Hunts Point Produce Market Still Shining After 50 Years
Traditionally, a 50th anniversary gift is something made of gold. At the half-century mark, the Hunts Point Produce Market knows something about gold, generating $2.4 billion in annual sales. As the market celebrates a bountiful 50 years in 2017, it is positioning itself to reap gold over the next 50. Produce houses are expanding their product lines and market presence. Facilities are being renovated to add state-of-the-art equipment and technology. And on the horizon are state and city investments in transportation and infrastructure that will improve access to the Bronx-based market, the largest of its kind in the world.
In May, New York City Mayor Bill de Blasio made his first visit to the Hunts Point Market to tour the facility and talk to business leaders about issues facing the wholesale produce hub. The market is a beneficiary of the $150 million de Blasio committed in 2015 to modernize the Hunts Point Food Distribution Center over 12 years.
Joel Fierman and Joe Palumbo, business owners and co-presidents of the Hunts Point Terminal Produce Co-Operative Association Inc., led the tour, accompanied by Myra Gordon, the co-op’s executive director, co-op general manager Nick Rodelli and members of his public safety department.
“We appreciate the fact that he came up here,” says Joel Fierman, president of Fierman Produce Exchange. “He was very nice. He spent the better part of an hour here. I think he realizes more now what we mean to the City of New York.”
De Blasio hails the market as “a crucial link in the city’s economy” and an “economic engine” for the Bronx. “I just want to get the magnitude clear here — 8,000 jobs here at the Hunts Point Market. That’s an extraordinary impact on not just the economy of the Bronx but all of New York City,” says the mayor.
“You know, for a long time the folks who run the market were saying to me, ‘You have to see it to believe it.’ And they’re absolutely right. This is one of the lifebloods of New York City. This market literally feeds New York City. New York City could not run without the Hunts Point Market,” he says. “And let me emphasize that so much of what people love about this city, New Yorkers and visitors alike — we love our delis, we love our restaurants, we love all the stores in all the different communities … all that runs through here.”
“The mayor spent considerable time with his aides listening,” says Gordon. “My sense of the event was the market appreciated the way the mayor engaged himself regarding the issues. He seemed to understand areas where his administration would be a valuable resource to make a concerted effort to solve some of these same issues.”
Fierman and Palumbo say the mayor and the Co-Operative’s leadership discussed issues ranging from transportation to the Food Safety Modernization Act (FSMA). “The mayor looked at our rail transportation situation and what may be coming down the road,” says Fierman. “He was very interested in addressing that issue.”
De Blasio stresses rail capacity will be a priority. “We want to keep focusing on those products that come in by rail,” he says. “If they are not coming in on a truck, that means fewer trucks on our streets, less pollution. So, we really believe in increasing the rail capacity here.”
Part of the de Blasio-pledged funding for the Hunts Point Food Distribution Center is earmarked for new buildings and storm protection. During his May visit, the mayor acknowledged how critical it is to the region that the Hunts Point Market remain operational, despite what the weather may bring. “We are going to continue to invest, to make sure this market can continue to be the best it can be, and to make sure it is protected. You know, I heard an amazing thing on the tour. This market has stayed open even in the worse storms,” says de Blasio. “A couple of years ago, we had the biggest snowstorm in the history of New York City. This market stayed open. People had to be fed. People who work here felt it was their commitment to keep going, no matter what. That’s incredibly important for this city. We need to make investments to make sure the market runs and is protected from Mother Nature.”
The prospect of upgrades is welcome news to firms headquartered at the market, where vendors like Thomas Tramutola Jr., a third-generation manager at A&J Produce, admit the 1967-built facility is a “little worn.” But on their own, companies continuously and rigorously invest in renovations to modernize facilities and meet FSMA requirements.
“We’ve recently upgraded our entire facility to bring the physical structure up to speed,” says Tramutola. A&J, founded by Al Weiler, Joe Levantino and John Tramutola, and with units on Rows A and D, is celebrating its 40th anniversary at the market this year.
On Row C, Nathel & Nathel has been under renovation, and with a twist. “We’ve taken on a really green initiative here,” says Angel Helck, controller. The company has added LED lighting and made changes to improve air quality. “We’re really trying to clean up the air for our employees and the environment as a whole.”
The quest among Hunts Point businesses for additional space is ongoing, and this year several of the produce houses are expanding into newly acquired units.
