BK Specialty Foods leaves city for Gloucester

Brett Kratchman in his new warehouse. The company has grown into a $25 million-a-year business.
Brett Kratchman in his new warehouse. The company has grown into a $25 million-a-year business. (DAVID SWANSON / Staff Photographer)
Posted: November 05, 2013

When Brett Kratchman started out in the food business in 1986, his biggest concern was fitting his vending carts on Philadelphia street corners where planters were placed to discourage food trucks.

At the time, Kratchman was selling frozen-fruit bars and ice cream novelties. Today, his space needs run a tad larger.

The warehouse at BK Specialty Foods holds 875,000 bottles of beverages, and more than 7,000 varieties of consumable products, from cheese to sushi rice, ravioli to hummus. The freezer is 24,000 square feet.

And yet, with $25 million in annual sales, just under 60 employees, and a service area limited to four states, BK is considered a bite-size contender in the food-distribution industry, where global provider Sysco Corp.'s revenue is more than $11 billion.

Which is why, Kratchman surmises, Philadelphia officials weren't apoplectic when the company recently moved from 65th and Eastwick in the city's southwest section to Swedesboro, Gloucester County.

"I'm under their radar," he said. "We're just a family-run business for close to 30 years. There's tons of them in Philly."

BK's move to New Jersey, underway since September, was completed last week, the same day city officials heralded the decision by specialty-chemical company FMC Corp. to remain in Philadelphia, committing to a 16-year lease at a new office tower to be built by Brandywine Realty Trust at 30th and Walnut Streets. With the added lure of $10 million in state grants, Philadelphia beat competing sites in New Jersey and Delaware to keep the headquarters, which employs 525.

Anne Bovaird Nevins, senior vice president of marketing and business development for the Philadelphia Industrial Development Corp., said the agency had general discussions with Kratchman "about the types of programs that could be available to assist the company in terms of specific financial incentives and tax credits."

Her understanding, confirmed by Kratchman, was that the city could not offer the type of property BK has moved to in the sprawling Pureland industrial park - a 48,000-square-foot warehouse on eight acres, with easy access to Interstates 95 and 295 and Route 130.

The New Jersey Economic Development Authority (EDA) sweetened the pot with a $333,022 Business Employment Incentive Grant. Under New Jersey's Statewide Loan Pool Program, Sovereign Bank, now Santander Bank, is providing a $2.43 million commercial mortgage loan that included $1.08 million participation by the EDA, said Catherine Scangarella, director of state marketing.

"While we always want to be competitive and in the mix for every business retention and attraction opportunity, we also recognize the city isn't going to be the absolute best fit for every single company," Nevins said.

Calling BK's move out of Philadelphia "to some extent regrettable," Kratchman was not bitter or angry, but nostalgic.

"I was born and raised in Philadelphia. It's who I am," said the 53-year-old Temple University alum who wanted to be a lawyer specializing in the business side of professional sports - until he started making serious money from a bartending job and his frozen-dessert carts, which had added juices to its offerings.

Kratchman had partnered with his sister Karen's husband, Bret Gold.

Their Natural Juice Co. of Philadelphia served retail and food-service clients, and exploded in growth when it added specialty beverages, such as Honest Tea and Arizona Iced Tea.

Next came frozen breads and hors d'oeuvres - and a huge boost in 1993, when Whole Foods signed on to let BK be its East Coast distributor for bakery, olives, and other condiments.

More growth came through acquisitions of a coffee roaster and cheese importer, and a specialty-food business featuring vinegars, caviars, and oils.

Kratchman carries some family brands too. BK is the only regional distributor of oysters from brother Barry's Little Shemogue Oyster Co., which the Norristown eel importer established on a secluded cold-water bay in New Brunswick, Canada. BK, which supplies most of Atlantic City's casinos and many hotels and universities, also carries desserts from the Philadelphia-based wholesale baker Classic Cake, co-owned by Barry Kratchman and Bret and Karen Gold, among others.

Critical to such a business are freezers and trucks. Conditions in BK's Philadelphia facility were lacking in both areas. It was just 12,000 square feet - half the size of the freezer in the new place - and in a neighborhood where the narrow streets were challenging for trucks.

"I was tired of trucks knocking down light poles - and the traffic," Kratchman said.

At his new headquarters and warehouse, in a conference room lined with framed photos of familiar Philadelphia sites - Boathouse Row, the Art Museum, Fairmount Park, the Center City skyline - Kratchman wanted to make clear that his company's move was nothing against the city. Though he did gripe about taxes, traffic, and crime.

"I'm very proud of the city and love it," Kratchman said. "Maybe one day I'll go back there - not as a business."


BY THE NUMBERS

675k - muffins sold each year.

24k - cubic square feet of BK's new freezer.

800k - miles driven each year by BK trucks.

7,000 - different types of products in the BK warehouse from more than 40 countries.


dmastrull@phillynews.com

215-854-2466 @dmastrull

comments powered by Disqus
|
|
|
|
|