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May 2019

Top Lawsuit Risks for Alabama Manufacturers and How to Manage Them

Bridget E. Harris, Adam K. Peck and Amber N. Hall

It is not unusual to read glaring headlines describing manufacturers that have been hit by a nine-figure jury verdict. These jaw-dropping monetary awards can occur even when a manufacturer has not committed a wrongful act, but the jury believes the company could have done more to protect users of its products. The top three categories of lawsuits that pose a risk to manufacturers are: (1) defects in manufacturing and/or design, (2) marketing defects, and (3) the class action. If these three risks are addressed through a manufacturer’s standard practices and procedures prior to a lawsuit walking through the door, it may fare better during settlement negotiations or at trial.

Defect: Manufacturing or Design

Potential product defects routinely land manufacturers in court. Typically, on the other side of a lawsuit, there is a sympathetic plaintiff who suffered a traumatic injury or death while using the manufacturer’s product. They will claim that the manufacturer either defectively designed or manufactured the product, leading to the alleged injury. As a result, manufacturers must always be prepared to address these types of claims with evidence that their product does not have a design or manufacturing defect.

A lack of adequate record-keeping will always hurt a manufacturer in this type of lawsuit. Manufacturers must be prepared to provide a judge or jury with ample evidence of its efforts to design and manufacture a reasonably safe product. To be in a position to assemble this evidence, manufacturers must make it a top priority to implement policies and procedures that ensure the preservation of documents that may be pertinent in a lawsuit, such as evidence of safety-testing.

Juries also regularly find manufacturers to be non-compliant with governmental or industry standards. Demonstrating non-compliance is an easy way for a plaintiff’s lawyer to prove a product is defective. That said, manufacturers must show the jury the documents that establish a product was in compliance with safety standards at the time. The manufacturers will most certainly also need to put an engineer on the stand to explain to the jury how and why the design met those standards. Without the documents to back up the engineer’s testimony, a jury is likely to find against the manufacturer. Even if the case does not proceed to trial and settles, the value of the settlement may be significantly higher without clear evidence of compliance.

Marketing Defects

Another area of liability for manufacturers is the so-called “marketing defect.” In this type of litigation, plaintiffs sue claiming a manufacturer either failed to warn of the danger of a product or advertised in an untruthful way to make their product appear safer and more compelling than it actually is.

As seen in the media over the past few years, manufacturers such as Johnson & Johnson are being hit with massive jury verdicts over alleged marketing defects. For example, a Los Angeles jury awarded a woman $417 million after finding that Johnson & Johnson was aware that their talcum powder was linked to ovarian cancer, and failed to warn consumers of the risk.

The best way to guard against such lawsuits is through effective product labeling. A manufacturer should put every possible risk on a warning label, even if the risk is unlikely to occur. The warning labels should be an appropriate size and font so as to catch the eye of the consumer. Even if a manufacturer does place a warning on a product, a jury may still find in favor of a plaintiff if the warning label was so small that an average consumer would not have seen it. There are safety standards that should be used to help craft an appropriate warning. A manufacturer must use these standards because plaintiffs’ lawyers will tell the jury the failure to follow these standards makes the warning inadequate.

The Class Action

A class action lawsuit has the potential to be a manufacturer’s worst nightmare. The plaintiffs’ lawyer can use the class action to take a few plaintiffs with a relatively small problem and combine them with a class of allegedly similar consumers with allegedly similar problems to create a potential multi-million dollar exposure. Even worse than that, potential exposure can be the negative publicity that a class action brings a manufacturer. These are lawsuits that can grab media attention and create the perception that a manufacturer has a shoddy product that has potentially damaged millions of consumers.

One such example is the class action lawsuit alleging certain Whirlpool front-loading washing machines had a design defect that allowed water to accumulate and create moldy front gaskets resulting in smelly washers. Whirlpool ultimately settled this class action in a manner that resulted in notices being sent to more than 5.5 million people advising them they might be eligible for a $50 cash payment or a 20 percent cash rebate on the purchase of certain washers and dryers made by Whirlpool.

As this washing machine example demonstrates, class actions are often brought by plaintiffs’ attorneys to try to force a settlement due to the risks posed by both the lawsuit and the adverse publicity generated by the lawsuit. One of the best ways a manufacturer has to manage those risks is by evaluating the class action thoroughly when first hit with the suit. Often, the class allegations are weak and legally suspect — and can be knocked out on procedural grounds, allowing the class allegations to be dismissed. It is important, therefore, to scrutinize a class action lawsuit to identify jurisdictional concerns or weaknesses involving the class of plaintiffs itself.

Conclusion

Manufacturers are going to get sued, even if their products do not have any defects. To help mitigate potential liability, manufacturers should take steps to keep careful records that clearly demonstrate compliance with safety standards. They should also ensure products carry adequate and clearly marked warnings and instructions. Finally, any class action lawsuit should be met with an aggressive response that focuses on eliminating class allegations from the outset.

Adam K. Peck is a partner at Lightfoot, Franklin & White LLC in its Birmingham office. Amber N. Hall and Bridget E. Harris are associates at the firm.

The Best in Alabama Interior Design

Paul Propst Center

Considering the double helix of the DNA molecule is one of the most elegant designs in nature, it’s appropriate that one of the top award winners in Alabama interior design recently went to a key expansion in genetics research at the Hudson-Alpha Institute for Biotechnology, in Huntsville.

The Paul Propst Center was one of 12 winners of the IDIE Awards presented in April by the International Interior Design Association — Alabama Chapter.

Take a look at what scientific research looks like at its very best, then explore the rest of the 11 best of show winners by Alabama design firms.

[Quotes are from submissions by the design firms]

Best of Corporate (Large) – The Paul Propst Center, design by Fuqua & Partners Architects

“The Paul Propst Center is the newest addition to the campus of Hudson Alpha Institute for Biotechnology. Similar in look and feel to the flagship building at 601 Genome Way, the Propst Center is a 105,000-square-foot, two-story building that is home to the main components of HudsonAlpha’s education and research programs. The design goal was “to create an aesthetic similar to the main campus, while still introducing some new, captivating features.” 

