With his round glasses, unruly gray hair, and unbuttoned flannel shirt, the 57-year-old Howie Glickberg looks as if he could be Larry David’s groovier brother. Taped to the wall of his office is a handbill from the late thirties, when Glickberg’s grandfather opened Fairway. He smiles, reading aloud: “Rolls, 1 cent each; eggs, 27 cents a dozen; sirloin, 37 cents a pound!” Then the smile disappears and a Larry David–like scorn rises as Glickberg steers the conversation back to his nemesis Fedele. “I despise him more than anyone I’ve met in my life,” Glickberg says.
In 1994, Fairway had a single, thriving store. Glickberg and longtime partners David Sneddon and Harold Seybert saw the grocery industry mutating rapidly outside the city. They began exploring ways to grow Fairway, but zoning restrictions and real-estate prices in the city narrowed the options. A store called By Choice had opened on the extreme western end of 133rd Street, in a former refrigerated meatpacking plant beneath the West Side Highway. By Choice was the brainchild of 51-year-old Brooklyn native Joe Fedele, a food broker to club stores like Costco, who thought he could cut his former profession out of the equation and bring meat, fish, and produce directly from producers to the public. “Joe is not squeamish about just barging ahead,” says Richard Lipsky, a veteran supermarket-industry lobbyist who attempted to help Fedele with city permits. “When he has partners, that becomes a problem. His personality is hard to take.”
According to Fedele, By Choice was a hit, and Fairway felt threatened. In Glickberg’s version, By Choice was a bomb and all he desired was Fedele’s location. However the union came to be, Fairway Uptown was, and is, a tremendous success. Cars from New Jersey crowd the parking lot on weekends, drawn by the high-quality goods at chain-store prices. Who gets the credit? Glickberg says the only thing Fedele contributed was the building. “Well,” he allows, “Fedele put up a billboard, but like everything he did, he put it up as cheaply as possible, so it had to be replaced.”
Fedele sees it a little differently. “They stayed in one store on Broadway and 74th for twenty years!” he rages. “Then, what, in his mid-fifties, Glickberg got an epiphany to work more hours on bigger operations? Excuse my language, but bullshit. I taught them how to make a better product at a better price and made them a higher amount of money than they ever did. ”
FAIRWAY ON FRESHDIRECT: “When Joe Fedele dies, I’ll be the ﬁrst in line to piss on his grave.”
The uptown Fairway quickly split into two seething ownership camps. Finally, in 1998, Fedele left. “I got a lot of money to be bought out as what they claim was just an ‘operations manager,’ ” he says with a laugh. “Can somebody do that again for me, please?”
During the negotiations, Fedele was introduced to Jason Ackerman. Now 37, Ackerman is nearly as brash as Fedele. After a decade as an investment banker at Donaldson, Lufkin, & Jenrette, where he specialized in the merger, acquisition, and financing of supermarkets, Ackerman was looking to switch sides. “There were not a lot of great supermarket operators in the Northeast, and many of them were in big financial trouble,” Ackerman says. “And consumers were becoming less interested in canned corn. They were more interested in organics, more interested in natural, more interested in cooking at home. But the chain stores weren’t able to give it to them. So New York became littered with small independents, people who were one or two stores. We said, ‘Let’s deliver quality fresh foods, like a Fairway or a Balducci’s, but do it at a great price point.’ It was Joe who said, ‘Let’s look at going online.’ And it was me who responded with a profanity.”
As Ackerman and Fedele schemed, an Internet grocer called Webvan was in the process of blowing through $1 billion. But the pair thought they could avoid two fatal flaws: expanding too quickly and going public. Ackerman raised $100 million, Fedele cut deals with suppliers, and FreshDirect was born in a former paper plant in Long Island City. The FreshDirect headquarters is a complicated combination of FedEx distribution center and industrial-size kitchen. Two miles of conveyor belts, twisting three stories high, weave through and past twelve different temperature zones ranging from 58 above to 36 below zero, each room, according to Fedele’s calculations, providing the perfect sanitary environment for the handling of everything from pineapples to 200-pound tuna. Plastic tubs—some bought at auction and still bearing the Webvan logo—rattle along the conveyor belts as 550 workers use scanners to read bar codes that tell them who gets a box of Wheaties and who gets a half-dozen fresh croissants. Outside the warehouse, 90 trucks idle, ready to make deliveries.
After test runs in Battery Park City and Roosevelt Island in the summer of 2002, FreshDirect started with regular service in Murray Hill, then expanded up the East Side, across the park, and arrived on the West Side in March 2003. “We slowed the rollout because we did more business than we expected,” Ackerman says.
It wasn’t slow enough for Glickberg. The FreshDirect posters blaring that the company was BROUGHT TO YOU BY A CO-FOUNDER OF FAIRWAY UPTOWN and featuring a photo of Fedele made Glickberg furious. He posted signs inside the 74th Street store reading FAIRWAY IS IN NO WAY AFFILIATED WITH FRESHDIRECT. FreshDirect jabbed back by sending staffers dressed as giant fruits and vegetables to pass out flyers in front of Fairway. Then the FreshDirect Website added a lengthy description of Fedele’s role in the uptown Fairway, headlined: HEY FAIRWAY, WHAT ARE YOU AFRAID OF? Fairway threatened to sue. Ackerman says Fairway also told suppliers that if they did any business with FreshDirect, Fairway would yank their product lines from the shelves. Glickberg denies using any such tactics.