Say cheese! Inside Sargento Foods’ evolution into a $2B dairy giant

In the challenging and often slow-growing food space, Sargento Foods’ sustained period of success hasn’t gone unnoticed.

The family-owned cheese maker with nearly $2 billion in sales each year is not only profitable but posts annual growth of between 3% and 7% — eye-popping figures that have captured the attention of other food makers and investors interested in acquiring the 71-year-old business. But today, most suitors have just stopped calling. 

“We used to be approached, and I think once that starts to get around that we continually say, ‘No, no,’ you don’t get approached quite as often,” Louie Gentine, the company’s CEO, said in an interview. “Certainly, we are an attractive company. We’re growing. We have a great brand. But it really is an easy answer for me to respond to.”

Sargento was founded in 1953 by Gentine’s grandfather who previously ran a funeral home in Plymouth, Wisconsin — an hour north of Milwaukee — before he found his calling in cheese. 

Since then, Sargento has not only been known for its cheese but some of the innovations tied to its products that are now commonplace within the industry.

Two years after its founding, Sargento developed a way to vacuum seal cheese in plastic. This not only allowed larger blocks of the product to last longer in the marketplace but eventually led to the sale of sliced cheese.

Sargento also claims to have introduced prepackaged shredded cheese in 1958. In addition, it brought the peg bar display to dairy aisles in the late 1960s, changing the way Americans shopped for cheese by making the bags more visible and aesthetically appealing.

The biggest success for the seven-decades old business, however, came more recently in 2015 when Sargento debuted its popular Balanced Breaks line that combined its cheeses with nuts, banana chips, Ritz crackers and Chips Ahoy!, among other items, into a portable offering. The innovation enabled the Wisconsin company to further benefit from surging consumer interest in snacking. 

“It’s a huge part of the success of the company. And it’s been a significant driver of our revenue growth over the many, many years,” Gentine said of Sargento’s innovation prowess. “If we’re not innovating and bringing new things and new items to the consumer, it gives retailers an opportunity to ask, ‘Why do I need Sargento in my dairy case?’ and I don’t want that question to ever come up.”

Even before becoming CEO, Gentine was intimately familiar with Sargento. As a teenager, he started washing trucks at the company and doing other tasks on the production floor.

Gentine left to attend college at Notre Dame and then went into commercial banking for three years — Sargento requires family members who want to come back to get experience outside the company — before applying for an open position as an associate brand manager in 2000. He hasn’t left.

Gentine gradually worked his way up in the company after amassing experience across all facets of the business, including marketing, procurement, and production. He eventually ran the company’s retail division, the largest at Sargento, and in 2013 became CEO after his dad retired.

The 49-year-old executive said he never considered returning to Sargento, or even taking over the top post, but he eventually felt a desire to carry on his grandfather’s vision of growing the business and doing right by its employees, customers, community and suppliers. 

Sargento’s history has been defined entirely by cheese, but Gentine said he is challenging his team to take the company’s success in innovation and brand building to other dairy categories, or an entirely new section of the grocery store, in the next two or three years. 

“Part of our success in innovation is just how we listen to the consumer,” Gentine said. “If you take that approach in other categories throughout the grocery store, not just in the dairy case, we potentially would have an ability to create some interesting new products to meet those demands of those consumers.”