To hive and to hold

Stung by growing pains, our Small Business of the Year finds itself busy as the bees its customers keep as orders swarm in.
By Edward Martin

There’s not a lot of cleared land in these parts, and apple and peach orchards going bare this time of year take up most of what there is. Through gaps in the dazzling red and yellow of the forest’s oaks, maples and poplars, Wilkesboro nestles in the deep valley below and, farther west, the Blue Ridge rises. “We’re so far out in the sticks even the Presbyterians handle snakes,” Steve Forrest says, laughing.

He laughs a lot. So does his wife, Sandy. In the ’70s, when they bought this place just down the road from Bootleggers Ridge, a neighbor gave them a primer on the local economy. “He said, ‘You can grow yourself a wagonload of apples, haul them down to Statesville, lay up under that wagon to sleep all week long and peddle them a peck at a time. Or you can run them through your still, and them folks will come up here and get ’em from you. Now which do you think I’m going to do?’”

Many of the Forrests’ customers — 70 or more on a good day — trek to the top of Brushy Mountain, though not for the moonshine Wilkes County once was famous for. Off the beaten path, Business North Carolina’s Small Business of the Year employs nearly 50 people who make and sell beekeeping equipment and supplies. More than 24,000 customers have shopped there in person and by mail order and e-commerce the last two years. Sales this year are projected at about $6.7 million, up 24% — despite the recession — from last year and 81% higher than in 2007.

“Brushy Mountain Bee Farm Inc. is a most unusual company,” says BNC Publisher Ben Kinney, one of the three judges of this year’s competition. “But in many ways, it is the quintessential small business, despite being one of the nation’s half-dozen or so largest in its niche.” The other judges were Gail McDonald, N.C. Department of Commerce small-business ombudsman, and Peter Mitchell, president of Stoneville-based TigerTek Inc., which was last year’s winner. Winston-Salem-based BB&T Corp. sponsored the competition, as it has since 2000.

Down Beekeeper Drive, a gravel lane in the Moravian Falls community, the company’s swelling compound is barely detectable through the woods. But once there, the hum of saws, chatter of mechanized nailers and smell of fresh-cut wood permeate the air. Eight buildings house more than 40,000 square feet filled with wood- and metalworking equipment, sewing machines and packing and shipping operations. A new showroom opened last year, and dust rises from a backhoe digging a foundation for a scratch-and-dent store. In October, the company opened a 12,000-square-foot showroom and distribution center in Pennsylvania.

“It’s a marketer’s nightmare trying to get people to keep little stinging insects,” Forrest says. Nevertheless, Brushy Mountain has increased sales every year but one since it opened in 1977. In fact, aside from the bane of many small businesses — health crises for the principals — Brushy Mountain Bee Farm’s only major hiccup developed over the last two years as fears of mysterious maladies wiping out honeybees prompted orders to flood in. “We’d built our reputation on customer service, but we fell behind three weeks to a month in filling them,” Sandy Forrest says. That stung — having more business than they could handle.

Winner

BRUSHY MOUNTAIN BEE FARM, INC.
Headquarters: Moravian Falls President: Steve & Sandy Forrest Employees: 48 Founded: 1977 Projected 2009 revenue: $6.7 million Business: make and sell beekeeping equipment

They’re flatlanders, he from Greensboro and she from Charlotte. When they married, she was working three jobs and he had two, plus going to school full time. “We’ve both always been hard workers,” he says. He graduated in 1971 from UNC Chapel Hill with a business degree — he also took graduate courses in education — and she attended community college, where she took business courses. They moved to Statesville, and Steve, now 62, taught high school in Iredell County. Sandy, 60, became a teacher’s aide. But they wanted their own business and considered raising blueberries or some other fruit. Then another idea took shape. “The first year I taught,” he recalls, “another teacher that raised bees solicited our help.” They became intrigued by the complex life within hives and bees’ crucial role in the environment. In addition to producing honey and wax, a colony will pollinate plants for two miles around the hive.

By 1976, they had close to 100 hives, which they moved to two locations near Wilkes County where sourwood trees were plentiful. “When time came to harvest the honey, we went up there and they were all gone,” he says. “The people who took them must have had numerous trucks. We’d tended them all summer and had put a tremendous amount of work into it. We were just wiped out.” The financial loss — about $75 a hive — was discouraging, but the thieves set them on a course that led to Brushy Mountain Bee Farm. “We’d put it all together ourselves. It was just a natural thing to get into making the equipment.”

