Featured

Melt or Merge? Brooklyn chocolatiers Liddabit and JoMart to join forces 

Two Brooklyn chocolate companies – one a South Brooklyn icon, the other a foodie upstart in trendy Industry City – are merging as both firms look for a secure future.

IMG_2836Sweet smell of success: Liddabit Sweets’ Jen King and JoMart’s Michael Rogak in front of a pair of chocolate tempering machines at JoMart’s Avenue R factory in Brooklyn.

EXCLUSIVE

Two Brooklyn chocolate companies – one a South Brooklyn icon, the other a foodie upstart in trendy Industry City – are merging as both firms look for a secure future.

Liddabit Sweets, the creation of Jen King and Liz Gutman, is moving out of its Sunset Park production space and into the cramped Marine Park kitchen of JoMart Chocolates, founded in 1946 by Martin Rogak, the father of proprietor Michael Rogak. Financial terms of the deal are being finalized.

In an interview over flourless chocolate cake in the back room of Rogak’s Avenue R location, the two talked about the pressures of being an independent candy maker and why joining forces makes sense. JoMart’s revenue is in the low millions of dollars annually, said Rogak, while Liddabit’s sales are under $1 million, King said. Both firms are closely held.

“We were looking to grow the business just a little bit – no pun intended,” said Rogak, “and I thought I’d rather merge than hire more salespeople.” With the minimum wage in New York State set to rise to $15 an hour by the end of 2018 (by 2019 for small employers), Rogak needs to increase revenue to meet the rising costs of kitchen staff, but at age 65, he doesn’t want to take on years of debt to expand.

For King, who’s 39, and whose partner  Liz Gutman will leave the business, the pressure to grow or die simply grew too strong, and the cost of expanding beyond their two-person operation grew too great. A marketing executive would add over $100,000 in salary alone, and they’d have to boost sales by $500,000 a year just to offset the costs. “All the math just started to break down,” said King.

The gentle merger allows King to bring her candymaking skills and existing customer base to JoMart’s small kitchen, where Rogak still makes candy with the same copper pots his father used.

Operating two distinct brands out of the same kitchen means both brands will need to learn to sell to each other’s customers, but they’ll be able to combine forces on everything from buying raw materials to marketing. Liddabit will have it’s own retail space in JoMart’s Avenue R building.

Liddabit tends to sell prepackaged candies, while JoMart sells unpackaged chocolates to other stores around the city. Liddabit specialties include chocolate covered caramels while JoMart has a strong business in chocolate novelties, like Easter bunnies and Thanksgiving turkeys. JoMart also makes many of its own fillings in house, including marshmallow and hazelnut butter, something few small chocolate makers do.

“We’re each doing something the other doesn’t do,” said Rogak. “We’re not trying to conquer the world, but we can satisfy all our customers and maybe a little bit more.”

The merger may also help Rogak solve a gently pressing issue: succession. His father and grandfather were candymakers, and Rogak’s two grown daughters work in health care. “If this tree can add some branches, why not,” he said.

“Mike has been a godfather to us,” said King, describing Rogak’s willingness to help newcomers to the city’s chocolate and candy-making world. She says she’s confident the two will be able to complete the merger. So is Rogak.

“At the end of the day,” he said, “we’re just in the happiness business.”

Does New York Need Another Food Hub?

 

Making tomato sauce at City Saucery in the Brooklyn Army Terminal


ONE THING anyone manufacturing food in New York City knows is that “real estate is crazy,” says Marisa Wu, the founder of Brooklyn-based taffy maker Salty Road.
Crazy real estate prices helped drive the city’s Economic Development Corporation to spend $15 million to turn a small piece of the 4.1 million-square-foot Brooklyn Army Terminal on the Sunset Park waterfront into a new hub for foodmaking. The 55,000-square-foot building has now attracted three tenants, with room for a half dozen more, to what the city touts as affordable, code-compliant space ideal for food manufacturing.
With rents between $22 and $24 a foot, compared with some industrial space on the market now for $14 to $18 a foot, according to online listing service Loopnet.com, the price is well above what many foodmakers are paying for leases they signed in the past several years.
Julie Stern, the city’s point person at EDC for the Army Terminal says the spaces offer intangible benefits that more than make up for the market rates.‘Rent is just one component,” Stern said in an interview. “Sure, New York City is expensive from a real estate perspective, but when you think about access to skilled labor and markets and transportation, the all-in costs are lower.

Smaller spaces are hard to find

    ”Smaller spaces, like the 2,000-square-foot floorplates available at the Army Terminal are hard to find on the open market, and the city doesn’t charge real estate tax at the Terminal and offers bulk-prices on electricity and gas, she said. Besides, says Stern, she’s got to work with a “double bottom-line”: help create jobs or keep existing jobs in New York, and ensure city property generates a profit.
Using the Army Terminal’s contractors, and the EDC’s assistance to secure city, state and federal permits made the price worthwhile for Michael Marino and Jorge Moret, whose City Saucery cooks and bottles tomato sauces devised by Michael’s mother, Carolina, a native of Calabria, Italy, and an alumna of Staten Island’s Enoteca Maria, a restaurant staffed by a rotating cast of “international grandmothers.”

