retail

Bread & Butter: Spotting Talent to Fuel CBDs

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While having brunch with my family at a downtown delicatessen the other day, I had the surprising good fortune to enjoy a slice of the best raisin bread I've ever had. So good in fact that I asked the server if they could give me the contact information for the bakery that supplied it...only to discover that it wasn't made by a bakery at all but by a local guy out of his mother's garage-turned-commissary. 

After several phone calls and a long lunch, I realized that this baker represented more than just an advisory engagement opportunity for me.  After determining his options for a sustainable business platform I quickly realized that this young man (and his uncanny ability to produce some of the best breads I've ever eaten) represented something more profound: The endangered demand for quality products in lieu of convenience. 

David Napolitano is making incredible bread and supplying a small local specialty grocer along with two or three eateries in town but the demand for his product is sure to outpace his ability to produce it. In order for David to continue making bread at a profit, he is forced to either a.) Charge a price beyond what the market will bear. b.) Outsource the production to a larger scale manufacturing facility---in which case product quality will suffer or c.) Collaborate with a complementary concept (such as a cafe, restaurant or bulk olive oil retailer) with both a scaleable platform (ie; starting as an artisan "open kitchen" bread studio) and significant financial resources in place to incorporate an additional revenue center into their operation for payroll to support a wider supply and delivery radius or ancillary supply channels like boutique / luxury hotels, etc...

Its sad to imagine my daughter growing up in the absence of  "downtown neighborhoods" with retailers like this. But almost gone are the days where local artisans and craftsman line the streets with their shops ie; specialty bakeries, cobblers or coffee roasters indigenous to every town. Granted....more and more Dean & Deluccas and Food Halls style gourmet eatery markets are popping up in most major US cities but outside those densely packed urban areas, suburbanites are driving to lifestlye-centers and super-grocery chains instead of the local town butcher, baker, candlestick maker or farmers' market.

Central Business Districts (CBDs) are the lifeblood and identifying character of any community but without operational systems for replication and mass production in place....master bakers (or coffee roasters, etc...) are saddled with the reality that although they will always be able to pay the rent, surround themselves with like-minded individuals and perhaps have a nice life living above their shop toiling away for 80hrs a week...they'll never realize the fortunes reserved for one stop shop food warehouses and most chain restaurants. Many will argue that franchises are the answer. Most of whom (save for a few with incredible brand equity and operational support in place) most often charge franchisees without sufficient experience (but plenty of passion) $30k for the right to use their name, "formula" and recipes but generally fail to deliver on the all important and imperative component ...the "secret sauce" or "genuine experience" which is only really provided by those who walk and breath their product or service...as the aforementioned artisan.  Its that "wow factor" that is delivered by committed people who love what they are doing and are working in concert with an experienced team.

In exchange for maintaining the integrity of their small-batch products many artisans like Napolitano are often exiled into obscurity... Unless they write a book or land on a food network show or... garner regular support from their neighbors. They are often underpaid and undervalued by the masses who pay their cable companies more than they pay their teachers...and choose their bread based on value and calories or even more ironic....the amount of carbohydrates per slice. 

Meeting David was like meeting Picasso. You could no less mass produce his product than you could mass produce him. Making bread is more than a culinary art. You're not just working with inert ingredients and measuring spoons. Yeast is a living thing and working with dough requires, touch, taste, smell, sound...its a living breathing thing affected by everything from sea level to humidity.  When I considered the great chefs I've worked with, I realized that although they were incredible artists and efficient kitchen managers...they were also able to cross-train and coach. Mentor and develop.  And that's what David needs...a venue in which to build systems, infrastructure and staffing levels that support a cross-training and development programs. He needs help creating a platform to turn people into bakers making bread his way so that he can share it with (or from) more downtown shops and not be forced to grow old above any one of them.

Its not enough to be great at what you do. The real value is in collaborating with and developing people within structured and managed systems. Perhaps that truth will transcend restaurants & hospitality and will, someday, prove relevant to my daughter in some other way. Until then, I'm stuck with my own frame of reference...and my own delicious raisin bread.

 

Growth Market: The Midwest is The Future

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When Catherine was just over a year old, she turned a Dr. Seus book over and placed the frame of a United States foam puzzle over it and exclaimed: "Look Daddy! I made a city!"

I'm not saying that the evolution of America's middle-market is going to be that fast or that simple but the growth in South Dakota- and the Midwest in general, has been both exponential and inevitable.

When you have both coasts of the country growing on top of themselves, it’s only a matter of time before generations that are increasingly more mobile (as they were four and five generations ago in the old country) affect the fluid dynamics of economic overflow into the middle of the country. After all, you can't have sprawl into the ocean.

