MARCH/APRIL 2018 BIZ.IDAHOSTATEJOURNAL.COM
bIg CHAngES FoR PHARmACIES New regULaTIONS, ChaNgeS TO STaTe rULeS are KeePINg PharMaCIeS ON TheIr TOeS pAge 4
mORe InsIde n Isu tO OFFeR mAsteR OF heAlthcARe AdmInIstRAtIOn degRee stARtIng thIs FAll n IF YOu’Re InteRested In beIng A lAndlORd, nOw mIght be A gReAt tIme tO stARt buYIng pROpeRtIes n 9 InspIRed wAYs tO sAVe mOneY whIle buIldIng YOuR busIness
Is your business doing something groundbreaking? do you have a business news tip? email Idaho state business Journal editor danae lenz at: dlenz@journalnet.com
2 Ma rch /A p r i l 2 018
The Idaho State Business Journal is published by the Idaho State Journal.
Id a ho St ate B us i ness J o urna l
In this issue the FASHION EVENT OF THE YEAR Page 3
Our mailing address is: 305 S. Arthur Pocatello, ID 83204 Main number: 208.232.4161 | Subscriber Services: 208.232.6150 Copyright © 2016 Pioneer News Group, All rights reserved. Idaho State Journal managing editor: Ian Fennell | ifennell@
New regulations, changes to state rules are keeping pharmacies on their toes Page 4 ISU to offer Master of Healthcare Administration degree starting this fall Page 6 If you’re interested in being a landlord, now might be a great time to start buying properties Page 8
journalnet.com Idaho State Business Journal Editor: Danae Lenz | dlenz@journalnet.com
Social engineering: a risk you can’t ignore Page 9 Farmer, miller, baker: In search of local bread in the 21st Century Page 10
Contributors:
20 under 40 event set for April 6 Page 10
Mountain America Credit Union | arosenkrantz@macu.com Debbie Beaumont | beaumontdesigns2@yahoo.
9 inspired ways to save money while building your business Page 11
com Adam Frugoli | adam-frugoli@leavitt.com Matt Sanger | roundriverbaking@gmail.com Marc Basham | mbasham@postregister.com
Real estate demand in east Idaho putting a crunch on the industry Page 12 Despite rough start, Treasure Valley wine has bright notes moving forward Page 14
Nicole Foy | nfoy@idahopress.com
Famous potatoes make famous vodkas Page 15
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Idaho St ate B u s in e ss J ournal
THE FASHIon EvEnT oF THE yEAR Zonta to put on annual fashion show april 21 bY debbIe beAumOnt For the Journal Mark your calendar for April 21 for the Zonta Spring Fashion show “Hats off to Fashion.” This is the biggest and best fashion show of the year. The event is organized by Zonta, a group of dedicated women working tirelessly to promote the status of women. These women donate many hours of volunteer work to raise funds for scholarships, funds to help battered and abused women through Family Services Alliance and recognize Young Women in Public Affairs, as well as many other projects. The fashion show is their biggest fundraiser of the year. It not only raises money for scholarships, but also features and promotes our local businesses. The fashions presented are all from local shops, as well as the venue and the caterer. It also promotes two of our local fashion designers. Deborah Beaumont has
been a local fashion designer for many years and auditioned for Project Runway and met Tim Gunn. She is a fashion design instructor through Idaho State University Workforce Training and teaches modeling classes. She is also the chairwoman of the fashion show. Cartier Dior is a young designer who appeared on “Project Runway: Junior.” Keep an eye on this very talented young designer. After she graduates from high school, she plans to study fashion in Paris. You could see her designs on the red carpet in the near future. The fashion show is planned as an afternoon tea this year on April 21 from 1 to 3 p.m. at the Rosewood Reception Center at 1499 Bannock Highway. Light refreshments are being catered by The Sand Trap, and a wine and champagne bar will be available. There will be lots of prizes, raffles and a silent auction. There will also be a prize for the best hat and, one of the favorites, a paper doll fashion design contest. Don’t miss the chance to enjoy a great fun afternoon and help raise funds for ISU scholarships.
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4 Mar c h /A p r i l 2018
Id a ho St ate B us i ness J o urna l
Doug Lindley/Idaho State Journal
Tori Shaver and Lorri Shaver own Shaver Pharmacy and Compounding Center in Pocatello. To keep up with changes in compounding regulations, Shaver Pharmacy is undergoing a $400,000 renovation.
big changes T
New regulations, changes to state rules are keeping pharmacies on their toes By Danae Lenz | dlenz@journalnet.com
here are big changes afoot for pharmacies both in Idaho and across the United States. Starting July 1 in Idaho, if you have a short-term illness or something that can be diagnosed via an easy test such as a sinus infection, strep throat or a cold sore, instead of going to the doctor, you can get a prescription straight from your local pharmacist. In addition, if you have something that has been previously diagnosed, such as asthma, you don’t have to return to your doctor for a refill of your prescription. That, too, you can get from a pharmacist. This is all thanks to House Bill 191, which was passed into law by the Idaho Legislature last year.
Marc h /A p ri l 2 01 8
Idaho St ate B u s in e ss J ournal Compounding labs across the country YOU CAN JUST WALK IN are having to deal with and remodel their According to Dr. Jennifer Adams, the associate dean for academic affairs at Idaho businesses to deal with a new regulation State University’s College of Pharmacy, each aimed at pharmacy safety created by the United States Pharmacopeia, which creates year the Idaho Board of Pharmacy goes to the regulations for pharmacies and their the Legislature and asks for certain things employees in the U.S. that pharmacists be allowed to prescribe in One compounding lab in Pocatello is the pharmacy. So pharmacists have been expanding its lab by 800 square feet and able to prescribe independently, for some investing $400,000 to keep up with the things written into state statute, since the regulations and keep compounding. 1990s. For instance, pharmacists have been “It can be overwhelming, but I think the able to prescribe fluoride for several years. first thing you have to do is tell yourself “We have counties in the state of this is what we do, this is who we Idaho that do not have fluoridated are,” said Tori Shaver, the co-owner water,” Adams said, “and so the denof Shaver Pharmacy, located at 235 tal community was concerned and S. Fourth Ave. in Pocatello. “Once wanting patients to have easy access you’ve decided that, then you need to getting fluoride supplements for to commit yourself to doing it right.” their children.” Shaver Pharmacy specializes in Last year, at the urging of the compounding, and when its ownBoard of Pharmacy, the Idaho Legers Tori and his wife, Lorri Shaver, islature decided to greatly expand Adams learned of the standard change, what the state’s pharmacists can called USP <800>, which comes into prescribe. effect in December 2019, they knew they’d “Last legislative session … there were a have to make the upgrade. number of things that were brought for“Compounding is making things from ward from the Board of Pharmacy and the scratch,” Lorri said. pharmacy community to our state LegisIf you compound, essentially you can lature and they passed those,” said Adams, take a drug and put it into any form. who teaches the pharmacy law class at ISU “If you have a child who can’t swallow a and has doctoral degrees in pharmacy and tablet and he’s 2, we might make (the drug) education. “But there were some members into a gummy or a liquid,” Lorri said. “Or of the Senate and the House Health and … it’s really hard to give a cat medication, Welfare committees who said ... ‘Is there so we might make it into a cream … that not a more efficient way of doing this other you can rub inside the cat’s ear and then than each separate thing being brought to you’re not getting bit trying to pill a cat.” the Legislature?’” And women all over the country are So House Bill 191 was passed, allowing using compounded hormones that more for the Board of Pharmacy to determine exactly match their symptoms. for itself in its rule-making process which Shaver Pharmacy already specializes in items pharmacists could prescribe. sterile compounding, which is regulated Still, there are only certain conditions by USP <797>, which has more stringent pharmacists can prescribe for. regulations and the environment is more There are four cases in which pharmacists can prescribe medicine: for something controlled and tested than in general compounding. that doesn’t need to be diagnosed; for Lorri said Shaver Pharmacy is the only something that is minor and will run its pharmacy in Southeast Idaho that is accourse (for instance, a cold sore), which credited to do sterile compounding. is called “self-limiting” in the health care But USP <800> will be even more strict community; for something that has a simand will focus on keeping both the pharple test that can be done by the pharmacist (for instance, a strep test); or in instances of macy employees and the patients safe. “USP <800> moves into recognizing emergency. that these powders that … our employees work with, even though they’re beneficial FEWER REGULATIONS to the patient because that’s what they need, In addition to letting pharmacists precan be hazardous chemicals to the people scribe a lot more medications, the Board of preparing them,” Lorri