Continued gains in employment and sales tax collections helped the Northwest Arkansas economy finish 2013 with a strong fourth quarter, according to The Compass Report.

The fourth quarter 2013 grade of B+ was unchanged compared to the third quarter and was an improvement over the fourth quarter of 2012.

The quarterly Compass Report for Northwest Arkansas is managed by The City Wire. The report is the only independent analysis of economic conditions in the metro area.

Economist Jeff Collins, who conducts the data collection and analysis for The Compass Report, said the regional economy “continues to grow at a rapid pace,” and he sees no reason it will slow in the near term.

“Despite (Northwest Arkansas) being roughly two-thirds the size of the Central Arkansas economy, nonfarm employment grew at at four times the rate of the state’s largest MSA,” Collins noted.

Continuing, he wrote: “The unemployment rate in Northwest Arkansas was the lowest in the state amongst all MSAs in December (4.9%). It was more than a full percentage point lower than that for the Little Rock/North Little Rock/Conway MSA (6.2%). The highest rate in the state was the Pine Bluff MSA at 9.8%. To add perspective, of the 372 MSAs in the country, only 22 posted rates above 10% in December and only 78 had rates below 5%.”

METRO COMPARISONS, IMPACT
The 2013 fourth quarter economy in the central Arkansas area received a grade of C- meaning that economic conditions declined slightly compared to the fourth quarter of 2012, and were unchanged compared to the third quarter of 2013.

The Compass Report for the fourth quarter of 2013 shows that small but broad based gains in key metrics has resulted in the Fort Smith regional economy finishing out 2013 with two consecutive positive quarters. A fourth quarter 2013 grade of C+ was unchanged compared to the third quarter and better than the C grade in the fourth quarter of 2012.

Collins said the relative poor performance of the central Arkansas economy is not a positive indicator of the overall Arkansas economy.

“The Central Arkansas regional economy is the most diverse in the state and arguably the representative of overall statewide economic performance. Given this relationship, recent data indicates the statewide economic outlook remains subdued,” Collins said.

He also said the three metro areas – especially Northwest Arkansas – continue to be key job generators for the state.

“To underscore the impact of the three largest metro areas, for December of this year the unemployment rate for the rest of the state was 8.5%, up 0.3% from December 2012 to December 2013. The statewide unemployment rate with the three largest metros added back in was 7.2%, up 0.1% December-on-December,” Collins said.

NORTHWEST ARKANSAS
OVERALL GRADES — Northwest Arkansas regional economy (per quarter)
4Q 2013: B+
3Q 2013: B+
2Q 2013: B
1Q 2013: B
4Q 2012: C
3Q 2012: B+
2Q 2012: B-
1Q 2012: B-

DATA AND REPORT DOCUMENTS
Link here for the raw data used to prepare The Compass Report for the Fort Smith area, Northwest Arkansas and central Arkansas.

Link here for more narrative about regional and national economic conditions.

SECTOR DATA
CURRENT INDICATORS
Non-farm employment — A-
Non-farm employment is well ahead of 2012 figures, with employment in the metro area at 224,400 in December compared to 215,500 in December 2012.

Goods-producing employment — B
The decrease in manufacturing jobs as a percentage of the overall workforce helps diversify almost any metro economy. The percentage of manufacturing jobs in the workforce was 16% in December 2013, down from the 16.2% in December 2012.

This measure speaks to the risk in a local economy from being heavily weighted toward sectors that have been under economic pressure. One of the fundamental principles of reducing risk is diversification.

Metro area Unemployment rate — B
The area unemployment rate, an important gauge in the health of the metro labor market, improved overall during the quarter. Unemployment in December was estimated at 4.9%, compared to 5.6% in December 2012.

Sales and Use tax collections — C+
Sales tax collections in the region have shown steady gains since 2010. The tax collections, which are good indicators of regional consumer confidence, were up in Benton, Madison and Washington counties to $6.489 million during November 2013 — compared to $6.254 million in November 2012. Overall, collections were up for the quarter.

LEADING INDICATORS
Building Permit (housing) valuation — A-
The total value of permits issued in the fourth quarter of 2013 (measured in a three-month rolling average) were higher than those in the fourth quarter of 2012. However, the rolling average in December was $24.012 million, behind the $38.238 million in December 2012.

Residential building is an indicator of current and expected population growth. As new households are created they induce growth in retail, education services, health care services and other types of businesses that provide goods and services to households. Also, new construction provides employment and tax revenues.

Hospitality employment — B
Hospitality employment in Northwest Arkansas has trended positive for several quarters. December 2013 saw 21,400 jobs in the regional hospitality sector, up from the 20,400 jobs in December 2012.

Growth in the hospitality and leisure sector as measured by growth in employment is included because of the emphasis on creating quality of place in local economic development initiatives.

Unlike enplanements/deplanements, which may or may not be tied to activity in restaurants, hotels, and cultural venues, hospitality and leisure employment most certainly are influenced by growth of these activities. Another possible measure is hospitality-related tax collections.

Manufacturing employment — C+
Manufacturing employment in the region grew somewhat during the quarter. Sector employment in December 2013 was 27,000, up over the 26,800 in December 2012.

Construction employment — B
This sector, which includes mining/natural resources employment, saw gains in employment compared to the fourth quarter of 2012, ending December with 8,900 jobs, up over the 8,200 jobs in December 2012.

The rationale for including construction employment is similar to that for building permits. The employment measure is influenced by changes in both the residential and commercial real estate markets.

Obviously, new space implies new residents and new businesses.

BioBotic Solutions, an undergraduate business plan competition team at the University of Arkansas, beat more than two dozen teams from across the United States to take the $25,000 grand prize at the Richards Barrentine Values and Ventures Business Plan Competition.

BioBotic Solutions won for a business plan built around a container and robot that automate tissue handling, one of the few areas in a pathology lab that is not already automated. The concept, which is based on existing technology, would decrease pathology lab errors from 1 percent to 0.005 percent.

Michael Iseman, a senior finance major in the Sam M. Walton College of Business and Honors College, said he and fellow members of the team would like to go forward with the plan as a real business.

“Every time we pitch this I believe in it more and more,” Iseman said. “I think that is why we do so well; we believe in this product. We’ve spoken with health care recruiters about hiring a CEO, and we’re looking for someone with experience in fundraising and pathology. With the money [from the award] and the time we’ve spent here, I could not be more excited about the future.”

Twenty-seven teams competed April 11-12 at the Neeley School of Business at Texas Christian University in Fort Worth, Texas. Teams that were invited to the competition had to demonstrate a societal or environmental need to be filled, as well as the profitability of the business.
Carol Reeves, associate vice provost for entrepreneurship at the University of Arkansas and one of the team’s advisers, said the win was the most significant for an undergraduate team at the U of A.

Just days earlier, BioBotic Solutions won $22,000 at the 2014 Donald W. Reynolds Governor’s Cup Collegiate Business Plan Competition, including the $15,000 second-place prize in the undergraduate division.

BioBotic Solutions developed its plan in close cooperation with the U of A’s department of biomedical engineering in the College of Engineering. Reeves and Jeff Amerine, who directs Technology Ventures, the U of A’s technology transfer office, co-advised the team.

In addition to Iseman, BioBotic Solutions includes: Kelley Coakley, a senior biomedical engineering major in the College of Engineering; Aundria Eoff, a senior biomedical engineering major in the College of Engineering; and Rachel Zweig, who is majoring in chemistry and mathematics at Hendrix College.

The team and results would not have been possible without the strong input and support from three units across the campuses of the U of A, Hendrix College and the University of Arkansas for Medical Sciences.

The clock is ticking for Wal-Mart suppliers from soap manufacturers to lipstick and consumers packaged goods (CPG) companies to ensure the goods they sell to the retail giant contain certified sustainable palm oil (CSPO) by 2015.

