East Troy’s Contract Comestibles helps Saz’s take off in retail sales
By David Niles, of SBT
Steve Sazama has been working for more than five years to build a solid retail business to complement his Saz’s restaurant and related operations in Milwaukee.
He’s encountered challenges typical of any smaller player in the consumer-oriented retail food business, including those associated with finding producers willing to handle his smaller amount of product with consistency and high quality.
Until he found out about an East Troy company that has a reputation for doing things that don’t seem quite feasible.
It’s a connection that Sazama believes is crucial to the expansion of his retail business, now that he’s reached a plateau in market development. That plateau was reached by a combination of diligence, trial-and-error, persistence, relationships and branding savvy. He himself is now part of the brand – witness his smiling face in the Sunday newspaper grocery store coupon section pages and on the packages of his products in grocery store refrigerators and freezers.
His East Troy business partners, John Delikat and Matt Nitz of Contact Comestibles, are smiling, too. Because the Saz’s connection has helped position their relatively young company for growth well beyond the work they do for Sazama and a handful of other customers.
The future is so promising that a "penthouse of pork" — as Sazama refers to is — is under construction on the upper level of the East Troy plant, a former milk condensing facility, providing dedicated space for the production of Saz’s shredded barbecue pork and chicken that is sold in grocery store "party packs."
Contract Comestibles also makes and bottles Saz’s barbecue sauces for grocery store sales, while other products — mozzarella sticks and barbecue ribs — are made elsewhere.
Delikat and Nitz are also working on a way to produce Saz’s salad dressing for bottling. And, someday, they may produce chili for the restaurateur.
And that’s how the connection between Saz’s and Contract Comestibles began.
Delikat and Nitz started their business in 1997, taking their experience from another food products company. "We decided we were going to start doing miracles for ourselves rather than for other people," Nitz recalled in a recent interview at the East Troy facility on Beulah Avenue.
Fortunately, they started with a product line, giving them immediate cash flow.
"But we knew a company isn’t built on one customer," Delikat said. "We knew we had to broaden the customer base."
A few leads went nowhere. Then their insurance agent contacted them. He had read an article about Sazama’s desires for more retail business. Delikat sent an e-mail to Kathy Koncel, sales and marketing director for Saz’s, noting that Contract Comestibles had some production time available.
The two sides talked — about chili. "The first product we talked about, chili, we haven’t even done; everything else just took off," Delikat said. "We just haven’t gotten to that chili yet."
Contact Comestibles started producing Saz’s pork and chicken in one package size, "and they just kept throwing more ideas at us," Nitz said.
Among those ideas was barbecue sauce, which another company had been making. When that plant was sold, Sazama learned the new owner wasn’t interested in batches as small as he required. He needed to find a new producer, and he turned to Delikat and Nitz.
The two were reluctant.
"We didn’t have any interest in putting in bottling equipment," Nitz said. "Working with rigid plastic bottles is completely different from packaging in bags."
And they didn’t see how it would make economic sense. "It’s kind of tough to put in a whole line of machinery for one customer’s sauce," Nitz said. But working with Sazama, they determined that it was feasible, although not terribly profitable.
So they agreed to take on the sauce project – in a slow, controlled manner. "But they wanted it about immediately," Delikat said. "So we did it."
"It was a minor miracle," Nitz added.
"They did the impossible," Sazama said of the situation. "Our goal was one year; they did it in two months."
While the sauce line might not be so profitable in the short term for Contract Comestibles, Delikat and Nitz see it as an opportunity for future business. "The equipment is now in place, opening a venue for more business," Nitz said.
Like the controlled growth of the business since its start, Delikat and Nitz want future growth to be measured. The welcome expansion, but not at the cost of lower quality.
They focus on lines that can be easily automated — for two reasons. One is the labor issue. The other is the quality issue.
Contract Comestibles currently employs eight people — four full-time and four part-time. Three to four people run production lines on any given day. It’s a staff that’s largely stayed on with the company. "We’re blessed with very little turnover; we do our darndest to take care of our employees," Nitz said.
But they don’t want too many employees. "We’re not fond of the minimum-wage concept that comes with labor-intensive lines of production, and the supervision needed for such work," Nitz added. "So we don’t want hand-intensive jobs."
"So we’re a little bit selective in the companies we’ll do work for," Delikat added. "If it doesn’t lend itself to automation, it’s not for us."
That automation not only reduces the need for labor, it also helps control quality, which pleases Sazama.
"The consistency of the product from this company is really great," Sazama said of Contract Comestibles. That high quality wasn’t always there when Sazama tried other food processors. He recalled how a former processor would provide barrels of sauce that significantly varied in weight. "So the viscosity of the sauce varied tremendously," he said. "Contract Comestibles caught that situation right away."
That’s thanks to the quality-control background of Delikat and Nitz. "We measure everything," Nitz said. "I think we have filed that companies 10 times our size keep."
Contract Comestibles also handles egg products for another firm. "When we learned they were dealing with eggs, we knew quality control wouldn’t be an issue," Sazama said.
Not only does keeping such records help ensure consistency, it also makes it a lot easier to correct a problem if something does go wrong.
"There’s definitely a lot to be said for keeping good records," Delikat said.
There’s also a lot to be said about controlling growth and about having the right mindset when selecting growth opportunities, the two owners say.
When asked why the company is doing so well, Nitz attributes the size of the company and the mindset of its management. Delikat adds that it’s because of a willingness to do things that other companies don’t want to undertake.
"They’ve been able to adjust things for us – things that other processors wouldn’t do," Sazama says.
Delikat, who had studied for a degree in electrical engineering, says the "you can’t do that" attitude seems to be too prevalent in some businesses. "By the time other businesses are saying that, I prefer to be starting to do it," he said. "There is no ‘can’t.’ It may be a matter of financial viability, but there is no ‘can’t’."
Nitz, with a chemistry degree, added: "You kind of have to look at it and find your way around the problem; to see what you can do to make it affordable."
Saz’s salad dressing is a classic case in point. Contract Comestibles is studying how to bottle it for retail sales. It’s not a matter of just making the dressing and bottling it. The problem? "Saz’s dressing is real food; it’s not a bunch of chemicals," Delikat said. "It contains real sour cream. Real eggs. Many salad dressings on store shelves really don’t have real food in them."
So they’re working on a way to keep the real ingredients and stabilize the product for shelf life.
Contract Comestibles currently leases about 15,000 square feet of space in its plant. It’s enough space to allow for growth – but regulated growth. "If we continue to add production lines at the same rate at which we’ve done, which is about one or two new lines per year, things will go well," Nitz said.
And the company will remain a processor of foods for other companies. "Contract Comestibles wouldn’t make a good brand name on a package," Nitz says. "But we’re not about having our name on a package; that’s not what we do. We’d rather do the manufacturing and figure out things for other companies. We know what our strengths and weaknesses are."
May 30, 2003 Small Business Times, Milwaukee
