Perhaps the greatest challenge to the modern-day dairy processor is staying relevant to consumers who are bombarded from every angle with new products, new ideas and new information about what or how they should eat.
Much like the vast array of narrowly focused channels one can find on their televisions, share of stomach continues to be segmented like never before, and competition is fierce. With their attention pulled every which way by work, family, technology and other responsibilities, consumers don’t want more challenges at mealtime – they want solutions.
More deftly than most processors, Wisconsin-based Sargento Foods delivers those solutions, pushing the envelope of the cheese category further and setting an example for a dairy industry striving to keep up with the times.
It is this relentless innovation in developing products people need and providing the support to use them creatively that helped Sargento earn this year’s Dairy Foods Processor of the Year award.
“We are very pleased to receive this distinction,” says Lou Gentine, chairman and chief executive officer of the $900 million privately held company. “It is possible only because of the hard work and dedication of the 1,400-plus employees who make up the Sargento family.”
Of course, when the CEO’s face is on the product, what’s inside has got to be good. And while Gentine is the public face of Sargento – from TV spots to his line drawing on the packages – he eagerly shares credit with the whole team for working together to support a brand and a legacy of quality.
“Sargento has always been about innovation to meet consumer needs,” Gentine says. “My father, Leonard, started a cut-and-wrap operation back in 1949 to provide cheese gifts for business friends to give to their customers. He noticed a particular interest in Italian-style cheeses, so he partnered with his neighbor, Joe Sartori, to sell these items in grocery stores.
“In 1958, Leonard introduced shredded cheese as a convenience to homemakers by retrofitting a pasta-cutting machine to create the shredded cheese. Today it is the largest cheese category in the dairy case. These are just a few examples of our many ‘firsts’ in the industry. Innovation is our heritage, and we continue to search for ways to improve consumers’ cheese-eating experiences, which has been key to our success.”
Always innovatingTrue, many cheese companies offer different convenience formats, but few have taken the concept as far as Sargento has.
Sargento’s lines have grown to encompass slices and shreds that include artisanal-type cheeses, regional products and ethnic blends. Just look at some of the company’s latest products: Limited Edition New York Sharp White Cheddar (shredded and sliced), Limited Edition 4-Pepper Fiesta Blend (shredded and sliced), Artisan Blends Shredded Wisconsin Sharp White Cheddar and Bistro Blends Shredded Italian Pasta Cheese.
Artisan Blends feature cheeses from regional producers, including those in Sargento’s home state; these products are doing “very well at retail,” Gentine reports. The company recently partnered with the Wisconsin Milk Marketing Board and its “chef ambassadors” to create holiday recipes using Artisan Blends that consumers can access at Sargento’s Web site. In fact, Sargento has three corporate chefs who help develop new consumer-focused uses for the company’s products.
Meanwhile, Bistro Blends combine shredded cheeses with herbs and spices to simplify home meal preparation. And last year, Sargento further broadened what it adds to its cheese blends with the Salad Finishers and Potato Finishers lines. Sold in the grocers’ produce department, the Finishers lines combine ingredients like chicken, bacon, dried fruits and herbs with shredded cheese to make consumers’ eat-at-home experience more exciting yet simple. Gentine says Finishers are “meeting retailer and consumer taste expectations.”
The diversification goes deeper. Two years ago, Sargento acquired Portionables, a producer of high-quality IQF sauces used in many national brands of frozen meals and vegetables. “We see this line as having enormous potential for food ingredients as consumers require quick meal solutions but do not want to sacrifice quality,” Gentine says.
And the winter holidays saw the return of Holiday Cheese Shapes, snack-sized cheddar and colby-jack shaped like snowflakes and Christmas trees. “Our natural sliced and snack cheeses have also grown significantly as we have led innovation in both of these important categories,” Gentine says.
In addition to network and cable TV spots, Sargento’s marketing activities often include promotions for cheese-centric foods, like “National Panini Month” last August, and partnerships with other complementary brands. The latest alliance, launched last month with a Sunday FSI, teamed Sargento Artisan Blends Parmesan shredded natural cheese with Bertolli pasta sauce in a promotion for lasagna. Each brand offered cross-couponing for the other’s product, and both companies featured recipes using both Sargento and Bertolli products on their respective Web sites.
“We have heard from numerous accounts that this kind of collaboration is a great way to promote usage of both products,” says Rob Krause, Sargento marketing manager. “This is a wonderful opportunity for Sargento Natural Cheese to align with a premium quality pasta sauce brand like Bertolli to do just that while providing consumers with a great recipe and our customers with incremental sales.”
