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Pete and Gerry’s Jesse Laflamme ’00 (Bridge ‘99) and the scrambled supply chain of eggs during COVID

Pete and Gerry’s Jesse Laflamme ’00 (Bridge ‘99) and the scrambled supply chain of eggs during COVID

Jesse Laflamme (Bridge'99 and Bates '00), CEO of Pete & Gerry's Organic Eggs, had a recent highlight in Bates News.
 

PETE AND GERRY'S JESSE LAFLAMME '00 AND THE SCRAMBLED SUPPLY CHAIN OF EGGS DURING COVID
https://www.bates.edu/news/2020/06/26/jesse-laflamme-00-on-supply-side-egg-economics/
By Mary Pols — Published on June 26, 2020

In December, when food pundits and the industry were forecasting food trends for 2020, their predictions included vegan cheddar made from cashews (The Food Institute), sweet and sour bone broth (Eater’s megalist) and monk fruit syrup (Whole Foods). 

No one was talking about eggs. And there was no reason for Jesse Laflamme ’00 to think that his New Hampshire–based organic egg company, Pete and Gerry’s, was going to suddenly be striving to meet a radical jump in demand. 

Cut to June 2020, when The Wall Street Journal posed a culinary question tailored to this precise moment in pandemic time: What do we really want to eat when there is no one around to impress? “The answer, as often as not, is eggs.”

From the deviled to the Dutch baby, eggs have been having such a moment that grocers around the country limited purchases of this most basic of foods starting in late March. Price spikes soon followed, along with empty shelves that indicated that eggs had become the refrigerated version of toilet paper: hoard-worthy.

Pete and Gerry’s Organic Eggs — laid by free-range hens raised without antibiotics or pesticides — were a hot commodity. So too was the other brand Laflamme founded in 2002, Nellie’s, free-range eggs certified humane by the nonprofit Humane Farm Animal Care organization.

“We are selling every single egg we produce,” Laflamme says from his home in Hanover, N.H., during a rare quiet moment.

Early on in the pandemic, the company entirely revamped its safety practices, and coped with two small COVID-19 outbreaks in its packing facilities. But practically overnight, Laflamme said, orders for Pete and Gerry’s eggs increased in volume by between 30 and 50 percent. “It is really significant,” he says.

Orders quickly exceeded supply.

As he put it, Hannaford, a Maine-based supermarket with stores throughout New England and New York, might be asking for a trailer and a half of those Pete and Gerry’s eggs, but the company would only have one trailer’s worth to send their way. No matter how much homebound humans are craving eggs, farmers can’t make hens lay any faster than usual. 

Initially, the increased demand could have been chalked up to an annual egg-centric event: the impending Easter holiday, which fell on April 12. But that Sunday came and went, and eggs were still flying off the shelves. Not only were hordes of Americans becoming bread-making experts, they were also apparently baking cakes, cookies and other family-friendly recipes that called for eggs.

The New York Times cooking site started making recipes available for free to nonsubscribers, including egg-oriented ones like Eli Zabar’s egg salad sandwich, in categories such as “30 Recipes for Lunch at Home,” perfect for workers suddenly ensconced in home offices and missing the local deli. (The secret to Zabar’s egg salad? Toss half the whites for double the yolkiness.) 

At the food and cookware website Food52, the late-May obsession was a recipe from a Charlotte, N.C., restaurant for the apparently addictive Kindred Milk Bread, served warm and colored a warm yellow by no fewer than three large eggs. (And Pete and Gerry’s own website offers even more recipe ideas.)

No wonder people need more eggs. But Laflamme is still a little stunned by the demand. As organic producers,  Pete and Gerry’s is very “niche,” he says. So too is Nellie’s, with its free-range eggs raised on small family farms. “We are really an outlier.”

He considers his company an outlier because, while the market for organic eggs is growing, organic flocks still represent a small percentage of the vast numbers of laying hens in the United States. In May there were 390 million laying hens nationwide, according to the U.S. Department of Agriculture. Only 15.7 million, or about 4 percent, were certified organic. That number fluctuates, but Laflamme said it’s usually between 5 and 6 percent. In its weekly reports on the egg market, USDA’s Agricultural Marketing Service doesn’t even list organics. 

And even within that small sliver of the market, there is abuse of the organic label, says a watchdog group, the Cornucopia Institute, which estimates that roughly 80 percent of the eggs that are labeled organic in the U.S. might be the product of organic-fed, antibiotic-free hens, but they’re still being raised in factory settings and never see the light of day. 

In Cornucopia’s rating of organic eggs from 1 to 5, Pete and Gerry’s recently received a 4-egg, or “excellent” ranking, whereas national brands like Trader Joe and Horizon Organic eggs scored only one egg in the same period.

