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Whether it’s grandma’s coffee cake or mom’s pasta sauce, every family has a favorite food they think they could sell. With the national “Fancy Food” trade show coming to D.C. this month, Kojo explores what it takes to start a specialty food business–from moving production out of your home kitchen to getting your product into stores.
- Ron Tanner Vice President of Communications, National Association for the Specialty Food Trade
- Clare Turner Co-owner, Virginia Chutney Company (Washington, VA)
- Susan Soorenko Owner, Moorenko's Ice Cream Cafe (Silver Spring, MD)
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. It's Food Wednesday. Maybe it's your grandmother's chocolate cake or your mother's pasta sauce. At every family gathering, people say these mouthwatering creations are so good their creator should package and sell them. So what does it take to turn a favorite family food into a viable business? How long can you keep cooking at home before you need a commercial oven and a fleet of delivery trucks?
MR. KOJO NNAMDIThe answers vary, but a lot of people have decided to find out. Specialty foods, many of them produced by homegrown businesses, account for more than one-tenth of all food sales in retail stores. And those sales are up nearly 20 percent in the last three years. Food entrepreneurs love their work, but it's not easy. From drafting a business plan and buying ingredients to marketing and delivering their product, it's tough to run a business that makes money by making food.
MR. KOJO NNAMDIJoining us for this Food Wednesday conversation on starting a specialty food business is Ron Tanner. He is vice president for communication with the National Association for the Specialty Food Trade. Ron Tanner, thank you for joining us.
MR. RON TANNERWell, thank you, Kojo. It's great to be here.
NNAMDIGood to have you. Also in studio with us is Clare Turner, co-owner of Virginia Chutney Company in Washington, Va. Clare Turner, thank you for joining us.
MS. CLARE TURNERThank you. I'm delighted to be here.
NNAMDIAnd Susan Soorenko is owner of Moorenko's Ice Cream in Silver Spring, Md. Susan, good to see you.
MS. SUSAN SOORENKOThanks for having me.
NNAMDIIt's a Food Wednesday conversation that you can join by calling 800-433-8850. What family recipe would you like to make and sell? 800-433-8850. Susan, you were traveling out west with your kids and had some amazing ice cream. How did that lead you to attend Ice Cream University in New York and to start an ice cream business?
SOORENKOWell, my children fell in love with this ice cream. And they said, Mom, you should figure out how to bring this back to Virginia. And today they still maintain that they meant a quart. So at the time I looked at it and I thought, well, how hard could it be? And of course, now, 10 years later I can answer that question, but it was just sort of one step at a time. Our neighborhood didn't have, you know, a homegrown ice cream store and so that was sort of the genesis of the idea.
NNAMDIYou spent 25 years as a fitness trainer. Fitness trainer, ice cream, don't necessarily go together.
NNAMDIBut you decided that it was time for a change of career for you.
SOORENKOYeah, it was time for a change after 25 years. And it is a lot easier to sell people ice cream then it is to sell them exercise.
NNAMDIClare, you wanted a career change yourself. And you went to school for a degree that would allow you to become a teacher. You could go work for a head start. Instead you ended up starting a food business. How did your degree in anthropology lead you to look at chutney in a new light?
TURNERI know. It seems a very far distance, but I was actually doing food ways in anthropology.
TURNERAnd to my amazement I saw that the south, in Savannah and everything, was a huge area for chutneys and things. And, as you know, being British chutney is absolutely critical. It's like our ketchup. And I was also raised in east Africa. We had chutney there. And I lived in the Caribbean so all the places that I've lived chutney's been a big, necessary part of every meal.
NNAMDIRon, what's the most common path for people who start their own specialty business? Do the stories of Susan and Clare sound unusual in any way? Do most people really just start at home?
TANNERMost people do start at home. And there's not really a common path, but I think the commonality is that people are doing something that they're not particularly happy with. For some reason, we have a lot of lawyers that have started a specialty food companies.
NNAMDIWhy am I not surprised?
TANNERYou know the last couple of years we've had a lot of real estate agents who've had trouble selling houses so they've gone into the specialty food business. So many people have these passions. They come at it from very different ways, but they wanna start a company and start selling something that they love.
