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"Pile it high, watch it fly. Set it low, never go."
So goes Roger Bassett's maxim for success at Reading Terminal Market, one of America's largest and oldest public markets. Housed in a cavernous space beneath a former train shed in Philadelphia's Center City, the market comprises close to 80 small businesses packed beef cheek by pork jowl within a welter of neon and noise. More than seven million visitors--from tourists checking their cheesesteak boxes at Carmen's Famous to low-income seniors perusing the dollar bags of barely-past-their-prime veggies at Iovine Produce--pass through each year.
With crowds huge and sensory stimuli overwhelming, Bassett advises merchants to stand out with an abundance--or better yet, an overabundance--of fresh food glistening in cases or steaming on counters. It's a rule he learned from another merchant 40 years ago when he was a kid scooping ice cream in the market with his grandfather. Bassetts Ice Cream was among the first tenants of Reading Terminal when it opened, either in 1893 (according to the market's official history) or 1892 (according to the Bassetts).
Back then, nearly 800 merchants, mostly small farmers, sold whatever was fresh that day from narrow stalls. The interior has been rebuilt several times since then, notably in 1992 when the new convention center went in next door. (The Pennsylvania Convention Center Authority acquired the market in 1990 and created a nonprofit corporation to manage it. The corporation acts as landlord to the merchants.) Hotels have sprung up too, releasing swarms of tourists to devour the roast duck and pork combo at Sang Kee Peking Duck or the Trainwreck Po' Boy at Beck's Cajun Cafe. The annual spend within the market is $60 million.
But Reading Terminal is no upscale food hall. "One of the beauties of this market is that there are stands that started long before things got so expensive," says Carolyn Wyman, a food writer who conducts tours of Reading Terminal Market. "People on fixed incomes shop there. They can go in and buy a tiny piece of chicken breast and nobody gives you a hard time." Reading Terminal accepts more food stamps than almost anywhere else in the state. Some businesses offer senior and student discounts.
The market also tries to field a merchant mix that reflects Philadelphia's diversity. So, for example, when Delilah's--home of Oprah-anointed mac and cheese--closed in 2012, the call went out for another soul food restaurant to take its place. Keven Parker's Soul Food Cafe came in; and this month Careda Matthews, who cooked at both, is opening her own place with a Caribbean concept. Recently management helped Amina Aliako, a Syrian refugee on its housekeeping staff, start a small business selling hummus and baba ghanoush from a market cart.
What makes that diversity possible are the crowds. With so much foot traffic, some merchants say if you don't make a million dollars here, you're not trying. Others argue it's not that easy. Strong concepts aren't always obvious, competition is robust, and expectations for quality are sky-high. But with a turnover rate of just one or two a year, many merchants appear to have figured out the formula. "Being in the market isn't like being an entrepreneur anywhere else," Wyman says. "It's an enviable position to be in."
Bassetts Ice Cream: Still scooping after all these years
Bassetts Ice Cream still occupies its original spot in the market, with the original marble counter. But the Reading Terminal location--Bassetts' only company-owned store--now comprises just 5 percent of what has become a thriving wholesale business selling to independent ice cream parlors and supermarkets, including Whole Foods.
"It's the most important outlet for us, because it is the public face of our brand," says Michael Strange, Bassetts' president and CEO. "We bring wholesale prospects over here to show them how to set up an ice cream shop."
Strange recalls one prospect who resisted switching all his business to Bassetts because of the price: $5.50 a cone. "He said, 'I can't charge more for it. I have competition. There is another ice cream shop down the road,'" Strange says. So Strange walked him 50 yards over to another market vendor selling ice cream for $1.50 less. "And I said to him, with my customer right there, 'Who sells more ice cream, you or us?'" Strange continues. "And he dropped his head and says, 'You guys sell about 10 times as much as we do.' Yeah. We do. Because it's a better product."
Bassett and Strange are cousins who have sold the business back and forth between them over several decades. Today Strange manages wholesale. The company has a third-party facility that churns out 600 tubs at a time in 40 flavors.
Bassett handles retail. He oversees 12 people at the store: The company employs in the high 20s. He also owns two other Reading Terminal businesses: the Original Turkey and Market Bakery. Original Turkey dates back to 1983, when sandwiches Bassett made for his father's lunch proved popular among market merchants.
