September 14, 2008
Sargento Moves Past Dairy Aisle Cheese Marketer Puts New ‘Finishers’ for Salads in the Produce Section
By DORIS HAJEWSKI
Plymouth -- After years of hanging out in the dairy aisle, Sargento cheeses are showing up alongside heads of lettuce at the other end of the supermarket.
"It's our first entry outside the dairy case," said Louie Gentine, president of Sargento's consumer products division and grandson of the founder of the cheese marketing business.
The rollout this spring of Salad Finishers and Potato Finishers - - mixtures of cheese, nuts, sauces and chicken -- marks another innovation for a family-owned company that has grown by finding new ways to package and sell cheese.
Sargento has high hopes for the new Finishers lines, which they see as a growth vehicle at a time when consumers are cutting back on restaurants meals.
"The produce aisle is the most-shopped part of the store," Gentine noted.
But even before the launch, Sargento has been on a fast growth path, with sales increasing from $600 million in 2005 to $700 million in 2007.
Sargento has worked in recent years to position the brand as a premium product that doesn't compete with store brands, said Chip Schuman, vice president of marketing. Research from the NPD Group's food experts in Chicago shows that 34% of all food sold in grocery stores now is private label, compared with 29% 10 years ago.
But despite the increase in private label food sales, Sargento hasn't lost any distribution, Gentine said.
Schuman said Sargento's positioning as a premium brand makes it compatible with private labels in the grocery store. Consumers who decide to save money by buying a store brand are more likely to be switching away from brands positioned in the middle, he said. Sargento's biggest competitor, Kraft, is in that mid-range.
Sargento has formed relationships in recent years with several Wisconsin makers of artisan cheeses to introduce a new line of Artisan blends, offering combinations such as mozzarella/provolone or Parmesan Romano. The company's Bistro blends are designed for meals featuring Mexican, Italian or American cuisine.
"It helps consumers replicate a restaurant experience," Schuman said.
In addition to the array of cheeses Sargento produces for supermarkets, the company also operates a food service division that produces products for restaurants and caterers, and an ingredients division that sells products to food companies.
The company has been expanding both its work force and its facilities to handle the growth of all its segments. Sargento will get $3 million in Enterprise Development Zone tax credits and $1.25 million in additional state assistance to help with expansions at its plants in Plymouth, Hilbert and Kiel.
The company expects to add 500 jobs over five years at the three plants. Since January, Sargento has hired 78 people, bringing its total work force to about 1,300.
The plant at Kiel, which produces snacks, shredded cheese and frozen appetizers is adding 60,000 square feet, while the Hilbert facility, which makes sauces and pasteurized cheese products will grow by 50,000 square feet. The addition, to be completed this month, will enhance the plant's freezing and chilling capabilities.
The Finishers launch this spring was the largest product introduction in Sargento's history, because it involves the use of other foods in addition to cheese, and it takes the product to another area of the store, said Barbara Gannon, vice president of corporate and marketing communications. Sargento has increased its advertising to support the launch, with TV, coupons and promotional events in stores, but won't disclose specifics on spending.
The effort to launch the Finishers involved persuading grocers to make room for it in the produce case. The company's pitch to get the space told grocers that they'd sell more vegetables by putting the Finishers in the produce aisle, Gentine said.
"It seems smart to go down that path," said Betsy Brown, general manager at the Milwaukee office of Cramer-Krasselt, a marketing communications firm with long experience in branded packaged goods. "It's important to have really good placement in the store."
Now, four months after the launch, Sargento's Finishers products are in 51% of grocery stores across the U.S., Gentine said. That level of penetration is good for the amount of time the product has been on the market, he added.
Trend toward convenience
Harry Balzer, vice president of NPD Group, believes that consumers' extreme sensitivity to price, which is pushing more shoppers to private brands, will moderate as the economy improves. But he doesn't expect the trend toward convenience foods to change.
"In this moment, money is of great concern to us," he said. "We want lower prices, but we want products that don't require us to cook."
But for food manufacturers in the long term, products that make meal preparation easier are a good bet in the 21st century, Balzer said.
Sargento traces its roots to a cheese counter shop in the back of a funeral home in Plymouth in 1949. Sargento Cheese Co. was founded in 1953 by Leonard Gentine Sr. and Joseph Sartori. The Gentine family bought Sartori's stock in 1965, and the company has been owned by the family since.
Sargento stopped making cheese in the 1970s in order to concentrate on product innovation and marketing. The company buys cheese in bulk from about 60 cheesemakers, many in Wisconsin, but also from companies in California, Vermont and Italy.
Sargento will be honored at the Deloitte 75 event Oct. 2 for its commitment to its people. In making the award, Deloitte considered the health and wellness centers that Sargento operates at two of its plants and employee volunteer participation in a number of community charities and outreach programs.
Deloitte & Touche will honor the Wisconsin 75 largest private companies and recognize five companies as Distinguished Performers on Oct. 2 at Pier Wisconsin. Timothy E. Hoeksema, chairman, president and CEO of Midwest Airlines, will be the keynote speaker. For information on the Wisconsin 75, visit www.deloitte.com/us/ wisconsin75.
SARGENTO INC. AT A GLANCE
Founded: 1953 in Plymouth as Sargento Cheese Co. by Leonard Gentine Sr. and Joseph Sartori. Forerunner business was a cheese counter in the back of a funeral home that opened in 1949.
Owners: Members of the Gentine family. Sartori's stock was sold to the Gentines in 1965.
Products: Packaged cheese sold to grocers; cheese sold as ingredients to other food companies; cheese sold in bulk and in portions to food service customers.
Annual sales: $700 million
Employees: 1,300 at four facilities in Wisconsin: the Plymouth headquarters and three other plants at Kiel, Hilbert and Elkhart Lake.
Little known fact: Sargento does not make cheese. The company buys cheese from 60 cheesemakers, mostly in Wisconsin.
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