1. Business Profile 1
Economic Outlook 1
Executive Profile 3
BankRI Notes 3
Spotlight on the Arts 4
B RI
USINESS
www.bankri.com Volume 2, Issue 1 A publication from BankRI May 2003
Kenyon Corn Meal
Rhode Island’s oldest company
by Frank Prosnitz
Company: Kenyon Corn Meal Company, Inc.
Founded: 1690
There aren’t very many
Owners: Paul Drumm Jr. and Paul Drumm III
companies that can resist
Business: Manufacture corn meal and
technological advances even
other grain products
for a few years and survive.
Number of employees: Seasonal
But how about three centuries?
Location: Usquepaugh, Rhode Island
In the case of the Kenyon
Web site: www.kenyonsgristmill.com
Corn Meal Company in the
quiet South County village of
Business Profile
Usquepaugh, it has been that very resistance
ECONOMIC OUTLOOK
to change for more than 300 years that
has made the company and its products
a Rhode Island tradition.
“For us around here it’s about trying
to maintain the historical aspect, because
An odd recovery has us
it’s the art of stone ground milling that’s
teetering on the edge of
really our lifeblood,” says Paul Drumm III
a double dip recession
who, along with his father, Paul Drumm
Jr., and four full-time employees and
by Leonard Lardaro, Ph.D
several part-timers, operates the mill.
Johnnycakes, clam cakes, and a host
What a strange time for the economy. It appears that all the “old rules“ have taken a vaca-
of other products under the Kenyon
tion. Things that we hear about in the media and observe firsthand seem in total contradiction.
name have made the mill not only a
We hear how the national economy has just about stalled, losing hundreds of thousands
Rhode Island tradition, but one that has
of jobs over the past few months. How industrial production continues to decline. That
caught the attention of national magazines,
consumer confidence has fallen to levels it has not reached in almost a decade, and that
and even the likes of Julia Child.
businesses are still not hiring or spending money on investments.
The manufacturing process has changed
Yet, just about anyone who goes to a restaurant or mall on the weekend has a hard
little since this company was founded,
“ It was sort
time finding a parking spot, getting seated, or locating someone in a store to wait on them.
perhaps as far back as 1690. The lifeblood
of passed
And despite the national weakness, the performance of Rhode Island’s housing sector
of this company, however, is still in its
down, a gift continues to be amazing – housing prices here remain very high by historical standards,
relationship with customers, often through
from one gen- while home sales remain brisk.
fairs and festivals where Kenyon’s famed
eration to How can all of these things all be occurring simultaneously? Why isn’t this recovery as
Johnnycakes are a favorite.
another.” rapid and robust as recoveries typically are?
“Over the years this mill has had the
Welcome to the new millennium! A time when the Rhode Island economy teeters on
Johnnycakes that hung on – a local Rhode
the edge of a second dip recession, one it is likely to skirt. Actually, the seeds for this go
Island thing,“ Paul III says. “It was sort
back to late 1987 in Rhode Island. Like the nation, Rhode Island is no longer a manufacturing-
of passed down, a gift from one genera-
based economy. Back then, Rhode Island had a dominant economic niche. Economic life
tion to another. The people that owned
was more predictable. A “job“ meant full time employment with fringe benefits. Job loss
it at the time were willing to put in that
was largely cyclical.
extra effort for the love of the place.
Then, in late 1987, Rhode Island became a service-and-information based economy.
“That’s really what it comes down
All the rules seemed to change. Firms, to remain profitable, are forced to continually find
to,“ Paul III says. “It’s not that this is a
ways to cut costs. This means layoffs throughout all economic conditions, recessions and
giant lucrative business.“ He says the
recoveries alike.
company grosses about $500,000 a year.
continued on page 2 continued on page 2

2. A Rhode Island mill for the next 66 years. are safe, with its owner-
ship and continuation
tradition continues He passed away in the 1980s.
assured for years to come.