C and J Brothers, on Row B, purchased two units. “It’s our first expansion,” says Matthew Park, managing director. “It will alleviate a lot of constraints the warehouse guys deal with. And we’re really going to be able to test to see whether we’ll be able to expand our product line. If it goes well, it will open a lot of doors for us.”
E. Armata Produce, helmed by co-owners Chris Armata and Paul Armata, recently closed on the four adjacent D.M. Rothman Co. units, expanding its Row A presence from 106-125. “We’re totally gutting it, and adding all new equipment,” says Steve Koster, E. Armata’s marketing director. “With what we will be doing we’ll be able to spread out.”
Also on Row A, FresCo, LLC purchased units 153-157 from S. Katzman Produce Co. FresCo has been headquartered in 258-259 on Row B. Charlie DiMaggio, FresCo president, expects to move into the new space in mid- to late summer. “It’s going to be great overall,” he says. “We’re going to be expanding our product line. But just in general, having the space is a huge difference for us. It’ll be at least triple the amount of what we offer now. It’s going to be an exciting year for us.”
S. Katzman Produce is nearing the end of a floor-to-roof renovation of its facilities, according to Stefanie Katzman, executive manager and a member of her produce family’s fourth generation.
“We finished renovations on units 205-220, and our offices, in January 2017. We are currently doing units 200-204 and 223-225, and plan to complete those by the end of the summer,” she says. “We bought units 200-204, and sold units 153-157 and 429-433 this past April. All of our buying and selling in the past two years has enabled us to move most of our departments under one roof.” The company’s current footprint is Row B, 260-265, 200-220 and 223-225; and Row D, 423-428.
“We gutted our new facility completely and redid everything. We blew out the walls, we dug up the floors and we put in a whole new drainage system. We built all the walls out of insulated refrigeration material. We added all new cooling units and condensers. We built new sales booths, and new foreman’s booths … Everything that could possibly be changed, we did it,” she says. Cutting-edge features to maintain the cold chain included a state-of-the-art temperature monitoring system and even a refrigerated sub-roof.
In an industry affected by everything from weather to changing palates, produce houses are constantly adjusting course to anticipate the next trend or customer need. Today, business continues to grow in the areas of delivery and direct services. Produce houses are working more with independent markets and smaller supermarket chains like Key Food and C-Town.
“The big firms are reaching out to the Mom and Pops in the New York area. It’s a fact of life now,” says Matthew D’Arrigo, vice president of D’Arrigo Bros. Co. of New York and first vice president of the Hunts Point Terminal Co-Operative Association.
Thomas Palumbo, vice president of business development at Top Banana, agrees. “We have to go out to the customer more. It has been so one-way for so long,” he says.
“There used to be a lot of customer pickups. Now it’s up to the companies to have delivery options.”
— Thomas Tramutola Jr., A&J Produce
Nathel & Nathel’s Helck offers, “For the first time in our history, we have hired outside salespeople. We’re bringing in new accounts. We have people now going out to the stores and helping with the set-up of the produce in the stores. We love produce. We want to show it in the best light possible.”
At J. Margiotta, president Jimmy Margiotta says it’s all about the customers. “We try to work closely with our customers, and help them if they want to run specials and ads. Anything that can help them in their circulars, or whatever they might have. We work closely with them on promotions.”
And part of catering to his customers’ needs today involves making more deliveries than ever before.
“In any business you need to change with the times,” says Margiotta, whose family has been in the produce business for more than 116 years. “And I think the biggest change in our business has been the delivery system by far. At one point, everyone would come here. Only a few firms had trucks, and delivered. Now, it’s the majority. People have realized that is one of the things we need to offer.” Margiotta says his company’s delivery capacity ranges from “very small to very large” — a few pallets, or a trailer full.
Tramutola says A&J has made the shift as well. “There used to be a lot of customer pickups. Now it’s up to the companies to have delivery options. We’re tending to do a lot more than we did in the past, and we’re OK with that.”
With making an increased number of deliveries, Tramutola says it’s even more important today to understand customers’ needs to avoid costly returns, among other pitfalls. “You have to allocate the right products to the right customers — some use eggplant with scarring on it, others need chain-quality stuff.”
At D’Arrigo Bros. Co. of New York, transportation is an important part of the daily conversation. “Our brand is service. And a huge portion of what we do is logistics,” says Gabriela D’Arrigo, marketing and communications director. “You can’t sell something that’s not here. If we can’t get the product to somebody, we might as well not be in business. We’ve invested a lot into our trucks in the last two years to make sure we’re on point.”