Taking over as chief financial officer right after Bates, Laflamme, now owner and CEO, has led the company to annual growth rates of 20 to 30 percent every year in the last decade. (The company name comes from Laflamme’s father Gerry, who took over his father-in-law’s farm in Monroe, N.H. in the late 1970s, and Gerry’s cousin Pete, who handled distribution. The family converted their operation to organic in the late 1990s.)

At the Pete and Gerry’s farm in Monroe, N.H., in 2004 , Jesse Laflamme ’00 holds two egg-laying hens while posing with the business’ namesakes: his father, Gerry Laflamme (center), and uncle Pete Stanton.

These days Pete and Gerry’s buys eggs from 65 small family farms throughout the Northeast, including in New Hampshire, Vermont, and Pennsylvania. To supply its Nellie’s brand of free-range eggs — named after Laflamme’s pet hen from childhood — the company works with another 60 small family farms, including in the Midwest. With a second packing plant in Pennsylvania, the firm employs about 200 people, all told, on the packing and shipping side. 

If Pete and Gerry’s and Nellie’s were well-positioned for the egg boom, the industry as a whole had a harder time responding to it. As with flour, toilet paper, cleaning supplies, and other commodities, the problem wasn’t so much short supplies as disruptions to the supply chain. As Laflamme points out, there are actually too many, egg-laying hens in the country, a result of an over-correction to a shortage created by the 2014–15 avian flu outbreak in 21 states.

It’s the destinations for those eggs that presented a problem as the pandemic began.

One-third of all egg production in the U.S. goes in liquid form (described by USDA as “broken”) to the food service and large-scale restaurant markets. Another 7%, so-called “loose” eggs, goes to the same outlets in bulk cartons, the kind that are open at the top and too floppy to simply be redirected to grocery stores. With most commercial food service shut down from March into May or later, the loose eggs had nowhere to go. Prices dropped to something like 39 cents a dozen, Laflamme says.

In theory those extremely cheap, still entirely edible eggs, might have been redirected to grocery stores. But egg producers were stymied, Laflamme says, “by the inflexibility in our supply chain. They can’t get their hands on cartons.”

To be clear, Laflamme doesn’t mean cartons full of eggs — he means cartons for eggs. “There are only four or five companies in the whole country that make those paper cartons,” Laflamme says, and they couldn’t adapt fast enough. Here’s another area where the Pete and Gerry’s approach paid off. “Our cartons are made from recycled soda bottles. They are a premium product and we largely haven’t been disrupted that way.”

Instead, the company’s major adaptations involved safety in the packing facilities to keep COVID-19 out. “We’ve been focused on meeting the demand while keeping our workforce healthy,” Laflamme says. This included shifting break times, and adding tents to keep employees a safe distance apart and Plexiglas shields on the packing line.

Key to the safety measures was an infrared sensor system for taking employees’ temperatures as they punched in for their shifts. They ordered it from Amazon in the nick of time. “We were early to get hold of it,” Laflamme says. “The owner of the company was losing his mind. We pulled a couple of the last ones he had in his inventory. We were lucky.” 

To meet demand, Pete and Gerry’s and Nellie’s expanded the weekly processing schedule by adding a day that was normally devoted to maintenance. The company also offered raises of anywhere from 10 to 20 percent to workers. “We’ve been compensating our workers more, increasing the hourly base rate,” Laflamme says. “It felt like heroics for them to come in. Especially early on.” 

They had an early small outbreak of COVID-19 in the Pennsylvania packing plant, with two workers self-diagnosing over the weekend. After that, 20 more called in sick the next day, in an abundance of caution. The company had to hire temporary workers to replace them. It helps, Laflamme says, to have operations spread out over many family farms (thus confirming that old maxim about not putting all your eggs in one basket).

Pete and Gerry’s sustained only small losses to its usual business and more than made up for them at the grocery store, by far its biggest outlet. “Ninety-nine percent of our business is oriented toward carton egg production,” Laflamme says. “Make that 99.9 percent.” Thus they were in the sweet spot in a marketplace that overall, is suffering.

“We are doing remarkably well,” he says. “We consider ourselves, knock on wood, in a good place simply because [the COVID-19 crisis] has increased home egg consumption and grocery shopping in general.” Typically Americans spend more on food eaten outside the home than they do on groceries. Suddenly they were stuck at home, many of them millennials learning how to really cook for the first time.

Laflamme speculates that because people were rediscovering their kitchens in lieu of spending money at restaurants, they wanted to cook with quality ingredients and were willing to pay more for them. (As indulgences go, even the organic egg is still a bargain at the supermarket, generally priced under $6 per dozen.)

“We’ve been compensating our workers more, increasing the hourly base rate…It felt like heroics for them to come in. Especially early on.” 

