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ELGIN – In 1922, Italian immigrant John B. Sanfilippo began a small pecan shelling company out of a rented store front on Larrabee Street in Chicago. He eventually joined his father, Gaspare, to open a small factory on Division Street to crack and shell pecans.
Now celebrating its 90th year in business, John B. Sanfilippo & Son, Inc. grew to become a premier processor, marketer and distributor of baking nuts, snack nuts and nut-based products. Today these products can be found under the Fisher Nuts, Orchard Valley Harvest and Sunshine Country brand names, as well as in a variety of private brands. During that time, sales have surpassed $674 million.
Net sales increased to $153.8 million for the third quarter of fiscal 2012, from $137.4 million for the third quarter of fiscal 2011.
The four-generation business remains very much a family affair, said President and Chief Operating Officer Jasper B. Sanfilippo, with kids “roped into coming to work” at an early age. The environment was and continues to be collaborative and supportive.
“It was really like a social thing for us as a kid. It was never something where we didn’t want to go work for our parents type of deal,” Sanfilippo said. “My dad has been retired for the last three years, but we’re a large Italian family. We share a lot of Sunday dinners and a lot of conversation about the business. My dad still comes to the factory once or twice a month to tour the facilities.”
JBSS sells almonds, pistachios, walnuts, peanuts, macadamias, cashews, Brazil, hazelnuts and pecans. It strictly sold pecans until 1964. Seventy percent of are grown domestically. Its repertoire also has expanded to include trail mix, sunflower seeds and specialty items such as Cheesy Cheddar Mix and Nut & Berry Mix.
Sanfilippo said he continues to eat a handful of nuts pretty much every day. “They’re good for you ... in moderation,” he said.
Business Journal: Did you pursue higher education?
Sanfilippo: Bachelor’s degree in economics from Barat College, Lake Forest.
Business Journal: What was your first job?
Sanfilippo: I was feeding empty cans to a can line at our [former] Des Plaines facility on Touhy Avenue when I was 12 years old. After that I came into the company as a product manager. We moved to Elgin in 2007. Production started here in 2006.
Business Journal: How did you get to where you are today?
Sanfilippo: All of the members in our family, as well as our cousins, have at one time or another held down just about every job the company had to offer.
I started as a product manager, then facilities manager out in Gustine, Calif. I then moved into vice president of operations and now to COO. Each of us gravitated to one type or another (sales, operations, finance, IT, etc.) and most of us pursued those interests in our college studies. My brother, Jeff, is CEO. My sister, Lisa, is director of business development. I also have four cousins in the business – Mike Valentine is chief financial officer and his brother Jim is chief information officer. Another cousin, Roseanne Christman, is director of graphics and customer service and Greg Karacic is procurement buyer.
Business Journal: Do you have a mentor?
Sanfilippo: My father (Jasper Sr.) He was a strong believer that you needed to understand the fundamentals – commodities and selling price, and the cost to convert raw materials into the selling price. He advocated a balanced approach.
There are so many elements that can destroy a company in the nut business (crops, procurement, demand, consumer trends, etc.) you have to have a mentor. Most of these things are best learned through experience. You have to have the basic building blocks yourself, but the rest lies in how you apply that knowledge to your particular environment.
Business Journal: Is there a philosophy that you work by?
Sanfilippo: Work hard, be proud, treat people fairly, and make sure people enjoy working for your company.
Business Journal: What role do you have in your company on a daily basis?
Sanfilippo: I oversee operations. It's more about managing the supply chain; making sure that you manage inventory properly and keep the quality level at what customers are expecting. I oversee replenishing inventories, buying and procurement. And I still interact
pretty heavily with customers. If you want to deal with the Walmarts and Safeways of the world, you need to have some fairly high-level people that have experience in the business.
Business Journal: What challenges do you face and how do you address them?
Sanfilippo: Because of crop cycles, each year poses different challenges. We try to identify those challenges as early as possible and then navigate the company around them. It is hard for people to constantly change direction (sell this, no don’t sell that, etc.) and it can be very frustrating.
We spend a lot of time explaining situations to people, often citing previous years where we had a similar situation. That seems to reassure them we aren’t crazy.
Because we’re vertically integrated and get a lot of raw materials from farmers, we’re subject to the economic strains attributed to that. Think of supply and demand. Demand is the driving factor on commodity costs. We’ve had a 25 [percent] to 30 percent growth in demand for almonds that go overseas, but it takes three or four years to enjoy higher prices that incentivize farmers to grow more acreage. And by then, the price gets to the point where it curbs demand.
We’re dealing with multiple roller coasters. Prices of $6 or $7 a pound for almonds have killed demand and consumption is down 15 [percent] to 20 percent. Walnuts are in the same vein where we’re starting to see demand wane down. Then coupled with that, if you have a supply issue, caused by rains or fungus, can exacerbate the situation and put more pressure on the market.
Business Journal: How does your industry evolve to keep up with demands?
Sanfilippo: For every nut, besides peanuts, the lag time to increase supply can be four to 11 years. This is the very reason why nuts are so volatile.
In a high-quality year, we may go after high-specification customers and we normally wouldn’t. The next year we might only sell them 50 [percent] to 70 percent of their needs. It’s a juggling act of moving your tonnage to the appropriate channels.
Where we can (mixed nuts, trail mixes and, fruit and nut mixes), we work with our customers to shift ingredients around to help maintain price points. For single-nut types, you either raise prices or downsize the packages to keep them competitive with other snacks.
Business Journal: Careers overall can be very rewarding. Do you have a favorite memory of a great day?
Sanfilippo: I believe it was the first time we started production up in Elgin. A lot of work from a lot of dedicated employees went into to getting to that point and the smiles and pride when we started the line were amazing. Of course, the line didn’t run that well, but we got the order out. The next day it was business as usual and all hands were on deck to get it fixed.
Business Journal: What is the best part of your job?
Sanfilippo: Interacting with the people. The heart and soul of this company lies with our employees. It’s extremely gratifying to personally get to know them, their families and what makes them tick. It is my privilege to know each and every one of them.