Baldor, Stew Leonard’s And Eataly Tour
At The New York Produce Show And Conference
A Unique Perspective On A Unique Supply Chain
Jim Prevor’s Perishable Pundit, November 4, 2011
Here at the Pundit, we get frequent requests from trade members in other countries to set up tours of retailers in the USA who are doing interesting things. For years, Stew Leonard’s has been a staple on these tours. The newest hot item has clearly been Eataly, which led us to include Mario Batali’s masterpiece in The New York Produce Show and Conference tour program last year — a tour we wrote about here. These visitors to America are always looking for what is hot and happening, innovative and new, different and rich with ideas… and in these two most atypical retailers, they find ideas to bring back to every corner of the world.
Of course, for a retailer to be innovative and interesting, it requires a supply chain that can meet those needs. So this year, we had the idea to try and provide guests of The New York Produce Show and Conference both an innovative supplier and two if its customers on one tour. This tour will include Baldor Specialty Foods, Eataly and Stew Leonard’s, a veritable cornucopia of food-marketing innovation. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:
Baldor Specialty Foods
Bronx, New York
Q: How did Baldor, which has secured a prominent position as a big specialty food distributor, decide to add a retail division? What role will your new facility play in your evolving business? Could you provide New York Produce Show attendees with a preview of what they will see and learn when they come to visit?
A: Baldor’s roots were developed in the retail world 20 years ago and over the years we’ve become known as a premier foodservice distributor. Being in this new facility has allowed us to reach back to our roots and reinvest in retail distribution.
Q: How will these plans integrate into the existing supply chain structure and competitive landscape?
A: We understand that a current distribution network exists. We’re not looking to disrupt that but are looking to complement that. Our new operation will allow us to bring direct to the store some very short-life items and difficult to source items that don’t lend themselves to larger distribution networks. Baldor has a fleet of nearly 200 trucks, so this is a natural transition as we are going by a lot of retail locations every day.
Q: How will your new facility accommodate your plans? What are some of the highlights you’ll be sharing with people on the tour?
A: I’ll begin by introducing myself, and to show how we transformed an old A&P distribution center into a state-of the art operation. The 150,000 square-foot facility sits on 15 acres and is fenced in with security gates in and out controlling traffic. We spent nearly $20 million renovating it with an energy efficient system that has full back up mechanisms in place. There are 48 loading docks with modern vertical dock plates, and a pit dock for sanitation, and controls for temperature and safety reasons.
We’re in the process of installing a warehouse management system, which includes computerized individual handheld computers to scan bar codes to improve traceability and order pick accuracy. We want to be able to monitor various temperature zones, and we need to separate out tropical to iced, to dry storage areas. We eliminated curtains separating those rooms to install high velocity doors.
Food safety can never be minimized, and we spend a lot of time, money and love making sure we’re providing good, safe, wholesome products. We’re a HACCP-certified food service distributor, and we’re proud of our rigid food safety standards. In our fresh cuts operation, everything going out of the room goes through a metal detector or x-ray machine to detect any foreign objects and validate the safety.
Q: Could you tell us more about your fresh-cut operations?
A: Baldor has a full fresh-cut facility, with more than $5 million spent on new equipment, including installation of a unique, high-tech custom onion peeling machine, and we run a full lettuce line, tomato line, bean line, as well as a sophisticated repack operation. We also have a certified organic repack house that allows us to further develop our organic brands.
On the fresh cut side, we have some 600 items to choose from and everything we do is cut to order. We can be the R&D for the client, customize cuts and products or find and source a specialized item.
We’ve installed state-of-the-art waste management in the fresh cut area that runs under the ground. So, there are various pick up points where waste gets vacuumed under ground to a holding container in the rear of the building where product can be captured and sold.
Q: Are you pursuing other sustainability measures?
A: We built solar panels on the roof with programming to calculate dollar savings combined with generators, which is a good recipe.
I’d also like to touch on the importance we place on benefits for our employees. I’m most proud of our people. We just celebrated our 20 years in business, and it’s amazing to see how we’ve grown to 650 employees. Baldor offers employees a subsidized meal program. It’s not common for a food distributor to have a cafeteria set up like ours. We also have a full gym with trainer, locker room and showers open to 100 percent of our employees.
In our Information Technology room that holds the brains of the company, we removed the wet sprinkler system and installed an FM 200 system. It sucks oxygen from the air, which would in fact put out a fire without use of water that would damage all the computer systems. We can maintain the brains of the company God forbid there was a fire.
We are implementing what I believe is revolutionary technology to increase efficiencies and ease the labor for material handling and movement of packaging as well as insuring continuity and uninterrupted flow. We should have a test model here for people to see on the tour.
Q: How is your test kitchen concept progressing? Will that be available for viewing?
A: Visitors on the tour can see our multifunction test kitchen, which is now up and running. It’s designed in a slight amphitheater type setting, looking into a full-equipped kitchen, with proper lighting, microphones and flat screen televisions. It will be used to introduce new products to our staff, and we can offer the room to customers that might need access to a kitchen and audio visual equipment. It also provides opportunities for special projects. For example, we’ve worked with the Hunts Point Alliance for Children to get kids in the community excited about cooking. For our first chef demo we brought in a premier French pastry chef to prepare desserts using a varied selection of Baldor-sourced products. In other instances, we’ll do an hors d’oeuvres line, or braised beef line.
Q: Have you done any notable events highlighting fresh produce?
A: We hosted a chefs meeting in the test kitchen, where we set up various tables with unique fruits from around the world that chefs might never have seen or tasted before. Chefs could also host their own show at Baldor.
We’ll also have smaller groups gather for more practical applications and experimental work with specialty ingredients.
