Michaelson Named FreshDirect CEO

JON SPRINGER

NEW YORK — Steve Michaelson, president of FreshDirect here, is becoming a more visible entity.

Not only has his face begun appearing on the Internet grocer's website as part of a weekly “President's Picks” of special food discounts, but the former Weis Markets and Wegmans Food Markets executive was named chief executive officer of the company early this year. Michaelson, who is succeeding outgoing CEO Dean Furbush, will retain his title as president, FreshDirect officials said.

Michaelson, who has served FreshDirect as its president since 2004, was not available for comment last week.

A FreshDirect spokeswoman told SN last week she had no additional detail on the executive change. Furbush was not immediately available for comment last week.

Steve Druckman, chief marketing officer for FreshDirect, in an interview with SN last week said he didn't expect the executive changes would make a big difference in the day-to-day business of FreshDirect.

Druckman said the company in 2007 would concentrate on deeper penetration within its current New York geography, rather than expanding to additional markets, and would continue a marketing plan begun last year of partnering with established chefs, restaurants and other avenues to market and sell fresh and prepared foods.

Two such concepts — a cookbook tie-in and a series of prepared meals based on recipes from renowned chef Terrence Brennan — were launched last fall to great success, Druckman said.

The cookbook program publishes hundreds of recipes from well-known cookbooks on the FreshDirect website, and allows shoppers to order the ingredients — and in some cases, the cookbook the recipes came from — with a single click.

Brennan, chef at famed New York restaurants Picholine and Artisanal, loaned his name and recipes to a series of heat-and-eat meals. These selections come delivered in packaging allowing them to be steam-cooked by microwave, Druckman said.

“We're talking with other restaurants, and hopefully this year we'll have three or four new restaurants on board with their own version of these meals,” he added. “We're trying to hit new cuisines. With Terrence covering the French side, we're talking to a company to do some Mexican, another to do some Italian and another to do Indian.”

Privately held FreshDirect garnered about $200 million in sales in 2006, Druckman said. Observers had been expecting the company to make an initial public offering for some time. Rick Braddock, chairman of the board of FreshDirect, told SN in an interview in 2005 that an IPO was a possibility.

The company got an equity investment of $10 million in June, government filings show. Investors included private equity funds associated with AIG Global Investments, New York, and Rockport Capital, Washington. The offering includes warrants to increase the investment to $22.7 million.

It was unclear last week whether the departure of Furbush — who came to FreshDirect from an executive position with the NASDAQ exchange — might affect financial plans.

“The difference between Dean Furbush and Steve Michaelson is that Dean has a Wall Street background and Steve has a Main Street background,” Burt P. Flickinger III, managing director, Strategic Resource Group, New York, told SN. Flickinger said he expected the company would execute an IPO, probably in the second half of the year.

“The volume base seems solid, the advertising is compelling and branded suppliers, which were once skeptical, are now supportive,” he said.