About five years ago, Christopher Salm was a finance and technology consultant, while his lifelong friend, Eric Romberg, was a mortgage lending professional. Both desired a career change and wanted to go into business together.
“We originally were dead-set on pursuing craft brewing as a career and spent several years researching it. But new microbreweries began popping up in just about every town across the country. Growing up around the meat industry, I learned about Salm Partners LLC’s unique processing technologies [including collagen co-extrusion, cook-in package production systems] and thought, ‘Let’s apply the same technologies of producing craft beer to craft sausage,’” Salm explains. “Gilbert’s Craft Sausages (www.GilbertsSausages.com), Wheaton, Ill., was formed in April 2010 and by June 2010 I quit my former job to be with Gilbert’s full-time. Eric soon joined me and we are now co-owners of the business.”
Salm just happens to be the son of Christopher P. Salm, one of four co-founding brothers of Denmark, Wis.-based Salm Partners LLC (www.salmpartners.com), a leading co-packer of smoked sausages and hot dogs. This leading-edge co-packer produces all of Gilbert’s Craft Sausages products – but it is not involved from a management or equity standpoint.
Great opportunity
Only a handful of key players dominate the retail dinner-sausage category in the United States, but many of them offer identical products, Salm and Romberg claim. There’s a lot of room for growth within the artisan-style sausage category where people are looking for healthier products that feature higher-quality ingredients and more unique flavors, they add.
“Consumers are willing to pay a little bit more for such products,” Salm adds. “We may never be as big as Oscar Mayer, but we’re doing our own thing making different, high-end sausage products.”
Indeed, they are. The company’s upscale product line-up includes Beef & Bleu Uncured Beef Smoked Sausage with Bleu Cheese; The Froman Uncured Beef Franks (named after Abe Froman, who is known as the Sausage King of Chicago); Chipotle Mozzarella & Lime Uncured Pork Smoked Sausage; Gluten-Free Beer Bratwurst (the only one on the market); Chicken Bratwurst with Sautéed Onions; Beef & Cheddar Uncured Beef Smoked Sausage – and the current best-seller Caprese Chicken Sausage with Sun-Dried Tomatoes, Basil and Mozzarella. Two more yet-to-be-identified new products will soon be launched.
Meanwhile, retail dinner sausage sales continue their healthy climb. For the 52 weeks ending Nov. 30, 2014, Retail Refrigerated Dinner Sausage category sales (for the total US multi outlet – supermarkets, drugs stores, mass market retailers, military commissaries and select club and dollar retail chains) totaled $3.2 billion, up almost 10 percent from the same one-year earlier period, according to Infoscan Reviews, IRI, Chicago.
Equally important, potential for further sales growth exists. Although dinner sausage is loved by millions of Americans, many others haven’t embraced this product because they’re unsure about the quality and safety of some of the artificial ingredients in such products, Salm says. Gilbert’s strives to use only the finest ingredients. All proteins used are fresh, refrigerated and never frozen from animals slaughtered within one week of arriving at the plant. Suppliers include American Foods Group, beef; JBS USA, pork; and Wayne Farms for chicken. Gilbert’s beef sausages also use beef sirloin to gain better flavor and texture, as well as a leaner nutrition profile.
Salm feels life choices fuel their business. “When someone picks up a package of our products, reads the labels and compares it to a mainstream sausage, our products include meat, cheese, spices, beer…simple, easy-to-understand ingredients – and there’s no MSG, nitrates or corn syrups,” he adds. “Our products are gluten-free. The conscious eater is something we hope is here to stay forever and not merely a trend.”
Other ingredients used include bleu, cheddar and mozzarella cheese; dill; chipotle peppers; sautéed onions; basil and sun-dried tomatoes, which can be clearly seen in the links. Each link in a unique collagen-protein casing exhibits a crisp snap with every bite.
“Sometimes bigger companies just can’t get out of their own way; they feel they need to add artificial flavors to make sausage taste more like sausage,” Salm says.
It’s a lot easier for some people to spend an extra 50 cents or $1 on a package of sausage that’s a little bit healthier, a more premium product, than it is to go from buying ground beef to a ribeye, he continues. “Our product is a luxury item that’s affordable and it’s a little bit better for you. You feel a little bit better about feeding it to your family – but it’s not going to break the bank,” Salm says.
Building something special
“We know Gilbert’s Craft Sausage is building something special in the marketplace,” says the elder Salm. “Each blending process could take days to prepare, but from the time we get [the sausage batter] to the vacuum stuffer until the time it goes into the finished carton probably takes two hours.”
