If you ask each member of the Fallucca family whether they are a supporter of family business or not, you’re going to get very different answers.
For three generations now, the Fallucca family has operated and grown Milwaukee-based
Palermo Villa Inc. into one of the country’s most successful frozen food manufacturers.
Just within the past two years, the company unveiled plans for two new manufacturing sites in Jefferson and West Milwaukee, creating a total of 250 new jobs. Palermo’s, on track to have annual revenue of $1 billion by 2028, now employs more than 1,400 people.
Still,
Giacomo Fallucca, board chairman and CEO of Palermo’s, is unflinching when he says he is not a big believer in the model of family-owned and operated entities.
“Generally, in family businesses, there’s so much dysfunction among family members and I think familiarity can breed contempt,” said Giacomo.
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Palermo’s headquarters on West Canal Street.[/caption]
Palermo’s began in 1964 as an Italian bakery on Milwaukee’s East Side, founded by
Gaspare “Jack” Fallucca and his wife,
Zina Fallucca. They opened a pizzeria and restaurant in 1969 and began making frozen pizza and pizza bread in 1979 at a facility on the city’s south side.
In 2006 the company opened a new, 137,000-square-foot headquarters plant at 3301 W. Canal St. in Milwaukee’s Menomonee Valley. In 2011 the company expanded the facility to 250,000 square feet.
In 2017, the company acquired Carol Stream, Illinois-based Connie’s Naturals LLC, adding Connie’s frozen pizza to its product line. The company’s portfolio also includes the Screamin’ Sicilian Pizza, Urban Pie Pizza Co., Surfer Boy Pizza and Funky Fresh Spring Rolls brands.
In 2023, Palermo’s expanded again, moving into the 30,000-square-foot former Tyson Foods plant at 1015 Industrial Ave. in Jefferson, which had been shut down in 2021.
Giacomo took over as head of the family business in 1982. By that time, both he and his younger brother,
Angelo Fallucca, had already gained years of behind-the-scenes experience.
Giacomo began helping at his parents’ restaurant in seventh grade. He worked his way up from busboy, to dishwasher, to cook. Angelo was only in second grade at the time and Peter, the oldest of the three brothers, was more interested in academia.
“I just happened to be in the right place at the right time from an age standpoint,” said Giacomo. “My father sold the restaurant when I was 17. Angelo was 12, so it just worked out well.”
For both Giacomo and Angelo, some of their earliest memories included the East Side pizzeria.
“As a kid, our mom took us to the restaurant at seven in the morning,” said Angelo, who now serves as president at Palermo’s. “We’d start by making dough, and then we used to make the sauce, and then the lasagna and cannoli shells.”
The restaurant’s parking lot and a nearby library served as Angelo and Giacomo’s version of a playground when there was spare time.
For both boys, there was never a thought that they’d work anywhere besides the family business. As Palermo’s grew and their parents took a step back from the restaurant, selling the original pizzeria in 1979 to establish the frozen pizza company, it was a natural progression for Giacomo, and then Angelo, to add to their existing responsibilities.
“There was always this thought that I’d be in the family business forever,” said Angelo. “My father had an exit strategy very early on. He said, this is your business, and I’m going to leave this up to you.”
Angelo takes a more neutral stance when it comes to the family business model. As his son and daughter begin considering what their future careers might look like, Angelo sees the potential pitfalls of having so many family members working together. Still, he believes a family business can be successful.
“I don’t want to hurt (my kids’) feelings, so I know I’m going to back off a little bit,” said Angelo. “I’m not anti-family business. I think it’s just something that you have to do right.”
Building goodwill in family business
When Palermo’s first formed a board of directors nearly 25 years ago, the late board member and family business adviser Walter Winding gave Giacomo a piece of advice he’s never forgotten.
“(Winding) would have horror stories (about family businesses),” said Giacomo. “He said one of the most important things you can do is build underlying goodwill with your family.”
Building goodwill can be as simple as being inclusive, being transparent and being respectful to fellow family members in the business. Little actions add up, Giacomo explained.
The way discussions and disagreements are handled can also help build goodwill. While it’s easy to be prideful, the Falluccas have always put the interest of the company first, said Angelo.
“We don’t always get it right, but I think for the most part, we make it work,” said Angelo.
Each Fallucca has maintained their unique leadership style but learned to be “hands off” when it comes to certain areas of the company. This allows each family member to run their respective segments. Large decisions are still discussed among the entire family.
“We don’t really treat (Palermo’s) as a family business, but more like we’re privately held,” said Angelo.
Giacomo also believes working with family can cloud a person’s judgement and says some distance in a business setting is ideal.