They searched for a site. “He wanted flat, tillable land,” she recalls, “and I wanted mountains. So this is a compromise: We got a mountaintop.” Paying $28,000 for 60 acres, a house and barn in Wilkes County, they started making equipment — his hobby was woodworking — and selling it by appointment on weekends. First-year sales were “less than $100,000,” he says. “Way less.” But by 1980, this was their full-time job. “I recently got my earnings report from Social Security, and I noticed that the first six years I didn’t claim any income. We heated the house with wood and barely got by. But we stuck with it. We poured everything back into the business.”

They moved a 200-year-old barn and attached it to the two-room house to serve as their store. They scrounged most of their equipment — and still do — from shut-down furniture factories. Forrest points to a machine in the assembly shop. “Paid $50 for it. Cost us $75 to have it delivered.” Brushy Mountain Bee Farm hired its first employee in 1981 — until then, the Forrests had called on family members for help during crunch times, such as when seasonal catalogs had to be mailed. “We went slow and didn’t overstep. We’re really conservative. Besides, I’m a beekeeper. Beekeepers are as tight as Dick’s hatband.”

In 1983, sudden winds roared across the mountaintop. “We were building the big warehouse we pack out of now,” Sandy Forrest recalls, “and the contractor had put up the walls before he tied in the trusses. We were up at the house and heard it — the rumble.” The building collapsed, seriously injuring a worker. When word spread, “our neighbors came — they just showed up — and tore it all apart.” Adds her husband: “There were about 25 men. They worked for two days with hammers and saws, and at lunchtime the ladies would show up with food they’d cooked for everybody.”

In the ’90s, Brushy Mountain Bee Farm added more warehouses, computerized orders and operations, built a seven-station sewing shop — most beekeepers dress in protective, head-to-toe suits and wear hoods with mesh veils that retail for about $80 — and opened a 4,800-square-foot woodworking shop. Bankers were willing to lend money for capital expansion. Then, in the mid-’90s, Forrest suffered a perforated colon. “He almost died,” his wife says. “He had seven surgeries in one year.” By then, there was a cadre of employees capable of keeping the business going. “But it was horrible,” he says. “I remember Sandy coming in and we were working on the catalog from the hospital bed.” Shunted between hospitals in Wilkesboro, Winston-Salem and Durham, he finally regained his health — just in time for Sandy to be diagnosed in 2000 with colon cancer. Both have recovered.

In the sewing room, a Hispanic woman turns from a machine where she’s stitching protective hoods. She has five daughters. “Seis mujeres en la misma casa,” Forrest booms in mock disbelief, thumping his head. “El marido pobre.” “Six women in the same house — that poor husband.” In many ways, Brushy Mountain Bee Farm is still a cottage industry. But its employee benefits rival those of larger manufacturers. Workers get a company-match 401(k) after a year and last year received a bonus equal to 5% of their annual pay. The company fully funds health insurance. Employees get eight paid holidays and vacation after a year and can contribute to a flexible-spending plan. Marketing is similarly sophisticated.

Upstairs in the headquarters, Shane Gebauer, hired in 2007 as general manager, crouches over a computer. Eventually, he’ll succeed the Forrests, who have no children. For now, his duties include electronic marketing, maintaining the Web site and advertising. The Internet accounts for nearly a third of sales and also is used for online seminars on beekeeping and educational programs for youths and beginning beekeepers. The company’s 80-page catalog, mailed in January, goes to a mailing list of 43,000 names — 100,000 copies are printed, the rest going to people who respond to ads and request them — and a late-summer flier goes to 33,000 customers. This year, about 3% of revenue is budgeted for advertising in gardening publications. “We’ve been accused by one of our competitors of running our ads [even]in Bride magazine,” Forrest says, laughing.

Brushy Mountain’s shops engage in woodworking, metalworking, sewing and fabricating items such as beekeeping tools. It manufactures more than half the products it sells, which allows it to eliminate middleman expenses and maintain quality control. “Anything we can possibly make, we do. I’m convinced the only way you can increase wealth is to manufacture things. I’ve never bought the line that we need to ship our manufacturing overseas.” Hives, priced from about $50 to more than $100, are a mainstay. Stainless-steel extractors, which spin honey from the comb, are among the highest-priced items. Some cost more than $1,200. Like the protective bee suits, which are modified by local seamstresses, they are hybrids, imported but fitted with frames and motors in Brushy Mountain’s metal shop.

