T. Marzetti Company

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T. Marzetti Company

1105 Schrock Road, Suite 300
Columbus, Ohio 43229
U.S.A.
Telephone: (614) 846-2232
Fax: (614) 848-8330
Web site: http://www.marzetti.com

Wholly Owned Subsidiary of Lancaster Colony Corporation
Founded: 1896
Sales: $580 million (2002 est.)
NAIC: 311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing; 311991 Perishable Prepared Food Manufacturing

T. Marzetti Company is the Columbus, Ohio-based Specialty Foods Group of Lancaster Colony Corporation, contributing the majority of the revenues posted by its parent company, amounting to nearly $560 million in 2002. Marzetti retails a wide variety of products, packaged under some 15 labels. In the produce section of the supermarket the company sells salad dressings, croutons, vegetable dips, fruit dips, fruit glaze, and apple crisp baking mix under the T. Marzetti label, as well as a line of croutons under the Chatham Village label. On the shelves, the Marzetti name is found on salad dressings, slaw dressings, and sauces. Other shelf items include Cardini’s salad dressings and marinades, Girard’s salad dressings, Texas Best barbecue and grilling sauces, Inn Maid noodles, Amish Kitchen egg noodles, Jack Daniel’s mustards, and Romanoff caviar. In the supermarket frozen foods section, Marzetti sells New York and Mamma Bella garlic bread, Sister Schubert’s rolls, Reames egg noodles, and Mountain Top pies. In the foodservice sector, Marzetti offers both brand-name and private-label dressings and sauces; New York Frozen Foods sells frozen breads and rolls to restaurants; and the Reames subsidiary sells frozen noodles and pastas. Most of Marzetti’s products are manufactured in 13 U.S. plants, with some individual items made by third parties.

From Florence to Columbus, Teresa Marzetti and the Birth of an Eatery

The person behind the T. Marzetti name was Teresa Marzetti (née Piacentini), who in 1896 at the age of 18 emigrated from Florence, Italy, to the United States, settling in Columbus, Ohio, the home of The Ohio State University. She and her husband Joseph established a small Italian restaurant that catered to the student population. According to company lore, she jotted down on a scrap of paper her goal for their endeavor: “We will start a new place and serve good food. At a profit if we can, at a loss if we must, but we will serve good food.” The quality of the meals, drawn from old world recipes, assured the restaurant’s popularity. After Joseph died in 1911 Teresa ran the business by herself until she was remarried to a man named Carl Schaufele. A second, larger, restaurant was opened in 1919, one that became especially known for its salad dressings, which many customers began to purchase for takeout in small buckets. While Marzetti’s evolved into a four-star restaurant, known throughout the region, one of its dishes, a ground beef and pasta casserole named Johnny Marzetti after Joseph’s brother, became famous across the country in the 1920s and standard fare at the family dinner table and school cafeteria.

Launching Slaw Dressing Commercially in 1947

In 1942 the older Marzetti restaurant closed and the operation consolidated in the remaining location. The demand for Marzetti’s dressings grew so strong that the upstairs kitchen turned into a small-scale factory. The first product bottled for sale outside the restaurant was Marzetti’s Original Slaw Dressing in 1947. The person behind the slaw recipe, however, was not Teresa Marzetti or even of Italian heritage, but a young African American woman named Katherine Hill, whose tenure with the company would last nearly 70 years.

In 1933, in the midst of the Depression, Hill was 17 years old and desperate for work. Drawn to a distant church by prayer, according to her story, she met a Marzetti’s employee who told her that the restaurant was looking for someone to take over for a dishwasher who was going on a two-week vacation. She took the job at $10 a week, then stayed on for another two weeks chopping vegetables to cover for another worker on vacation. She was so hard-working that when a baker quit on her last day of employment, she was hired to take his place on a permanent basis even though she possessed no knowledge of baking and displayed no interest in cooking. Nevertheless, she soon exhibited a natural affinity for the work, so much so that she was eventually asked to develop breads, salad dressings, and sauces. Without the use of a cookbook she experimented, once explaining her method to the Cincinnati Post: “I taste, see, smell, feel and pour.” One of Hill’s greatest attributes was her insatiable desire to improve on an already delicious product. For decades she would arrive at work at 5:00 in the morning to develop new recipes for Marzetti, ultimately becoming the company’s senior food scientist, despite the lack of formal training, as well as a company icon. She finally retired in 2002 at age 86 after 69 years of service.

