Sorrento, Inc. History

Address:

2375 South Park Avenue
Buffalo, New York 14220-2653
U.S.A.

Telephone: (716) 823-6262
Fax: (716) 823-6454

Wholly Owned Subsidiary of Besnier S.A.
Incorporated: 1947 as Sorrento Cheese Co.
Employees: 1,000
Sales: $400 million (1996 est.)
SICs: 2022 Natural Processed & Imitation Cheese

Company History:

Based in Buffalo, New York, Sorrento, Inc. is a producer of Italian-style cheeses. On its 50th anniversary, in 1997, Sorrento ranked sixth in cheese production in the United States and was the nation's leader in sales of Italian cheeses. This product was available in 75 percent of U.S. markets through a well-developed network distributing the company's Sorrento and Precious brands.

Sorrento was acquired in 1989 by Source Perrier S.A. and in 1992 by another French food firm, Besnier S.A.

The First 40 Years, 1947-87

Sorrento was founded in 1947 by Louis Russo, an immigrant from Sorrento, Italy, who brought with him a family tradition of making soft Italian cheese. Russo made cheese the old-fashioned way for his Sorrento Cheese Co., established in Blasdell, New York, a suburb of Buffalo. He bought fresh cans of milk every morning and spent the early hours making ricotta and mozzarella. Afternoons were devoted to traveling throughout western New York, selling the products of the morning's labors. In 1960 Sorrento's 18 employees moved to the location on South Park Avenue in Buffalo that was still the company home in the late 1990s.

Louis's son Joseph became president and chief executive officer of Sorrento Cheese in 1978. The company had estimated sales of $32 million in 1980. Sorrento Food Service, Inc. was founded in 1986 to distribute food products to restaurants, institutions, and other clients. Sorrento, Inc., the parent firm, was the Buffalo area's fifth largest private company in 1988, having recorded sales volume of $175 million in 1986 and $215.6 million in 1987, when it acquired California Cheese, a San Jose, California, cheesemaker. That year Sorrento also purchased J. Beres & Son, a milk processor that, in addition, made juices and fruit drinks and produced private-label goods for national companies selling to schools and the government. Sorrento, Inc. also had another subsidiary, Sorrento Express, Inc., functioning as a common-carrier trucking company.

Sorrento's facilities were capable at this time of producing 150,000 pounds of cheese per day, most of it mozzarella, ricotta, and provolone. The company had benefited from the rise of popularity in such cheeses. According to the U.S. Department of Agriculture, U.S. consumption of cheese per person rose from 13 to 25.3 pounds between 1971 and 1988 and consumption of Italian varieties increased from 2.3 to 8.1 pounds over the same period.

Acquisitions, Expansion, and Divestitures, 1988-97

Société des Caves de Roquefort, a subsidiary of the French firm Source Perrier S.A., purchased a majority interest in Sorrento in 1988. This gave Sorrento the backing to pursue other acquisitions. The company acquired the former Joseph Malecki Corp. sausage-making plant in Cheektowaga, New York, a Buffalo suburb, in 1988. The following year it purchased Hickman Coward & Wattles, a $70-million-a-year food service division of Peter J. Schmitt Co. that was supplying 2,000 restaurants and other institutions in three states from a facility of 70,000 to 80,000 square feet in an industrial park in West Seneca, another suburb of Buffalo.

Sorrento decided in 1989 to add 72,000 square feet to its Buffalo cheesemaking plant on South Park Avenue, where it also maintained company headquarters; to add 36,000 square feet to the former Malecki manufacturing and warehousing facility; to add 46,000 square feet to the former Schmitt-owned West Seneca facility; and to construct an office, repair facility, and distribution center in Blasdell. Sorrento also was selling its Walden Avenue plant in Buffalo to Wegmans Food Markets, Inc. and was shifting freezer space from this plant to the former Malecki facility. Sorrento Food Service, the distribution subsidiary, was to move into this building.

The Erie County Industrial Development Agency approved $26 million in bonds for the expansions and renovations. This agency had worked with Sorrento when it acquired the former Malecki and Schmitt facilities. "Any time a locally owned and managed company is acquired by out-of-town interests, there has to be some concern," an agency official explained to a Buffalo-area reporter. "Being part of the Perrier family gives Sorrento the opportunity to make these new investments and commitments." In 1992 Besnier S.A., a French company with worldwide dairy holdings, acquired Caves de Roquefort, Sorrento's immediate parent.

