Welcome to Season 18 of the Troubleshooting Innovation podcast. Nick Fallucca, chief product and innovation officer at Palermo’s, explores what leadership, product development and growth look like for this third-generation pizzaiolo. Sponsored by HaFSBX.
In our first episode, we get to know Nick and the Fallucca family history.
Learn more about this season here, and tune into Troubleshooting Innovation on Apple or Spotify.
Joanie Spencer: Hi, Nick. Thank you so much for spending this month with me. I am so excited to sit down and just really dive into your personal and professional history with Palermo’s and learn all about how you grew up in the pizza industry with your family.
Nick Fallucca: Yeah, thanks for having me on. It’s an honor to be on, and I’m happy to talk about pizza and leadership and innovation and some of our successes and failures and everything in between.
Spencer: I love it. We are going to dive into probably every single thing that you just said, but first, let’s just get to know you a little bit and your family. You’re the third generation of leadership for Palermo’s right?
Fallucca: That is correct. Yes, it’s myself, and my father is our CEO, my uncle is our president. And then we have some other family members in the business as well, in various roles.
Spencer: I can’t help but notice this is a family-owned company, but it doesn’t carry the family name. So, what’s the story here behind the name Palermo’s?
Fallucca: Yeah, so my grandfather and grandmother came over from outside of Palermo, Sicily in the 1950s, hence the name Palermo’s Pizza. They opened a bakery on Milwaukee’s east side that was a very popular bakery in 1964. They made traditional cookies, cannoli, Cassada cakes, traditional Sicilian breads with the sesame seeds, and then eventually got into the restaurant business and then in the pizza business. So, I’m happy to go into as much depth in the from the baking side to how we got into the restaurant.
Spencer: Let’s talk about that. For starters, let’s talk about how it went from being a bakery to being a restaurant to being a pizza company.
Fallucca: So, in 1964 my grandfather opened the bakery, and then in 1969 he expanded. He started his career, actually in terrazzo, construction and dishwashing. And so, he’s a very hands-on guy. And so he actually did the build out himself of the bakery and then into the restaurant in 1969. And his restaurant was an incredibly popular restaurant. They were open until 2:30 on weekdays, 4:30 on the weekends. And they would have celebrities at the time — Frankie Avalon, James Darren, etc. — and they would all come after the shows and hang out with my grandfather. And there were lines out the door of just people waiting to get food. People would wait at the bar for their table.
And he had this really amazing Sicilian bread. It’s a white bread with the sesame seeds on. It’s really great day of; you eat it tomorrow, and it’s good for croutons only. And so, what he would do with his bread is he would top it with tomatoes and sausage and cheese or just tomato sauce and anchovies, and he would just give it to the people waiting at the bar or people waiting for their table. It’s kind of similar to a French bread pizza.
So, one of the local grocery stores in Milwaukee came up to him and said, ‘Jack!’ So, his name was ‘Papa Palermo.’ Well, that’s what he went by was papa Palermo. His name was Gaspare, and he went by Jack. That’s, you know, the Italians, when they came over from the old country, they picked more of an American name.
And so, he said, ‘Jack, you gotta try this Stouffers French bread pizza. And this is no offense to the Stouffers product by any means. But what he said is, ‘This is garbage! Why are you giving me this, this terrible product?’ And he said, ‘That’s the point.’ He’s like, ‘You should get into frozen pizza.’ And my grandfather is already shooting kind of a guy and said, ‘Okay, let’s do it.’
And he decided that he wanted a better life for himself and his family, because of the restaurant business, it’s tough. They were making everything themselves. They were making their own sausage. They were obviously making their own dough. They were making their own sauce. They were obviously chopping their own vegetables, and everything was from scratch. It was him and my grandmother and my two uncles and my father. They were just, they were in there all the time making product. It was a hard business, but it was a successful business.
And it’s funny, because today, you look at the world of manufacturing, and it’s a 24/7 operation. Back in the day, it’s like, ‘Oh, I make a product, I sell the product and it’s easier.’ But it’s interesting that, you know, one of the things I reflect back on is — obviously, I wasn’t around for the restaurant days — but my grandfather, the way he did business, has really transpired for us across generations. And you know, from our 60 years in business is, you got to have a great product, because people won’t come back if you don’t have a great product.
And so that was, you know, that was critical, and it’s always been, making great food, and that’s one of the things that we do today. You have to treat your customers right.
