As Robots Grow Smarter, American Workers Struggle to Keep Up
Although fears that technology will displace jobs are at least as old as the Luddites, there are signs that this time may really be different. The technological breakthroughs of recent years — allowing machines to mimic the human mind — are enabling machines to do knowledge jobs and service jobs, in addition to factory and clerical work.
More girls training for careers in trades
Technical programs welcome female students
By Dean Narciso The Columbus Dispatch • Wednesday October 29, 2014 4:11 AM
DELAWARE, Ohio — Strapped into her safety harness, Savannah Adkins clasped the buckle of her lineman’s belt, dug her boots into the pole and began her ascent. The 17-year-old Galena resident and senior at the Delaware Area Career Center likes tough, outdoor work. And she likes climbing, whether up a pole or toward success in a field traditionally dominated by men.
“More girls are starting to realize they can do these jobs,” Adkins said, “and they want to prove that they can do the same job as men.”
As a journeyman, a line worker earns up to $40 an hour, she has been told. And the two years of class and fieldwork “sets you up to get the career.”
Women entering male-dominated fields hear about gender gaps in pay, discrimination and rigors of physically demanding jobs. And most take it in stride.
Their instructors even prepare them for it.
“No guy would ever climb with a pink jacket,” said Mike Lewis, an instructor in Adkins’ power-line technology class, using humor to illustrate long-held beliefs that girls should avoid dangerous jobs.
Welding appears to be another one of the more popular choices in central Ohio.
The Career and Technical Education Centers of Licking County has four female welding students. In previous years, there weren’t any. The Eastland-Fairfield Career and Technical Center reported that the number of girls enrolled in building and mechanical trades and welding has more than doubled in three years. Delaware’s program had no female welding students five years ago. Today it has three.
One of the Delaware welding students is Megan Stark, 17, who grew up around boys in her Westerville home, playing basketball, baseball, soccer and football.
“I was so much of a tomboy, people couldn’t tell I was a girl,” Stark said.
Her 100-pound frame belies a mental toughness that surprises people.
“Every time I tell someone I’m in a welding lab, they just look at me.
“I look little, but I’m actually pretty strong. You have to be tough and be one of the boys,” she said after dipping glowing steel into a cooling bath.
Stark’s instructor, Brad DeMent, said diversity in the workplace drives demand for females.
“If they come through the training, they’re almost guaranteed to get a job,” he said.
Federal laws have helped strengthen vocational education programs, but stereotypes about dead-end jobs persist, experts say.
“For sure there are some programs doing a very good job attracting females into nontraditional jobs,” said Steven DeWitt, deputy executive director for the Virginia-based Association for Career and Technical Education.
“Generally, it has been challenging for schools. A parent may not want their daughter to be a welder. It’s very difficult for a school to fight that.”
But girls, DeMent said, are welcomed and might even have an edge.
“They’re more about quality than quantity, more fine-tuned, and pay attention to the details.”
Some girls in rural Delaware County want skills to help them on the farm. Others simply want a broad range of skills.
Brooke Mack is learning how to repair tractors and car engines, and excited to become self-sufficient.
“We’re stereotyped to not do this kind of thing,” said Mack, of Ostrander. “The girls who want to do it but were afraid are now more willing.”
Boom in Energy Spurs Industry in the Rust Belt
By NELSON D. SCHWARTZ SEPT. 8, 2014
YOUNGSTOWN, Ohio — Waist-high weeds and a crumbling old Chevy mark the entrance to a rust-colored factory complex on the edge of town here, seemingly another monument to the passing of the golden age of American industry.
But deep inside the 14-acre site, the thwack-thwack-thwack sound of metal on metal tells a different story.
“We’re holding our own,” said Greg Hess, who is looking to hire draftsmen and machine operators at the company he runs, Youngstown Bending and Rolling. “I feel good that we saved this place from the wrecking ball.”
The turnaround is part of a transformation spreading across the heartland of the nation, driven by a surge in domestic oil and gas production that is changing the economic calculus for old industries and downtrodden cities alike.
Here in Ohio, in an arc stretching south from Youngstown past Canton and into the rural parts of the state where much of the natural gas is being drawn from shale deep underground, entire sectors like manufacturing, hotels, real estate and even law are being reshaped. A series of recent economic indicators, including factory hiring, shows momentum building nationally in the manufacturing sector.
New energy production is “a real game-changer in terms of the U.S. economy,” said Katy George, who leads the global manufacturing practice at McKinsey & Company, the consulting firm. “It also creates an opportunity for regions of the country to renew themselves.”
The environmental consequences of the American energy boom and the unconventional drilling techniques that have made it possible are being fiercely debated nationwide. New York officials have imposed a moratorium on hydraulic fracturing, or fracking, because of concerns that the fluids injected into the shale to free oil and natural gas deposits might contaminate the local drinking water.
Although that danger worries environmentalists here as well, there has been much less opposition because residents are so desperate for the kind of economic growth that fracking can bring, whatever the risks.