Sargento sells to all major retail grocery chains, mass merchants and military commissaries. “We also sell to many of the top 25 food manufacturers in the United States and most of the quick-service and casual dining chains nationally,” Gentine says. “We are the largest selling brand of sliced natural cheese in the U.S. and the second-largest-selling national brand of natural shredded cheese. Our retail business is currently the largest of our divisions.”
To what does Sargento owe this success?
“We emphasize the premium quality, taste and consistency of our products to our customers and our consumers,” Gentine says. “In addition, we believe that our high level of service and response to our customer needs sets us apart from our competition. Finally, we take great pride in our innovation which first and foremost is beneficial for consumers but also importantly drives growth in the categories in which we compete.”
And one more thing sets Sargento apart, according to Gentine: “We believe that being a family-owned and operated company gives us a competitive edge. We can be more future-focused; we do not have to base our decisions on the next quarterly shareholder earnings report.”
Explore, expand, excelNot that the company is free of all shackles. “Government regulation is challenging because it greatly impacts our cost structures,” Gentine notes. “This includes dairy price supports, health care legislation and potential cap-and-trade legislation. We, of course, do our best to stay informed through multiple resources (including IDFA, GMA, IFMA, NAM, etc.) and to educate our employees about these issues. We encourage them to contact their legislators so their opinions can be counted and we do the same from a corporate perspective.”
Otherwise, little is standing in the way of Sargento’s continued growth. “We expect 2009 to finish at approximately $900 million in net sales, up slightly from 2008,” Gentine says. “We are proud of this performance, given the year-over-year changes in dairy markets and the broader challenges of the economy.”
Sargento is on track for continued and aggressive growth, and Gentine says the company will soon pass the $1 billion sales mark. “We will continue to be family-owned and operated, with [Lou’s son] Louie Gentine, who recently was appointed president and chief customer officer [upon the retirement of Bob Clouston], expected to step into the CEO role in the next few years. Two other third-generation family members – Mike McEvoy, VP of food ingredient sales, and Greg Strehlow, national accounts sales manager for foodservice – round out the current direct family involvement in the company,” he says. “We expect our product mix may change, but we will still concentrate our efforts on natural cheese and cheese-based culinary solutions.”
That means more innovation. “We believe that the dairy industry and Sargento need to continue to innovate to provide consumers with products of excellent quality. We know consumers will continue to expect new product concepts as well as better packaging, better merchandising, more flavor and greater convenience,” Gentine says. “It will probably be a combination of value-added new product concepts, enhancement of our core business offerings and acquisitions in order to meet the customer and consumer needs of each of our divisions.”
Asked to explain what makes Sargento truly unique, Gentine points to “People, Pride and Progress,” the company’s definition of its corporate culture. “We subscribe to Leonard’s philosophy of hiring good people and treating them like family,” he says. “It includes our stakeholder concept of decision-making, considering the impact on all of our stakeholders; that includes not only our stockholders but also our employees, customers, suppliers and community. We think this environment is a big part of the reason we are in the position that we are in. We have employees with long tenure, as Sargento is a fun and caring place to work where we truly share our success with all employees who contribute to that success.”
As it says right on the package, Sargento has a passion for cheese, and the company is dedicated to providing high-quality and innovative products and services. It is toward that end that Sargento continues to explore, expand and excel.
HISTORYIn the late 1870s, Plymouth had become known as the center of Wisconsin’s emerging dairy industry. Many prominent European cheese masters came to this small picturesque German community between Chicago and Green Bay because they had heard of the abundance and richness of Wisconsin produced milk.
In 1949, Leonard Gentine Sr. launched the Plymouth Cheese Counter, a deli and mail order gift house from a small retail shop in Plymouth. Gentine’s business acumen, interest in cheese and Plymouth’s tourist industry combined to make his new venture a great success. While operating the Plymouth Cheese Counter, he observed frequent repeat orders for smaller-sized packaged Italian cheeses. At the time, retail stores sold cheese only in larger, bulk sizes.
Within four short years, it became apparent that the only way to satisfy the consumer’s ever-growing demand for old-world quality cheeses was to establish a new cheese company. Sargento Cheese Co. Inc. was formed with the partnership of Joseph Sartori and Gentine, a blending of their surnames creating the new brand’s name (Sartori later sold his interest in Sargento to the Gentine family and continued his own cheesemaking business). With only a handful of products in 1953, Sargento capitalized on the demand for individually sized Italian-style products, selling packaged mozzarella, provolone and romano cheeses.