Your customers are the ones who pay you. They’re the ones who decide to come back and buy your product, whatever it may be. And lastly, you can’t do it all. Back at the restaurant, he was able to do it all. Today, we’ve got over 1,000 employees, three locations. There’s zero chance of the family or the ownership or leadership or anyone doing everything.
But what’s interesting is that one of the roles I have is innovation. And the fuzzy front end of Innovation, it’s a very vague and ambiguous topic. And role. It’s difficult. You go out, you have to manufacture this amount of pizzas for this amount of dollars, and this is your labor. And that, in itself, is incredibly challenging. And so, you’re blocking and tackling your linemen, who that person’s job is to just protect the quarterback. That’s his job, his sole purpose; there’s no way that the safety, who has to analyze the entire field, can do that. But there’s also no way that linemen can do that safety’s job. And as I was talking to our innovation team, I said, ‘There’s no way that you guys could go out and run manufacturing, but there’s also no chance that the person running manufacturing could live in this vague, ambiguous world that we live in, in innovation.’
So, so kind of getting back to the, you know, the restaurant. My grandfather was this very simple, hardworking, driven man. And then when eh got into retail, the world changed. The world of retail is so much different than the world of restaurants. And so my father took over in 1982 because my grandfather would get upset. He would send product into a grocery store, and it would sit in the back warehouse and nobody restocked it, and it got old. And then they would send him a bill for reclaim. And he’s like, ‘What the F are you talking about? I’m not paying this money.’ And he’s like, ‘Well, you didn’t, you know, you didn’t tell us this.’ And it’s not a simple transactional business as a restaurant. ‘I make good food, I give you great service. You pay me.’ That’s it.
Spencer: And then you turn the table over and do it again.
Fallucca: Exactly. And you think about the world of retail and manufacturing today, it’s so complex, all the intricacies. And so, what our company has really leaned on is, again, really great food, treating our customers great and having really amazing employees. And that’s really carried us through to, you know, where we are today and into the future.
Spencer: So you mentioned, you know, your dad and your uncle and other family members. And I did notice on the ‘Our Team’ page of your website, it is like you scroll for a while and it’s like a Fallucca family tree. And I was trying to, like, make my best guesses of who, like matched up with whom. So can you just kind of run me through that ‘Who’s Who’ of the Fallucca family and their roles in the company?
Fallucca: So Giacomo Fallucca is chairman of the board and CEO — front of the business, customer relationship, sales, products — he loves that. Angelo Fallucca is my uncle. He’s our president, and he’s really into the operations side. He was integral in all of our building, all of our capital, our new facility here at West Milwaukee. He was a critical part of that.
My mom, Laurie, she does our creative, and so really great with all of our designs and the way the company looks and feels. And if you look at our tradeshow booth, to our websites, to some of our packages, to make sure that we are while we are, CPG, we’re not pretending to be ‘big CPG,’ that we still keep this really amazing esthetic. And you know, she says that beautiful paint costs the same as cheap paint, at least you know, from a color scheme. So you might as well make things look good. And my brother, Jasper, he helps head up some business development, new ventures, etc.
What’s interesting, though, is that I grew up in the business from a very young age. That’s all I’ve done, is this business. Each of my family members, I’ve learned so much from, as well. From my Dad, I’ve learned this entrepreneurial spirit, you know, shooting for the stars, and if you fall, you land in the clouds. You know, it’s a music quote somewhere.
Spencer: I love that phrase.
Fallucca: My uncle is, is very pragmatic. He’s into the details of the operations and the ‘what if’ scenarios. What if this happens? What if this happens? And my mom has that creativity. And so I feel, I feel blessed that I have kind of a little bit of all their skill sets of understanding, dreaming big, doing it, but also thinking about the consequences of the actions, and then, you know, trying to do it creatively and making sure that we’re not just becoming a ‘me too,’ or just doing something just to do it, but why we’re doing it. Is there a consumer demand for it? Is there an unmet need? So those are the things that I’ve learned from them.
And then my other uncle’s in the business as well, not on our page, but kind of oversees all of our facilities and making sure that the place is well kept. Because it’s first impressions. It’s like, when you walk into a restaurant, you can tell the quality of — not the quality of the taste of the food — but at least the cleanliness of the restaurant, but like when you go into the bathroom. And so those little things for us are important.