Best of Corporate (Small) and Best in Show – Office of Nequette Architecture and Design, design by Nequette Architecture and Design

The Office of Nequette Architecture & Design at The Thomas, located in one of downtown Birmingham’s most active and growing districts. “The architecture office sits atop the three-story historic brick building with 360-degree views of the city. Reclaimed wood for flooring, beams and other work surfaces combine with the clean plaster walls.”

Best of Assembly – Exactech Arena at the Stephen C. O’Connell Center Renovation, design by Davis Architects

The University of Florida’s Stephen C. O’Connell Center is a hub for athletic, student, and community events. “Originally constructed in 1980, the arena was in serious need of an update. The result is a next-generation venue that the university and community takes pride in.” 

Best of Design Detail – UAB Collat School of Business, design by Williams Blackstock Architects

The new Collat School of Business building forms a gateway for the western edge of the University of Alabama at Birmingham campus. “The new building is built as the home of innovation and entrepreneurship for UAB and the City of Birmingham, designed around a central commons “living room” that fronts the primary artery through campus. The Commons focal point is the Grand Stair — a connective tissue between all building levels providing vertical walkability and an elegant landmark for wayfinding.” 

Best of Furniture Installation (Small) – Shipt Headquarters, design by Office Environments

This historic space serves as headquarters for the local high tech start up Shipt. “The furniture used in Shipt’s corporate headquarters allows employees to be highly productive and collaborative, while reflecting the company’s modern style within the traditional, marble lined space. The overall design, paired with the furnishings, supports Shipt’s progressive culture.”

Best of Furniture Installation (Large) – WME Entertainment, design by AI Corporate Interiors

The new Nashville office of the talent agenc William Morris Endeavor “showcases and embodies WME’s brand and culture. Driven by their ‘culture of duality,’ the space was designed to be approachable, hospitable, and relaxed, while also being unapologetically unscripted, impassioned, and confident. WME embraces an “anything is possible” philosophy and this new environment offers a sophisticated interpretation of WME’s global presence within a Nashville context.”  

Best of Healthcare (Small) – Core Plastic Surgery & Schaffer Plastic Surgery, design by Heidi Core Interior Design, LLC

“The design provided two well-established plastic surgeons with an upscale, highly functional office consisting of a clinic with operative suite incorporating design elements unique to the medical industry in Alabama. Highly specific patient flow patterns mixed with the soothing elegance of a modern hotel lobby provides patients with a glamorous experience tantamount to entering a 5-star resort, yet at the same time reflects the efficiency and professionalism of the owners.”

Best of Healthcare (Large) – Hospice Family Care, design by Fuqua & Partners Architects

Hospice Family Care is located on a wooded lot with mountain views. “The facility is designed for people with terminal illnesses who need constant medical care but prefer to spend their final days in a homelike setting rather than in a hospital. The clinical aspects of the facility are hidden from view and the feeling of home supports both the patients and their families during a difficult time of life.”

 

Best of Hospitality – The Grand Hotel, design by Goodwyn Mills & Cawood, Inc

The Grand Hotel in Point Clear on Mobile Bay recently completed a comprehensive renovation. “The conversion of The Grand Hotel to an Autograph Collection Hotel captures the timeless essence of the storied and historic ‘Queen of Southern Resorts.’ Upgraded guestrooms, fully renovated conference center and spa, as well as reinvented restaurant and bar venues bringing a refreshing, yet classic, ‘sense of place’ to this beloved Alabama destination resort.” 

Best of Institutional – Auburn University Mell Classroom, design by Williams Blackstock Architects

The Mell Classroom Building and the partial renovation of the adjoining Ralph Brown Draughon Library “was envisioned as a transformative educational environment for Auburn University and its 20,000 undergraduate students. The learning experience in this facility is not only effective but unforgettable. The building advances Auburn’s commitment to fostering innovative and active learning experiences by providing interactive, collaborative, and technology-driven classrooms.” 

Best of Residential – Hawk’s Nest Private Residence, design by Nequette Architecture and Design

A single-family home on the banks of Lewis Smith Lake northwest of Jefferson County that “provides an intimate retreat for a family located in a quaint village named Hawk’s Nest, a collection of 23 stone lake cottages near the town of Ardell on Bear Pen Branch. The village is designed for community interaction with a central lawn, an observation tower standing over a crescent-shaped pool and a meandering boardwalk that laces all the cottages together along the waterfront.”

Best of Retail – Caliber, design by Christopher Architecture and Interiors

A high-end firearms and sporting goods store in Homewood “that raises the bar for the outdoorsmen retail environment. The team of owners and designers sought to create something unique, believing the store design could remind clients of the history, culture, and ambience of the classic sporting tradition. A modern exterior is juxtaposed with timeless interior elements and materials, including wood, concrete, stone, and steel, blended in a contemporary design reminiscent of more traditional hunting lodges.”

The Alabama Chapter of the International Interior Design Association presents its DIIE Awards every two years.

The association invites organizations, firms and furniture dealers to submit projects completed within the previous two years. The submissions are judged by a panel of professional peers who practice in other market areas.

“Alabama is rich with interior design talent, and it is our honor to recognize those contributing to the industry through the IDIEs,” says Amy Cope, IDIEs chair and president of IIDA-AL. “Congratulations to all the winners — we thank you for your participation and help in growing our profession and industry.”

Flashback: Alabama’s King Cotton Merchants

The Weils in the cotton sampling room, from left: Bucks and Bobby with sons Adolph III and Bobby II.

In the March issue of our first year of publication, 1986, staff writer Bessie Ford took us on a tour of the rarely seen offices of one of the oldest, most veiled businesses in the state.

“There is no street sign to advertise the location of the business,” Ford wrote, describing the headquarters as a “deserted looking gray building in downtown Montgomery.”

“Walking in the door at 311 Montgomery St., an antique nameplate of polished brass and a portrait of the founding grandfather provide a museum atmosphere to the otherwise barren entranceway. The chatter of a commodities teletype is a tipoff that big business is conducted in these understated quarters.”

These Dickensian digs were home to one of the top five cotton merchants in the country, Weil Brothers Cotton Inc., a family-owned company 107 years old that year.

Four principals — overseeing 100 employee agents around the world in the buying and reselling of an annual $100 million worth of cotton — faced each other across anachronistic partners’ desks. Senior partner Bucks Weil, 71 years old, faces brother Bobby, and at the other partner desk Bobby’s son, Bobby II, faces Bucks’ son, Adolph “Andy” Weil III.

