Long-term success in the frozen pizza business isn’t just a matter of a proprietary sauce and tasty toppings.
Innovation is crucial, even in a mature market.
“Relevancy is key,” said Giacomo “Jack” Fallucca, president of Palermo Villa Inc., better known as Palermo’s Pizza. “We have to find out what products we can develop that are relevant in the minds of consumers. It’s all about what our consumers want.”
Fallucca will deliver the keynote address at the Wisconsin Manufacturing Extension Partnership’s Manufacturing Matters! conference on Feb. 25 at the Hyatt Regency Hotel in Milwaukee.
Palermo’s keeps tabs on popular trends in the restaurant industry in order to determine consumer preferences, Fallucca said.
“We buy a lot of syndicated data to see where consumers are moving to. We also listen to consumers and simply ask them what they are looking for,” he said.
Palermo’s employs a full-time innovation team led by Fallucca’s eldest son, Nick, to develop new products to meet consumer demands.
“We have a team of food scientists and chefs that work on a variety of projects ranging from really great new innovations to making an exceptionally good cheese pizza,” Giacomo Fallucca said.
Palermo’s brands include Primo Thin, Pizzeria, Screamin’ Sicilian, P’mos and Mission Pizza. In addition to the company’s popular branded products, Palermo’s is the nation’s leading producer of premium private label frozen pizza for the retail and club industries.
Palermo’s has had considerable success with one of its more recent innovations, the Screamin’ Sicilian brand, which Fallucca described as a craft frozen pizza with a proprietary crust.
“That is a brand that has really taken off,” Fallucca said.
The brand has grown from about $1 million in sales in 2013, the year of its introduction, to $75 million in 2015. Fallucca projects that Screamin’ Sicilian could generate as much as $100 million in revenue in 2016.
“We decided we’d go back to a more hand-produced, locally sourced frozen pizza with the Screamin’ Sicilian brand,” he said. “We can leverage our buying power to buy the ingredients and we could make a safe and consistent product that we have the ability to market nationally.”
Palermo’s plans to introduce a number of new products this year, he added.
“The challenge is how we continue to bring value to our customers in such a way to win in the marketplace, whether it’s private label or with the Palermo brand, and continue to win with our employees. That’s the key,” Fallucca said.
In December, Palermo’s announced the formation of another new venture, Mission Pizza Co., which launched, in part, as a means to fight hunger. For every five Mission pizzas sold, Palermo’s will donate another pizza to a local hunger-fighting organization. Palermo’s hopes to donate as many as 500,000 pizzas in the Midwest this year.
“Pizza is a food that unites people and families who may be suffering from hard times, so it’s a food we can share,” Fallucca said.
Palermo Villa’s roots date to 1964, when Fallucca’s late father, Gaspare, who came to the United States from near Palermo, Sicily, started a bakery. Gaspare Fallucca ran the bakery until 1969, when he opened Palermo Villa restaurant on Milwaukee’s East Side.
“The restaurant was very successful. He did phenomenal business,” Giacomo Fallucca said.
At peak hours, the restaurant would be packed with patrons and Gaspare Fallucca often would send trays of his homemade French bread pizzas to the bar. The popularity of the pizza led Fallucca to sell the restaurant and open a pizza production plant on Milwaukee’s south side, at first focused solely on making handmade French bread pizzas.
”I think we did about $700,000 in sales that first year,” Giacomo Fallucca said. “We sold our products to anybody and everybody. Bars, taverns, restaurants, hotels, movie theaters, hospitals, you name it. We branched out to sell frozen pizzas a year later.”
During the company’s early years in operation, it sold its products regionally, mainly to grocery stores and taverns. It later began to sell its products nationally, with much of the growth stemming from the addition of large national accounts.
“From a business standpoint, we were fumbling around as a regional company for a long time,” Fallucca said. “I’m a college dropout and my dad was a dropout, and I’m not saying that proudly, but I think we had to learn from other people.”
Palermo’s eventually appointed a board of directors to bring accountability and structure to the organization and oversee a formalized plan for growth.
”That changed our company dramatically,” said Fallucca, who has served as president since 1985. “We put our pride aside and said we don’t have all the answers so let’s bring in some folks that might have the skills. We were restaurateurs, not manufacturers. My father was a ready, shoot, aim kind of guy. He didn’t have a plan and didn’t know our competition. He just made a really good pizza. He then realized the size and the magnitude of the competitors he was going up against and I think it scared him a bit.”
Palermo’s moved into a new facility in the reborn Menomonee Valley industrial area, just east of Miller Park, in 2006. About 650 employees currently work at the site, which includes a pizza production plant and corporate offices.
“I have to say, we were the pioneers,” Fallucca said. “But some people make it seem like we were doing the city a favor by moving to the Valley. For us, it wasn’t a risk. We wanted to be in Milwaukee. We loved the location and never really had reservations about it.”
Fallucca’s keynote address will kick off the daylong Manufacturing Matters! conference, which features 18 breakout sessions in six tracks and is expected to attract more than 450 manufacturing leaders. Panelists and presenters include America Makes director Ed Morris; Janice Lemminger, executive vice president at ManpowerGroup; Mark Hogan, secretary, Wisconsin Economic Development Corp.; Water Council CEO Dean Amhaus; and many more.
For more information or to register, go to www.wmep.org/events/manufacturing-matters-conference/