HUNTS POINT MERCHANTS OPTIMISTIC ABOUT FUTURE

Originally printed in the July 2018 issue of Produce Business.

Excitement builds over prospect of new facility that would bring 51-year old market into a new age.

A year into its second half-century, the Hunts Point Produce Market is at full occupancy — 29 thoroughly modern businesses meeting the diverse needs of the 23 million people in the New York metropolitan area. As the merchants reinvest and reinvent to serve their customers, negotiations for the market’s redevelopment are called ‘promising.’ This summer, that new scent in the air, blended with the fragrance of strawberries, tomatoes and sweet peppers, is optimism.

“I think we’ve made a lot of progress looking toward a new market,” says Joel Fierman, president of Fierman Produce Exchange and co-president of the Hunts Point Terminal Produce Cooperative Association Inc. “My predecessors worked very hard. They got something that thankfully didn’t get built, because it probably wouldn’t have conformed to what we needed. And hopefully that delay has paved the road for a market that will be better situated for this facility going forward. Are we getting cooperation from the city and the state? Yeah. We’re still talking.”

Details about negotiations remain behind closed doors for now. “At this time we’re not in a position to share the latest details publicly on our redevelopment work. We’re currently performing capital works at all three wholesale markets to make sure that the tenants can operate,” a spokesman for the New York City Economic Development Corporation says.

“A new market will give us the ability to compete with other bigger mousetraps out there,” says Matthew D’Arrigo, vice president of D’Arrigo Bros. Co. of New York and first vice president of the Hunts Point Terminal Cooperative Association Inc. “This 51-year-old facility has served the New York City area very, very well.”

The prospect of a market rebuild elicits enthusiasm and ideas from business owners, who have similar and clear views about the need for accessibility, parking and room to spread out.

“The biggest challenges coming forward in the business are going to be food safety,” says Jimmy Margiotta, president of J. Margiotta Co. “Keeping in mind who we service in New York, the amount of people, it’s very important. You’re feeding so many people. We should be at the top of the list to take care of them and have a modern facility. We’re hoping in the near future to get a new market rebuild going. It’s been topic of discussion for so long now.”

“Obviously we could certainly benefit from a more modern market with more space. It’s a no-brainer.”

– Cary Rubin, Rubin Bros. Produce

“We would like to see a facility that maintains the cold chain so that product is kept continually in the appropriate storage temperature,” says Joe Eisinger, director of organics at Nathel & Nathel. “We also need greater warehouse space so we can cut costs associated with storage vans and continue to grow our business.”

“We need a new facility that’s going to help us be compliant with all the food safety regulations,” says Sasha LoPresti, director at A.J. Trucco Inc. and chairperson of the Hunts Point Market PR Board. “Also, a market that has an easier way of navigation for customers and will solve some of the parking issues we have would be beneficial.”

“Obviously we could certainly benefit from a more modern market with more space. It’s a no-brainer,” says Cary Rubin, vice president of Rubin Bros. Produce Corp. “So how it gets done, I don’t know. But it needs to be done in a way that doesn’t put everyone out of business.”

“Customer-friendly” is the first phrase Denise Goodman uses to describe what she’d like to see in a new market. Goodman is vice president of M&R Tomato Distributors, and co-owner with her brother Michael Tambor, who serves as president. “There’s still a good amount of business for people who drive to the market,” she says. “A lot of independent chain stores shop at Hunts Point because our prices are better than at many other places. But the market needs to have more parking.”

MAKING IT WORK NOW

Though their wish lists are long for the future, businesses are successfully building workarounds — and success.

“Business is great,” says Margiotta, who continues to modify and refine his space on Row A, units 100-105. “It seems as if we’re growing in all areas, and in all departments. It’s just been nice. We’ve actually increased a lot of delivery business and are doing a lot more importing and exporting. We’ve also enjoyed some success from The New York Produce Show. The show’s been great.”

The D’Arrigo Bros.’ 2017 acquisition of John Georgallas Banana Distributors of New York set into motion a floor-to-ceiling renovation with a reveal planned this summer. But the business, located across the street from Hunts Point, has not been sitting idle. It has literally been going bananas. “We’re moving 20 loads a week out of there, and we were doing the math, and that is about 2 million bananas,” says Gabriela D’Arrigo, vice president of marketing and communications. Cousin Kevin D’Arrigo presides over the banana operation, which has 13 ripening rooms and additional refrigerated space to further extend the D’Arrigo franchise.