As consumers expressed added interest in convenience products, Sargento expanded the number of cheese varieties sold, and was the first company to introduce shredded and sliced natural cheeses. A crumbled blue cheese was also developed in response to increased demand for blue cheese in salad dressings. Sargento was also the first company to market blends of shredded cheese, such as pizza, taco and a line of “Bistro Blend” shredded cheeses.
In addition to new cheese products, Sargento has spearheaded other important marketing innovations. The company introduced a unique merchandising program that changed retail dairy sales displays forever. The peg-bar system displays packaged cheese at eye level, within easy reach of the consumer. Following its introduction, retailers experienced significant sales increases, and today supermarkets across the country continue to use this merchandising program.
Since July 1986, popular-sized packages of Sargento shredded cheese have included press-to-close packaging, making Sargento the first cheese marketer to include this resealable packaging feature on perishable products. In 1989, Sargento was again the first food company to incorporate the easy-open feature on resealable packages, and in 2001 introduced the first inline-applied Slide Rite zippered packaging on many shredded and snack products.
Lou Gentine was appointed chief executive officer in 1981 and, upon Leonard’s death in 1996, assumed the additional role of chairman. Lee Gentine served as president of the Consumer Products Division from 1989 to 1997, when he left to pursue an interest in local real estate development. Larry Gentine served as president of the Food Service Division from 1984 until his retirement in 2004. Both Lee and Larry remain active on the Sargento Board of Directors.
Sargento maintains its headquarters and a production facility in Plymouth, Wis.; other Sargento plants are located in Hilbert and Kiel, with a technical center in Elkhart Lake. In 2008, Sargento acquired Portionables, a company specializing in the production of high-quality individually quick-frozen sauces, with facilities in Bellingham, Wash., and North Sioux City, S.D.
Sargento Foods Inc. remains family owned and is one of the largest privately held cheese companies in the United States, employing more than 1,400 people. Sargento provides its customers with hundreds of different varieties and forms of cheese, cheese products, cheese ingredients for other food processors, appetizers and snack foods.
Sargento's OutreachSargento Foods is actively involved in far-reaching community activities. “Sharing our time, talent and treasury are key tenets to our corporate culture,” says CEO Lou Gentine. “We focus our giving to food and shelter charities, but we support many other local nonprofit organizations in which our employees are involved.”
Among the organizations Sargento supports are the following:
• Habitat for Humanity: Since 1991, Sargento has built 20 homes in inner-city Milwaukee, providing building materials and volunteer labor. Sargento employees can work at the building site up to five days each year while still receiving their regular wages.
• Hunger Task Force: In 2003, Sargento created its Touchdowns for Charity program. For each touchdown scored by the Green Bay Packers, Sargento donates $1,000 to fight hunger in southeastern Wisconsin. More recently, the company has added further contributions to Paul’s Pantry in Green Bay. Total contribution exceeds $400,000.
• United Way: Participation in the annual campaign is significant; Sargento continually increases employee participation and matching contributions.
• SECAP: Sargento encourages employee involvement in company outreaches. Sargento Employees Caring About People is a choir that performs seasonally at nursing homes. The company also organizes employee groups to serve at a food site in the Milwaukee area.
Plymouth, Wis. – Headquarters and manufacturing (slices, shreds, blends, snacks)
Elkhart Lake, Wis. – Technical center
Kiel, Wis. – Manufacturing (shreds, snacks, appetizers)
Hilbert, Wis. – Manufacturing (process cheese and sauces)
North Sioux City, S.D. – Manufacturing (sauces)
Bellingham, Wash. – Manufacturing (sauces)
Capital improvements of the past two years:
• Plymouth – Expanded distribution facilities, updated office facilities.
• Kiel – Increased production capacity with an expansion of manufacturing, cooler storage and warehouse space.
• Hilbert – Shipping and receiving dock, material handling areas, blast freezing, refrigerated storage.
AT a glance
Sargento Foods Inc.
Headquarters: Plymouth, Wis.
Plant locations: 6
Products made: Natural sliced, shredded, cubed and snack cheeses, shredded blends, appetizers, sauces, ingredient solutions.
Annual sales: $900 million
Corporate structure: Consumer Products Division markets natural shredded cheese, (including Artisan Blends, Bistro Blends, Limited Edition and Finishers as well as Classic shredded varieties) natural sliced cheese, (including Deli Style and Limited Edition) natural cheese snacks (including string, sticks, shapes and Limited Edition).
Food Service Division markets custom-cut natural cheeses (including shreds and slices) for national chain restaurant customers, battered and breaded cheese appetizers, and sauces.
Food Ingredients Division markets portion-controlled, custom-cut natural and process cheese and sauces for major food manufacturers.
Culinary Solutions Division markets complete meals to delis in traditional grocery, club and convenience chains.