Packaging is critical to the line’s growing success. Each cardboard package of Gilbert’s Craft Sausages contains four single-serve, individually vacuum-packaged links separated by perforations. Each one-link package features an easy-open peel. Each raw link is also cooked inside its package at the plant, which greatly enhances food safety, product quality and extends shelf-life up to 180 days. Gilbert’s links can be heated in the package via microwave or by boiling in water for 25 seconds. “I prefer grilling, but the microwave is a convenient option when time is an issue,” Salm says.
And the rest is history. “Last year we produced a bit less than 1 million lbs. of Gilbert’s Craft Sausages, which is up 100 percent from the prior year,” the younger Salm says, “and we’re hoping to grow another 100 percent this year.”
Two-man show
Salm and Romberg basically run a two-man sales and marketing organization. “Chris handles the accounting. All of the other day-to-day functions we split between us,” Romberg says. “We work with some independent contractors for demos and certain sales functions.”
“We also work on developing new-product concepts,” Salm says. “Developing new-product ideas involves everything we take in around us – different culinary trends we see, potential products we’re interested in testing. Over the summer, I grew kale and Swiss chard. I came across a recipe that included sautéed kale with shallots and white wine and thought that would be really good in a sausage. So, we started experimenting with creating such craft sausage products.”
Both men test their new-product concepts at the Denmark plant’s test kitchen, which was developed by Paul Hargarten. “Prototype sausage products we develop in that test kitchen are almost identical to what comes out of Denmark’s full production facility,” Salm says.
A growing business
Gilbert’s Craft Sausages are sold in more than 600 retail locations nationwide, and in more than 70 club stores throughout the Midwest. Chicago is Gilbert’s Craft Sausages’ biggest market. Other major markets are Iowa, Nebraska, Minnesota, Kansas, Missouri and Ohio. Major customers include Harris-Teeter in the southeast (the company’s first foray outside the Midwest) and Costco Midwest, among others.
“We’re about 95 percent retail and we do some foodservice with Chicago’s Goose Island Beer Company, which operates a catering business; we help them cater to the Wrigley Field Roof Tops customers,” Salm says. “We are also sold at chains such as Mariano’s, Jewel, Hy-Vee – supermarkets that cater to [higher-end] demographics and offer more unique products. We also do some online website sales.”
Although controlling growth is harder for smaller, growing companies, “We haven’t taken on additional capital; we have a line of credit, but we’ve never dipped into it,” he adds. “We’re taking a rifle not shotgun approach to growth. It’s kind of like a poker tournament where maybe the right opportunity will come along where you put all your chips in the middle, but it has to be the right opportunity – win big and lose small – we want to grow strategically.”
On the manufacturing end, the sky is the limit, Romberg says. “But we have to make sure we don’t outgrow what we can support,” he adds.
Gilbert’s doesn’t undertake traditional advertising and marketing. “We feel our dollars are best spent marketing at the point-of-purchase in stores,” Salm explains, “doing demos, featuring shelf tags or getting end-cap displays. We also provide products for a lot of beer fests and street fests during summers – it’s a revenue source and great marketing for us because these people associate Gilbert’s with the fun times they’re having – sausage and beer go well together. We give away t-shirts and other promotional merchandise. Summertime is really good for non-traditional advertising and marketing.”
The growing company’s greatest challenge is building its business into a nationally recognized, year-round, leading brand. “Right now we’re a seasonal business in the Midwest consisting of Eric and me,” Salm says. “To make that big leap, we’re going to need additional infrastructure, additional capital, additional people, etc.”
Their biggest opportunity is in the vastness of the market. “We’ve barely touched it,” Salm says. “We’re experiencing success in the Midwest and Southeast. We have a formula that works and there’s no reason to think it won’t work elsewhere.”
Opportunities may also exist in foodservice. “There are plenty of restaurants that might want individually wrapped sausages,” Salm reasons. “Maybe they have a hot dog on the kid’s menu that sells four or five hot dogs a night – they don’t want to have a giant box of frozen, bulk-pack hot dogs.”
“We’re going to continue down the path we’re currently on and keep developing unusual craft sausage products,” Romberg adds.
But diversifying into other sausage categories isn’t out of the question. “Maybe we’ll come out with a breakfast sausage; there are other things we’d like to do that involves cook-in manufacturing technology,” Salm says. “We’d like to tinker around with things like charcuterie and dry sausage on a small scale. As far as where the business is going, for now it’s refrigerated smoked sausages, franks, bratwurst and products like that.”
Gilbert’s Craft Sausages’ goal before it possibly further diversifies is to first establish a solid national brand, Romberg iterates. “If you want to launch a totally new product, the best thing to do is have a brand behind it.”
As for those who are curious about who Gilbert is, Salm explains: “Gilbert is my middle name, my father’s father’s first name and my mother’s mother’s maiden name. Gilbert just sounds like someone who should be making sausage.”
