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Produce Business

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Not Your Father’s Wholesale Market…
The New Philadelphia Wholesale Produce Market Wants The World To Know….'We Are Open For Business!'

Jim Prevor’s Perishable Pundit, November 4, 2011

Last year The New York Produce Show and Conference featured a “sneak preview” tour of the not yet open brand new Philadelphia Terminal Market.  The tour was a hit and many spoke with awe of the new facility. Dr. Johan van Deventer, who was visiting with us from South Africa, was so impressed he wrote a report to his government on the facility.

But then it was a lifeless building — a mere facility — today it is open and bustling –a true market. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out what had transpired since last year and to get a “sneak preview” of what is in store for those heading down to Philadelphia on The New York Produce Show and Conference tour this year:

John Vena
John Vena, Inc.
Philadelphia, PA

Q: As attendees at the New York Produce Show board the bus on November 9 for a tour of the new Philadelphia Wholesale Produce Market, what should they expect? Could you update readers on what has transpired since last year? I understand the launch was quite an undertaking…

A: Our scheduled move from Galloway Street to Essington Avenue in January of this year turned into a sort of moving target due to a few issues that raised concerns among our merchants and the construction team. We identified two issues that needed attention before we could comfortably move our operation to the new Market. The first turned out to be fairly easy to remedy. We were concerned about the finish on the floors, particularly in coolers containing iced product. The solution was fairly simple, but required a few weeks of research and we lost some time as a result.

The second issue revolved around the central refrigeration system. This required a lot more study due to the complexity and sheer size of the system and the unusual demands that a facility such as ours puts on that system.

We have 224 loading doors, 10 street-level access ramps and a fair amount of product and people moving around. Fine tuning the system so that all the common areas, which are fully refrigerated, and coolers maintained their set points, was quite challenging and resulted in two delays of our move and kept us out of the building until June 5. However, we feel good about the decision to delay the move. It gave our team a chance to learn about the system, and get it “right”. Of course, the system and our technical staff were tested immediately. We had record high temperatures in July and August, but the Market was comfortably cool all summer.

Q: Could you provide more perspective on how the refrigeration system works at this state of the art terminal market? Do you have backup plans if there is a problem?

A: The system is actually split into three interrelated sections. Each section is responsible to cool different zones in the Market. This minimizes some of the concerns about having a centralized system, since the actual load is spread over the subsystems. In addition, there are several different ways of monitoring stress on the system, such as computerized leak detectors and a complete monitoring system. In fact, the system is operated by touch screens, and there are terminals throughout the building with remote monitoring capability.

Q: What are some of the biggest changes and advantages you’re seeing with the new market compared to the old market?

A: Without a doubt, the biggest advantage to operating from our new building is the most obvious — the product that we are unloading and loading for our customers is inside the Market. So many positives are generated by that very simple difference. I am delighted everyday when I come to work and enter this building. Outside it might be hot, humid, pouring rain, breezy or still, birds buzzing and perching, but inside the Market, the air is always clear, sunny and 50 degrees. No birds, no rain, no blowing dust.

Q: With cold chain integrity integral to quality control and food safety, are you generating more business and attracting a new customer base?

A: Certainly any potential customers that have visited the Market are impressed with the possibilities we offer in the area of safety and cold chain management. We have seen renewed interest in doing business here from many of those customers, and our merchants are reporting that new business is coming their way. In my own business, we have seen that many customers are buying more from us, because of the cold chain component and the confidence it gives them in getting their orders loaded in top condition.

Q: Do you have any feedback you can share, any stories that illustrate the enthusiasm about the new Market?

A: A few weeks ago, I was leading a group of growers from Quebec on a tour of our Market. They had a lot of questions about how the building, especially the refrigeration system, worked and if we were satisfied with the facility. As we entered the Coosemans Philadelphia sales area, I introduced them to Marty Roth, the managing partner. The Canadian growers asked Marty what he thought of the new Market. Marty replied, “This building and our refrigeration are so wonderful, if you send me bad product, it gets good in my cooler!”

Q: Could you discuss your ability to better service customers, the logistics, efficiencies, etc.

A: In order to enhance the total customer experience, the merchants participated in a series of meetings to brainstorm about operational issues. Those meetings resulted in a wider range of hours for customers to shop the Market and fewer restrictions on access to the Market for customers and shippers trucks. Those departures from the Galloway Street business model, along with the wealth of common space and the number of doors in this building, have created a very positive atmosphere for customers.

The entire process for our customers has been streamlined. There is no pressure to find a place to load, no need to find and position dock plates and plenty of space to stage product prior to loading their trucks. All customers report that they get in and out of the Market faster and easier than they ever thought possible. To use the words of Tommy Kovacevich from T.M.Kovacevich, “We never dreamed we could be this efficient”.