said. Pharmacy was able to reduce some other According to Pharmacy Times Continuregulations. ing Education, “Hazardous drug exposure “One of the more important things to is an issue of vital importance for pharmahappen at the same time (as House Bill cists and pharmacy technicians. Abundant 191) was a reduction of regulation in the evidence has shown links between hazardrule book,” Adams said. ous drugs and increased risks for cancer, Adams said that reduction has allowed teratogenicity (something that causes birth increased access to health care for Idaho’s defects), and reproductive problems. USP smaller communities. General Chapter <800> provides standards “Really that’s what all of this is about,” for safe handling of hazardous drugs to Adams said. “We want to provide access minimize the risk of exposure to health to patients who would otherwise enter the health care system in another place. It’s fair- care personnel, patients and the environment.” ly expensive to enter the health care system Lorri, who teaches the compounding at urgent care or at an emergency room. If lab at ISU, said USP <800> is supposed you have access through a pharmacy to be able to handle things that are minor or self- to protect the public by making sure their medications are completely sterile, and it is limiting then it’s not as expensive.” intended to protect the pharmacists, who Adams said there is also more room for are routinely exposed to chemicals and innovation thanks to the change in regulasubstances that could be harmful for them, tions. as well. “We now have telepharmacies in the “When I have (my students) make state of Idaho,” Adams said. “We have these capsules, I have them use food coloring broad allowances that have benefited compowder, and I tell them, ‘This food coloring munities.” is your hazardous drug,’” Lorri said. “The According to Wikipedia, “Telepharmacy lab is a mess, covered in rainbows. They is the delivery of pharmaceutical care via telecommunications to patients in locations have powder around their nostrils. They’ve been wearing gloves. It’s gone through two where they may not have direct contact pairs of gloves. It’s all over their clothing. with a pharmacist.” It’s all over the floor. And I say, ‘Now you’re Patients can talk to a pharmacist via going home to your 2-year-old and gonna video conference and get their medications give them a hug with those scrubs that you prescribed locally. just wore.’” Adams said there are communities in USP <800> is there to put regulations in Idaho that haven’t had a pharmacy in more than 40 years but now have a telepharmacy. place to prevent such exposure from happening. “They have access to pharmacy services “This goes beyond pharmacy,” Tori and care that they would have had to drive said. “Pharmacy is just the first step in this a distance to get to before,” Adams said. because it’s the place where most of these drugs are prepared.” NEW COMPOUNDING These drugs, if they aren’t properly STANDARDS prepared and if workers aren’t properly In addition to the changes at the state protected, can expose anyone from delivery level, there are also big changes happening drivers to pharmacists to nurses to houseto pharmacies nationwide.
“Really that’s what all of this is about. We want to provide access to patients who would otherwise enter the health care system in another place. It’s fairly expensive to enter the health care system at urgent care or at an emergency room. If you have access through a pharmacy to be able to handle things that are minor or self-limiting then it’s not as expensive.” — Dr. Jennifer Adams keepers and more. “It’s all of health care,” Lorri said. Some of the changes taking place at Shaver Pharmacy include rearranging much of the building. The compounding lab will move upstairs. The contaminated air from the compounding lab will need to be ventilated immediately outside. Employees will have to wear more protective gear. Hazardous materials will have to be incinerated instead of just washed down the sink. “We’re the Boy Scouts of this,” Tori said. “We believe in doing what is required at the federal level.” Tori said some compounding labs might “roll the dice” and not make the changes to their buildings. But they will likely be fined by the Federal Drug Administration and shut down for exposing their employees to the dangerous substances. Tori said that adding that if some compounders decide to not make the upgrades and get out of compounding altogether, that only benefits Shaver Pharmacy. AMAZON MOVING IN ON THE MARKET? The news of Amazon entering into the pharmacy world was released last year. This has some pharmacy companies feeling anxious, and according to Pharmacy Times, two grocery chains that contain pharmacies, Bi-Lo and Tops Friendly, are preparing to file for bankruptcy. Apparently, Amazon getting into the pharmacy market contributed to the bankruptcies. The article in Pharmacy Times states, “Now that Amazon, with its acquisition of Whole Foods, has entered the brick and mortar arena, some of the older chains are being forced to find new ways to compete if they want to survive.” It is expected that there will be some tension placed on the middle-men: pharmacies. There is a term called the “Amazon Effect” — when Amazon infiltrates markets, brick-and-mortar stores start closing. To offset the “Amazon Effect,” Lorri Shaver says Shaver Pharmacy is specializing in something that can’t be easily done: compounding. And after July 1, Shaver Pharmacy will take advantage of the new Idaho law allowing it to prescribe medications to patients. According to Pharmacy Times, “With Amazon’s growth escalating, from 19 percent in 2014, to 20 percent in 2015, to 28 percent in 2016, jobs are being taken away from traditional retailers. Thousands of jobs are being lost across traditional retail in stores, supply chain positions, and headquarters facilities.” Pharmacy Times reports that 2 million additional jobs in various sectors of the U.S. economy are expected to be lost over the next five years as a result of the “Amazon Effect.” Could some of those lost jobs be in the pharmacy industry? It appears so. OTHER CHANGES TO STATE RULES Dr. Adams said the Idaho Board of Pharmacy has recently strengthened and preserved all of the state’s opioid-prescribing laws. “Opioid abuse is a significant issue across the country and in the state of Idaho, especially in Southeastern Idaho,” Adams said. The Board of Pharmacy last month put out a prescriber report that is sent to
anyone who prescribes opioids. It compares each physician’s prescribing habits to other doctors in their same field and shows if they are an outlier or not. According to Adams, when Arizona implemented this process, it saw a 10 percent reduction in the amount of opioids being prescribed. “We want to make sure patients have access to pain medication when they need it but that we’re not over-prescribing and ending up with more opioids out there in the community that could potentially be used,” Adams said. Patients can also get a partial prescription for opioids now if they only want a couple days’ worth of pills, so they don’t have leftovers in the house. “If you don’t need it, you don’t have it, and you don’t have it in your home,” Adams said. ‘HUGE SHIFT IN HEALTH CARE’ Adams said health care professionals, namely doctors and pharmacists, can work really well together, and the new Idaho law is a great way to collaborate. “When it comes to how we train health care professionals, the roles go hand in hand,” Adams said. “With a physician, they diagnose and they say what’s going on with their patients, and they have a lot of education on how to do that. Pharmacists get a little (of that type of education) but not a lot. And then on the physician side, they get some education about treatments and about what’s most appropriate, and pharmacists get a lot. It’s a collaboration, and we can work really well together.” Lorri Shaver also commented on how collaboration with doctors can help patients. Instead of going to five different doctors who each prescribe different things, some of which could be conflicting and unhelpful, starting July 1 you will be able to get everything you need from one pharmacist. “A pharmacist … can look at all of that information, sit down with the patient and say, ‘This is kind of a duplicate therapy,’” Lorri said. And then they can help the patient get on a better medication regimen. Adams said this should help with Idaho’s primary care physician shortage, adding that Idaho is a very dismal 49th out of 50 states as far as doctors per capita. “It just allows another access point for people in our state to get access to services,” Adams said about pharmacists being able to prescribe. Lorri said the state Board of Pharmacy is making Idaho a great state to practice pharmacy. “(They are) making Idaho one of the best states in terms of pharmacists’ ability to practice,” she said. “And safety for the public.” Lorri also touched on the changes coming from the Idaho Legislature and House Bill 191. “It’s a huge shift in health care right now,” Lorri said. Tori Shaver said that despite the stress of all the changes in the pharmacy world, he’s looking forward to the future. “With the stress that we have because of these changes and what we’re trying to do, I would be under more stress if we were sitting here doing nothing,” Tori said. “Because I know the outcome.” In response, Lorri said, “We would be a dinosaur.”
