New York City is a petri dish for food innovation – it’s creative, diverse, filled with a multitude of ethnic groups and packed with adventurous eaters.

While the city has served as an incubator for new food companies, businesses looking to scale up are turning to locations outside the five boroughs with lower property costs.

These companies start in small facilities, but as demand for product grows and they look for new locations, they’re priced out because food-manufacturing companies face competition from a lot of other businesses that can afford to pay more to landlords. Plots of land big enough for medium to large-scale manufacturing are also hard to come by, according to Leah Archibald, executive director of a North Brooklyn business group that assists food companies establish themselves and grow in the city.

“They’re growing rapidly and cannot afford the real estate appropriate to meet the demand for their product,” Archibald said. “So they’ve got lots of orders. They need more equipment and space to fulfill the orders. They can’t find it affordably.”

A lot of the growth in the food manufacturing industry, which employs nearly 20 percent more people than it did in 2010, has come from small, start-up artisanal companies. Companies faced with increasing orders, but an inability to find space to handle that level or production, end up relocating, Archibald said.


Some companies don’t totally relocate, but turn to copackers – companies that manufacture and package food products for their clients. A recent survey by the Pratt Center for Community Development found that 40 percent of food start-ups have some of their operations outside of the city.

The issue doesn’t just affect start-up food production companies; it can also impact legacy manufacturers that spent decades in the city. Junior’s Cheesecake, which spent just under 65 years in Brooklyn, recently moved production over the Hudson River into New Jersey.


Before the move, Junior’s ran its ovens 24 hours a day, seven days a week. The company still couldn’t keep up with orders, according to Junior’s owner Alan Rosen. Rosen had to turn away wholesale customers.

“We just literally could not make another cheesecake,” Rosen said. “We needed to expand.”

Rosen didn’t even apply for an incentive from New Jersey, even though manufacturing is a target industry for Grow NJ, the main New Jersey incentive program. The deal to buy the 103,000 square-foot building – five times the size of their old building – went down too quickly.

Junior’s never even considered expanding in New York City even though cheesecake is a quintessential New York food.

“You can’t find seven acres of real estate in Brooklyn, or in Manhattan, or in the Bronx,” Rosen said. “If you can find it, it’s not going to be economical for a wholesale baker.”

The new facility has five times the oven capacity of the old facility, so Junior’s has been able to expand its mail order business and it’s getting ready to expand its restaurant business. Currently, Junior’s has three New York City restaurants and one in Connecticut. The production facility in Burlington, N.J., sends two trucks filled with cakes into the city every day for the restaurants.

“Before we had this bakery, we couldn’t open another restaurant because we didn’t have the capacity,” Rosen said.

Junior’s has also been able to expand as a wholesaler. The cheesecake producer – which sells to chains like Fairway, Kroger, Costco and BJ’s – has picked up almost 1,000 retail stores since the company moved production.

Not all of this growth comes from the new ovens and freezers – Junior’s also has better access to highways now. New Jersey is within a two-hour drive of 22 million consumers and within a day’s drive of 40 percent of the country’s population.

Space constraints in the city also meant that the old Junior’s facility had only two loading docks. The new facility has six.

Streit’s Matzos, another long time New York City company that recently moved operations to New Jersey, didn’t have any loading docks in the city, according to owner Alan Adler. Workers were loading trucks from the sidewalks with forklifts.

“It was just kind of a nightmare getting trucks in and out,” Adler said about the old Lower East Side facility in which Streit’s baked matzos for 90 years.


Streit’s trucks were getting parking tickets while being loaded up with the squares of unleavened bread.

“We were trying to run an industrial operation that should have been in a modern, one-story building out of four converted tenement buildings that were six stories high,” Adler said.

Location is key not just for shipping out finished products, but also for shipping in ingredients and packaging, according to Diane Holtaway, associate director of the Rutgers Food Innovation Center.

“New Jersey’s in the smack middle of everything,” Holtaway said.

The Garden State also took a sausage-shaped bite out of New York City recently; this time from the Bronx. Cibao Meat Products, which applied for a tax incentive package from New Jersey in November of 2011, was granted a small tax break of $173,600 based on its plan to spend $11.3 million on a Paterson, New Jersey facility.

Cibao brought about 70 jobs into the state in October of 2014. The company looked around the Bronx for a new facility, but was unable to find something that fit its expansion plans.

Edgar Soto, Cibao’s vice president of sales and marketing, said the company moved because it needed more space and couldn’t find a larger facility in the city. The cost of real estate in New Jersey is also cheaper for the company.

It may be possible to stem the tide of companies leaving New York City for larger, cheaper pieces of real estate outside the city, according to Jen Becker, an economist at the Pratt Center for Community Development. The city can keep food companies and sustain the industries growth if zoning regulations are tightened in Industrial Business Zones.

“There’s definite positive outlook in terms of employment,” Becker said. “People are expecting to grow and looking to grow in New York City.”


By: Aliza Chasan