The brewing recovery in Western North Carolina

Summary

The Brewing Recovery in Western North Carolina: A Deep Dive into Economic Resilience

Episode Title: The Brewing Recovery in Western North Carolina
Host/Author: NPR's The Indicator from Planet Money
Release Date: December 11, 2024

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Introduction: Celebrating Economic Narratives through the Beige Book

In this engaging episode of The Indicator from Planet Money, hosts Weilin Wong and Robert Smith delve into the intricate stories captured within the Federal Reserve's Beige Book. The show celebrates these narratives through their unique "Beigey Awards," highlighting how diverse economic tales shape our understanding of the current landscape.

Weilin Wong [00:56]: "Yes, and I was invited because we here at the Indicator are the biggest fans of one of the obscure documents the Federal Reserve puts out, the Beige Book."

The episode centers around the recent Beige Book release, described as "Spotify wrapped, but for the economy," encapsulating various facets like labor markets, inflation, and natural disasters.

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Runner-Up Spotlight: Labor Struggles in Rural Montana

The hosts commend the Minneapolis Fed for their insightful contribution, earning the runner-up spot. Their Beige Book entry sheds light on the labor challenges faced by rural businesses, particularly illustrated by a Montana grocery store owner's efforts to hire immigrant workers by offering housing.

Robert Smith [03:19]: "We read it and give awards to the best stories."

Weilin Wong [03:19]: "And before we get to the biggie, we like to recognize the runner up. This time, it's the Minneapolis Fed, always a strong contender."

This narrative underscores the precarious nature of the rural job market and hints at potential ramifications if immigration policies tighten, referencing the Trump-era crackdown.

Robert Smith [03:46]: "I would expect that rural areas will be the first to see any impacts if there's a real crackdown on immigration under Trump."

The story not only highlights immediate labor shortages but also foreshadows a competitive landscape for workers, potentially igniting bidding wars among companies.

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First Place Award: Richmond Fed's Insight on Hurricane Helene

The pinnacle of the episode is the award bestowed upon the Richmond Fed for their compelling report on the economic aftermath of Hurricane Helene in Western North Carolina. Hunter Jones, representing the Richmond Fed, shares firsthand observations of the region's ongoing recovery efforts.

Robert Smith [04:25]: "Hunter, congratulations."

Weilin Wong [04:28]: "We've decided to give the Beacon to the Richmond Fed and to you, Hunter, because your entry in the Beige book told a lot of stories about the impact of Hurricane Helene."

Hurricane Helene, which struck in late September, caused extensive damage, resulting in over 232 fatalities across six states and leaving businesses grappling with reconstruction challenges months later.

Robert Smith [04:39]: "At least 232 people died in six states, most of those deaths in north and South Carolina."

Despite the grim initial impact, the Beige Book entry highlights both the devastation and the resilience of local businesses striving to reopen and adapt.

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In-Depth Story: Riverbend Malthouse's Battle Against Adversity

Central to the episode is the poignant story of Brent Manning, co-founder of Riverbend Malthouse in Asheville. His malt production facility, crucial for the beer industry, suffered significant losses due to Hurricane Helene.

Brent Manning [07:19]: "So we had £100,000 of dying grain on our hands in the wake of Helene."

The hurricane left Brent's factory without power, leading to the spoilage of valuable barley grain and resulting in business interruption expenses totaling approximately $150,000.

Robert Smith [07:44]: "Oh, ouch."

Despite these setbacks, Brent's commitment to his staff remained unwavering as he navigated the challenges of restoring production.

Brent Manning [07:36]: "But we estimate that our business interruption expenses were around $150,000."

The broader implications of his story reveal a cascading effect on the regional economy, affecting not only malt production but also the entire supply chain, including barley farmers and local breweries.

Weilin Wong [08:33]: "But you can see how the whole supply chain gets hit in a case like this."

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Economic Ripple Effects and Recovery Efforts

Hunter Jones provides additional context on the recovery landscape, noting efforts to revive tourism and support businesses struggling to return to normal operations. Local organizations have been proactive, utilizing social media to reassure tourists and encourage visitation despite the lingering infrastructure issues.

Hunter Jones [06:18]: "The local organizations there have done a really good job using social media and those resources to promote that."

Brent Manning’s recount of his business challenges extends to anecdotal evidence of other breweries facing similar plights, such as lost inventory and damaged facilities, further emphasizing the pervasive impact of the hurricane.

