Wednesday August 14, 2019

Success Story: Giovanni Food Co.

From humble beginnings in the Port City, Louis DeMent grows third-generation family pasta sauce business into key player on food manufacturing scene
By Lou Sorendo

    Louis DeMent


    It’s in the sauce.

     

    Louis DeMent is the CEO and third-generation owner of Giovanni Food Co., a business that is flourishing at its home in Baldwinsville.

     

    Over the last five years, the business has experienced about a 10 percent growth on average per year.

     

    The business produces tomato-based products such as pasta sauce, as well as salsas, barbecue sauces, and cooking sauces.

     

    The company also bottles vinegar and does beverages as well.

     

    “We’ve had to diversify over the years,” DeMent said.

     

    In its infancy in 1934, the business started out as a tavern and evolved into DeMent Grill on the west side of the city of Oswego.

     

    DeMent’s grandmother Thelma and great aunt began cooking for thirsty sailors coming off steam ships in the 1930s.

     

    “They liked what they were cooking, which was pasta and the old family recipe of pasta sauce,” he noted.

     

    When World War II broke out, women were tied up working in factories while men were off to battle.

     

    “Nobody had time to make food, so they started doing take-home in Fulton Sealright containers,” DeMent said.

     

    The paperboard ice cream containers doubled as take-home containers for pasta, sauce and sometimes meatballs.

     

    “That’s when my grandfather [John DeMent] said, ‘Hey, let’s put sauce in a bottle.’”

     

    In the 1950s, the family became one of the first in the country to put pasta sauce in glass jars and began distributing to grocery stores. Their son, Jack, eventually took over.

     

    DeMent’s sauce is still sold today, mostly in the Oswego, Fulton and Pulaski areas.

     

    “It’s definitely a mainstay for us, and it’s something that we are really proud of. But it is only a very small fraction of our business at this point,” DeMent added.

     

    The family at the outset thought it could sell its own brand.

     

    “We had DeMent’s, and tried to push that. We also had the Maria Angelina brand, and tried to sell that,” he said.

     

    However, Jack met with a lot of closed doors because of his higher price point.

     

    “The marketplace was accepting product that was 59-to-69 cents a jar, so he created the Luigi Giovanni brand, and that’s where our current company name comes from. He was able to sell truckloads at that point,” DeMent added.

     

    “Then, we got some major customers on the private brand and contracting manufacturing side who indicated to us that the least path of resistance was to pack for them rather then fight the big brands,” he said.

     

    “We didn’t have huge amounts of marketing dollars to push our brand, and it would take millions of dollars and many years to do that,” DeMent added.

     

    The business focus today is nearly a 50-50 split between contract manufacturing and private brands.

     

    With contract manufacturing, Giovanni is putting the customer’s brand name on a product and selling it to the customer. With private or store brands, store chains have their own brand and Giovanni manufactures the product and sells it to the retailer to compete with brand-name products that the store carries.

     

    Giovanni Foods does private branding for many regional as well as national retailers.

     

    The Oswego native observes a sense of propriety when it comes to keeping the names of those who use private branding confidential.

     

    “I treat that very seriously because it’s the livelihood of all our 103 families,” he said.

     

    When DeMent started working for his father Jack in 1997, they had about 14 employees.

     

    “Companies and the general public are asking for more organic products, private brand products, and not necessarily brand names. So there is a trend and it’s going hand-in-hand with our capabilities, and that’s extremely important.”

     

    “We continue to see growth in private brand products in terms of market share on the store shelves,” he said. “I think every consumer understands that.”

     

    “You can go into a Wegmans retail outlet, and most of what you can buy from a regular brand, Wegmans offers, and they are doing it very well,” he said. “People trust that name sometimes more than they trust the national brand.”

     

    Forming the foundation: DeMent said his father’s integrity was first and foremost.

     

    “He pushed reputation as something very much earned. You just don’t get there by showing up,” he said. “You have to stand behind what you do. That has really served us well in regards to the relationships that we have. It’s part of our corporate culture here.”

     

    “It’s important for each of us to have high integrity, which is essentially what a person does when no one is looking,” he said. “People are eating the stuff we are making, and we take that really seriously.”

     

    The business is highly regulated by the likes of the U.S. Food and Drug Administration and certified by the NSF’s safe quality food program, part of the Global Food Safety Initiative.

     

    “If you want to go out and communicate to a store chain that you want to pack for them, the first question is, ‘Are you SQF certified?’” DeMent said.

     

    The business is also certified for gluten-free, non-GMO [genetically modified organism] and kosher products.

     

    “We have all these audits going on throughout the year, and that is a huge cost of business. But it is the arena we want to play in. We want to be best in class at what we do, so we hold ourselves to a really high standard,” he said.

     

    “You can put whatever you want on the label, and we can validate that for a store chain or brand. That’s what we are really good at. So those certifications are very valuable to us,” he added.