Another driving force behind this growth is what I like to call “The Delaware Factor” -which is the creation of a tax friendly environment for corporations and dynastic trusts. Corporations and families being able to thrive in soil like this results in more Fortune 500 companies relocating their corporate headquarters… which serves as a catalyst to attract other businesses... that holistically contribute: more jobs, more rooftops, more retail and finally more advanced medical and educational development (Take note Obama).

In the last three years, the population of Sioux Falls alone has gone from 75,000 people to almost 180,000. From 2010 to 2011, the departures and arrivals from the airport (which you pull into like a lifestyle center) doubled which prompted the construction of two additional terminals and an initiative to establish Sioux Falls as an international hub.  In the first quarter of 2012, the number of flights has already doubled the total amount of flights in 2011.

Two major hotel flags have recently been planted in the area in addition to to the already significant number of beds. One by Hilton and the other by Hamilton Suites. The construction of the Midwest’s largest sports and entertainment arena, scheduled to be completed in 2013, will bring with it zoning for an entirely new "Entertainment District" and one of the country's largest state-of-the-art Convention Center. The fact that the mayor’s office recently announced that they would be submitting an RFP for another large hotel across from the new Convention Center (contiguous to a championship golf course) has a lot of developers, as far as New York, peeking over their Chemex to get a better look at what’s going on here. But after speaking with quite a few of the old guard in this small city, one is left with the feeling that an RFP is more of an exercise in protocol than of a genuine offering. The deals seem to be locked up before they’re even made public and with a surge of Ag[riculture] money in the market from farmers who profited greatly over the last few years with the corn belts spreading. Farmers and local developers are buying up land and investing in commercial development almost as fast as those profiting from the oil boom in North Dakota. According to Gov. Ed Schafer and Paul Hegg of Hegg Companies, development of the Bakken oil patch is a 25 year play, and it’s not too late for businesses to participate in the economic boom here. This is looking more and more like a better short-term opportunity for developers and operators from the coasts than for the newly relocating fund managers, institutional investors or capital intermediaries. But there does seem to be a long-term play here. I left the East Coast with the luxury of never needing to waiver from my sense of integrity and commitment to fair-play. Those principles may not have brought me as much action as I would have liked, but definitely enabled me to grow with like-minded colleagues, learn from benevolent leaders, and forge a few lasting friendships built on trust and respect. Perhaps not the most popular of business practices employed by ambitious young professionals in America’s biggest cities… but certainly seems to be the way of life in a city of less than 200,000.

Sioux Falls feels like an instant culture-fit for my family and me.  If, over time, I’m fortunate enough to earn the trust and respect of my new neighbors, I am confident that the numerous opportunities here will bear fruit.

The mayor’s just announced that a total of $200MM has been spent in the last year on new road construction and repairs of existing roads. Although I am still trying to adapt to things such as driving 35mph on long stretches of road with four to five lanes that could benefit from a few extra signalized intersections; there is a tremendous amount of investment in infrastructure to support and sustain development of the 43rd fastest growing state in the country.

Is Sioux Falls the best kept secret in America? I'll have to pay close attention to my 3yr old daughter's musings and get back to you.

 

 

Psychographics : Our New Digs & The Dissipation of Culture Shock

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The above ticket was waiting for me after I knowingly parked at an expired meter and decided to chance it rather than go trollling the nearby shops for change and risk being late for an introductory meeting with a local developer in town. I took a breath before pulling it from my winshield wiper and as I opened it, thought: "Geeze, how much could it be? After all it's Sioux Falls...surely not the $36-$115 fine I was accustomed to back east." As I sat in my truck and scanned my bill for a "total due" I was shocked to find that not only was there no charge or penalty...but someone actually took the time to print up this ticket as a "courtesy notice" and thanked me for visiting downtown Sioux Falls. If this happened in Philadelphia, I would have been searching my surroundings for the hidden cameras and practical jokers at play.

Culture shock such as this has been occurring almost daily.  We have a new and surprising tale of random hospitality and kindness to share with our friends and family back home every week.  I know it must sound like we're simply "making the most of things" here but people in Sioux Falls, South Dakota really make New Hampshireites almost seem blase. 

We arrived here with what I think is a typically common mindset of those relocating or visiting from any major city. We ignorantly suffered the ego-centric assumption that a large population equated not only with a cosmopolitan lifestyle but with quality of amenities as well.