In 2010, Wal-Mart made a public commitment to source 100% CSPO by the start of 2015 and it’s an important milestone the retailer plans to meet. The goal was one of several set by corporations coming under pressure from environmental groups to help stem the deforestation taking place in Malaysia and other developing countries to make room for tree plantations helping to fuel global demand.

“Palm oil is a commodity which is present in around 50% of all the products we sell. It is in everything from detergents to sandwiches, as it is an extremely versatile oil. Palm oil often only amounts to a very small percentage of a product, so it is often an ‘invisible’ ingredient simply listed as ‘vegetable oil’ in the ingredients list,” Wal-Mart notes on its website.

Supplier compliance to the rule has been mixed thus far, according to the World Wildlife Fund (WWF) who is keeping tabs on the conversion to CSPO for retailers and suppliers alike. (Link here for a PDF report from WWF.)

RETAILER COMPLIANCE
Wal-Mart said the first thing it did in 2010 was to look at its own use of palm oil in the markets where it operates.

“Through this process of calculation we realized that Wal-Mart is accountable for 84,000 tonnes of palm oil and derivatives, or only 0.5% of global palm oil usage, so although we are a large business we use a relatively small amount of palm oil,” the retailer said.

WWF gives Wal-Mart, the retailer, a palm oil sustainability score of 7, out of a possible 12 for 2013. The score card notes that just 9% of the palm oil used by Wal-Mart last year was CSPO. WWF notes Wal-Mart commitment to 100% by 2015.

Wal-Mart’s ASDA business garnered a score of 11 with a 100% CSPO usage. Other retailers posting high scores include: IKEA at 12 and Tesco at 11. Target and Costco both scored a 0.

EARLY COMMITMENT
WWF reports that in 2011 only 47% of the palm oil that the assessed companies reported to be using was certified. Many had set themselves the target of reaching 100% by 2015 – but WWF said it  “had doubts they were on course to achieve this.” In 2011, WWF concluded that no company in the world had an excuse not to be using 100% CSPO. By 2013 WWF revealed which companies have met that challenge and in return are poised to meet the 2015 deadline with Wal-Mart. 

Unilever reached 100% CPSO used in 2012, while United Biscuits, L’Oreal and Johnson and Johnson each reached the 100% milestone in 2010. H.J. Heinz and Nestle were each at 94% CPSO used in 2013.

SUPPLIERS MAKING PROGRESS
The Hershey Company reached 50% CPSO used in 2013, according to WWF. The candy company said it has recently achieved the 100% usage goal a full year ahead of schedule.

Hershey said it will also work with its suppliers to achieve 100% traceable and sustainably sourced palm oil by the end of 2014.

“The Hershey Company is committed to continuous improvement and transparency in our sustainable sourcing efforts,” said Frank Day, vice president of Global Commodities. “Our move to source 100% traceable palm oil is the latest step forward in our efforts to ensure we are sourcing only sustainably grown palm oil that does not contribute to the destruction of wildlife habitat or negatively impact the environment.”

The Kellogg Company scored only a 2 on the WWF 2013 scorecard for sustainable palm oil usage. The low score was attributed to Kellogg not sharing its relevant information.

"As a socially responsible company, traceable, transparent sourcing of palm oil is an important concern, and we are collaborating with our suppliers to make sure the palm oil we use is not associated with deforestation, climate change or the violation of human rights," said Diane Holdorf of Kellogg.

Kellogg also noted in its recent sustainability report that it has urged its partner Wilmar — a large palm oil trader controlling 45% of that market — to adopt the commitment to eliminate deforestation from its supply chain.

"Kellogg's commitment to verifying that the palm oil it uses is not linked to illegal and high risk deforestation provides critical protection for both shareholders and the environment," said Leslie Samuelrich, president of Green Century, an environmental advocacy group.

Mars scored a 9 with 56% of is palm oil usage being certified in 2013, according to WWF. In March, the company announced two major new green policies and outlined a new sourcing charter designed to ensure all its suppliers are providing fully sustainable and traceable palm oil by 2015 — or have plans in place to do so — and setting out a strategy for addressing how its sourcing of beef, pulp and paper, and soy indirectly can contribute to deforestation.

"We're looking to build out a whole suite of policies across all materials and all issues," Barry Parkin, chief sustainability officer at Mars, told BusinessGreen. "The deforestation and palm oil policies are just another step in that effort, which you'll see us filling out over the next few years."

The new policies are set to cover land use, water use and social metrics such as human rights, Parkin revealed. Palm oil and deforestation are being tackled first because the company sees them as two of the most pressing challenges facing the global company.

Wal-Mart’s largest supplier, Proctor & Gamble, scored a 7 by WWF reporting 13% of its palm oil usage certified sustainable under the CSPO guidelines. P&G said last month that 100% of the palm oil it purchases is certified as sustainable under the RSPO guidelines as a Roundtable member. And now it is adding a commitment to no deforestation in its palm oil supply chain.

P&G said it will establish traceability of palm oil and palm kernel oil to supplier mills by Dec. 31, 2015, and it will ensure no deforestation in the palm supply chain to plantations by 2020.

“These goals go beyond our current commitments. P&G will continue to work with each of our suppliers, and we will invest in and work directly with small local farmers, where much of our supply comes from, to improve their production practices,” said Len Sauers. “This is the most complicated aspect of the palm supply chain, where P&G believes we can make a significant and lasting impact.”

A “Healthy” Discussion was the focus of The 5th Annual The Compass Conference on Thursday (April 17) at Mercy Fort Smith. The conference, presented by The City Wire and sponsored by Benefit Bank, featured a panel discussion on the current state of healthcare in the Fort Smith region, as well as what the future holds in the rapidly growing segment of the Fort Smith regional economy.

Cooper Clinic CEO Doug Babb started the forum by stating what many in the industry have been expressing for the last several years — the Affordable Care Act (also known as Obamacare) has changed everything within the industry.

Kyle Parker, the newly-appointed President and CEO of the planned-Arkansas School of Osteopathic Medicine, said while the intent of the law was noble, it was doing nothing to address the physician shortage taking place not only in the Fort Smith region, but nationally.

“It's a great premise, Obamacare itself. We're the richest nation in the world. You're trying to take care of healthcare. It makes a lot of sense, right? The problem with that is when you make insurance mandatory, you tend to use it. If I'm paying for it, I want to go use it. We simply don't have enough doctors. Period. They can't handle the onslaught of the people that are going to want to come into this. ... It's not taking care of this problem. It's not adding to the residencies,” Parker explained.

That is among the reasons for the creation of the new school, Parker said, adding that it hoped to address both current needs in the community and needs in the future. And the needs will only increase.

According to Sparks Health System Chief Operating Officer Jeremy Drinkwitz, while his hospital system has a need for more than 80 physicians, regionally there is a need for more than 200 physicians. In specialty areas the challenge is even more daunting. Pointing to the urology specialty, he said only 250 urologists will enter the marketplace this year in the United States, essentially guaranteeing them a job anywhere they would like across the nation. The low number both specialists and primary care physicians is making it more and more difficult to recruit in the increasingly competitive medical field.

As a result, the region's three large medical providers — Cooper Clinic, Mercy Fort Smith and Sparks — have begun to partner and share physicians in order to ensure that all its patients can be served, according to Matt Keep, Mercy Clinic's chief operating officer.

"There are things that we can do together. We talk about Sparks, we talk about Mercy, we talk about independent physician groups — but when you think about it, Mercy physicians are on staff at Sparks and Sparks physicians are on staff at Mercy. And Cooper physicians are on staff at both places. Mercy Clinic physicians refer to Cooper Clinic physicians. And the circle just goes on and on and on. So basically, we're in this together, we just have to figure out how to put this together in the new marketplace that's going to incentives population management, it's going to expect better outcomes at a lower price. We're going to have to figure those things out. I don't have a lot of answers on that, but I do know it involves more physicians."