Sorrento Cheese Co. completed a three-year, $15 million renovation program in 1994. This effort included an upgrade of its refrigeration and electrical service and an 8,700-square-foot addition to a packaging area for cheese products. In 1996 the company began preparing a 53,000-square-foot expansion of the South Park Avenue manufacturing plant to add production capacity. Sorrento Cheese recently had added automated equipment as part of an automation upgrade of its ricotta unit. It also had a manufacturing plant in Goshen, New York.

This expansion, it was soon revealed, was for a building that would house Sorrento Cheese's research and development units. Most manufacturers--including Sorrento--were converting milk into cheese through a time-honored process in which enzymes separate partially skimmed milk into curds and whey. The curds are then pressed into cheese, with the type of enzymes determining the ultimate flavor or type of the cheese. The new facility was to include a pilot plant where company research engineers would modify and test various layouts, equipment, and processes.

The new building was completed in the late summer of 1997 with the aid of the Erie County Industrial Development Agency, which had promised to issue bonds valued at $4.28 million to finance its construction. The company also was granted about $600,000 in tax breaks over 15 years. The agency said these incentives were justified because Sorrento was a company that did not have to be in Erie County.

The South Park Avenue expansion also meant an end to the Cheektowaga plant, which was put up for sale in 1997. Two product lines were being made there: a string cheese snack and a prepackaged topping made by taking excess cheese from large molds at the South Park plant and shredding it. This plant was employing about 200 workers, of which 80 were transferred to the South Park operation.

Also closed in 1997 was Sorrento Express's refrigerated trucking operation in Blasdell. This subsidiary was then phased out, with some 50 employees cut from the company payroll. The 21,000-square-foot property was sold to Penske Truck Rental by means of a three-way deal in which Sorrento received a combination of cash and trade credits--in this case commodities that middleman Icon International had purchased from vendors at a discount because of their volatile shelf life. Another Sorrento business, J. Beres & Son, was sold in 1995.

Sorrento Food Service was sold to JP Foodservice Inc. in early 1998 for an undisclosed sum. Sorrento's wholesale food distribution subsidiary was serving about 7,200 accounts in western New York, western Pennsylvania, and Ohio and had sales volume of $108 million in 1997.

Sorrento Cheeses in the 1990s

Sorrento Cheese was producing a complete retail line of mozzarella, ricotta, string, and shredded cheeses in the 1990s. It also added a line of Mascarpone Italian cream cheese in 1993 for specialty pastry and dessert recipes. By the end of 1996 the Buffalo plant was taking in more than 1.5 million gallons of milk on any given day for processing into cheese, making it far and away the largest user of milk in western New York. This plant was producing 100 million pounds of cheese a year, almost half the company's total of 210 million pounds. Sorrento Cheese was accounting for about three-fourths of company revenue, with Sorrento Food Service accounting for the remainder.

Dairy Foods, a trade magazine, named Sorrento's International Shredded Cheese line as one of the top new dairy foods of 1997. Varieties consisted of English Country (a blend of Cheshire, farmer, Gloucester, and sharp cheddar), Mediterranean (Asiago, fontina, kasseri, mozzarella, and provolone), and Old European (emmental Swiss, farmer, Gouda, and muenster). Also available in shredded form were "Mexican combo" (a combination of mozzarella and cheddar with added spices), "pizza cheese" (a blend of mozzarella, romano, and parmesan), and stand-alone sharp and mild cheddars and mozzarella (in whole-milk, part-skim, low-fat, and fat-free options).

Sorrento's nonshredded mozzarella was available in whole-milk, whole-milk low-moisture, part-skim, low-fat, and fat-free options and also in string form. Its ricotta was available in all of these options except low-moisture. Sorrento Food Service also offered whole-milk diced mozzarella, provolone in block and sliced form, and ricotta colored green and red as well as white. The company completed an update for its retail packaging of ricotta, mozzarella, and shredded cheese, with a new logo unveiled to commemorate its 50th anniversary. In early 1998 Sorrento Cheese Co. launched a new television advertising campaign featuring both 10- and 30-second spots in major U.S. markets and starring Father Guido Sarducci of "Saturday Night Live" fame.

Principal Subsidiaries: Sorrento Cheese Co., Inc.

Sorrento, Inc. History

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