Klement's Sausage Company

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Klement's Sausage Company

207 E. Lincoln Avenue
Milwaukee, Wisconsin 53207
U.S.A.
Telephone: (414) 744-2330
Toll Free: (800) 553-6368
Fax: (414) 744-2438
Web site: http://www.klements.com

Private Company
Incorporated: 1958
Employees: 420
Sales: $120 million (2002 est.)
NAIC: 311612 Meat Processed from Carcasses

Klement's Sausage Company produces more than 700 varieties of sausage and meat products at its two plants on the south side of Milwaukee. Its processing activities are split into three distinct "kitchens" based on the type of product produced: a Pre-Rigor Pork (Fresh Sausage) Kitchen, a Cooked and Smoked Sausage Kitchen, and a Summer Sausage Kitchen. The company emphasizes the production of sausages using traditional European recipes to create the distinct flavors of Italian, German, or Polish sausages. In addition to its processing, distribution, and warehouse operations, Klement's facilities also encompass a hog slaughtering plant and a USDA certified lab that regulates product safety.

Klement's sausages are sold mainly in Wisconsin and the surrounding area, although the company's products can be found at special venues in all 50 states. Aside from the products sold under its own brand, Klement's supplies meat products for private-label contracts, for restaurants and caterers, and for institutions such as schools, theme parks, hotels, casinos, and correctional facilities. The company also has exclusive agreements to sell its sausages at a number of sports venues. It is particularly well known for sponsoring the "sausage races" at Miller Park, home of the Milwaukee Brewers. The company is family-owned and is still led by members of the Klement family.

An Old-Style European Sausage Kitchen: Founding the Company in 1956

Klement's Sausage Company was founded in 1956 when three brothers, John, George, and Ronald Klement, bought the Badger Sausage Company at Lincoln Avenue on Milwaukee's south side. They had learned the art of sausage making from their father Frank, who was part owner of the Milwaukee Sausage Company. The brothers used recipes that "Grandpa" Frank had brought from Europe to open a small sausage kitchen that catered to the tastes of area residents. The south side district where their shop was located had a strong European heritage, and many of the Klement brothers' earliest customers were descendants of Polish or German immigrants who appreciated sausage with the distinct flavors of the old world. The shop was ensured a steady supply of fresh meat thanks to its location in the midst of Wisconsin's thriving pork and cattle industry.

The company was renamed Klement's Sausage Company in 1958. At first, the sausage shop had only six employees and all products were made in a small kitchen. But the company grew as each brother brought his own particular talent to the enterprise. Ron was known as a good salesman, George was an expert sausage maker, and John (or "Jack") had a gift for administration. His son John told the Milwaukee Journal Sentinel in 2002, "He could bring an organization together so it could work like a finely tuned machine. He was able to get the personnel and put them in the right positions to make the company grow." Klement's expanded its meat processing facilities at the original Lincoln Avenue site into a full-scale factory in the 1960s.

Expanding Visibility in the 1980s

Klement's increased its public visibility with the institution of the "sausage races" in the early 1980s. The promotion got its start from a popular crowd diversion at Milwaukee Brewers baseball games, where a group of cartoon sausages would race across the scoreboard. Fans liked the sausage entertainment enough that Brewers executives decided to make it a live event with real humans wearing large sausage costumes. Klement's became the event sponsor. By the mid-1980s, at every home Brewers game, the Hot Dog, the Bratwurst, Stash the Polish, and Guido the Italian would race each other to home plate as spectators made bets on who would win.

In 1985 Klement's built a hog butchering facility at its main Lincoln Avenue plant to provide a reliable source of fresh meat for its processing operation. With the onsite slaughterhouse, an animal could be turned into sausage within an hour after being eviscerated. Three years later the company expanded again when it built an 85,000-square-foot distribution center and warehouse on Chase Avenue, a few blocks away from the existing plant. Klement's also had acquired a 32,000-squarefoot sausage plant, formerly known as the Uncle August Sausage Co., in the northeast part of Milwaukee. Production of summer sausage and beef sticks was transferred there for several years. The Chase Avenue facility served as the distribution hub for both plants.

