Big Business Freezes Out New York Ice Company Natuzzi Brothers has been selling ice since 1959, but it's having trouble expanding because three big companies now control almost half of the wholesale ice market.
NPR logo

Big Business Freezes Out New York Ice Company

  • Download
  • <iframe src="https://www.npr.org/player/embed/138818887/139696608" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Big Business Freezes Out New York Ice Company

Big Business Freezes Out New York Ice Company

  • Download
  • <iframe src="https://www.npr.org/player/embed/138818887/139696608" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

DAVID GREENE, Host:

Beth Fertig of member station WNYC reports.

BETH FERTIG: Ice is just frozen water, right? Well, not if you're John Natuzzi, Jr.

(SOUNDBITE OF MACHINERY)

JOHN NATUZZI: It is a luxury, because our ice is crystal clear and it's, it's a premium product in my eyes.

FERTIG: Nearby, tall blue cylindrical tanks are freezing purified city tap water. The ice is chopped up while still in the tanks and then sent to a bagging machine.

(SOUNDBITE OF MACHINERY)

FERTIG: Here on a loading dock at JFK airport, workers are hauling Natuzzi's ice out of freezers onto catering trucks. The ice will be used by thirsty JetBlue passengers.

M: It's close to, I'd say, about five percent of our business. They bring in the revenue to say the least.

FERTIG: At a Waldbaum's supermarket on Long Island, Natuzzi points to a freezer filled with ice made by a big Canadian competitor, Arctic Glacier.

M: Most of the products now are outsourced and coming from out of state and coming from bigger organizations. And it's really not beneficial for any small business, because they're not able to do business within the community.

FERTIG: In the past 15 years, the number of ice wholesalers like Natuzzi Brothers has shrunk from around 3000 to just around 500, according to the International Packaged Ice Association. Executive director Jane McEwan says that's because chain stores like Walmart don't want multiple vendors.

M: When they went to consolidated purchasing, it caused a lot of the wholesale ice producers to lose their local Walmarts as a customer.

FERTIG: McEwan says almost half of the wholesale ice market is now controlled by three big companies. They're so dominant they've been investigated by antitrust regulators for price fixing - and two of the companies paid settlements. This level of consolidation is unusual, says Awi Federgruen, a professor at Columbia Business School in New York. That's partly due to the nature of the product.

AWI FEDERGRUEN: Relatively speaking, as you can imagine, a product like packaged ice - how much of a difference really could there be between one type of packaged ice and the other?

FERTIG: After growing up in the ice industry, John Natuzzi appears pretty cool about the hard road ahead. He says ice is something people will always need. So he's trying to increase business with existing customers, while also seeking out new ones.

M: We've partnered with some ice cream distributors and they're able to utilize their networks. And it's working well for us. You know, you've got to be creative nowadays.

FERTIG: Still, he says he can't even think of passing his family's company on to a fifth generation - if there is one someday.

M: I wouldn't imagine passing this along to anybody at the moment, given the state of the economy. You know, there's a lot of different things out there that we need to really put under our belt before I would consider doing something like that.

FERTIG: For NPR News, I'm Beth Fertig in New York.

(SOUNDBITE OF MUSIC)

GREENE: You're listening to MORNING EDITION from NPR News.

Copyright © 2011 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.