When not at their paired desks, Ford wrote, they can be observed in the sample room pouring over coded boxes of cotton swatches labeled by country of origin, like a roll call of the United Nations.

Each partner has spent time, in his generational progression, as a “squidge,” an apprentice “cotton classer,” becoming skilled in valuing cotton by its staple, grade and micronaire, a gauge of the fiber’s thickness.

But it was the intangibles that made for risk and finally brought the company to announce, in November 2008, “Losses resulting from market gyration in early March were significant and the risks of trading cotton have become much greater.” And, as also announced, following a period of reconciliation, the company closed in 2010.

Weil Brothers merged with U.K.-based Stern Ltd. in 1991, but unpredictability of prices following the recession proved too much. Weil had been in the business for 130 years and Stern 156 years.

Chris McFadyen is the editorial director of Business Alabama.

Business is Booming in Madison County

As more jobs become available in Huntsville and Madison County, city and county leaders also are actively attracting more residents to live and work in the urban sectors, such as near Big Spring International Park in Huntsville. Photo courtesy of Alabama Tourism Department/Brit Huckabay

Madison County in north Alabama is one of the fastest growing counties in the Southeast and home to leading defense, aerospace and technology industries.

A recent analysis by 24/7 Wall Street found the Rocket City is one of the best places in the country for the number of high-tech jobs. Huntsville ranks No. 3 on the list, based on Bureau of Labor Statistics data. The most common tech job in the city is aerospace engineer, with an average salary of $80,483 for all tech jobs, according to 24/7 Wall Street.

And the 2018 Inc. 5000 list of rapidly growing companies includes more than two dozen businesses in Huntsville and Madison County.

Jobs are plentiful in general, too. According to the Huntsville/Madison County Chamber of Commerce, since 2010 the metro area has added more than 23,000 new jobs. While the area still has workforce capacity in target industries, the chamber is looking ahead, working to increase career awareness among students, the unemployed and underemployed, while attracting skilled and educated people from other parts of the country.

Madison County’s three public school systems are constantly updating career technical and science, tech and math opportunities for students, and the state will be opening a new Alabama School of Cyber and Engineering here. Local institutions of higher education work with K-12 schools and are major partners in economic development.

Along with jobs, the cities of Huntsville and Madison are undergoing change with lifestyle retail and commercial centers, hundreds of lofts and apartments, new home construction and other amenities that will improve quality of life. Madison County also has a strong tourism sector.

“We have fiber internet to homes now, and we are working on 5G technology that will result in even more jobs,” says Huntsville Mayor Tommy Battle. “We have many young people moving in to take high-tech jobs, and while we are looking to urban development, we also know that there are many people of all ages who want to live in urban areas. We are seeing a lot of development to keep up with the pace of the new jobs we are seeing. We also want people who work here to choose Huntsville to live.”

The area continues to be a magnet for big economic announcements, from aerospace companies to manufacturing to research and development and data centers.

Here are a few of the most notable recent announcements:

  • Mazda and Toyota corporations are building a $1.6 billion automotive plant in Huntsville that will employ 4,000 new workers. The plant is currently under construction and is expected to be operational by 2021.
  • The Federal Bureau of Investigation is growing and building on 1,600 acres at Redstone Arsenal and expects to add 1,300 employees by 2021. Facilities in progress include the hazardous devices school, a ballistic research facility and training for weapons for mass destruction. Two years ago, the FBI opened the Terrorist Explosive Device Analytical Center with 200 jobs.
  • Facebook has invested $750 million to build a data center in North Huntsville Industrial Park. It will be 1 million square feet and will employ approximately 100 people.
  • Blue Origin will build a rocket engine production facility on 46 acres in Cummings Research Park and employ more than 300. United Launch Alliance recently picked Blue Origin to supply its next generation BE-4 engine for the first stage of the Vulcan Centaur rocket that ULA is building in Decatur.

Lori Chandler Pruitt is a freelance writer for Business Alabama. She lives in Birmingham.

Aquaculture Goes Commercial in Shelby County

Kyle Raburn checks on a raft of plants, which are nearly ready for packaging under the firm’s Southern Fresh Produce label. Photos by Joe de Sciose

Stuart Raburn spent 26 years in IT before 2012, when he sold the last of several companies he had founded. Along the way, he had acquired a piece of land adjacent to the Shelby County Regional Landfill in Columbiana for a venture that didn’t work out.

Not long after Raburn began thinking he might retire, his son, Kyle, then an Auburn University student, saw the documentary “Fresh.” The film profiles small farmers across the country using innovative techniques for sustainable and clean agriculture.

The younger Raburn suggested his parents watch the documentary, and they were impressed and inspired by what they saw.

“We had experienced cancer and other diet-related illnesses in our family and were trying to eat whole, clean foods, avoiding pesticides and other poisons,” Stuart Raburn says. “The idea of creating our own farm sounded like fun.”

The Raburns decided to pursue aquaponics farming — using a combination of aquaculture and hydroponics — on their Columbiana property, kicking off their company Southern Organics in 2014, says the senior Raburn. He serves as chief executive officer. “You can produce so much more per square foot in controlled-environment vs. dirt farming, and it’s easier to farm without pesticides using beneficial bugs,” he says. “Plus it’s a lot cooler working inside a greenhouse than out in the field, and you can grow year round.”

Fresh and green and healthy and delectable are the basic ingredients at Southern Organics, led by (from left) Alan Cameron, Judy Thibodeax, Matt Bowker, Stuart Raburn, Mary Alex Waite and Kyle Raburn — all enjoying freshly plucked basil leaves.

Currently Southern Organics supplies a number of gourmet restaurants in the Birmingham area — including Whistling Table, Root to Tail, Foodbar and Gianmarco’s — as well as select grocery stores. “Although it’s always changing, about half of our business now is restaurant and half retail,” says Kyle Raburn, who started in sales but now primarily handles marketing for the family business.

Those restaurants’ top chefs are provided with specialty microgreens, peppers, edible flowers and various types of oyster mushrooms from around the world. “The chefs gave us a lot of good feedback as we were developing our products and how they were delivered,” the younger Raburn says. “We have added new products they have suggested.”

