With $1.8 billion in sales, Sargento continues to innovate its top-selling cheddar, mozzarella and string cheeses, all while keeping the company private. And third-generation CEO Louie Gentine has a plan to keep shredding the competition.

_{By Chloe Sorvino, Forbes Staff}

When it’s time to introduce a new kind of cheese to grocery stores, many brands spend millions to develop a product without putting much additional money into marketing. But at Sargento, as its third-generation family CEO Louie Gentine explains, the company spends millions on advertising to make sure a new variety of cheddar or mozzarella is well-received.

“I don’t call them big bets because I don’t think they’re bets,” says the 49-year-old Sargento chairman, who succeeded his father in 2013. “Our opportunities are well-vetted. They’re great investments, and we’ve had more successes than we’ve had failures.”

That strategy has helped Wisconsin-based Sargento maintain its position as a cheese powerhouse with $1.8 billion in annual sales. As the company enters its 71st year, Sargento’s slice of the $14 billion U.S. cheese industry continues to grow. It is now America’s top-selling natural cheese brand—a position it secured (as opposed to processed cheese products like Velveeta) in the past decade under Gentine as its market share has grown 20% to some 13% of all cheeses sold.

Sargento remains 100% family owned, which has given it an edge as the cheese industry has consolidated amid pricing pressure from private label competitors and large swings in the cost of milk. Including Gentine, there are a total of 60 shareholders, all descendants of Dolores (d. 2012) and Leonard Gentine (d. 1986). Forbes estimates their combined stake to be worth $1.1 billion.

Family ownership is more common in the cheese business than other parts of the food industry—and the Gentines compete against several other family dynasties, including billionaire James Leprino’s Denver-based mozzarella maker Leprino Foods, with $3.5 billion in estimated annual sales. There’s also Canada’s Saputo with $12.6 billion in revenues, which is publicly traded but founded and controlled by billionaire Lino Saputo and his family.

At the top of the cheese pyramid is family-owned Lactalis. The world’s largest cheesemaker is based in France but has a significant U.S. dairy business as the owner of Stonyfield Organic, Siggi’s yogurt and the Kraft cheese brand, which it acquired from Kraft-Heinz for $3.2 billion in 2021. Lactalis is owned completely by CEO Emmanuel Besnier and his two siblings, whom Forbes estimates are worth a combined $43.2 billion.

Compared to those behemouths, Sargento is a smaller, more nimble player —operating four cheese making and packaging plants in the Midwest and its own trucking fleet, which delivers 25% of its products. It has been opportunistic. Decades ago, when the Kraft cheese brand wasn’t getting much love from its then-parent Kraft-Heinz, Sargento took advantage of the moment and increased its market share.

“Twenty years ago, Kraft was the big name in the business, and they left a lot of opportunities for somebody like Sargento to get out there and grow,” says Richard Guggisberg, the owner of Guggisberg Cheese, a $100 million family-owned Ohio-based business that invented Baby Swiss.

What makes Sargento’s growth more impressive is that profits in the cheese business are slim. Saputo’s net income margin this year is 1.5%. Its five-year average is 3.4%. The company won’t comment on specific numbers but says that its profits have grown three-fold since Gentine took over.

To stay competitive and boost sales, Gentine says Sargento spends among the most on advertising and logistical support at grocers compared with other cheese brands. “There’s nobody that’s innovating at the consistent level that we are, which is affording us that opportunity to grow share,” says Gentine, whose first job at his family’s company was at 13 years old washing the trucks that delivered cheese.

Inpost-war Plymouth, Wisconsin—a hamlet of just under 9,000 today that’s about an hour north of Milwaukee—Leonard Gentine was an entrepreneur who owned several businesses, including a funeral home. When he decided he wanted to run a delicatessen in the late 1940s, he opened Plymouth Cheese Counter in the carriage house of the Gentine Funeral Home. By 1948 he had a thriving mail-order cheese business that shipped products around the country. Soon, Gentine was pre-packaging cheeses on a mass scale when he and his design partner Bill Lindstedt figured out a way to vacuum seal cheese in plastic. That industry-first allowed Sargento cheese to last longer and initially gave its business a clear edge. Within a few years, Sargento was selling pre-sliced packaged cheese, which became an instant grocery store staple. Pre-packaged shredded cheeses soon followed.

Sargento continued to grow under Leonard’s middle son Lou, Louie Gentine’s father, who became CEO in 1981. As Louie grew up, so did Sargento. He watched his dad, along with his uncles, Lee, Larry and Ed Sturzl, take their family business to new heights. After graduating from University of Notre Dame and then Loyola for his MBA, Louie worked outside Sargento for three years as a commercial banker in Chicago. When he joined Sargento in 2000, Gentine started as an associate marketing manager working on the shredded cheese line. He moved through key departments: product, procurement and retail sales. When his father retired as CEO in 2013 after 30 years, it was Louie’s turn to be Sargento’s big cheese.

In his first decade as CEO, Gentine grew Sargento by 4% each year. Sargento got there by being “really sharp on their processes and things like quality control,” while leaning on natural formulations that steered clear of a lot of processing agents and additives, says Ed Zimmerman, the founder of California-based consultancy The Food Connector, who has worked in the cheese industry for three decades. “What they’ve done a great job with is making the everyday cheese-eating experience special.

“It is sort of like the champagne of cheddar cheese,” Zimmerman continues. “Their brand really stands for something.”

But now there’s more competition from Kraft under Lactalis. In March, Kraft Cheese launched its first new product since the Lactalis acquisition three years ago. The “Signature Shreds” (in three blends of cheddar, mozzarella and Mexican) were designed to melt better because the shreds are wider.

And Sargento is continuing to innovate, particularly in snackable cheese. Gentine says he expects the company to grow by 5% a year for the next few years. Sargento is also coming into its own as a long-term acquirer in the cheese industry, after buying one of the leading string cheese brands in the U.S., Baker Cheese, in 2022 for an undisclosed amount from the fourth-generation family that had owned it for more than 100 years.

Gentine says he wants Sargento to always remain a family affair, and that extends to the family-owned businesses it acquires, as well as his thousands of employees. In 2006, more than 100 Sargento plant workers split a $206 million Powerball jackpot and, despite the windfall, several of those lottery winners still work for the company. It’s that kind of place. Some 110 employees who have worked at Sargento for more than 30 years, including one who is celebrating 60 years this year.

“We’ve always had a very long-term focus on our business,” Gentine says, “and it allows us to continue to make investments and ultimately do what’s right, not just for the business but also for our 2,600 Sargento family members.”

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