Ah pizza. Cheesy, tasty, wonderful pizza. It is a perfect food, but pizza just wouldn't be the same without the cheese. It turns out one guy has been supplying the cheese for Domino's, Pizza Hut, Little Caesars, and Papa John's for decades. He also supplies the cheese for Hot Pockets, Stouffer's lasagna, and Smart Ones baked ziti. All of that cheese comes from Leprino Foods and its founder, secretive 79-year-old billionaire James Leprino. He controls 85% of the large chain pizza market and owns 100% of Leprino Foods, the world's biggest cheese supplier. James Leprino has a net worth of $3.1 billion.
James Leprino's father, Mike, left southern Italy in 1914 when he was 16 years old. Because he was used to living at high altitude, he chose Denver to settle in. He could not read or write English and didn't have much of an education so he became a farmer. In 1950, after 30 years in the U.S., Mike Leprino Sr. opened a grocery store to sell the produce from his farm. Naturally, Italian dishes soon found their way into the store. James' sister Angie would make fresh ricotta, mozzarella balls, and ravioli. Cheese is in Leprino's blood.
James Leprino was the youngest of five children. He noticed that his classmates were hanging out at local pizza parlors after school and on weekends. When he graduated from high school in 1956, he went to work in his father's store full time. Around this time he realized that pizzerias just in his part of the country were buying 5,000 pounds of cheese a week. He thought this would be a good business to go into, so he did.
In 1958, large grocery store chains forced the Leprino's store to go out of business. So James Leprino took $615 and started his cheese empire. It was a case of being in the right business at exactly the right moment. The same year that Leprino went into the cheese business, the first Pizza Hut opened in Wichita, Kansas. The following year, the first Little Caesars opened in a suburb of Detroit. In 1960, Dominos started delivering pizzas in Michigan. After just two years in business, Leprino Foods was delivering 200 pounds of mozzarella a week to local Denver restaurants.
Leprino was a success, but he still had a lot to learn. He needed to figure out how to make cheese on a mass scale. That involved science. The problem was, Leprino was running his business, married with a child and another one on the way. He didn't have time for college. So he hired Lester Kielsmeier, who had run a cheese factory in Wisconsin. Kielsmeier served in the Air Force during World War II and came home to find that his dad had sold his cheese factory because he thought Lester had been killed in action. With Lester on board, Leprino went to the local junkyard and bought a couple of bigger cheese vats to make his business look bigger than it actually was.
In 1968, Leprino hit a stroke of genius. Pizza Hut was looking for a cheese supplier that could help the company reduce their costs while also making portion standardized. Leprino heard that shredding five pound blocks was super time consuming and didn't produce consistent slices of cheese. So Leprino Foods started selling frozen, pre-sliced blocks of cheese. This was the first time pizza makers could layer slices of cheese onto each pizza simply and efficiently.
By the early 1970s, he was hustling to satisfy Pizza Hut. Franchises sometimes waited too long to thaw the pre-sliced mozzarella and as a result, the cheese would crumble. Leprino went back to the drawing board—after all, by the 1990s Pizza Hut accounted for 90% of his business—and came up with a preservative mist. This mist stopped the crumbling, but it also revealed something else. The mist could be infused with flavors such as jalapeno. This breakthrough led to Leprino Foods producing two million pounds of cheese a week, a sixteen fold increase in production.
Leprino had timing on his side when he entered the cheese business just before the pizza boom swept the U.S. He also had location on his side. He was in the center of the country. In the 1970's most of the U.S.'s milk came from Wisconsin and New York. However, California had a young and growing dairy industry and that milk was cheaper. Leprino locked California dairy farmers into decades long contracts at rates that were above the local rate, but below the national rate.
Leprino's cheese business had another breakthrough when a Pizza Hut executive left to go to work for Domino's and took Leprino's cheese with him. Domino's then expanded at a rapid rate, going from 200 stores in 1978 to 5,000 in 1989. He also had the Little Caesars business, which in the 1980s was growing its then 3,000 pizza places at a rate of 25% a year. Then in 1991, Papa John's hired Leprino to supply the cheese for their pizzas.
Leprino manages to juggle the U.S.'s four biggest pizza chains pretty effortlessly. Each of the four pizza giants has its own silo. He treats every customer as if it is his only customer. For instance, Papa John's wanted cheese without fillers, so Leprino accommodated that, making a special blend for them that is not used at Pizza Hut, Domino's, or Little Caesars.
Because of the sheer size of Leprino's business, he is able to offer his customers his cheese at a much better price than his competitors.
Leprino is a pretty modest guy for all of his billions. Sure, his company has three private planes—a Gulfstream G450, a Bombardier jet, and a small commuter plane, and he has an 11 bedroom house in an affluent suburb of Denver as well as an 8,000 square foot home in Scottsdale, Arizona, but he's more likely to fix things around his houses himself rather than call a repairman. He is also a very devout Catholic who donates money to charities anonymously.
James Leprino shows no signs of slowing down. He has no plans to retire, not while he's still alive.