In the '90s he expanded, eventually opening 25 franchises. But "my partners were lawyers from New York and they hired this guy who didn't know anything about the food business," he says. The larger company failed, and in 2000 Bassett returned to the market to run the first--now only--Original Turkey location and take over operation of the ice cream shop. "I came home to Reading Terminal Market," he says.
Marketing the Market
More than 90 percent of Bassetts' sales are to first-time customers, many of them out-of-towners. Reading Terminal owes most of its current financial health to tourists and convention-goers. People wearing nametags are ubiquitous at lunch and on Saturdays. But that's not the audience the market was built to serve.
"This is still a locals market. The visitors come because the locals use it," says Sarah Levitsky, Reading Terminal's director of marketing. But purveyors serving locals who grocery shop here are in the minority, despite a requirement that the market maintain a ratio of two-thirds fresh-food stalls to one-third prepared foods and restaurants.
The managing corporation uses a multi-tier rent structure, with full-fledged restaurants paying the most. Fresh-food purveyors such as butchers, fish markets, and produce stands pay the least, with no base rent. But money isn't really the issue. A large majority of Reading Terminal businesses are owner operated, "and it is very hard to get a farmer who can be here seven days a week or can devote staff to being here seven days a week," Levitsky says. "And it is much easier to make money as a restaurant than as a fresh-food store."
The market hopes to lure more businesses like Godshall's Poultry, launched in 1916 by Charles Godshall, a farmer who filled his stall with chicken, duck, and vegetables, much of it harvested the previous day. Brothers Dean and Steve Frankenfield are the third-generation owners. "We hand-cut everything," says Dean Frankenfield, gesturing toward a case crowded with pale, dimpled breasts and rosy cutlets. "There is no automation. We are old-school here."
The Frankenfields sold their farm in the '60s and now source birds from other small farmers. In addition to chicken and turkey, they sell fresh duck, goose, rabbit, squab, and quail. Prominent in one case are chicken feet and stewing hens to make soup. This is not appealing fare for tourists.
"The conventions are getting larger, and there are times when it is difficult for the regular shoppers to get through the aisles," Frankenfield says. "We are fortunate that we have very loyal customers who are able and willing to navigate that."
Beiler's: Pennsylvania Dutch to the rescue
The 1970s and early '80s were not pretty at Reading Terminal Market. In the deteriorating building, a couple dozen vendors struggled for survival. People walked around with umbrellas as protection from the leaking roof. There were puddles on the floor, rats in the walls. "It was a dump," says Kevin Beiler.
Beiler's grandparents were among the Pennsylvania Dutch merchants who brought Reading Terminal back to life. Hoping to lure customers with new offerings, management recruited vendors from Amish farmers' markets to set up shop. Today, 12 Amish businesses are scattered throughout the building, with many clustered in the northwest corner. "People are interested in the Amish community in general, and the style of cooking is very down home and comforting," Levitsky says. "They are a huge part of our identity."
Alvin Beiler and his sons Kevin and Keith own two market businesses: Beiler's Bakery and Beiler's Donuts and Salads. (The family sold its barbecue chicken stall to an uncle and its milk and juice business to someone else.) Kevin and Keith began working here full time after eighth grade, the end of formal schooling for the Amish. They arrive at 4 a.m. from Lancaster, Pennsylvania, ferrying their Amish employees--who don't drive--more than 70 miles in a 15-passenger van. (The Beilers are Mennonites. They do drive.)
For years, the Beilers employed mostly Amish workers, whose plain clothes and head coverings stood out against the market's bright eclecticism. Now, about 50 percent of the Reading Terminal workforce is Amish; the rest is from Philadelphia. "It is hard when the economy is this strong to get people to want to drive into the city when they can get jobs closer to home," Kevin says.
The doughnuts, added six years ago, have become one of the market's hottest tickets, with lines so long they sometimes block the Dutch Eating Place and Sweet as Fudge Candy Shoppe down the aisle. Adapted from a grandmother's bread recipe, they are made from potato flakes, sugar, yeast, salt, eggs, and oil. There are 56 flavors, from apple fritter to maple bacon. "We started doing them for a Dutch festival in Center Court once a year, and people went crazy over them," Keith says.