“I believe in any business, someone has to be in charge, and someone has to call the shots at the end of the day,” said Giacomo. “That’s where it ends, and that was my responsibility.”
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Fallucca's playing to their strengths
Growing up in the family business, Angelo said their late father taught them not to place importance on what their position was.
“We all kind of naturally fell into our own area of expertise,” he explained.
While Giacomo focused more on the sales and administrative side of the business, Angelo was more on the manufacturing and operations side.
They played to their own strengths in those earlier years. Now, the third generation of Falluccas working at Palermo’s looks to do the same.
Giacomo’s two sons,
Jasper Fallucca and
Nick Fallucca, each have prominent positions within the company. Much like their father and uncle, they began working for the company in their youth.
Jasper, director of business development at Palermo’s, began working for the company in high school. At 16, he started running booths at local events like Wisconsin State Fair, and every day presented a new challenge.
“It was dealing with a lot of adults and you’d have to stand firm and have a lot of tough conversations,” said Jasper. “It was a lot of problem solving. It was a really great baptism by fire of what a business is.”
Nick, chief product and innovation officer, also grew up working the Palermo’s booths and gradually began to do “more and more” within the business.
“It was kind of all I knew,” he said.
He learned a touch of everything in those early years: management skills, how to order inventory, event planning, customer service and more.
Nick never had the intention of joining Palermo’s. He aspired to go to culinary school, but he eventually decided a business degree would serve him better. As his family needed more help with tasks ranging from marketing and sales to manning the pizzeria, he slowly became more engrained in the business.
“I grew into my role by doing a whole bunch of needed activities,” said Nick. “I’ve been here since.”
His love for food naturally tied to the product development side of the business. During the time he spent working in sales, he had to learn what makes a product work and how different pizzas reacted in varying environments.
“I’ve had different roles, but I’ve always (been part of) research and development,” said Nick. “That’s probably my number one niche, along with general innovation.”
Jasper didn’t have immediate plans to join his family’s company. Instead, he ended up studying finance and was working in Manhattan up until the COVID-19 pandemic.
“Especially being early on in my career, not being in the office for two years was not something I wanted to do,” said Jasper.
Luckily, there were some ongoing projects at Palermo’s that allowed him to get into the business. One of those projects was the acquisition of the Funky Fresh Spring Rolls brand in 2022.
Both Jasper and Nick echo the sentiment that the business can only work if each family member takes a step back, stops themselves from micromanaging, and owns their strengths.
Having a shared vision and goals has also allowed the Fallucca family to keep putting the company first.
“I think that’s really important, because if you go into a business with your family … it’s tore a lot of families apart,” said Jasper.
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Palermo’s new production plant under construction in West Milwaukee.[/caption]
Palermo's latest innovations
Palermo’s latest expansion project, a new 200,000-square-foot production facility in West Milwaukee, is scheduled to begin production in July. The 20-acre parcel was formerly the site of the Froedtert Malt Corp. plant, which was last operated by Malteurop until it was shut down in January 2022.
Core to the new Palermo’s facility is proprietary manufacturing equipment that was flown in from Italy. Palermo’s is the only company in North America that has this specialized equipment, which creates a high-hydration dough that ferments over a 24-hour period. This process breaks down the gluten in dough to provide an airier, lighter and crispier crust.
The Falluccas sourced this specialized equipment during their travels overseas. The family travels to Italy several times a year for both business and leisure. They also occasionally make trips to other food-centric destinations, including Tokyo and Mexico City.
“We saw this Roman style of pizza, this street food, and we fell in love,” said Nick. “We loved its lightness and airiness and crispiness, and the ability to digest it better.”
When the family realized they couldn’t incorporate this new equipment into one of their existing facilities, they decided it was time to construct a new one.
The specialized dough will eventually be used to create a high-fermentation, wood-fired pizza. A final product is still being worked out, and Palermo’s plans to make a formal product announcement by the end of the year.
“We have a product that we assume will be the (final) product, but until we get in the facility and have our chefs and food scientists start experimenting with what this technology can do, we won’t know,” said Nick.
Palermo’s had a team of employees traveling back and forth to Italy over the past year to train on the new equipment.
Once it’s fully running, the West Milwaukee plant will produce 50 million pounds of product, both dough and pizzas, annually. The West Milwaukee plant will make pizzas in a variety of shapes and sizes.
One large production line will make dough. Another will place toppings on the pizza. The West Milwaukee site will also support Palermo’s recently launched food service business. The company plans to provide specialized dough, crust and pizzas to clients like universities and sports venues.
