Milwaukee-based Kangaroo Brands Inc., a manufacturer of pre-sliced pita breads, is expanding. By spring 2007, the company expects to have more than doubled its capacity and number of employees.
At the same time, Kangaroo is rolling out two new product lines – ready-to-eat omelet sandwiches in pitas and flavored pita chips. Kangaroo executives believe those products, in particular the breakfast sandwiches, have huge growth potential.
Although the new products are still being introduced, they’re already lifting Kangaroo’s impressive sales growth. The company has averaged double-digit growth over the past seven years and expects more than 20-percent growth this year.
"We expect 40- to 50-percent revenue growth in 2007," said George Kashou, co-owner and vice president of sales and marketing. "2008 will be in the 30- to 40-percent range."
Depending on sales increases, Kangaroo may need to hire an additional 100 employees for the expanded facility, which would double the company’s current payroll.
The sandwiches are currently made in the firm’s 55,000-square-foot facility at 7620 N. 81st St., Milwaukee, where it makes its pita bread.
The company has been at its current location since it was founded in 1979. The building has been expanded three times.
"We’re out of land here," he said.
So, Kangaroo recently purchased a 16,000-square-foot plant at 8222 N. Granville Woods Road, Milwaukee, a former bagel factory. The facility sits on a five-acre site.
The Granveille Woods building has been gutted, and Kangaroo officials are busy designing a new production line for pita chips. Because there are relatively few pita makers, about 80 percent of Kangaroo’s equipment is custom made by co-owner John Kashou and other employees.
Production at the new facility is expected to begin by September. Including the new machinery and improvements there, the company will have spent about $1.2 million for the expansion, George Kashou said.
When the new facility is opened this fall, Kangaroo will hire 15 to 20 new employees, Kashou said.
Once the new pita chip-producing facility is open, Kangaroo will begin a 70,000-square-foot expansion at the facility, bringing it up to 86,000 square feet in total space. The space occupied by the $2 million to $3 million expansion will make the company’s breakfast sandwiches and will include a large freezer unit to store the sandwiches before they’re shipped.
The original facility currently has two pita bread-making lines and one breakfast sandwich line. When the new facility is completed, Kangaroo will install a third pita-making line at the original facility, Kashou said.
Kangaroo is currently selling the pita omelets to some supermarkets and food service organizations. Because both the pitas and omelets use all-natural ingredients, they have been positioned within the organic and natural frozen foods sections in supermarkets, Kashou said.
"That is the fastest-growing segment of the grocery store," he said. "And unlike other frozen sandwiches, these are the ideal hand-held healthy sandwich. There’s no grease or oil in it, and they’re delicious."
Continental Airlines has started serving the Kangaroo sandwiches on morning flights, Kashou said. Some convenience stores have started carrying the sandwiches. In those stores, the sandwiches are pre-heated at the store and are placed in the ready-to-eat hot food cases.
The company’s pita chips use sunflower oil and natural flavorings, which not only make the chips taste good, but also make them a healthy choice. They’re also baked instead of traditional fried potato and corn chips.
Frito-Lay recently purchased an existing pita chip maker on the East Coast. The entry of a food giant like Frito-Lay into the pita chip market is good news, Kashou said, because they will be able to expose more people to the product.
"They will help to grow the category and open the door for other companies that offer a better product at a better price," he said.
Kashou and other Kangaroo management feel confident about their company’s prospects in the chip category because Kangaroo is the only pita chip maker that makes its own bread.
Kangaroo will increase its marketing efforts of the pita chips to retail consumers later this year, when the pita chips begin full scale production.
The company has already started marketing its breakfast sandwiches to convenience stores, supermarkets and food vendors. It will increase marketing to consumers as distribution of the product widens, Kashou said.
"We’re the No. 1 retail brand in the pita category," he said. "As we gain distribution, we will look at accelerated marketing efforts. As it is, we now do more consumer marketing than all other (pita makers)."
Kangaroo Brands Inc.
Address: 7620 N. 81st St., Milwaukee
Employees: 100
Web site: www.kangaroobrands.com
Industry: Pita bread and related product