The doughnuts are so popular they inspired the Beilers to do something uncharacteristic: expand outside the market. "In the Amish culture, our biggest strength is also our biggest weakness," Keith says. "We work in the business nonstop. We are there all the time." As a result of that dedication, fewer than 10 percent of Amish companies fail. But they don't get very big, either.
Four years ago, the family opened a second Beiler's Donuts, in Lancaster. They now have two other outlets: one in University City, the other in Germantown, Maryland. They hope to franchise. "I love starting new stores and training people," Keith says. "If I'm stuck here making doughnuts and that's all I'm doing, it is sandpaper to my soul."
Still, the Beilers love the market and credit the huge crowds it draws for their success. Keith says management has assembled the strongest collection of vendors in its history. He recalls the excitement in 2012 when Adam Richman proclaimed that the fourth-generation Italian sandwich shop DiNic's made the best sandwich in America. "The publicity from that--there were lines out the door," he says. "If I am doing my job right, I should be able to sell those people doughnuts as well."
Venerable family businesses are Reading Terminal's heart. But startups provide its energy. The Day Stall program deploys fledgling businesses on wheeled carts around the market. Vendors pay $50 a day, typically setting up shop a few days a week. "There is not a ton of turnover in our permanent spaces, so it is a way to refresh the offerings," Levitsky says. "Entrepreneurs who couldn't afford a build-out can test their concepts."
On a recent day, Anthony Roebuck stands by his cart urging passersby to sample his chicken burgers, available in flavors like spinach, honey sriracha, and the best-selling shrimp. Roebuck is trying to launch his business, Chic-A-Delphia, out of the Enterprise Center, a West Philadelphia organization that supports minority entrepreneurs. He started on the cart a month ago; until then he had just been catering. "If we could get a permanent place here, we could show that Chic-A-Delphia is the best chicken burger in Philadelphia," he says.
Fox & Son: Homegrown at the Reading Terminal
Reading Terminal also encourages new talent within its merchants' ranks. In 2012, Valley Shepherd Creamery recruited Rebecca Foxman to create, in an adjacent market space, a grilled cheese mecca featuring its products. MeltKraft was a hit, spawning seven outlets. Aware that Foxman wanted to do her own thing, market management asked if she'd like to pitch a business idea.
Foxman sat down with business partner Zeke Ferguson, Valley Shepherd's former retail guy, to come up with a concept. "We wanted foods that people crave but are not easy to find," says Foxman, who trained at the Culinary Institute of America. Off the table: anything another market vendor already did.
Foxman concocted a poutine-centric menu, which management nixed. But one item grabbed their attention: corn dogs. In 2015, Foxman launched Fox & Son, featuring corn dogs, French fries, cheese curds, and funnel cake. "Real American, county-fair-style food," she says.
Like many merchants, Foxman sources heavily from the market. All her produce--such as the sweet potatoes she blends into corn dog batter for one of her best-selling items--comes from Iovine and OK Produce, the two largest purveyors of fruits and vegetables. Unwilling to quit poutine entirely, she makes it with a 13-hour beef gravy incorporating marrow bones from Halteman Family Meats, a Pennsylvania Dutch butcher. Some vendors set up wholesale accounts for fellow merchants, and most offer at least a 10 percent discount.
Sourcing under one roof also facilitates creativity. "If you want to do something in the moment it is very easy to walk out of your space and find what you need," Foxman says. "If you were working in a restaurant, you would have to travel to a market or go through a catalog." Sometimes she wanders the market for inspiration. "I try to create specials by walking around and seeing what looks good," she says.
Fox & Son's traffic splits roughly in half between tourist and local. Locals are often repeat visitors drawn by the stand's gluten- and nut-free menu. Sales are rising rapidly month-to-month, and the company just bought a food truck to service the catering and events that are a growing part of the business.
Foxman grew up in Philadelphia and has been eating at the market since she was a toddler. She left a job at the Four Seasons in Washington, D.C., just to be here. Other markets are interested in opening a Fox & Son, but she's not convinced it would work anywhere else. "We created it to fit here," she says. "It's a place I love."