Vallourec, a French industrial giant, recently completed a million-square-foot plant in Youngstown to make steel pipes for the energy industry, the first mill of its kind to open here in 50 years. The facility, which cost $1.1 billion to build, will be joined next year by a smaller $80 million Vallourec plant making pipe connectors.
The change is evident in the once-moribund downtowns of northeastern Ohio cities as well as in the economic data for the state as a whole.
Ohio’s unemployment rate in July was 5.7 percent, well below the national average of 6.1 percent. That’s a sharp reversal of the situation four years ago, when unemployment in Ohio hit 10.6 percent, significantly above the country’s overall jobless rate at the time, as manufacturers here and elsewhere hemorrhaged jobs. In the Youngstown area, the jobless rate in July was 6.7 percent, compared with 13.3 percent in early 2010.
“Both Youngstown and Canton are places which experienced nothing but disinvestment for 40 years,” said Ned Hill, a professor of economic development at Cleveland State University. Now, “they’re not ghost towns anymore. You actually have to go into reverse to find a parking spot downtown.”
Youngstown and surrounding Mahoning County is hardly Silicon Valley or even Pittsburgh, which long ago bade farewell to its industrial past and sought out growth in new sectors like health care and education. Broad swaths of Youngstown look almost rural, the result of a decade-long campaign to tear down abandoned homes and factories, letting sites that were once eyesores return to nature.
And the new factories that have gone up — like Vallourec’s new complex, or a $13.2 million plant that Exterran opened in May 2013 to make oil and gas production equipment for local customers — employ only a fraction of the workers who once labored at Youngstown’s mills. Vallourec’s state-of-the-art pipe mill has about 350 workers; the old Youngstown Sheet & Tube plant that once stood on the site had a work force of 1,400 when it shut down in 1979.
But the improvement is undeniable, especially to those who grew up here. “It’s a night-and-day difference,” said Robert E. Roland, a Youngstown native who moved away when he was 18, and is now managing partner at one of Canton’s biggest law firms, Day Ketterer. “It was extremely depressed, and nobody was downtown except for people who were down and out.”
A 2013 McKinsey study co-written by Ms. George estimated that production of shale gas and so-called tight oil from shale could help create up to 1.7 million jobs nationally. Many of those jobs are expected to end up in places like this, in part because they are close to newly developed fields like the nearby Utica shale formation.
The United States still imports hundreds of billions of dollars more in manufactured products than it exports. But industrial production has rebounded strongly in the wake of the Great Recession, up roughly 20 percent since the end of 2009. Employment in the factory sector, after a steep fall during the downturn, has also recovered. Since hitting bottom in early 2010, manufacturers have added nearly 700,000 jobs, bringing total factory employment in the United States to 12.2 million.
At the same time, cities like Youngstown and Canton are also beginning to emulate the advances of places like Cleveland, which went through an earlier revival as more white-collar jobs arrived.
Mr. Roland, for example, is planning to hire lawyers in Youngstown and open a branch there. “I never thought I’d consider being in business in Youngstown,” he said. “But we think this is a market for us and we need a foothold.”
Downtown Youngstown’s new federally financed center for advanced manufacturing is drawing notice as well, including a mention in President Obama’s last two State of the Union addresses.
Consumer-oriented businesses that survived the lean years are also enjoying a resurgence. Kravitz Delicatessen in the nearby suburb of Liberty has a Vallourec sandwich on the menu (corned beef and pastrami with Swiss cheese and coleslaw), a testament to how much business the 75-year-old Jewish-style deli draws from green-vested Vallourec workers, and from catering corporate events.
During the construction of the Vallourec plant, “you’d come in at lunch and half the people were wearing green,” said the deli owner, Jack Kravitz. “The Utica shale brought in Vallourec, which brought in more workers and helped me hire more people.”
In the energy surge, Canton has emerged as the center for white-collar jobs associated with the energy industry, like engineers, surveyors and other specialists. About an hour’s drive from both Cleveland and Youngstown, Canton borders the rural region farther south in Ohio where increasingly large quantities of natural gas are being pumped out of the Utica shale.
Rettew, a nationwide engineering services firm based in Lancaster, Pa., first opened a field office in Canton in August 2011, with a handful of employees driving in from Pennsylvania and staying in local hotels from Sunday to Thursday.
Today, Rettew has 35 employees in Canton. Most of these jobs pay $50,000 to $100,000, which goes far in the area, especially considering the relatively cheap housing, said Jake Wilburn, Rettew’s regional manager in Ohio.
The economic impact in rural areas of Ohio is less visible but equally significant. Mostly hidden from view behind trees off a two-lane road in rural Harrison County is an Erector-setlike maze of tanks and distillation towers, one of three huge plants in the area built by Access Midstream, an energy firm based in Oklahoma City.