As the Kenyon product
Kenyon – continued from page 1 “The mill is a place that
gained more regional and
is very important to me
national recognition, people
History is important to Paul III and to carry on,“ Paul III
slowly realized that the old
his father. The mill, they said, has been says. “It is important
method of grinding corn
at its current site since 1886, but docu- for the state too – a
into meal was perhaps a
“The mill is a mentation says it was located elsewhere Rhode Island icon. A
better formula than the
place that is in this small village as far back as 1711. lot of it has to do with
newly mechanized processes.
Now the Drumms say they’ve found a what Kenyon means
And now, Paul III says the
very impor-
land transfer that first mentions a grist- to Rhode Island.“ And
company is producing
tant to me
mill in the village dating back to the 1690s. what Kenyon means to many Rhode
60 to 100 tons of corn meal and other
to carry on.”
Kenyon Corn Meal Company is one Islanders is translated into Johnnycakes
milled grains a year.
of about 500 to 1,000 mills still operating and clam cakes and chowder, a few
Kenyon Corn Meal Company and its
in the country, Paul III says, and one of a very tasteful traditions.
place on Rhode Island’s historical map
handful in Rhode Island and nearby
Connecticut and Massachusetts. Many
are operated as hobbies, with very few
n
established as commercial enterprises,
and even fewer with the regional and
A Jobless Recovery
national reputation of Kenyon.
Economic Outlook – continued from page 1
Kenyon Corn Meal Company is in the
same wooden building it’s been in since Unlike the “good old days,“ layoffs often mean the permanent elimination of posi-
1886. The previous building, just across tions. When new jobs are created, they are frequently part-time. Throughout the 1990s
the spillway, was washed away in the Rhode Island attempted, but was ultimately unsuccessful, in building a “critical mass“ in
floods of 1886. A tour takes but a few high technology, an area that might have become Rhode Island’s dominant economic niche
minutes, walking past and around the in this “new“ economy. But there were a number of notable successes, especially in the
large grinding stones, some of which Paul financial services industry, and, more recently, in biotechnology and pharmaceuticals, the
Jr. believes to be older than the building, area that Governor Donald Carcieri has targeted to become our dominant economic niche.
used elsewhere and then moved to the In 2001, as the national economy slipped into a recession, so too did Rhode Island. It has
new facility when it was built. become apparent that economic trends in Rhode Island parallel those of the nation.
Set along the picturesque Queens Ironically, though, our lack of a substantial high tech presence spared us from expe-
River, the mill has historically been the riencing as severe a recession as did the nation overall or “successful“ high-tech states.
gathering place for local residents who For Rhode Island this recovery has not been as vigorous as it would have been after
would bring their corn to be ground, or a more traditional recession. Since the recession wasn’t very deep and several key areas
came to buy products. It was where local were spared the usual damage (notably housing, retail sales, and unemployment),
news was exchanged and was, and still is, there is simply not as much for us to recover from. And, the job loss that continues to
the largest employer of the small village. occur, which offsets the gains from being in a recession, makes recent changes in payroll
The Drumms are the 12th recorded employment very small. Rhode Island added 500 jobs last year. While this 0.1 percent
owners of the mill. rise would usually be viewed as unsatisfactory, we were among a very short list of states
When Paul Drumm, Jr. bought the to actually add jobs in 2002.
mill in 1971 he was actually looking for While we hear that this is a “jobless“ recovery, this designation is far more serious
an empty building where he and his wife at the national level than it is for Rhode Island. Furthermore, our unemployment rate
could make and sell crafts. A computer in the early stages of this recovery is nowhere near as high as it was at the beginning
repairman for IBM and MAI for several of the last recovery in 1992.
years, Paul Jr. had hurt his back and As of the last quarter of 2002, however, Rhode Island’s relatively slow recovery began
decided to change professions. A Realtor to sputter, moving us perilously close to the second dip of a “double-dip“ recession.
suggested the mill – a business Paul Jr. My Current Conditions Index (CCI), a broadly based indicator of the Rhode Island
knew nothing about, so he mortgaged economy, has registered ongoing deterioration since last October, with the 2003 values
his home and bought the mill. indicating contraction. This is the usual “signature“ of the onset of recession.