“Business is great. It seems as if we’re growing in all areas, and in all departments. … We’ve actually increased a lot of delivery business and are doing a lot more importing and exporting.”

– Jimmy Margiotta, J. Margiotta Co.

“So, when the market is closed on Saturdays, we have the flexibility now to have that facility stay open,” she says. “It’s 24/7 over there. Here we are 24/6. With the evolving industry, people are wanting seven-day delivery,” she says.

Charlie DiMaggio, president of FresCo LLC, says, “We have relocated and expanded into our entirely renovated facility at 153-157 Row A. In addition to our warehouse upgrade, we have installed new boxes as well as refrigeration. A new state-of-the-art security system with cameras bestows a full view of our platform and entryways into our facility.”

Food safety has been a guiding force as well. “FresCo firmly believes the future of our industry is implementing as many safety measures to control and ensure a safe and quality product is delivered 100 percent of the time,” he says. “We are in the process of receiving our Hazard Analysis and Critical Control Points (HACCP), a systematic preventive approach to food safety from biological, chemical and physical hazards. Upon completion of the HACCP program, we will be FSMA-compliant. All of our employees are both eager and excited to master the new regulations, which they will implement into their daily work regimens.”

At Nathel & Nathel on Row C, warehouse spaces have been reconfigured and joined together to create one space. “This change has been instrumental in increasing efficiency and organization within the warehouse,” says Eisinger. “It also allowed us to devote an entire section of warehouse to our growing organics division.”

The company has refurbished its offices, adding “a fresh, clean and modern look that we believe highlights our company’s desire to continue improving our service to our amazing customers. This new look will also facilitate a more enjoyable and productive work environment for our employees,” says Eisinger.

At LBD Produce, the company’s vice president, Lori DeMarco, says, “We have put in a new repacking station, did some structural work and painting.”

From its state-of-the-art complex of 35 units, S. Katzman Produce Co. is positioning itself “for where we want to be in five, 10, 20 years from now,” says Stefanie Katzman, executive manager. A major player along that timeline is Katzman’s private label, BloomFresh. “It’s really just going out there, finding the best stuff we can, making it customer-appealing and putting our label on it.”

“Over time, this market has gone from 90 percent pick up to a 50 percent delivery market.”

– Matthew D’Arrigo, D’Arrigo Bros.

The newest addition to the line of popular BloomFresh products, such as pomegranate arils and the Brix-scale-breaking honeydew, is the gooseberry. Slightly homely in its frumpy outer layer and largely unfamiliar to millions of Americans under the age of 50, the gooseberry has re-emerged as the golden berry and with a BloomFresh makeover.

“We found another way of doing it,” says Katzman. “We took the cape off — that little outside sleeve — and we packaged them in a cup. So, it’s more of a snack pack now versus something you might buy and cook with. We’re trying to take an item that was popular and make it popular again. Whether that’s redesigning the package, whether it’s giving it a new name, whether it’s finding a new clientele. … I’d say 50-75 percent of people I talked to who are 50 and older know what a golden berry is. I have yet to find somebody under the age of 21 who has ever heard of a golden berry, a gooseberry, or even tried one.”

For the uninitiated, Katzman says the berries, sourced from Colombia, have a “very unique flavor. People either love them or hate them. They’re very sweet and tart at the exact same time, and super sugary. And there’s a little bit of a tomato kind of finish — not the flavor, just the texture.”

The golden berry is an example of the firm’s strategic focus. “We’re not reinventing the wheel or anything like that. We’re selling fruits and vegetables that people can buy.”

Nathel & Nathel’s Eisinger reports an increased investment in organics. “This past year Nathel & Nathel began selling organic items, and we initially started with 75 items. However, within four months we were selling upward of 200 items. Now, as we approach a full year of selling organics, we are in the process of opening a stand-alone subsidiary, Nathel Organics, that will be focused exclusively on this highly demanded industry.”

He says the company has responded to the trend of fewer buyers physically visiting the market by offering more deliveries. “Additionally, a growing percentage of our customers are looking to Nathel & Nathel to be a full-service wholesale provider.”