Over the last two years, the company has spent $1.8 billion on new infrastructure to help refine and separate the raw hydrocarbons that come out of the Utica shale.
“This is a 50-year asset,” said Scott Hallam, who oversees Access’s efforts in the Utica shale. “We wouldn’t be spending billions here if we didn’t believe that.”
While the energy industry is looking forward half a century, in Youngstown, a real estate developer, Dominic Marchionda, is trying to bring back something the city hasn’t had in nearly that long: a place to stay downtown.
With help from investors in New York, Mr. Marchionda is planning to turn a landmark 1907 building that was once home to the executive offices of Youngstown Sheet & Tube into an upscale hotel. Construction is expected to begin in mid-2015.
The son of a steelworker, Mr. Marchionda, 54, witnessed Youngstown’s precipitous decline, but has become a believer in its nascent renaissance. “I wanted to leave so badly when I graduated high school and the steel mills were closing,” he said. “It’s nice to be a part of bringing the city back.”
Correction: September 11, 2014
A picture caption on Tuesday with an article about a rebound in manufacturing in the Rust Belt as a result of a resurgence in energy production misstated the year when the straight-side press shown with Greg Hess, plant manager at Youngstown Bending and Rolling in Youngstown, Ohio, was built. It was in 1897, not 1819.
As coal jobs vanish, miners search for new careers
Originally published September 1, 2014 at 7:42 PM | Page modified September 2, 2014 at 2:55 PM
Poverty rate higher in suburbs than cities, including Seattle area
Across the country, more poor people live in suburbs than live in cities. According to research last year by the Brookings Institution, poverty also was shown to be on the rise in Seattle suburbs.
By Teresa Wiltz
The fires of Ferguson, Mo., run counter to the narrative about suburbia, the story Americans tell themselves about strip malls and rolling lawns, about McMansions and upward mobility.
Instead, the unrest in the St. Louis suburb after the shooting of an unarmed black 18-year-old by a white police officer evokes images of 1960s-era Watts, of burning inner-city neighborhoods in New York, Washington, Detroit and Chicago.
The tear gas and protests in Ferguson were sparked by the shooting of Michael Brown, but they point to deeper, more pervasive problems that plague suburbs across the country: rapidly increasing poverty, scarce jobs and even scarcer resources.
“Poverty is rising in suburban communities and it’s smashing the stereotype of calm and prosperity,” said Lawrence Levy, executive dean of the National Center for Suburban Studies at Hofstra University. “All over the country outside major central cities, the rate of poverty in the suburbs is exceeding that of the (urban) places people used to leave to escape.”
In Ferguson, which has a population of just over 21,000, the poor population rose 99 percent in the past decade, said Elizabeth Kneebone, a fellow at the Brookings Institution and the co-author of “Confronting Suburban Poverty in America.” (Overall, the poor population in the St. Louis suburbs rose 68 percent.)
Across the country, more poor people live in suburbs than live in cities.
Perceptions have yet to catch up with how radically the geography of poverty has shifted, Kneebone said. Without an up-to-date understanding of the complexity of poverty, suburbs often don’t have the resources needed to help their impoverished populations, she said.
From 2000 to 2011, the number of Americans living below the federal poverty level ($23,492 for a family of four in 2012) rose about 36 percent, to 46.2 million. Meanwhile, the number of the suburban poor grew 64 percent.
Poverty also has shown to be on the rise in Seattle suburbs. Last year, Brookings Institution researchers using the federal benchmark for poverty from 2010, which for a family of four was an annual income of $22,300, found that two out of three Seattle-metro-area residents who were at or below the poverty line were living in the suburbs.
In fact, the number of poor people in the suburbs increased by 80 percent between 2000 and 2011 — with much of that growth concentrated in the cities south of Seattle.
The rate outpaced the nation’s and ranked the Puget Sound region as the 23rd fastest growing for suburban poverty among the largest 100 metro areas.
At the same time, in the core cities of Seattle, Everett and Tacoma, poverty grew by 31 percent.
Nationally, there’s no single path to poverty in the suburbs. Some of suburbia’s poor are the formerly middle class who were walloped by the 2007-09 recession, losing jobs and homes when the housing bubble popped. Some are immigrants who bypassed the traditional urban route and headed straight for the suburbs. Others are lower-income African Americans and Latinos who were pushed out of gentrifying cities as housing prices skyrocketed. Other people, some of them with federal housing vouchers, left cities looking for jobs, safer neighborhoods or better schools.
“The movement to the suburbs is really about people moving to opportunity,” said john a. powell (he spells his name with lowercase letters), a professor at the University of California, Berkeley, and director of the Hass Institute for a Fair and Inclusive Society.
“But low-income people have not landed in places of high opportunity in the suburbs,” Powell said. “They move from depressed cities to depressed suburbs. They are trying to move to opportunity, and they are failing. Opportunity is moving away from them.”
