Schwan's Secret Recipe

Having grown up in southwestern Minnesota and northern Iowa, respectively, Greg Flack and Mark Jansen knew about Schwan Foods—or believed they did. Like almost everyone else, they thought the Marshall-based food company consisted of a fleet of trucks that brought families ice cream and frozen entrées to their doors. Some of their friends, along with a majority of Minnesotans, still think of Schwan’s that way.

“When I tell people I work for Schwan’s, they probably think I drive one of those yellow trucks,” says Flack, who’s now president of Schwan’s Consumer Brands division. He went to work for Schwan’s Food Service division in 1987, fresh out of college. “I was totally unaware that the company had a food-service presence at the time,” he says.

"We're driving the growth in the [frozen pizza] category," says Mark Jansen, Consumer Brands' vice president of product strategy, "and we're driving it through product innovation."

As for Jansen, who’s now vice president of marketing and product strategy for Schwan’s Consumer Brands, it wasn’t until the 1990s, when he was managing Totino’s and Jeno’s pizza brands at Pillsbury, that he discovered how big a player his current employee had become in the frozen pizza category. “At that time, I saw Kraft was number one, but behind it was this company in Minnesota named Schwan’s,” Jansen recalls.

The extent of Schwan’s reach is “a fairly well kept secret,” says M. Lenny Pippin, the company’s vice chairman, president and CEO. Last year, Schwan’s—the largest privately held maker of frozen foods in the United States and the fifth-largest frozen-food manufacturer in the world in the world, with customers in 50 countries—had total revenue approaching $4 billion. Home Service (i.e., the yellow trucks) accounted for about 40 percent of the company’s revenues. Ten years ago, that division had 50 percent. Food Service, which sells frozen foods to stadiums, schools, and institutions, claims 25 percent and Consumer Brands about 35 percent. Revenues in Consumer Brands and Food Service have been growing at about double the growth rate of Home Service, according to Pippin, though all three divisions’ revenues continue to grow.

From the beginning of 2001 through 2006, sales of new products launched by Schwan’s Consumer Brands have tripled. The division is the fastest-growing frozen pizza company in the United States, and the Schwan Food Company as a whole has the largest dollar-sales volume of frozen pizzas in the world. It’s also number one in worldwide market share in frozen desserts (through the Edwards and Mrs. Smith’s brands) and Asian appetizers (via the Asian Sensations brand). Growth in Consumer Brands has been faster than the growth in the other two divisions, Pippin says, “so it is conceivable that at some point it will become the largest part of our company.” 

Flack offers an even grander vision: “The Schwan Food Company has a goal to be the biggest, the best, and strongest provider of frozen food solutions on the face of the Earth.”