“He (the Realtor) said this is a going Retail sales growth in Rhode Island has slowed
“ I believe we will remain
business,“ Paul Jr. says. “The problem is dramatically, now around a 1 percent annually. Just a
close to sliding into recession
he didn’t tell me which way it was going.“ few months ago, this indicator was growing at well
for several more months.”
“There was no volume,“ says Paul over 5 percent. Our labor force is rising, and at an
III. “It was a very slow pace. Johnnycake unbelievable 3.7 percent annual rate. The number of
Paul Drumm, Jr., meal was 29 cents a box.“ working Rhode Islanders in February grew by almost seven times the net number
with his son, Paul For the first five years, Paul Jr. just of jobs added in our state. Try explaining that at the same time employment in
worked to keep the building from falling
Drumm outside Massachusetts is falling dramatically.
down, and continued to learn about the The ability of analysts to “make the call“ concerning the actual state of our economy
Kenyon Corn Meal
milling process from Charley Walmsley, has been greatly complicated by data difficulties. Not only do we continue to operate in
Co. They are the
who worked as the miller at Kenyon for the environment of a service and information economy, with its non-traditional patterns,
12th owners of the
66 years, following his father Ed’s reign but the the war with Iraq, higher oil prices, and atypical weather have caused major
mill, which dates
of 50 years. problems with the data that persons generally follow to gauge the economy.
back to the 1690s.
Charley, the Drumms say, was 12 I do not think Rhode Island has indeed entered the early stages of a double-dip
recession. I believe we will remain close to sliding into recession for several more
when his father asked him to skip school
months, but that activity here and nationally will progress to a more well-defined
one day and help at the mill. Charley
upward direction.
never returned to school, working at the n
Leonard Lardaro is a Professor of Economics
at the University of Rhode Island.
2

3. “ What are the lessons
I’ve learned over the
years?” Pinelli asks.
“I’m just a street per-
son. I just learned to
never give up, to be
persistent, to remain
focused, and to have
fun…I have no regrets.
I’m loving my life.
Everything’s great.”
Bill Pinelli (right) and
partner Steve Mara at
The Grille on Main
Bill Pinelli exchanged rented a chair and shuttled between “Steve always dreamed of it being a
in East Greenwich. the two businesses. restaurant. Our story is amazing. We
scissors and comb for a “I eventually realized that the only never knew each other. We sat down
spatula and chef’s hat. way to do something properly is to give once. We shook hands the third or fourth
it 100 percent attention,“ Pinelli says. time we sat down, and became business
“By 1990 I was in the deli full time. It partners. Then we became friends, now
About 15 years ago, after well over taught me how to run a business. If it we’re neighbors and he’s like family.
two decades in the same business, Bill weren’t for my family helping me out we “I don’t think I could have ever done
Pinelli felt it was time for a change – would have never made it. We almost it without Steve, with his financial back-
and what a change it was. lost it twice in the first five years.“ ground, and I don’t think he could have
He was turning in his scissors for a After seven years, Pinelli’s deli done it without me.“
spatula, giving up on the hair stylist became a café, and a popular destina- What they’ve done includes the
business that had led to ownership of tion for many area residents. Among opening of the Post Office Café in East
two salons, for a small deli in a strip those customers was a young man, Greenwich in June 1994, followed six
mall off Route 2 in West Warwick. Steve Mara, who also had a dream. He months later by the transformation of
Executive Profile
Where it led him was to join forces owned Alias Smith & Jones on Main Alias Smith & Jones into The Grille on
with another entrepreneur, Steve Mara, Street in East Greenwich, a bar that Main, also in East Greenwich. Their
and to a restaurant business that continues catered to loud music and young crowds. restaurants now stretch from North
to grow and will reach nine restaurants His family also owned the old post Providence to Kingston, with their
in Rhode Island this year. office on Main Street. Once the post eighth and ninth facilities set to open
For Pinelli this is a story of persist- office relocated to another part of this year. One is on Route 2, near the
ence and determination, of someone town the building became home to a Warwick Mall, and the other is in the
who was convinced that you simply few offices and an antique store. Mara former Bookstore Café at Wayland
don’t give up. It has been quite a journey envisioned the post office becoming a Square in Providence.