In the suburbs, as in the rest of the country, race and poverty are inextricably linked. There are prosperous African-American suburbs, like Maryland’s Prince George’s County (outside Washington), California’s Ladera Heights (Los Angeles) and New York’s Hillcrest (New York City). And yes, most poor suburban residents are white. But increasingly, the faces of suburban poverty are black and brown.
People of color in the suburbs are disproportionately likely to be poor and much more likely to live in neighborhoods with high concentrations of poverty. The disparities are stark, Kneebone said: More than half of African Americans and Latinos live in poor suburban neighborhoods, compared with 23 percent of white suburbanites.
Case in point: Ferguson, where 25 percent of blacks live below the poverty line, compared with 11 percent of whites. (Ferguson is divided along strictly black/white lines; its Asian and Latino populations are quite small.) The median income for African Americans in Ferguson is $32,500, compared with $53,400 for whites. The black unemployment rate in Ferguson is 19 percent; white unemployment is 6.7 percent. In 1990, Ferguson was a majority-white enclave; today 67 percent of the population is African American. Its leadership structure, from City Hall to the police, remains overwhelmingly white.
Broader changes in the U.S. economy also have changed the character of the suburbs. Jobs have moved out of cities into the suburbs, even with the revitalization of many cities. But most are not the well-paying manufacturing jobs that bolstered the urban middle class for decades. Instead, suburban jobs are concentrated in the retail or construction sector — jobs that tend to pay less and were decimated by the recession.
In many ways, being poor in the suburbs is harder than it is in cities.
For one, transportation is often a problem. Few suburbs have the kind of reliable public-transit systems of cities like Chicago, New York and Washington, making owning a car imperative. Commutes are often lengthy and expensive; a sick child in day care needing to be picked up from the other side of town can present a crisis for a parent who could lose a much-needed job.
For poor suburbanites, having a car can be both a lifeline and a liability. In St. Louis County, which includes Ferguson, there are 90 municipalities. In a nine-mile strip, a driver can drive through as many as 16 of them, said Thomas Harvey, co-founder and executive director of the Arch City Defenders, a nonprofit agency that provides legal services for the indigent in St. Louis County. The Arch City Defenders released a study of the municipal courts in St. Louis County and found that in Ferguson, court fees were the suburb’s second-largest source of revenue.
Often, Harvey said, their clients will get traffic tickets driving through one of those 16 jurisdictions. Perhaps they’re driving a car that needs repairs before it can pass inspection. They can’t afford to pay the tickets and their licenses are suspended.
“These are people who are making a choice between paying their electricity and getting their car fixed,” Harvey said. He added that his group’s study also found that in Ferguson, 86 percent of traffic stops involved black motorists, although blacks make up just 67 percent of the population. Whites make up 29 percent of the population of Ferguson but account for just 12.7 percent of vehicle stops. Blacks in Ferguson were much more likely to be searched by police, although whites were more likely to be found with contraband, the study found.
Ferguson has a large apartment complex just across from where Michael Brown was shot. But most suburbs don’t have the kind of bleak projects that put inner cities like Chicago on the poverty map. Privation can look different in the suburbs, but poor is still poor.
And most suburbs aren’t equipped — and in some cases, aren’t willing — to handle the problems presented by its poor populations. Most government and nonprofit money is concentrated in the cities, leaving the suburbs short on services. Few have adequate job training, foreclosure counseling, food banks or multilingual social workers.
That’s partly because suburbs with large impoverished populations don’t have the tax base to fund such programs, said Ed Paesel, executive director of the South Suburban Mayors and Managers Association in suburban Chicago.
Some communities are battling the suburban poverty crisis by encouraging jurisdictions to work together, combining resources and sharing solutions. In Montgomery County, Md., county government worked with local churches and other nonprofits to create the Neighborhood Opportunity Network, which provides help for those in need of such things as paying utility bills, health care and foreclosure prevention.
The city and county of Denver partnered with investors to create a fund that would build affordable housing close to mass transit, so that lower-income residents would have easy access to jobs.
Chicago’s south suburbs have 43 municipalities, many of which have populations and face problems similar to Ferguson’s. When the housing industry tanked at the end of the past decade, government officials collaborated to apply for federal government assistance. The idea was to think about the needs they had as a collective region of 650,000 inhabitants, rather than just that of individual towns, said Janice Morrissy, deputy executive director of housing for the South Suburban Mayors and Managers Association.
Information from Seattle Times archives was used in this report.
Why quirky Portland is winning the battle for young college grads
By Emily Badger October 20
PORTLAND — Of all the Very Portland things that exist in Portland, there is a plot of land next to City Hall, right outside the building’s front portico, where the city is growing its own Swiss chard.
“And on a place that used to be a parking lot!” exclaims Mayor Charlie Hales, adding a detail that actually makes this story even more Portland.
When Hales was first elected as a city commissioner in 1993, the ground in front of City Hall that has become a vegetable garden contained a parking lot with reserved spaces for the mayor and city commissioners. “Those of us on the council then said, ‘that’s not consistent with our values and our rhetoric,’” Hales recalls.
