Philadelphia Regional Market Profile: Philly’s Vibrant Retail Community

The Philadelphia region continues to expand with a host of retail formats and the wholesalers who serve them.

Originally printed in the September 2021 issue of Produce Business.

More than just a city, Philadelphia is a wide variety of various towns, neighborhoods and even states, and the region’s dynamic shows through its produce environment. “The greater Philadelphia area is competitive and evolving,” says Jon Steffy, vice president and general manager at Four Seasons Produce in Ephrata, PA. “The independent retailer in a variety of forms is alive and well, even as major regional and national chain stores jockey to stake their claim. Discounters and eCommerce disrupters continue to shape the future of retail food choices too.”

The marketplace is quite competitive in terms of having the newest, the freshest, the biggest and the most unique, relates Tony Mirack, director of produce at McCaffrey’s Food Markets in Langhorne, PA, with 7 stores. “It’s very cutting edge,” he says. “This is exciting because I always have to keep up. I can walk into any one of my competitors and they’ll have something different than I do.”

The region also is home to a wide assortment of wholesalers. “The Philly region is a very competitive marketplace with many well-established suppliers competing for the retail business with different business models,” says Greg Golden, owner/partner at Amazon Produce Network in Vineland, NJ. “There are power players in individual commodities, companies that offer multiple commodity combinations, companies that offer full lineups of all commodities, and those with specific capabilities in logistics, or ripening, or packaging.”

Wide Retail Landscape

The Philadelphia region presents a myriad of retail produce opportunities from corner delis to large national chains such as Ahold to discounters including Aldi and Lidl. “Smaller store formats are seeing success especially with the easier real estate access to empty sites in strip malls or from other waning areas of retail to convert to food markets,” says Steffy. “Discounters and experiential retailers continue to garner loyalty at the opposite ends of the consumer spectrum.”

Such examples include Mount Airy Groceries in Philadelphia, PA, a unique retail food box program with a storefront. “Our patrons thank us every day for introducing them to items they normally have difficulty in accessing,” says Jessica Rights, project director. “The ability for us to affordably provide fresh nutrition to our population has made a big difference in people’s quality of life.”

Smaller stores are a vital part of serving the communities in Philadelphia. “We are a city with unique and diverse neighborhoods,” says Nicholas Freeman, Mount Airy operations manager. “It is very important that the inventories in retail stores honor the specific cultural and health needs of their neighbors. This is best executed with proprietors who are familiar with their patrons so that they may customize their services.”

Golden reports noticing significant growth in all retail formats – large, small, high-end, discount, club, and online. “We are seeing growth even this year over last year, which had already grown incredibly due to COVID demand shifting from foodservice to retail,” he says. “It just continues on.”

The future promises additional formats. “E-commerce is growing fast in all parts of food retail,” says Steffy. “Next up will be the entry of rapid-delivery eCommerce retailers that use ‘dark stores’ and eBikes and apps for 15 to 30 minute food deliveries in densely populated areas of Philadelphia like we’re already seeing in New York City.”

Cutting-Edge Wholesalers

Philadelphia’s expert produce wholesalers are highly valued by their customers. “Philly has a great selection of produce wholesalers,” states Mirack. “They have a handle on the right items, the specialty items, and getting us items that make a difference to our customers. We need suppliers who know the growers, who know when to be in an item and know when to pull out.”

The relationships of stores with suppliers play a crucial role, especially in the independent success, explains Mirack. “We performed exceptionally well during the crazy pandemic months,” he says. “One major reason was our variety when it comes to suppliers. We were able to keep our shelves full more than some of the big corporate stores. We really thought out-of-the-box to keep supply coming in, to do what we had to do.”

Amazon Produce Network utilizes a variety of supply chain options to get product into stores. “We deal with many large regional chains and national accounts with local DCs directly, but also have fantastic wholesale partners to service the smaller independent retailers,” says Golden. “With our diverse grower base from everywhere mangos come from, we are able to handle the supply shortages of the mango market and cover commitments when others fall down.”

With a state-of-the-art produce distribution center and fleet of trucks located in the farmland of Lancaster County, PA, Four Seasons Produce reaches all of Philly and its suburbs, the Lehigh Valley, plus much of South and Central New Jersey in a one to two hours’ drive. “Our location also allows us to bring in locally grown apples, mushrooms, potatoes, and a fantastic variety of organic and conventional seasonal spring and summer fresh produce right from the farms around the area and distribute it in the quantities needed directly to retailers throughout the marketplace,” says Steffy.

Selling produce to retail in Philly is a blend of honoring the traditional favorite brands, preferences, and local selections while also meeting the changing needs of convenience and value-craving shoppers, explains Steffy. “Retailers have many choices of suppliers in the region for direct-store-delivery and warehouse supply, so supply chain capability, consistent service, and insights to help partners be better all really matter,” he says.