2019 Snack Producer of the Year - John B. Sanfilippo & Son
A legacy of snacking fortitude
Some companies have been in the industry for so long that they become synonymous with snacking. Such is the case with John B. Sanfilippo & Son, Inc., based in Elgin, IL, and its longstanding nut business of nearly 100 years.
The company’s roots trace back to the early days of the 20th century, with a father and son newly arrived from Sicily who established a small pecan shelling business. Today, John B. Sanfilippo & Son—led by fourth generation Jeffrey Sanfilippo as CEO—is a global, vertically structured nut company with sales of over $888 million for fiscal 2018. Its Orchard Valley Harvest brand has shown significant year-over-year growth, and its Fisher Nuts brand has seen a strong resurgence over the past year with the Oven Roasted Never Fried line debut. The company also diversified its indulgent offerings via acquisition of Squirrel Brand in 2017.
The story of John B. Sanfilippo & Son is punctuated with grit, strategic business decisions, and increased strength through innovations and acquisitions. It’s a story of a smartly cultivated snacking portfolio across branded and private label product segments that meet the diversified needs of an ever-challenging market. And it’s a story that just continues to build momentum.
Strength through diversification
In 1910, Gaspare Sanfilippo, Jeffrey’s great-grandfather, arrived in the U.S. from Sicily, with his wife Rosa and sons Giovan (known as John—Jeffrey’s grandfather) and Joseph following three years later. Gaspare and John signed on in 1917 with the Kelling Nut Co.—the largest nut company in the U.S. at the time—shelling pecans like so many immigrant families in turn-of-the-century Chicago. It was hard work that paid by the pound.
But Gaspare and his son John excelled at the task. They started their own shelling business in 1922 in a 2,500-square-foot storefront on Division Street in Chicago, and then opened a dedicated shelling facility in 1929. By the 1940s, John was leading the company, and his four children—Rose, Anne, Jasper (Jeffrey’s father) and Mary—would all eventually play vital roles in growth of the business.
John always had a keen interest in technology. “My grandfather was always looking into how to use technology to do a better job,” says Jeffrey.
This trait—along with a savvy business sense—carried on to Jeffrey’s father, Jasper, who eventually took the helm in the 1960s and was responsible for expanding the business into manufacturing, including the launch of its first retail brand, Prairie State.
John B. Sanfilippo & Son added its first private label customer in 1968. “Private brands just started to get developed in the 1960s,” says Jeffrey. The company was quick to help local Chicago grocery chains Dominick’s and Jewel develop their own private brands.
The company also began to offer a wider range of nuts. “We needed to diversify our product portfolio,” says Jeffrey. “Customers were starting to look for a broader range of products.”
Those customers included industry partners like bakery and confectionery companies that bought pecans—as well as almonds, cashews, peanuts and more. Corporate diversification continued via the acquisition of H. H. Evon Co. in 1974, including its fleet of trucks and the regionally known Evon’s brand, a move that grew distribution across 13 Midwest states.
Growth continued, and in 1980, the company built a new, state-of-the-art processing facility and corporate headquarters in Elk Grove Village, IL. Then, in 1984, the company acquired Midwest Nut & Seed Co. and its bulk nut business.
In 1991, John B. Sanfilippo & Son went public—and then promptly acquired the Sunshine Nut Co. and its Sunshine Country and Texas Pride retail brands, along with key industrial customers. Contract packaging also factored into the business plan. Adding new shelling, storage and manufacturing facilities in strategic nut-growing regions across the U.S. fueled a period of strong growth. “Diversifying the product portfolio helped mitigate some of the risks of being in a commodity business by being able to diversify your sales base and your margins,” says Jeffrey.
A strong current of innovation and engineering prowess has followed John B. Sanfilippo & Son since its early days. Company engineers regularly developed new operational processes and technologies.
Acquisition of the Fisher Nuts brand in 1995 from Procter & Gamble, and the addition of large private label customers, continued the company’s pathway of progress despite periodic nut market fluctuations and nationwide economic downturns. “Fisher allowed us to have a national brand portfolio,” says Jeffrey. It also expanded the company’s presence in the recipe nuts category.
