Change rarely comes easily, but how a company manages that change shows its true strength and value. Fairway Market – known as a high-quality, full-service grocery to New York City – has seen quite a bit of change in recent years, both planned and not. But the business continues to be profitable, serve its New York customers well and even expand into surrounding areas, bringing its unique brand of service and quality to a range of new customers.
Fairway Market got its start in 1933 when Nathan Glickberg established a small fruit and vegetable stand in New York City to support his family. By 1954, the business was going so well that Glickberg and his son, Leo, partnered to open the first store at 74th and Broadway. Twenty years later, Leo’s son Howie Glickberg came into the business. With two partners – Harold Seybert and David Sneddon – Howie Glickberg worked to expand Fairway Market beyond anything his grandfather had dreamed.
Howie Glickberg and his partners took the operation from a small storefront offering fresh fruit, vegetables and penny candy to an expanded business with traditional groceries and specialty items. They also started hiring dedicated foodies who became Fairway’s department experts. By the mid-1980s, Fairway Market was known across the city and beyond as the place to get unique and imported goods – items shoppers couldn’t find anywhere else.
Fairway’s most recent round of changes started around 2006 when Glickberg’s partners were ready to retire, and he was in need of a new partner who could help him further the business. The company was acquired by Sterling Investment Partners of Westport, Conn., in 2007, and Glickberg stayed on as vice president of development and maintain some ownership in the operation.
“We came in and acquired the company in 2007 and our goal was to take a very powerful brand and scale the brand to operate multiple locations in multiple regions,” President Bill Sanford explains. “The company had just opened its fourth store within 30 miles of Manhattan at that time, but that was just the start. Fairway opened three stores in its first 60 years, and we opened three more in just 2011. Our infrastructure is set up to open three stores per year, and we’ve created significant compliance and food safety infrastructure to keep up with the regulations in multiple states – New York, New Jersey and Connecticut.”
Next Stage of Growth
Fairway Market boosted its human resources infrastructure to keep pace with its substantial growth, and it now has 4,500 employees – 3,500 of which have been hired in the past three to five years, Sanford says. Within the first two years that Sterling owned the company, it also hired general counsel and a new CFO, and recruited personnel with expertise in food merchandising and supply chain efficiencies.
“Now we’re focused on building scalability in our logistics infrastructure, and we’re going to open a new commissary to help with that,” Sanford says. “Right now, we do most of the cooking in our stores, although we have one location in Harlem that has a small bakery. But we’re going from cooking 70 percent of food in our stores to making 70 percent of our food in a central commissary, which will give us better quality control and allow us to leverage our trucking network.”
Although the commissary won’t be completely ready this year, parts of it will open as the space is available. Sanford believes the areas for produce, bakery, kitchen, olive oil bottling, cheese and packaged fruits and nuts will be operational by the end of the year. He notes this is a major change, but the commissary will support Fairway’s plans to open 20 new stores in the coming years.
“We had our IPO in April, and we are very much looking forward to the next stage of growth,” he says. “The main thing is that we are investing heavily in talent at every level. We have two to three managers in training for every slot in a store, so whenever we open a new store we put one in. It’s been going very well.”
Passion Runs the Business
Fairway managed all of this growth in a fairly smooth manner, but it had one major challenge last year when Hurricane Sandy hit the East Coast and New York City in particular very hard. The hurricane’s devastation included Fairway’s Red Hook store in Brooklyn, as well as the surrounding neighborhood. The Red Hook location was Fairway’s fourth store and the company was one of the first large merchants to locate in the industrial area in 2006, but since then it had grown into a vibrant community and Fairway was a big part of that. The company immediately knew it wanted to rebuild.
The hurricane left five feet of water in the Red Hook store, and once it cleaned up, the site only had bare walls and a floor. Fairway took less than four months to rebuild, and it spent as much time helping to rebuild its community as it did the store. The company kept all of its employees at other stores so no one lost a paycheck, and it partnered with the Restore Red Hook organization to help all of the small businesses and families in the area, matching donations to Restore Red Hook up to $20,000. On Thanksgiving, seven of Fairway’s locations served more than 5,000 hot meals to residents who had been displaced by the hurricane, and after that, it continually donated food money and supplies.
When the store reopened in March, Mayor Michael Bloomberg, Senator Charles Schumer, Borough President Marty Markowitz and Miss America Mallory Hagan (a resident of Brooklyn) participated in the celebration, understanding how important Fairway is to the neighborhood.
Sanford stresses Fairway’s people were key in helping the Red Hook location reopen, and they have been a critical part of the company’s successful growth in recent years. Additionally, he credits the Fairway team with its ability to maintain a high-quality culture across all of its locations.
“Our managers are passionate about food, and so are our customers,” he says. “It’s really a bunch of food guys running a business. We have hundreds of opportunities to offer good food and innovative selections of food to our customers, and we do our best to fulfill them. We love our jobs, and that attracts the best people in the industry. It’s really all about the food first, which is great for the business we are in.”
Fairway’s love for food and dedication to its customers and communities will continue to drive the company forward, he says. With a bigger focus on its supply chain, Fairway plans to build as many stores as it can in the New York City area and then focus on the next location. Eventually, the company plans to have 90 stores between Boston and suburban Washington, D.C.
“We attract customers and our locations do well because Fairway is unlike any other market,” Sanford says. “We combine many elements of the grocery industry under one roof, and quality rules them all. We are a conventional grocer, but we also have elements of a farmer’s market, a large organic offering and the biggest selection of imported foods in the area. Customers know they can get the best of what they need with us and at a good value.”