February 7, 2007

Jeno's

And the man behind the brand is...
Jeno Paulucci

Ettore Paulucci came to Aurora, Minnesota from Italy to work in the iron mines. Work was sporadic and his son Jeno began hustling for money at the age of 12. It was 1930, the Depression just getting underway. Jeno collected cardboard boxes to sell for a penny apiece and gathered lumps of coal that fell off the passing trains. He unloaded boxcars for $1 a car, sold ore samples to tourists and conducted tours of the mines.

When he was 14 Jeno got a job as a barker on Duluth's produce row. The 5'5" Paulucci paraded around his stand hawking fruit so loudly that the city passed an ordinance outlawing fruit stand barking. Meanwhile the Great Depression continued to beat down on his father who deserted the family in 1933. He would not return until Jeno was successful.

There were never enough hours in a day for Jeno Francisco Paulucci. He worked in the City Markets of Hibbing, Minnesota after school and from 5 a.m to midnight on Saturdays. At 16 he became a sales rep for a food wholesaler, a business he worked in until 1945.

During World War II fresh vegetables became scarce and Paulucci noticed that Oriental families were growing bean sprouts in hydroponic gardens. Paulucci decided to form a partnership in the Bean Sprouts Growers Association. "I don't think I'll ever forget the look on the banker's face when I told him I wanted to borrow $2,500 to grow sprouts from mung beans," he said. But he got the money.

The bean sprout business struggled but as he talked to retailers Paulucci realized that they never had any canned Chinese food on the shelves. He would make chow mein. Paulucci named his food line Chun King, the first Chinese-sounding name that came to mind. But how was an Italian from Minnesota going to sell Chinese food?

He added flavor to the typically bland Chinese fare. He worked constantly to improve his profit margins. When the Minnesota growing season was too short to grow celery Paulucci had to buy his celery in Florida like everyone else. But when he noticed that farmers cut the stalks in even bunches to facilitate shipping he negotiated to buy the cut-off celery, typically discarded for cattle-feed. He paid one-quarter the going rate.

Every dollar saved in production became a dollar spent in advertising. The food processor who began in a quonset hut in Grand Rapids, Minnesota was the leading Chinese Food maker by the early 1960s. But there were growing pains - especially quality control. Food Fair, a major grocery chain and Paulucci's largest customer, threatened to discontinue handling Chun King over a rash of customer complaints.

He flew to Philadelphia to meet Food Fair's head buyer. Opening a can to demonstrate Chun King's quality Paulucci looked in and met the bulging eyes of a huge grasshopper. He reached in, snatched the grasshopper and ate it before the buyer noticed. The account was safe.

Paulucci sold Chun King for $63,000,000 in 1966 to R.J. Reynolds Foods. He came along as Chairman of the Board. The arrangement did not last long. Paulucci was used to arriving for work at 6:00 a.m. On his first day of work at RJ Reynolds the guard wouldn't let him in the building at that hour. Paulucci took his 63 million dollars and tackled the frozen pizza business.

At the time only local and regional brands of frozen pizza were available. Using his same formula of low-cost production and an aggressive national advertising campaign Jeno's became America's #1 frozen pizza by 1972. The big food processors now entered the field. To compete Paulucci needed more central distribution and moved to Ohio.

He was vilified in Duluth for taking away 1300 jobs from a depressed area and he vowed to replace every one of the lost jobs. The effort consumed him. It crushed Paulucci's ego to take jobs from his hometown. He offered his terminals rent-free for two years but was only able to attract five companies and 200 jobs to town. Paulucci helped build a new arena, recreation center and a downtown retail center. Still, the battle with Duluth raged.

In 1986 Paulucci sold Jeno's to hated Pillsbury for $150,000,000 and made one last attempt to revive Duluth. Nothing worked. And now the failures of Duluth haunted his business ventures as well. An Italian-American magazine failed. He opened and closed pizza delivery and Chinese food delivery businesses in Florida. A billion-dollar real estate project in Orlando floundered. But throughout his ordeals Jeno Paulucci remained a man of boundless energy still pursuing his dreams.

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