Delivery is a “huge extension of service that we can give to the customer, which makes the customer’s job so much easier,” says Matthew D’Arrigo. “Over time, this market has gone from 90 percent pick up to a 50 percent delivery market.”

At FresCo, new floor salesmen and independent brokers are in the news. “These individuals present with many years of experience and service customers throughout the Northeast and Midwest,” says DiMaggio. On the growing side of things, a pending hydroponic deal “will allow us to harvest product year-round, right from New York City,” he says.

Staying nimble continues to be a winning business strategy at J. Margiotta. “It’s funny, because every year it changes. In my whole career, it’s been such a moving target of where to find business,” says Margiotta, who represents his produce family’s fourth generation. “As the market evolves, you find areas of growth.”

One new line of business led to exports. “We started to dabble in exporting commodities. Finding a customer base has been very interesting. We do everything … whatever the customer is asking for, a mixed container or one product. Can you tell I’m trying to be vague?” he said with a laugh, hesitant to divulge company secrets. “This is as general as I can make it sound.”
`

HOT COMMODITIES

Bananas and apples on the fruit side, and potatoes and tomatoes on the vegetable side continue as the most-consumed fresh fruits and vegetables in the United States, according to the United States Department of Agriculture Economic Research Service (USDA ERS). Hunts Point merchants have that covered and are tireless in their pursuit of items to meet customer demand.

At M&R Tomato Distributors, Goodman says the expanded line includes vegetables from California and Florida, “a full line of produce. … We try to support USA product when we can.”

As a giant produce department for much of the greater metropolitan New York area, the market has the opportunity to feed diverse communities and adjust to changing tastes. And sometimes the changes are very familiar.

“For example, people are going back to things that were not used for many years — things like our grandparents used. Kale, collards … Everything old is new again,” says Goodman.

“It’s so important to have a good, respectful relationship with customers. If you want customers to come back again, service is very important.”

– Denise Goodman, M&R Tomato

At Rubin Bros. Produce Corp., if a vegetable is trending as healthy it’s apt to be a best seller. “First it was kale, which really took off. Now it’s moved to Brussels sprouts, which are really trendy. Then believe it or not, it’s not green but everyone’s very much into cauliflower now, and that goes for cauliflower crumbles. You can make a crust with them, or you can use them to make rice. With cauliflower it’s really more about a carb replacement,” says Cary Rubin.

“We had representatives from OrganicGirl in the office, and they gave us new varieties. One’s a protein-based item – Protein Greens. The leaves in the clamshell are basically the most protein you can get out of a salad. The other item was a replacement for kale — not that kale is going away. It was [Rebel Greens], a baby bok choy-type leaf. So, things like that are definitely trending. I just think that the continued trend of people looking to eat healthy has certainly benefited our business.”

Along with the search for nutrition-packed items, the hunt for new and different continues apace, particularly to quench the tastes of the Millennial generation. “Everybody wants to say, ‘Well, I had this new whatever,’” says Gabriela D’Arrigo. “Someone texted me yesterday because a customer saw pink radicchio on Instagram. I don’t know anybody that actually grows that domestically. Turns out it’s only grown in Italy, and they’ve got to import to Holland and then it’s got to be imported here. There’s always that new hot thing, and it’s not hot for very long.”

MARKETING THE MARKET

Attracting attention to the market — from customers or those seeking customer-facing jobs and careers — is an effort headed by Trucco’s LoPresti, chair of Hunts Point’s PR committee. She says the committee is looking at new marketing campaigns that highlight the benefits of shopping at Hunts Point. The refreshed website is a step in that direction.

“We made it more user-friendly for people wanting to come here and to look for items,” she says. “There’s a merchant map you can search, for instance. If you want apples, you can put in apples on the search function, and it’ll pull up all the companies that sell apples.” (Apples, seven; radicchio, three.)

Because when it comes down to it, customer service is one of Hunts Point’s unique selling propositions.

“If I was to leave the Hunts Point Market and become a retailer, there would only be one place I would shop and that would be Hunts Point, because it’s the greatest value for the dollar that God has ever created.”

– Joel Fierman, Fierman Produce

“What I try to emphasize, is do the best job for the customer and the shipper, to have everyone coming back, to keep everyone happy,” says J. Margiotta Co.’s Margiotta. “It’s about getting the right stuff to the right people at the right time.