Spencer: You know, it’s funny that you mentioned that — just a little aside — just a couple weeks ago, I was at a restaurant that my family and I enjoy going to every once in a while. I used the restroom, and the restroom was just really sloppy, and the first thing I thought was, ‘Wow, this place has really gone downhill.’ Like, you’re absolutely right. It formed my opinion of the overall restaurant experience. And then I just kind of started looking around like, what else has gone downhill?
Fallucca: I’ve been in a lot of manufacturing facilities, from co-packers to ingredient suppliers. We just really pride ourselves on, on cleanliness. I mean, obviously, from, like, food safety and regulatory, that’s needed. But I walk into food-safe, regulatory-safe environments, but it’s not kept up. It’s not taken care of. There’s not that sense of ownership. And I think that’s one of the things, that it’s not just us, but it’s our entire team. They have a sense of ownership with everything from making sure that the bills are paid, to that the bathrooms are clean and everything in between. Anybody can make a pizza, right? Anybody can, can go and buy a facility, but not everyone has the team. And so, we say, It’s our team versus their team. Because that’s what wins it.
Spencer: Okay, I’m curious, and I do like your football analogy, that everybody kind of has their role on the team to play in order to get that first down or to play good defense. When I think about your family, I’m imagining a big Italian family with a lot of opinions and a lot of things to say. So, what does that look like on a day-to-day basis? And also, I guess, what was it like growing up in that — you spent your life, obviously, in your family — but you said you’ve also spent the majority of your life in the business. So how do they intertwine? What does it look like or feel like?
Fallucca: I mean, it’s, it’s definitely intertwined. I mean, that’s what you know, family dinners would be like. And, you know, it’s ‘Never talk business at the table!’ But you know, we did. We always talk business at the table, and that’s just, you know, part of our DNA. And it wasn’t just business, per se, but it’s food. And food kind of gets into business, and the ‘what ifs.’
We love traveling. We love eating different foods and seeing what’s out there. And then it’s like, ‘What are they doing?’ and ‘What can we do? How do we how can we incorporate that?’ How do we try these, these new things, and how do we maybe bring it to market? And so, I mean, that’s, that’s a lot of how we’ve grown is just those kind of organic conversations about the ‘what ifs’ and seeing these amazing food trends out there and then trying to bring it to market.
Spencer: So, does the family dynamic come into play, like when you’re at the facilities? Or are you guys pretty good about taking off the ‘Fallucca family’ hat and putting on ‘Fallucca family owns Palermo’s pizza, let’s get down to business’?
Fallucca: I think it’s one and the same. We don’t have family drama, which is great. We do have a business to run. And there’s always challenges for the business of a truck didn’t show up, or, you know, we lost an employee. There’s always, something in business. And I would say the world of business comes into the world of family, versus the world of family coming into the world of business. But, yeah, we all have strong opinions, and so that can be, that can be fun. And we try to, you know, try to temper it as much as we can.
Spencer: So okay, where do you fall? Are you the oldest, youngest?
Fallucca: So I’m the oldest, third generation. So, my brother is 10 years younger. And then my Uncle Angelo, he’s got two children who are not in the business. They’re doing their own thing for a while, and maybe at some point they come back. For now, they’re doing their own thing. And even my brother, he did his own thing for a while, and then he came back into the business shortly after covid.
Spencer: If you had to use like three words to describe what it’s like growing up in a big family that owns a business that started as a restaurant. What would it be like when you think back on your time?
Fallucca: I would say excitement, stressful and I guess purpose is another one. As we’ve grown, you know, one of the things I try to do in my life is, think about my sphere of influence. I might not be able to, you know, change the world, but I can definitely affect at least people around me. And the people around me, you know, include our 1,000-plus employees. It includes our community. It includes our vendors, it includes our customers.
So, we’re not big food. You know, there’s, there’s a difference between our size of company and, you know, a big multinational. But we can still affect a lot of people’s lives, and for me and our family and our company, that’s a really important thing is making sure that we are, we have that sense of purpose. And it’s not just, you know, giving back to the community, but it’s making sure that we are doing the right thing for the company, to keep a sustainable company, so that we can continue to pay good wages and provide good benefits, provide great working environments. And we’ve had a lot of very long tenured employees, and I think it’s for us, that’s an important piece to us.
Spencer: Yeah, absolutely it is. I love that use of the word purpose. And it’s not surprising when you’ve never done anything but work in the family business. Was there ever a time like when you were a kid that you wanted to do something else or be something else?