The new osteopathic school will help with that, with all three of the medical providers represented on the panel committing to working with the school to ensure physicians can complete their residencies, Parker said.

And even with the cost of medical school rising and fewer students looking to enter the medical profession, Parker said he expects the osteopathic school to fill at least some of the need by offering lower tuition than what his son, who was recently admitted to medical school himself, will be paying.

The tuition rate for the Arkansas School of Osteopathic Medicine, he said, would be about $43,000 each year, while his son's tuition looks to be about $75,000 per year. For students who do not have the financial backing of wealthy parents or some other funding, that could leave a hefty $350,000 to $400,000 in students loans.

"The way that we addressed it was we simply looked from a pro-forma basis and what we could do from a revenue standpoint but at the same time, giving back to the community. So we set our tuition in at $43,000 a year. Most medical schools sit north of $50,000 to do that. We know that we can be successful at those rates, doing that," Parker said, adding, "It's about $75,000 a year to put a kid through medical school. …It's a major problem. You look at the wages these doctors are making today and they'e going to be $300,000 in debt plus the interest that's going to be charged on that."

To go through all of that for lower pay rates, all the men on the panel acknowledged that it would be more difficult to encourage individuals to pursue an education and career in medicine.

All the local hospital groups have said that they are prepared to invest to bring the region's medically underserved population more primary and specialty care, but they acknowledge that it is a problem that is faced not only in Fort Smith, but other places, as well, according to Babb.

"I don't think this (physician recruitment) is a Fort Smith area or regional issue," he said. "This is a national issue and we can't be blaming ourselves and feeling badly about this wondering community. What we need to do is recognize the shortage. We all need to go out and seek our own providers and bring them in so we increase the number of providers. And that's what everyone is trying to do. I really believe, both (when I was at) Beverly with professionals and now at Cooper with physicians – as Kyle said – that if you bring someone to our community and you show them the symphony, show them UAFS, show them the wonderful things we have in our community, they will take the position. The problem is they can go anywhere in the country, any community they want to because they're so scarce. That's the way I see it."

Home BancShares Inc., parent company of Centennial Bank, announced late Thursday (April 17) plans to acquire Florida Traditions Bank. The two institutions have entered into a non-binding letter of intent that will merge the Florida bank into Centennial.

Traditions’ shareholders will receive approximately $43 million of Home common stock. Although the parties have entered into a letter of intent, there is no guarantee the parties will enter into a definitive agreement.

Traditions currently operates eight banking locations in Central Florida, including its main office in Dade City, Florida. As of Mar. 31, Traditions had approximately $312 million in total assets, $249 million in loans, and $279 million in deposits.

“We continue to execute on our very successful acquisition strategy in Florida and are happy to report another pending strategic in-market acquisition,” said John Allison, chairman. “We look forward to continuing to serve the needs of these communities.”

The acquisition is expected to close late in the third quarter or early in the fourth quarter of 2014 and is subject to execution of a definitive agreement, shareholder approval, regulatory approvals, and other customary conditions.

“Traditions Bank is excited to join the Centennial Bank family,” said Bud Stalnaker, CEO of Traditions. “Our footprint along the I-4 corridor fits nicely with what Centennial has built over the past several years. Centennial is an extremely well run institution and we are looking forward to helping them expand their presence in Central Florida.”

Additional information regarding the potential acquisition is provided in a supplemental presentation available on the company’s website under the “Investor Relations” section.

Mercy Northwest Arkansas is again expanding the reach of its specialties announcing its integration with Ozark Orthopaedics of Rogers. Mercy said this integration is another piece of its plan to create a patient centered health care model. The six Roger’s orthopedists: Dr. Cody Grammer, Dr. John Mertz, Dr. Scott Cooper, Dr. Mike Griffey Dr. Gannon Randolph and Dr. Jacob Kaler and physician assistant, Julie Slavik join Mercy’s other 157 integrated providers offering the most seamless care available. 

“Today, a patient having a joint replacement surgery may experience care in five different locations around NWA,” said Eric Pianalto, Mercy Hospital president. “It is our vision to bring patients access to their care needs in a singular location.”

August 2012, Mercy’s Joint Replacement Center earned the Joint Commission’s Gold Seal of Approval™ for its hip and knee replacement programs. The five orthopedic physicians worked closely with Mercy in developing the Joint Replacement Center.

“The seven of us, now the providers of Mercy Clinic Orthopedics in Northwest Arkansas, have worked as a strong team supporting Mercy for many years, this takes efforts to a whole new level,” said Dr. Kaler. “We have been through an extensive process in assuring that this transition would be best for our community and for not only continuing high quality care, but that this integration would result in streamlined talents and resources to further improve orthopedic patient experiences and outcomes.”

As the population is aging and sports medicine evolves, there is a greater need for orthopedic care. Pianalto said. “This partnership allows us to develop what the future of orthopedics is for Northwest Arkansas. From families with children engaged in local sports to hip and knee replacements that often comes with age, we can provide complete care.”

The seven orthopedic providers now join all of Mercy’s electronic medical record giving them complete access to a patient’s record and all of their health conditions; another example of Mercy’s commitment to comprehensive patient care.

Arkansas’ March jobless rate of 6.9% ends 61 consecutive months that the rate was at or above 7%, and the drop was helped by significant year-over-year job gains in the state’s tourism industry, the retail sector and the education and health services sector.

The March rate of 6.9% was below the February rate of 7.1% and below the March 2013 rate of 7.4%, according to the report issued Friday (April 18) by the U.S. Bureau of Labor Statistics. The March figures are subject to revision.

Year-over-year, the state’s tourism sector gained an estimated 5,100 jobs, the Trade, Transportation and Utilities sector was up 3,000 jobs and the Education and Health Services sector was up 2,500 jobs.

Arkansas’ labor force was an estimated 1.33 million in March, essentially flat compared to February, and up compared to 1.327 million in March 2013. The year-over-year comparison shows an estimated 3,174 more Arkansans in the labor force.

The number of employed in Arkansas during March was 1.238 million, above February employment of 1.236 million, and up an estimated 10,227 jobs compared to the 1.228 million in March 2013.

The number of unemployed was an estimated 91,721 during March, down from the 94,110 in February, and well below the 98,774 in March 2013.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to a revised 7.5% during 2012. The initial annual average jobless rate for Arkansas during 2013 is 7.5%.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during March was an estimated 243,500, up from 242,900 in February and ahead of the 241,500 during March 2013. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during March totaled 154,000, down compared to 154,300 in February and above the 153,200 in March 2013. Employment in the manufacturing sector fell in 2013 to levels not seen since early 1968. Peak employment in the sector was 247,300 in March 1995.

Government job employment during March was 215,300, down from 215,500 in February and below the 215,800 during March 2012.

The state’s Education and Health Services sector during March had 173,700 jobs, up from the 173,500 during February and up from 171,200 during March 2013. Employment in the sector is up more almost 23% compared to March 2004.

Arkansas’ tourism sector (leisure & hospitality) employed 109,500 during March, up from 109,000 during February, and above the 104,400 during March 2013. The March employment level sets a new record for the sector. The number is subject to revision in future reports.

NATIONAL DATA
The BLS report also noted that 46 states had unemployment rate decreases from a year earlier, and four states had increases. The national jobless rate during March was at 6.7%, and was down from the 7.5% in March 2013.

Rhode Island had the highest unemployment rate among the states in March at 8.7%. The next highest rate was Nevada at 8.5% and Illinois at 8.4%. North Dakota again had the lowest jobless rate at 2.6%, followed by Nebraska and South Dakota each at 3.7%.