And so they gave up their spaces for a bit more of the city’s famed green space. “That’s not the only place in Portland,” he adds, “where we took out a parking lot and put in a little piece of paradise.”
Portland, I tell the mayor during a recent conversation here, has lived up to every one of my expectations: I have eaten made-in-Portland ketchup, drunk brewed-on-the-premises beer, and slept in an inn that was once a schoolhouse, where the housekeeper looks cooler than me.
From across the country, Portland looms as this place where everything comes in quirkier, locally produced, more artisanal versions of what the rest of us have. And then when you come out here, it turns out that all of these things are actually true. The Portland of public imagination is, in fact, Portland in reality.
City Hall is seriously growing its own Swiss chard.
“But there are some deep roots to those things,” Hales tells me. “It’s not just that somebody painted a ‘keep Portland weird’ sign, or started a doughnut store, or founded a naked bike ride. There are some really deep cultural roots to the character of Portland.”
And, in fact, part of why Portland has become a cultural phenomenon, and a symbol — sometimes teased — of the new move-first-then-find-a-job Millennial paradigm, is that the city has for decades been pursuing a set of policies and values that the rest of us are now suddenly into.
Across the country, “sprawl” has become a dirty word, a sign of housing-bubble excess that many young college grads are rejecting for denser, no-car urban living. Portland, meanwhile, has been living with an urban growth boundary since the 1970s. Back then, Oregon realized, Hales says, “coastal condomania, sagebrush subdivisions and the ravenous rampage of suburbia” could devour the region — a mantra former governor Tom McCall first uttered.
The growth boundary regulates new development at Portland’s edges in a way that has heavily influenced both the shape and character of the city. Indeed, when land isn’t endless, the region has to invest in its core infrastructure. People have to share.
I later remarked to Joe Cortright, an economist with the Portland consulting firm Impresa, that Hales seemed unusually wonky about land use, and he corrected me: “Well everybody is here,” he said, looking around the local coffee shop where we met. “We could pick any three people here, and ask them about the urban growth boundary, and they’d have an opinion.
The city’s conscious anti-sprawl ethos isn’t its only advantage. Where other cities are now trying to figure out how to retrofit for the public transit Millennials say they want, Portland has been heavily investing in light rail for decades. This city even had a bike plan in, well, 1973.
And, finally, whereas much of urban American is now enamored of all things farm-to-table, locally grown, organic, artisanal, walkable and shared, Portland got there first, too. Sorry, Brooklyn.
These attributes are helping Portland win a fierce competition among cities for young college grads — Americans in their 20s and early 30s – who have been flooding the downtown-ish neighborhoods of decently big metros like Portland over the past decade.
By 2012, metro Portland had 34,545 more 25-to-34 year-olds with bachelor’s degrees than it did in 2000, according to American Community Survey data that Cortright just analyzed for the research site City Observatory. That’s an increase, of about 37 percent, that’s outpaced similar gains in New York (25 percent), Los Angeles (30 percent) and even — barely — metropolitan Washington, D.C. (36 percent).
Portland is succeeding in large part because the long-term direction of the city happens to align with what these young people prize today. The college grads decamping for Portland probably don’t say “I’d like to live somewhere with an urban growth boundary!” But that policy is partly responsible for producing the things about Portland that now draw them here: the compact living, the easy access to nature, the possibility that a farm might actually be near your table, the emphasis on communal assets — parks, public transit, tool shares (people kept telling me about the tool shares) — over individual ownership.
“To some extent, bring it on,” Hales says. “We’re happy that that migration is coming here, because that is the future, and we’re happy to have an outsized slice of it coming to Portland.”
But it’s also given Portland a reputation, as a young person’s mecca, and two related problems: The cost of living here is rising, as is the quip that Portland is a place where young people come to retire. The New York Times magazine recently argued that Portland now has more educated young people than it knows what to do with (or how to employ).
Hales is worried about the first problem, as well as the pockets of poverty in the city that seldom make stories about Portland’s cool. As for the second? “That, of course, is not actually true,” he says (nearly everyone I met chafed at the “retirement” line of Portlandia fame). Cortright points out that the unemployment rate for 25-to-34-year-olds with a college degree in metro Portland is 4.8 percent — lower than it is in Chicago, Los Angeles, Atlanta or New York City.
Part of the perception, no doubt, stems from the fact that people do move here without a job, because you can’t really sign up for a job that doesn’t exist quite yet — whether it’s conceiving a food cart or crafting a local kind of ketchup (GMO-free!) that will eventually be served in brewpubs.
“A lot of entrepreneurship comes from that: I chose to live in Portland, now I will find my way forward economically,” Hales says. “That’s very much this generation’s view of work. It’s not ‘I’ll go anywhere to get a job.’ It’s ‘I’ll live a certain way, and then I will find my work life there.’”