6 Mar c h/A p r i l 2018
Id a ho St ate B us i ness J o urna l
HEALTH CARE LEADERSHIP ISU to offer Master of Healthcare Administration degree starting this fall By Danae Lenz dlenz@journalnet.com
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ooking to take the next step in health care leadership? Idaho State University will be offering a Master of Healthcare Administration degree starting this fall, and it’s designed to fit with your schedule, wherever you may be across the state. “It’s fantastic news,” said Tracy Farnsworth, president of Idaho College of Osteopathic medicine and associate dean for ISU’s College of Business. “We’ve been thinking and talking about this for many years, and we finally have the leadership, resources and support from the industry to do it.” This MHA degree is the first of its kind in Idaho. According to a press release by ISU, “With the introduction of an Idaho-based MHA degree, aspiring health care leaders will now have the opportunity to pursue graduate healthcare management education locally. In the past, aspiring MHA students were required to pursue fully online or out-of-state programs.” “Idaho does not have an MHA degree of its own,” Farnsworth said. “Nobody in the state of Idaho offers the MHA degree — until now.” Farnsworth said that this degree is intended to prepare its students for the business side of the health care industry. “We’re all familiar with what doctors and nurses and pharmacists and therapists do,” Farnsworth said. “But behind the clinicians there is an army of administrators in hospitals, physician clinics, long-term care organizations, consulting and so forth that direct the business
side of the health care universe. So in the Master of Healthcare Administration degree, we teach students about health care accounting, finance, health care planning and marketing, health care operations and quality. We teach them about leadership and government and health care policy.” The degree is part of the College of Business and will be a non-cohort model, meaning people can start whenever they want. The opening class will be comprised of about a dozen students. If you want to be one of those dozen students, the College of Business is accepting applications now. The program is set up to make it as easy as possible for students — especially students who are already full-time professionals — to take classes. About half of the classes will be taught at night and will be offered at the Pocatello, Meridian and Idaho Falls campuses in person and through distance-learning technology. About one-third of the classes will be offered online. As to why someone might want to enroll in the program, Farnsworth said this in a press release from ISU: “The MHA is the preferred degree for health care administration professionals. The MHA greatly enhances one’s professional preparation, opportunities and earning potential for both entry-level and mid-careerists in the health care field. The MHA curriculum is focused on the administrative and business domains of health care, including leadership and governance, planning and marketing, accounting and finance, operations and quality, health care informatics, and so forth.” The ultimate goal for these students would be to lead health care organizations.
“Students would pursue this degree so that they can gain the body of knowledge and expertise needed to lead health care organizations,” Farnsworth said. “... They’ll pursue this MHA degree so that a) they can good a good entry-level job in the health care field, and b) so they can improve their prospects for employment and promotion and better employment and better pay. The MHA is the preferred degree for health care leadership in the health care professions.” The MHA is a 48-credit hour master’s degree, and eventually it will be accredited by the Commission on the Accreditation of Healthcare Management Education. “It’s a very robust degree,” Farnsworth said. “... We’ve designed the program to meet (CAHME’s) very rigorous criteria.” ISU has offered an undergraduate degree in health care administration for more than 40 years, and Farnsworth said the university felt it was the right time to introduce the MHA degree. “We’re now in the position where it’s time to introduce the graduate degree,” Farnsworth said. “We have the faculty and the staff. There’s public interest, student interest. So all these things combined cause us to feel that now is the right time.” Farnsworth said the university has already had lots of interest in the program. “We have dozens of students and professionals that have either called us or written us or indicated in one way or another that they are actively interested in the program,” Farnsworth said. According to Farnsworth, this is the perfect degree for mid-career professionals, in addition to recent undergraduates. “The drawing card will be that they feel like they need a graduate health care management degree to get a promotion,”
Farnsworth said. “They might be a nurse or a pharmacist or a physical therapist or a doctor or a public health official, an association leader, and feel like the graduate degree will improve their performance on the job and increase the prospects for promotion and improved employment.” In addition, ISU will offer dual Master of Healthcare Administration/Master of Business Administration degree as well as a Doctor of Osteopathic Medicine/Master of Healthcare Administration degree. According to the press release, “Nationally and locally, opportunities in the health professions, including health care administration, are on the rise. According to the Bureau of Labor Statistics, the field of health care management is projected to grow 17 percent from 2014 to 2024. The Bureau of Labor Statistics also reflects an average salary of $72,800 among Idaho’s entry to mid-level medical managers.” According to a pamphlet from ISU, the MHA degree is projected to cost students about $12,000. Farnsworth has big plans for the program. “Our vision is to create one of the most highly regarded MHA programs in the western United States,” Farnsworth said in the press release. “The program has been designed to meet or exceed all accreditation standards of the Commission on the Accreditation of Healthcare Management Education, which represents the highest and most distinguished standard for graduate health care management education” Students may apply for the MHA program at isu.edu/apply or request more information at isu.edu/mha.