What Laflamme doesn’t know — no one does — is whether this trend will continue. The price of carton eggs, after climbing in April and May, has mostly leveled off. In the meantime, there is a generation, or two, of people who may be eager to eat out again, but don’t feel safe doing so.

For them, Laflamme surmises, “It’s like, ‘OK, now I know how to make these 10 great dishes — but eggs are so easy. Breakfast for dinner, that is probably going to be happening.’” In his household, that is definitely happening, most commonly with omelettes or French toast. His kids, a 9-year-old son and an 11-year-old daughter, are more than fine with it. “They don’t miss a beat.” After all, their dad is the egg man.

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Mountain Made

Mountain Made

MOUNTAIN MADE
By Jeff Moag
Photos by Rob Strong Photography 
Jan 30, 2019
http://www.tuck.dartmouth.edu/news/articles/how-tuck-bridge-propelled-skida-ceo-corinne-prevot

 

SNOWBALLED. That’s the term Corinne Prevot uses to describe the business she started as a 17-year- old ski racer at Vermont’s Burke Mountain Academy, a school renowned for turning out champion ski racers. Prevot had started as a downhiller and switched to cross-country in her junior year. She loved the sport but found its grey knit cap fashion aesthetic uninspiring. At home that rainy Christmas holiday in 2007, she bought a yard of floral-print Lycra fabric at a local craft store and sewed matching hats for herself and her teammates.

We went to a race in Maine sporting our colorful flower hats,” she recalls. “It was super fun, and after the race a few girls from another team came up and asked, ‘Can you make us some of those hats?’ I said, ‘Sure,’ and it just snowballed.

So started Skida, a ski-inspired hat and accessories brand known for its quirky patterns, sustainable ethics, and deep New England roots. Last season the company sold more than 100,000 Vermont-made hats, headbands, and neck warmers, earning its 27-year-old founder and CEO a spot on Forbes 2018 30-Under-30 list of young entrepreneurs. The magazine has had its eye on Prevot for years; in 2011 when she was a junior at Middlebury, she filmed an interview for the Forbes website, telling a reporter how she’d built the company from scratch without borrowing a dime. “The money comes from the hats,” she explained to the man, who looked to be in his 40s and clearly dazzled. He asked her to describe her style as a CEO, and Prevot smiled. “Whimsical,” she said.

Skida was already doing $100,000 in business annually, and Prevot was balancing her career as an up-and-coming entrepreneur with her classes and rigorous training as a member of Middlebury’s Division I Nordic ski team. She planned to give Skida her full attention after graduation, but recognized she’d need more than whimsy to scale her business. In many ways, Prevot was a perfect candidate for Tuck Bridge, the three-week transition-to-business program for rising juniors, seniors, and new graduates of liberal arts schools.

She learned about Bridge from her father, Roger Prevot T’83, operating partner at Kohlberg & Company, and attended the program in the summer of 2013 with her younger brother Mitch Prevot, an investment analyst who was then an undergraduate at Williams College. The Tuck connection runs deep in Prevot’s family; an aunt and uncle are also graduates of the MBA program. Entrepreneurship, too, is in the blood. When Prevot was a girl, the family lived on a few acres in rural Pennsylvania, and she and her brothers sometimes worked a farm stand after school.

“We had sheep and we would shear them. There was a phase when my mom was really into spinning yarn and I’d go to the wool festival with her over in Lancaster,” she says. Margie Prevot has played a variety of roles at her daughter’s company, from seamstress to supply executive. Roger Prevot, who sits on the boards of several precision manufacturing firms, shares his advice whenever his daughter asks for it. Skida has always been Corinne Prevot’s company, however, and she was eager to develop the business skills to guide its growth.

“Bridge made sense for me because I needed a crash course—a kind of mini-MBA,” she says. “I’d taken a lot from Middlebury but I didn’t have any experience in accounting, or building business models with really sophisticated Excel sheets, or talking about corporate responsibility. Bridge was an amazing crash course in all of those skills.”

The Bridge program emphasizes the same case-based collaborative learning method for which Tuck’s MBA program is renowned, with a similar emphasis on general management. Prevot’s group research focused on the sports apparel company Lululemon, a particularly relevant project given her plans for Skida. “They do their own manufacturing, so that was very relatable in the way that they structure their business,” she says. “Bridge gave me a lot of confidence and I left the program just itching to hit the ground running and start working on Skida. I haven’t slowed down since.”

The ability to go back and forth between the creative and the more data-driven aspects of the business is so rewarding. I’m able to inform so many different decisions because I understand both sides of that picture.

