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September 21, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

From Harrison, Krasdale Foods builds on century-long business stocking NYC’s shelves

Steve Silver is the newly minted president of Krasdale Foods Inc., the century-old grocery distributor that stocks the shelves that feed millions of New York City residents each day. In a conversation with the Business Journal about the grocery business and his new role, he uses the term “challenge” often.

Steve Silver, the president and COO of Krasdale Foods Inc., at the company’s corporate headquarters in Harrison. Photo by Ryan Deffenbaugh.

“It’s a challenge to stay ahead of the curve,” Silver said from the company’s corporate headquarters on the Platinum Mile in Harrison. “You have to be innovative, you have to adapt to changing consumer tastes, you have to adapt to the digital world when supermarket businesses have traditionally always used print media.”

Real estate and wages cost more than ever, shrinking profits further in an industry where margins have long been slim. Digital competitors are closing in on the local grocer Krasdale serves, offering to send groceries to consumers’ doorsteps.

Krasdale, which has survived since 1908, has clear strengths, including a network of more than 350 independently owned supermarkets Krasdale supplies under its Bravo and C-Town banners; a private brand with nearly 800 products; and a 300,000-square-foot warehouse in the Bronx that makes the company the only grocery wholesaler left within city limits.

“Because of where we are located … we have a huge tactical and logistical advantage over anybody,” Silver said. But despite steady company growth and a strong base of grocery clients, Silver adds that Krasdale “can’t rest on its laurels. You have to prove to everybody that you are on your game and it makes sense to be our customer.”

Krasdale has been owned and operated by the Krasne family for all of its 111 years. Silver has been with the company for 38 of those years, rising from a junior staff accountant to accountant manager, controller, CFO and now president. He took over the role in January from Charles Krasne, the family’s second-generation owner and leader, who will remain CEO and chairman of the Krasdale board.

The company spent its first seven decades supplying dry groceries to New York City’s supermarkets, which is still a major part of the business today. But shortly before Silver joined the company, in 1981, its leadership launched a new part of the business that has since driven Krasdale’s growth. At the time, supermarkets were abandoning the city for larger stores on cheaper land in the suburbs. Meanwhile, local markets struggled to compete with larger chains.

In response, Krasdale launched C-Town, a way for smaller, independently owned grocery stores in the city to team up for the same bulk advantages of their larger competitors. Krasdale provided branding, marketing, merchandise and designed weekly sales circulars for the stores, but each remained independently owned.

The local control was important for Krasdale’s mix of small New York City grocers, as the stores often cater their offerings to best serve the diverse populations of their neighborhoods. “We were smart enough to realize that while we have the expertise in the industry, they know their consumers better than we do,” Silver said.

Within a decade, a dozen C-Town stores grew to 200. Suddenly those stores had buying power. Directed through Krasdale, stores got better prices on meat, dairy and produce, along with the dry goods in Krasdale’s warehouse. C-Town ads ran on full pages of the Daily News at rates that individual owners could never afford.

Through pooling resources and driving product costs down, Silver said Krasdale helped give independent store owners “the opportunity to compete with anybody else.”

As the needs of the stores grew, Krasdale added to its banner offerings to include register systems and digital marketing. Krasdale also provides stores financing for expansion, land purchases and other business costs. Particularly in the early days of the C-Town brand, the mostly cash-driven nature of the small grocery business made traditional bank financing difficult for store owners, Silver said. Krasdale helped stores expand and they likely then needed more products from Krasdale.

Today Krasdale’s banners for independent stores have expanded to include Bravo, Market Fresh and Shop Smart among other titles.

By the ’90s, the company’s need for corporate offices had outgrown the small executive space in its Bronx warehouse. That’s when Krasdale arrived in Westchester County, signing a lease for the second floor of a three-level building at 65 W. Red Oak Lane in Harrison. The company eventually expanded to occupy the entire building before spending $5.5 million to purchase it in 2005. About 200 of Krasdale’s 550 employees work out of the Harrison office with the rest in the Bronx.

Krasdale is enough of a family company that Silver’s years on the job make him just the 18th longest tenured person in the company. He said Krasdale employees take pride in helping small grocery owners build businesses that span generations, just as Krasdale has.

The grocery store owners the company works with “have been able to grow from often being immigrants coming to the United States and maybe opening a bodega, to then transforming that bodega into a supermarket with our help, then maybe they own two or three stores, and then expanding to Florida,” Silver said. “It has been a good run for a lot of families.”