Southeastern Wisconsin has long been a leader in the world of manufacturing. That reputation might conjure images of machinery and tools. But nine percent of the items manufactured here are food products.
There are more than 250 food and beverage factories in southeastern Wisconsin, and the economic development group, the M7, estimates that those companies employ more than 14,000 workers and generate nearly $600 million in annual salaries. In this installment of “Project Milwaukee: What’s on our Plate?” WUWM’s Marti Mikkelson takes us to several operations that have been growing.
Workers in our region of the state produce everything from candy to meat to coffee. There are even companies that specialize in spices and sauces. Of course, being the dairy state, cheese is on the list, so we traveled 50 miles north to Plymouth to visit Sargento Foods, a huge cheese producer.
More than 100 workers are on the plant floor today, weighing and packaging cheese slices. Vickie Mayer is sealing boxes of the product toward the end of the line and loading them onto palettes for shipment to stores. She’s worked here 32 years, saying she enjoys the decent wages and good care the company takes of its workers.
“If something happens to your family, yourself, they’ll normally let you off, they’ll do stuff like that, they really accommodate you,” Mayer says.
Two men named Sartori and Gentine started the company in 1953.
Chief Operations Office Mark Rhyan says it’s been growing ever since, even in the midst of the recession.
“We have a little more than 1,400 employees working for the company nationwide today. Roughly 1,200 of them work in Wisconsin. We’re hiring folks to work in our production facilities, in our distribution facility and certainly all the way up into executive and professional positions,” Rhyan says.
Sargento is one of Sheboygan County’s largest employers, averaging $1 billion per year in sales. The company ships its cheese products throughout the country and even into Canada and Mexico. Rhyan says the business has grown so fast that it recently enlarged its distribution center and hopes to break ground soon on a three story office building.
“All of those things put all sorts of people to work, architects, designers, engineers, construction companies, equipment companies,” Rhyan says.
Rhyan says state and federal tax credits have helped the company grow. But cheese is also a popular product. One company that uses plenty of it is Palermo’s Pizza located in Milwaukee’s Menomonee Valley. Vice President of Marketing, Laurie Falluca, says Palermo’s is the fastest growing pizza manufacturer in the country.
“Most people are looking at pizza as a real affordable alternative to a large meal going out. It’s a great family meal. You can make a salad and serve a pizza and feel really good about serving that to your family,” Falluca says.”
Falluca says sales have exploded during the recession, so Palermo’s has doubled its workforce to 400 employees.
“This is where the taste testing happens…”
We’re entering the kitchen, where Corporate Chef Dax Schaefer has just pulled a margherita pizza from the oven. The taste of cheese, garlic and diced tomatoes is a hit with customers and has become one of Palermo’s signature brands. Schaefer says this is just one of 20 pieces of pizza he samples each day, to make sure the product is high-quality.
“Basically I get paid to eat and play with food. It’s a pretty great job,” Schaefer says.
Schaefer has worked at Palermo’s for eight years and lives in Milwaukee. Marketing Vice President Falluca says that’s not unusual.
“The employees we have working here, the majority are coming right from this area,” Falluca says.
Falluca says the company also purchases much of its cheese and meat from Wisconsin, benefitting the greater economy. She says Palermo’s sales are expected to top $150 million this year, and like Sargento, the company plans to break ground on an expansion and create dozens of new jobs in the foreseeable future.
Another company that has grown is the El Rey grocery chain. It now has six stores in the Milwaukee area and 400 employees. El Rey also operates a food factory on Milwaukee’s south side. That’s where I meet co-owner Ernesto Villareal, Jr.
“What we do here, we make corn tortillas and we also make tamales. My parents came from Mexico and they couldn’t really find Mexican goods or Mexican tortillas. They decided to make their own and it’s grown since then,” Villareal says.
About 50 workers are counting and packaging tortillas as they roll off the production line. They’ll be shipped to grocery stores and restaurants in the region. Villareal says the company has experienced a slight drop in sales to restaurants because fewer people have been eating out due to the recession. So he says for now, El Rey is resting while it decides its next move, and watching other factors that could impact business, such as water prices. Water is a huge ingredient in food manufacturing.
“About 40 percent of corn tortillas are water, so if water doubles, triples or quadruples, that’s definitely going to affect us,” Villareal says.
Villareal says the company did take advantage of tax incentives to build a new store on 16th street. Tax breaks are one way to ensure that local food manufacturing grows, according to Shelley Jurewicz of the Milwaukee 7 economic strategy group. It recently studied the food industry’s potential here.
“And we said yeah, it truly is a sweet spot for us. We should be competing pretty aggressively for this industry, Jurewicz says.
Jurewicz says the M7 has identified several areas that could expand by 20 percent over the next few years. They include organic and locally-grown foods, along with the production of food ingredients.