She leased an old woodshop in Burlington, VT which became Skida’s business office, design studio, warehouse, and retail space. It’s a fitting headquarters for a company steeped in Vermont’s rich history of cottage industry. That connection is important to Prevot, who wrote her senior thesis at Middlebury on the potential for northeastern Vermont’s landscape and outdoor lifestyle to drive sustainable economic growth.

“The Northeast Kingdom used to have a really strong manufacturing background, with a lot of woodworking and garment manufacturing,” says Prevot, who sees the network of seamstresses she hires to stitch hats and headbands in their homes as a part—perhaps the last part—of that tradition. She believes that outdoor recreation in Vermont, from ski resorts to mountain bike trails and canoe routes, can help reinvigorate the cottage economy.

Every piece in Skida’s Vermont Collection is hand-sewn in the Northeast Kingdom. That commitment to local manufacturing is important to Prevot personally, and essential to the Skida brand. The company’s products command a premium because they’re made in Vermont, and because they’re designed by and for people who live an active outdoor lifestyle.

The locally sourced concept also applies in Nepal, where Skida sources its Cashmere Collection of premium hats, shawls, and ponchos. Prevot fell in love with the Kathmandu Valley when she studied sustainable development there in 2011. She launched the Cashmere Collection in 2015, working with some of the same herders and mills she had visited as a student.

Prevot leased an old woodshop in Burlington, VT that serves as Skida’s headquarters and workshop. | Photography by Rob Strong

“The cashmere industry used to be a really strong part of Nepal’s export economy, but a lot of the manufacturing has gone to India and China. It’s the same cause-and-effect that we’re seeing with the cottage industries in the Northeast Kingdom,” says Prevot, who spends a few weeks each year in Nepal and always brings her mountain bike.

She uses the bicycle “to explore in a wild place that’s just full of discovery,” and also to get around Kathmandu, careening through the city’s crowded streets with blonde locks streaming and a floral-print neck warmer pulled over her nose to filter the smoke of cooking fires and vehicle exhaust. “It always throws people for a loop when I pull over on my bike and ask someone for directions in Nepali,” she says. “Sometimes people don’t even answer; they’re just like, ‘This is too weird.’”

Combining sports and business comes naturally to Prevot, still a formidable ski racer and a regular podium finisher in regional mountain bike races. Skida is an outdoor sports brand, and much of its success stems from Prevot’s genuine embrace of that culture. Another key branding element is the Skida Plus One program, in which the company will donate one hat to a cancer center for each one a customer purchases.

Prevot was inspired to start the program in 2011, when a man ordered a dozen hats to give to patients at the Norris Cotton Cancer Center at Dartmouth- Hitchcock Medical Center, where his wife was undergoing treatment. The man thought the brightly patterned hats would bring a bit of warmth and cheer to the patients, and Prevot seized on the idea.

She’d been looking for a meaningful program to give back to the communities that had embraced Skida, and found a seamless way to execute it using a series of online promotional codes corresponding to cancer centers in ski towns from New England to Vail. Each time a customer enters a code at checkout, Skida sends a second hat— the Skida Plus One—to the chosen clinic. Customers don’t pay for the extra hat, but they play an active role in the act of giving. The program creates a feeling of goodwill and community engagement that would be hard to put a price on, though Prevot doesn’t seem to think of the program in that way. She’d rather talk about the smile a simple gift can bring to a person in need than the nuances of brand equity.

The limited runs and fun, sometimes quirky, designs are part of the Skida mystique. | Photography by Rob Strong

Still, there’s no question that feeling good about Skida keeps customers coming back time and again, as does the company’s ever-changing palette of limited-edition prints. “We spend a lot of time curating and developing each year a new collection of bold, colorful, super-unique patterns, and so a lot of our customers become collectors,” Prevot says.

The limited runs and fun, sometimes quirky, designs are part of the Skida mystique. In the early days, when she and her mother were still sewing hats at their kitchen table, Prevot scoured the Internet for bolt-ends and remnants of brightly colored prints. On one memorable occasion, she found a few yards of strawberry print scratch-and-sniff fabric on eBay. The sweet-smelling hats made from it attained instant cult status, and last season Skida commemorated its 10th anniversary with a limited run of colorful (though unscented) hats and accessories called “Strawberry Fields.” The collection pays homage to that serendipitous eBay score and celebrates the sense of spontaneity and (here’s that word again) whimsy that has driven Skida’s success from the very beginning.

There’s a certain magic in that playful mindset, especially when harnessed to cottage industry, sports culture, and local pride. The catalyst in that powerful mix has been Prevot’s steady management, and for that a measure of credit goes to the Tuck Business Bridge Program. “The ability to go back and forth between the creative and the more data-driven aspects of the business is so rewarding,” she says. “I’m able to inform so many different decisions because I understand both sides of that picture.”

*This article originally appeared in print in the winter 2018 issue of Tuck Today magazine.

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