Fallucca: Yeah, I’m, I’m too tall to be a race car driver, so I can’t do that. But yeah, I mean, as a kid, I had no intention of ever staying with the business. I originally was going to go to, I was actually going to go to culinary school out in Hyde Park. But I decided not to, and say Milwaukee, and go to UWM and go for marketing. But at the time, I was like, ‘Oh, maybe I’ll go for psychology.’ But I’m like, ‘I don’t want to go to school for eight years.’ And then I was gonna go to school for Italian, but I was like, ‘I can’t. There’s no, there’s no real job that if I just go to school for Italian.’ And so I went to school for marketing.
And I was like, ‘Well, I’ll just, like, do some odds and ends.’ And I’ve always like, in grade school, I used to work our festivals. And then in high school, I started running all of our festivals. So even though it’s just festivals, it’s, you know, managing inventory, hiring people, making sure people are paid, making sure that the cash is deposited. And then in college, I worked in our in our pizzeria and started doing foodservice sales. So, we would sell into stadiums or smaller foodservice venues. And so I got to really learn the ins and outs of the needs of the operators, and whether they have an impinger oven or a deck oven, or what their hold times might be, and so selling that right product. And then eventually in some of the custom foodservice. And as I was doing this custom development, I found a knack for developing products and working with the team to create items and launch items. And so, I’ve managed pretty much everything besides finance at Palermo’s at some point or the other — or had a influence of that — but I’ve always, I’ve always kept R&D and innovation, just because that, that just seems to be my sweet spot. That’s my specialty.
I mean, I’m pretty good generally. But, I think specialty is around that innovation piece. And I think what’s also important, just, you know, from like, a personal standpoint, is making sure you have other things that are important to you. And for me, it’s whether it’s, you know, hobbies or side businesses or whatnot with my wife. And so that’s important because my whole self isn’t — I mean, I love I love my job, I love my company — but it’s not who I am. And so, it’s important to have other things of who I am versus, you know, what I’m doing on a daily basis.
Spencer: Yeah, and when it’s so intricately tied with your family, you’re right, you have to have some sort of personal passion or personal outlet, or else you could just burn out so easily, it would seem. Did I read somewhere that you have sort of a side business?
Fallucca: So, yeah, my wife and I, we own a couple LLCs together. And one of them recently, we opened a an event space in the town I live in. And it’s this old, beautiful, 1868 building that was a blacksmith shop. And so, it’s on the main street, and it’s this beautiful building, and we just really wanted to be able to do something fun in our community. And so now it’s events, and we do co-working there. So, one day a week, I work out of that office. And it was a fun renovation project where we renovated the whole building. It was a blacksmith shop, and then it was an auto body shop, so it really wasn’t public use in that space. It’s been really fun to be able to bring in the local community and, like, share the space with the whole community. So, that’s been a fun project. And you know, hospitality is — even though I’ve not owned an event space or bar or restaurant — it’s something that we do all the time, whether it’s tradeshows or corporate events. And I obviously always I sell our, you know, we’ll sell our frozen pizzas there as well. Or we get to share some new fun items as well as we’re working on new items, I’ll bring it out there.
Spencer: Yeah, it seems like it’s a little bit tangential to what you do in your work life, but this is something that you can just really put your own creative spin on it and have that project with your wife. I personally would not survive working with my family or my spouse, so I just have to tip my hat to you, because it takes some thick skin and patience and really determination and unconditional love. And I’ve got the unconditional love, but I do not have the patience.
Okay, so you, when you’re talking about this space, I noticed that you used the word community a lot. And I know your family is known for something beyond just your pizza, and that’s really generosity and your place in the community. I read a few articles about passion projects around fighting hunger. So, could you share some thoughts as to why helping support your community is so important to the Fallucca family?
Fallucca: Again, I think it’s like that sphere of influence. And so, if you’re an individual contributor somewhere, and you can make one person’s life better, I mean, why not?
And so, for us, we’ve been blessed as a family. And so, for us to be able to help the Milwaukee community has been, it’s been great. And even outside, you know, as we’re out now in three facilities, there’s a lot of need in this world. There’s a lot a lot of stuff going on, you know, and every, every week, every it just gets, you know, crazier and crazier.