“Our lines are specially designed (in Milwaukee) to make a 12-inch pizza that goes in the grocery store,” said Nick. “At the other facility, we’ll be able to do different things, whether the product goes to restaurants, or elsewhere.”
The company will review the possibility of an addition in West Milwaukee within the next two to three years.
Expanding Palermo's product portfolio
Acquiring a majority stake in
Funky Fresh Spring Rolls was a pivotal moment for Palermo’s expanding its frozen foods business.
Funky Fresh Spring Rolls was founded in Milwaukee in 2013 by
TrueMan McGee. The brand partnered with Palermo Villa Inc. in 2022 to expand its reach.
After taking a step back from a 150-store test market in 2023, the Funky Fresh team took time to refine product lines and packaging based on consumer feedback. Funky Fresh officially returned to stores last August and is now in 400 stores nationally.
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TrueMan McGee[/caption]
McGee knew from the moment he met Giacomo in 2018, as he served as a moderator during a food business panel, that he wanted to work with him.
“(Giacomo) reminds me of myself,” said McGee. “He’s energetic, and he’s such a big dreamer as well.”
Now, he says his relationship with Jasper, who heads up the partnership between the two brands, is just as strong.
“We work together daily. (Jasper) is like my new little brother,” said McGee. “They say it’s a family of brands and they really treat you like family.”
Jasper says the partnership between Palermo’s and Funky Fresh is “exactly where we planned it to be.”
After decreasing cost by nearly 40%, introducing a smaller packing format and swapping out the co-manufacturer for Funky Fresh, the team is now focused on bolstering “consumer adoption.”
“It’s so impactful when someone really buys into TrueMan’s story,” said Jasper. “They want him to succeed, which allows us to focus on what we do really well: the back-end logistics of how to make it, distribute it, sell it and market it.”
The Funky Fresh partnership is certainly not the last frozen food offering Palermo’s is looking to add to its portfolio.
“We’re exploring a variety of platforms throughout the grocery store, outside of frozen (foods),” said Giacomo.
Cheez-It, Stranger Things pizza partnerships
As Palermo’s looks to continue growing its brand exposure, the company is constantly pursuing a variety of licensing agreements with well-known companies. Palermo’s brainstorms 50 different innovations each year.
A noteworthy licensing partnership for the brand was announced back in 2022, when Palermo’s partnered with Netflix and Walmart to bring Surfer Boy Pizza, featured in the hit Netflix show “Stranger Things,” to life.
In the past, Palermo’s also considered partnerships with Johnsonville and Leinenkugel’s, but those projects were scrapped due to complications that arose during the pandemic.
The company’s latest licensing partnerships have led to two new frozen pizza lineups. The first line includes four pizzas made with Ragú pasta sauce. The second is a line of three pizzas that feature Cheez-It flavored crust.
Each product took more than a year to develop. Palermo’s even invested in new tooling so the company could manufacture the Cheez-It crust in the brand’s iconic square shape.
“Being able to leverage the brand assets that Ragú and Cheez-It has is pretty incredible,” said Jasper.
While companies often do “gimmicky” collaborations to get consumers to try a new product, Jasper said these new pizzas were designed to be a repeat purchase.
“They’re really great products at the end of the day,” he said.
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Succession planning in family business
Citing the family’s desire to run Palermo’s like any other large, private corporation, Giacomo explained the company does not have a typical succession plan in place.
Instead, the family has opted to craft an overall strategic plan. Regardless of who is next in line to lead the business, the next several years are mapped out.
“It’s a business plan versus a family succession plan,” said Giacomo. “Whoever the best candidate is to lead the company might not necessarily be a family member.”
The time to make that decision isn’t soon approaching. Both Giacomo and Angelo expressed a desire to stay actively involved at Palermo’s through the coming years.
Although nearing retirement age, Angelo says he has not yet thought about stepping down. When his children enter the later stages of adulthood, there will come a point in time that he’ll want to spend more time with them. In the meantime, he says his wisdom is still needed at Palermo’s.
“I see myself as being a counselor to the business,” said Angelo. “There are certain things that I know because I’ve been around for so long. I feel I add value in that way.”
Being part of a family business affords him the luxury of having flexibility when it comes to retirement, he added.
Regardless of who makes up the Palermo’s C-suite in the future, each family member has been taught the decision is not personal.
Giacomo likened the sentiment to a favorite scene in “The Godfather,” when the character Michael Corleone accuses Hyman Roth of orchestrating a hit.
“Hyman Roth proceeds to tell Michael, ‘Look, when you killed so-and-so, I let it go, because it’s not personal, it’s business,’” said Giacomo. “This is the business we’ve chosen.”