NNAMDIDo you know someone who started their own food business? You can call us at 800-433-8850. Send us a tweet @Kojoshow or email to Kojo@wamu.org. Susan, can you describe the scale of your Moorenko's operation? You started making ice cream at a small factory store near your home in Mclean. And then you moved to a larger space in Silver Spring.
SOORENKOYeah, you're right. We were in the back of our shop and just making ice cream for the shop. And then one-by-one we started getting restaurants calling us. And then markets calling us. And when the lease ran out we decided to move to a place that gave us more production capacity. So now we have an 8000 square foot factory in Silver Spring that allows us to make all that ice cream.
NNAMDIClare, you apparently still test new recipes in your kitchen at home, but the chutney you sell is made at a factory in Pennsylvania. Explain for us what a co-packer is and why you're moving production to a factory that you're setting up closer to home.
TURNERWell, as you know, you're not allowed to make it in your home unless you're making a small amount. So you have everybody, if they have a small family business, have to make it in a co-packer. And it's like a huge factory which makes and has all this very, very expensive machinery. Like labelers are very expensive, fillers and the freezers. And so you just sort of book space and then they make it for you. But when you only make a small amount you can't afford all that machinery, but soon, hopefully -- we've actually taken a lease on a building 'cause we're now making enough that we'll be able to have our own facility in Rappahannock.
NNAMDIWhat is the challenge of working with a co-packer, if you will?
TURNERThere are some advantages. It's tricky 'cause you know you have to take your time with other people. You have to take your slot and some, you know, they have more time maybe for bigger stores. You haven't quite got the same control.
NNAMDIIf you were making your chutney and only selling it directly to consumers, could you make it at home? You would not need a co-packer in that situation?
TURNERYes. But in our physical home we can't. We just need a place where we could just get a bigger -- these pots that we use. And we can make tiny little amounts, too. It should be fun.
NNAMDIRon, do most specialty food companies start out using a co-packer?
TANNEROur membership, which is 2900 members, roughly about two-thirds of them start out using a co-packer. And others start out using restaurant kitchens, using commercial kitchens or using other ways that they can make their products.
NNAMDIWhen can people make food to sell from their home kitchen? And when do they have to move into a commercial kitchen?
TANNERWell, they need to move into a commercial kitchen if they're going to be selling it, usually, to a retailer or to somebody else who is reselling it because they need to have the proper permits to do that. So that's a good point for people to move out. Many of them will go out and they'll rent space, they'll rent a restaurant space from 1:00 to 5:00 in the morning or rent a bakery space where they can go out and produce things there.
TANNERWe recommend people do not do it in their home kitchens. That is a way that a lot of people get started in the business, but you cannot really control the safety of your products and you can't produce a lot of it if you do it in the home kitchen.
NNAMDIIn case you're just joining us, this is a food Wednesday conversation on starting a specialty food business. We're talking with Clare Turner, co-owner of Virginia Chutney Company in Washington, Va. Susan Soorenko is the owner of Moorenko's Ice Cream in Silver Spring, Md. And Ron Tanner is vice president for communication with the National Association for the Specialty Food Trade. If you've got questions or comments you can call us at 800-433-8850. Have you started a food business? What was your experience?
NNAMDIYou can also send email to Kojo@wamu.org. Let's go to Allison in Arlington, Va. Allison, you're on the air. Go ahead, please.
ALLISONThanks so much for taking my call, Kojo.
ALLISONI have a company which makes Ely's Gluten Free Cookies. And I, too -- I'm not a lawyer by training, but I used to work on the Hill. And when my son Ely was diagnosed with celiac disease several years ago, my mother and I spent probably two or three years trying to come up with a recipe for a gluten free chocolate chip cookie dough that would be just as good as a non gluten free chocolate chip cookie dough. And when we finally came up with our product and the recipe, people couldn't believe that it was gluten free.
ALLISONAnd I started to think, hum, maybe I should actually try to sell this. And hence, my company was born. And I actually had a little bit of advice for people at home who were thinking of marketing, selling, making their own product from a family recipe. And that is to really find what makes you, your company or your product unique. And it might not be necessarily be the product, for instance, having a product like mine that's gluten free. It could be your location, where you are. In Arlington, Va., there are not too many food product manufacturers coming out of Arlington, Va. And stores like Whole Foods are wonderful in their desire to support local vendors.