What we discovered rather quickly was that although there may be fewer offerings in a city 1/10th the size of Philadelphia, they were no less in quality. For example, my wife and I are foodies who have grown accustomed to big city privileges like:  Dean & Deluca, Eatily, Reading Terminal Market, The Italian Market, Carlino’s, DiBruno Bros., Wegmans, Chestnut Hill Coffee, Whole Foods, Fox and Obel and Trader Joe’s….we were shocked to find great butcher shops like Look’s Market & Cleavers as well as incredible local mainstream grocers (Hy-Vee and Pomegranite ) who not only stock what we thought were more obscure staples like: Mary’s Gone Crackers Pretzel Stix, Nut Thins, Haloumi, Boucheron, Jamon Iberico, Guanciale / Salame,  Sunbutter and Pop'd Kern… but also have cattle-chutes of  Melissa & Doug-sized  real shopping carts (in addition to the racing car carts of course) for “Shoppers in Training”.

The specialty markets here offer everything we thought was exclusive to big city markets or small European towns (cured meats from Italy, truffles, truffle honey & oil, fois gras, fennel pollen, Illy Coffee, etc…) There are also some amazing local coffee roasters here too… like Black Sheep and  Coffea Roasterie. The local Co-Op sells Peace Coffee and Breadico Breads (best I've ever had in the U.S.) made by David Nepolitano in his local garage turned commissary.

Wonderful beer & wines (Monk’s House of Ale Repute” and “Taylor’s Pantry”) although it is tough to find a reasonably priced ’09 Bordeaux ready to drink now.  

There are no Midwest high-concept restaurant giants or native geniuses like my Philly favorites: Michael Solmonov, Konstantinos Pitsillides, Pierre Calmels, Lee Styer, or Robert Halpern....and quite frankly they would probably only intimidate rather than impress here.

There are, however, restaurants like Bros. Brasserie who would give The Oyster Bar and Royal Tavern a good run for their money with an “Oh My God” burger of their own. A nice mature "old guard" sort of comfortable place: Minerva's, surprisingly wonderful gourmet Mediterranean fare from Saanas, fresh(ish) sushi from Sushi-Masa and cerebral, light-handed (and beautifully executed) haute cuisine from Minnihaha Country Club and Parker’s Bistro whose dishes would not be out of place beside many from the kitchens of Daniel Bouloud, Stephen Starr, Stephanie Izard, or Todd & Ellen Grey.

I think it’ll be a while before the South Dakota sees anything as progressive as Vedge or as hip as Amada, NoMad and Ichimura. But "The Cities" (Minneapolis and St. Paul) aren't too far off.  Nothing here comes close to Birchrunville Store Cafe, Dillworthtown Inn, Per Se, Lacroix or LeBec and that’s ok…we go back to the East Coast occasionally and will always take vacations.

But I do miss offerings like good Pho, Thai, sit down charc staples like Amis and Tria, The Kibitz Room and Wawa’s Turkey Shorties… with salt, pepper, oregano, oil mayo (lil bit) and extra meat (YES)! so perhaps there are few opportunities for me here…

Good to Great: Moving from East Coast to Midwest

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My wife brought home a refrigerator magnet one day that read: ”Life begins where your comfort zone ends.”…and so life is certainly about to "begin".

After a lot of careful consideration, lengthy discussion and exhaustive research we decided to sell our dream home in Pennsylvania and move to Sioux Falls, South Dakota. The plan is to pack up the contents of our house in the next few weeks (making most of the headway while my wife takes Catherine to see her sick Grandpa in Tampa next week) and store everything neatly in the back basement.

We will list the house just in time to hit the tail end of the summer market with hopes that it will be an attractive situation for someone looking to move into the area before the school year starts in September. We will be shipping my wife’s car and drive my Suburban with one week’s worth of supplies in our (just purchased) Thule Atlantis 1800 (Sonic XL) rooftop carrier, along with a 2yr old and a 125lb Newfoundland... should be interesting to say the least. Below is my navigational chart which is an example of how over-thinking and over-planning allays most anxiety for me. It took quite a bit of time to determine the best times to travel, how long to travel and where to stop based on a myriad of variables including everything from nap times to doggy’s potty breaks and anti-anxiety meds (the dog’s). I learned a lot in my 1 week intensive course in trip planning…like the fact that zoo keepers and vets most often move animals under cloak of darkness when possible to avoid additional visual stimulus and potential anxiety / motion sickness…but we also wanted to see most of the trip as well since neither one of us could ever imagine needing or wanting to make a drive like this again.

Although this level of organization may seem like the science of qiyas when equipped with a state-of-the-art navigation system in my truck, I can’t help but think that a 5-day trip with 5 planned stops for a family traveling with a dog and a baby (neither of which have ever traveled in a car for more than a couple of hours) it’s imperative to identify additional potential stops at dog-friendly hotels in advance. We need alternate targets that can serve as half-way markers between stops in the event Catherine or Lulu just aren’t doing well…AND potential stops / hotels just past our scheduled stops in the event we are able to / need to make up time and can comfortably survive going on a little further….so that explains the thought process a little… 

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