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SECRET SAUCE For Hoboken Farms, success has come by building loyalty one customer and one sale at a time

Brad Finkel, founder and owner, Hoboken Farms.-(PHOTOS BY AARON HOUSTON)

Local business owner Brad Finkel is proud to say that his hard-earned success was never dependent on whether he wore a suit.

“It has become abundantly clear that, through 25 years of hard work and the mission to delight our customers, we have built up a beloved brand one customer at a time,” he said.

In between touring as a bass player in high school and college, Finkel developed a small-scale service in which he delivered curated goods such as locally baked artisan bread and fresh mozzarella from Hoboken-based markets to the suburbs on weekends.

Finkel, founder and owner of Hoboken Farms, has since grown the business into a retail sandwich shop in Summit, a manufacturer of award-winning marinara sauce and the ability to serve 30 New Jersey farmers markets a week — and over 700 a year.

“Our society teaches us that, in order to be successful, we have to go from startup to unicorn,” he said. “But slow and steady growth allows you to make and learn from mistakes while building your customer base.

“If you delight your customers one at a time, they are customers for life and they will become your biggest advocates.”

Finkel officially started the company in 1992 after graduating from Ramapo College in Mahwah with a degree in arts management.

A longtime customer, Peter Beronio, had then recently become the economic development coordinator for Englewood and invited Finkel to participate as a vendor in the city’s farmers market.

“I brought 50 baguettes and 50 pounds of mozzarella,” Finkel said. “We sold out in an hour.

“The next week, I brought 100 baguettes and 100 pounds. We sold out in half an hour.”

Based on his unexpected success, Finkel hired staff to attend multiple markets a day, seven days a week, while curating additional local products, such as meats and pastas.

“Without any plan at all, there was a business,” Finkel said. “It was not built by design, but by taking the opportunity.”

And by listening to his customers.

Since Hoboken Farms would sell homemade ravioli at farmers markets, customers would continuously ask Finkel if they also sold sauce.

Biz in brief
Company: Hoboken Farms
Headquarters: Hoboken; warehouse in Clifton.
Founded: 1992
Revenue: Undisclosed; retail year-over-year growth is up 8 percent; sauce expected to quadruple in capacity within five years; farmers markets weather-dependent.
Employees: Under 30
One more thing: Hoboken Farms works closely with the New Jersey Farmers’ Market Council of Farmers and Communities. “I wish that the state would give a lot more money to the Department of Agriculture,” Finkel said. “Every year they are being stripped of their funds. I mean, come on — we’re the Garden State!”

“I looked to my left and there was Matt Conver from Cherry Grove Organic Farm in Princeton and I looked to my right and there was Doug Race from Race Farm in Blairstown,” Finkel said. “I asked them if I could have some ugly tomatoes. They gave me a couple of boxes and … (we) started making sauces in 2003.”

Hoboken Farms later caught the attention of the Rutgers Food Innovation Center after selling its sauces at a conference.

“They saw a line of people waiting to buy cases of our sauce and asked if we would be interested in bringing it to market,” Finkel said.

Two years and $10,000 later, Finkel had over 350 cases of sauce stored in Hoboken Farms’ small warehouse.

“I thought that was going to last us for the next couple of years,” he said.

Then Whole Foods called and paired Hoboken Farms up with McMahon’s Farm, an independent wholesale distributor, to bring its Big Red Marinara, Big Boss Vodka and Big Basil sauces to its shelves in 2010.

Today, Hoboken Farms marinara sauce is available at Whole Foods, ShopRite, Kings Food Markets and more.

“We did this without a sales team,” Finkel said. “They just call.”

While Hoboken Farms’ sauce is now expected to dominate sales, farmers markets have historically comprised two-thirds of the company’s business.

1,000 sandwiches
Brad Finkel, founder and owner of Hoboken Farms, wanted his employees to build up muscle memory in order to quickly and efficiently manufacture orders.
“When we opened the sandwich shop in 2011, it became very clear that we needed to become experts at making sandwiches,” he said.
Hoboken Farms therefore partnered with the Community FoodBank of New Jersey to make 1,000 sandwiches and let customers pay what they wanted in the amount of a donation. Provident Bank joined the project as a matching partner.
“Together, we raised about $10,000 in two days,” Finkel said.