But you know, for us, what we see is that hunger is a big issue. We like to try to help the community. I could probably talk just for an hour on, you know, some of the organizations that we work with, but one of them is called Kinship Community Food Center. And for them, food is just a catalyst because some of the individuals that they’re working with, you can’t just say, ‘Oh, why don’t you just go get a job?’ Some of these individuals are, you know, come from deeply broken homes, and so they come into this amazing community food center, and they end up volunteering there, then they end up going through some of the programs, whether it’s just getting food for their families, whether it’s mental health, or whether it’s learning how to work and working with different organizations.
These people, they haven’t had a job where someone actually cares. So, let’s say, someone doesn’t show up for work. Most businesses, they’re just gonna get fired, whereas with some of these individuals they say, ‘Hey, you know, if this was a normal job, you would have just been terminated. But what you got to do is you got to call us and let us know, like your car broke down, or whatever is going on your life, if you communicate with the organization, that is a better shot of staying with it.’ Or if you’re upset, don’t, you know, don’t just cuss out the manager. Maybe say, ‘Hey, here’s a way to deal with conflict,’ so that eventually these people that have come in from a hunger standpoint can end up getting out there and getting a job. And especially in the world of like, you know, for us foodservice, or in the in the world of food, there’s so many opportunities in that career.
So, for us, it’s really working with a couple organizations. And we donate lots of pizza. That’s easy for us. But beyond the donating pizzas, it’s the working with these organizations to help further this. Because of not just hunger, but some of the root cause of hunger. Because it’s, you know, simple: If you give a you can give someone a fish, but if you teach them how to fish different. And so for us, it’s that teaching, that education that’s important.
Spencer: I love that you’re saying that you’re looking at root cause. And it feels like you are attacking several issues that are really prevalent for food manufacturing. One — I went to a Jesuit college, so this does feel like a very Jesuit way of thinking — in that when Jesuit universities educate their students, no matter if they’re teaching math or psychology or theology or whatever it is, there’s always a point where they say, ‘Okay, now that you are becoming an educated and productive member of society, it’s time for you to think about ways that you can use that education and your intelligence to better your community.’ Because when you’re a productive member of society, you have a responsibility to contribute to it in positive ways. So, I feel like you guys are doing that in helping the food industry attack hunger, but you’re also going at it from this really unique standpoint, in that you’re applying root cause.
Fallucca: And we can’t say that we’re the ones who know how to do it. And so again, it goes back to your team. I couldn’t work our mixing station. I couldn’t do that, but we have amazing people that do know how to work the mixing station, all the SOPs, similar to we’re not the ones who can address the ability to stamp out hunger at the root cause, but we have amazing organizations that we work with that they are the experts in that field. So how can we support them, that can support other people?
Spencer: And then by doing that, I can see the ripple effect very clearly. The industry also has a labor crisis. And so, when you are helping solve a hunger problem — or solve for hunger as the root cause — and then getting people job skills and interpersonal skills, you’re creating opportunities for people to get jobs that are going to ultimately fill positions that a lot of companies in our industry need. That’s pretty cool. It’s complex and deep, and it’s more than donating pizzas, which is important too, but it’s just not here have a pizza or here’s money to this organization that we really love. I really like how you all are going about it in a very deeply complex manner.
Okay, I’m gonna ask you another question that is going to require a little bit of self-reflection. But the good news is, it’s the last question for this episode. My guest of the month, I often like to — especially when it’s someone who’s a generational baker — I like to start off by picking your brain about, like, what are the monikers that you think describe you? And so, if you can picture a word cloud, and it has all the words that describe you, and if your family were to choose words that they think of when they think of you, what would some of those biggest words be? So, like the word cloud is the ones that are most often used that stand out. Like, what would your word cloud look like?
Fallucca: Let’s see. I think one would be innovation. So, I would say then visionary is that word. Relentless and curious.
Spencer: All right, we’re going to revisit that one in a few weeks. But for now, you get a break next week. Well, I just want to give you a heads up on what we’re going to be talking about over the next month. We’re going to look at growth in terms of product and operational expansion. We’re going to really pick your brain on product development and the artistry of pizza making at scale. We’re going to talk about how your family company has really, like, expanded and grown your brand, and what it takes to do something like that. And we’re going to finish off by looking at the future of innovation for you and for Palermo’s. So that’s going to be a really fun month. I’m already just thrilled and excited about this conversation and all the things that we’re going to talk about in the weeks ahead. So, Nick, thank you so much.
Fallucca: You’re welcome. It’s been a pleasure. Looking forward to continuing to chat.