The March jobless rate in Oklahoma was 4.9%, down compared to 5% in February and down from 5.2% in March 2013.

Missouri’s jobless rate during March was 6.7%, up from 6.4% in February and up compared to 6.6% in March 2013.

The board of directors and shareholders of Legacy National Bank officially announced its new Pinnacle Banking Center with a groundbreaking ceremony Friday, April 18 at the new Rogers building site.

Legacy’s Pinnacle Banking Center will be located at 4901 W. Pauline Whitaker Parkway and is scheduled to open in early fall of 2014. This center will offer a full range of banking services to include deposit services, commercial loans, mortgage loans and consumer lending products. In addition, the center will offer investment services through Legacy’s strategic partnership with Wells Fargo Advisors. 

The new Pinnacle center location will replace the small branch which is currently servicing Rogers and Bentonville customers at 5415 Pinnacle Point Dr.  Legacy now has five banking locations in Washington and Benton counties.   
 
Ken Shireman and Associates are the architects for the building and Milestone Construction is the general contractor.

“We are excited to be breaking ground on a Legacy full service banking center in what we believe is the best possible location in Pinnacle for convenience and long term growth. With the opening of the Arkansas Music Pavilion and the future retail and office center along Pauline Whitaker, we could not be more pleased to be part of this dynamic growth. As a Northwest Arkansas small business serving small businesses and families, our expansion will create not only new banking service convenience but also new jobs,” said Patrick Swope, Legacy’s chief operating officer.

Legacy National Bank recorded net profits of $2.028 million in 2013, growing the bottom line profits from $1.133 million in the prior year. The bank is flush with capital of $37.35 million, with a Tier One capital ratio of 12.56% which is within the 87th percentile of peer banks, according to the Federal Deposit Insurance Corporation. In 2013, the bank had a return on assets of 0.76%, improving from 0.43% the prior year. The benchmark return on assets for community banks is 1.0%. Legacy has total assets of $278 million. 

Legacy’s local board of directors include its Chairman Gary George, Mary Kathryn Brown, Loyd Swope, Steve Stafford, Gary Jech, David Harris, Patrick Swope and Don Gibson.

Fort Smith and Van Buren hospitality tax collections for the first two months of 2014 are off to a good start compared to the year-over-year declines both cities posted in 2013.

February hospitality tax collections in Van Buren were $32,342, up 1.3% compared to February 2013. The February increase follows a 3.6% gain in January. For the first two months of 2014 the Van Buren Advertising and Promotion Commission has collected $65,751, up 3% compared to the same period in 2013.

The city collects a 1% tax on lodging and a 1% prepared food tax.

Collections in Van Buren during 2013 totaled $423,221.83, remarkably close to the $423,222.91 during 2012. During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.

“Despite bad weather during February, tax receipts still saw a slight improvement over 2013. Lodging receipts are still well ahead of 2013 through the first two months of this year,” said Maryl Koeth, executive director of the Van Buren Advertising and Promotion Commission.

Koeth said the restaurant sector in Van Buren continues to struggle, and may do so until more travelers roll through the area.

“Restaurants receipts continue to lag behind last year by about 1.5%. I anticipate this to be the trend for the next 2 or 3 months until the traditional vacation travel season begins in June. I think we will see a slight improvement for March as more people stayed closer to home for Spring Break this year,” Koeth said.

FORT SMITH
February hospitality tax collections in Fort Smith totaled $54,315, down 2% compared to February 2013. The February dip follows a 13% gain in January.

However, for the first two months of the year the Fort Smith Convention & Visitors Bureau has collected $110,314, up 4.9% compared to the same period of 2013. The city collects a 3% tax on lodging.

Collections in Fort Smith during 2013 totaled $731,057, down 2% compared to the same period in 2012. The gap in collections improved through the year with first quarter collections were down more than 6% compared to the 2012 quarter. For the fourth quarter, collections were up 0.62% compared to the 2012 quarter.

During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period. The 2011 collections were up 4.3% compared to 2010.

ARKANSAS COLLECTIONS
January revenue from Arkansas’ 2% tourism tax was $787,043, ahead of the $751,792 in January 2013. The state did not have February numbers as of April 21.

The 2% tourism tax set a record in 2013 by reaching $12.716 million, and the state’s tourism chief is predicting that 2014 could be even better for Arkansas’ tourism and travel sector.

The 2013 collections were up 2.5% compared to the $12.405 million in 2012, and well ahead of the $11.378 million slump in 2009 when national economic conditions proved tough on Arkansas’ tourism industry.

TuffTek by NanoMech is among the products honored with a 2014 Edison Award. Inspired by Thomas Edison's persistence and inventiveness, the annual awards recognize innovation, creativity and ingenuity in the global economy. Each recipient will be honored April 30, at the Edison Awards Annual Gala in San Francisco.

"It's exciting to see companies like NanoMech continuing Thomas Edison's legacy of challenging conventional thinking," said Frank Bonafilia, Edison Awards' executive director. "Edison Awards recognizes the game-changing products and services, and the teams that brought them to consumers."

Edison Award nominees are judged by more than 3,000 senior business executives and academics from across the nation whose votes acknowledge the finalists' success in meeting the award's stringent criteria of quality.

"The TuffTek platform is the company's patented, award winning and nanoengineered advanced coating technology incorporated into cutting tools and wear parts for machining materials used in automotive, aerospace, energy and other sectors, and critical wear parts for machines and vehicles," said company CEO Jim Phillips. "Its novel bio-inspired surface architecture -- designed to mimic a lotus leaf -- is capable of self-sustained lubrication.”

NanoMech was founded in 2002 by Dr. Ajay Malshe, chief technology officer, who credited this award to his team of scientists, and the support of Nano Materials Science and Engineering Institute at the University of Arkansas. In 2003, NanoMech began working to develop nanomanufactured products based on a coating technology pioneered by Dr. Malshe and exclusively licensed from the UA. From 2003 until 2008, NanoMech developed various applications of the NanoSpray technology under government and industrial sponsorship.

"NanoMech could not have received this prestigious award without the tireless work of our world-class team of scientists, including Dr. Wenping Jiang, Vice President of Manufacturing,” Malshe said.

He also commended the National Science Foundations and the Environmental Protection Agency for their contributions over the years in support of nano technology.

Deborah Wince-Smith, CEO of the Council on Competitiveness and a member of NanoMech's Board of Directors, praised NanoMech for its innovative work.

"The ability to develop and deploy the most cutting-edge tools and products to bolster U.S. advanced manufacturing will deliver outsized benefits to the U.S. industrial base. NanoMech and TuffTek are at the leading edge of a resurgent U.S. manufacturing capability - on that is not dumb, dirty, dangerous and disappearing: but is smart, safe, sustainable and surging."

The biggest investment most families make is their home, but the past few years it’s been painful to look at neighboring home sales prices, especially for homeowners who purchased in the past decade. And that’s true even in the strong economy of Northwest Arkansas.

RealtyTrac estimates that 9.1 million U.S. homeowners are still underwater, which means they owe substantially more than their home is worth. Their loan-to-value ratio is 125%, according to Irvine, Calif.-based real estate tracking firm. Underwater properties are down from 9.9 million a year ago

The first quarter negative equity numbers were down to the lowest level since RealtyTrac began reporting negative equity in the first quarter of 2012. 

“U.S. homeowners are continuing to recover equity lost during the Great Recession, but the pace of that recovering equity slowed in the first quarter, corresponding to slowing home price appreciation,” Daren Blomquist, vice president at RealtyTrac, said in the statement. “Slower price appreciation means the 9 million homeowners seriously underwater could still have a long road back to positive equity.

Tom Reed, owner of Reed & Associate real estate appraisal firm in Fayetteville, said Northwest Arkansas’ residential market has been on the upswing since early 2012. The upward trend came after a deep 35% average price decline between the market peak at the end of 2005 and the bottom of the trough reached in mid-2010, Reed said.

