« June 2005 Table of Contents
One on One: David McInerney
Sr. VP of merchandising and product developement, FreshDirect
June 01, 2005
Long after the dotcom bubble burst, online food retailer
FreshDirect is still going strong, delivering fresh food daily to customers in
Manhattan, Brooklyn and Queens.
FreshDirect was founded in 1999 and started deliveries in
2002. Sales in 2004 reportedly surpassed $100 million, and FreshDirect will
follow its customers to their vacation homes in the Hamptons with deliveries
this summer. Company execs are “researching” a possible expansion to the
David McInerney was hired as executive chef at the Long
Island City, N.Y., company in 2000. He designed products and opened the
company’s catering department. Now, he is senior VP of merchandising and
product development, responsible for sourcing products, from seafood to coffee,
and working with product-department managers.
His grandfather, an Italian immigrant, instilled McInerney’s
love of food, which led him to the Culinary Institute of America. Since
graduating, he has worked in some of the world’s best-known restaurants,
including La Cote d’Or in France and Bouley, Raphael and One if by Land, Two if
by Sea in New York.
Sourcing seafood comes naturally to McInerney, as a love of
fishing was another of his grandfather’s legacies. Seafood at FreshDirect is
merchandised in 12 categories, ranging from product forms, such as whole fish
or steaks, to species categories.
A recent interview with McInerney shows the retailer moving
full steam ahead with its online model.
Robinson: Who are FreshDirect’s typical customers?
McInerney: We cater to everyone in the city. Our prices are
better than anyone’s, from simple eaters to foodies. Seafood like stone crab
claws, Nantucket bay scallops or wild kings moves pretty easily. We can also
tell the story behind it. In a retail store it’s hard to do that. We can target
customers. We can look at their buying history and send them an e-mail [to tell
them] when we will have product.
FreshDirect launched its Montauk Dayboat seafood last
summer. Can you describe the program?
We worked out a deal with Gosman’s Wholesale Seafood in
Montauk [N.Y.]. The original idea last spring was, ‘We have all this beautiful
fish landed there, why not get it direct from the fisherman?’ But we didn’t
want to take a whole load. So we partnered with Brian Gosman, who buys for our
I like dayboat because it’s so fresh. [The fish is] caught
in the morning, we get it at night, and the customer gets it the next day. With
our chain of distribution, it’s beautiful. It’s in a refrigerated truck, then
it’s in our production facility, which is 34 to 40 degrees. Then we cut the
fish to order. And the retail prices aren’t that much higher [than what we pay
Do you have plans for similar dayboat programs?
After Montauk we got a call from Michael Dimin, who was
starting a similar program out of Tobago. They have all these local fishermen
who have gone out in 20-foot skiffs catching wahoo, tuna and other fish. They
troll with hand lines off the back of the boat. [Dimin] certifies them through
a training facility. Each morning when they go out, he gives them a cooler.
It’s loaded up within two hours. He has a truck that goes around the island,
and [the fish] is on a plane to New York that night. We’re launching this
program in a few weeks.
Their plan was to sell to high-end restaurants in Manhattan.
We are the only retailer in their distribution.
How do you source the rest of the seafood sold on FreshDirect?
We have a lot of direct deals. The farmed salmon is from
Ireland. Salmon from Alaska is from a co-op, tilapia is direct, and scallops
come directly from a fisherman. I travel and get to know the fishermen. We try
to do the right thing by them.
Do you source both wild and farmed seafood?
We carry wild and organic farmed. Organic salmon is 35
percent of salmon sales now. [Wild] seasonal product does well for us. New York
City is a great market with sophisticated customers.
Did the article on the cover of the New York Times about fraudulent sales of wild salmon
affect your salmon sales?
We haven’t heard anything from the article. We send our
salmon out for testing ourselves; we put a policy in place as a result of that
article. We have a lab in house with a microbiologist who does testing on a
daily basis. We try to buy everything direct, and we buy whole [fish] and cut
it to order.
How often is the seafood product mix changed?
It can change daily. We have a lot of flexibility on our
site. Once a SKU is set up, we can just turn it on or off. If we have a
commitment from the fisherman, we’ll put it up [on the Web site] before we have
the fish. This week it’s softshell crabs, and we’re merchandising those on the
What is your biggest challenge in retailing seafood online?
It’s not that challenging — it’s almost easier. We’re almost
buying to order. We know what we’re going to sell each day and have great
forecasting. We have a site that can tell stories. We’ll tell customers in the
spring if flounder will start to spawn and won’t be available [because of
quality concerns]. We may even take it off the site.
I don’t know that there are any challenges. Produce is
tough, but seafood is easy. It’s not as subjective as produce; a ripe peach may
mean two different things to you or me, but a tuna is pretty clear as to what
it should be.
How many employees are there in FreshDirect’s seafood
We have a seafood production manager [and his staff], a
buyer and myself. I spend a lot of time setting up programs like Montauk and
Tobago. Once a program is going, other people follow up on it.
The production manager works at night cutting, and he has a
few managers under him. He manages 20 to 25 people. The cutoff [for ordering]
on the Web is midnight. [The production team] works until 8 or 9 a.m. cutting
and fulfilling orders.
How do value-added products sell?
The area I see growing the most is value-added, ready to
cook. We take a piece of salmon, bone it, maybe put a stuffing in it. People
like to cook, but they don’t want to do the prep work. We put a lot of emphasis
on ready-to-cook items. We make it simple. We just launched a summer menu with
a shrimp-and-mango kabob.
The most popular value-added item is steamed
split-and-cleaned lobsters. They fly out the door from spring through the fall.
We also do a lobster bake, with all the trimmings. We buy well, and we try to
keep the margins in check. We want fish to be a big part of our customers’
What made you decide to leave the kitchen and go work for FreshDirect?
Part of the reason I came here is, I got a call from Jason
Ackerman [founder of FreshDirect], and I fell in love with his crazy dream of
going directly to the consumer, and the fish stuck out in my mind. I had three
gourmet shops within a few blocks of where I lived, but I’d never buy fish from
them. Since then, the quality of fish [at those stores] has improved, but that
got me excited to put in a restaurant-quality fish program.
Do you ever get the urge to get back in the kitchen?
Yes, sometimes. The thing I miss most is the intensity
level. It’s almost like a theater, and the immediate gratification is
wonderful. I miss that. I’m immersed in food here. I’m in seafood, produce,
coffee. But the excitement level is not the same. This is more of a marathon
versus a short sprint.
What have you learned from working at FreshDirect?
It’s a food job. A lot of people in this company are food
people. They know, appreciate and respect food. It’s constantly changing. For
the last 20 years I’ve been working intimately with food, and every day I
realize how little I really know. You could spend your whole life learning
about food. We’re just trying to figure out how to do this. There’s no book you
can read on it. It’s a lot of learning every day. And we’re all learning.