Businesses large and small in Jackson County are working creatively to develop their own niches in these challenging economic times, proving that a spirit of entrepreneurship and a willingness to roll up one’s sleeves and work more often than not will lead to success.

Jackson Paper: Changing with the times

Tim Campbell and Jeff Murphy have done something their predecessors couldn’t: figure out how to keep a small paper mill viable during an era that increasingly favors big economies of scale.

When the two business partners bought a dated Sylva paper mill in 1995, it had been through three owners in three decades, all of them large corporations that ultimately decided the site didn’t fit their portfolio.

“Sylva to them was an enigma — a little, tiny thing stuck up in the mountains,” said Campbell, President and CEO of Jackson Paper. “It caused a disproportionate amount of work for a whole lot less output.”

After years in the paper industry, Campbell wanted to try his hand at running a mill of his own. A small, independent paper mill was becoming an anomaly amidst a rapidly consolidating industry, however. The large corporations that dominated the industry were closing down smaller sites to focus production at fewer and fewer behemoth factories.

But Campbell was known for an unmatched knowledge of the industry — one of the few who had both market savvy and technical know-how when it comes to making paper. Leaning on that reputation, he and Murphy courted investors and bought the mill, naming it Jackson Paper Manufacturing Company in 1995.

For the first nine years, Jackson Paper had just one sales account, a single customer that bought all the cardboard paper they could make. It was a good ride while it lasted, but the lack of a diverse client base eventually caught up with the mill when that one buyer found a new supplier.

“We were thrust into the open market,” Campbell said.

Campbell began the uphill slog to find customers for their cardboard product.

“The trick was like most things: a whole lot of hard work,” said Campbell. “I had been the guy, who if a machine broke at four o’clock in the morning, would be down at the plant. I had to put on another hat and be the chief diplomat to go out and find us business.”

Jackson Paper makes a unique product commodity — the wavy middle layer found in corrugated cardboard boxes. Jackson Paper doesn’t make the actual boxes, nor the actual cardboard — but merely that middle layer. The middle layer is sold to other plants, which in turn sandwich it into actual sheets of corrugated cardboard. Those sheets are sold to yet another plant that makes them into finished boxes.

In the end, there were four plants each performing their own step in process: one making the middle layer, one making the out layers, one sandwiching them together, and one cutting them into boxes. The fragile chain would not hold up amidst the shifting market dynamics, Campbell feared.

“We realized there was still risk in what we were doing as the industry was still consolidating,” Campbell said. “Our customers were disappearing.”

So Campbell embarked on a two-fold mission: to secure a customer base and to make forays into vertical integration. Remarkably, he managed to do both simultaneously.

The mill launched an $18 million expansion so it could churn out actual finished sheets of corrugated cardboard. The expansion is bringing 60 new manufacturing jobs — with an average salary of $40,000 plus benefits — to Jackson County.

The new venture, a separate entity called Stonewall Packaging, will purchase the corrugated medium from Jackson Paper. The outer layers will be purchased from another supplier but sandwiched on-site and sold to the end box makers.

To fund the expansion, Campbell courted small independent box makers to be the capital investors behind Stonewall. The small box makers were in the same boat as Jackson Paper in their struggle to find secure footing. They were just as concerned about having a steady and affordable supply of cardboard as Jackson Paper was about having a steady buyer.

The new cooperative venture was a stroke of genius, since the very people buying Jackson Paper’s product are now financially vested in the plant they are buying it from.

“What we wanted was the built-in support,” Campbell said.

Jackson Paper may be a small town factory, but it’s written a new page in the playbook the big boys will likely be pondering for some time to come.

Annie’s bakery: recipe for success

When Joe Ritota started churning loaves of organic bread out of his retrofitted garage-kitchen and pedaling them to grocery stores, the typically impenetrable wholesale market quickly and eagerly made room on their shelves.

“People just taste my bread and love it,” he said. “They were willing to take a leap of faith and say, ‘Yeah, sure, I’ll put it in my store.’”

He quickly learned there was a downside to people loving his bread so much: he couldn’t keep up with demand.

“It was quite a feat,” Ritota said.

On the hunt for bigger kitchen space, Ritota moved into a large downtown building in 2002 with a dual purpose in mind. Downstairs would house a massive commercial kitchen dedicated solely to the wholesale business, while a Main Street storefront upstairs would serve a retail clientele with a bakery and café. He was instantly adopted by the community.

