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Get An Inside Look At The New Philadelphia Produce Wholesale Market By Taking A Tour During The New York Produce Show And Conference

Jim Prevor’s Perishable Pundit, November 26, 2012

Ever since the founding of The New York Produce Show and Conference, we have had a tour bus head down to Philadelphia on the day after the trade show. Our friends at Wegmans have always been kind enough to let us stop in the Cherry Hill, New Jersey store and to treat us to lunch at their bountiful foodservice offering.

Then the bus has headed down to see the brand new Philadelphia Wholesale Produce Market, the newest design in the country. Our inaugural year, the market was not yet open for business, so attendees got a sneak preview of what was soon to come. We highlighted that tour in a piece titled, Tour To New Philadelphia Wholesale Produce Market Offers A Glimpse Into The Future Of Produce Wholesaling In America.

By Year Two of The New York Produce Show and Conference, the market was open for business, and we profiled that experience with a piece we titled, Not Your Father's Wholesale Market... The New Philadelphia Wholesale Produce Market Wants The World To Know..."We Are Open For Business."

This year, The New York Produce Show and Conference is offering an expanded tour option: There are six tours in total:

1) To the Hunts Point market, the largest wholesale market in the country,
2) To a hot selection of Manhattan retailers,
3) A visit to the powerhouse New Jersey retail community,
4) A visit to the unique facility of Baldor, which includes a tour of their test kitchens, fresh-cut processing facility and more,
5) A unique tour of Brooklyn retailing combined with some examples of New York’s urban agriculture operations and, once again,

6) Our visit to Wegmans and the Philadelphia Market.

We asked Pundit Investigator and Special Projects Editor Mira Slott to find out what is new and exciting down in Philadelphia:

John Vena
Board of Directors of PWPM
Chairman of Marketing Committee
President of John Vena, Inc.

Q: Do you view the Philadelphia Market as a model for the future of terminal markets? In what ways?

A: Absolutely, there are certain required features if you intend to preserve the cold chain and to keep cleaning and maintenance manageable, but I am sure that facilities built in the future will improve on our design. The best advice that we can give is this: Get involved in the design from the first day of discussions and stay involved until the building is completed. The best investment in a project like ours is in a staff of “owner’s reps” to insure that all the details are managed.

Q: Since the market has been operating, what are some of the biggest accomplishments, surprises, issues that have arisen?

A: The biggest surprise most of us have had is the increase in the shelf life of our product and the increase in efficiency when loading and unloading product. An unfortunate occurrence has been the closing of two of our merchants, leaving some unoccupied units.

Q: How important is the Market to supplying the region? What is your reach?

A: Our market is a major supplier to both foodservice and retail customers within a large radius. We serve customers from upstate New York to Virginia and west to Ohio every day. A big part of our customer base consists of various wholesalers and distributors with an even wider reach daily.

Q: How has your customer base changed? Have you expanded the range of customers, the number of customers, the amount of business with established customers, etc.?

A: We have made a concentrated effort to better serve existing customers and to rebuild our customer base within the metropolitan Philadelphia area. Tad Thompson, our Business Development Director, has been working on ways to reconnect our market to areas in the region that have been classified as food deserts. This means working closely with a variety of non-profit organizations and government agencies that are developing programs to kindle local entrepreneurship and create new outlets for fresh produce in underserved communities.

Q: Are there unique attributes and variables that might make it difficult to duplicate the Philadelphia Market elsewhere?

A: The most unusual aspect of our development was the “buy in” from all our merchants. We spent many hours in lively discussion, but everyone agreed that our course of action was the right one.

Another key to the successful completion of our project was the unflagging determination of our CEO, Sonny DiCrecchio. There were times when he literally carried the project on his shoulders to keep things moving forward. However, without the support of The Commonwealth of Pennsylvania — specifically our landlord, The Philadelphia Regional Port Authority lead by Jamie McDermott — we would never have made it to Essington Ave.

Q: What advice can you offer to other terminal market operators that want to improve their operations based on what you’ve learned through the process?

A: The most important thing to consider is to continually reinvest in facilities… the future depends on it. However, be sure that those improvements are well thought out and well funded.

Q: Could you describe competition in the area and what impact the Philadelphia Market has had on penetrating that competition?