Q: In a financial context, could you discuss the costs and benefits of building an operation like this? Have you done assessments on the upfront costs versus the savings realized short term and long term?

A: It will be sometime before we are able to get a good grip on the real cost of operation here, but we are finding many little savings that are adding up nicely. For example, on Galloway Street my company spent about $2000 per month repairing our pallet jacks, mostly for wheel replacement. However, since moving, almost no wheels have failed. Also, we are seeing a drop in the cost to dump trash and remove bad product. New types of compactors, some basic recycling of paper, cardboard and plastic and improved shelf life of our product due to the environment have all resulted in real savings.

Q: How are people responding to the new facility, customers, people in the supply chain, etc.

A: We have had visitors from every segment of our industry, from the food industry in general and from educators and philanthropic foundations. Everyone has responded in a positive way to our facility and what we are able to do here. For some of our recent visitors, this is the first terminal market they have seen. For others who have experienced our old market and terminal markets around the country, the typical response is usually “whoa, this is awesome”.

Q: How about internally?

A: The most amazing thing to me is how quickly everyone who makes their living here — staff and customers alike — have shifted their attitude about the building and facilities. Everyone uses the large bins for trash, recycling and garbage positioned around the building. Everyone took the time to learn how to properly operate the load levelers and to close the dock doors when they are finished loading. It seems that our customers are as proud of this new building as we are and they are doing their part.

Q: Could you describe how the market fits within the competitive environment. What is its reach, scope of people it’s servicing, and is that changing now that you have a state-of-the-art facility?

A: Our customer base is usually described as 500 miles in any direction, and we tend to do business with every kind of produce customer. In order for us to succeed, that must change. I think that the change will mostly come as increased market share within our trading area. The demands of the industry and our ability to meet those demands will open doors for us. However, we have to turn that opportunity to advantage through service to those customers.

Q: Can/should the industry look to the Philadelphia Market as a model for other terminal markets?

A: I think the industry will soon realize that this facility is not just an “improvement”; it’s a game changer.

Q: What are your goals for the future? Do you have any news in the pipeline that could be of interest to attendees?

A: Short-term, many of us are still trying to find the best way to use our new facility. But we are going to be very aggressive in the development of new business, including new ways to serve customers and the development of non-traditional markets.

Many potential and former customers know we have moved into the new Market but we still need to communicate to them the value of sourcing from within the Philadelphia Wholesale Produce Market. We are looking for ways to promote and facilitate food safety certification for our merchants and our market. We are exploring partnerships with associations, educators and foodies of all kinds to support programs that encourage and promote healthy food choices, particularly for children and young people.

Q: What are some of the biggest opportunities moving forward?

A: For sure, building this Market has left our merchants well-positioned for the future. Not to oversimplify, but our opportunities are only limited by our own imagination and initiative. Everything is in place, now. It’s up to our merchants.

Q: As the bus pulls up to Philadelphia Wholesale Produce Market and people step off the bus in anticipation of the tour, what will they see and learn?

A: The first thing, of course, that everyone sees is this massive house of produce, lots of trucks, forklifts, product, buyers, sellers, and so forth. The skylight over the main concourse and the way the building is color-coded to make it easier to find our merchants are also popular topics. But the biggest takeaway from a visit to our Market is really the merchants themselves and the courage and willingness to work together that they have shown over the last 10 years.

It has been a hard road for all of us, and several good companies have been lost along the way. But as much as we have argued and quarreled over the details of this project, not one of us has ever stopped believing that we could get here or stopped working to make it happen. To be honest, we are not without challenges, but a visitor to this Market will see a group of merchants that is working together to face them.

We had the opportunity to get a tour of the market a few weeks ago. It is an exceptional facility. Anyone in produce should certainly go see it. There is simply nothing else like it in the United States. It is more similar to state of the art food distribution facilities that are built by supermarket chains or foodservice distributors than it is to traditional terminal markets.

This kind of facility addresses food safety, food  security and sustainability concerns in such a way that buyers who have shied away from terminal markets would have cause to reevaluate their stance.

Although building facilities such as this is certainly expensive, we suspect that over time the efficiencies and customer appeal of such facilities will have made it a very good investment.

What we really enjoy about the Philly market, though, isn’t the building. It is the people. It is large enough to offer a broad range of product but it is also small enough that everyone really knows each other and they are friends as well as competitors. In fact, getting this market built required great cooperation. The close personal bonds between so many of the principals was quite possibly a prerequisite for turning this dream into a reality.

If you would like to register for this tour just send us an e-mail here.

You can register directly for any facet of The New York Produce Show and Conference here.

Hotel rooms are available here. And travel discounts here.

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