The Raburn farm sells its Southern Crunch lettuce and various greens mixtures to retailers under the brand Southern Fresh Produce. In the beginning, Southern Organics delivered boxes of preordered produce but now is featured in a number of grocery stores in the Birmingham area, including a growing number of Piggly Wiggly and Organic Harvest locations, says Mary Alex Waite, head of sales. “Currently we’re at Organic Harvest on Highway 31 in Hoover, but we will soon be at the new downtown Organic Harvest, where they are planning to use our greens in their salad bar,” she says.

Southern Organics doesn’t use the word “organic” in its retail brand because its produce is not certified organic. “The USDA’s rules for certified organic for aquaponics are still evolving and so complex that it just gets silly,” Stuart Raburn says. “Our customers know we are pesticide-free and use natural nutrients, and that’s what they care about. We follow the Certified Natural Grown protocols.”

The Raburns started their operation with one commercial greenhouse and an aquaculture facility. Using his IT background, the senior Raburn set up computerized controls and mechanisms for the facility, including light and temperature sensors. The greenhouse uses natural light supplemented by grow lights, which only turn on when needed. With the moderated temperature and light plus hydroponics, Southern Organics is able to turn around crops in 30 days. “During the winter, especially when we experience so much cloud cover, it’s helpful to have supplemental lighting,” he says.

Stuart Raburn credits the work of Dr. James Rakocy, who is called the “father of aquaponics,” for helping guide many of the choices and much of the success of Southern Organics operations. Rakocy, who received his doctorate at Auburn University, spent 30 years at the University of the Virgin Islands perfecting the aquaponics system. “We have learned from many people in building our company, but we couldn’t be doing what we’re doing without Dr. Rakocy’s work,” Raburn says.

Southern Organics’ 10,000-square-foot aquaculture facility hosts tilapia in various stages of development, from pinky size to full grown. Large blue tanks are regulated by a computerized system that also controls the feeding of the fish.

When they reach 2 pounds, the adult tilapia are taken through a gut-cleansing process and are harvested for use by one customer, the Super Oriental Market and its Red Pearl Restaurant in Homewood. “We’re not using aquaculture to make our money selling fish, but we do cull the tilapia at a certain stage so we can keep our fish healthy,” Raburn says. “Their real purpose is to produce waste so that we can naturally fertilize our hydroponic plants.”

The tilapia waste goes through a stringent filtration process to produce nutrient-rich water for the farm’s plants. The solid fish waste is then used to create compost.

New Zealand crayfish, which grow as large as small lobsters and are being cultivated in the farm’s aquaculture facility, are being tested for use in cleaning the operation’s greenhouse nutrient water trays. “We’re always trying to find a better way, and the crayfish, which are considered a delicacy, might become a commercial product as well,” Raburn says.

Although the company is doing well now, back in 2015 the Raburns realized there was no way they would ever make money with the small scale of their operation. “I told my wife we have to double down or shut it down,” Raburn says.

Many small aquaculture operations go out of business because they aren’t large enough to cover their costs and make a profit, he says. Most successful ongoing aquaculture is done by the hobbyist using simple materials in his or her garage or backyard. Businesses such as Hydro-Ponics of Birmingham have sprung up to support the hobbyist and small commercial operations. “To do it right commercially, you have to be able to produce a large enough supply, and that takes a significant investment,” Raburn says.

After their soul searching, the Raburns decided to “double down,” adding a second commercial greenhouse for a total capital investment of about $1 million in the farm. Now Southern Organics has 22,000 plant positions in rafts that float in nutrient rich water. “We are now able to produce enough to keep ahead of our operating costs,” Raburn says.

The company employs about 20 workers, including six full-time. It can be challenging to find farm workers, even for an indoor farm, so the company offers flexible scheduling, Raburn says. Plans for the farm include the construction of a series of large hoop greenhouses to house the production of heirloom tomatoes.

Will controlled environment farming eventually beat out the dirt farmer? Raburn doubts that will happen anytime soon. “Commodity crops such as wheat, soybean and corn are best grown on large tracks of land,” he says. “We can’t grow those things economically.”

Kathy Hagood and Joe De Sciose are freelance contributors to Business Alabama.
She is based in Homewood and he in Birmingham.

Managing a Portfolio of the World’s Best Wine

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The chance to meet winemakers and grape growers, as well as the wine itself, called Gregory Doody back from retirement to run Vineyard Brands. Photos by Joe de Sciose

Surely it’s the ultimate retirement dream — traveling the world, sipping fine wine, experiencing other cultures, making lasting connections. But for Gregory Doody, president and CEO of Vineyard Brands, it’s the career that lured him back from early retirement — again. And all of that traveling and wine sampling are hard work, something he’s accustomed to.

Doody’s career path has not been conventional. Now in his early 50s, the Birmingham native has carried a long line of titles in his career — attorney; CPA; partner with Balch and Bingham based in Birmingham; executive vice president, general counsel and secretary of HealthSouth; executive vice president, general counsel and secretary of Calpine, and executive vice president of Charter Communications. It’s evident that he’s mastered the intricacies of restructuring companies during difficult times, but he can’t get the hang of retirement. It just doesn’t stick, which is why his latest job title as entrepreneur and certified sommelier occupies him now.

Earlier in his career, when Doody was with Balch & Bingham, his work as an attorney was diverted to corporate restructuring when rehabilitation giant HealthSouth was exposed for wrongdoing on a grand scale. Sorting through the aftermath of the firestorm in 2002 and beyond, Doody helped to keep the company alive, saving thousands of jobs. After the resolution, he considered retirement, but there was more restructuring work to be done with Calpine and Charter Communications. It’s not the sort of niche just anyone can be plugged in to, but Doody had the skill set to right badly listing ships.

The intensive commitment it takes to determine how to restructure in the face of massive mismanagement might make days seem like months, and months years. Doody again thought it was time to take a step back, and retirement seemed a certainty. But when he decided to attend the esteemed French Culinary Institute in New York to occupy his suddenly free time, he discovered a natural affinity for the world of wine.

“The thing I fail at most is retiring,” Doody says. “I thought about getting into the food and wine business, but being a chef is for someone much younger than me. I took a 12-week intensive sommelier training course.”