RealtyTrac reports 8,445 homeowners in Benton County – one in five of all homeowners – are upside down on their mortgages, with the value of the property 25% less than what is owed against it.

One in four Benton County homeowners is recovering equity lost during the bust. Another 14% have positive equity with loan-to-value ratios at 50% or lower. That means that their homes appraise at twice what is owed.

In Washington County, 19% of homeowners are underwater on their loans. This is nearly dead even with numbers in neighboring Benton County and a little higher than the 14% reported at the state level. One in four Washington County homeowners are seeing their equity recover and 11% are in strong equity positions with their homes valued at twice what is owed.

Reed said local home prices have been recovering since early 2012. He attributed that upward price movement to the lower overall inventory of unsold homes. He said there is a lot of new home building underway and subdivision expansion in areas where lots have become scarce and there is ample demand for new homes.

“These land prices in new subdivision phases come at a higher cost to the builder today and that is driving up the cost for new construction. In the past few years the new home market was in direct competition with the existing home market because there were so many discounted lots on the market. Those lots in the most desirable areas have been absorbed,” Reed said.

He said the higher new home prices are also lifting existing home values and he expects that to continue this year and next. The only caveats being that the local economy continues to keep the pace it’s on and new building does not outpace demand.

“I see the local property values continuing to rise at a normal range whether that’s 3% or 5%, I don’t know, but it’s not the unsustainable double digit increases that occurred ahead of the market peak,” Reed said.

Small formats, unique items and home delivery aren’t just popular with retail, they are also drawing the attention of restaurant giant YUM Brands who is seeking to breathe life into its Pizza Hut and KFC segments.

Louisville, Ky.,-based YUM Brands is a major food service customer of Tyson Foods Inc. and also does retail business with Wal-Mart Stores Inc.

David Novak, chairman and CEO of YUM Brands, said during a March 13 presentation at RBC Capital Markets Conference in Boston, that Yum is taking a page from the Taco Bell playbook to spur innovation into its sluggish casual dining formats. He said Taco Bell has enjoyed success with millennial consumers that the other YUM segments have not had. He admitted that Domino’s Pizza has outperformed Pizza Hut, something he hopes to reverse with the use of social media and smaller, more flexible formats.

Novak said the company plans to take knowledge gleaned from its social media insights at Taco Bell and infuse that learning into KFC and Pizza Hut to help drive sluggish sales.

Earlier this year, the company began testing the concept of Pizza Hut by-the-slice in two locations. And last August, the company opened KFC Eleven, an upmarket version of its fast-food chicken chain, with a menu of updated side dishes, salads, rice bowls, flatbread sandwiches and only boneless pieces of Original Recipe chicken.

“I think that the small-box format and fast-casual really has shown us that we can actually take our quality up, our pricing up and give people more even within our own formats,” Novak said. “But I think we are really going to unlock a lot of growth just by looking at the Subways and the Chipotles and the fast-casuals, the Five Guys. These kinds of concepts I think are showing us there's different ways to make money, and you can do it very profitably.”

FAST CASUAL WINNERS
According to Technomic's Top 150 Fast Casual Restaurant Report, fast casual makes up just 14% of the total $223 billion limited-service restaurant segment. However, its sales continue to outpace other operators.

Fast-casual sales increased 13% in 2012, and the largest chains — those posting more than $325 million in sales  — did even better, growing by 16%. Technomic notes that fast-casual restaurants continue to outperform quick-service and full-service establishments by posting strong gains while the rest of the industry is having a more difficult time.

"Fast casual has become a $31 billion segment since Chipotle began reinventing fast food 20 years ago," Darren Tristano, executive vice president of Technomic, said in a statement. "Consumers today want quality offerings made quickly. Segments like burger, sandwich and Mexican have done a great job delivering on quality, fresh, gourmet, and made-on-demand offerings. There are still areas of growth in the fast-casual segment for operators to adopt these ingredients for success and become viable in the fast-casual landscape."

The trend is expected to continue. While the compound annual growth rate for all limited-service restaurants is 4.5% (2012 through 2017), fast-casual operators are expected to grow 10%, on average, over the same period. The categories that saw the fastest sales growth were sandwich (up 17%) and Asian/noodle (up 16%), according to the Technomic data. 

Top players within fast-casual clusters include:
• Bakery café led by Panera Bread with sales of $3.7 billion.
• Mexican led by Chipotle Mexican Grill with sales of $2.7 billion.
• Chicken led by Zaxby's with sales of $979 million.
• Asian/Noodle led by Panda Express with sales of $1.8 billion.
• Better Burger led by Five Guys Burgers and Fries with sales of $1.1 billion.
• Sandwich led by Jimmy John's Gourmet Sandwich Shop with sales of $1.3 billion.
• Pizza led by Donatos Pizza with estimated sales of $157 million.

DESTINATION PRODUCTS
Last month YUM launched its Taco Bell breakfast platform taking on McDonald’s with its waffle taco loved by real-life Ronald McDonalds featured in television ads for the fast-food breakfast taco.

Novak said Taco Bell has worked on refining its breakfast menu for five years. He said the waffle taco and the resurrection of the KFC Double Down, bun-less chicken sandwich, are destination products.

“We have products that we think are destination driven at what we think is very, very good value,” Novak said.

Analysts are lukewarm on the wacky menu items saying they could drive consumer interest and traffic in the short-term, but noted that consumer trends point to fresh, healthier and “made to order” items faring better over the long-term.

J.P. Morgan downgraded YUM Brands on Monday (April 21) one day ahead of its earnings announcement noting the stock is overvalued at its current price of $75.98, with significant exposure in China and sluggish U.S. sales.

CHICKEN DELIVERY
“In the U.S. ... we will be delivering our award-winning wings with plans to ultimately be the first home meal delivery service chain to offer up complete chicken meals that you can order to go along with your pizza,” Novak said. “We now have fryers in all of our Pizza Huts in the U.S., and this will be a major sales layer that we will launch.”

Since restructuring the organization at the beginning of the year, Novak said YUM’s new brand-focused approach has helped revitalize the global operations. He said each day KFC wakes up asking how they can attack McDonald’s market share and Pizza Hut does the same with Dominos.

The waffle taco by Taco Bell was a direct hit to McDonald’s lucrative breakfast market which is 25% of the company’s total U.S. sales.

NorthWest Arkansas Community College is offering a tuition discount for out-of-state veterans that will enable them to attend NWACC or complete online courses at the reduced rate that in-state residents pay.

The college’s board of trustees approved the out-of-state tuition waiver at its March board meeting, and the new policy becomes effective with the fall semester. The cost for in-state tuition is $122.50 per credit hour.

“We are committed to honoring the dedication of our nation’s service men and women, and we believe this waiver will help support returning veterans who are seeking additional education,” said Dianna Portillo, director of NWACC’s Veterans Resource Center. “For some veterans, this step removes a significant hurdle. Under the terms of the post-9/11 GI Bill, the Department of Veterans Affairs only covers the cost of in-state tuition for a service member.  The waiver eliminates that extra out-of-state expense that may have put college out of some veterans’ reach.”

The waiver will be available to any veteran with a DD214 who was discharged under honorable conditions.

“The tuition waiver is the latest of many steps the College has taken to show continued support of veterans,” said Dr. Todd Kitchen, vice president for learner support services. “NWACC offers academic advising for all enrolled veterans and dependents of veterans and assistance for guardsmen and reservists submitting their tuition assistance applications through Go Army Ed,” he said.

Portillo noted that the College also has recently added two scholarships that are available to veterans. The Veterans Resource Center currently serves 400 veterans and their families.

More information about the tuition waiver or veteran services is available online.