Marzetti’s dressing was followed by French and Italian, the products proving so popular that the restaurant staff simply could not keep up with the demand. As a result, in 1955 a bottling and distribution operation was established on Indianola Avenue in Columbus, a facility expanded numerous times over the years and still in operation. Moreover, the salad dressing business began to overshadow the restaurant. It attracted the attention of Lancaster Colony Corporation, which purchased the company in 1969 following the death of Schaufele. Teresa Marzetti died in 1972, at which point the restaurant was closed.

Lancaster Colony also was based in Columbus, founded in 1961 when local entrepreneur John B. Gerlach decided to create a holding company for all the businesses in which he held a controlling interest. Lancaster Colony through its subsidiaries produced a varied assortment of manufactured items, including stemware, plastic housewares, components for televisions and scientific instruments, work gloves, and kitchen and bath accessories. Gerlach took the company public in 1969, when by year’s end Lancaster Colony was posting net sales of $63.9 million. The acquisition of the T. Marzetti Company for $4.6 million was completed in 1970, and the new subsidiary quickly took steps to grow. With the rising popularity of salad bars, it proved to be a good time to be in the salad dressing business. Management introduced seven new flavors and also spent $1 million to acquire the Frenchette product line from the Carter-Wallace Company. As a result of these steps, Marzetti improved its sales by 26 percent in two years.

Over the ensuing years, Lancaster Colony made further acquisitions in food products, which were folded into Marzetti, expanding the subsidiary well beyond salad dressing and ultimately transforming the former restaurant sideline into the holding company’s Specialty Food Group. In 1977 Quality Bakery Company, based in central Ohio, was acquired, which brought with it the Mountain Top Pies brand of homemade quality frozen pies, which had been successfully launched in the early 1960s and became popular throughout Ohio and surrounding states. In 1978 Lancaster Colony added New York Frozen Foods, a Cleveland family bakery, and Frozen Specialty Bakers. The holding company then bought Inn Maid Products, makers of dry egg noodles, in 1981. As had been the case with Marzetti dressings, Inn Maid noodles was a sideline that evolved into a full-fledged business. The founding Reining family operated the Smithville Inn, located in the heart of Ohio’s Amish country, where egg noodles were traditional fare and served at the Inn. Guests began requesting egg noodles for home use, which eventually led to the family packaging the product under the “Inn Maid” label. By 1982 Marzetti, now offering frozen pies, partially baked frozen breads, and noodles in addition to salad dressings, contributed 11.5 percent of Lancaster Colony’s profits. A year later, the salad dressing line was bolstered by the acquisition of New York based Pfeiffer salad dressings, which had been operating as a subsidiary of Hunt-Wesson Foods. Like Marzetti’s dressings, Pfeiffer products originated in a restaurant, in the Marine Grille of Buffalo New York during the 1950s.

Marzetti gradually took on greater importance for Lancaster Colony as other business segments failed to produce the same level of long-term success as Specialty Foods. In 1989 it introduced its Ranch Veggie Dip, a product that essentially refashioned the supermarket produce section. As had been the case with salad bars in the early 1970s, Marzetti successfully tapped into a popular trend. In this case, supermarkets were beginning to cut up vegetables such as celery and carrots, packaging them as convenience items. A refrigerated vegetable dip was a perfect complement, but what was even more crafty was Marzetti’s decision to ignore the already crowded dairy case in favor of placing their product in the produce section, thereby inventing its own niche and avoiding competition. Until Campbell Soup Co. introduced Marie’s Dip in 1993, Marzetti faced no major competition and by adding to the line with such varieties as Dill, Blue Cheese, and Spinach, the company was able to establish itself as the undisputed leader in the veggie dip category. Marzetti’s hold on the business would be strengthened by an ongoing development program that eventually added a number of other flavors as well as “light” and fat-free varieties and new formats such as single-serve tubettes. Marzetti also looked beyond the produce section of supermarkets, turning to convenience stores and even airlines.

Company Perspectives

Everyday, Marzetti’s quality products are found on the dinner tables of millions of consumers, as well as in well-known restaurant chains across the country, a fitting tribute to Teresa Marzetti’s pioneering Columbus restaurant.