Marisa Wu Making Taffy
Marisa Wu spinning taffy at the Brooklyn Army Terminal   

Like the other tenants at the Army Terminal, City Saucery got some givebacks including a grace period and a break in buildout costs to entice them into the space. The pair had outgrown a shared kitchen at Long Island City’s Entrepreneur Space, and now employ three full-time staff, and hope to ramp up to 5,000 jars a week, with a piston-filler machine. “It’s a little difficult to scale up and still share a kitchen space with 80 other producers,” said Marino.
Masaki and Yukimi Momose say the space works well for them. Momose got his start in New York in 2010, while visiting his sister in Manhattan’s Murray Hill neighborhood. Noticing a weekly greenmarket across the street, he got permission to sell salad dressing next to a vegetable stand. “The first day, I sold only two bottles,” he recalled.

The sales gimmick

    Speaking little English, but aware he needed a gimmick to jumpstart sales, Momose put up a sign to entice buyers. “It said ‘If you teach me one new word of English, I give you $1 off.’ Kids came and they brought their parents, and I sold 18 bottles.” He collected 400 words, and says his favorite was “entrepreneur.”
While his wife worked as a chef in a sushi restaurant, Momose rented shared kitchen space in Sunset Park, Brooklyn, making and bottling Momo Dressing, which he now sells at markets including Whole Foods across the New York area. Momo Dressing moved into the Army Terminal a year ago, as its first tenant, attracted by the location, with views of New York Harbor, and the option of room to expand his growing business.
Despite the convenience of a tailor-made factory space, Salty Road’s Wu says she’s struggling to produce in New York. “There are so many challenges to manufacturing in New York City,” she said, citing endless regulations, the high cost of living, which means paying higher wages to keep her staff, and the very high cost of real estate, including a standard practice on many city commercial leases of adding 25 percent to the square footage to cover the cost of common areas.
Strapping a pizza-sized lump of taffy base onto a stretching machine, Wu says she looked at manufacturing upstate, but for now, she says “the reason I am doing this is because I love New York City and I want to live here.” She says with all the added costs of doing business in New York, she’s given her firm five years grow big enough to make it worth staying in the city. If not, she’s gone.“I’ll end the lease if we don’t reach that size.”

3 Questions: New York’s Health-Care-for-All proposal

Three questions for N.Y. state Assembly member Richard Gottfried, chairman of the health committee and sponsor of the New York Heath Act, which would provide free, unrestricted health care for all New York State residents.

How would your plan work?

By creating a single payer with no insurance companies,the savings that you get from not paying insurance company administrative costs, and from doctors and hospitals not having to fight with insurance companies, lowers the

Richard+Gottfried+NYCLU+12th+Annual+Benefit+Be1OEEXf5iAl
Assemblyman Richard Gottfried, D-Manhattan

overall price tag. Every New Yorker would be eligible. There is no mandate, because everyone is covered, and no out of pocket cost. Healthcare today accounts for 17% of  household income. Under the N.Y. Health Act it would be 6% to 7%.  New York employers pay $2 billion a year just handling paperwork on health insurance, picking a plan, dealing with complaints – all of that would be gone.

How will it help small business?
Because it’s paid by a graduated tax on payroll and taxable unearned income, not only is the total lump smaller, but the share paid by employers of food and restaurant workers would be much smaller. For a small business that’s not now providing coverage, it’s a way for the owner to get his or her own coverage at a lower cost and to no longer be worrying about recruiting or holding on to good people who find a new job with health coverage.

What’s next?
It’s passed the Assembly this year by a 2-to-1 margin, and there are now 30 state senators sponsoring the bill [32 are needed for a majority, but the Republican leadership could block a vote]. I think Gov. [Andrew] Cuomo likes to see a lot more popular support for something this big before he jumps in. (Answers have been edited and condensed)

3 Questions: Training the workforce of tomorrow

Three Questions for Babette Audant, assistant professor of culinary arts at Kingsborough Community College, and director of its Center for Economic and Workforce Development. Kingsborough, in Sheepshead Bay, offers the only public culinary arts degree in New York City.

Q: What’s the biggest workforce challenge facing the food industry in New York City?

A: A lack of qualified labor and stubbornly low pay rates. That means one of the biggest challenges facing the industry is a shortage of qualified cooks. The pay scale in private restaurants hasn’t changed in 15 years or more: they make about $120 a shift, and those are 10-hour days. In fast casual chain places with a corporate structure, the hourly wages start at $10-$12. We all say shift pay doesn’t happen – it’s illegal – but of course it does. And part of that is because of the high cost of doing business in New York City, from construction to rent. It will be interesting to see what happens when the minimum wage goes up to $15 an hour.