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Id a ho St ate B us i ness J o urna l
INTO THE FRAY If you’re interested in being a landlord, now might be a great time to start buying properties By Danae Lenz dlenz@journalnet.com
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f you’ve been considering buying some property and becoming a landlord, now might just be the perfect time to take the plunge. According to the an article by Pew Research Center, the amount of households in the U.S. that are renting their homes is an a 50-year high. “The number of households renting their home … rose from 31.2% of households in 2006 to 36.6% in 2016,” the article states. “The current renting level exceeds the recent high of 36.2% set in 1986 and 1988 and approaches the rate of 37.0% in 1965.” The Joint Center for Housing Studies at Harvard University released a report that said the percentage of homeowner households has been on the decline for a while. “Although the number of homeowner households grew by 280,000 in 2016, the homeownership rate fell to 63.4 percent, marking the 12th consecutive year of declines,” the report states. Sarnen Steinbarth, the founder and CEO of TurboTenant, said that for the reasons stated above and more that now is a great time to consider being a landlord. “The rental industry is growing very rapidly,” said Steinbarth, who has been in real estate since he was 18 years old and at one point had a property management company and has managed more than 1,000 tenants. “… You have the United States population growing and you also have net positive immigration. But really the crux of it is you have the largest generation in U.S. history, the Millennials, coming to this age of graduating college, having student loans. It’s harder to get a home purchased. So you have a huge population base that is at the prime rental age. And they are renting longer.” The other population that is renting a lot are the Baby Boomers. “Less and less Baby Boomers are moving back in with their children like they might have 20 or 30 years ago,” Steinbarth said. “They are also opting to rent, oftentimes.” Steinbarth’s company, TurboTenant, is a service based out of Fort Collins, Colorado, that takes some of the hard work out of being a landlord. The company provides free tools for landlords to use, including rental marketing, rental applications, tenant screenings and renters’ insurance. TurboTenant makes its revenue from tenant application fees instead of charging landlords to use its service. When Steinbarth was running his own property management
likely to rent than othcompany, he was paying ers, and rental rates $300 to $400 for software have increased among to help manage his propthese groups over the erties. past decade,” the article “More rental units are stated. “However, rental owned by the little landrates have also increased lord as opposed to the big among some groups that landlord,” Steinbarth said. And paying hundreds STEINBARTH have traditionally been less likely to rent, includof dollars for software isn’t ing whites and middlevery feasible when you’re aged adults.” just one guy managing Idaho, especially, might properties. be a good place to be a “Like many companies, landlord. it was founded out of a According to the U.S. need,” Steinbarth said. Census Bureau, Idaho is Using TurboTenant can the fastest-growing state save a lot of the headaches in the nation. that go along with renting. JOHNSTON The state’s population Tenants can apply for increased 2.2 percent rentals and pay their rent to 1.7 million from July online. Landlords can get background checks on applicants. 1, 2016, to July 1, 2017. The other top states were Nevada, Landlords can post their open Utah, Washington, Florida and rentals all over the web with a Arizona. single click. They never have to Greg Johnston manages 65 deal with messy handwriting or rental properties in Pocatello missing information. They never and Chubbuck under the have to wait for an application to umbrella of Johnston Property come through the mail. Management and he works as “When was the last time you a realtor for Keller Williams filled out a paper form to book Realty. He has been working in a hotel room or book a rental the industry for 19 years, and car? … Yet it is still the norm in the United States to fill out paper he says that now is a great time to get into buying real estate in applications for rentals,” SteinPocatello. barth said. “… Now more than Pocatello, especially, is a great ever, that’s going away very, very place to be a landlord. There are rapidly.” low vacancies and the market is Since its founding in January 2016, TurboTenant has grown to consistent. “It really is a great time to be have 90,000 landlords and more a real estate investor,” Johnston than 500,000 renters using its said. “In my experience, we service, and Steinbarth expects that number to continue to grow have very low vacancy rates and with the way the housing market a very high demand for rental properties. ... Pocatello tradiis right now. tionally has had low vacancy Steinbarth also thinks part of the reason for the rental boom is rates. Part of it is because we have Idaho State University. A because renting, especially longlot of students fill up a lot of term, isn’t as frowned upon now these apartments. And some as it has been in the past. of our larger employers pay a “Renting has really been destigmatized in society,” Steinbarth good wage but maybe not high enough that people are buying said. “It is certainly more ac(houses).” ceptable to rent for maybe your Also, the rental rates in Powhole life. In fact, luxury rentals catello are fairly low, which is are fastest growing categories. So you have the confluence of all attractive to renters. “If you compare what we pay in these factors and the net effect of rent to places in Utah or the Boise that is that the rental market is area, our rental rates are low,” growing faster than ever.” Johnston said. “So people will say, Steinbarth thinks it’s a good ‘Boy, I’ll just rent a house. Look time to be a landlord. how inexpensive it is.” “You have the net effect of a Johnston also sees quite a few lot more rentals, so there’s really people from outside Pocatello high demand,” Steinbarth said. who see the low real estate costs “There’s not a risk of this being and want to buy up property in outsourced. There’s not a risk the Gate City. of the need for housing going “A lot of people from outside anywhere, and you have a lot of Pocatello are attracted to buy more people getting into it. You rental properties here because combine that with this wave they see our low real estate of technology boom, and you prices compared to their town have tools like TurboTenant that and that we have a very stable make it easier than ever to be a economy and they want to invest landlord.” here,” Johnston said. According to that Pew ReJohnston said that people on search article, rental rates have the fence about being a landlord risen in all demographics. should keep in mind that there “Certain demographic groups are four ways you’re making — such as young adults, nonmoney as a landlord. whites and the lesser educated “You should generate some — have historically been more
monthly cash flow with your tenant. You have the mortgage being paid down every month by your tenant. The property should be going up in value. Plus there’s tax advantages because (there’s) so many things you can deduct,” Johnston said. “So you have four ways that you’re making money on a rental property.” With all those ways of making money, even if you’re only making $100 directly from your tenant, you actually are making several hundred dollars more than that. Also, if you don’t want to directly manage the property yourself, you can get a property manager, who usually only takes 7 to 10 percent of the collected rent. Johnston said there are a lot of reasons why, maybe, people aren’t buying houses right now. “Ten years ago, it was a lot easier to purchase a home and now it’s not as easy,” Johnston said.
“You have to have higher credit scores, a little bit more money in the bank. … It was very easy to purchase a home, and then things tightened up when the economy was bad seven to 10 years ago.” Johnston said a lot of people don’t necessarily want to buy a house right away when they move to a new city. And Millennials also might not be as interested in buying homes because they want to be free to move. Johnston said real estate is one of the best investments. “Overall, it’s one of the best investments you can find for stability and income,” Johnston said. If you have questions about real estate investing in the Pocatello/Chubbuck area, you can contact Greg Johnston, or his father Jim Johnston, at Keller Williams Realty in Pocatello at 208-232-9041.
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Idaho St ate B u s in e ss J ournal
Social engineering: a risk you can’t ignore
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ocial engineering attacks are on the rise, accounting for 43 percent of data breaches that were reported/documented in 2016. This risk is not unique to large businesses — in fact, more than half of the data breach victims (61 percent) were businesses with fewer than 1,000 employees. Adam Frugoli
What is social engineering? Social engineering is the “use of deception to manipulate individuals into divulging confidential or personal information that may be used for fraudulent purposes.” A hacker who is attempting social engineering might use email, postal mail, phone or direct contact to gain illegal access to your computer system, convince you to give away sensitive information, or gain access to crucial company data. Social engineering is particularly dangerous because it takes advantage of human error rather than weaknesses in software and operating systems. Examples of social engineering include the following: Phishing: Emails, phone calls or text messages from someone posing as a legitimate organization with the goal of convincing individuals to provide sensitive information. Pretexting: This is a scam where the perpetrator will create a fabricated scenario to build trust in order to convince their victim to willingly hand over sensitive information. Baiting: This is similar to phishing, but the baiter will offer an item or good to entice the victim to provide certain information. Quid pro quo: These attacks promise a benefit in exchange for information. The difference between this and baiting is that baiting promises something in the form of a good, whereas quid pro quo promises a service. Tailgating: This type of risk is different from other types of social engineering as it involves the perpetrator actually physically entering your business. It is one of the most common and innocent-appearing security breaches. Tailgating occurs when someone who lacks proper authority follows an employee into a restricted area of the company.
