The growth of Palermo Villa Inc. — and its plans for a new pizza plant in Jefferson — go beyond the popularity of its newest brand Surfer Boy based on the popular sci-fi horror series “Stranger Things,” chairman and CEO Giacomo Fallucca said in an exclusive interview with the Milwaukee Business Journal.
Fallucca discussed the family-owned company’s growth and extending production beyond its headquarters plant on Canal Street in Milwaukee’s Menomonee River valley. Four varieties of Surfer Boy Pizza are available at Walmart for $6.98 with retro 1980s packaging commemorating the pizzeria in the Netflix series.
Palermo Villa announced Feb. 9 expanding production with a new location in Jefferson — about 50 miles west of the company’s existing plant. The expansion will create more than 200 new jobs both in Jefferson and in Milwaukee, the company said.
How have you achieved this kind of growth — new product lines, new markets?
“The growth is organic. Number one, it’s the growth of our brands. Our brands are outperforming the marketplace. It’s just the innovation of the brands and growing the variety of the brands. We’re in like every retailer in the country.
“I give credit to our entire team. We’ve been able to execute so well in the challenging market of supply chain issues and labor. So as a result, customers are coming to us because they know we can execute against their needs. There’s growth in that way as well.”
Has any particular brand or brand extension been a home run for you?
“Screamin’ Sicilian is one of our best-performing brands. The new one — Surfer Boy — has also performed very well. That’s our newest brand. It’s taken from the movie ‘Stranger Things’ on Netflix.”
Do you have other products at Walmart? Has that been a big driver?
“Walmart is a large customer for us, but the fact is they have a lot of stores throughout the country. So, when they take on a new variety or a new flavor like Surfer Boy, it does add a significant amount of volume, of course.”
Has the growth been gradual — or a hockey stick?
“It has been gradual. We have been working on creative scheduling here at our Canal Street plant. We are utilizing a couple other manufacturers. We design the product, develop the product, we manage the production of the product. So that’s also helped.”
When did you start looking for a new facility?
“We have been working on looking for another facility since about nine months ago.”
When you get this new facility up and running will you stop outsourcing some of your production?
“We will still need all that outsourced production. What this is going to do is alleviate some of the inefficiencies at Canal. We’re still going to be producing the same number of pizzas in 2023 that we are planning on. But they’ll be more efficient between the new plants.
“And we have some new growth coming on board in the next three to four months. So, it’s all going to accommodate that new growth.”
New growth meaning new customers, new products?
“All the above. We’re in almost every retailer in the U.S. There is some international business coming in that I can’t really talk about — through some of our domestic customers. But also new product lines within those customers.”
Can you give an idea of the cost for the project in Jefferson?
“The majority of the investment we’re making is all manufacturing equipment. It’s in the $15 million range.”
Did you acquire the property in Jefferson?
“No — we are leasing the property. We would’ve liked to acquire it. All the money that we’re investing is all in equipment. And some expansion to the building.”
Any concerns about recruiting employees in Jefferson?
“Recruiting employees is definitely harder in this day and age, but we’ve done a pretty good job of working hard with our employees. It’ll be a challenge, but it’s one we’re ready to take and we’ve worked with Jefferson County and we’ve worked with a number of agencies in Jefferson already. It’s not a slam dunk but we’ll be in good shape.”
These other manufacturers that you’re working with — are they in other parts of the country so you don’t have to ship pizzas as long a distance?
“It’s actually more related to their capacity and their capability. They are not in Wisconsin. They are outside Wisconsin — not too far. But it’s based on capability versus location.”
Are you looking to expand anywhere else?
“I think for the next couple of years, this will be good for us.
“We looked at every available facility we could in Wisconsin — in the Milwaukee County area. We would’ve preferred to have been closer — just could not find it.
“We’re always going to be looking at probably not building because of building costs and the timing. We would’ve built, but the timing would put it into 2024 and we were looking at four, five times of building cost (compared with Jefferson lease).”
Anything else you would like to add?
“The headline here is that our employees have done an outstanding job. I want to give credit to them because it’s our employees that have executed the opportunities that are available. And not every company is able to take advantage of those. It’s a really great relationship that we have and so I just want to really highlight that.”