PhillyDeals: Phila. Wholesale Produce Market is bearing fruit

A warehouse man moves a pallet of fruit at the thriving Philadelphia Wholesale Produce Market.
A warehouse man moves a pallet of fruit at the thriving Philadelphia Wholesale Produce Market. (ED HILLE / Staff Photographer)
Posted: June 17, 2014

We're a little bit jealous of Philadelphia," says Matthew D'Arrigo, produce wholesaler and market officer at Hunts Point Terminal, the big New York distribution center that will move $2.5 billion worth of food this year.

D'Arrigo is talking about his Philadelphia rivals' success at getting the Philadelphia Wholesale Produce Market built. That quarter-mile-long, multi-story, skylit, fully refrigerated fruit and vegetable warehouse and showcase just celebrated its third anniversary on Essington Avenue in Southwest Philadelphia.

And it's growing, says Sonny DiCrecchio, the Philadelphia produce broker turned market chief executive and president: Sales at the new market will approach $1.6 billion this year, up from $1 billion when it was proposed in the mid-2000s.

The market now employs 1,500, up from 1,100 at the former Philadelphia Regional Produce Terminal on Galloway Street in South Philly.

It expects to pay Philadelphia $7 million in wage and business taxes this year, up from $3.8 million before the move.

On the other hand, just 25 produce firms now operate in the new center, down from 40 at the old terminal, though surviving firms have expanded to fill the available space.

"Here, the overhead is higher. You have to sell more product," says broker John Vena. "The rent is 21/2 times what we paid in the old neighborhood."

But he's getting more for that money, Vena added: "The cost here includes central refrigeration. On the old market we paid for our own."

He welcomes the centralized recycling, the 54-inch rodent wall that steers varmints away ("We see more deer than rodents here," DiCrecchio said), the tight entry security, and especially the central refrigeration system covering storage, work, and loading docks.

"We have less spoilage. Much better shelf life. Much better security," Vena concludes.

"They are giving their customer a stronger product than before," Hunts Point's D'Arrigo said. At places like Hunts Point or Philadelphia's former Galloway Street terminal, "when it's 25 or 95 degrees out, those open-air docks are tough," D'Arrigo said.

Crates of produce freeze in an hour, or liquefy in the heat. Brokers have to time deliveries so boxes don't stack up in those conditions.

At the fancy new terminal, brokers still have to hustle to attract buyers. On a typical day they draw more than 800 customers, from chain-store buyers with tractor trailers, to neighbors' groups and corner bodegas.

"They are competing with independent produce distributors. The industry is consolidating. This market uniquely has a high-tech facility," which gives it an

edge, said Miriam Wolk, vice president at United Fresh, a Washington produce advocacy group.

"It took a lot of courage for the city, the state, and the owners to pony up for this," says Anthony Barbieri, the former head Acme produce buyer who is now a senior official at the Produce Marketing Association, in Newark, Del. "It was absolutely the right thing to do for the longevity of this business in the city."

DiCrecchio says his hair "went half-white" keeping the market's financial package together after the 2008 financial crisis. Funding for the Brian O'Neill-built center included:

$152.5 million borrowed from the Philadelphia Regional Port Authority, to be paid back over 40 years.

A $50 million loan from American International Group, which was nearly canceled when the insurer was taken over by the government during the financial crisis.

Public money, including an $11 million PennVEST state-backed loan, a $3 million federal Housing and Urban Development loan, a $2 million federal "brownfields" grant (the site had held 200,000 discarded tires), all conditional for the larger loans.

Brokers credit produce and political leaders for relentless advocacy, including former state Sen. Vincent Fumo, (D. Phila.), who will be honored at a produce dealers' luncheon later this year.

"What now separates Philadelphia's wholesale market

is the assurance it's deemed

fresh for fruits and vegetables," Barbieri told me. "The biggest-selling section of a produce department today is bagged salads. These salads are fresher, and they last longer at home.

"If I'm a buyer, I'm going to be loyal to the product that lasts longer, because I won't throw as much away."


JoeD@phillynews.com

(215)854-5194

@PhillyJoeD

www.inquirer.com/phillydeals

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