Wire fraud through social engineering Wire fraud is one of the crimes that is committed through social engineering. This can occur when a criminal deceives employees to wire money to pay phony vendors. This is not your typical “foreign prince” type of email that screams fraud. These type of sophisticated events occur when a criminal gains access to an email account belonging to someone in the business who has access to company finances. The criminal will silently monitor emails waiting for an opportunity when financials are being discussed. The following real-life scenario illustrates how easily this crime can occur: A 20-employee manufacturing facility in a small rural town was nearly the victim of a social engineering scheme. This company has vendors and clients internationally and uses a third-party foreign exchange service for large transactions. A hacker was able to infiltrate the email of the manufacturer’s chief of sales and discovered this relationship with the foreign exchange service. Acting as the chief of sales, the hacker started a conversation with the account manager of the exchange service and attempted to initiate a transfer to a “new vendor” (presumably himself and his associates). Following their established protocol, the account manager at the exchange service mentioned that he would call later that day for voice verification. The perpetrator then gave the account manager a “new mobile number” because he was “on the road.” The account manager called that number, talked with the perpetrator posing as the chief of sales and verified the transaction. Luckily for the manufacturer, the account manager still felt like something wasn’t right and decided to call the manufacturer directly. At this point, the jig was up, and no transfer was initiated. Upon further investigation, the perpetrator had set up email “rules” so that all of the conversation with the account manager at the exchange service was automatically sent to the “trash.” The chief of sales had been using his email at the same time as a hacker and had no idea. If it were not for two-factor verification on the part of the foreign exchange service, this small-town manufacturer would have lost tens of thousands of dollars. The manufacturer has since set up two-factor
authentication on all email accounts to hopefully prevent something like this from happening again. Insurance coverage for social engineering risks Because of the nature of social engineering, cyber and crime insurance policies do not generally cover losses that result from this risk. To have coverage, businesses need to have a “social engineering fraud coverage extension” added to their crime policy. When considering this type of coverage, it is important to thoroughly review the policy language to make sure you understand what is covered and what is not. Take time to talk with your insurance agent to discuss this policy to make sure you have the coverage you need to protect your business. Social engineering coverage extensions vary among insurance companies. Options to look for include coverage for the following: n Vendor or supplier impersonation n Executive impersonation n Client impersonation n Losses beyond use of computer, email, or phone Mitigating risk While it is difficult to completely prevent the risk of fraud by social engineering, there are steps you can take to protect your business. Social engineering tactics are constantly evolving and becoming more sophisticated, so it is important to stay informed and be aware of current techniques. Here are a few tips to help protect your business. n Develop specific protocols including dual control, separation of duties, and twostep verification for activities that involve access to sensitive information or company finances. Enforce these guidelines, and regularly educate employees on new or continuing risks. n Be on the lookout for red flags, such as requests to change account numbers, expedited requests, or requests for unusual amounts. n Limit information that is shared publicly. For example, if you are out of the office and not checking emails, do not broadcast this on social media. Be careful what information is shared publicly about specific job duties. Job descriptions that are publicly available should be reviewed to ensure no sensitive information is
included. n Be aware of red flags in emails, such as the following: Email sent at an unusual time, such as 3 a.m. Subject line that is irrelevant or doesn’t match the message content. Attachment included that you were not expecting or that doesn’t match the message content. Bad grammar or spelling errors in email subject line or message content. Misspelling in hyperlink. Emails that only have long hyperlinks with no further information in the message body. n Regularly update your antivirus / antimalware software. n Be suspicious of tempting offers — if it sounds too good to be true, it could likely be an attempt at social engineering fraud. It is important to remember that social engineers are able to carry out their schemes by manipulating human feelings, such as curiosity or fear. If you feel alarmed by an email or a request, trust your gut. Paying attention and being alert can help protect against many social engineering attacks. Adam Frugoli is a vice president and broker at The Leavitt Group in Idaho Falls. He consults with complex businesses and executive risk mitigation nationally and can be reached at adam-frugoli@leavitt.com. References: http://resources.infosecinstitute.com/ common-social-engineering-attacks/#gref http://www.riskmanagementmonitor. com/beware-of-coverage-gaps/ http://www.rmmagazine. com/2016/02/01/6-tips-to-reduce-the-riskof-social-engineering-fraud/ http://www.verizonenterprise.com/ verizon-insights-lab/dbir/2017/ https://www.incapsula.com/web-application-security/social-engineering-attack. html https://www.social-engineer.com/2017verizon-dbir-social-engineering-breakdown/ https://www.tripwire.com/state-of-security/security-awareness/5-social-engineering-attacks-to-watch-out-for/ https://www.webroot.com/us/en/home/ resources/tips/online-shopping-banking/ secure-what-is-social-engineering
10 Mar c h /A p r i l 2018
Id a ho St ate B us i ness J o urna l
Farmer, miller, baker:
In search of local bread in the 21st Century
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hough it’s now hard to But the 21st century has seen imagine, 23,000 grain mills a movement to revive not only once dotted the landscape high-quality, hand-made artisanal of this country. The mills served breads, but also local grain econoas hubs for local grain economies mies that feature locally grown in which farmers grew wheat to wheat, milled on a smaller scale, be milled nearby for use in local using mills that keep the entire bakeries, which in turn made grain together throughout the bread for their communities. This Matt Sanger process. The milled wheat is then meant that wheat was grown (and used by local bakers. Such an apmilled and baked) all over the proach represents an idyllic vision country — on a relatively small of farm-to-table food production scale. — and one that also creates a number of With the industrialization of our grain substantial challenges for farmers, milleconomy, the number of mills dropped ers and bakers. to around a couple hundred by the late For farmers, the challenges include 20th century, and locally baked bread finding wheat varieties that grow well was largely replaced with industrial stuff. and re-learning how to effectively grow As a result of that industrialization, we wheat in places where it hasn’t been have gained a great deal of efficiency and grown much for decades. This is paroutput, with wheat varieties being bred ticularly true for farmers who don’t live for yield, disease resistance, and ease of in climates amenable to modern wheat milling in industrial conditions. Large varieties, bred to thrive in a narrow mills process grain by splitting it into range of controlled environments. For its constituent parts, the most valuable millers, the biggest challenge is working of which is the white endosperm that with farmers to take what they grow and makes our white flour. The more nutriproducing flours that provide consistious and flavorful parts of the grain tently good baking quality (because often go to feed livestock. In this prothey are unable to blend wheat from cess, “whole wheat flour” is a product in across a wide range of wheat producwhich those separated parts are (mostly) ers to achieve that consistency). Bakers recombined. in local grain economies must have the Where does your bread come from? skills to take flours that are more difficult The supermarket, of course! to work with, and less consistent from
crop to crop, and still make appealing breads for their customers. Despite these challenges, this is one of the most noticeable trends in the artisanal baking world, where some bakeries mill at least a portion of their flours themselves and some even contract with local farmers for single-source supplies of particular varieties. What does that have to do with us here in Southeast Idaho? Well, even though we do not have widely renowned artisan bakeries like Tartine of San Francisco, we do grow a lot of wheat around here (and it grows well). What’s more, down the road in Logan, Utah, Central Milling is one of the leading millers of organic artisan baking flours in the country (and also happens to be the longest continuously operating business in the state of Utah). This is not exactly a mom-andpop stone mill grinding only local grains, but they do purchase the majority of the organic wheat produced in this region and blend it with wheat from other regions to produce highly prized baking flours. Happily, Pocatello now has a local baker who uses those flours to bake bread for this community. Round River Baking got its name by embracing the ideals of the new local grain economies. It refers to a mythical round river that forms a circle in which everything that
goes into it comes back around (see “Former ISU Professor Pursues Dream of Baking Bread, Idaho State Business Journal, November 28, 2017). Following these ideals, the bakery is also working to make use of its own small mill (made in McCammon) to grind grains from local farmers for its baked goods in the future. So how does one partake of this local bread and participate in this aspirational version of a local grain economy? The Pocatello Co-op’s mission is to support local food production, and it provides a variety of local foods for its customers. Vegetables from Bowman Farms, meat and dairy products from Stanger Ranch, dairy products from Clover Leaf, and coffees roasted locally by Bill’s Beans, Leapknot and Steve and Harry’s are just some of what you will find on the Co-op’s shelves. And on Tuesdays and Fridays from 5 to 7 p.m., you will find tables loaded with trays of freshly baked, local bread from Round River Baking (for more information and updated schedules, go to roundriverbaking.com). The Co-op invites you to come in to shop and eat locally, six days a week, at 308 E. Center St. in downtown Pocatello. Matt Sanger is the proprietor of Round River Baking and a board member of the Pocatello Co-op. He can be reached at roundriverbaking@gmail.com.