“It’s so important to have a good, respectful relationship with customers,” says M&R’s Goodman. “If you want customers to come back again, service is very important. We are very hands-on. There’s always an owner on the premises, actively involved, night and day.”

From their more than 1 million square feet of space, the Hunts Point businesses generate $2.3 billion in annual sales. The produce makes its way to Green Carts, bodegas and large grocery chains. It’s served in restaurants and on airplanes. All told, the market feeds almost 9 percent of the U.S. population.

“Produce is being grown better, it’s maintained better. New items are coming up. I think it’s the greatest industry in the world because people have to eat,” says Marc Rubin, president of Rubin Bros. Produce Corp.

“I always said if I was to leave the Hunts Point Market and become a retailer, there would only be one place I would shop and that would be Hunts Point, because it’s the greatest value for the dollar that God has ever created,” says Fierman.

IMPORTS EXPANDING

Some call it importing. Stefanie Katzman, executive manager with S. Katzman Produce Co. calls it “international sourcing.” Regardless of the appellation, imported fruits and vegetables are growing commodities at the Hunts Point Produce Market, and in crispers and fruit bowls across North America.

As the appetite for popular fruits and vegetables increases, so do the imports. In 2016, 43 percent of fruits and vegetables imported to the United States came from Mexico, according to the USDA ERS, making it the single biggest source of fruit and vegetable imports into the U.S.

“The best thing about imports is that it lets us carry product year-round, and that’s really what the United States has turned into,” notes Katzman. “And I specify the United States because in most other countries it’s still kind of the way it used to be, where they only eat what’s in season. But because we have access to all these imports, and we have planes and boats and other ways of getting product to us, we don’t have to settle for that anymore.”

Importing is more than just filling a gap. Sometimes it’s about finding a better, or singular, product. That’s why BloomFresh flies in pomegranate arils from India twice a week, 52 weeks a year.

“When we went to India we found this sweet variety they grow year-round, and it has a better color and a better taste. And the actual packing they do at this facility is all by hand, so we don’t get any breakage in the arils. We wanted to maintain that perfect product,” says Katzman.

If you Google kiwifruit, Italian chestnuts, and imports, one company dominates the search results: A. J. Trucco Inc., one of the market’s largest importers. KiwiStar, Trucco’s signature brand, contributes the largest sales volume among the company’s imports, with fruit arriving from Italy, Chile and New Zealand, according to Sasha LoPresti, director.

“The best thing about imports is that it lets us carry product year-round, and that’s really what the United States has turned into.”

– Stefanie Katzman, S. Katzman Produce

Showing the biggest growth is blueberries, starring in a year-round program that begins in South America, moves to Florida and works its way up the coast, says LoPresti.

Pineapples from Costa Rica are a recent addition to the Trucco product list. Other imports include lemons, fresh and dried figs, apples, garlic, Clementines and, of course, the Italian chestnuts for which the company was known long before Google.

“We couldn’t be more excited to announce that after significant time and research, we have partnered with a major grower … who will grow and pack bananas in my new banana label ‘Belleza Premium Banana,’” says Charlie DiMaggio, president of FresCo LLC. “The reception we received has been overwhelming, to say the least. Besides acquiring new customers on a weekly basis, we are noticing repeat business and inquiries to other items we handle as well.”

The mango, pineapple and plantain programs continue strong at FresCo, and an avocado program is in the works. “We are also working on a garlic program, which we hope to launch in the very near future.”

At Nathel International, a direct importer, apples and grapes from South America and peppers and eggplants from Holland are the biggest sellers, apart from Mexican imports.

Jimmy’s Gold-branded pineapples stand out among imports at J. Margiotta Co. “Pineapples have been very good,” says Jimmy Margiotta, president. “I’d say the importing of the pineapples has grown, among all the other fruits.”

Rubin Bros., which considers itself more of a vegetable house, turns to Mexico for product at certain times of the year. “But we’re big into Western vegetables,” says Cary Rubin. “That typically remains domestic year-round, so we kind of stay that way even though there are Mexican options there for instance.”

