearing them and the entire desire curve changes overnight. They have 52 stores now. They’re opening one at Mashpee Commons, a trendy location in Cape Cod.

Everybody’s making a similar product. Sperry makes them. But none has the cachet of ‘made in America, fully guaranteed with your money back, L.L. Bean.’

What’s another ‘young’ old business?

Hannaford Bros. employs 8,400 people. In 1944, they went retail. In 2011 they added online ordering with Hannaford to Go. They work hard to stay ahead of the curve. Last year they took more steps to eliminate food waste. Twenty-five million pounds of food were donated to offset hunger. Who knows how people will get their groceries in the future? Uber drivers, drones–who knows? What we do know is, Hannaford is paying attention.

You mean parent company Delhaize Le Leon (of Belgium and The Netherlands) is paying attention.

Hannaford has been acquired three times, I believe. Hannaford’s headquarters are in Scarborough. They have a significant impact here.

Who took them to the next level here before they
were acquired? Who was the magic exec?

Hugh Farrington did a great job. With a lot of the mergers and acquisitions, he probably did do a lot of that. But before him there was James L. Moody, who joined the company in 1959 and was named president in 1971. That’s when Hannaford took off.

Like Colin Hampton at Union Mutual, when UNUM had a benevolent presence here deepened by a deft understanding of Portland and more local cultural participation? Union Mutual started here in 1848.

UNUM is interesting. The stock peaked in 1999 at 60.44, and it’s getting back to almost those levels. As I speak, the stock is 48. The high for the year is 51.43. Low for the year is 33.98.

Who didn’t get the memo this year? Please tell me about two businesses marooned by time that have to reconsider their basic premises?

The Maine Mall has been marooned, so they’re going to have to keep adjusting. What’s going to replace malls? You’re going to see roller skating. An Apple store will always survive at a mall, but other stores are victims of the times.

The fringe stores like Dollar General, Dollar Tree, TJ Maxx/Marshalls, and whatnot are threatening malls. People want name brands at a discount. The competition is tough, and everybody wants to buy things online. Footlocker just reported a horrendous quarter. Sears has gone through a major restructuring, but at least they’re doing some partnering with Amazon.

The competition is so fierce that the malls are struggling. People don’t like the hassle of parking. With it, half of the restaurants around the malls are closing. What will take the place of the Maine Mall and places like it–little medical offices and dental offices to take care of the people who used to go to the malls? It’s going to be movie theatres and trampolines. Old-age health-care facilities.

In Gone Girl, an abandoned mall has become home to a den of squatters. But that could never happen in Maine!

The other thing that’s marooned is the paper industry. Half of the paper mills in Maine have closed since 1980. In 2012, they fired up the Great Northern paper mill in East Millinocket. They caused a stir when they won the contract to produce 3,000 tons of paper for that erotic book Fifty Shades of Grey. If they keep making reprints of Fifty Shades, the paper industry will be saved.

What’s the global picture?

In 1960, Maine lost its top-paper-producing state status to Wisconsin. Then China, Brazil, Germany, Canada, and Finland closed in.

Tell us about a hot business that is enriched by, and driven by, diversity.

The Somalis and the Sudanese are growing populations in Maine. There’s been an impact on the seafood industry. No state has a lower percentage of people between 15 and 44 than the state of Maine. In 2011, there were more people dying than were born in the state of Maine.

Barber Foods has always hired minorities. The economists say the only way Maine is going to grow is through the new immigrants coming in. The growth needs to happen through 2035, and it’s going to be driven by the people who come here.

In 1955, Gus Barber opened up his meat shop–a little more than a butcher knife and an old truck. It was acquired by Cincinnati AdvancePierre foods in 2011. Today, Barber Foods claims they have employees from over 50 nationalities. Gus had English classes at the plant early on. It was a melting pot. Most of the Barber family has moved on, but they all did very well. In Portland, the company still operates as Barber Foods and is going pretty good guns. In 2017, Tyson Foods, Inc. of Arizona purchased AdvancePierre, including Barber Foods, which is famous for dishes like Chicken Cordon Bleu and Chicken Kiev, for $4.2B. A sixteen percent premium from where it was trading when the deal was announced on April 25.

Tell me about a person who started out at the bottom at Barber Foods and then, with precocious skills, cracked into the executive level.

David Barber says you should talk to Besim Musliu to get a great success story. After Musliu’s farm in Kosovo was overrun and his dogs were killed, he escaped and fled to the States. When he arrived, he spoke no English and is now in a supervisory position at [AdvancePierre/Tyson].

Tell us about a high-flying business that just started
out as two people and a phone jack, where the ‘idea
is everything.’

Luke’s Lobster started with two employees, Luke Holden and and his father, Jeff Holden, from Cape Elizabeth. Luke went to Georgetown and Wall Street. Jeff went to SMCC. Jeff has always been in the lobster industry.

Cape Seafood LLC, the sister company for Luke’s Lobster,  processes 30,000 pounds of seafood a day. Luke’s Lobster is in Miami, Las Vegas, everyplace including the Brooklyn Bridge. They’re just going crazy.

Luke’s Lobster is on the Inc. Magazine’s list of fastest-growing companies. Luke is on [NBC’s] Hoda and Kathie Lee all the time. They discovered their president with an ad on Craigslist in 2009. They started a co-op in Tenants Harbor and still have a retail store at the end of the wharf. They’re going through a million pounds of seafood just there. They know where each of the lobsters is coming from, which is amazing. They have a diverse work force. I’ve asked Jeff, “What happens when the price of lobster goes up 50 cents in a week? What do you do then?” He says, “Well, we eat it.”

We’ve always loved lobster rolls in Maine. What’s the ‘paradigm shift?’

People love a $15 dollar lobster roll all
over the world.

What if people in Manhattan want to buy some lobster rolls but need something to carry them in, and their Kate Spades are just too precious?

Sea Bags was founded in 1999. They’re growing about 30 percent a year. They’re privately held. They went from two stores three years ago to 12 stores. If you bring them a sail, they’ll give you a free bag. That’s where these people get their sails–from their customers! It’s still a relatively small operation, but they’re in Connecticut, New Jersey…

What do you see in your crystal ball?

New Balance has 888 factory workers in Maine–396 in
Norridgewock, 338 in Skowhegan, 154 in Norway. If the ruling goes through that the military and U.S. government agencies need to use ‘Made in America,’ New Balance, made in Maine, will benefit. Specifically, in their product line they have a New Balance 1400–a high-end suede sneaker–that could really take off because of this. They’re going to build the uppers in Skowhegan, and then they’ll send them to Boston, where they’ll put in the soles. You can’t buy a shoe made anywhere in Maine anymore, so this is refreshing. Right now in Skowhegan, they’re making 450 pairs a day.

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