The master sommeliers recognized a fellow purist and saw a new direction for his career  — moving wines from point of origin to fine restaurants and retailers.

Intrigued, Doody arranged a meeting with Jerry Neff, head of Vineyard Brands, an international importer based, conveniently enough, in his hometown and recognized by his culinary colleagues as a top worldwide importer.

Neff, in his 70s and ready to retire, before long offered Doody the leading role in the company.

“At first I said no,” Doody says. “I thought I was ready to retire at last. So my first year was a test. I wanted to see if I wanted to work and if I was a good fit for this business.”

Doody bought in right away on the employee-owned concept of Vineyard Brands, knowing everyone from sales managers to office employees were invested in the success of an enterprise they partially owned. When the original founder, Robert Haas, left to begin a winery in California, he had arranged for the company to transition to the employees through an Employee Stock Ownership Plan. In the late 1990s, the ESOP completed its purchase of the business from Haas.

“They’re literally invested,” Doody says. “Because the wine business is a non-traditional business, you don’t look at ROI. It takes a long time to see growth. You think of it like planting a vineyard. It won’t start to produce wine for three years, and it won’t be in its prime for 15 years. We get to think about business like our wineries think, which is very untraditional.”

Vineyard Brands is something of an anomaly — an acclaimed wine import organization based in the Southeast, where the firm has been located since 1997, after a stint in Vermont.

Doody’s financial artistry has impacted the business and revenue has steadily increased. He attributes that to expanding the knowledgeable sales force and to adding the right wineries to the company’s portfolio.

Catching the entrepreneur in town isn’t easy, but between a tasting trip to Germany and a wine fair in Italy, Doody is in Vineyard Brands’ headquarters in downtown Birmingham. From that prime corner, the company represents more than 60 wineries from major growing regions in France, Spain, Portugal, Chile, Argentina, New Zealand, Australia, South Africa, Germany and Italy.

The wine import business is 100 percent relationship and reputation-driven, Doody says, and Vineyard Brands works only with family-owned wineries. From one such winery they may buy 335 bottles a year, and from another, one million cases for distribution.

“It’s all about relationships and all about the wine itself,” Doody says. “It’s a pretty rigid process before we agree to take on a winery. In our business, what we do is curate the portfolio. If we have bad wines in there, we haven’t done our job. If you see ‘Imported by Vineyard Brands,’ that’s a stamp of approval from us.”

With overall imports of more than 10 million cases a year, Vineyard Brands is considered a midsize importer, but its portfolio makes it extraordinary and it covers the entire U.S.

Doody recently re-established the Vineyard Brands’ relationship with the exclusive Château Petrus in Bordeaux, France. Petrus, a coveted brand, was warmly welcomed back to the company, which now has more than 60 employees throughout the U.S. and an office in New York. It’s from the downtown Birmingham office that more than 30 employees handle shipping, accounting and marketing materials.

The wine business, with its long waits for yield and maturity, naturally draws people who are passionate about what they do — “especially the winemakers. If you’re not passionate about it, it doesn’t work,” Doody says. “You can have a perfectly made wine that’s well balanced with good acidity. Technically it can be correct, but it has no soul.”

Doody is finding new challenges that make postponing retirement — again —worthwhile, planning shipments and marketing for new releases to coordinating with sales teams. But any growth is carefully controlled, and his skills as a restructuring master keep him vigilant about how and when to make changes.

Making sure the portfolio is diverse is part of his goal. Vineyard Brands had one Italian wine four years ago, and now boasts five. Doody wants to fill out more of the Italian regions, as well as adding different regions from South Africa, but only when the relationships warrant a partnership.

“We want our portfolio to grow, but we don’t want to be a totally different company that grows exponentially,” Doody says.

The ESOP owns the vast majority of shares, with only two individual shareholders — a national sales manager in California and Doody, who together own 15 percent of the business.

Beyond the business challenge, Doody enjoys the challenge of the wine itself and the friendship of the farmers who grow it.

“The more you know about wine, the more you know what you don’t know about wine,” Doody says. “There are 30,000 grape varietals, and they are all affected by where they grow. I think everyone who studies wine realizes it’s impossible to know everything.”

At the end of the day, it all comes down to taste, Doody says, and you don’t have to be an expert to know the flavors you enjoy.

Vintners have to be grounded, considering the minimum two-year investment in every bottle of wine. Doody says the way the hardy vines grow and the smartest farms are managed have become fascinating aspects of wineries many never consider. Biodynamic soil is becoming more prevalent as farmers avoid adding chemicals and watch as the life takes over the soil.

“The wine is happy when the grapes are happy,” Doody says. “If I see a winery with no weeds and everything looks perfect, it’s probably not as healthy” as one that looks less manicured.

Doody says in a biodynamic approach, the farmer is inviting the life back in.

“The vines are stronger and the grapes better when the plants compete with a few weeds here or errant blades of grass there. One farmer in the Burgundy region of France was expanding a cellar and stopped construction when the earth opened to reveal the roots of vines stretching 30 feet deep in the earth around them to find the sustenance they needed to produce the best grapes. That’s a tenacious vine poised to produce a robust grape crop.”

Cara Clark and Joe De Sciose are freelance contributors to Business Alabama. Both are based in Birmingham.

YellaWood Enlists Icon of Animal Endurance

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Say what you want, but YellaWood commercials are never boring.

First it was Buc-ee’s, a Texas-sized convenience store with a beaver mascot that opened recently in south Alabama. Now Great Southern Wood and YellaWood have gone to the drawing board to create a mischievous band of beavers, driven to create their own waterside deck oasis with the iconic brand of Southern yellow pine.

Beaver fever has definitely arrived in Alabama.

The campaign, which launched March 17, can be seen in its entirety on YouTube here.

Pixar would be proud of this team of five lumber-obsessed beavers, led by a mastermind who brings to mind Sylvester Stallone from “The Expendables.” They’re masters of deception and camouflage, experts at subterfuge and rappelling, and they aim to outwit their human opponents.

“Through the use of non-traditional YellaWood fans, in this case, a team of beavers, we’re taking a humorous approach to establishing the desirability of YellaWood brand products,” said James Riley, chief marketing officer. “It’s a fun and engaging way to encourage homeowners to create their own five-star backyard and to demand pressure-treated pine with the little Yella Tag.”