“Both the business community and the people have been very supportive,” Ritota said. “People just flock in to get fresh croissants and Danishes. The lawyers and doctors and bankers all come into our bakery and get coffee on their way to work.”

While Jackson County locals know Annie’s as their hometown bakery, 75 percent of Ritota’s business is on the wholesale side. Bread from Annie’s Naturally Bakery in Sylva is found throughout a four-state area on dozens of grocery store shelves and restaurant tables. Ritota employs 26 people.

Ritota credits his success with the quality of his product. It’s organic, hand-crafted and baked in the Old World style — with no preservatives, no dough conditioners or modifiers. Ritota has an arsenal of 26 bread varieties, including his famous holiday breads like German Stollen, and a whopping 150 pastries and cookies. Some recipes he developed from scratch, others were passed down through his family lineage of bakers. He grew up in a town in the northeast with nine bakeries in a single square mile.

When starting a bakery business, Ritota was drawn to Sylva as “a very up-and-coming and vibrant community.”

“In Western North Carolina, bakeries like ours and really few and far apart,” Ritota said. “We give customers breads they would have been accustom to in metropolitan areas. Everybody just goes bonkers over what we do.”

Heinzelmannchen Brewery: Earning a spot on the menu

Dieter Kuhn had built a strong following for his home-brewed beer long before launching a hometown brewery in Sylva.

But turning a personal passion into a fulltime business venture was an entirely different undertaking. While customers in search of a local craft beer streamed across the brewery’s threshold when it opened in 2004, getting placement in restaurants and bars required good old-fashioned foot pounding. The regional wholesale market is crowded with competitors, with nearby Asheville sporting 12 microbrews, the most per capita of any city in America. Restaurants only have limited space for beers on tap, and winning a spot in the line up often meant edging out an existing beer in their offerings.

“A lot of it has to do with trying numerous times,” Kuhn said. “You have to be persistent. You have to knock on doors.”

As a case in point, Kuhn finally landed a coveted spot this winter in the beer line-up at Cataloochee Ski Area in Maggie Valley, visited by tens of thousands of traveling skiers annually. It was the third year in a row that Kuhn made the trip to the ski area with beer samples in tow in hope of winning over the bar manager, and it finally paid off.

“Especially at tourist venues people tend to want local microbrews so he said, ‘OK, let’s try you,’” Kuhn said. “A good salesman never lets up.”

The beer is now found at more than 20 restaurants in the mountain region. One smart move to help set the beer apart was the creation of a special tap handle that looks like a hand-carved wooden gnome, a fitting symbol since the name Heinzelmännchen is a gnome-like creature found in the Black Forest of Germany. The brewery had initially outfitted kegs with a plain paddle bearing nothing but the beer’s name.

“Unless you were a bartender you didn’t realize what was on that label,” said Sheryl Rudd, Kuhn’s wife and business partner. But the eye-catching gnome is now a beacon to beer drinkers. Fans requesting the beer by name often helped in getting their foot in the door.

In addition to beer, Heinzelmännchen brews up batches of handcrafted root beer and birch beer, something no other brewery in the state can claim.

“You have to be inventive,” Kuhn said.

The brewery’s wholesale business dipped slightly during the recession as people cut back on going out to dinner and ordered fewer beers with their meals. To combat the trend, Heinzelmännchen launched a marketing campaign dubbed Beer Brewed for Food. They analyzed restaurants’ menus and educated staff on what beers to suggest, much like they would with wine. Heinzelmännchen also began hosting a monthly beer and food pairing at the brewery, inviting a different local restaurant to sample menu items paired with one of their 10 beer varieties.

The slogan for Heinzelmännchen is “Your Gnometown Brewery,” a throwback to Kuhn’s roots growing up in a small German hamlet.

“Every village has a different flavor because it has its own brewery. As you travel from village to village, the way you understand that village was going to their local brewery,” Rudd said. “We would be Sylva’s ‘gnometown’ brewery.”

That, and a whole lot more.

Dillsboro Chocolate Factory: local product sells nationwide

As a purveyor of fine chocolate, Bob Williams has adopted a guiding philosophy behind his handcrafted morsels: you get what you pay for.

Williams bought the Dillsboro Chocolate Factory somewhat on a whim. He was living in Florida, but owned several vacation rental cabins in the mountains. He and his wife dreamed of moving here to raise their three children. During a visit to the area in 2005, he learned the chocolate company was for sale and decided to buy it on the spot, taking out a second mortgage on several of his cabins to fund the venture.