Product Diversification in the Early 1990s

Klement's Sausage's association with the Milwaukee Brewers became official in 1992 when the company won a contract to supply all the bratwurst at the team's home County Stadium. Over the next few years the company built connections with other sports teams as well. Klement's sausages became available in the home venues of the Minnesota Twins, the Minnesota Vikings, the Kansas City Chiefs, and the Green Bay Packers. The sausage races, however, remained unique to County Stadium. But by the early 1990s the sausage characters were venturing out of the stadium to mingle with the public at events including grand openings, parades, the Wisconsin State Fair, and the Polish Fest. Klement's even developed sausagerace jackets that grocery stores could give away in customer drawings. Now, even those who were not sports fans might bump into the 8-foot tall sausage characters over the meat cooler at the grocery store. "Klement's realized that if we were going to continue to be successful, we would have to connect with our target consumers on a different level," said Daniel Lipke, senior vice-president, to the Milwaukee Journal Sentinel in 1998. Klement's also launched a web site in 1995 to sell gift packages over the Internet—and the web site included a sausage race game.

By the mid-1990s Klement's product line had diversified into more than a hundred different products. A light line was introduced in the early 1990s in response to consumer demand for low-fat products. By the middle of the decade, the light line, which included light bratwurst; bologna; and Italian, smoked, and summer sausage, accounted for about 10 percent of sales. Turkey bratwurst was introduced near the end of the decade as another light option. Another growing product category was ready-to-eat meats, including pre-sliced deli-style meats such as ham, corned beef, and bologna. The category grew about 20 percent a year through the early 1990s. Finally, sales of nonrefrigerated meat snacks such as ham and beef sticks also were rising rapidly. Klement's promoted them as a high-protein, lowfat snack and worked to place the products in more convenience stores as well as grocery stores. In general, according to the company's market research, consumers were looking for more conveniently packaged products in smaller portions with lower fat so long as flavor was not sacrificed. Klement's developed a wider array of products each year as it worked to address those demands. Still, the company's largest sellers overall continued to be traditional products such as bratwurst, liver sausage, and summer sausage. Private-label contracts, in which Klement's produced products to be sold under another company's name, also contributed to sales. The company became a supplier for Sysco Food Services Inc., Reinhart Institutional Foods Inc., and Saz's Barbecue Products.

Klement's celebrated its 40th anniversary in August 1996 with an employee party at the Milwaukee Zoo. The company now had more than 350 employees at the main Lincoln Avenue plant and the Chase Avenue distribution center. After four decades in business, Klement's was still making sausages with strong ethnic flavors. "We use natural spices for higher and more intense flavor profiles," James Klement told the National Provisioner in 1996. "We put garlic in Polish sausage because people want to taste it. They would rather have more than less."

Building Capacity for the New Millennium

By the mid-1990s, the Lincoln Avenue plant was getting to be too small for the company's increased production, so Klement's embarked on a $5 million project to add 60,000 square feet to the Chase Avenue facility. The facility had been used previously only as a distribution center, but most of the addition was devoted to processing activities. Several employees were moved there once it was completed in 1998 and five to ten more workers were hired. The Uncle August factory on the northeast side was sold within the next few years and all production was focused at the two south side plants.

George Klement, one of the founding brothers, died in 1996. He had been vice-president and production supervisor. John "Jack" Klement was now the only brother still at the plant; he acted as president. Several second-generation members of the family were involved in the company. John's sons James and Jeffrey both held high management positions, and James had even earned a Ph.D. in food science. George's son Roger was vice-president of finance. Over the years, the company had received offers to move out of Wisconsin, but Klement's stayed where it was. Jeff Klement told Milwaukee's Business Journal in 1996, "We're very committed to Milwaukee. My dad always says he's keeping the business here because Milwaukee's where the sausage eaters are."

