Giacomo and Angelo Fallucca grew up working in their family’s business on Milwaukee’s East Side. Their father, Gaspare Fallucca, opened an Italian bakery in 1964 and a restaurant named Palermo Villa in 1969.
He later opened a frozen pizza company on the city’s south side in 1979.
“Our dad had an insatiable desire to be the best and not be complacent,” Giacomo said.
“Sometimes he’d camp out at the bakery for two weeks – he’d sleep on the flour sacks,” Angelo said.
The brothers took control of their father’s frozen pizza company, known as Palermo Villa at the time, in 1991. The company had about 30 employees, and sold its pizzas in grocery stores across the state.
By sticking with the values, lessons and entrepreneurial spirit that Gasparen taught them, Giacomo, Angelo and Laurie Fallucca, Giacomo’s wife, have grown Palermo’s Pizza into a player in the national frozen pizza market. The company has about 425 employees, and runs three shifts in a 135,000-square-foot facility in Milwaukee’s Menomonee Valley.
Palermo’s sells more than 40 varieties of frozen pizza all over the country, and has posted double-digit growth every year since 1996, a pace it sustains even in a down economy.
“We’re a privately held company that is run by a family, and we treat our people like family members,” Giacomo said. “People like family values – a family cares about you, you can trust family, family nurtures you, family challenges you and family stands for something. That attracts an employee, and they’ll perform in a way that is different than they would at other companies. And that helps us win and excel in the marketplace.”
Giacomo serves as the company’s president and CEO, Angelo is chief operations officer, and Laurie is vice president of marketing. Peter Fallucca, one of Giacomo and Angelo’s brothers, works in employee services and facilities management.
Palermo’s moved to the valley in 2006, and is already planning for an expansion that will likely occur within the next year, Angelo said.
“We’re doing our new five year plan right now,” he said. “We’ve got to figure out the line (for this expansion) but also where the next line will be. We’ve got plenty of room for growth – we have 13 acres of land.”
Giving them what they want
Palermo’s developed its double-digit annual growth pace after it entered the private label business in 1991 – producing frozen pizzas for grocery stores sold under their own brand names.
“The private label (sales) to grocery stores is where the foundation was built for our growth,” Giacomo said.
That growth has been built upon by Palermo’s own brand – today it sells more than 40 different varieties of frozen pizza, including its Rustico, Primo Thin, Hearth Italia and Classics lines, as well as a line of breakfast pizzas. In its on-site test kitchen, the company is continuously working with new toppings, sauces, flavors and crust varieties, Angelo said.
“We have no less than 30 different projects in branded and private label in R&D,” he said. “We’re always looking at extensions of our existing products.”
The company’s Classics line was introduced about six months ago for more value-conscious customers looking for a more traditional frozen pizza. Palermo’s Hearth Italia line, introduced several years ago, uses a crust partially baked in an imported Italian pizza oven, giving it a crispier, airier crust than most other frozen pizzas.
Palermo’s continues R&D work with its private label customers, but the majority of that work involves looking at trends in the marketplace, Angelo said.
“It’s more about what the customers want,” he said.
Giving customers what they want was one of the central business lessons that Gaspare taught his children, and one that has helped Palermo’s continue growing even in a down economy, Giacomo said. In today’s economy, many customers are eating out less, and cooking a frozen pizza at home can feel like a small luxury without spending a lot of money.
“That’s been a key to maintaining our growth – we use restaurant quality toppings on our pizzas so it’s not a manufactured type pizza,” Giacomo said. “It’s one that tastes good, that’s a good value, so you don’t feel like you’re sacrificing anything.”
Gaspare started handing more control of the family business to his sons in the mid 1980s, when he could see that they had ambitious plans to expand and grow.
“Our dad was instrumental in starting (the company),” Giacomo said. “He knew his sons wanted to start taking it over. He told us ‘I’m going to support you.'”
“We started to run some aspects of the business,” Angelo said. “He took on more of an advisory role. He was still running the plant and was still a baker.”
Giacomo, who is five years older than Angelo, had been working in the family business longer. While he has been placed in the top leadership position in the company, Giacomo, Angelo and Laurie generally make most decisions together.
“It’s rare that I have to pull rank,” Giacomo said. “We formed an advisory board a few years ago and one of the guys told me that I am responsible for maintaining the good will of the family, because that builds the success of a family business, the foundation. Angelo and I are pretty much aligned in what we do.”
Giacomo and Laurie’s 22-year-old son is working part-time at Palermo’s while studying business at the University of Wisconsin-Milwaukee, but there is no plan to transition him into the family business. Angelo’s children, 5 and 7 years old, are too young to start working.
“There are very few of us (family members) working in the business,” Giacomo said. “And the same principles apply. You’ve got to earn your position.”
While the Fallucca family is intrinsically tied to Palermo’s Pizza, the pizza company has also become an extension of the family.
Palermo’s customer and community outreach program is called La Familigia (family in Italian). When customers visit the Palermo’s web site, they are invited to join the family. When they do, customers are sent the company’s newsletter, which includes cooking tips, community programs and new products under development, Laurie Fallucca said.
Milwaukee-area La Familigia members are invited to the factory once a month to test Palermo’s new products under development.
“La Familigia asks our customers to join our family,” she said. “We use them as part of our R&D process.”
By making its customers part of product development, the company is able to extend their connection to the company and La Familigia, Giacomo said.
“People love being involved and tasting new things,” he said.
Making a personal connection to customers, employees and the community and delivering quality product at a fair price is something that Gaspare instilled in his children, and something that drives Palermo’s Pizza today.
“We still want to have that entrepreneurial spirit to celebrate the Italian culture,” Giacomo said. “It’s about food, spirit and entertainment, as well as the servant mentality. We have to serve our customers, our employees and the community.”