Over the years, as Baldor has developed relationships with the finest level of chefs in New York City, we’ve become very good at sourcing products for their needs, whether it’s a Prince Edward pear or a rare chocolate, or sugar that can be pulled in sugar demos. Not only are we able to source but also to teach on how to use ingredients.
Q: How are you building this expertise on the retail side?
A: For our retail line, Baldor has introduced a few different brands, including an organic line From the Earth with a beautiful logo. Those brands are out there to help along with the custom labeling we do. We can put the stores name on a particular salsa or hummus dip, making it unique for that store. We have the flexibility as we develop our business.
We also have close working relationships with retailers like Eataly, where we can partner on creating winning produce departments.
Although the footprint on our new facility is 21 percent larger than our old facility, it is 3.5 times bigger in cubic capacity so we have room to grow.
Mira contacted T.J. Murphy, Vice President at Baldor, and son of Baldor’s CEO and Founder Kevin Murphy to learn more:
Baldor Specialty Foods
Bronx, New York
Q: Could you tell us about Baldor’s partnership with Eataly and the role you play in the program? Attendees at last year’s New York Produce Show had the opportunity to tour Mario Batali’s Eataly and as a preview we featured Jennifer Rubell, the original Vegetable Butcher there…
A: My father started Baldor and I’m vice president. I oversee the partnership between Eataly and Baldor. I started the relationship with Eataly to go in a different direction and explore retail and take care of the produce department, which is so necessary but difficult to run in the retail store. Our specialty is produce and Eataly lets us run the department and they don’t have to be concerned about shrink and overhead and shelf life. Baldor has all the resources, local farmers and international sources. We have the infrastructure to buy the best produce at the best price and get it to Eataly on time, seven days a week.
Q: That’s quite a responsibility. Eataly’s produce department carries a continually changing cornucopia of fresh seasonal items, exotic imported produce and hard-to-find specialty items with eye-catching merchandising. What do you find the most difficult part of the job?
A: Logistically it’s not that complicated, but the challenge is managing 500 line items every day, keeping them fresh and available and at the right price. Eataly has a multi-faceted operation with 700 employees, so our working relationship allows Baldor to focus in on the produce department and understand the items and identify the trends that Eataly’s customers are looking for.
It’s not a 700 employee retail store figuring out produce, which is a little piece of the pie. It’s Baldor’s 10 highly focused Baldor employees, working with all the tools of a produce company, servicing all Eataly’s major high-end produce users in New York City.
The best way to put it, we’re Eataly’s go-to suppliers, and with that commitment between us, it allows us to allocate all the resources we have to offer to help them to operate that produce department. We go further than just having a traditional customer/supplier relationship. We rely on each other to put together the best produce department out there.
Q: As you’ve developed this partnership, what has surprised or impressed you most?
A: What has surprised me is that if you make unique items available and have your department educated that this will careate a willingness for consumers to try something new. Basically, we bring in a new item and we educate staff at the store of where and how it can be utilized so they can explain to customers. There is increased T.V. and media attention these days on fresh produce, and cooking has become such a popular thing. It’s satisfying to see the trust we’ve built.
Q: Could you elaborate on your product selection strategies?
A: Baldor takes only the best product, so we don’t offer corn in the winter. It’s a focus on seasonal when possible, and organic when possible. We put such a focus on what’s in season. If you buy a peach out of season, you’ll probably be disappointed. At the same time, we’ll bring in premium New Zealand yams and educate consumers on all the ways to roast, boil and mash them. It’s about steering customers in the right direction. It’s a trust factor. If Eataly has it out on display, it must be good.
Q: Do you work with the Vegetable Butcher?
A: The Vegetable Butcher is part of the produce staff. Originally it was an idea to help customers prep their vegetables to be ready to cook, and it’s still that, but it has morphed into an educational area. So, now instead of just waiting for consumers to come with their vegetables, we work with the Vegetable Butcher, peel this, make celery root salad, do what’s in season, what tastes good or what may be a little intimidating. The concept is very much part of the success in the produce department.
Q: With your experience, do you have any advice for the produce industry on ways to increase produce consumption?
A: It’s fun to get people good fruits and vegetables. I think what happens in produce is that many companies get mired in the transaction and the education of staff in the industry and onward to the consumer is what struggles. The more you educate, the more enthusiastic the consumer becomes and the better your sales are going to become.
Especially with this local movement, it has to be in season when possible. The idea is growing in the right place at the right temperature at the right time of year. It’s not that grapes from Chile can’t taste good, but they need to endure a 15 day trip to get here, make it through logistics networks and remain on the shelf; it’s that they have to be picked earlier, and they’re not at peak ripeness.
An uneducated consumer identifying local really means in season and it tastes better.
We only do corn in the summer starting with Georgia and the Carolinas, moving to New Jersey and Pennsylvania and then Long Island.
If consumers have a bad experience, they often will blame it on the store. Our partnership has allowed Eataly access to Baldor’s resources, where we buy direct and know the ins and outs. We have unique items we’ll present, but how we operate is what’s most important. We don’t want to disappoint consumers.
We watched that old A&P facility deteriorate over the years and, although it became a controversy over who should get the space, we have to say that the image of a reborn facility humming with fresh-cut operations, solar panels and test kitchens is a pretty intense transformation. And speaking of transformations, every business faces the question of how best to train the younger generation. Unlike so many up-and-coming produce executives. T.J. Murphy is fortunate enough to be working in a position in which he is exposed to consumer habits and preferences -- that will serve him well as the years go by.
Everyone in the industry will be well-served by getting an opportunity to observe this unique facility and intriguing supply chain.
To join the tour of Baldor, Eataly and Stew Leonard’s, send us a note here.
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