Join us in honoring 20 young professionals 20 Under 40 event set for April 6 By Journal staff Welcome to the 2018 Idaho State Business Journal’s 20 Under 40 event. Along with Idaho Power, we are proud to bring you this signature event that will be unlike any other event hosted in Southeast Idaho. Our community is filled with many young professionals who are doing great work each and every day, and although they may be known within their own work and social circles, we feel the whole community ought to know the good work they are doing. Hard-working young professionals are key to a vibrant community and the thriving region. This age group is busy establishing a career, building a family and doing great things in our community. There are many individuals in this group who go above and beyond the necessary day-to-day tasks to better themselves, their businesses and the community. So we created this event for them, the young professionals who contribute to the success and growth in our community through business. We want to bring attention to their work. Join us April 6 at the Stephens Performing Arts Center in Pocatello for our Black Tie event beginning at 6 p.m. with social hour. Walk down the red carpet, enjoy dinner while DJ
Submitted photo
The Stephens Performing Arts Center in Pocatello will play host to the 2018 Idaho State Business Journal’s 20 Under 40 event.
Adrian spins music. Don’t forget to get your glass of champagne swirled through our 20 Under 40 ice sculpture and snap a picture in front of the selfie wall. Social hour will be followed by our awards ceremony, where we will award 20 individuals under 40 for all of their accomplishments. The awards ceremony will be followed by our Casino Royale. Poker chips will be given to all attendees and the gambling will begin. The person who has the most chips at the end of the night will receive
a Grand Prize. It will be a night of great entertainment and fun, don’t miss out. The 2018 nominees are: Benjamin Hirschi
Blaire Zikratch Brittney Duffin Cassandra Hunter Cassey Leatham Christian Robinson
Clarissa Alexander Daniel Russo David Gorham Dustin Manwaring Elizabeth Merzlock Gustin Blad Heidi Buck Morrison Jace katseanes Jamie Anthony Joshua Swift Kaitlin Loukides Kellee Kirkpatrick Kevin Jordan Kolby Cain Lisa Adams Maxwell Daniels Natalie Thomas Paul Romriell Ric Boyce Russell Davies Ryanne Benao Shantay Bloxham Spencer Gilbert Stephanie Welker Stratton Laggis
Marc h /A p ri l 2 01 8 1 1
Idaho St ate B u s in e ss J ournal
9 inspired ways to save money while building your business By Mountain America Credit Union It’s extremely difficult for small businesses to survive the long haul. Business owners need to find that magical place between providing customers with what they need in a simple and knowledgeable way while making smart money decisions. Not living up to this last point is a reason many businesses fail. What’s the solution? Start by finding ways to save money. Many small business owners reject certain money-saving opportunities because they think they don’t make enough of a difference. But any money you save is a mark in the plus column — and it all adds up. Here are nine resourceful ways to start saving money: 1. Partnership advertising: Marketing is an expensive necessity. How are you going to get the word out without spending money? A new small business may not have the contacts (mailing list, social following, built-in customer base) to see an immediate return. That means you’ll need to spend quite a bit of money first. Partnering with another business may be a great choice. Find a company that you have something in common with — either through close proximity or complimentary products or services — and pitch the idea of advertising together. Not only can you share the cost, but perhaps you can share each other’s contact lists as well. Essentially, you could double your customer base with one campaign. 2. Use website templates: Instead of
spending thousands for a custom website, use a website builder. Platforms like Wix, Squarespace or Shopify are easy to use, have all the bells and whistles a new business needs and can help you create something beautiful and functional without a lot of technical experience. 3. Sign up to speak at industry conferences: Conferences and events are always looking for speakers. Pick a few and reach out with your pitch. Your industry expertise or experience as a small business entrepreneur can help others while giving you free brand and business exposure. 4. Find alternative office space: For non-retail businesses, the evolution of technology probably allows you to do a lot of your work remotely. If you have the space to work from home, save on rent while getting a tax write-off, too. 5. Buy gently used office equipment: Monitors, furniture, printers — all this and more can be purchased in the secondary market. Just because it’s used doesn’t mean it has to look bad, and it doesn’t have to be forever, either. When your bank account is a little fatter, start upgrading. 6. Consider outsourcing: Onboarding, training and benefits for full-time employees really adds up. Using freelancers and independent contractors who are already experts means you’ll only get charged for the work they do — no need to pay for downtime. Once your business becomes steadier, start building a permanent staff. 7. In-kind exchanges: Approach
“Start by finding ways to save money. Many small business owners reject certain moneysaving opportunities because they think they don’t make enough of a difference. But any money you save is a mark in the plus column — and it all adds up.” businesses that provide the products or services you need and see if they will trade those for your services or products. It’s the oldest form of business and it still stands up to the world of today. It won’t always work, but when it does, it’s a significant savings. 8. Leverage the power of social media: Ads, reviews, testimonials — all necessary for the growth of your business. Social media spreads the word to a more targeted audience at a much lower price than traditional advertising. If you’re not in the know on social media, hire someone who is or get trained yourself. It’s definitely worth the savings. 9. Use open-source software: Instead of purchasing software licenses (potentially costing thousands of dollars), research open source versions that may work for your business. You may not get
every bell or whistle, but many businesses only need the basics to start. Database management, word processing, accounting and design software options can be found across the web. Using this type of program is not only cheaper, it also gives you an opportunity to decide what you like (and need) to better evaluate your future purchases. Mountain America Credit Union provides a full slate of business services to its members including credit card and payroll processing, remote deposit and online electronic transactions. Our Business Services department has professionals available to consult with on business growth and efficiencies as well as online banking solutions. We have branch locations in Utah, Idaho, Nevada, Arizona and New Mexico as well as a network of community branches across the country.