He told me about one local business, a makerspace that includes a woodshop and metals manufacturing equipment where local entrepreneurs can prototype their products. The facility is angling to expand, because there is now a cottage industry in Portland out of helping people launch cottage industries.
All of this is decidedly different from Washington, D.C., the region where Hales grew up. If Portland is a place where people move for the lifestyle, then find work, Washington’s allure is the reverse: People move to D.C. for jobs in very specific industries, then adapt to the lifestyle (sometimes begrudgingly). I tell Hales about a theory I’ve been working on, that you can tell a lot about a place by the first question anyone living there asks of new acquaintances, in a bar, at a party, anywhere.
In D.C., it is, of course, “so what do you do?”
“Oh, that wouldn’t be it in Portland,” Hales says. “Here, the first question would be ‘what neighborhood do you live in?’”
I then ask Hales about where he lives. And he starts telling me about a great park near his home and, in true Portland fashion, his nearest farmer’s market.
Mini-D.C.’s: A small-city boom revitalizes downtowns once left for dead
Cereals Begin to Lose Their Snap, Crackle and Pop
By STEPHANIE STROM SEPT. 10, 2014
Cereal, that bedrock of the American breakfast, has lost some of its snap, crackle and pop.
For the last decade, the cereal business has been declining, as consumers reach for granola bars, yogurt and drive-through fare in the morning. And the drop-off has accelerated lately, especially among those finicky millennials who tend to graze on healthy options — even if Cheerios and some other brands come in whole-grain varieties fortified with protein now.
As a child, Adam Feuerstein started his day with a homemade breakfast. “Growing up, I would combine Frosted Flakes and Cap’n Crunch,” said Mr. Feuerstein, a financial reporter at The Street. “I have such vivid memories of it that if I walk down the cereal aisle today, I still gravitate toward those cereals.”
But Mr. Feuerstein, who is 46, isn’t buying the sales pitch. These days, he eats breakfast around 10 or 11 in the morning, preferring juice he makes himself. If he eats cereal at all, it is a Trader Joe’s private label version “as a treat,” he said.
“You realize that it’s just a sugar delivery vehicle,” he said of cereal. “We’ve all gotten a little smarter about the foods we eat, and while there are plenty of healthy cereals out there, I just don’t choose to eat much cereal.”
Cereal consumption peaked in the mid-1990s, according to the NPD Group, a consumer research firm. Still, some 90 percent of American households report buying ready-to-eat cereal, which remains the largest category of breakfast food with some $10 billion in sales last year, according to Euromonitor, down from $13.9 billion in 2000. And the consumer research firm estimates sales will fall further this year to $9.7 billion.
“More and more consumers are eating breakfast,” said Noel Geoffroy, senior vice president for morning foods marketing and innovation at the Kellogg Company. “The absolute market is growing — and along with that, so are the choices of what consumers eat for breakfast.”
Cereal sales have long been subject to dips brought on by food fads like the Atkins diet or bagel mania. And many cereals are neither gluten-free nor protein-rich, so they fail to resonate with the growing number of consumers who are gluten-intolerant or adherents of the so-called paleo diet.
But investment analysts say the current slump is a result of more pernicious trends. “The common observation by a lot of companies facing declining cereal sales is that this is a kind of death by a thousand cuts,” said Nicholas Fereday, an investment analyst specializing in food and agriculture at Rabobank and author of a report, “The Cereal Killers: Five Trends Revolutionizing the American Breakfast.” “This is frustrating for food companies because they’re faced with people making choices and they’re not really sure which trend to blame.”
Mr. Fereday noted, for instance, that the birthrate was declining — and children traditionally have been the largest consumers of cereal. Other demographic factors are at play as well: Many surveys have shown that Latinos and Asians prefer other breakfast foods.
And, of course, there are the millennials, those consumers between the ages of 14 and 32 who are proving to be a headache for food companies.
“They’re much more likely to be snacking rather than eating three meals a day, and therefore may not have a traditional breakfast at all,” said Jeff Fromm, president of FutureCast, a consumer research firm specializing in millennials. “Additionally, there’s a small but very active and influential group of millennials who are focused on health and don’t like processed food. Guess what, cereal companies? They want to kill you.”
As if those challenges were not enough, new kitchen gadgets make whipping up a smoothie or a custom blend of juices easy to do at home. Plus, a number of new fast-food breakfast options — waffle taco, anyone? — have put dents in cereal sales.
For example, Daniel Bjornson travels four days a week as a consultant, and he likes to eat cut fruit and toast with peanut butter while on the road. “If I’m just at home, it would be Greek yogurt,” he said. “I don’t dislike cereal, but yogurt just seems like a healthier option.”
About three months ago, he said, he bought a box of Kashi with added protein, an attribute that attracted him.
At General Mills, the company’s yogurt brands have eaten away at sales of its cereals, which include Lucky Charms, Cinnamon Toast Crunch and Cheerios. “Some of my business has definitely gone to my colleague running yogurt,” said Jim Murphy, president of Big G, General Mills’ cereals unit.