     

    DeMent said he brings in the best organizations possible to hold the company to that high standard.

     

    “That includes not only certifying bodies that audit us, but also store chains and the Amazons of the world who will come in and look under the hood,” he said.

     

    “We want to continue to grow, but it’s a very conservative growth. There are not aspirations to double, triple or quadruple or anything like that,” DeMent said.

     

    Since working for the company, the business has grown 10-fold.

     

    “We’ve grown a lot, and it wasn’t because we’re setting out like, ‘Hey, we want this accolade.’”

    “We had no desire to put our names in lights or anything like that,” he added.

     

    “We do have an upward trend that we want to continue, but we also want it to be sustainable. We’re trying to actually just focus on what we have and make it stronger. We have added 50 stock keeping units in the last year, and that’s a lot for us,” he said.

     

    Family feeling: DeMent, 46, resides in Clay with his wife Cheryl and their two children, Angelina, 15, and Jack, 12.

     

    He graduated from Oswego High School as well as Le Moyne College in Syracuse.

     

    Besides DeMent, there is no other family member on staff. His mom, Mary DeMent, sits on the board of directors.

     

    “If I meet somebody, some of the first words out of my mouth are, ‘We are a third-generation family company,’” DeMent said.

     

    “When I am having conversations with our entire employee staff, it’s about the family aspect of the business and that we care about each other,” he said. “We want to have a sustainable business because we need to take care of our families at home and feed them.

     

    “In this day and age, there are a lot of transactional businesses. We see private equity companies coming in and buying things out. That might be right for other businesses, but for us, we look out for the individuals that work for us,” he added.

     

    He said his past experience in the trenches help him to relate to his workers today.

     

    “We value each one of our employees and we want to make sure we take care of them and understand what they are doing,” he said.

     

    Prior to working at the company in an official capacity, DeMent worked for his dad nights, weekends and during holidays.

     

    “I’ve been there and have done most of these jobs,” he said.

     

    “I’ve cooked, labeled, case packed, filled, and palletized. As an overall leader, you need to know what people are going through,” he said.

     

    Ideal location: The business recently celebrated its two-year anniversary at its plant on Sixty Road in Baldwinsville.

     

    “We have employees that live in Oswego and Fulton, so we are trying to advertise to that area that we have good jobs here that we’re trying to fill. It is a tight labor market, and we want to offer careers to folks. You can start out here, and hopefully as we grow, you grow,” he said.

     

    From its beginnings in Oswego, the business established more space when it relocated to Liverpool in 2006, where is took advantage of 60,000 square feet of space and a semi-automatic production line.

     

    It then would buy rival Ventre Packing Co. and its 67,000-square-foot production plant on Court Street Road In Syracuse in 2009.

     

    The facility featured three fully automatic production lines, a huge transformation from a semi-automatic line.

     

    “My dad and I dreamed of having a manufacturing plant that had fully automatic production lines. In Oswego, we had one, but it was very intimate and very hands-on,” he said.

     

    “It was a dream of ours to be able to do that, because it was backbreaking work and you had to work in uncomfortable conditions, he added. “When I was palletizing for my dad, the boiler was in the next room and it was 120 degrees.”

     

    “I called it the ‘quantum leap’ to our capacity and capabilities,” DeMent said. “We got wonderful employees with that transition too.”

     

    DeMent then had to relocate again because of the lack of locker room and parking space, and because they were doing business in five different locations.

     

    That’s when Giovanni renovated the former longtime PaperWorks plant in the Radisson Corporate Park in Baldwinsville and converted it from a dry to wet plant, necessitating the need to install drains and clean rooms.

     

     

    The business went from three productions lines to six production lines running out of five kitchens as a result of the project.

     

    “We had a beautiful facility before, but this is definitely even better. It’s brighter with all LED lighting, cleaner, and the ceilings are taller,” he said.

     

    He said it is designed to attract major brand and store chains in the country.

     

    Giovanni Food Co. leases warehouse space for storage as opposed to building new facilities, which can be deemed too costly.

     

    Pioneer Warehousing & Distribution in Liverpool takes care of railcar receiving of all tomato products for Giovanni.

     

    Giovanni Food Co. has also instituted a Microsoft Dynamics NAV enterprise resource planning system that handles everything from orders to cash.

     

    “It also handles a lot of our lot tracking, which is extremely important when dealing with food,” DeMent said. “We can go back to the source of every raw material just by reading a code and instantaneously knowing where it came from.”

     

    He noted this is essential given the level of food recalls and withdrawals that occur in the industry.

     

    “We can control that by having this heightened level of control. Recordability wise, it also helps in terms of how you handle product. It creates the behavior and culture that people are going to do the right thing. They have to; it’s the way the system is set up. It’s more the architecture of best business practice,” he said.