12 Mar c h /a p r i l 2 018
Ida ho St ate B us i ness J o urna l
REAL ESTATE DEmAnD In EAST IDAHo PuTTIng A CRunCH on THE InDuSTRy
JOhN rOarK/POST regISTer
Mel hill nails up hangers for floor supports on a home under construction in Idaho Falls on Feb. 22. homebuilders are having a hard time keeping up with a booming real estate market.
bY mARc bAshAm Post register
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t’s no secret that the economy in Idaho Falls, and eastern Idaho in general, has been on the upswing in recent years, with population growth and employment reaching high levels. With new businesses opening in the area on a weekly basis, and an unemployment rate among the lowest in the nation for a city of Idaho Falls’ size, the influx of new residents has provided area officials with a bit of a conundrum. Where will they live? The local real estate market is seeing a crunch, with the demand for housing outpacing developers’ abilities to keep up. This is resulting in higher costs for developers and customers alike. And, according to many in the local housing industry, there is no sign of this growth slowing down. deVelOpIng dReAms And Issues After more than a decade of work in the medical billing industry, Katie Davenport decided to take a leap of faith and focus her time and energy into real estate investment. An Idaho Falls native, Davenport recognized the growth of her hometown in such a short span, and in October she felt the timing was right to make a career change and focus attention on the rising real estate market. “About two years ago I bought my first rental property knowing I was probably going to be getting out of medical billing, and that’s exactly what happened,” Davenport said. “I preferred more passive means of income, compared to what I was doing, but it was time.” Davenport, along with her husband, David, currently own seven rental properties in the area, with hopes of expanding to 10 properties by April. “We’re just having to play the game and keep watch on new listings,” she said. Davenport, however, quickly discovered that entering the real estate market at this time was no easy task. “I had really terrible timing,” she said. “I wish I would have started a year ago.” That is the sentiment of many looking to break into the local market. Over the past year, real estate prices have increased upward of $20,000 on an undeveloped lot in the
region, according to Jake Roberts, owner of Vantage Point Homes in Idaho Falls. “From what I’ve been told, costs are going to be even (higher) this year,” Roberts said. “Before, I would buy lots in bulk, from six to eight (lots) to try and get a discount. Now, I’m having to buy as I need them and where I need them.” The rise in real estate prices is a simple result of supply and demand. And the demand has been greater than many developers can manage. In 2018, more than 30 applications have been submitted to the Idaho Falls building department for new residential construction, and those in the industry are expecting more to come. Brett Magleby, president of the Greater Idaho Falls Association of Realtors, said the area’s housing prices have risen 7 to 9 percent in the past year, and inventory remains at an all-time low with most houses lasting just a few days on the market. “At the end of January we had 231 homes actively on the market, and a year ago we had 267,” he said. “That’s a 13 percent drop in inventory in one year. And if we even go back seven years to 2011, there were 830 homes on the market here at the same point in time. That’s 72 percent lower inventory on the active market than we had seven years ago.” Magleby said a four- to five-month supply of homes for sale signifies a healthy market. At present the Idaho Falls market has a threeto four-month supply. When the supply is out of balance — either too many homes for sale or not enough — it affects prices. Between Aug. 23, 2017, and Feb. 23 there was less than a month’s supply of homes between $100,000 and $200,000 in Bonneville County, according to numbers supplied by Magleby. cOntRActIng heAdAches In 2017, the median price for single family homes and condos sold in Bonneville County was $178,000, that’s $44,000 higher than what it was in 2011. There were 2,036 homes and condos sold last year compared to 1,019 in 2011, according to the Snake River Multiple Listing Service. Randy Hill has operated R. Hill Construction out of Idaho Falls since 1984. With only a few employees on the payroll, this small operation builds just a few houses a year, but it’s allowed Hill the opportunity to make a comfortable life.
JOhN rOarK/POST regISTer
David and Katie Davenport pose for a photo Feb. 22. The couple have been purchasing homes for rental properties in the Idaho Falls area since October.
“We’ve been pretty fortunate here and there,” Hill said. But the region’s real estate crunch has provided new headaches for Hill’s small operation. And it is not necessarily due to the rising real estate costs, but to the lack of employees to help with the increased work. “We’ve been having trouble finding skilled laborers, so we’ve just hired laborers and have been trying to teach them,” he said. “It’s just not like it used to be when you could get as many guys as you wanted, and that’s the biggest thing.” An unemployment rate of only 2.3 percent has been a blessing and curse for the construction industry in Idaho Falls. While residents have seen a steady increase in employment opportunities, industries such as home building have seen a higher demand for more skilled workers to help through the recent construction boom. “We’ve been fortunate to find a few people to help us out,” Hill said. “But still, it’s taking a little longer to get your jobs done.” Vantage Point’s Roberts has noticed a similar trend. “It’s been a fight, for sure,” he said. “Three or four years ago I would tell people on a 1,800-square-foot home that it would take six months to build. Now I’m having to tell them it will take eight to nine months to build, just to cover myself.” Roberts estimates his company’s production schedule has slowed by a third in the past
year, due to both added demand for housing and lack of employees vying for positions. And Roberts is not anticipating the market to slow down anytime soon. “I think the number’s are really going to pick up in the next 10 years,” he said. pushIng FOR ImpROVement Local officials are enthusiastic about the region’s real estate boom, but they are trying to anticipate the consequences of such an influx. Ammon Mayor Sean Colettiwelcomes the boom, but has some concerns. Coletti, who was sworn into office in January, noted that a 9.8 percent population growth since the 2010 census has put additional strain on Ammon’s infrastructure, with the roads being a particular concern. These will be issues that he hopes to address in the coming year. “It’s certainly been a challenge to our infrastructure, but our growth seems to be at a good, healthy pace,” Coletti said. But further expansion raises question. How much growth is too much at such a fast pace? “In 2006, even Rockwell Homes was building upward of 400 homes a year,” Magleby said. “Now, they’re only going to build around 150 this year. And it’s not because of demand, but they can’t get the subdivisions (approved) or the area to do. “We’re a little bit nervous with the market,” Magleby said. “Because prices are still at an all-time high.”
