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A caviar niche: Even more growth is ahead for Miami Gardens-based Markys

By Ina Paiva Cordle
Published on Monday August 26, 2013

Marky's Group President Christopher Hlubb with some caviar in the warehouse at the company headquarters on Monday, Aug. 19. PATRICK FARRELL / MIAMI HERALD

From the Belgian chocolate on your hotel pillow to the delicate cheeses at your specialty grocer and the caviar youre served onboard a cruise, all likely have one thing in common: Markys Group imported and distributed the gourmet products and soon may even have a hand in manufacturing them.
 
Miami Gardens-based Marky’s, founded 30 years ago as a small retail store on 79th Street in Miami, has morphed far beyond that into an international wholesaler with a variety of other related subsidiaries, including an aquafarm that raises sturgeon, which is in line to become the sole United States producer of Beluga caviar.

Now undergoing even more expansion, new retail and café locations are in the works, and plans are underway to open a catering operation and to launch an enhanced e-commerce site soon.

“The future success of Marky’s Group is to meld manufacturing with distribution and direct to consumer retail,” said Marky’s Group President and Chief Operating Officer Christopher Hlubb, who has spearheaded Marky’s growth since joining the company three years ago.

Founded in 1983 by Ukrainian émigrés Mark Zaslavsky, 60, and Mark Gelman, 58, Marky’s began with a small store, selling such items as imported caviar and smoked salmon. Soon the store widened its range of gourmet products to include cheeses, meats, olive oils and more.

During the 1990s, the company also began wholesaling its products, mostly to local restaurants, hotels and stores, like Epicure Gourmet Market in Miami Beach.

By the early 2000s, the company expanded those wholesale operations to major grocers like Whole Foods as well as to cruise lines and other businesses nationwide and in the Caribbean.

Today, Marky’s sells 7,000 different items worldwide, with 97 percent of its goods imported. The top seller is caviar, followed by foie gras, smoked salmon, cheeses, truffles, chocolates, oils and vinegars, and cured meats. In addition to its store, Marky’s also operates a kiosk at Aventura Mall, Caviar & More, which it opened in 1999.

Sturgeon AquaFarms, the brainchild of Zaslavsky, came next, geared to ensure the company’s future source of caviar, in light of increasing regulations governing the importation of sturgeon, which was becoming an endangered species.

In 2003, Zaslavsky began 13 separate trips to fly several hundred live fish from Germany to Florida to breed. The timing was just right: The U.S. government in 2005 ruled that it is illegal to import Beluga caviar and related products, including the fish itself. Marky’s was grandfathered in, and today, the aquafarm, in Bascom, Fla., has 100,000 sturgeon of different varieties.

Last year, the aquafarm started selling meat from two sturgeons: Sterlet and Sevruga, mostly in New York. The aquafarm’s Sevruga caviar is currently sold exclusively at Whole Foods. Beluga, the priciest caviar, is not yet available for sale; the company is still focusing its efforts on reproduction.

At the same time, Marky’s has also reached agreements with the governments of Russia and Azerbaijan to contribute to their sturgeon repopulation efforts, Zaslavsky said.

As Marky’s has grown, it needed more space to house its wholesale operation, so the company moved its headquarters and wholesale division to a 35,000-square- foot warehouse in Miami Gardens in 2008, where 65 of its 110 employees now work.

Hlubb arrived in 2010, to head corporate sales, and has been revamping the company ever since. He became a vice president in 2011, and at the beginning of this year, was named president of Marky’s as part of the creation of a parent group, where he is taking the expansion in all new directions.

“He is a very smart, young, ambitious and well-educated gentlemen, and we are happy to have him,” said Zaslavsky, Marky’s chief executive. “We expect great things from him.”

Under Hlubb, last year Marky’s opened a wholesale and retail operation in Panama to handle Latin American sales, as well as wholesale operations in Russia and Ukraine, followed by the launch this year of a new Marky’s European wholesale and e-commerce division, based in Germany.

Recently, the company hired a corporate chef and built an onsite kitchen, with plans to offer cooking classes, seminars and training sessions. The chef also has participated in demonstrations at Whole Foods and onboard cruise ships.

“Our goal is to be not only the top company in terms of caviar production and distribution, but in terms of caviar education,” said Hlubb, 38.

The key, he said, is connecting with the customer, teaching them rather than just selling to them.
Along those lines, Marky’s retail store on 79th Street, known as the Russian Store, has added international tasting events on Saturdays. The shop, to be renamed Marky’s Gourmet Store, is set to undergo a major renovation, in which it will add a café and a glassed-in area where customers can watch cheese being manufactured.

The store, visited by the likes of Martina Navratilova and Iggy Pop, offers a plethora of products that fill the shelves in three rooms. There is everything from packaged Russian candies to Russian cakes, herring and frozen pierogies, along with caviar, foie gras, truffles, cheeses and meats, and a selection of champagnes and wines, including a $2,500 bottle of Petrus Bordeaux.

