Maglio outsources sausage production as a new recipe for survival

Ed Wenda packages wrapped sausages at Maglio Fresh Foods. The focus now is on a market under construction to serve the general public. AKIRA SUWA / Staff Photographer
Ed Wenda packages wrapped sausages at Maglio Fresh Foods. The focus now is on a market under construction to serve the general public. AKIRA SUWA / Staff Photographer
Posted: July 17, 2014

Given the adage likening anything distasteful to watching sausage being made, there's probably something funny to say about no longer being able to see sausage production at Maglio Fresh Foods in South Philadelphia.

But nobody's laughing at Third Street and Pattison Avenue. Not the owners. And certainly not the employees - 70 at the company's peak in 1989 - who lost their jobs when the third-generation company outsourced manufacturing and packaging to North Jersey seven months ago.

It was a do-or-die situation, said Anthony L. Maglio, 72, co-owner and vice president, whose late father, Lou, was a brother of the company's founder.

"It's a matter of economics," Maglio said. "We didn't want to do it. It's a matter of survival."

Survival looks like 15 employees at the plant, just blocks from the sports complex. The focus there now is a market under construction to serve the general public, and on building brand awareness. Culinary tinkering also will continue there.

"Quality is first," Maglio said. "That's the legacy that we try to carry on."

The late Anthony J. Maglio Sr. started the business just after World War II, as a butcher shop at 10th and Wolf Streets. Brothers Lou and John joined him, and soon the shop was a company.

The first plant was on South Sixth Street, between Dickinson and Reed Streets. It sold to butcher shops, small markets, and a fledgling enterprise of three to five stores called Food Fair that would become a national chain of more than 500 stores - best known in this area as Pantry Pride.

"As Food Fair grew, we grew," with Maglio sausage winding up in about 100 stores, said company president and co-owner Anthony J. Maglio Jr., 59, son of Anthony Sr. and cousin of Anthony L.

An opportunity to make breakfast sausage for Food Fair in the mid-1950s led to a permanent new line and the need for a bigger plant, Maglio Jr. said.

The 1976 move to its current facility put the company close to the enormous Philadelphia Regional Produce Market and its customers, including restaurants, grocers, and food-truck vendors.

"And then Food Fair went out of business," Maglio Jr. said. (The chain entered bankruptcy in 1978, shedding stores gradually until the last closed in 2000.) "My dad was at his wit's end."

Fortunes flipped again when a Maglio competitor went under, creating a void the sausage company filled by getting their product into the refrigerated cases of Acme, ShopRite, Super Fresh, and Pathmark, among others.

"A lot of families were fed out of this business," said Anthony L.

And then, said Maglio Jr., "the world shrunk." Locally based markets that used to buy from local suppliers were bought by out-of-town chains, where price mattered more than quality and "the cheapest guy gets the business," he said.

As Anthony L. put it: "When the bean counters come in, the taste buds go out. We were taught by our family you never sacrifice on quality."

So the company could not, and did not, stay competitive in pricing, especially with pork's ever-increasing costs.

"We fought for a long time trying to keep everything afloat," said Anthony L., declining to disclose Maglio's revenue. "We had to make a decision in order to save the company. Even though we've outsourced to New Jersey, it's still our blend of pork, still our seasoning. We're still up there every other day to make sure it's up to our standards."

Customers haven't seemed to notice, said Jeff Brown, whose Brown's Super Stores owns 11 ShopRites in the Philadelphia region, all of which carry Maglio product. His father, Len, used to own Shop 'n Bag stores and carried Maglio sausage, too.

"From a business standpoint, sometimes you're confronted with the better of two bad choices," Brown said of Maglio's dilemma to outsource or close.

Outsourcing left the company with considerable unused space at its nearly 10,000-square-foot plant, where the public has been able to buy sausage and Italian cheese from a tiny service counter for years.

One day, Jerry McNelis III, nephew of Maglio's president and director of logistics and operations, had an "aha, give-the-people-what-they-want moment."

That was the new store, planned to open in time for the Eagles' first home game.

"If we play our cards right, I think we can capture a nice portion of the tailgate business," said McNelis, 49.

As a third-generation Maglio operator, involved in the company since he was 17, McNelis feels like a quarterback getting serious playing time after a number of seasons on the sidelines.

"My goal is to build the name again, let the people know what our amazing family history is," he said. "Not many people get to do this - work in a family business and carry on the legacy."

215-854-2466 @dmastrull

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