That also needed to change.

“In 2009, we had an over 60 percent inclement weather rate,” Finkel said. “It became very clear that storms were becoming stronger and more frequent. That was certainly going to impede the growth of our outdoor business.”

Since 50 percent of a great sandwich is just some mozzarella and bread, Finkel said, he had the idea to open Hoboken Farms Sandwich Shop in Summit in 2011.

Hoboken Farms also partnered with Equinox gym in Summit to open its first Good Health Café in 2012.

Still, weather would continue to be a problem.

“I nearly lost the business in Hurricane Sandy,” Finkel said. “Our warehouse in Hoboken was getting … flooded twice a year, so we moved it to higher ground in Clifton.”

Farmers markets, too, have more recently taken a hit.

“Our markets were astronomically up in sales over the last three years because our gross sales were heavily weighted on the brilliant weathered weekends,” Finkel said. “Now, we are down 15 percent due to the weather we’ve had over the last few months.

“But being in this kind of business creates great habits when it comes to cash flow because we are used to being fiscally conservative.”

With farmers market sales being weather-dependent and retail year-over-year growth remaining consistent around 8 percent, Finkel has realized that Hoboken Farms marinara sauces represent the only truly scalable business opportunity.

“Within 24 months, our sauce will easily surpass our farmers market business,” Finkel said. “We sell a lot less sauce than more established brands, but more people buy three or more jars of our sauce at a time than any other brand.”

Competition — especially in New Jersey and New York, where “you better have an expert palate when it comes to marinara sauce,” he said — will always be high.

“Our capacity was at about 10,000 cases a year,” Finkel said. “I am told that is about three-quarters of a day of sales for some of the leading markets. What we sold in a year, they sold in a day.

“But we’re now able to go beyond that.”

After building up the infrastructure and the online business, Hoboken Farms marinara sauce has now doubled in capacity to be able to ship increasing daily mail orders and sell to more distributors and retail stores across the country.

Finkel is also in discussions with Continental Logistics, a warehouse and logistics company in Edison, to have the sauces delivered and shipped directly from its warehouse space.

Employee education
Brad Finkel, founder and owner of Hoboken Farms, is concerned for the financial wellbeing of up to 30 New Jersey residents during the busy season.
“I feel a huge responsibility to my employees who not only have to deal with the crushing costs of living in New Jersey, but are also drowning in college debt,” he said.  
Finkel recently sent an email to his employees that would hold both him and them accountable in this struggle.
“I have recently been very influenced by the push for a prevailing wage of $15 per hour. I hope that becomes a citizen’s right, but until then I have chosen to do my part and raise our minimum hourly wage to $15 an hour,” Finkel said. “It’s challenging to provide, but, ultimately, it’s an experiment that I am doing with my employees.
“I want them to work more efficiently to allow them more time at home while making more money. My hope is that next year I can do the same thing for them and other employees.”
Finkel also works with his employees on a weekly basis to make sure they understand the financial logistics of running an entrepreneurial business.
“They understand their responsibility in this,” he said.

“I can then reinvest all of my money and resources into making better sauce or putting another SKU out there, as opposed to maintaining shelves filled with inventory,” he said.

“My goal is to quadruple our capacity without having to compromise our quality over the next five years.”

Or its high level of customer service.

“Someone from Parsippany recently emailed complaining that a lid had opened up in a package we had delivered and there was sauce all over,” Finkel said. “We received the email at 1 p.m. Within an hour and a half, I had my warehouse manager drive up to deliver another case with a note attached.”

The customer emailed Finkel back telling him how much that meant to her because she was making lasagna for her son’s birthday.

“I love being able to take a complaint and turn it into a delighted customer,” he said. “That, to me, is not brilliant. That, to me, is easy.”

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On Twitter: @megfry3

Meg Fry

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