From a family-run cottage industry to one of the world’s leading nut processors this Elgin-based company represents the American Dream. On the company’s 90th anniversary, we sat down with the founder’s grandson, now company CEO.
America is called the land of opportunity for good reason. Citizens willing to roll up their sleeves and work diligently have often succeeded, both financially and personally. Headquartered in Elgin, John B. Sanfilippo & Son nut company stands as a testament to that American Dream. This publicly traded, international company began with one family of Italian immigrants in 1920s Chicago.
In 1910, John B. Sanfilippo, along with his mother Rosa and brother Joe, emigrated from Sicily, Italy, to join his father, Gaspare Sanfilippo, in Chicago.
During the early 1900s, the Windy City emerged as a hub for pecan shelling because of its transportation access to other markets and its proximity to many candymaking companies. The popularity of the pecan had exploded after the nut was exhibited at the 1893 Columbian Exposition in Chicago.
By the 1920s, dozens of cottage industry, family-based enterprises supplied hand-shelled pecans to distributors. John B. and other Sanfilippo family members each earned about $6 per day shelling 40 pounds of pecans per person. It was a fairly good income for the times.
By 1922, John B. rented a small storefront on Larrabee Street in Chicago and supplied pecans to distributors, nut shops, confectionaries and candymakers. He eventually joined Gaspare in opening a small factory on Division Street to crack and shell pecans. The business of pecan shelling remained hands-on for nearly two decades, until new technology significantly changed the industry.
“The automated shelling process was pioneered by the Champion Pecan Machine Company in San Antonio in the late 1930s,” says Jeffrey Sanfilippo, the company’s current chairman and CEO. “My grandfather, John B., purchased two crackers in 1940, and by 1950, the company owned 22 crackers.” This technology made it possible to process 40 pounds of pecans per hour. “It would take an individual man a full day to crack 40 pounds of in-shell pecans,” explains Sanfilippo.
Today, the company owns the technology and equipment to crack more than 20,000 pounds per hour, or about 250,000 pounds per day. Nearly 800 of the company’s 1,400 global employees are based in Elgin.
In 2007, 12 years after acquiring Fisher Nuts from Proctor & Gamble, the company opened a new 1.1 million square-foot processing facility in Elgin that may be the largest of its kind. Visible from Interstate 90, the plant includes office space and a Fisher Nuts outlet store, where consumers can buy nuts and other treats directly from the source.
A Growing Market
In the late 1950s, the company became John B. Sanfilippo & Son (JBSS), when John’s son, Jasper, joined the team.
“My father, Jasper Sr., was instrumental in seeing the value of new technology. He pushed my grandfather to continue to invest in expanding manufacturing capabilities,” explains Sanfilippo.
When John B. died in 1963, Jasper took the helm and continued extending the company’s reach into bakeries, grocery stores and more. With upgraded technology and diversified product lines, JBSS became more competitive as the nation’s infrastructure expanded and as consumers became more quality-conscious and demanding. JBSS took advantage of the trends by entering the private-label market.
“In the late 1960s, generic brands started to come to market, as retailers sought to provide value-conscious consumers with a choice for lower-priced brands,” Sanfilippo explains. “At that time, Certified Grocers in Chicago approached our company and asked us to pack a generic bag of 8-ounce pecan halves for the baking nut section in their stores. This was the company’s first entry into private-label nuts. Over the years, private label evolved into private brands, as retailers now aim to differentiate and segment their store banners with quality, variety, flavor and packaging innovations. Our company has strategic partnerships with several key retailers, and private brands are a significant part of our company’s business.”
While JBSS was fulfilling private-label orders, it also was enhancing its market share. The company went public in 1991 to raise capital for long-term expansion; sales reached $151 million that year and operations expanded into other varieties of tree nuts and peanuts. The 1995 acquisition of Fisher Nuts from Proctor & Gamble was JBSS’ own foray into the name-brand product line.
“Originally established in St. Paul, Minn., in 1927, Fisher Nuts is a leading snack nut brand in the United States, and became the first national brand that our company owned,” says Sanfilippo. “We expanded the Fisher product line to include baking nuts and today it is one of the leading ingredient nut brands in the country. We own several other brands as well, including Orchard Valley Harvest, specifically sold in the produce section, ARMA, which is an energy snack brand, and Sunshine Country.”
JBSS is recognized as a leading manufacturer of snack, baking, produce and culinary nuts in the U.S., with a focus on consumer and commercial ingredient channels of distribution. That’s why the company maintains five processing facilities: the Elgin headquarters; peanut processing plants in Bainbridge, Ga., and Garysburg, N.C; a pecan processing plant in San Antonio; and a walnut and almond processing plant in Gustine, Calif.
“The multiple locations provide both manufacturing and distribution capabilities to better service our customers,” says Sanfilippo. He adds that a majority of JBSS nuts are grown domestically. “For example, peanuts, walnuts and almonds make up 32 percent of our sales, and we specifically procure raw material from U.S. growers.”
About 30 percent of the nuts are imported, including cashews from Africa, India, Vietnam and Brazil; hazelnuts from Turkey; macadamias from Australia; and pecans from Mexico.
New Products, Same Vision
The company’s philosophy of constantly evaluating new technologies, innovations and products has been a key factor in its success.
“The company’s commitment to a business model of vertical integration across multiple nut types, and our investment in controlling the quality of our products, from the field to the shelf, have contributed to our success,” Sanfilippo says. “Innovation is one of the key elements in our vision statement. JBSS has a history of investing in innovative manufacturing technology, packaging and products.”
One recent innovation can be found in the baking section of grocery stores. “Our Fisher brand baking nuts are now being packaged in stand-up, resealable bags,” says Sanfilippo. “This allows consumers to use what they need and have a convenient, stay-fresh means to store any remaining nuts for their next cooking occasion.”
Even as the company seeks out new products and practices, and reaches out to new customers and new marketplaces, it seeks to strengthen core products.
“Our company has three strategic pillars,” Sanfilippo says. “First, we intend to grow our brands – Fisher, Orchard Valley Harvest, ARMA. Second, we expand globally. Third, we provide integrated nut solutions. We’re investing in each of these core areas and look forward to executing plans to become a $1 billion business over the next few years. One example of how we’re supporting our strategies is that the company is opening its first overseas sales office in Shanghai, China, this year, to pursue growth in the emerging Asian markets.”
Back home, JBSS is firmly committed to its community. Its Elgin facility, like all of its manufacturing plants, is recognized by the national Energy Star Challenge for Industry for its effort to reduce energy usage and increase sustainable practices. In 2011, the company was named Energy Star Partner of the Year, for incorporating sustainable, energy-saving practices.
JBSS also helps people in need.
“The company is a supporter of Feeding Greater Elgin, Ronald McDonald House Charities, and Elgin Walk & Roll for the American Cancer Society, along with other local not-for-profit groups working to end hunger in our communities,” Sanfilippo says. “The Sanfilippo Foundation, set up by the family, is very active in providing a means for dozens of charity organizations to utilize the Sanfilippo estate and antique collection as a venue for fundraising events.”
From its humble beginning 90 years ago as a family-only business, JBSS has grown to represent The American Dream. In a nutshell: Hard work, foresight, ingenuity, a willingness to embrace progress and the courage to take advantage of opportunities add up to an all-American success story.