It also found a way to capitalize on Chex, which had produced consistent sales but little growth since General Mills acquired it in the 1990s. “We had tried everything to move the needle: new advertising, new flavors — and then we marketed it as gluten-free, and it took off,” Mr. Murphy said.
General Mills also is marketing its iconic cereals as family brands in an appeal to nostalgia: Adults account for almost half of the consumption of Cinnamon Toast Crunch, for instance.
Such changes have kept the company’s sales of cereals stable at a time when its competitors are struggling. This month, Post Holdings reported that sales of its cereals, which include Alpha-Bits and Grape-Nuts, were down 3.4 percent in the fiscal third quarter compared to the same period last year, while sales of morning foods at the Kellogg Company, which includes Pop-Tarts, breakfast bars and beverages in addition to its cereal brands, slid 4.9 percent in the second quarter.
John A. Bryant, the chief executive of Kellogg, was characteristically blunt in explaining the decline to investment analysts on July 31. “The overall decline has been largely due to innovation that hasn’t worked,” Mr. Bryant told them, citing disappointing sales of Mini-Wheats Crunch, now discontinued, as well as efforts to alter its FiberPlus and Crunchy Nut brands.
The executive who had been in charge of Kellogg’s cereal business for eight months left the company and was replaced by his predecessor. Kellogg’s also brought back David Denholm from Chobani to run its faltering Kashi brand, which he had previously overseen, and the company said it would move the business back to La Jolla, the San Diego community where it was founded.
Kellogg’s has added protein to Kashi GoLean and Special K, a move that Ms. Geoffroy, the marketing executive, said was working well, and it has begun packaging its staple cereals for children, like Froot Loops, Apple Jacks and Corn Pops, in pouches to make them more convenient for mothers to use as snacks.
MOM Brands, formerly Malt-O-Meal, has so far been immune to the trends buffeting the rest of the industry; two years ago, it surpassed Post to become the third-largest cereal maker, largely with simple innovations.
“Over the last 10 years or so, as the category has been going down, we’ve doubled our market share,” said Paul Reppenhagen, senior vice president for marketing and corporate strategy. “We’ve had 5 percent compound annual growth over the last five years.”
About that time, it began a campaign it called “bag the box,” eliminating the box from its cereals to reduce packaging, which resounded with the environmental crowd (though it once again is boxing some of its products).
The company also periodically offers “price buster bags,” selling its Malt-O-Meal cereals in 11-ounce pouches for $1 to drive sales. It also offers 13 to 15 ounces of its cereals at an everyday price of $2. “These are great value, particularly for those consumers who get to the end of the month and are strapped for cash,” Mr. Reppenhagen said.
MOM, which is owned by the descendants of its founder, John Campbell, also has had success with a relatively new brand, Mom’s Best cereals, “because of an absence of negatives,” Mr. Reppenhagen said. “No hydrogenated oils, no preservatives, no artificial flavors and colors — we even use vegetable dyes in the packaging.”
All of those changes, however, would not make a difference to Megan Scott, an account executive at Trozzolo, an advertising and public relations firm in Kansas City, Mo. “I really value my sleep, so typically I won’t wake up any earlier to eat breakfast,” Ms. Scott said.
She could not remember the name of the cereal she had eaten as a child, and as a teenager, her mother handed her and her brother cans of Carnation Instant Breakfast drink just to get them to eat something with nutrition in it.
Ms. Scott said she liked breakfast, but simply didn’t have time for it. So her morning menu is a cup of coffee.
“I hope that breakfast will become a meal for me,” she said. “I feel like it should be, but right now, convenience is more important.”
Americans are not lovin’ McDonald’s—and haven’t been for years
Susquehanna Flats show hope for Bay
W. Michael Kemp, a professor at The University of Maryland Center of Environmental Science, examines grasses underneath the surface of the water at the Susquehanna Flats. (Lloyd Fox, Baltimore Sun)
By Timothy B. Wheeler, The Baltimore Sun
September 1, 2014, 2:04 PM
There weren’t any keepers yet, but the fish were definitely biting for Willie Edwards one day last week as he trolled along the edge of the Susquehanna Flats. The 72-year-old fisherman from North East said he’d caught “a lot of little rock,” or striped bass.
The Flats — a vast, grass-covered shoal at the mouth of the Susquehanna River — are a magnet for fish and the anglers who pursue them. But they’re also a symbol to scientists of the Chesapeake Bay’s resilience, and of its ability to rebound, if given a chance, from decades of pollution and periodic battering by storms.
“This part of the bay is healthy, at least,” said Cassie Gurbisz, a graduate research assistant with the University of Maryland Center for Environmental Science, as she stood waist-deep in the water to get a closer look at the grasses carpeting the bottom.
“Underwater plants could be considered sentinels of environmental quality,” she added, because they can only grow in relatively clear, unpolluted water.
