How two companies fare outside the Hunts Point Produce Market gate
BRONX, N.Y.— Drivers who exit Hunts Point Produce Market in South Bronx can’t miss the 270,000-square-foot office, storage and distribution warehouse with 99 docks for truck loads.
The big, black, oval Baldor logo on the building and white trucks is pretty clear.
Baldor Specialty Foods is one of many companies handling fresh produce a stone’s throw from the primary Hunts Point institution of 30-plus businesses.
All over the southern Bronx peninsula, in between the auto part suppliers and repair shops, are produce wholesalers and distributors for every niche, from African and Latin to Caribbean and Vietnamese.
Like the firms within the gates of the produce market, these companies on the outside are competitors as well as partners when necessary.
And partnerships have helped companies find solutions — or at least Band-Aids — when New York City’s foodservice industry bottomed out during the COVID-19 pandemic.
Baldor
“My back was against the wall. It devastated our business,” said Baldor president Michael Muzyk.
Baldor is primarily a wholesale restaurant and foodservice with an Urban Roots division of fresh-cut produce for retailers — all in all, a business-to-business operation.
However, to survive, Baldor introduced a direct-to-consumer revenue stream by doing home grocery deliveries during the health crisis.
“It’s certainly an umbrella in a rainstorm,” Muzyk said.
What helped was the company already had a strong e-commerce website, plus started accepting credit cards a few years earlier.
And then Baldor pushed for retail business.
Muzyk connected with friends at Albertsons Cos., which has the Acme banner in New York and Shaw’s in Boston, and learned what problems they had that Baldor could help solve.
Baldor could take 30 hard produce spots from Acme trucks and deliver those categories directly to its stores so that the Acme trucks would have more room for other items, like toilet paper.
“It was really the B-to-C home delivery and retail business that got me out of a deep, deep hole,” Muzyk said.
Restaurant business is ticking up, slowly, especially outside of New York City.
“There is hope,” he said. “The farther you get away from the city, you can have a bigger footprint and space around the table. In New York City, you have to step outside just to change your mind.”
On Sept 30, Gov. Andrew Cuomo allowed New York City restaurants to open for indoor service at 25% capacity. But with the threat of a coronavirus resurgence, he mandated that on Nov. 13, bars and restaurants statewide must close by 10 p.m.
Pre-pandemic, the web-driven business model has helped Baldor collect data on what chefs are searching for and buying — data they didn’t have when chefs called in their orders by phone.
With months of experience delivering directly to consumers, Baldor has a better handle on the logistics of customers who purchase items in smaller quantities.
That ability is helping Baldor in its B-to-B business now, with chefs just reopening their restaurants or serving at 25% capacity. They don’t need the big quantities they used to.
FreshDirect
Also web-driven and based in the Bronx outside of Hunts Point Produce Market, FreshDirect is an online fresh food grocer delivering directly to consumers’ homes in seven states in the Northeast.
Already focused on retail, FreshDirect was poised to grow even more than it was before the pandemic as consumers sought ways to get groceries with less exposure to other people.
“There are currently no signs of slowing down,” said Eric Stone, vice president of merchandising.
The year-over-year sales growth rate remains high, with third quarter 2020 enterprise residential sales up 50% compared to 2019.
“We saw our greatest growth come from the suburbs, 100%,” Stone said. “As more customers relocated temporarily or permanently outside of New York City, they took FreshDirect with them.”
The company’s direct relationships with growers helped avoid supply chain disruptions in those early weeks of the pandemic.
“Our key challenge was in handling the tremendous surge in demand,” said Scott Crawford, chief merchandising officer.
From January through March, new customer traffic surged to 800%, and order size and frequency ballooned as customers began to eat every meal at home, he said.
To cope, FreshDirect temporarily streamlined its stock-keeping-unit base to the most popular products and limited the number of items per order.
Hiring ramped up in March and has continued, with a projected 1,000 new hires by the end of the year.
Crawford expects an almost 50% increase in new customers compared year over year.
To meet the needs of consumers spending more time at home, FreshDirect created more prepared foods, more fresh-cut and value-added products, easy meal solutions and healthier options.
Customers often start filling up their online shopping carts days in advance, giving FreshDirect insight into new trends.
“COVID-19 effectively obliterated the key barriers to entry — getting shoppers comfortable with the technology and with someone else picking their food,” Crawford said.