We talk to our students a lot about the relatively low wages in the industry – it ends up being part of the reason why people are driven out of the business, or leave for other cities where the pay scale may be the same but the cost of living is significantly lower.

Q: How many culinary professionals do you train every year?

A: Our two-year associates degree program serves about 175 students every year, with 40 to 50 new students each semester. And we do short-term training to serve another 100 – 150 students through programs including the New York City health department’s food handler certificate, and some teaching of basic skills to prepare students for entry level jobs.

Half our grads have their eye on a career in restaurant kitchens, about 25 percent are interEsted in being caterers and another 25 percent ultimately decide that working in food service is not what they should be doing. About half of our graduates go on to a four-year degree, mostly to study hospitality management or business at CityTech. And then I had a student who went on to study organic farming and is now doing a public health degree at Hunter.

Q: What are you doing to help train more food workers?

A: We’re building a new baking and pastry program at Kingsborough, and for that we’ve done a very intentional outreach to industry – we did a listening tour of 12 producers: pastry chefs and bakeries across Brooklyn and Manhattan and we’ve created an industry council that we’ll be convening next week. We’ve been talking to people about industry trends, and listening to them talk about their employment needs. We had a chance to collect a lot of input about what various employers thought needed to be emphasized. We want industry to get involved with us. Ask us to send students and accept our invites to provide you with interns. Let us know when you look for line cooks and prep cooks. And take a chance on our graduates: they won’t be as polished as the graduates of the private institutions, but those who have the energy and the drive it takes for a restaurant kitchen are amazing. It’s well worth the gamble.

By the numbers: Food cart sanitary violations

Food cart sanitary violations

Borough Violations Per Inspection
Manhattan 1.17
Brooklyn 1.11
Queens 1.09
Staten Island 1
Bronx 0.82

Most common violation? 779 citations for food kept at the wrong temperature, and (yecch) 372 violations for vendors who failed to wear a hat or net to keep hair from falling into the food, according to a recent survey of Dept. of Health citations. State and city officials have ordered food carts to post cleanliness “letter grades” like those on city restaurants, sometime next year.

Brooklyn Space Squeeze Hits Van Brunt Stillhouse

Van Brunt StillHouse
Sookie guards the aging room at Van Brunt Stillhouse’s Red Hook distillery

 

Like a good whiskey, a good distillery needs room to breathe. That’s the problem facing Daric Schlesselman and Sarah Ludington, the co-founders of Van Brunt Stillhouse in Red Hook, Brooklyn. After more than five years in this once tumbledown waterfront neighborhood, their business is growing and they need more space to make more whiskey.

The revival of Red Hook’s fortunes, where old warehouses and flophouses are now multi-million dollar harbor-front condos and private townhouses, has doubled commercial rents, Schlesselman said in an interview.

“When I started considering opening a business in Brooklyn, you could look around and find buildings that were available, and now there’s not as much stock on the market and the cost of what there is is astronomically high,” said Schlesselman, who left a job writing for Jon Stewart’s “The Daily Show,” to start the still in 2012.

The distillery’s got 4-and-a-half years left on a $14 a foot lease, but Schlesselman hopes to double production next year, then double it again over the next several years, and for that he needs more space.

The problem is that New York City’s real estate boom has asking rents in the western part of Brooklyn hovering around $24 to $26 per square foot annually. At Van Brunt’s current sales volume that’s about $10 a bottle just for real estate. And at $50 a bottle retail, Van Brunt needs to lower its price to sell more whiskey. “There’s just no way for me to push my prices down if I’ve got to pay that kind of rent,” said Schlesselman.

He says he’s looked in Industry City, but prices there are close to $50 a foot. At the Brooklyn Army Terminal, the 12-foot ceilings are too low for the larger fermenting vats Schlesselman wants to expand production.

The 6,000-square foot distillery includes the still room itself, about 40 feet on a side, a bottling area, a tasting room, and barrel and grain storage. The new still would produce double today’s output of about 30 gallons per 5-day run, and allow him to increase his staff from the current eight full-time employees.

Schlesselman says he wants to stay in the city, and preferably in western Brooklyn, a short commute from his home. Moving an hour or two north of the city would cut his costs dramatically — he’s been offered a barn in Orange country for a dollar a foot — but much of his brand’s value is that it’s distilled and aged in New York City.

“Either I find someone who believes in manufacturing and owns a building and is willing to rent to me, which is highly unlikely, or I get a warehouse outside this area and I am trucking my barrels, or I move my production outside the city and this becomes just a tasting room until my lease is up,” said Schlesselman.

“There’s value to being the hometown product in a marketplace like New York City,” he said. “The idea of being the local guy in Putnam County bears a little less fruit.”