The Woodland’s Most Wanted will be front and center for the brand through the autumn with extensions including digital, broadcast, billboards and in-store elements.

Established in 1970, and headquartered in Abbeville, Great Southern Wood Preserving Inc. markets to D-I-Y retail home centers, pro dealers and other retail building related segments. With 14 facilities across the South, Midwest and Mid-Atlantic regions, it is the nation’s leading producer of pressure-treated lumber for residential, farm, commercial and industrial uses.

Cooking Up A Successful Beach Destination

Brian Harsany and his wife Jodi opened Cosmo’s in 2006. Now it’s the centerpiece of a multi-faceted Cosmo’s Courtyard. The pair also own nearby Cobalt and GTs on the Bay. Photos by Todd Douglas

When Jodi and Brian Harsany needed a name for the restaurant they wanted to open in Orange Beach, the answer sat right at their feet. Literally.

“We decided to name it after our dog, Cosmo,” says Brian Harsany, part owner of Cosmo’s Restaurant & Bar, alongside wife Jodi. The popular eatery opened its doors in 2006, and today, the 15-year-old lab mix Cosmo can rest easy, knowing that his name has become synonymous in Orange Beach with consistency, professionalism and downright delicious food.

Brian sits at a table inside the playful restaurant, among its orange walls and a collection of paintings portraying coastal scenes and, in one instance, a tuxedo-wearing pooch. What began as a single restaurant on Canal Road has grown into what is now known as Cosmo’s Courtyard, a collection of businesses that the couple has developed following the success of Cosmo’s Restaurant & Bar. This includes Maggie’s Bottle & Tail gift shop, Luna’s Eat & Drink, BuzzCatz Coffee & Sweets and the popular Magnolia Hall event space.

But Brian doesn’t forget the restaurant that started it all. Recently, Cosmo’s has received its fair share of statewide acclaim. Aside from its banana-leaf-wrapped fish being named one of “the top 100 dishes to eat before you die” by the Year of Alabama Food, the restaurant also was chosen as one of the 12 finalists for “Alabama Small Business of the Year” and “Emerging Small Business of the Year” by the Chambers of Commerce of Alabama. To top it all off, Brian and Jodi were selected as 2018’s Restaurateurs of the Year by the Alabama Restaurant and Hospitality Association.

“But that’s what the team has done through the years,” Brian says. “Whether it be the bartenders, the bussers, the hostesses, the servers, the cooks, the dishwashers, the management. It’s everybody working together as a team that creates a product that people appreciate.”

A Tallahassee native, Brian entered the restaurant industry at a young age, clearing tables and washing dishes throughout high school. After studying hospitality administration at Florida State University, he worked a stint at Ralph & Kacoo’s in Baton Rouge before eventually moving with Jodi to Orange Beach, where he managed Bayside Grill at Sportsman Marina for more than 10 years. He then entered into a partnership that ended after just seven months and began looking for another venture.

“I didn’t have the next plan mapped out in my mind. I just knew something would come to pass,” Brian says.

The notion of a place like Cosmo’s had been evolving between Brian and Jodi for quite some time.

“The whole concept was to create a restaurant where we would also love to dine,” he explains. “We thought that if we did that, then there would be enough people who would like the same things: a nice, cozy atmosphere with great food, everything made from scratch, and a wide array of food from which to choose.”

As Brian points out, the canine concept has contributed more than just a fun name. “A majority of people do like dogs,” he says. “And by naming it after a dog and not associating it with a type of cuisine or a country, we weren’t tied in. So we could make anything and put it on the menu, and you can’t argue that it doesn’t fit.” That’s why Cosmo’s is able to serve everything from sushi, steak and pasta to po’boys, sandwiches and seafood. And the best part is, they do it all so well.

“When you go on vacation with family to the beach, and you’ve got a group of 20 people,” says Executive Chef Rob Benson, “somebody wants sushi, somebody wants pasta. With the menu offerings that we have, we’re able to capture those groups of people, because we have such a variety of different items.”

Cosmo’s banana-leaf-wrapped fish earned a coveted spot on the Year of Alabama Food’s top 100 dishes to eat before you die. But if you’re just hankering for a po’boy, Cosmo’s has that, too.

Brian explains that the growth from a single restaurant to what is now Cosmo’s Courtyard is something that evolved out of necessity.

“We keep growing and changing as we need to,” he says. “In March of 2010, we opened up Maggie’s [Bottle & Tail] because it was an opportunity to sell our merchandise, and it also provided people with something to do while they were waiting for a table.” Maggie’s was named after — you guessed it — Brian’s and Jodi’s Bluetick hound.

As patronage increased, the couple purchased a neighboring lot to create more parking spaces. With four acres to spare, they decided to develop what is now Luna’s, BuzzCatz and Magnolia Hall. And while much has changed around the original restaurant, the soul of Cosmo’s remains the same.

“It’s very difficult to change any menu item now because if you take one off, you hear about it for a good year,” Brian says with a laugh.

That’s where Corporate Chef Jack Baker and Executive Chef Rob Benson come in. With the help of sous chefs Rachael Golden and Jermaine Townsend, the restaurant’s kitchen staff creates mouthwatering fare that attracts tourists and locals alike.

Corporate Chef Jack Baker (above) and Executive Chef Rob Benson (below right) have created an array of mouth-watering delights.

“We’re fortunate in that we have staff who have been with us for a number of years and know what’s expected,” Benson says. Benson himself joined the Cosmo’s team in 2007 after attending culinary school in Portland, Oregon, and working in restaurants throughout the Southeast.

“We have access to some of the best fresh seafood in the country,” Benson says. “Gulf fish, Gulf oysters and Gulf shrimp I think are right up there with the best of what’s available anywhere else. So we try to highlight those things in our dinner specials.”

The key to his kitchen’s success? “Hard work,” he says. “This is not the kind of thing that you can do halfway.”

Brian couldn’t agree more. “We always concentrate on the details and try not to let anything slip through the cracks, whether it be back of the house or front of the house.” For current and potential small business owners, he offers a few pieces of advice.