Williams admittedly knew little about chocolate, but he dreamed of marketing their products beyond their Dillsboro storefront. There was a small problem, however.

“Our chocolate was not very good,” Williams said. “I realized we couldn’t grow this business unless we improved our product.”

So he set out to do just that, starting with the cacao base. He ordered a variety of samples from chocolate suppliers and gathered his employees in the kitchen for a taste test. The vote was unanimous, but the leading sample was also the most expensive.

“Our costs went up 8 times,” Williams said.

Armed with a product Williams could now comfortably tout as the best on the market, he began courting wholesale buyers willing to put his chocolates in their stores.

“I knocked on a whole lot of doors and I kept knocking,” Williams said.

Today Dillsboro Chocolate Factory’s fudge, truffles, bars and other delicacies have found homes in gift shops, book stores, resorts — and are even carried by other specialty chocolate shops. Dillsboro Chocolate Company does a brisk Internet business, filling orders to ship across the county.

Williams specializes in exotic chocolate flavors, constantly cooking up new recipes in his kitchen. The list of creations now tops 100, including favorites like sea-salted caramels, key lime white chocolate, pumpkin pie fudge and even chocolate covered Kettle potato chips.

One of his more unusual wholesale accounts is a beef jerky outlet in Tennessee. Williams developed a special recipe for a savory chocolate using peppercorns and Cajun spices. A few of his recipes borrow inspiration from customers, like his ginger chocolate bar that was a special request by a regular from Charleston.

One of Williams most clever inventions was a line of Great Smoky Mountain truffles named for famous places in the mountains. There’s the Tail of the Dragon truffle, named for a renowned motorcycle ride, using dried jalapenos for kick. There’s the chai-flavored Chimney Tops truffle, the kahlua-infused Nantahala truffle, and the Fontana truffle with a creamy orange brandy and chocolate center.

Williams has also discovered a niche market in private labels, with clients ranging from resorts to a performing arts center. The tailored line of chocolates are made in custom molds bearing a personalized logo and specialty wrappers.

When creating custom chocolates, Williams is an ardent believer in making the product belong to the customer.

“We actually listen to them and work hard to meet the needs of what they want,” Williams said.

As the Great Smoky Mountains National Park celebrated its 75th anniversary last year, Williams saw a once in a lifetime opportunity to create a souvenir chocolate bar with potential to sell by the thousands while raising money for America’s most visited park. But even Williams was surprised by the initial order after landing the account: they wanted 25,000 bars.

“When we landed that national park bar that was more than just a chocolate deal to me,” Williams said. “That bar is very special to me in so many ways.”

Williams had once longed to be a park ranger in the Smokies, so creating a specialty bar whose proceeds would help support the place he loved so dearly brought his chocolate endeavor full circle.

“It’s about being persistent and believing in what you are doing. I believe in our product,” Williams said. “People will pay for quality. They appreciate finer chocolate and are willing to spend a little extra money.”

Tim’s auto parts: six stores and growing

Tim Jones has come a long way since his first job in an auto parts store stocking shelves and driving a delivery truck right out of highschool.

Thirty years later, Jones is the owner of not just one but six auto supply stores. Beyond the rows of car mats and antifreeze you expect from a hometown auto parts store, Tim’s Auto Parts has become a major supplier and automotive vendor — from parts for off-road mining rigs to paint for body shops.

“Our saying is we don’t just sell wiper blades and spark plugs,” Jones said. “There is not a customer out there that we can’t talk legitimately to about selling them something.”

Among the many niches Tim’s Auto Parts caters to, the heavy equipment trade has become a tour de force. The quality of life in the mountains — whether for retiring baby-boomers or young outdoorsy types — has given rise to a booming construction and development industry. Jones noticed the need among heavy equipment operators and construction companies for parts for their bulldozers, concrete trucks and the like.

Another niche Jones has cornered is as a vendor for garages and body shops. Mechanics could feasibly find what they need online or in catalogs, but Tim’s Auto Parts has amassed a large and diverse client base thanks to its customer service and knowledge of the industry. Jones’ staff can service a body shop’s paint mixing system, get a part for a garage faster than they could get it themselves or help fleet managers hone their routine maintenance schedules.

Jones said the business has come naturally to him.