First quarter 2014 commercial airline enplanements are up 5.36% and 9.1%, respectively, in Northwest Arkansas and Fort Smith, but down more than 6% in Little Rock.

Travelers flying out of XNA during March totaled 51,325, up 4.09% compared to the 49,309 during March 2013. For the first quarter of 2014, enplanements at XNA total 133,785, up 5.36% compared to the same period in 2013. The early 2014 traffic is up 1.77% compared to the same period in 2007 – the year that XNA reached its record enplanement of 598,886. (See XNA enplanement history at the end of this report.)

While they welcome the gain, officials at XNA aren’t sure why traffic began to push more positive in the first quarter.

“We even went back in (February) to look at last January weather thinking it could be  the reason for the jump. It was not,” said Kelly Johnson, director of the Northwest Arkansas Regional Airport. “I think the economy is picking up thus more travel. We hope the trend continues. I have talked with other airport operators and they too are seeing increased traffic at different places around the country.”

Johnson also said the effort continues to recruit more carriers to the airport, but industry conditions are not helping.

“The U.S. has seen 200 airlines come and go and we are now down to four major carriers and just a handful of start-up discount carriers (discount airlines). There are hundreds of airports nationwide doing the same things we are in attempts to get service into their individual markets. We are taking an all-inclusive approach to lure new service into XNA,” Johnson said.

For all of 2013, XNA enplanements totaled 579,679, up 2.58% compared to the same period in 2012. The enplanement growth remained stable through the year, with enplanements up 2.42% at the end of the first quarter of 2013.

Enplanements at XNA totaled 565,045 during 2012, up just 0.4% compared to 2011. Although slight, the gain prevented XNA from posting two-consecutive years of enplanement declines. XNA’s first full year of traffic was 1999, and the airport posted eight consecutive years of enplanement gains before seeing a decline in 2008.

American Airlines remains the dominant carrier at XNA with around 43% of all enplanements during 2013. Delta is second with around 27% of enplanements followed by United Airline at around 15%. The airport has more than 10 service connections with five carriers.

FORT SMITH TRAFFIC
The Fort Smith Regional Airport, served by flights from Atlanta and Dallas-Fort Worth, posted March enplanements of 7,658, up 9.11% compared to March 2013.

Enplanements for the first quarter of 2014 total 20,692, up 9.14% compared to the same period in 2013.

For all of 2013, enplanements at the airport totaled 84,520, down 2.46% compared to the same period in 2012. The decline ended three consecutive years of enplanement gains at the airport. (See Fort Smith enplanement history at the end of this report.)

With 12,171 enplanements for the first quarter of 2014, American Airlines accounts for 58.8% of commercial traffic out of Fort Smith. Delta Air Lines had the remaining market share for the first quarter of 2014.

Enplanements at the Fort Smith Regional Airport totaled 86,653 during 2012, just ahead of the 86,234 in 2011, and marked three consecutive years of enplanement gains.

Total system traffic for American Airlines was 1% for the first quarter of 2014 compared to the same quarter in 2013. Regional enplanements were up 0.4%, while the regular, or “mainline,” traffic was up 1.2% in the quarter.

Delta total system traffic was up 3.5% for the first quarter, and it’s domestic (U.S.) traffic was up 3.8%. However, regional traffic for domestic flights was down 1.4% during the quarter.

LITTLE ROCK NUMBERS
Enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport) were 88,282 in March, down 6.24% compared to March 2013. Enplanements for the first quarter of 2014 were 231,380, down 6.51% compared to the same period of 2013.

Enplanements in 2013 totaled 1.085 million, down 5.45% compared to 2012. Enplanements in 2012 totaled 1.147 million, up 4.07% compared to 2011. The 2012 numbers ended five consecutive years of enplanement declines at Arkansas’ largest commercial field.

With 68,708 enplanements during the first quarter, Southwest posted the most enplanements of the eight carriers operating out of Little Rock. However, the enplanement count for Southwest was down 17.14% in the first quarter compared to the same quarter in 2013.

System traffic for Southwest Airlines during the first quarter was down 0.2% compared to the first quarter of 2013. The discount carrier also reported that the number of flights during the quarter was down 5.9%.

ENPLANEMENT HISTORY (Fort Smith Regional Airport, since 2000)
2013: 84,520
2012: 86,653
2011: 86,234
2010: 86,129
2009: 78,432
2008: 87,030
2007: 99,127
2006: 94,717
2005: 102,607
2004: 92,928
2003: 90,493
2002: 87,944
2001: 95,419
2000: 104,182

ENPLANEMENT HISTORY (Northwest Arkansas Regional Airport, since 2000)
2013: 581,487
2012: 565,045
2011: 562,747
2010: 570,625
2009: 540,918
2008: 571,845
2007: 598,886
2006: 586,320
2005: 583,940
2004: 511,714
2003: 448,228
2002: 400,063
2001: 374,122
2000: 367,157

The Cherokee Nation will hold a groundbreaking for a new casino located about six miles west of downtown Fort Smith on April 29.

According to a press release, the casino will replace the tribe's casino located at the intersections of Interstate 40 and U.S. Highway 64 in Roland, Okla.

Plans for the casino call for 170,000-square-feet of space spread between a casino and a "6-story, resort-style hotel, featuring 120 rooms along with convention space."

The casino-hotel will feature 850 electronic games, as well as table games and a private high limit poker room. Two restaurants will also be included within the new complex — what the tribe described as a grab-and-go café and a Las Vegas-style buffet. The new facility will also feature a live music venue.

The casino now located at the same intersection as the planned development opened in 1990 as the Cherokee Nation Bingo Outpost, according to the release, and houses a 50,000-square-foot gaming venue with 600 electronic gaming machines, as well as eight poker tables and seven table games. A 24-hour diner is also located at the site.

Cherokee's planned expansion will bring the area's second casino-hotel complex. The Choctaw Nation opened an upgraded gaming facility with a 7-story hotel tower in late 2012 as part of a $60 million expansion. It houses a total of 2,200 electronic gaming machines and employees about 850 people.

A cost estimate for the Cherokee Casino-Hotel project has not been announced.

The Roland facility is one of two casinos the tribe operates in Sequoyah County, the other located along I-40 in Sallisaw. The tribe also owns the former Blue Ribbon Downs race track, which is leases to a horse training company.

The tribe also operates the Hard Rock Hotel and Casino in Catoosa, Okla., which features two hotel towers and thousands of electronic gaming options.

Groundbreaking for the new casino-hotel will be April 29 at 11 a.m.

Bentonville-based America's Car-Mart Inc. announced the opening of its 134th dealership on Tuesday (April 22). The dealership is located in Dalton, Ga., and makes the company’s fourth dealership in the Peach State. It also marks the tenth new dealership opening for fiscal year 2014.The Dalton dealership will be managed by Michael Kelley. 

Car-Mart management also said it expects to open two additional locations very soon but these openings will take place just beyond the April 30, fiscal year-end.   

Car-Mart will report earnings in mid-May. The buy here, pay here, used auto dealer stock was trading at $36.30 following Tuesday’s announcement. Shares were down 31 cents.
     

Americans are looking at more than dollar savings when it comes to feeding their families. A recent food trends report by Cone Communications indicates families are reaching for healthier, more sustainable foods which is forcing changes within the grocery industry.

Although family satisfaction reigns supreme in the study findings, 93% of shoppers surveyed consider health and nutrition important, and 77% said sustainability is key in their decision to purchase. A majority of consumers named specific sustainability initiatives that influence their buying decisions:
• 74% locally produced
• 69% sustainable packaging
• 69% animal welfare
• 67% non-GMO
• 65% protects and renews natural resources

Nearly nine out of 10 survey respondents consider where a product is made when making food purchasing decisions, and two-thirds said they would pay more for food that is produced close to home.