“It’s a great store,” said Svitlana Harrison, who is Ukrainian and shops there every couple of months to stock up on items from home. “You get nostalgic, so we found this place, and we love it.”

Marky’s also sells its products online at Markys.com. Next month, that site will convert to Markysgourmet.com, where it will offer videos, and consumers will be able to email or chat with the corporate chef and caviar manager for advice.

In addition, Marky’s handles fulfillment for other companies’ websites, Hlubb said.

More growth is in the works. In September, Marky’s will debut a South Florida catering operation, called Catering by Marky’s, offering complete party planning, from in-home parties to large scale events.

Other plans for the future include acquiring other luxury food distributors around the country, to expand Marky’s direct distribution. Three companies, in New York, Las Vegas and Los Angeles, are already under consideration, Hlubb said, and at least two acquisitions could be made by the end of this year.
“The goal is to be the premier provider of gourmet food products,” he said.

Sunny Oh, executive chef and partner at Juvia in Miami Beach, who was formerly a chef at Nobu, has been buying wholesale from Marky’s for more than a decade. It’s where he gets his restaurant’s French Cantalet cheese and La Perruche sugar cubes, as well as specialty duck, among other items.

“They try to get anything that we want,” Oh said. “They are a good company, a reputable company.”
Marky’s is also expecting to stretch its retail expansion nationwide, with a prototype store, offering prepared foods, a cafe and cheesemaking demonstrations. The company is currently eyeing a variety of cities, including New York, Washington, D.C., Philadelphia, Dallas, Las Vegas and Los Angeles, Hlubb said.

Meanwhile, a Marky’s café is also planned for a mall in downtown Panama City, Panama, which is slated to open this fall.

And in the United States, Marky’s mall concept, Caviar & More, is being redesigned to fit into other malls, with hopes of opening 10 to 15 kiosks within the next year-and-a-half, beginning with New York, Hlubb said.

Additionally, the company is branching out to sell its gourmet products, like caviar, smoked salmon, chocolates and olive oils inside duty-free stores. The first, at New York’s John F. Kennedy International Airport, is expected to open in September.

Figures on the market for gourmet foods are not readily available, but Marky’s has clearly found a niche in a nation that relies on fast food.

“Is there a place for gourmet foods? Absolutely. Is it part of our daily diet? By definition it can’t be,” said Harry Balzer, chief industry analyst for the food group at NPD Group, a consumer and retail market research firm based in Port Washington, N.Y. “But we are always looking for the spice of life, and gourmet foods provide the spice of life.”

For its expansion, Marky’s has invested about $10 million over the last several years, including the aquafarm.

The overall objective, Zaslavsky said, “is to be better integrated, and to be a stronger international company.”

Indeed, Hlubb said the goal is to take the company from more than $35 million in revenue today to $100 million within two years. Already, retail sales have doubled in the past 18 months, while wholesale sales locally have risen 25 percent, he said.

And while Marky’s has competitors in segments of its business, such as Epicure, Whole Foods or Chef’s Warehouse, it doesn’t appear that any other single business handles everything from caviar production to distribution to retail stores and kiosks.

“That’s what we’ve been changing these last three years,” Hlubb said, “is that focus on integration.”
Born in Baltimore, Hlubb said he has never taken a business course in his life. He recalls his father, a commercial real estate developer and consultant in Maryland, giving him the book The Art of War, by Sun Tzu, and telling him it was the only book on business he needed to read.

Hlubb has a degree in genetics and worked for seven years in biochemical neurogenetics, neuroscience and neurophysiology at Johns Hopkins and two private companies in Maryland before taking on an entrepreneurial project in the wine industry in 2004, working with Chilean cooperatives. After a few years at that, he joined Marky’s.

At the warehouse headquarters, Hlubb works in a modest office, devoid of art or fancy trappings.
Inside the nondescript warehouse, a caviar lab is used for processing — salting, curing and repacking – caviar. In another room, gourmet products fill boxes and shelves, such as a small jar of winter white truffles that retails for about $600. Cured meats, cheeses and sausages are held in coolers.

Hlubb is involved in every aspect of the business, and among his biggest hurdles, he said, has been changing the mindset as the company grows.

“Everything we do is because it’s something I think we can do better,” he said. “You have to be able to see the future of what it can bring you.”

Marky’s Group at a glance

Founded: as Marky’s ‘The Russian Store,’ open since 1983 in Miami.

Based: Miami Gardens

Employees: 110

Revenue: More than $35 million

Gourmet products: 7,000 in total — including caviar, foie gras, smoked salmon, cheeses, truffles, cured meats, oils, chocolates and more

Subsidiaries: Wholesale operation, store in Miami, kiosk at Aventura mall, Sturgeon AquaFarms in North Florida, Panama operations, European operations based in Germany, and wholesale divisions in Russia and Ukraine

http://www.miamiherald.com/2013/08/25/3583535_p3/a-caviar-niche-even-more-growth.html