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July 31st, 2003, 02:38 PM
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Specialty Foods: Strong in Weak Economy

The baguette, says Noel Labat Comess, is the fruit fly of bread.

Its life span is abbreviated, an eight-hour rocket ride from exquisite to over the hill. That is one reason why Mr. Comess built his bakery close to Manhattan. And Manhattan is one reason his business will long outlive a baguette.

This year, Mr. Comess expects his Tom Cat Bakery to do $15 million in sales. That is up from $275,000 in 1987, the year it opened in Long Island City. The work force has grown to 170 souls, hand-shaping and hearth-baking 350 varieties of bread and rolls for sale to restaurants, corporate dining rooms and hotels.

"We deliver two to three times a day," Mr. Comess said. "We have a very direct need to be close to Manhattan. We're not providing an emergency service, but we have fairly narrow windows within which to make those deliveries. People eat at noon and at 7, and bread goes stale."

Some might say that supplying artisan-baked bread to spoiled New Yorkers is a type of emergency service. Either way, the story of Tom Cat's success helps explain why the manufacturing of specialty and ethnic foods in New York City is growing in the midst of a recession, and at a time when other manufacturing industries are fading fast.

Between May 2002 and May 2003, the number of people working in food-related manufacturing in New York City jumped by 1,100, or 7.7 percent, said Marc M. Goloven, the senior regional economist at J. P. Morgan Chase. The number of jobs in all so-called soft-goods manufacturing — the production of goods with less than three years' shelf life — shrank by 10,500, or 11.2 percent.

"Food-related manufacturing has been bucking the trend of sharp job losses in soft-goods manufacturing at least over the past year," Mr. Goloven said. "Unless New Yorkers stop eating, there is a prospect that this industry could continue to grow in New York City. Clearly this is an industry that does not find it necessary to move to lower-wage climates around the globe."

Two types of food manufacturers seem to be doing well. One is specialty food companies catering to the cosmopolitan tastes of prosperous overachievers happy to shell out for convenience and quality, even in a recession. The other is ethnic food producers serving the growing number of immigrant communities in New York City and up and down the East Coast.

For many such companies, being in New York is an advantage. It offers quick access to a large market. Transportation costs are reduced, immigrant labor is abundant and the companies are able to stay in close contact with the shifting tastes of the customers they serve.

"The density of restaurants and restaurant customers is beyond belief," Mr. Comess said. "I jokingly say we deliver on a three-dimensional grid. We can have eight clients on a block and even in a single building we know someone on the 2nd, 4th and 68th floors. So the density is there and also the demand for a high-quality product.

"I have friends who have equivalent businesses in Minneapolis, for example," he said. "The number of people there who are willing to try something new, who have traveled and tasted these things and are willing to put up the money for it — it's a much smaller percentage of the population. Here it's rich, in whatever way you want to apply the word."

What is more, at least some food is relatively recession proof.

"Wall Street may be hurting," said William J. Solomon, former president and chief executive of Voila! Bakeries in East Williamsburg, Brooklyn. "There are fewer people putting down payments on BMW's, but food is an affordable luxury. You may not be able to go out and buy the latest Prada ensemble, but you can treat yourself to a nice piece of Danish."

It is not clear exactly how many food manufacturers there are in New York City. A 1999 study by the New York Industrial Retention Network identified 540 companies, employing about 14,000 people. But Adam Friedman, the group's executive director, said official figures underestimated the size of the industry because part of it probably went unreported.

The companies tend to be small and family-owned, many of them with fewer than 100 employees. They rely heavily on networks of immigrant labor. Nearly half the companies surveyed by Mr. Friedman's group reported doing at least 40 percent of their business with customers beyond the city. And more than half the companies surveyed said they were looking for more space.

"New York is a great big test kitchen because of the diversity of the city," said Mr. Friedman, whose group is trying to help the food manufacturers expand into regional and national markets. "It incubates new products. So you have all these literally dozens of submarkets from each immigrant community incubating their new products."

Wonton Food in Brooklyn makes wonton skins, egg roll wrappers, noodles and two million fortune cookies a day in a 60,000-square-foot plant next door to a pretzel factory in East Williamsburg. In the 14 years since Wonton Food moved out of Chinatown in search of room to grow, its work force has nearly tripled from 100 to almost 300 people.

Pat's Exotic Beverages in the Bronx grew out of one woman's experiment making juices at home, said Lori Brown Griggs, the chief operating officer. Now it sells tropical juices and beverages in flavors like sour sop and sorrel to some 70 West Indian restaurants and bakeries, African-American restaurants and health food stores in Brooklyn, Harlem, the Bronx and Queens.

Cibao Meat Products was started in 1969 by a Dominican immigrant in upper Manhattan to sell salchichón, Spanish-style sausages, to other Dominicans. It now has 40 employees and a plant operating round the clock near the Hunts Point market. Its customers now include West Indians, Cubans, Puerto Ricans and others, said Edgar Soto, the only nonfamily member in management.

Earlier this year, Cibao introduced a new salami, salapeño, in hopes of expanding its reach to include more of the city's rapidly growing Mexican market. Similarly, Wonton Foods has been credited as one of the pioneers of a well-known crossover item, the chocolate fortune cookie. Pat's Exotic Beverages has been developing soy-based products including soy sour sop.

New York is not without drawbacks for food manufacturers. Space is expensive and in short supply. Some firms say they find the city a less than hospitable place. They say they are being squeezed out of industrial areas by real estate speculation and illegal building conversions that have left them at odds with their new neighbors.

Donald H. Lau, vice president of Wonton Food, said that after a nearby building that had housed a knitting factory was converted into lofts, the new neighbors began to resent Wonton's flour delivery trucks. "The so-called artists sleep till noontime," he said. "They say our trucks arrive too early. They throw eggs at the drivers. We had to call the police."

Jeffrey Levi, chief executive of John's Gourmet, a 12-year-old Brooklyn company that produces grilled salmon, grilled chicken and some 300 other prepared foods for specialty markets, supermarkets and delis, said that he felt that his company was being pushed out of Red Hook and that he had been unable to find affordable space in which to expand.

"The administration doesn't have a manufacturing plan or an industrial plan," Mr. Levi said. "These are businesses that employ thousands and thousands and thousands of working people. I don't employ 70 people from New Jersey, I employ 70 people from Brooklyn. If I didn't employ them, where would they get a job today?"

Daniel L. Doctoroff, deputy mayor for economic development and rebuilding, said that over the past year and a half the city had helped secure some $20 million in financing to enable nine food manufacturers to expand and upgrade. He said the city had also invested $41 million in capital improvements to the Hunts Point produce distribution center and meat cooperative.

The administration is in the midst of a study of industrial businesses in New York City, Mr. Doctoroff said, to determine what the city's approach to
promoting such businesses should be. The total number of manufacturing jobs in the city has dropped from about one million after World War II to about 200,000, he said. But the decline has been leveling off.

"I think there's a long history of not paying enough attention to the manufacturing businesses in this city," Mr. Doctoroff said. "In part, we are the victim of forces well beyond our control. But I think it's certainly also the case that we can be more thoughtful about what we do to maintain and to potentially grow the markets where we have a competitive advantage."

He added, "If you look at the food industry over time, I think we're evolving toward a niche specialty food manufacturing industry. And because of our ethnic base and the size of our market, it's a great base from which to build and obviously has export potential out of New York City."

(Edited by billyblancoNYC at 7:28 am on Aug. 1, 2003)

TLOZ Link5
July 31st, 2003, 09:48 PM
Might want to edit that a bit, Billy. *You posted the second half of the article four or five times.