“Make sure you’re doing what you’re passionate about,” he says. “Never rest on your laurels. Always strive to do better and reach a new goal.”

At Cosmo’s, that vision has translated into a local business that operates under a corporate structure, 80 employees strong. “The idea was to take not only the positives from mom and pop operations but also to incorporate the structure you’d find in a corporate setting,” Brian says. This has allowed Brian and Jodi to offer competitive employee benefits while creating a reliable management structure that has facilitated the growth of Cosmo’s Courtyard.

As they gear up for another busy summer season, the chefs and servers at Cosmo’s keep their eyes on the prize.

“It’s deeply satisfying to run a smooth service,” Benson says. “When people are excited to come back and are looking forward to their next visit, then you’ve hit all the marks.”

Breck Pappas and Todd Douglas are freelance contributors to Business Alabama. Pappas is based in Mobile and Douglas in Fort Walton Beach.

Go Behind the Scenes at Auburn’s Behind the Glass

Behind the Glass founder and owner Donna Young (right) is teamed with daughter, General Manager Chloe Young Floyd, who has been on the payroll since age 13. Photos by Julie Bennett

One block from Toomer’s corner in Auburn is a small business that’s something of a landmark itself — particularly for university women.

“Definitely, for anybody who succeeds in downtown Auburn, their customers are going to be about 70 percent students,” says Donna Young, the founder and owner of Behind the Glass, perennially named by The Plainsman as “Best Women’s Clothing Store.”

Knowing what that 70 percent is collectively craving has been Young’s secret, going back to when she was studying for her Auburn baccalaureate in art and English in the days of free speech and tie-dye.

Today, the fashion leader is Free People, a boho young women’s line that grew out of Urban Outfitters.

“When I was that age, I would have loved a brand like Free People,” says Young, who pegs her store’s close relationship with the brand as one of its best assets. “I went around in the ’70s in long dresses, jeans, overalls, cargo pants — all those trends that have all come back, including flares and ’60s prints.”

Other top lines in the store are Jack by BB Dakota, Show Me Your MuMu and Z Supply.

Merchandizing has become a carefully practiced craft over the years, but that’s not how this still-growing small business got started. It was more cobbled together like a ’70s outfit.

“At the time we started, I was married, and it was something that my husband and I wanted to do at the time.”

Donna Young’s eye for visual merchandising shows itself throughout the store.

Owning their own business was what they wanted, but settling on the exact “something” of the enterprise took time.

“The building became available, a two-story building downtown, a great opportunity, and we sort of fell into it,” Young says.

It was 1987, and downtown retail had been drained by the burbs, after the opening of the Auburn Mall in 1973. The two-story building on Magnolia Avenue that they snapped up had been Parker’s Department Store.

“Except for the Ware Building, it’s the biggest space downtown,” Young says. “It’s across from AuburnBank and one block from campus.”

Location, location, ok. What about product?

“When we opened, we had a cafe and art gallery,” Young says. “Actually, we put more of our faith into the food. There were not many places to eat, and the food was a bigger draw in the beginning, and the other grew as we went along.

“The art was always just for decoration and to make it interesting. The food made the money in the beginning. I always ran the retail (gifts and art) and my husband ran the cafe, and, then, he decided he didn’t want to do that anymore. I always liked clothes and fashion. It transformed from a gift shop into a boutique.”

Even then, the transformation was “trial and error,” Young says. “We went to the markets in Atlanta when it was not even market day, just showed up there and some people would help us,” recalling the start of her training by immersion in the wholesale trade shows at AmericasMart Atlanta.

“The most important trade shows for fashion are in Atlanta and Vegas,” says the general manager of Behind the Glass, Chloe Young Floyd. “New York used to be the biggest city for fashion shows, but now Vegas is the big deal.”

Chloe is Donna’s daughter, who has been working at the store since even before she went on the payroll at age 13. She is an Auburn graduate with a major in apparel merchandizing.

“Actually, it’s more vice versa,” says Chloe, about the help she got from schooling. “My experience at Behind the Glass helped me in school. I learned important things at college, but on-the-job lessons were the most valuable.

“When I was 18 years old I was general manager, in charge of all the staff management, and since junior high I have been buying for the store.

“I learned from my mother as a spectator since I was 13 or 14. I learned through her visual merchandising. She has such an eye for the merchandise and how it is presented and keeping up on what does well and what doesn’t.”

Founder Young has been slowly spending less time at the store, but she still keeps an eye on the competition, which has been steadily growing since the reversal of the retail flight from downtown.

“There are more shops downtown than there used to be, but we’ve been here longer, and we’re bigger, have more of a selection. We’re sort of a mini department store,” Young says.

And keeping up with the online competition has not gone unattended. “Website sales right now are about 10 percent of total but growing,” Young says. “I think the main thing that will change in the near term is continued increase in online sales, and we’re always trying to use social media better and grow Facebook and Instagram followers.

“We have a social media team, four people, and an e-manager for the website. We do photo shoots every week, on location. We take models to locations in town. The photo shoots involve the same team as the social media team. And I’m on that team, as well.”

Making things happen in the store, however, is still a big part of this small business success.

“That’s really important to us, to have really good music, a fun atmosphere, to have events in the store and customer service that’s friendly and helpful,” Young says. “We try to change up things and have something that’s new and fresh, to make it a place that is really fun to go to, where they can run into their friends. That’s a really important part of what we do.

“And customers want to have someone who can suggest things. You can’t get that online.”

The biggest event is football season, which can be a windfall, but a good share of total annual sales is always riding on team spirit. “We are fortunate that Auburn is a bubble, but that means how the football team is doing impacts the area,” Floyd says. “The better they do, the more people come downtown. If they are not playing well, people are not willing to travel. And if it’s not a good season and they are not going to the game, they are not looking for new outfits.”

The constant that offsets such vagaries seems to be a lot of hard work. Behind the Glass is open seven days a week and employs on average 30 workers — 20 part-time rising to 25 at peak fall season, and six full-time.

As for the founder, “I’m trying to go to part time, and, so far this year, I’ve done a pretty good job of that,” Young says. “I’m trying to gear down to 20 hours a week, want to focus on other things a little bit.”

Chris McFadyen is editorial director of Business Alabama and Julie Bennett is an Auburn-based freelance contributor.