Joel Fierman, president of Fierman Produce Exchange has seen attitudes shift around imports and tells a story to illustrate that. “About 10 years ago, a guy calls me up. He’s a reclamation guy, and he has 10 containers of garlic from China on the pier in Port Elizabeth. And he says. ‘I don’t know what to do with it.’ The garlic market is red-hot — $50, $60 dollars a box. I say, ‘Well, send the container up. We’ll take a look at it.’ … It’s drop-dead gorgeous. I offered it to one of the importers. … I said to him, ‘Take the garlic. The market’s hot. Whatever you get for it, you get for it.’ He says to me, ‘It’s from China. I cannot support China.’ … I sell all the garlic. I have no problems selling the garlic. The following year he comes in, and he drops off four pounds of garlic. They’re from China. I say, why do you bring me Chinese garlic? I thought you don’t support China. ‘Well, you know the prices are so good out of China.’ I said, get the stuff out of here. I only use U.S. garlic.”

EVOLVING WITH LABOR NEEDS

As companies expand and look to the next generation’s labor pool, there are the usual and expected growing pains, and the tensions between the established and the new.

About six years ago, Katzman says the company started recruiting from outside the produce business. “This was unheard of in produce — at least for us. To hire someone who doesn’t know anything about the produce business? This is a very unique business. How are you going to be able to come in here and do this? … Well, I don’t want people to come in here and do this. I want people to come in here and bring their own flair to make this better.

“So, we have someone who used to work for a cheese company, someone who used to work for a coffee company, someone who used to work for UPS. What did they bring to the table? They bring management skills. They might bring leadership skills. They’re going to bring enthusiasm. They might bring buying and selling skills. It’s not produce but you know, if you can buy and sell produce, we say you can buy and sell everything. But if you can buy and sell everything, we can teach you some of the different things about produce. Yes, we’re perishable. Yes, we get affected big-time by weather. So there are a few things you’ve got to take into account. But if you have a salesman’s personality, you’re selling yourself anyway,” she says.

As employers know, or have often heard or read, many in the Millennial generation have a different perspective on work — which can clash with long-held company values, particularly in an industry such as produce.

“So if they care more about work-life balance, you know my first reaction might be that that’s not going to work in this industry,” says Katzman. “But if the entire next generation is thinking that way, maybe it’s the industry that needs to change a little bit. And it’s not that they’re lazy, it’s just that they do things differently.

“Some positions in this company we can change. Some we can’t. I mean, my salesmen downstairs on the walk have their shift. If a Millennial wants to work from home half the week, that’s not going to work in that position. But maybe there’s a position we’ve never had before — maybe we hire someone to handle social media. Do I need them in the office? Yes. Do I need them in the office every day? My normal reaction would have been ‘yes’ 10 years ago. But let’s think about it. No. Especially if it’s going to mean this highly talented person … might work from 10 p.m. to 3 a.m. just because that’s when they like to work. You’re getting all the work done, and it’s better for my business because it’s motivating them, then that’s what I have to do. So, this won’t work for all businesses across the entire company, but there are plenty of businesses where we can bend a bit for the Millennials. And what do we get for it? We get everything they bring to the table.”

“Wholesale’s a way of life for sure,” says Gabriela D’Arrigo. “And it’s tough to get into. Had I not had a family that was doing it, I would’ve never done wholesale. You live here 24 hours a day. But at the same time, it’s not about working harder. It’s about working smarter. We don’t have to be here all hours of the day anymore — except for night buying on the walk and night sales. You have to physically be here for that.”

Merchants are also noticing demographic changes on the buying side.

“There are some Millennial buyers,” says Katzman. “And what we’ve had to adjust to is just how they buy. In our industry, the older buyers have an old-school produce type of mentality. They are more hands-on. They probably came up through the industry. The Millennials we have found to be a little more numbers-driven and analytical. You really just need a mix. On our end, we have a mix of seasoned veterans who have been in this business longer than some of the people in this business have been alive. So, I might take my experienced guy and have him work with an experienced buyer and a Millennial buyer so that he learns a bit, and he can also teach the Millennial a little bit.

“They [Millennials] are going to be focused on the numbers. They’re not going to understand that the numbers this week are going to be different than last year’s this week, because this year we have a snowstorm we’re supposed to get tomorrow. And snow — weather — is a big impact on our business. So, while your computer might tell you that you’re only going to need 1,000 boxes today I, in my experience, am telling you that you’d better order 1,800 because I’m not going to be able to deliver to you tomorrow.”