The Schwan Food Company

Pizza rounds out business at The Schwan Food Company. With well-known retail pizza brands like Tony's, Red Baron, and Freschetta, the company is one of the top frozen pizza makers in the US, alongside rival Nestle. But pizza dough isn't its only money-maker. Schwan's core business is fueled by a fleet of 4,500 Home Service trucks that deliver 350 frozen food products directly to the doorsteps of some 2.5 million customers. Home Service provides entrees, breakfasts, sandwiches, side dishes, snacks, ice cream, and more to homes and by mail order throughout the US mainland. Beyond the US market, Schwan sells food in Western Europe. The family of the late founder Marvin Schwan owns the company.

Operations

The company's business segments include Schwan's Home Service, Schwan's Consumer Brands, and Schwan's Food Service.

Its Home Service business, which is supported by nearly 500 sales and distribution centers and about 4,500 home-delivery vehicles nationwide, is the largest direct-to-home food provider in the US with brands Schwan's and LiveSmart.

Schwan's Consumer Brands unit focuses on making fine frozen foods for sale in North American grocery stores. Brands include Red Baron, Tony's, Freschetta, Mrs. Smith's, Edwards, Pagoda Express, Bon Appétit, and Larry's.

The company is also a big supplier to the institutional frozen-pizza market through its Schwan's Food Service operation, which boasts more than 1,800 active distributors. The group serves healthcare facilities, public and private schools and universities, chain restaurants, and convenience stores with its Freschetta, Holiday Foods, Tony's, Mrs. Smith's, Minh, Villa Prima, and Big Daddy's products.

In the non-food arena, the company owns Bi-Phase Technologies, which is headquartered in Eagan, Minnesota. Bi-Phase designs and produces fuel-injection conversion systems that allow gasoline truck and car engines to burn alternative fuel, such as liquefied propane gas.

The company operates a total fleet of some 5,300 vehicles.

Geographic Reach

While its operations are US-centric, Schwan sells its food items in Western Europe, as well.

Through its subsidiaries, Schwan operates from nearly 600 US locations, including a dozen major food production facilities located in Florida, Georgia, Kansas, Kentucky, Minnesota, Oklahoma, and Texas, as well as four major refrigerated warehouses. It operates a packaging plant in Pennsylvania, which produces stamped metal and thermoformed plastic products that are used in a variety of business units and external clients. Schwan's Salina, Kansas, plant is one of the world's largest frozen pizza-manufacturing facilities.

Strategy

The company's Consumer Brands business has been expanding into new retail categories with its premium and Asian-style entrees and shelf-stable crusts and ice cream. As part of this effort, Schwan opened a new entree production line at its Stillwell, Oklahoma, manufacturing plant to support the Bon Appétit brand of premium entrees and its Pagoda Express Asian-style entrees.

Known for its branded desserts, the company's Edwards business rolled out ice cream products in 2011 in the southeast region, where it's most popular, and Schwan's brand ice cream items in the Midwest in 2012. Despite its efforts, Schwan saw a downward trend in the frozen-food category in 2012 after having logged historic growth rates. The company's frozen bakery desserts business is a $900-million category. (Pies comprise some 61% of that total, with cakes and cheesecakes each bringing in 13%.) To this end, Schwan in 2014 expanded distribution of its Edwards frozen pie brand to the western US to give traction to the already strong eastern US food business.

Within its Home Service segment, Schwan launched more than 30 new products in 2012 across multiple product categories. New items include beer-battered cod, four-cheese Penne with prosciutto, and a strawberry/banana smoothie. Indeed, new products rolled out during the past three years now account for more than 17% of the subsidiary's sales.

Schwan also leverages its distribution expertise to help other companies deliver their products. NutriSystem partners with Schwan for its distribution. As part of the deal, Schwan delivers the weight-loss company's products to customers in the US.

Sales and Marketing

Schwan serves foodservice customers, such as schools, universities, restaurants, healthcare facilities, and convenience stores. It sells fine, branded frozen food through home delivery, the foodservice industry, and grocery stores across North America. Some of its top brands include namesake Schwan's, LiveSmart, Red Baron, Freschetta, Tony's, Mrs. Smith's, Edwards, Pagoda Express, Minh, and Big Daddy's.

Financial Performance

The company logs about $3 billion in sales each year.

Company Background

The secretive company is under new management. Alfred Schwan (brother of Marvin) retired as chairman in 2009 after 15 years at the helm. He was replaced by longtime board member and former president of Ecolab Allan L. Schuman. The Schwan family is tight-lipped about its business, as the late founder Marvin Schwan, himself, made a point to give no interviews after 1982.

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The Schwan Food Company


115 W. College Dr.
Marshall, MN 56258
Phone: (507) 532-3274
www.theschwanfoodcompany.com

STATS


  • Employer Type: Private
  • CEO: Dimitrios Smyrnios
  • Chairman: Allan Schuman
  • CEO: Dimitrios Smyrnios

Major Office Locations

  • Marshall, MN

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