for the gregarious Pinelli. From a young restaurant. He turned to Pinelli, a stranger When the two new restaurants
man still in his teens – 18, married with a and asked him to be his partner. open, the Pinelli/Mara Group will
child and headed for barber school, “He just gave me the employ 350 people – people that Pinelli
earning $15 a week. keys to go and look at considers family.
“ I just wanted to do something
He would go on to it,“ Pinelli says. “It was “What are the lessons I’ve learned
else. Food has always been
see pay increases to a deserted old post over the years?“ Pinelli asks. “I’m just a
part of my culture.”
$25 and then $40 that office. Three, four street person. I just learned to never give
enabled him to buy a times I went in there up, to be persistent, to remain focused,
“wrecked car“ and move his young and it just hit me that it would make and to have fun…I have no regrets. I’m
family into their own apartment. He a beautiful restaurant.” loving my life. Everything’s great.“
n
would become a hair stylist, and
eventually own two salons – Heads Up
BankRI’s Lending Directory
on Oaklawn Avenue in Cranston and
BUSINESS LENDING: Kevin Kelly, Sr. VP, Department Manager,
Headliners in Pawtucket.
kkelly@bankri.com • Dan Hagerty, Sr. VP, dhagerty@bankri.com • Mike Kerr,
It was a career that served him well
Sr. VP, mkerr@bankri.com • Manny Barrows, Sr. VP, mbarrows@bankri.com •
for 26 years – until he decided it was
James Tiernan, Sr. VP, jtiernan@bankri.com • James Kelshaw, VP,
time for a change.
jkelshaw@bankri.com
“I knew that eventually when I got
COMMERCIAL REAL ESTATE: Stephen J. Gibbons, Sr. VP, Department Manager,
out from behind the chair cutting hair
sgibbons@bankri.com • Laurel L. Bowerman, Sr. VP, lbowerma@bankri.com •
I wanted to make money,“ Pinelli says.
David R, Cunningham, VP, dcunning@bankri.com
“Cutting hair you can only make money
SMALL BUSINESS LENDING: Don DiBlasi, VP, Department Manager,
with the two hands you can cut hair
ddiblasi@bankri.com • Joseph Hindle, VP, jhindle@bankri.com • Andrew
with. I just wanted to do something
Deluski, AVP, adeluski@bankri.com • Joseph Sheehan, AVP,
else. Food has always been part of jsheehan@bankri.com
my culture.“
CASH MANAGEMENT: Mike Regnier, VP, mregnier@bankri.com
With the support of his family he
opened Pinelli’s Deli in West Warwick. We welcome your input.You can email your comments, suggestions
and letters to Christopher J. Cannata, Commercial Marketing Manager,
It was conveniently located next to a
at ccannata@bankri.com. You can also see this newsletter online at
hair salon, Whispers, where for the first
www.bankri.com
two years of the deli business Pinelli
3

4. Merrill Sherman, BankRI Chief Executive Officer, honored by
BANKRI NOTES the National Jewish Medical and Research Center.
Merrill received the prestigious National Jewish Humanitarian Award at a
BUSINESS RI SPRING 2003: luncheon at the Biltmore Hotel in Providence in April. The award recognizes
GROWTH people across the country who have made significant civic and charitable contri-
RECOGNITION butions. Winners exemplify what an individual can do for his or her community.
EXPANSION
BankRI opens Lincoln Operations Center.
In a major move to accommodate its growth, the Bank opened a 20,000
square foot operations center on Washington Highway (Rte. 116) to house
Thanks a Billion! deposit operations, loan underwriting and servicing, MIS, and training.