Brent Manning [07:49]: "We have customers that their buildings were literally wiped off the map."

Moreover, Jones reflects on his personal connection to the affected region, having grown up there, and his continued visits to assess and support recovery efforts.

Hunter Jones [09:03]: "I was actually there last week for Thanksgiving."

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Conclusion: Navigating Uncertainty and Building Resilience

The episode concludes by highlighting the uncertain future facing Western North Carolina's economy, where businesses like Riverbend Malthouse strive to rebuild amidst ongoing challenges. The concerted efforts of local organizations, coupled with potential federal aid, paint a cautiously optimistic picture of recovery.

Robert Smith [09:20]: "So you did your part."

Hunter Jones [09:21]: "Yep."

Through the lens of the Beige Book and the heartfelt stories shared, The Indicator from Planet Money offers a comprehensive view of economic resilience in the face of natural disasters, emphasizing the interconnectedness of local economies and the enduring spirit of businesses striving to overcome adversity.

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This detailed exploration not only informs listeners about the specific economic impacts of Hurricane Helene but also underscores the importance of localized economic insights in understanding broader economic trends.

Transcript

[Weilin Wong]

Robert, you will never guess where I was last week.

[Robert Smith]

I heard you were inside the Chicago Federal Reserve Bank. I imagine there are piles of money everywhere.

[Weilin Wong]

Not that they let me infiltrate, but I was there to moderate a panel and they didn't want me recording any Fed business. Though I was able to sneak a little voice memo of the catering spread. Ooh, breakfast. They had a yogurt bar and they had a lovely fruit spread. Raspberries, blueberries. Not just the honeydew in the cantaloupe. They had very nice feature fruit, not just the filler fruit.

[Robert Smith]

And apparently a great soundtrack too. It is good to be the organization that creates money.

[Weilin Wong]

Yes, and I was invited because we here at the Indicator are the biggest fans of one of the obscure documents the Federal Reserve puts out, the Beige Book.

[Robert Smith]

We are obsessed with the Beige book and every time it comes out we do a little awards show to celebrate.

[Weilin Wong]

I warn them, though raspberries cannot bribe us, we are as impartial as ever. Let the chocolate chips fall where they may on the metaphorical yogurt bar breakfast buffet.

[Robert Smith]

It's the Beigey Awards, our eight times a year salute to the art and science of telling stories about the economy. I'm Robert Smith.

[Weilin Wong]

And I'm Weilin Wong. The last beige book of 2024 is like Spotify wrapped, but for the economy. There's a little bit of everything inside. Labor markets, inflation, and even natural disasters.

[Robert Smith]

We'll let you know who wears the Crown going into 2025 after the break.

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[Robert Smith]

We always like to remind you how this award show works. There are 12 regional banks in the Federal Reserve System. Each one carefully studies their local economy and brings back these little stories of what they see, publishes them in a document known as the Beige Book. We read it and give awards to the best stories.

[Weilin Wong]

And before we get to the biggie, we like to recognize the runner up. This time, it's the Minneapolis Fed, always a strong contender.

[Robert Smith]

Here's the anecdote that got us thinking. Quote, many rural businesses struggled for labor. The owner of a Montana grocery store reported traveling out of state to hire immigrant workers with the promise of providing housing.

[Weilin Wong]

That's really interesting. We saw some of this a couple of years ago when companies were desperate for workers.

[Robert Smith]

Yeah. And it reminds us to pay attention to the rural job market. I would expect that rural areas will be the first to see any impacts if there's a real crackdown on immigration under Trump. This Montana story may be a sign of the kind of bidding war companies can get into for workers.

[Weilin Wong]

Congrats to our runner up. And now our first place winner. And this is a special award for reporting on economic conditions under difficult circumstances. The Beijing goes to the Richmond Fed.

[Robert Smith]

Coming to the stage is Hunter Jones from the Richmond Fed. We talked to him last Friday. Hunter, congratulations.

[Hunter Jones]

Thank you so much. I really appreciate it.

[Weilin Wong]

We've decided to give the Beijing to the Richmond Fed and to you, Hunter, because your entry in the Beige book told a lot of stories about the impact of Hurricane Helene, which hit in late September.