The beekeeping crisis — colony collapse disease — has propelled sales. Studies have linked the decline in the honeybee population to such factors as pesticides, chemicals that beekeepers use, loss of genetic diversity — wild bees nearly have vanished — and even microwaves from cell-phone towers. Forrest, a promoter at heart, played upon beekeepers’ fears of the disease in his marketing. His customers — 99% are hobbyists with fewer than 10 hives each — responded not only by buying herbal treatments for bee mites and other health threats but by increasing their number of colonies. Though selling bees, which it does only a few days a year, is but a sliver of its business, peddling the hives they live in is the company’s bread and butter.

In 2007, the company had $3.7 million in sales and about two dozen employees. As alarm spread, sales soared to $5.4 million last year. In October 2008, employment was 35. Business was brisk — too brisk to keep pace with. “Two things about beekeepers,” Forrest says. “They’re frugal — they’ll drive 50 miles to save 6 cents on shipping — and they expect delivery the day before they order. We’d built our reputation on being able to do that.” Adds his wife: “We were shell-shocked. We’d prided ourselves on how fast we could get out our orders, and suddenly we were three weeks behind.”

Struggling to keep up, the company began working with N.C. State University’s Industrial Extension Service. “They looked at how things were arranged, such as traffic flows, and set up things more efficiently. At an employee’s workstation you have all the tools needed for the task there, so you don’t ever borrow anything. Then they sat down with us and set up Excel charts to help us figure costs. We’d been flying by the seat of our pants.” Forrest — now on the IES advisory board — estimates productivity increased 20%. But that was only part of the problem. When Brent Jackson, a United Parcel Service account executive from Granite Falls, arrived, shipping was nearing gridlock. “We act as business consultants, and basically myself and some of our engineers spent several days interviewing Steve and Sandy and their employees. Then we said, ‘Let’s look at your manifest and packing areas.’ We made recommendations on adding motorized conveyors, packing stations and staging a UPS truck there.” UPS didn’t charge its usual fee, figuring the increased shipping volume justified the effort.

Now packages flow smoothly, directly into the back of a waiting UPS trailer. Over the steady thump of boxes sliding along the conveyor’s rollers, Steve Forrest outlines the results. “We’re journalizing our mistakes now. One guy pulls the order, and it’s double-checked by another. We’re staying fairly constant at 0.1 of 1% of orders that have a problem.” Backlogs? “It’s not going to happen again,” Sandy Forrest says.

Boys once roamed the woods searching for swarms and bee trees. They would coax the wild bees into hives or cut the trees to get at them. The practice put honey on the table and fostered the genetic diversity that allowed bees to flourish throughout rural America. That era won’t return, but Steve and Sandy Forrest estimate as many as 10,000 Tar Heels still keep bees. It’s those who will come after them in this state and others that form the future of Brushy Mountain Bee Farm.

“The average age of our customer is probably 70,” Forrest says. So the company makes and sells products targeted at fostering a new generation of beekeepers. A portrait of Nora Brown, the 2-year-old daughter of employee Eric Brown, is on the cover of the current catalog. She’s fearlessly holding up a frame of honey swarming with bees. “You can’t see it, but she’s also not wearing shoes,” Forrest says. The company emphasizes natural, chemical-free beekeeping, conducts classes — $20 for beginners — makes and distributes videos on beekeeping and works with beekeeping clubs. “We’re not just selling equipment but education,” he says.

As the sun slides down the mountain toward Wilkesboro on an autumn afternoon, Steve and Sandy Forrest walk through the bee garden they maintain between the shipping warehouse and woodworking shop. “The bees love the lavender,” she says. They’ll likely bequeath the 120 acres they now own to a conservation trust. Until then, they’ll continue expanding the business. “If you aren’t moving ahead,” he says, “you’re falling behind.” In a small meadow above the shop stands a row of more than a dozen hives. He tests new products there — up to 50 a year — but the hives also serve as his anchor. “I’ll always keep bees. They give you a window on nature that’s unequaled.”