Bank Rhode Island announced earlier this year that it had attained a
BankRI announces major data processing conversion to Fiserv CBS.
milestone in 2002, growing its total asset base to more than $1 Billion,
After seven years with Bisys, the bank announced its plan to convert its
double the total asset base when the bank was formed in 1996.
data processing and systems requirements to Fiserv over Memorial Day
BankRI receives the Encore Award. weekend. The bank also plans to implement the InformEnt data warehouse
The Arts and Business Council of Rhode Island awarded Bank Rhode Island system to improve its reporting and data analysis for call center and customer
its highest honor for its sponsorship and continuing support of the arts. service quality initiatives.
Spotlight On The Arts
All Children’s
For the All Children’s Theater it’s not ACT’s home is in an unpretentious Barrington, East Greenwich, and at the
Theater about developing Broadway actors or one-story building on Valley Street in University of Rhode Island in Kingston.
Hollywood stars. It is about building East Providence. There’s enough room There’s the summer academy, held on the
character, the kind that will stay with for rehearsal space and offices. And it’s Providence Country Day School Campus in
youngsters whether their dreams ulti- large enough to house the theater’s four East Providence, and acting groups for all
mately bring them to Broadway or Wall full-time employees, plus part-timers and levels and all ages.
Street. It’s not so much about reciting a volunteers who are involved in everything “They come from all over the state,
line perfectly, as it is about responsibility, from the acting ensemble to a variety of with different backgrounds,“ Joanne says.
accountability, leadership, and self-esteem. educational and outreach programs. “What they have in common is ACT.“
“Our mission is to provide a total In any given year, ACT will serve 900 Together, these children from varied
theater experience where the kids grow to 1,000 kids who participate in acting backgrounds – from the wealthy neighbor-
and develop through drama, where it’s classes, the performing ensemble, winter hoods of Barrington and East Greenwich
not only to entertain but to educate and and spring vacation camps, summer theater and the urban centers of Providence and
to empower,“ says Joanne Fayan, ACT’s academy, a playwriting competition and Woonsocket – create magic, the likes of which
associate artistic director. festival, and outreach programs. that sometimes only children can attain.
ALL CHILDREN’S THEATRE
“The children learn all aspects of the The theater has a full array of educa- “There’s just an amazing thing that
ENSEMBLE, in its 16th season
theater – how to be on stage, the skills tional opportunities, some held at the happens when you walk into a room full of
127 Valley Street
they need to direct, run lights, do back- East Providence facility, others at sites in kids,“ says Elizabeth Baker, ACT’s education
East Providence, RI 02914 stage, run front of house – those skills
and outreach director. “It’s a type of energy
teach responsibility, leadership, and
you don’t find anywhere else.“
401-435-5300 cooperation,“ Joanne says. “The students
It’s the kind of energy that translates into
Web site: www.ACTinRI.org develop self confidence, self esteem.
a few of ACT’s graduates pursuing perform-
email: ACTinRI @ aol.com They research, they write. When they’re
ance careers in Los Angeles and New York.
ready to interview for college or for a
It’s the kind of energy that influences a
job, they’re more poised, well spoken
boy from a housing project, teaching him
and have a whole array of things in
accountability, leadership, and responsibili-
which they’ve been involved. They will
ty in a nurturing community that helped
be strong candidates.“
him achieve his goal of attending college.
These are the lessons that ACT has
It’s the kind of energy that inspires a
been teaching thousands of Rhode Island
Down’s syndrome teenage girl to want to
children, ages four to 18, ever since its
learn about theater and become, at 18, a
founding by Wrenn Goodrum in 1987.
“ There’s just an participant in the ACT program.
Wrenn, ACT’s artistic director, is a graduate
amazing thing It is, as ACT’s literature suggests, where
of the North Carolina School for the
that happens students develop life skills and learn to use
Performing Arts. She came to Rhode
when you walk their imagination and creative energies.
Island from New York City where she
into a room Where as Joanne suggests, “kids simply
was an actress and children’s theater
full of kids.” director for 10 years. take center stage.“
n
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