Marzetti expanded its product offerings in the early 1990s through a number of acquisitions. In 1991 Lancaster Colony acquired Girard’s Fine Foods, another manufacturer of salad dressings, established in San Francisco by chef Pierre Girard, who started out with an original recipe for Original French dressing and then added other varieties. In 1993 the parent corporation paid $5.4 million for Romanoff International, which added products such as Romanoff Caviar, Texas Best Barbecue Sauce, Mr. Marinade, and Jack Daniel’s Mustard. Focusing on specialty food products proved to be a wise decision by Lancaster Colony; despite a poor economy in the early 1990s, niche food products continued to prosper. In fiscal 1994, the Specialty Foods Group contributed 40 percent of the corporation’s $722 million in sales, as well as 40 percent of operating income. Through the first five years of the 1990s Marzetti enjoyed annual compounded sales growth of 14 percent. In 1996 the company added to its core line of salad dressings by acquiring the Cardini line. Cardini dressings bore the last name of chef Caesar Cardini. His first name will be forever linked to his 1924 culinary creation, the Caesar salad. He supposedly concocted it for guests out of necessity at his Tijuana, Mexico hotel, which was popular with Hollywood celebrities who visited the city during the Prohibition era.

Frozen Garlic Bread: A Mid-1990s Boon

Marzetti’s innovative spirit was again evident in the mid-1990s when it revitalized the frozen garlic bread category, a product that had been far from convenient for consumers, requiring some 30 minutes to bake and generally resulting in a loaf that the customer squashed while attempting to slice it. In 1996 Marzetti introduced Texas Garlic Toast, which offered eight individual slices in a resealable bag, with preparation time reduced to four to five minutes. It was the first pre-sliced garlic toast product when it debuted in six states. Moreover, the bread tasted good and developed strong word-of-mouth from consumers. While the competition followed its lead, Marzetti developed new items to support its growth, in 1998 introducing Texas Toast with Cheese, followed by a Parmesan Cheese Toast. The category as a whole enjoyed strong growth in the late 1990s, driven in large part by the success of Marzetti, which according to company officials was responsible for about half of the category’s growth. In 1996 Marzetti was a distant fourth in the category, with little more than an 8 percent market share, compared to Pepperidge Farm’s leading share of 40 percent. By November 2001, however, Marzetti surpassed Pepperidge Farm in a highly competitive and rapidly growing category, capturing 27.1 percent of the market.

Marzetti also added to its frozen bread business by external means. In 2000 it acquired Sister Schubert’s Homemade Rolls, Inc., an Alabama producer of frozen Parker House yeast rolls. The business was established in 1989 in Troy, Alabama, by Patricia Barnes, who initially produced the rolls in her home kitchen for a small catering business. By the time Marzetti purchased the company it was generating more than $20 million in annual revenues. In 2001 Marzetti bought Mamma Bella Foods, a California frozen bread manufacturer. The 17-year-old company also produced a highly popular garlic toast and was the category leader west of Denver. As Marzetti had done with its New York brand of garlic bread, it looked to expand the Mamma Bella brand by building a reputation for quality and introducing innovative products. Shortly after the acquisition, Mamma Bella introduced Garlic Bread Sticks and Five Cheese Garlic Toast.

Acquisitions to Marzetti helped to fuel the growth of the Specialty Food Group’s contribution to the Lancaster Colony’s balance sheet. In 2000 the retail portion of Specialty Foods accounted for 22 percent of all revenues, and foodservice sales accounted for another 20 percent. In 2002 those numbers grew to 27 percent and 24 percent, respectively. With the group continuing to develop new branded products and expand on its existing channels of distribution, there was every reason to expect Marzetti to enjoy even stronger growth in the foreseeable future.

Principal Competitors

H.J. Heinz Company; Kraft Foods Inc.; Campbell Soup Company.

Key Dates

1896:: Teresa and Joseph Marzetti establish a restaurant in Columbus, Ohio.
1947:: The restaurant’s slaw dressing is sold commercially.
1955:: A bottling plant is opened.
1969:: The business is sold to Lancaster Colony Corporation.
1972:: Teresa Marzetti dies; the restaurant is closed.
1977:: Quality Bakery Company is acquired.
1978:: New York Frozen Foods and Frozen Specialty Bakers are acquired.
1981:: The company purchases Inn Maid Products.
1983:: The salad dressing line is bolstered by the acquisition of Pfeiffer salad dressings, previously operating as a subsidiary of Hunt-Wesson foods.
1991:: Lancaster Colony acquires Girard’s Fine Foods, manufacturer of salad dressings.
1993:: Romanoff International is acquired for $5.4 million.
1996:: The company acquires the Cardini line of salad dressings.
2000:: Marzetti acquires Sister Schubert’s Homemade Rolls, Inc.
2001:: Marzetti purchases Mamma Bella Foods, a California frozen bread manufacturer and category leader west of Denver; Marzetti surpasses leader Pep-peridge Farm in the frozen bread category, capturing 27.1 percent of the market.