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14 Mar c h/A p r i l 2018
Ida ho St ate B us i ness J o urna l
Despite rough start, Treasure Valley wine has bright notes moving forward By NICOLE FOY Idaho Press-Tribune
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espite a disappointing 2017 harvest season, southwestern Idaho growers and vineyard owners are optimistic about the surviving vintage and coming growing year. Many Treasure Valley vineyards are still recovering from last year’s historically low harvest following harsh winter weather in early 2017. Nearly every vineyard in Idaho’s Snake River Valley wine region, which includes southwestern Idaho and two counties in eastern Oregon, was damaged by the extreme cold and snow. Approximately 1,100 of Idaho’s 1,300 total acres of vineyards are in the Snake River Valley. Yet this year’s mild winter has local winemakers and vineyard owners confident the worst is over, and the effect on Idaho wine prices will be minimal. Many who attended the Idaho Wine Commission’s annual meeting in mid-February said they were encouraged by what the wine community was able to produce with the short supply. “I thought that the wines were showing pretty well for the limited harvest, so that’s exciting,” said Stephanie Hodge, co-owner of the Parma Ridge Winery. Mike Williamson, a commissioner at the Idaho Wine Commission, said he was particularly impressed with the quality displayed at the meeting’s 2017 vintage tasting, where members of the commission show and taste the unfinished wines of the most recent vintage. Based on the tasting, Williamson said it seemed like the chardonnay, riesling, cabernet franc and petit verdot grapes survived well, while the Idaho syrah and cabernet suffered more widespread injuries. “It’s good to see which ones make it in hard years like this,” said Williamson, who also operates Williamson Orchards and Vineyards in Caldwell. “These wines are going to be really nice, I think.” SLOW BUT SURE RECOVERY Hodge, who owns and operates Parma Ridge Winery with her husband, Storm, said they harvested less than a ton of white wine grapes from their 9.5-acre Parma vineyard. The Hodges, who purchased the vineyard in 2015,
had to replant all of their red wine grapes later in 2017. “Idaho wine” labels were another casualty of the winter weather. In order for wineries to be labelled “Idaho wine,” 75 percent of the grapes must come from Idaho vineyards. To be labelled Snake River Valley wine, 85 percent of the grapes must come from growers in that area. Some winemakers had to turn to Washington grapes to fill out the 2017 vintage, while others tapped into the remainder of their 2016 bumper harvest. Melanie Krause, winemaker at Cinder Wines in Garden City, usually sources exclusively from the Snake River Valley. This year, only about a third of her 2017 vintages will bear Snake River Valley labels, while the rest used some Washington grapes. “The 2017 vintage did make good wine, even though there wasn’t enough of it from the Snake River Valley,” Krause said. “We have really high-quality Snake River Valley wine.” However, Hodge said they were able to retain their Snake River Valley wine label for their only surviving 2017 white wine vintage. She said they combined their surviving white chardonnay grapes with gewurztraminer and vigne varietals sourced from other Snake River Valley vineyards to create their 2017 white blend. Williamson said he is looking forward to a much improved 2018 growing and harvest year. “We trained up everything that was damaged,” Williamson said. “I am pretty optimistic about getting a full crop or 80 percent of a full crop.” Hodge said the complete replanting of their red wine grape varieties presented Parma Ridge Winery with exciting new opportunities. She’s excited to debut a new harvest of cabernet sauvignon, cabernet franc and petit syrah grapes that they had to plant in June 2017. “The loss that we experienced was not permanent,” Krause said. “Vines didn’t die — they get cut back to the roots. The regrowth went really well, and I think we’re going to have a really good year as long as Mother Nature continues to behave herself.” Even with the last few weeks of scattered snow, Williamson was positive about the future. “It’s like night and day,” Williamson said. “What a difference a year makes.”
Ky Tucker/For the Idaho Press-Tribune
Teresa Shively has a friendly conversation with a guest at the Williamson Orchards and Vineyards wine tasting on Feb. 23.
Ky Tucker/For the Idaho Press-Tribune
Williamson Orchards and Vineyards in Caldwell is looking for a much improved year in 2018 after a historic low grape harvest in 2017.
Ky Tucker/For the Idaho Press-Tribune
Mike Williamson with Williamson Orchards and Vineyards examines the growth status of a vine at his orchard in Caldwell on Feb. 23.
Marc h /A p ri l 2 01 8 1 5
Idaho St ate B u s in e ss J ournal
Famous potatoes make famous vodkas John Roark/Post Register
Bottles of Colter’s Run bourbon whiskey, Catamount whiskey, and Born and Bred vodka are seen at the Grand Teton Distillery in Driggs recently. “There’s still tons of growth for the distilled craft market,” Andrew Boczar said.
By MARC BASHAM Post Register
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alking into the small distillery here, customers are welcomed by a series of faux motivational signs such as “If life hands you lemons, add vodka.” For several eastern Idaho businesses, however, life has not necessarily handed them lemons, but the liquid counterpart that helped start a thriving business. Distilleries ranging from locally owned operations to multi-national corporations call Idaho home. The region’s spirits industry has attracted outside investors, multi-national corporations and even Hollywood celebrities. Setting up shop in a region that provides the perfect ingredients for production of potato and grain vodka has allowed several local distilleries to make their mark on the national level. Grand Teton Distillery’s website says it sources “our raw materials locally, within 25 miles of the plant.” But while some have hit the big time, production of these products originated in the area and remains here.
Locally operated, with a celebrity catch In 2011, Andrew Boczar was sitting on the front porch of his parent’s house discussing potential business plans for the family. The Boczars purchased a plot of land in Driggs in 2007 that was originally slated for the development of a hotel. However, the beginnings of the Great Recession made demand for hotels a risky business at the time and the project never got off the ground. “We were sitting on this land for three years, and one night we were sitting on the front porch and thought ‘what can we do with this land?’” Boczar said. “We’re surrounded by thousands of acres of potatoes, can we make vodka?” One year later, the company was selling its products in Idaho and Wyoming. In the
following years, Grand Teton Distillery has grown into one of the larger independently owned distilleries in the state, winning numerous national awards. “I used to have a hammock and sleep here, I was working so long,” Boczar said. Grand Teton’s products are now sold in 26 states, which is impressive production for a staff of five employees. Through recent success, Boczar’s business has gained notable fans and clientele, including actor Channing Tatum. Impressed by the quality of Grand Teton’s product, Tatum invested in the company in an effort to collaborate on a new product — Born and Bred. According to Grand Teton’s website, Born and Bred came about due to Tatum’s “quest to find the best vodka in the USA,” which led him to Idaho. “Channing’s trainer told him he couldn’t consume calories, like beer,” Boczar said. “‘If you want to drink, drink vodka.’ After a couple of nights thinking out loud, he thought ‘why are all of these vodkas foreign or imported?’ So he thought it would be cool to find an American vodka company to invest in and make a product with. “We thought it was fake (when he first called us). But they liked this area and that it was a small, family owned company, and decided to invest at this point.” The collaboration with Tatum, which started in early 2015, has helped grow Grand Teton’s sales of Born and Bred to 20 states. “There are definitely growing pains, but we are looking to further expand soon with the hopeful demand for the product,” Boczar said. National recognition Bill Henderson, chief marketing officer for Beach Whiskey LLC, has made a name for himself in the liquor industry. An innovator in the vodka business thanks to the highly successful Grey Goose brand he helped bring to the national spotlight, Henderson wanted to find a new product to bring to the mainstream when he moved to a new company in
John Roark/Post Register
Andrew Boczar poses with a bottle of Grand Teton Vodka at the Grand Teton Distillery in Driggs recently.
2015. And that quest ultimately drew Henderson to American Harvest organic vodka in Rigby. “We acquired the brand about a year and a half ago from Sidney Frank, who I worked for previously,” Henderson said. “Sidney Frank created the brand, and when it was purchased by Jägermeister all of the brand portfolios were released they had to find new homes. We negotiated with the Frank family to bring the brand on at Beach Whiskey.” What drew Beach Whiskey to the American Harvest brand was the quality of the product and what it represented. “For us, the fact that it’s American made, and we know today American products are hotter than ever,” Henderson said. “And you talk about the heart of America in Idaho, I think that resonates with people. They want products that are homegrown.” American Harvest was first produced in Rigby in 2011. And although Henderson’s New York-based corporation purchased the company, Beach Whiskey is not ready or
willing to abandon American Harvest’s Idaho roots. “We have absolutely no intentions of moving this brand out of state,” Henderson said. “We went to Idaho for a reason. We like to think of ourselves as state-made, so there are no intentions of moving the product out. We feel like we’re in a really good place moving forward.” The Rigby distillery has about 20 full-time employees. Since its purchase, the only change Beach Whiskey has made to American Harvest has been its packaging. The company’s focus will remain on regional sales. “We’re looking to grow the plan organically,” Henderson said. “We don’t have any plans for mass, mass distribution. As far as our growth, we want to be at the right account at the right time. Henderson believes the future looks bright for Idaho’s spirits market. “Sales will come to anyone with the right distribution and the right plan,” he said.
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