Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Volpi Family Built a Cured Meat Empire Over a Century
Transcript
- Lucas: There's a family business in St. Louis that has been curing meat since 1902. The Volpi family. And they have survived Prohibition, the Great Depression, the rise of Oscar Mayer, and the trend toward low-fat everything — all without changing their core process. Luna: Okay, so they're still doing it the old way. Dry curing, long aging, that kind of thing? Lucas: Exactly. The founder, Giovanni Volpi, immigrated from Italy — from a town near Parma, actually — and started making salami and prosciutto in a small storefront. His son John took over and kept it going through the tough years. But the real hinge point came in the 1970s, when the third generation — John's sons, also named John and Bill — had to decide whether to modernize or stay small. Luna: And they chose to modernize. But I read that they didn't cut corners. They invested in a new usda inspected facility but kept the original recipes and the long aging times. Lucas: Right. That decision is actually the heart of the story. Because in the 1970s, the USDA was cracking down on small processors. A lot of old-school Italian salumeria owners either shut down or started using shortcuts — chemical cures, faster fermentations, less salt. The Volpis took the opposite approach. They built a facility that met every federal standard, but they refused to accelerate the process. Luna: So what does that mean in practical terms? How long does their prosciutto take? Lucas: Minimum ten months of aging. Some products go fourteen to eighteen months. That's expensive. You have inventory sitting in a climate-controlled room for nearly a year before you sell a single slice. Most industrial prosciutto is done in four to six months. So the Volpis were essentially accepting a much lower inventory turnover rate, which means they needed more capital and more patience. Luna: That's a huge bet. Especially for a small family company. How did they finance it? Lucas: They used retained earnings and a local bank loan. No outside investors, no private equity. John and Bill were determined to keep control in the family. The facility cost about two million dollars in 1978, which was a massive sum for them. But it paid off because they became one of the first artisan cured-meat producers in the U.S. with a modern USDA stamp. That opened up grocery chains like Schnucks and Dierbergs, and later national retailers. Luna: So the investment was the catalyst. But I'm curious about the economics of artisan cured meat today. A lot of people think of prosciutto as a premium product. What's the margin like? Lucas: It's good, but not as high as you'd think. The raw material — pork legs — fluctuates in price. And the aging process has a natural shrink rate: a leg can lose up to 30 percent of its weight to moisture evaporation. So you're paying for that loss. Volpi's gross margin is probably in the 40 to 45 percent range, but after SG&A and distribution, net margins are likely single digits. It's a volume game, but with a premium positioning. Luna: And they've managed to grow. I saw that they now have about 70 employees and sell nationwide. Not huge, but healthy. Lucas: Yeah, they've grown at a compound annual growth rate of roughly 8 percent over the past decade. That's steady, not explosive. But they've done it without diluting the brand. They haven't launched a cheap line. They haven't private-labeled for big retailers under a different name. Everything is under the Volpi label, and they sell primarily through specialty food distributors and direct e-commerce. Luna: The e-commerce piece is interesting. That's a fourth-generation initiative, right? Lucas: Yes. The fourth generation — John's son, also named John, and his cousin — started pushing direct to consumer sales around 2015. They launched a website selling curated charcuterie boxes, gift sets, and subscription plans. That channel now accounts for maybe 10 to 15 percent of revenue, but it's growing faster than wholesale. It also gives them better margins because they capture the retail price. Luna: So the younger generation is finding new ways to sell, but the product itself hasn't changed. That seems like a smart balance. Lucas: Exactly. They haven't tried to reinvent the product. They've reinvented the route to market. And they've also leaned into the story. The packaging talks about Giovanni Volpi's original recipes. They have a 'family reserve' line that uses the same methods but with higher-grade pork. It's all about authenticity, which is a powerful marketing angle in a world of processed food. Luna: But authenticity can be a double-edged sword. If you're too rigid, you miss trends. For example, the rise of keto and paleo diets has been great for cured meats, but what about the growing concern over processed meats and nitrates? Lucas: That's a real challenge. Volpi uses celery powder as a natural source of nitrates, which is a common workaround for 'uncured' labeling. But the science on nitrates is complicated, and consumer perception is often negative. They've had to invest in messaging to differentiate their traditional curing from industrial processed meats. They emphasize that their products have no artificial preservatives, no MSG, and are gluten-free. It's an education play. Luna: And the family structure itself — any tension between generations? It's almost inevitable in multi-generational businesses. Lucas: From what I've read, the transition from third to fourth generation was relatively smooth. The older generation gave the younger ones autonomy to start the e-commerce channel without interference. But there was a moment in the early 2000s when the third generation considered selling the business. A larger food company made an offer — reportedly around 30 million dollars. They talked about it seriously but decided against it. Family unity won out. Luna: Thirty million is a lot of money for a small family business. That must have been a tough decision. Lucas: It was. But John and Bill felt that selling would betray their father's legacy. They also recognized that the company had more growth potential if they stayed independent. And they were right — the company's value has likely increased since then. But it's a reminder that family businesses often face a fork in the road where they have to choose between liquidity and legacy. Luna: Legacy seems to be the theme of this whole show. And it's a theme that resonates with a lot of our listeners, who are themselves entrepreneurs or managers in family-owned firms. Lucas: Absolutely. And if these conversations have moved your work forward in some small way, a couple of dollars a month is genuinely what keeps these going. Buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: Yeah, it really does make a difference. We keep the show ad-free, and listener support is the only reason that's possible. Lucas: Right. And now back to Volpi — the other interesting thing is how they've handled the commodity risk. Pork prices can swing wildly, and they've had to get creative. Luna: How do they manage that? They can't just raise prices every time hog prices go up. Lucas: They use a combination of forward contracts and diversification. They buy pork legs on contract from a few large suppliers, locking in prices for six to twelve months. They also source from different regions to avoid supply disruptions. And they've gradually expanded their product line to include more items like pancetta, capicola, and soppressata, which use different cuts of pork — so they're not completely dependent on the price of a single primal cut. Luna: That's smart risk management. So the business has become more sophisticated over time, but the core remains the same. Lucas: Exactly. And that's what I find most impressive about the Volpi story. They've been around for 124 years, through wars, depressions, dietary fads, and regulatory changes. They've adapted in the margins — new facilities, new sales channels, new products — but the fundamental process of dry-curing meat with salt, time, and air hasn't changed. That consistency is rare in any industry, let alone food. Luna: It makes you wonder: could a family business today replicate that model? Starting from scratch in 2026, with a premium artisan product, and building a multi-generational company? Lucas: It's harder now because of scale economics and retail consolidation. But it's not impossible. There are dozens of small charcuterie startups that have grown to regional brands. The barrier is patience. Most venture-backed food companies want rapid growth and an exit. The Volpis never wanted an exit. They wanted a living. And that long-term orientation is exactly what allowed them to survive. Luna: So the lesson for today's entrepreneurs might be: know whether you're building to sell or building to last. Both are valid, but they require different strategies. Lucas: Exactly. And the Volpis are a clear example of builders to last. Their story is one of quiet persistence, not flashy disruption. And that's worth remembering.