The company’s diversity has served it well through the years. “Investing in growth has always been part of our culture,” says Jeffrey.
In 2005, John B. Sanfilippo & Son broke ground on its current 1,000,000-square-foot facility in Elgin, housing its corporate headquarters, as well as manufacturing and distribution.
Acquisitions of Orchard Valley Harvest in 2010 and Squirrel Brand in 2017 further diversified its corporate portfolio. Then the company launched its Fisher Oven Roasted Never Fried line in 2018.
Private label has long shown strength in nuts, and the company’s alignment with that business has paid off. Jeffrey estimates that private label accounts for roughly 50 percent of the company’s consumer business today. “We have an amazing research and development lab here in Elgin. We bring our retail partners in to work with us on product lines. We’re tracking where consumption trends are going.”
A healthy mix
Over the years, John B. Sanfilippo & Son built a consumer insights team to help identify trends and potential business directions—not only for its private brand customers, but also to find niches within consumption trends.
This opened the door to the Orchard Valley Harvest brand, which is merchandised in the produce section. “We realized that consumers were shifting from the center of the store to the produce department for snacking,” says Jeffrey. “There were snacks in the produce section, but typically not a formal snack nut program.” Produce category managers loved the idea. “It was a very profitable investment for them.”
The company has added convenience options via single-serve Orchard Valley Harvest packs, including varieties like Omega-3 Mix and Antioxidant Mix. This has continued the brand’s momentum. They also recently launched an extension of the brand with a new line of Salad Toppers. “We feel there’s still a lot of opportunity to expand that brand,” says Jeffrey.
The goal is to expand consumer reach—including distribution to chain restaurants and university foodservice. “We’re looking to discover where we can find people looking for a healthy snack and then have our Orchard Valley Harvest products available for them,” says Jeffrey.
One spot in the company’s lineup that needed reinforcement was indulgence. “We didn’t have a strong indulgent snack nut brand,” says Jeffrey. “So that was the genesis around why we acquired Squirrel Brand. We were a co-packer for them prior to buying the company, so we knew the brand. It has worked really well.”
One of the newest company innovations is the Fisher Oven Roasted Never Fried line. The goal was to find a new point of differentiation. “We can’t just launch the same items as our competitors,” notes Jeffrey. They took notice of the health and wellness trend. “We thought, ‘What is it about the snack nuts category that maybe people don’t realize?’ Well, a lot of people don’t realize that many snack nuts are roasted in oil.” So they found a point of difference for health-focused consumers.
“We highlighted the benefits of a snack nut line that’s just oven-roasted—only nuts and sea salt,” says Jeffrey. “It’s a very simple message. People are looking for cleaner ingredients.”
“Our focus is getting as fresh a product as we can from the field through production to consumers while controlling the whole supply chain,” says Jeffrey. “That’s an investment that my grandparents and my father made. And we’re continuing that work. It helps control costs. It’s a huge investment. But we believe it’s the right one in order to get a competitive product to the market with the best possible quality. We’re always looking ways to optimize.”
Over the last couple of years, John B. Sanfilippo & Son has seen record sales and earnings, notes Jeffrey. “I’m proud of where we are today. I’m proud of the way we’ve been able to evolve over the years, the way we’ve been able to adapt to market trends, to changes in supply chains, changes in technology. I think we’ve brought on a lot of good people to help make decisions from the bottom up, and it has helped us to be the company we are today.”
It’s about creating opportunities for growth. “We’ve brought in a lot of talent over the years,” says Jeffrey. “We’ve developed leaders. We’ve invested in training. We’re investing in our people. And we’re investing in the communities around us.”
This community connection extends beyond the workplace via The Sanfilippo Foundation, which hosts charitable events at the Sanfilippo Estate in Barrington Hills, IL. The foundation educates the public about its collection of automatic music instruments, theater organ and other turn-of-the-century antiques while providing charities with a unique fundraising opportunity.
Much has changed since Gaspare and John Sanfilippo launched their fledgling business nearly 100 years ago—but some of the most-important aspects have remained, notes Jeffrey. “I’m proud of the fact that we’re still providing the same value and resources as we did in 1922. And we’ve sustained a culture of innovation, and doing what is right for our customers and consumers.”