Local food sourcing is linked to environmental and economic benefits which are the two biggest reasons cited by the survey respondents. Americans' convictions are so strong in their commitment to purchase locally produced foods that nearly half (46%) would sacrifice variety to do so, the findings show.

"As the local food movement goes mainstream, it's not just about the 'mom and pop shop' or farm stand. Even large companies have a role to talk about where they source food and the respective impacts on local communities," Alison DaSilva, executive vice president of Cone Communications, said in a statement with the report. "Using local as a broader value proposition helps companies of all sizes talk about the social and environmental benefits of responsible sourcing."

Wal-Mart Stores Inc. has been at the center of the sustainability sourcing movement for a decade now and it continues to tweak its operations and requirements of is suppliers to provide more fresh and more localized products without higher costs to consumers.

‘FOOD UPSTREAMING’
One way Wal-Mart hopes to provide fresher food and beverages is with a program Duncan Mac Naughton recently referred to as “Food Upstreaming.” Mac Naughton, chief merchandising officer with Walmart U.S., shared during a March 19 speech at the IRI Retail Conference that his merchandising team is now focused on food upstreaming work and making some great progress.

“This is really about how we can decrease product cost while we increase product quality. It is that simple, simple in concept, but it takes some work to do. We now have three wine warehouses across the United States in California, in Florida and in Arizona. We are able to take cost out of the distribution center and then reflect that cost back to the customer, MacNaughton said.

Continuing, he explained: “In produce which I am very excited about, we are able to use regional facilities to start to centralize some of the produce supply chain activities, things like culling and things like quality assurance ripening, cutting, packaging and even sorting across an entire crop to say which stores should get which products. We opened our first facility in South Texas in the third quarter of last year and we plan to open five more of these facilities in the coming years.”

Wal-Mart has followed Kroger, Safeway and Texas-based H-E-B in the push to win share in the competitive “fresh war” throughout the grocery industry.

FRESH GUARANTEE
It’s been nearly a year since Wal-Mart unveiled its “fresh guarantee” to consumers promising money back for produce that doesn’t meet expectations.

"We're listening to our customers and delivering on our promise to offer great produce at the most affordable price," said Jack Sinclair, executive vice president of the food business for Walmart U.S. "We are so sure our customers will be pleased with the fruits and vegetables they buy in our stores, they can receive a full refund if they aren't completely happy."

Grocery accounts for 55% of the net sales revenue at Walmart U.S., which amounted to $151 billion last year. 

Retail experts like Carol Spiekerman, CEO of NewMarketBuilders, have said that fresh is everywhere because it is often a reason people will travel to a particular grocery store. She adds that playing the fresh game raises the bar for grocers because consumers expecting fresh are unforgiving when they don’t find it as advertised.

Sinclair said consistency would be key to the fresh program’s success, which is why it mandated training for 70,000 of its employees who are responsible for stocking and restocking fresh produce in stores across the country. To improve freshness, Wal-Mart hired produce experts to work directly with farmers in the key growing regions where they have produce-buying offices. They also employ third-party produce auditors at the store level.

Wal-Mart said it has been focused on local farm sourcing since 2010 and ongoing efforts to streamline the supply chain have reduced the number of days produce is in transit to ensue the freshest fruits and vegetables get to the customers.

In the recent quarter, Wal-Mart reported its overall food and consumable grocery marketshare grew by 0.24% despite negative comparable sales attributable in part to SNAP (federal food stamp) benefit reductions. That said, Wal-Mart had mid-single digit positive comp sales in produce, with positive results in other fresh departments including meat, deli and bakery.

Sinclair told analysts in the October meeting in Bentonville that Wal-Mart’s efforts were starting to pay dividends toward Wal-Mart’s goal of $25 billion in “fresh” sales annually. He said the plan involves using a 33% share in consumables as the benchmark. 

To date, Wal-Mart has a 21% share in bananas, which Sinclair said was linked to better sourcing. With just a 9% share in strawberries, he said, Wal-Mart knows there’s work to do.

CONSUMER EDUCATION
"Grocery shopping decisions no longer hinge on price and taste alone. Consumers worry about where their food is made, what's in it and how it affects the environment," DaSilva said. "The stakes are higher for companies to not only provide food options that meet consumers' modern needs but communicate attributes in a clear and transparent way."

Consumers look to companies to help them understand the broader implications of their food purchasing decisions, with nearly three-quarters (74%) stating they want companies to do a better job explaining how their purchases impact the environment, according to the Cone report.

"Although consumers are shopping with an eye toward sustainability, they are equally motivated by personal needs and a desire to improve society," said Liz Gorman, senior vice president at Cone Communications. "Messaging must be two-fold. Companies must clearly demonstrate the impact consumers' purchases are having on the environment, while reinforcing health, taste and quality attributes."

One area of growing concern among consumers is the GMO (genetically modified organisms) debate. Cone’ research found that 84% of the consumers surveyed want companies to disclose information and educate them about GMOs in products because half said they don’t fully understand whether GMOs are good or bad.

Despite this confusion, three-in-five Americans are on the lookout for non GMO-labeled foods when shopping giving the following reasons:  
• 39% believes non-GMO foods are healthier
• 32% worries about the effects on the environment
• 24% questions the ethics behind the use of GMOs

Wal-Mart has stayed virtually silent on the GMO labeling debate after it leaned toward labeling support efforts in March 2013. An industry trade group and grocery competitor have each more recently spoken up.

"The Food and Drug Administration up to now has said that GMOs are safe, but we also recognize that some consumers want more information and companies might want to include GMO information, so we are asking the FDA to outline labeling standards companies can use voluntarily," Pamela Bailey, CEO of the Grocery Manufacturers Association, said in a statement.

Grocery retailer Wegmans also weighed in on the controversial topic of GMOs this week encouraging The FDA to implement a mandatory approval process for new GMO foods and label non-GMO foods.

Wegmans nutritionist Jane Andrews said in a NPR interview on Monday (April 21) it’s a complex issue and the store is trying to better educate its customers.

"Many people assume GMOs are in the produce department," she said. "They’re not, with a couple of exceptions. GMOs are fed to animals that produce our meats, eggs, poultry, seafood. Or it’s commodity crops that go into processed foods."

She said there's no way to tell if even minor ingredients are genetically modified and labeling would involve a paper trail of documentation.

“We think that official approval is important for consumers to know that the FDA has signed on and said this is a safe product,” Andrews said.

When it comes to genetically modified foods, Andrews said the store’s stance on the products is clear — GMOs are safe. However, not everyone is buying it. 

Last month Kroger and Safeway vowed not to sell genetically engineered salmon, joining Trader Joe’s, H-E-B, Aldi and Target.

Danny Loe has been promoted to vice president-enterprise customer solutions for Fort Smith-based Arkansas Best Corp. following the retirement last month of Jim Keenan who previously held the job.

Loe will report directly to Arkansas Best President and CEO Judy McReynolds, and his start date is effective May 1.

The Enterprise Customer Solutions group was formed in November 2013, to drive sales and revenue across the ABF Freight, ABF Logistics and Panther Expedited Services businesses.

Loe is a 17-year veteran of the company and most recently served as vice president-yield management for ABF Freight System since 2010. He held a number of increasingly senior positions in the ABF Freight pricing department after joining the company as an associate pricing analyst in 1997. He also served as director of Marketing & Public Relations for ABF Freight for six years until assuming his current role.

"Danny's deep experience in pricing analytics, combined with a strong knowledge of our customers' needs, will be very valuable in his new role as we look to better serve our customers across the supply chain and particularly drive additional sales of multiple services across ABF Freight, ABF Logistics and Panther," McReynolds said in a statement.

Succeeding Loe in his role at ABF Freight will be Eddie Sorg. Sorg, who most recently has served as director of Pricing, has been with ABF Freight since 1995. In addition to various positions in pricing, Sorg also served as a director, Revenue Accounting.