Huntsville Confectionery Enjoys Sweet Success

Surrounded by chocolate are Pizzelle’s owners Caitlyn Lyon (left), Michelle Novosel Pennell, and pastry chef Emily Hawkins.

When Pizzelle’s Confections earned a nomination as Huntsville’s small creative business of the year, nobody at the shop expected to win. They knew their competition.

“We just make chocolates; these people make rockets,” co-owner Michelle Novosel Pennell remembers thinking before the event.

But win they did, taking honors last August at the 33rd Annual Small Business Awards Celebration presented by the Huntsville/Madison County Chamber of Commerce.

Pennell and her co-owner sister Caitlyn Lyon had kicked around the idea of a confectionery for years.

“We knew we didn’t want a full-blown restaurant and kind of honed in on the idea of a dessert cafe,” says Pennell. During a trip to Washington, D.C., in 2007, the sisters stumbled upon a tiny chocolate shop and caught a glimpse of their future. “To see a place that small and what they offered, it was, like, ‘Oh! This is an attainable thing.’”

“And that was the first time we’d ever seen artisan chocolate,” Lyon adds. “They were colorful and used interesting ingredients, like curry.” The sisters also were impressed that everything was made on site.

Pennell attended a year of culinary school at the Art Institute of Nashville and later took online classes at Ecole Chocolat Professional School of Chocolate Arts, based out of Vancouver. When she began selling her candies through a local art shop, the sisters decided it was time to come up with a name for their business.

In 2012, they formed Pizzelle’s Confections, named for the classic Italian cookie they grew up eating. Once they had a name, “everything just started happening really fast,” Lyon recalls. A friend suggested they apply for space at Lowe Mill, and Pizzelle’s was juried in early that summer.

Converting the 800-square-foot storefront began that fall, allowing time for Lyon and Pennell to reach out to their culinary connections for information and advice. They worked with Rocket Hatch, a non-profit resource agency for startups in northern Alabama that emphasizes collaboration over competition, to form a spin-off, Food Hatch, with other small food-industry businesses.

When they first opened their doors in the early spring of 2013, they thought they had started a hobby business. Their initial vision was that Pennell would make and sell a modest quantity of her truffles during the week and Lyon, who was working full-time as a tech writer, would help out on Saturdays. There were tentative thoughts of making small-scale wholesale arrangements with other businesses in town, but they were conservative in their expectations.

“And it turned out to be the exact opposite,” says Lyon, who took time off from her job to assist during that first week. “There was a line out the door. We hired our first employee the very next week.”

“Who is still here, by the way,” adds Pennell, referring to Marcie Purves, now Pizzelle’s executive confectioner.

Lyon left her job nine months later to work full-time as general manager, and the business continued to grow.

When the manager of Lowe Mill contacted the shop a couple of years later about expanding into the room adjacent to theirs, they accepted. As a result, in 2017 they nearly tripled their space to 2,300 square feet, dramatically increasing their customer seating area and expanding their kitchen to accommodate a full dessert menu. They also hired Emily Hawkins, who completed a pastry certificate program at The Culinary Institute of America in Napa Valley, as their executive pastry chef.

Cakes, tortes, truffles and bon bons as works of art.

The new space and menu weren’t without growing pains. “We went through a lot of changes when it came to trying to figure out what people wanted and what we wanted to do,” says Pennell. And it took a while for their clientele, accustomed to ordering their chocolates and leaving, to adjust to being able to sit and enjoy a dessert or get a coffee and just hang out.

The sisters also had to figure out how to incorporate Hawkins’ cakes into their business; selling them by the slice was proving to be wasteful. They focused instead on creating wedding and special occasion cakes for individual clients and selling miniature versions of those in the shop. “Michelle was the one who suggested the switch to mini cakes, and it made so much sense because it’s kind of the same story the truffles are: it’s this one piece of art and you get to eat it,” says Lyon.

“And they’re inspired by the truffles,” Hawkins adds. “The ‘Goodbye Earl’ cake has the same ganache that’s in the ‘Goodbye Earl’ truffle, and the decorations, the colors, are inspired by the blue and yellow of the truffle.”

“We obviously have a company culture and a company presence and a brand,” says Lyon. “But at the same time, there’s not a lot of things that we tell Emily to do creatively. She’s worked in this industry long enough that she knows how to control costs and waste and all that, and the creative part is just…” the icing on the cake.

“We always try to put a little twist on things or something that you wouldn’t think about,” says Hawkins. She points to a lavender and orange curd cake she recently made. “It’s actually a pretty traditional pairing, but it’s not something you see in cakes very often.”

“When we opened, we weren’t sure if people would respond well to what we were offering,” says Pennell, referring to including ingredients like chile pepper or goat cheese, even vinegar, in their truffles. It turns out, they did.

Pizzelle’s celebrated its sixth anniversary on March 16, definitely planning to stay on at Lowe Mill. Customers who visit the shop more than once or twice will likely find that the staff remembers their favorite chocolates. Cultivating that kind of relationship is something they feel their location at Lowe Mill uniquely enables them to do.

“Coming here is not just, ‘Let me grab a bag of M&Ms and be on my way and I’ll just eat it in the car,’” says Lyon. “Although, we have had people get out to their car and turn around and come back in and say, ‘I already ate all my chocolate and I need more.’”

“We want to stay here and be that destination where you can come and really get an experience,” adds Pennell. “Emily was decorating a beautiful cake earlier, and people were just watching her.”

The sisters are pleased with the recognition Pizzelle’s has received and encourage and celebrate the successes of other small businesses in the area. They volunteer for Catalyst Business Center, a non-profit agency that provides free business mentoring and educational resources for small businesses and are involved in outreach programs through local schools.

“I think that outreach to schools is really important,” says Lyon. As Huntsville grows and demand for employees to fill tech jobs increases, she’s concerned that other career paths are undervalued. “The people that work for us are professionals, and to be able to go to middle schools and high schools and show them what we do and say, ‘This is possible for you; you can make a living at this’ matters. Not everybody is going to be an engineer.”

“Someone has to give the engineer their dessert,” says Hawkins.

Katherine MacGilvray and Dennis Keim are freelance contributors to Business Alabama. Both are based in Huntsville.

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