For the third time in five years, Milwaukee-based Klement Sausage Co. has lost a major local sponsorship deal to its rival, Sheboygan County-based Johnsonville.
It’s a curious trend for Klement’s, which was acquired in 2014, by a portfolio company of California-based Altamont Capital Partners.
The first big blow came in 2018 when the Milwaukee Brewers suddenly switched their sausage sponsorship from Klement’s to Johnsonville. The move stunned many in the community because Klement’s was long associated with the Famous Racing Sausages.
Some criticized the Brewers for not staying loyal to the hometown sausage company. But these sponsorships are bottom line business deals, and it was obvious that Johnsonville simply made an aggressive offer to the Brewers, much more lucrative than the Klement’s deal, and was an offer the team couldn’t refuse.
After losing the Brewers deal, Klement’s regrouped. Later that year the company entered into new sausage sponsorship deals with Summerfest and the Milwaukee Bucks.
But the Summerfest deal, which included the naming rights sponsorship for the Klement’s Sausage & Beer Garden stage at Henry Maier Festival Park, fell apart in late 2022 when Summerfest operator Milwaukee World Festival Inc. filed a lawsuit against Klement’s saying the company hadn’t made its $140,000 sponsorship fee payment that year. MWF said Klement’s still owed it $1 million through 2027.
Klement’s said that “the nature of the relationship” with Summerfest had changed since the deal was signed and that it wanted to negotiate its future obligations. The company claimed it was not in breach of the agreement.
In January, Klement’s and Summerfest parted ways. Then in February, Summerfest announced its new deal with Johnsonville.
Recently, the Milwaukee Bucks announced a new sponsorship deal with… Johnsonville. Notice the pattern?
Just how important are these sponsorship deals? Johnsonville is significantly larger than Klement’s and has more resources to compete for them. But the family-owned and Wisconsin-based business also appears to have a stronger desire to support local institutions than Klement’s, owned by an out-of-state private equity firm.
The fact that Klement’s Summerfest deal melted down over what seems to be a relatively small amount of money is concerning.
But the company has shown signs of growth. Earlier this year it closed its outlet store at its Chase Avenue plant saying it needed the space for “manufacturing demands and the need for more space for our growing business.”
Klement’s invested $7.5 million in upgrades to the plant in 2018, then sold it in 2021 for $12.2 million in a sale-leaseback deal, providing the company with a cash infusion.
Hopefully, despite losing major sponsorship deals to Johnsonville, Klement’s remains a growing and thriving business in Milwaukee for many years to come.
