Fairway Red Hook:
The 65,000-square-foot Fairway, the first Brooklyn site in the Manhattan-based grocer’s chain, is housed in a five-story, 230,000-square-foot, Civil-War-era former coffee factory on the Erie Basin. The market—complete with expansive seafood and meat departments, produce, an international cheese case, coffees, specialty and organic foods and everyday groceries—is on the ground floor, while upper floors will house office and storage space as well as an upcoming restaurant (see sidebar).
Anchoring an Underserved Area
The 66-year-old merchant has been in expansion mode over the past decade, opening outposts in Harlem and Plainview, Long Island. Like the 35,000-square-foot Harlem store on 125th Street, Red Hook is anticipated to bring jobs to an area that is undergoing a revitalization. Residential construction, along with restaurants, bakeries and boutiques are cropping up and big-box businesses such as IKEA are moving into the neighborhood.
Fairway’s approach to establishing itself in fringe locales is to build equity within the community. “In the same manner as in Harlem, we feel that we can be an anchor, helping grow the economy, explains Dan Glickberg, junior partner and fourth-generation member of the family-owned business. Fairway has already hired about 170 workers from a nearby housing project; 300 in total are expected to be brought onboard and trained.
According to David Sneddon, an owner along with Howard Glickberg and Harold Seybert, the customer demographics in Red Hook are almost identical to the Harlem store. “You’ll find wealthy people from Brooklyn Heights or lower Manhattan as well as people shopping with food stamps because the prices are low.“Fairway did a lot of due diligence to keep the format of who we are on track with this neighborhood, Sneddon continues. “We’re not here to be an upper-class store; we want to be an everyday market, stressing the value of what we offer, as well as the quality.
The chain’s positioning continues to make an impact on consumers, especially at a time when mega-merchants Whole Foods and Trader Joe’s have entered the New York food retailing scene. Fairway declines to share sales figures with the trade, but industry analysts have estimated its total annual sales at $200 million.
“I hear people saying, ‘the store’s so beautiful, it must be expensive,’ then they realize it’s not, says Sneddon. Fairway buys the majority of its perishable products direct, keeping prices competitive. “We have a container of cheese shipped every week from France; another arrives every two weeks from Italy with olive oil that we private label, he continues.
The merchant also purchases retail space when possible to avoid passing prohibitive New York rental costs on to customers. According to a recent article in Crain’s New York Business, the company and developer Gregory O’Connell purchased the Red Hook land for $25 million.
Inside the new store, shoppers are treated to specialties like fig and walnut confit, 30 kinds of freshly bathed and marinated olives, about 50 fresh pastas such as saffron linguine and striped snow crabmeat ravioli, and heirloom baby beets. Two grocery sections are separated by center-store cases of cheese, seafood, deli and a full-service butcher complete with a kosher meat case. Throughout departments, Fairway carries products from 15 European counties, six in the Far East, ten in Central and South America and Russia. Fairway’s goal is to offer products not found in other supermarkets, not to customize its offerings by location. There are no categories or product lines exclusive to the Red Hook store; rather the additional space allows for more of what other Fairways feature. To maintain consistency, buying is centralized among a core group of seven junior partners who head the various departments chainwide.
Barbecue Tofu and Coconut Water
Natural and organic is a major category across the board. A specific organic and vegan salad bar offers almost 70 options such as hummus, acorn squash, barbecue tofu and chickpea salad, while a nearby refrigerated case highlights prepacked organic foods, including a dozen varieties under the Fred’s Organic label, coconut water, flax oil, Ad-Vita flavored beverages with acidophilus cultures and dairy products high in probiotics.
Five grocery aisles carry predominantly natural selections and household items. The organic baby food and cereal categories are large to appeal to Red Hook’s growing family population. The area also features a create-your-own-granola section with 92 items to mix and match; 54 are ready-made mixes to which consumers can add raisins or seeds, explains Paul Weiner, junior partner and natural foods director. Fairway also carries a gluten-free category in all stores.
“The space we have here allows us to service anyone from the hard-core organic customer to those who are just curious, Weiner says. In most facings, natural and organic are merchandised side by side with mainstream grocery. “In snacks and chips, for example, I want shoppers to see that natural products usually match or beat the conventional item’s price, he adds.
In Tune with a Lifestyle
Fairway is noted for its large and somewhat-esoteric selections of fruits, vegetables and dairy. Among oranges and bananas, the floor-to-ceiling displays of produce feature more elusive varieties such as cranberry beans, white-tipped radishes, celery root and gray shallots. A direct-purchasing policy enables price maintenance in produce, especially among organics. “We have six trucks come in from California producers twice a week, and we’ll also put on two palettes of organic fruits and vegetables, notes Weiner.
“We want to service customers looking for uncommon items that are in tune with their lifestyle and cooking style, explains Director of Perishables Terry Byrne. In addition to upwards of 300 cheese varieties, Fairway offers one of thecity’s largest kosher and organic dairy departments as well as sizeable sets of yogurt and imported butters. Organic dairy items and kosher cheese reportedly were top sellers during the Red Hook store’s opening week.
Two Tons of Coffee
Bagels, pastries and cakes are among the 200 varieties of fresh-baked goods that are done on premise and served in the market’s 40-seat café. The Red Hook store has a made-from-scratch bakery in addition to separate kosher baking facility and kosher butcher. A production bakery at the Harlem location churns out baguettes hourly, says Byrne. Coffee, too, is small-batch roasted in-store daily. Company-wide, Fairway sells nearly two tons of coffee per week. Roasters conduct intensive buying trips to producers and ship direct, enabling them to offer farmers a fair price, says Head Roaster Giorgio Testani. The selection, about double the size as that in Fairway’s Manhattan store, is separated by country, flavored varieties and organics. Top sellers include Fairway blend and Testaroasta (Italian for head roaster), in which beans from Africa, Indonesia, Central and South America are roasted separately and blended later for a full-bodied coffee.
Each Fairway has its own kitchen. Overall, the Red Hook market carries nearly 500 types of prepared foods—offered at the deli counter and in several self-service and pre-packed convenience cases that dot the store offering everything from domestic and imported sausages like bockwurst and jamon Serrano to fresh soups such as Fisherman’s Stew or Potage Sante at $4.99/quart.
Prepared foods is a category Fairway is reportedly hoping to build beyond its current 7 percent of sales, particularly as Whole Foods and online merchant FreshDirect capitalize on consumers’ desires for ready-to-eat meals. Additionally, its own online delivery capability may not be far off. Currently only gift basketssite, but a delivery operation run out of the Red Hook location’s substantial square footage—as well as a possible fifth store—are among plans the owners are mulling to continue to make superior products at everyday prices less remote to the outskirts of New York.
Denise Purcell is managing editor of Specialty Food Magazine.
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