E. Armata has enhanced its fleet of trucks and is “very much into distribution now to service the customer and expand our customer base, says Koster. This was one of the things Chris [Armata] saw as a way to expand our base.”
Delivery volume is also growing at Sharkey’s Trucking Corp., a Katzman-owned company where Robert Ferrara is director of operations. “Our delivery business has grown tremendously over the past few years,” says Katzman. “We have increased our own fleet and number of drivers, as well as the number of outsourced carriers we use.”
Also trending at the market is an expanding matrix of technology, sweeping even the more traditional business owners onto the digital wave. Sensors monitor temperatures in warehouses and trucks, sending alerts if there are minute shifts in conditions. Advanced GPS technology allows for precise pinpointing of truckloads of valuable cargo. Produce can be tracked to the section of the field where it was grown. Tablets and smart phones speed communications between the Hunts Point businesses and their customers.
“As other companies in the terminal have younger generations coming in here, they’re driving more of the technical/technology side of the business,” says FresCo’s DiMaggio.
Hunts Point “digital natives” range from second-generation family members, like Sasha LoPresti, director of business development at at A.J. Trucco Inc., to the market’s only fifth generationer, Mike Cochran, vice president at Robt. T. Cochran & Co.
“As more and more of the older generation members fade out, and more and more Millennials are part of the process, the usability of the internet and technology in general will be much more prevalent in the industry,” says Tramutola.
Next New Things
The never-static produce business makes real-time adjustments to inventory and product lines in anticipation of and in response to the literal tastes of consumers. “The market’s changing to reflect the demographics of New York,” says Fierman. And in the Tri-state area, demographers also must factor in 60 million tourists annually, according to a de Blasio estimate. This brings even more diversity to the table.
“Diversity drives demand,” says LoPresti. “We’re seeing more of an interest in exotic items and organics. Millennials want to try something new. Dragon fruit, for instance.”
The logistics of adding new product lines can range anywhere from surprisingly smooth to remarkably challenging. A rather momentous shift happened in January 2017 for D’Arrigo Bros., when as Matthew D’Arrigo tells it, “We got into the banana business. A company (John Georgallas Banana Distributor of New York Inc.) was for sale, and we were fortunate to find out about it and reached a deal.”
“It’s proven to take a lot of our creative energy,” he says. “It’s a steep learning curve. It’s almost a separate business from produce. Bananas don’t play well with other produce. But we are always looking for ways to grow and evolve.”
Gabriela D’Arrigo agrees. “Matthew has the innovation bug in him,” she says of her uncle.
At Top Katz Brokerage, a shipper/grower representative on the Hunts Point Market, general manager Paul Manfre has witnessed countless innovations in his 40 years in the industry, and has been a change agent and trend-spotter. His perspective is steeped in experiences ranging from selling produce from trucks and stands in Manhattan to walking the market each morning to identify the best fruits and vegetables for Top Katz customers.
“When I walk around Hunts Point Market, I get to see everything from all over the world in one place. And I can compare it — Mexican squash to Georgia squash — and assess the best and freshest offerings for customers.”
Looking to the future, Manfre sees greenhouse- and shadehouse-grown produce as the next big thing.
“It’s changing the whole dynamic of the business. Why is that? Because weather is the big factor. Most growers grow an excess of stuff in expectation of the weather hurting a percentage of their crops. The past year in Mexico the weather was perfect. I saw prices I haven’t seen in 40 years — red peppers for $2 to $3 FOB. There was such an abundance of produce, you just couldn’t move it.”
Hunts Point businesses see innovations like protected agriculture fueling growth in consumer demand and market share in the coming years. A Centers for Disease Control and Prevention report shows there’s plenty of opportunity. It notes that just fewer than 18 percent of Americans consume their recommended daily allotment of fruit, and fewer than 14 percent are eating their suggested servings of vegetables. Industry leaders want to move that needle.
Park, of C and J Brothers, is one of several Hunts Point leaders who see education as a valuable tool in increasing consumer demand and interest in an expanded array of produce. “The lack of produce knowledge in the United States is always shocking to me,” he says. “If you go to Europe or Asia, you’ll see every little city has its own farmers market. In Thailand or Cambodia, you’ll see people cooking with maybe 15 different vegetables, and 10 different spices. The flavors are crazy and outstanding. We have wine and beer connoisseurs, we have car connoisseurs. But we don’t have that crazy produce person. Even the best cook in your house won’t have that level of produce expertise. I’ve always found that interesting, and I’ve been thinking a lot more about it, and what the solution might be.”