Covering nearly 10 square miles, the grass bed on the Flats is one of the biggest and lushest in the entire bay. The water is calm and clear in the heart of this underwater prairie, revealing tiny yellow water star grass flowers reaching toward the sunlight amid a mane of wild celery, its green, ribbon-like shoots bent over by the tidal current.
“This habitat for hundreds of years provided a place for migratory ducks and waterfowl to stop over and feed,” said W. Michael Kemp, ecologist and professor at the UM center’s Horn Point laboratory. It draws hunters as well as fishermen, he said, because “it’s teeming with life.”
Until three years ago, the grass bed was nearly twice as large as it is now. That’s when Hurricane Irene and Tropical Storm Lee hit the Mid-Atlantic region within two weeks of each other, flushing 19 million tons of sediment and tens of thousands of tons of pollution down the Susquehanna into the upper bay.
But the fact the Flats still are here at all is remarkable. They were virtually wiped out after an even bigger tropical storm, Agnes, inundated the region in 1972, dumping an estimated 30 million tons of sediment into an already ailing bay. For nearly three decades afterward only scattered clumps of grass remained beyond the river’s mouth.
Then, starting in the early 2000s, the Flats began an abrupt resurgence. Kemp said he and other scientists were impressed at the time — and mystified — by what he calls this “magnificent and totally unexpected” development.
Gurbisz and Kemp think they’ve figured out now how it happened: A modest reduction in pollution, coupled with some favorable weather patterns, sparked the comeback, and then momentum took over. They laid out their hypothesis in a paper published earlier this year in the journal Limnology and Oceanography.
Like plants above ground, underwater grasses need nutrients to grow, but too many can stress and even kill them. The bay has been choking for decades now on an overdose of nutrients and sediment from sewage plants, farm and suburban runoff, and air pollution, resulting in algae blooms, an annual “dead zone” and a decline baywide in grasses.
But starting in the 1990s, the scientists say, there was a small decline in the amount of one nutrient, nitrogen, flowing from the Susquehanna. That alone was not enough to spur a rebound in underwater grasses, but a prolonged dry spell from 1997 to 2002 proved the tipping point, clearing up the water enough to allow more sunlight to reach the bottom and fuel new plant growth.
Nutrient levels coming from the Susquehanna are still excessive, but once the grass bed’s revival had begun, the researchers say, it fed upon itself. The grasses slowed the water’s flow enough so sediment dropped out of the water, clearing it up. And with more sunlight penetrating the water, more plants could sprout.
The 2011 storms, especially Lee, dealt a severe blow to the Flats, one which scientists at first feared would lead to its demise again.
“There was so much sediment dumped on some of the Flats that it actually buried the grass,” said Robert J. Orth, a Virginia Institute of Marine Science biologist who coordinates an annual survey of grasses throughout the bay. The Susquehanna’s raging flow also uprooted and washed away plants in the outer portion of the bed.
As a result, the extent of underwater vegetation seen from the Conowingo Dam in the lower Susquehanna to just south of the Flats shrank by more than half, from more than 15,000 acres before the storm to 6,500 acres in 2012, according to Lee Karrh, a biologist with the Maryland Department of Natural Resources.
What survived was the densest part of the bed, Karrh said. Grasses covering at least 70 percent of the bottom were able to withstand the pummeling of mud and flood.
Since then, the Flats appear to be coming back again, albeit slowly. Last year’s aerial survey of bay grasses found vegetation covering 7,000 acres of the bottom, an increase of about 8 percent. This year’s canvass isn’t complete.
Even in its somewhat reduced state, the Flats serve as both lungs and kidneys for the upper bay. The sprawling grass bed breathes fish-sustaining oxygen into the water while filtering out sediment and nutrients.
“You can see a visibly clear plume of water coming out of the south end of the bed,” Kemp said.
Nitrate levels are also orders of magnitude lower, Gurbisz added.
The Flats’ resurgence a decade ago spurred a similar rebound in numbers of waterfowl and at least some fish frequenting the grass bed, according to state biologists. Though there’s been a drop-off since the 2011 storms, Joseph Love, the DNR’s tidal bass manager, said it’s still a “wonderful area” for largemouth and smallmouth bass to spawn in and forage for food. The area is also a popular site for tournaments, he said.
Likewise, in fall and winter, thousands of ducks, Canada geese and tundra swans flock to the Flats to chow down on the dormant vegetation and the critters hiding in it. DNR waterfowl manager Larry Hindman calls their return “a welcome sight.”
“It’s an incredibly important part of the economic and social structure of this region of the bay,” Kemp said.
The scientists hope their research on the Flats can inform efforts to restore degraded waters throughout the bay and elsewhere. It required an extra boost from nature, they say, but reducing nutrient pollution did help bring back one of the bay’s most important grass beds.
“It shows that the bay responds,” Kemp said.
Drought forces big changes among California growers