With $1.8 billion in sales, Sargento continues to innovate its best-selling cheddar, mozzarella and shredded cheeses. Third-generation CEO Louie Gentine has a plan to continue its market dominance.
When introducing a new type of cheese to supermarkets, many brands spend millions developing a product without devoting much additional money to marketing. But at Sargento , as third-generation family CEO Louie Gentine explains , the company spends millions on advertising to make sure a new variety of cheddar or mozzarella is well-received.
«I don’t call them big bets because I don’t think they are,» says the 49-year-old president of Sargento, who succeeded his father in 2013. «Our opportunities are well studied. They are big investments and we have had more successes than failures.»
That strategy helped the Wisconsin-based brand maintain its position as a cheese powerhouse with $1.8 billion in annual sales.
A family business
As the company enters its 71st year, Sargento’s slice of the $14 billion U.S. cheese industry continues to grow. It is now the top-selling natural cheese brand in the U.S., a position it secured (against processed cheese products like Velveeta) over the past decade under Gentine’s tenure, as its market share grew 20% to about 13% of all cheeses sold.
Sargento remains 100% family-owned, which gave it an advantage as the cheese industry consolidated amid price pressure from private-label competitors and wild swings in the cost of milk. Including Gentine, there are a total of 60 shareholders, all of them descendants of Dolores (who died in 2012) and Leonard Gentine (who died in 1986).Forbesestimates their combined stakes are worth $1.1 billion.
Family ownership is more common in the cheese business than in other branches of the food industry, and the Gentines compete with other family dynasties, such as Leprino Foods , the Denver-based mozzarella maker of billionaire James Leprino, with $3.5 billion in estimated annual sales. There’s also Canada’s Saputo , with revenue of $12.6 billion, which is publicly traded but founded and controlled by billionaire Lino Saputo and his family.
At the top of the cheese pyramid is family-owned Lactalis . The world’s largest cheesemaker is based in France but has a significant dairy business in the United States as the owner of Stonyfield Organic , Siggi’s yogurt and the Kraft cheese brand , which it acquired from Kraft-Heinz for $3.2 billion in 2021. Lactalis is wholly owned by its CEO, Emmanuel Besnier , and his two brothers, whose combined worth, according to Forbes , is $43.2 billion .
Compared to these giants, Sargento is a smaller, more nimble company, with four cheese manufacturing and packaging plants in the Midwest and its own fleet of trucks, which distributes 25% of its products. It was timely. Decades ago, when the Kraft cheese brand wasn’t getting much attention from its then-parent Kraft-Heinz, Sargento seized the moment and grew its market share.
«Twenty years ago, Kraft was the big name in the business, and they left a lot of opportunity for someone like Sargento to go out there and grow,» says Richard Guggisberg , owner of Guggisberg Cheese , a $100 million, family-owned Ohio-based company that invented Baby Swiss.
What makes Sargento’s growth all the more impressive is that profits in the cheese business are typically slim. Saputo’s net profit margin this year is 1.5 percent. Its five-year average is 3.4 percent. The company won’t discuss specific numbers, but says its profits have tripled since Gentine took over.
To stay competitive and boost sales, Gentine says Sargento is one of the biggest spenders on advertising and logistics support in grocery stores compared with other cheese brands. «There’s no one else that’s innovating at the level of consistency that we’re doing, which is giving us that opportunity to increase share,» says Gentine, whose first job with his family’s company was at age 13 washing cheese delivery trucks.
Sergeant’s Story
In postwar Plymouth, Wisconsin (a town of just under 9,000 people north of Milwaukee), Leonard Gentine was an entrepreneur who owned several businesses, including a funeral home. When he decided he wanted to run a delicatessen in the late 1940s, he opened the Plymouth Cheese Counter in the Gentine Funeral Home garage.
By 1948, he had a thriving mail-order cheese business that shipped products nationwide. Soon, Gentine was prepackaging cheeses on a large scale when he and his design partner Bill Lindstedt discovered a way to vacuum-seal cheese in plastic. That industry first allowed Sargento cheese to last longer and initially gave his business a distinct advantage. Within a few years, Sargento was selling packaged sliced cheese, which instantly became a staple in grocery stores. Prepackaged shredded cheeses soon followed.
Sargento continued to grow under the guidance of Lou, Leonard’s middle son and father of Louie Gentine, who became CEO in 1981. As Louie grew, so did Sargento. He watched as his father, along with his uncles, Lee, Larry and Ed Sturzl, took the family business to new levels. After graduating from the University of Notre Dame and then Loyola for his MBA, Louie worked outside of Sargento for three years as a commercial banker in Chicago.
When he joined Sargento in 2000, Gentine started as an associate marketing manager working on the shredded cheese line. He worked his way through key departments: product, purchasing and retail. When his father retired as CEO in 2013 after 30 years, it was Louie’s turn to be Sargento’s grand cheesemaker.
In his first decade as CEO, Gentine grew Sargento by 4% each year. He accomplished this by being “really sharp on their processes and things like quality control,” while leaning on natural formulas that steered clear of a lot of processing agents and additives, says Ed Zimmerman , founder of the California-based consultancy The Food Connector , who has worked in the cheese industry for three decades. “They did a great job of making the everyday experience of eating cheese special. It’s kind of like the Champagne of cheddar. Their brand really stands for something.”
There is now more competition from Kraft under Lactalis. In March, Kraft Cheese launched its first new product since acquiring Lactalis three years ago. The » Signature Shreds » (three blends of cheddar, mozzarella and Mexican) were designed to melt better because the shreds are wider.
Meanwhile, Sargento continues to innovate, particularly in snack cheeses. Gentine expects the company to grow 5% annually over the next few years. Sargento is also becoming a long-term acquirer in the cheese industry, having purchased one of the leading string cheese brands in the U.S., Baker Cheese , in 2022 for an undisclosed amount from the fourth-generation family that had owned it for more than 100 years.
Gentine said he intends for Sargento to always remain a family business, and that extends to the companies it acquires as well as its thousands of employees. In 2006, more than 100 workers at the Sargento plant shared a $206 million Powerball jackpot, and despite the windfall, several of those lottery winners still work for the company. It’s that kind of place. About 110 employees have worked at Sargento for more than 30 years, including one who is celebrating his 60th birthday this year.
“We’ve always had a very long-term focus on our business,” reflects Gentine, “That allows us to continue to make investments and ultimately do the right thing, not only for the business, but also for our 2,600 Sargento family members.”