A: I think the heaviest competition we will face in the future won’t come from the people and businesses that we struggle with today. There are some fundamental changes occurring in the way all business is done in this country, particularly the food business, and we have to prepare ourselves.

Q: Could you describe the scope of companies in the Philadelphia Market. Do you see that changing in the future? Are companies at the Market also operating elsewhere? How is capacity for storage, distribution, etc.?

A: We will see a change in the makeup and the lineup of players in our market. One of our newest merchants, Philly Produce, is a division of a very large wholesale distributor based in northern New Jersey. Colonial Produce, composed of some of the younger generation of salespeople on the market, opened its doors earlier this month. This is an interesting development, because it highlights the fact younger people who are familiar with the challenges that we face are not afraid to throw their hats in the ring.

Q: You say that you now have open units and offices for the first time. Could you elaborate on this? What companies could benefit most by capitalizing on the availability?

A: At the end of last year, Al Finer Co. and Klayman Produce both closed their doors. Finer closed without finding a successor to either take over the business or the three units it was committed to lease. We are actively seeking a tenant or tenants for those units, and this is a terrific opportunity for a new or existing business. In addition, the design of our building contains a supply of office space that is open to any related business. Currently we have a variety of tenants including buying brokers, an IT provider, transportation companies and an HR consultant. Our location is excellent, convenient to highways and the airport.

Q: On a personal note, what inspired you to become so involved with bringing this Market to fruition?

A: I have always believed that a healthy, modern facility was crucial to future success in our industry and was a key component in the success of my company. I am very committed to the concept of terminal markets as a viable part of the supply chain, at least in an area as densely developed and populated as our region.

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All the tours offered at The New York Produce Show are incredible learning experiences, and this one offers a one/two punch — an opportunity to visit the one retailer, Wegmans, that foreign retailers most want to see when they visit America, and the most modern wholesale market in the country.

In fact when Dr. Johan Van Deventer traveled from South Africa to join our very first “Thought Leaders” panel, a journey we chronicled here, he was so impressed he submitted a report to the Government of South Africa urging them to pay attention to this model.

The whole future of terminal markets is yet to be determined. There is no question that this new facility is dramatically better in every way than the old facility — it keeps the product better, it keeps it safer, it is more efficient, a dramatic winner — except it is also a lot more expensive than continuing in an old warehouse long-since paid for.

This wouldn’t be a problem if the new market attracted dramatically more business, but it is not clear if that will happen. In theory, a high quality market might lead big chains — both retail and foodservice — to buy more from a market. After all, there are significant benefits to buying off the market, most notably that retailers can order less direct, which is the same thing as saying the retailer takes less risk. In all likelihood, it also means the consumer will have fresher product.

Still, this is a big switch for chains, and they are so focused on buying direct and leveraging volume to get better prices that it is not obvious that any improvement in facilities will lead them to buy much more from terminal market wholesalers.

If, however, one thinks of a terminal market as a distribution center for independents, then the fact that the facility can do a better job, give the customer more shelf life, etc., means that those independents may do better than they would have without a market. Over time, they may grow and that may be the way a better market winds up producing extra business. But that can take a long time.

In any case, if you haven’t seen the new Philly market, you are not fully up to date on the produce scene in the United States, so consider this as the option for your tour.

For those traveling out right after, we always arrange for special limos to take attendees directly from the market to either the Philadelphia Airport or to the Amtrak station nearby. If you would like to take advantage of this complimentary limo service, just let us know here.

If you haven’t registered for the show yet, you can sign up for the show and all the tours right here.

If you have already registered and would like to add a tour, you can simply e-mail us here.

Hotel reservations can be gotten here.

Lots of travel discounts have been negotiated here.

And there are still opportunities for a few last minute exhibitors and sponsors. Just let us know of your interest right here.

Well, it is The New York Produce Show and Conference, but Ronald Reagan when shot was asked by a nurse how he was feeling. He paraphrased W.C. Fields, who proposed that his epitaph should read, “On the whole, I would rather be in Philadelphia,” by saying “All in all, I would rather be in Philadelphia.”

Which is pretty much the exact feeling that the Philadelphia tour attendees expressed the past two years.

Come join us on December 6th, 2012.

Many thanks to John Vena for updating us on things in Philadelphia. 

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