business travelers association
A regional consortium of locally owned restaurants is throwing its combined purchasing power into a new contract with an old partner, Ginsberg's Foods Inc. of Hudson.After 10 years with Houston-based food services giant Sysco Corp., which has a local operation in Halfmoon, the Restaurant Operators Cooperative has selected Ginsberg's as its prime vendor. The designation means that Ginsberg's will supply a wide variety of foods and restaurant products to the cooperative's 86 members, which include diners, Italian restaurants, cafes, country clubs, hotels and bistros around the Capital Region. The estimated value of the three-year contract, which takes effect Jan. 1, is about $15 million a year for the family-owned Ginsberg's. Evan Christou, president and founder of ROC, as the cooperative is called, and vice president and general manager of Tops American Grill in Rotterdam, said the change didn't stem from any dissatisfaction with Sysco. "The relationship was very successful," he said. "They were very good partners." But as members of the cooperative heard proposals from three finalists, which also included US Food Services, which has operations in Clifton Park, they were especially impressed with the Ginsberg's package. "The main goal of the purchasing cooperative is to save our members money," Christou said. But the range and quality of products available also were among the factors considered in the choice, he added. "Ginsberg's just put a really good foot forward," Christou said. "The climate was right for a change." ROC was founded about 15 years ago as a way to help independent local eateries combine their buying power and gain the kind of high-volume discounts typically available to larger restaurants. "It allows us to become more competitive with chain restaurants," Christou said. Members often buy some specialty items from other suppliers, but typically can purchase as much as 80 percent to 90 percent of their supplies from the prime vendor, he said. In addition to joining in the prime vendor food supply contract, members also cooperate to secure volume discounts on laundry and linen services, dairy and produce, and, potentially, insurance, he said. Ginsberg's had the prime vendor contract with ROC for several years during the 1990s, a period Christou described as the group's "adolescence." Ginsberg's, which celebrates its 100th anniversary in business next year, is pleased to be contracting again with ROC, said Suzanne Rajczi, the company's vice president of merchandising. "We feel it's a privilege to have it back," she said of the prime vendor contract. She said Ginsberg's emphasizes local produce and products, as well as well-known national brands. "We believe in the philosophy of doing business with independents. It's important for us to be two steps ahead of these chains and keep these independent restaurants successful and profitable," Rajczi said. Cathy Woodruff can be reached at 454-5093 or by e-mail at cwoodruff@timesunion.com. COLONIE ? You're standing at Osborne and Albany Shaker roads, in tony Loudonville. To the southwest is a Rite Aid drugstore. To the northeast is another Rite Aid. And to the northwest is the corner where Walgreen Co. has been buying land, including a $2 million purchase in October. One intersection. Two existing drugstores. One planned drugstore. Overkill? Perhaps. But the intersection is not unique. You'll come across similar corners in much of the Capital Region, following the drugstore building boom of recent years. And despite the recession, the proliferation continues. Other retailers, shaken by falling sales, are limiting expansions ? but nearly every planning board agenda, it seems, contains a drugstore proposal. The retail economy is ill. But drugstores seem healthy. "We're not immune from what's going on in the economy, but we're better insulated," said Michael DeAngelis, spokesman for Rhode Island-based CVS Caremark Corp. "People are still getting their prescriptions filled. They're still getting sick." CVS reported record profits for the third quarter, with net revenue of $20.9 billion. Walgreens, meanwhile, said October sales were 6.8 percent higher than in the same month a year ago. Both chains still are expanding aggressively and are among the nation's fastest growing retailers. They seem confident that demographic trends are in their favor, as baby boomers head toward prescription-filled retirement. And the drugstores long ago diversified, adding food and other items that Alan McNally, Walgreens' acting CEO, described as "the necessities of life." "The convenience store business has been cannibalized by the drugstore business," said Britt Beemer, who runs the retail consulting firm America's Research Group in South Carolina. Drugstores do face threats. Supermarkets and discount retailers are eager to grow their prescription businesses. Wal-Mart, in particular, has been opening in-store clinics and offering $4 prescriptions. Independent drugstores and some small chains have struggled against the large competitors. And even one of the largest chains, Rite Aid, worries some analysts. "They've undertaken some rather ambitious expansion plans during the boom period of this economy, including the acquisition of the Eckerd/Brooks pharmacy chain," said Tom Sullivan, who analyzes retail trends on the Web site No Turn on Red. But that growth "has saddled the retailer with debt that is frightening to shareholders and will curtail their future expansion," he added. In recent years, Rite Aid has been building new Capital Region stores. But many, like one under construction in the Lansingburgh section of Troy, are designed to replace nearby locations. With an eye toward cutting costs, Rite Aid executives last month said they will close stores that sit near other company locations, particularly those resulting from acquisition. That could affect the intersection of Albany Shaker and Osborne roads, where an Eckerd became a Rite Aid in September last year. Walgreens, which did not return a phone call seeking comment, first bought property on the corner in 2006, and in October bought more land from Osborne Road Associates LLC, which had proposed a shopping plaza there. Joseph LaCivita, planning director for the town of Colonie, said Walgreen Co. has not submitted a proposal for the land. Neighbors, though, frequently ask him about the company's plans, he said. Chris Churchill can be reached at 454-5442 or by e-mail at cchurchill@timesunion.com. The big picture • The U.S. has about 40,000 drugstores with combined annual revenue of $160 billion. • The largest chains are Walgreen Co., CVS/Caremark Corp. and Rite Aid Corp. • The industry has become more concentrated: the 50 largest companies hold close to 70 percent of the market. • Prescription drugs draw customers, so stores focus their efforts on the number of new prescriptions they fill. The average store fills about 1,000 prescriptions per week. Source: Hoovers.com MALTA ? The manufacturing capacity of a computer chip factory planned for Saratoga County could grow, depending on how much the Emirate of Abu Dhabi invests in the venture.The $4.6 billion factory, or chip fab, is being planned by a joint venture between Advanced Micro Devices Inc. and the Persian Gulf country. AMD, which originally announced plans for the chip fab in June 2006, is spinning off its manufacturing operations to create a foundry that will make chips for AMD and other companies. Much of the new venture is being funded by oil-rich Abu Dhabi. A government-owned fund there, Advanced Technology Investment Co. LLC, will invest $2.1 billion in the new venture, temporarily called The Foundry Co. AMD's two existing chip fabs in Germany will be included in the deal, and there are plans to build the factory in Saratoga County. ATIC has also vowed to invest between $3.6 billion and $6 billion over the next five years, money that will be used on the German and New York facilities. The amount of that investment will determine how many computer chips the Saratoga County factory makes each month, according to documents approved by the state on Monday, Chip fabs are technically wafer factories, where circuitry is printed onto silicon wafers that are later cut into individual chips. The Saratoga County plant, planned for Luther Forest Technology Campus in Malta, will produce 12-inch wafers. The project is in line to receive $1.2 billion in economic incentives from the state. The package was originally awarded to AMD before the company began experiencing financial difficulties, which led to the decision to split manufacturing from design. On Monday, Empire State Development Corp., the state's economic development arm, approved the transfer of the incentives to the new joint venture. Although most of the language was the same as the original agree
Restaurant consortium chooses Ginsberg's Foods as its prime vendor with $15-million-a-year deal
Despite recession, number of drugstores in Capital Region keeps growing
Production at plant tied to size of investment from Abu Dhabi fund