Aside from making sausages, Klement's was involved in some real estate dealings, mainly managing some commercial and residential property in the neighborhood around its facilities. In 1996 the company bought a 75,000-square-foot office building in the Town of Pewaukee west of Milwaukee. Three years later the company bought a 160-unit apartment building in the southern part of Milwaukee. Jeffrey Klement eventually started an independent company to pursue real estate development.

Company Perspectives:

Mission Statement: To continue to improve our leadership in the production of the finest quality meat products for all of our valued customers at an affordable price in a very safe and efficient working environment.

In 1998 Klement's profited from historically low hog prices. Prices were low due to overproduction and the closing of several slaughterhouses, so that there was more pork than could be processed. Retail prices at grocery stores, however, dropped only slightly and pork consumption by consumers remained steady. Klement's operating profit rose in 1998 due to the lower raw material costs and wider profit margin.

Klement's announced a new partnership with the Milwaukee Brewers in 1999. The team was moving to a new stadium, Miller Park, and Klement's would be the official provider of hot dogs, Polish sausages, and bratwurst at the new venue. The company opened its own "Sausage Haus" building adjacent to the stadium as a place for fans to gather over beer and brats. Klement's also would be promoted with signs at the stadium and ads during game telecasts. The sausage races continued at the new stadium. The sausage characters branched out into other sports as well: in 2001 they arranged to play basketball at a Milwaukee Bucks game. That year Klement's became the exclusive supplier of sausages for Bucks games as well as any other event that was held at the team's Bradley Center.

Yet baseball and hot dogs would always be first and foremost. In a bizarre occurrence during the 2003 Brewers season, the team played host to the Pittsburgh Pirates. When the sausage race was underway during the seventh-inning stretch, Pirates first baseman Randall Simon took a playful whack at the Italian sausage with his bat. The sausage went down, and the hot dog also tumbled to the ground. The incident drew considerable media and legal attention, but in the end, with no injuries reported, Simon paid a fine of $432 for disorderly conduct and all was forgiven.

A growth in the sales of jerky and other meat snacks helped fuel an 11 percent increase in growth at Klement's in 1999. The company spent $2 million that year on additional processing equipment for meat snacks and hired more sales representatives to market the products in as many convenience locations as possible. In 2000 Klement's announced plans to hire 45 new workers by March of that year, the largest single addition in the company's history. Even though meat snacks accounted for only about 3 percent of sales, Klement's anticipated growth in the sector. Nationwide meat snack consumption had grown in the late 1990s. Jeff Klement told the Milwaukee Journal Sentinel in 2000, "We're finding growth is harder to get in certain lines. So we're making commitments to segments that will give us growth in the long haul."

Founder and CEO John Klement died in 2002 at the age of 84. He had continued to guide the company even in the last years of his life. Now the cousins Dr. James Klement and Roger Klement became co-presidents of the company. Klement's came up with new products and promotions to keep its sales strong in the new millennium. The Bella Delina brand was introduced as a high-end line of gourmet deli products that used particularly high-quality meats and ingredients. The company also started the "Patio Daddio" King of the Grill promotion. The campaign's slogan was "Who's Your Patio-Daddio?" Consumers got a free T-shirt and the chance to win a wooden deck or a Weber grill if they sent in four Klement's UPCs along with a picture of their favorite cook grilling Klement's products.

Key Dates:

1956:: The Klement brothers buy the Badger Sausage Factory in Milwaukee.
1958:: Badger Sausage is renamed Klement's Sausage Company.
1980s:: Klement's Racing Sausages become popular at Milwaukee Brewers games.
1985:: Klement's adds a hog butchering facility at its main plant.
1988:: The Chase Avenue distribution center is opened.
1998:: A processing addition opens at the Chase Avenue site.
2000:: Klement's hires 45 workers to support increased production of meat snacks.