Park used mangos as an example of how a little knowledge can expand consumer tastes. Shoppers are drawn to the stalwart Tommy Atkins, one of the most durable cultivars, in a belief that ripe mangos should blush in shades of pink, red and yellow. Yet, many people who sample the Atkins are turned off by the mango’s fibrous nature and cross the fruit off of their shopping lists. Enter the Kent, a cultivar whose skin is mostly green even when ripe. “When you cut it, it’s sweet and delicious, with no fibers,” says Park. “People buy with their eyes. It’s hard to get to the customer to explain that green is good, not bad. But we always try to stress that to our buyers.”
Like Park, Tramutola believes an informed consumer is essential. “I would like to properly educate the customers on what determines the price; what goes into the agricultural end of the deal,” he says. “There’s a good reason why things are priced at what they are. If I could help educate a customer on why something is the price it is, then it would help them feel more comfortable in making that purchase.”
Cost, of course, can be a factor in limiting consumers’ access to fresh produce. And pricing is one of Manfre’s “pet peeves” on the macro level. “Going back to the peddling days, if there was a glut of something, say cherries, they’d sell them cheap to keep stuff moving through the system. Today the retailers are controlled by the giants — the Costcos and Wal-Marts of the world, who don’t move the stuff the same way. The big stores don’t seem to grasp the concept that people would buy more if it cost less.”
Some of the smaller retailers are “doing it right,” says Manfre, citing the Sprouts Farmers Market chain as an example. Founded in Chandler, AZ, in 2002, the company — with 250 stores and new locations in the pipeline — prides itself on making “healthy living easy and affordable.” In June 2017, some Sprouts locations were selling cauliflower for 77 cents a pound. During the same time period, the USDA Agricultural Marketing Service report recorded a national average of $1.41 per pound at major supermarket chains.
Manfre says produce is losing out when for under $3, a family of four can make a dinner of macaroni and cheese. “Every vegetable is a much better option for health. It’s better for you than macaroni and cheese. But that’s how junk food beats us — in price per calories. When you look at food that way, that’s where we’re losing. A head of broccoli is $2.99; you can’t feed a family of four on that. But if it’s 79 cents, maybe you make broccoli with your macaroni. That’s a hell of a lot better.”
J. Margiotta’s Margiotta agrees. “Growing up, we had vegetables on the table at dinner every night. That’s something I was raised with, and my wife and I are lucky enough to be able to do the same. Hopefully, everyone starts to eat a little healthier. At the end of the day, everyone needs to eat more fruits and vegetables.”
$700 From NY State
As the delivery business continues to grow for market businesses, Joe Palumbo and Joel Fierman, business owners and co-presidents of the Hunts Point Terminal Produce Co-Operative Association Inc., applaud Gov. Andrew Cuomo’s $700 million commitment in March toward the $1.8 billion project to reconstruct the Bruckner-Sheridan Interchange. The multiyear project will create a flyover, channeling trucks straight to the market’s front door. Work will begin in 2018.
“While plans have been proposed and languished for decades, we’re taking action to finally right the wrongs of the past by reconnecting South Bronx communities that have dealt with unnecessary barriers to revitalization and growth,” says Cuomo in a statement. “The project will create an interconnected South Bronx with access to the waterfront, recreation, and less traffic on local streets while simultaneously better supporting those who use the Hunts Point Market — a vital economic engine for the borough.”
Fierman says removing 13,000 trucks a day (a governor’s office estimate) from surface streets in the Bronx will greatly reduce air and noise pollution, an outcome he and market leadership welcome. “Everyone wants to reduce carbon emissions,” says Fierman. “Industry has to work in harmony with the community.”
Clean Truck Program
Another partner in the quest for cleaner air is the New York City Department of Transportation. It oversees the Hunts Point Clean Truck Program, which offers rebates to replace or retrofit older, high-polluting diesel trucks traveling into the Hunts Point and Port Morris areas. A new round of funding announced in March 2017 will replace or retrofit up to 100 more diesel trucks.
“The Hunts Point Clean Truck Program … has dramatically reduced dangerous emissions and particulates,” reports the mayor’s office. “Over the last three years, more than 500 high-pollution diesel trucks — that were either based in Hunts Point or that served the markets there — have been replaced or retrofitted. The federally funded program has awarded more than $15 million to 85 different trucking and delivery companies, financing the replacement of conventional vehicles with newer vehicles that operate on alternative fuels, including compressed natural gas, hybrid or battery electric.”