Two closely watched freight reports indicate positive movement in the U.S. economy, but also note that “signals are still mixed,” and that truck tonnage gains in 2014 are not likely to be as strong as they were in 2013.

The American Trucking Associations’ Truck Tonnage Index was up just 0.6% in March after a 1.9% gain in February. For the first quarter of 2014, the index is up 2.3% compared to the same period in 2013, but was down 2.5% compared to the fourth quarter of 2013.

The not-seasonally adjusted index, which represents the real change in tonnage hauled by the fleets, was 12.1% below the previous month.

“Tonnage continued to claw its way out of the hole that was dug in December and January,” ATA Chief Economist Bob Costello said in his monthly report. “However, with a cumulative gain of 2.5% during the last two months, we still have a way to go to offset the total loss of 5.2% in December and January.”

Trucking serves as a barometer of the U.S. economy, representing 68.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. Trucks hauled 9.4 billion tons of freight in 2012. Motor carriers collected $642.1 billion, or 80.7% of total revenue earned by all transport modes.

Trucking industry fundamentals “look good,” but the pace of growth seen in 2013 may not continue into 2014.
 
“While it will take time to regain what was lost due to weather and other factors, like a potential inventory correction in the first quarter, I remain optimistic for 2014; however, don’t expect a 6.3% annual gain in truck tonnage like during 2013,” Costello explained.

The Cass Freight Index reported that shipments were up 0.4% compared to March 2013, but up 6.6% compared to February.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the index. The data comes from a Cass client base of 350 large shippers.

Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., also noted in the Cass Freight report for March her uncertainty about the pace of growth in 2014.

“All in all, lots of strengthening in the economy, but taking everything into consideration the signals are still mixed. It will be interesting to see if we can continue to climb up or if we will keep with the trend of recent years and stumble in the second quarter,” Wilson noted.

Wilson’s report included the following points.
• “Shipment volume and total freight payments continued to climb in March, ending the first quarter of the year on a high note. Bad weather continued to plague many parts of the country, but transportation seemed to be less affected than in January and February.”

• “The number of shipments was 0.4 percent higher than last March and 4.6 percent higher than in March of 2012. Railroad carloads rose fairly steadily throughout March, up over 5 percent, while intermodal loadings increased over 3 percent. Truck traffic has also been picking up after falling for the first two months of the year.”

• “New (manufacturing) orders, a bellwether of future freight, rose again in March, up 1.1 percent, after plunging dramatically just two months ago. The backlog of orders jumped 10.6 percent, another indicator that freight volumes should be growing in coming months. Freight volumes in the first quarter were up over 10 percent over Q4 2013, showing the strongest start of the last few years, but it remains to be seen whether the number of shipments will follow the trends of recent years and falter in the second quarter.”

• “Manufacturing and production have turned a corner and are back in expansion mode. Strong new orders and backlog figures bode well for the freight sector. Imports were up in February, especially for autos and parts. Sales of cars and pickup trucks – which are considered a harbinger of recovery in the construction sector – rose sharply in March.”

• “The labor picture appears to be strengthening on the surface, with 192,000 jobs added last month, but Gallup’s measure of the percentage of the adult population that is employed full time (at least 30 hours a week) dropped to 42.7 percent, just slightly above the low point in February 2011. Gallup also puts the seasonally adjusted unemployment rate at 7.5 percent, compared to the Bureau of Labor Statistics’ (BLS) 6.7 percent (the Gallup figure includes the so‐called discouraged workers that fall off the BLS rolls.) Private‐sector payrolls are now higher than in December 2007, the start of the Great Recession.”

Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc., noted in a March 26 investor note on the less-than-truckload (LTL) industry that tonnage gains should bode well for companies like Fort Smith-based ABF Freight System – a subsidiary of Arkansas Best Corp.

Delco wrote that “tonnage has been stronger than previously expected in 1Q assuming that March plays out well (which indications have suggested they have), and we think commentary regarding this on the earnings calls can help to buoy LTL stocks despite lower-than-expected earnings due to weather.” In the note, which also included support from Stephens’ associate analyst Ben Hearnsberger, Delco said the LTL industry should also benefit from improved pricing.

“Per updates from LTLs at industry conferences and our private company channel checks we believe that tonnage levels have accelerated throughout the quarter and that core contractual pricing for most of the industry has remained strong,” he wrote.

Arkansas Best is scheduled to announce first quarter earnings on May 1.

With a population on the brink of 500,000, Benton and Washington counties grew beyond their infrastructure long ago. More than a dozen major road projects are underway in Benton County, which means the growing pains will exist for a few more years, said Steve Lawrence, chief engineer for District 9 of the Arkansas Highway & Transportation Department. 

Lawrence recently spoke at the Bentonville-Bella Vista Chamber of Commerce Business Matters breakfast meeting sharing the timelines and costs of these projects throughout Benton County.

After more than a decade of planning, the first section of the Bella Vista Bypass opened for traffic on Tuesday (April 22). This three miles section connects U.S. 72S and U.S. 72N bypassing the small town of Hiwasse. The section cost was $20 million. The next phase is slated to open this fall which connects U.S. 72N to C.R. 34, a $13 million project. The biggest stretch of bypass construction began in February from U.S. 71 to U.S. 72, a $53 million project slated for completion in the fall of 2016, Lawrence said.

Two more phases of the Bella Vista Bypass have been put on hold until Missouri can come up with the funds to build their portion of the highway. Lawrence said it will take $10 million to connect C.R. 34 to the Missouri line and there is also $30 million tagged to build the interchange at the southern entrance of the bypass at Highway 71 between Bentonville and Bella Vista.

In the meantime, the state is building a roundabout to provide connectivity between the  bypass and U.S. 71 and junction to Interstate 540, now called I-49. The roundabout is an interim cure so cars and trucks can travel the finished portions of the bypass, Lawrence said.

One of the more visible projects is the widening of the new I-49 to six lanes from U.S. 62 to U.S. 72 — a 26-mile stretch taking place over the next two and half years. The widening of I-49 will take place over the next three years. The first phase from Wagon Wheel to Highway 264 it is a $15 million job with completion slated for this fall.

The next phase expected to begin this summer is construction from New Hope Road, Exit 84 in Rogers up to Exit 86 at Highways 62/102, Rogers/Bentonville. Lawrence said next year there is $60 million of widening projects slated for the new I-49 corridor through Benton County that will be conducted in two phases a two-mile stretch from Exit 86 north to Exit 88 — a $20 million project. Widening from Exit 78 in Lowell up to New Hope Road at Exit 84 with a $40 million price tag. Lawrence said there is also a major interchange improvement project on tap for 2016 at Exit 85 Bentonville/Rogers.

Elsewhere in the county, two other large projects are nearing completion. The state is widening U.S. 62 between Avoca and Garfield to five lanes. Lawrence said this $23 million project is slated for completion in the fall of 2015. U.S. 102 from Greenhouse Road in Bentonville to Centerton is also getting a five lane makeover with a $7 million price tag. The work is close to completion.

Two other large projects in Washington County are also nearing completion. The Fayetteville flyover has been an 18-month project costing $6.2 million. Contractors are ready to pour the concrete in the next couple of weeks as soon as temperatures stay above 50 degrees. The flyover will connect traffic headed north on College Avenue with easy access to the Fulbright Expressway without having to go through the red light and make a U-turn at Joyce Boulevard. The project is expected to ease traffic congestion around the Northwest Arkansas Mall area.

In Springdale, the $11 million Don Tyson interchange in slated to open in August and will provide an alternate route to U.S. 71 and the business district. The goal is also to help alleviate traffic congestion on U.S. 412. City officials also expect this will open up development by the Arvest Ball Park as it provides easier access to the west side of the interstate.