“A lot of my family were mechanics by trade,” Jones said. “I always had my nose in everything. I was under a car every time I had a chance.”

Jones’ ultimate success hinged on his business partner: his wife Marcy, who has been the driving force in the business since they opened the first shop in 1989.

“She was like I was. Ambitious to own her own destiny,” Jones said. “My whole philosophy was to invest everything back in the business to grow the business.”

It also meant a lot of sacrifices, especially each time they opened a new location.

“You can’t always do two things great,” Jones said. “We had to go through the growing pains of that.

With each new store, they mustered the spirit and courage of a true entrepreneur.

“It is like anything. You don’t know for sure. You say ‘I think it is going to work. Do I have the nerve to take this risk?’” Marcy said.

They soon discovered every market has its own nuance, however. Cashiers needed entirely different parts than their Sylva store.

“People with BMWs and Lexus were in this remote place for vacation land,” Jones said. “We weren’t used to dealing with that. We had to restock our inventory to meet the needs of our customers.”

If there is a single secret to their success, it’s this: seize opportunities when you recognize one. It was certainly true of their geographic expansions, as well as their foray into the heavy equipment sector

“You build it up over time and then you realize, ‘Oh my goodness, look at how heavy-duty business we are doing’ so you expand on it and focus on it,” Marcy said.

As for coming a long way? Marcy isn’t so sure.

“When we started there was the two of us and we did everything from delivery to sales. We both still do those things. We get out and still deliver and still go see customers,” Marcy said. “The community can make you or break you. You have to have a good working relationship.”

Shelton family farms: Connecting the community to the land

William Shelton made a dramatic overhaul to his business model at Shelton Family Farms last year.

After 25 years of planting large mono-crops of lettuce, strawberries and tomatoes to sell on the wholesale market for grocery store shelves, Shelton entered the new scene of Community Supported Agriculture. Rather than loading crates of produce on big trucks bound for out-of-town distributors, Shelton is placing boxes of homegrown food directly into the hands of his friends and neighbors.

“To be connected to smiling faces who actually take an interest in my farm and to know who is enjoying my product, it has added a whole new dimension,” Shelton said. “I feel like it is breathing new life into my farm.”

Customers pay $500 at the beginning of the growing season, in essence buying a “share” of Shelton’s business for the year. In return, they get a box of fresh vegetables each week for six months.

In the spring, the bounty includes early greens, like kale and collards, and the sweet strawberries Shelton has long been known for. When summer is in full swing, the boxes overflow with zucchini, tomatoes, corn, eggplant, okra and scores of other vegetables — even shallots and onions. As the season winds down, delicious fall root vegetables like acorn squash, potatoes and pumpkins come in.

Last year, Shelton had nearly 100 participants in the program from four counties. He hopes to have 200 families this year.

The community agriculture model has experienced a national surge in popularity alongside the local food movement. There were 42 community agriculture ventures in Western North Carolina last year. But Shelton’s history as a large-scale commercial farmer makes him one of the best equipped and most diverse.

For Shelton, the new approach also means helping the environment. Instead of food grown elsewhere being shipped long distances, burning fossil fuels in the process, Shelton’s produce is being enjoyed right here at home.

The model creates a deeply personal connection between the customers and the farmer. If the farm has a tough season, the customer feels it directly in the form of smaller boxes of produce each week — and if the season is plentiful, customers reap the rewards.

Under the traditional agriculture model, Shelton bore all the risk of bad weather and crop disease. He was also held hostage to the whims of the fickle wholesale markets, which haven’t been kind in recent years.

“The market pressures have gotten worse instead of better,” says Shelton. “It’s just cutthroat supply and demand. For the last couple of years, the markets have just been horrible.”

Shelton hasn’t completely given up the wholesale side of his farming business, however. He has continued growing greenhouse lettuce year-round, which is found in local grocery stores, as well as a few other staple crops. His operation employs 10 full-time employees during the growing season, as well as contract labor during peak harvests.

But the venture into community-supported agriculture has put his farm on firm economic footing.

“It has given me hope that I can support my family as a full-time farmer,” said Shelton, who has four children.

Customers who help keep local farming alive are also preserving the pastoral scenery of the mountains, giving rise to the local saying “eat your landscape.” Those who enjoy the sight of rural farms when they drive through the countryside now have a way of making sure it stays that way.

“I’ve always had a connection with the land, but now I’m segueing that into a connection with local people and neighbors,” Shelton said.