[Robert Smith]

We all saw the terrible images of the flooding. Buildings swept away, roads crumbling, gone in some cases. At least 232 people died in six states, most of those deaths in north and South Carolina. Three months later, the news crews have moved on, but businesses are still trying to reopen. Here's one of the quotes from the Beige book. Quote, a food manufacturer lost five production days, infrastructure and livestock due to the hurricane. An estimated six to nine months to become fully operational. Hunter, I imagine that for some businesses in western North Carolina, they might be thinking hard about if they even want to reopen. If it's going to take six to nine months to become operational.

[Hunter Jones]

It's still a little unclear and some of probably the smaller businesses are really trying to decide on do we want to reopen, Is it going to be a challenge to reopen? I've heard both sides. I mean, some. It's actually kind of added a little bit of a boom in business.

[Weilin Wong]

Right, like for construction firms who are doing a lot of the rebuilding. And in your beige book entry, it says that some hotels were seeing increased business because of the influx of repair workers.

[Robert Smith]

Yeah, but I guess the hard Part is, after all those dramatic photos of the damage, getting tourists who are sort of the lifeblood of western North Carolina to start thinking about going back to places like Asheville again.

[Hunter Jones]

The local organizations there have done a really good job using social media and those resources to promote that. Hey, they're open for business. We may not have the hotels that you normally stay in, but if you can come visit for a day and shop in our stores, it's greatly appreciated.

[Weilin Wong]

We wanted to hear directly from someone rebuilding a business and the questions they're facing now. So we reached out to Brent Manning. He's the co founder of Riverbend Malthouse, located in Asheville.

[Robert Smith]

And Brent had to walk me through what a malt house does. It is a production facility that takes in barley grain and allows it to germinate into malt, which is the building block to make beer.

[Brent Manning]

So we opened back in 2010 and have grown steadily from a tiny little one ton operation to now. We're producing close to £5 million a year.

[Robert Smith]

Can I go get beer at your place?

[Brent Manning]

No, we're a manufacturing facility. We, we don't have hamburgers and draft beer. It'd be nice, but just, we just make malt.

[Weilin Wong]

Helene hit Asheville and Brent's factory in the middle of the night. Just getting out of his neighborhood was difficult. So it was days before he got to see his factory. The good news is that it was intact, but without power. All his product was spoiled.

[Brent Manning]

And so we had £100,000 of dying grain on our hands in the wake of Helene.

[Robert Smith]

£100,000?

[Brent Manning]

Yeah, it was pretty nasty.

[Robert Smith]

Brent kept paying his staff. Eventually they cleaned out all the tanks and dumped the bad grain and they are making malt again.

[Brent Manning]

But we estimate that our business interruption expenses were around $150,000.

[Robert Smith]

Oh, ouch. And from a longer term perspective, are your sales still down?

[Brent Manning]

They are, yeah. I mean, in, in some cases, I mean, we have customers that their buildings were literally wiped off the map. I mean, like, they went to visit their brewery and it was a gravel patch of dirt. And in one case, one of our customers found their cooler box a mile and a half down the river wrapped around the McDonald's in Biltmore Village. It had 150 kegs of delicious beer in it, but he had nowhere to sell it because he had no brewery.

[Robert Smith]

The owner of that brewery, like Brent himself, is waiting to see what insurance payouts they might get. There are also federal funds coming to help rebuild. But in some of these destroyed sites, they may not be allowed to put up structures. Again, things are still very uncertain in the region.

[Weilin Wong]

And there are, of course, more challenges for western North Carolina beyond the beer industry. But you can see how the whole supply chain gets hit in a case like this. Fewer tourists drinking less beer plus destroyed breweries means that less malt is needed from Brent, and this eventually hits barley farmers far from the devastation.

[Robert Smith]

The man who alerted us to all this, Hunter Jones from the Richmond Fed, told us he grew up in the region hit by the hurricane. I asked him if he was going to, you know, head back down there to support them with a few tourist dollars.

[Hunter Jones]

I was actually there last week for Thanksgiving. So I, I did a little bit more, say, off the beaten path, traveling around the area, looking at again, the damages and as again, roads come back online, being able to go see other parts that have kind of been disconnected.

[Robert Smith]

So you did your part.

[Hunter Jones]

Yep.

[Robert Smith]

Hunter Jones from the Richmond Fed, thank you so much for talking with us and congratulations again.

[Hunter Jones]

Thank you, Robert.

[Weilin Wong]

This episode was produced by Julia Ricci with engineering by Jimmy Keighley. It was fact checked by Sierra Juarez. Kay Kinkanan edits the show. The indicator is a production of npr.

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