ALLISONAnd they've been super helpful. Also looking around at your community, the community of food product manufacturers is really willing to lend a hand, share ideas. For instance, Susan Soorenko has been a little bit of a mentor to me and has spent some time on the phone talking to me. She's a Virginia …
NNAMDINow, it is revealed. Go ahead, please.
SOORENKOMy long-lost sister.
ALLISONBut it's true that people are really willing to help and share their advice and their insight and the mistakes that they've made and, you know, how they think that, you know, your products can succeed or whether or not your product can succeed. In addition to, you know, local food product manufacturers, other local entrepreneurs. Everyone thinks of everyone in D.C. as just lawyers, policy-wonks, but they're actually an incredible number of really creative, resourceful entrepreneurs who...
NNAMDIAs we're discovering. We have some of them in the studio.
NNAMDIAllison, thank you very much for you sharing that with us because Susan would probably not have revealed these things herself, how she has been mentoring other people, but it allows me to go to what is the next logical part of this conversation. Let's talk about money. What are the upfront, what are the lesser-known costs of starting a specialty food business? I'll start with you, Susan.
SOORENKOOh, my gosh. It's such an exercise in humility. Things that you don't think about. What happens when the price of fuel goes up? What happens if there's -- in my industry -- if there's unrest in countries where cocoa is grown? What happens if there's a monsoon that knocks out the vanilla crop? Those are the things that you don't think about when you're putting your business plan together. You've got your equipment and your ingredients. You've got your lease and your labor, but you don't think about natural disasters or political upheaval when you're making those plans.
NNAMDIRon, do you also have to think about a lot of capital investment, necessarily, if you're starting out in a business like this?
TANNERSurprisingly not so much in the specialty food business because of the way that it works with people using co-packers or people renting equipment space. You don't really have to go out and buy a lot of manufacturing equipment. You can get started without purchasing a lot. And many of our members over the years have started their companies on home equity loans. Not so much anymore, but they used to do that quite a bit. Or starting them on their credit cards because you can really get going as a start-up company for probably $7000, $10,000. And you're gonna have to have more money after that, as Clare and Susan will tell you, but to get started you really don't need that much.
TURNERYeah, what the strange thing is that the more you sell the more money you need 'cause you need to put it back into the business. So at the beginning you feel you're never gonna get ahead 'cause -- so you feel a constantly raising money or worrying about money. But I'm told it gets easier as you get higher.
NNAMDII am -- Susan said, don't look at me.
SOORENKODon't look at me.
NNAMDIRon, what advice do you give new companies about pricing their food products?
TANNERWell, we recommend that they price their food products so that they can be in business for three or five years. Many people go into the specialty food industry and you might be making a wonderful coffee cake that you're giving to people as a gift. And say if your ingredients on that coffee cake are $3 you think, oh I can sell that for $4. But the fact is if you start selling it for $4 and then you start going through distributors, going to a brokers, going through a store, you're not going to be making enough money to have a sustainable business.
TANNERSo we recommend that people, you know, put some margin into their products, so they have money for marketing and money for advertising, have money for participating in trade shows and other activities.
NNAMDIOn to the telephones again. Here is Rodge, in Herndon, Va. Rodg, you're on the air. Go ahead, please.
RODGHey, everybody. I want to know how we can start something which would -- I mean, Herndon is an area where we have a lot of businesses and there are a lot of people who go out and eat. I want to give something like a healthy option directly from the farmers like the community-supported agriculture kind of thing where the food directly comes from the farmer into the consumers to their offices. A part of that as a business plan, how do we make that happen?
NNAMDIWell, we're not necessarily talking specialty foods here. We're talking about farm to office, Ron. Can you offer any -- or farm to workplace -- can you offer any advice for that?
TANNERSomething I've never thought about before, but it certainly sounds like a good idea. And I think many people in offices would love to get things that are fresh from the farm.
NNAMDIIt's been suggested that you might want to talk to some of the people at Fresh Farm Market, Rodg. So that might be a good starting point because they apparently provide all kinds of advice to local agriculture. For the time being, that's all the advice we can offer. We've got to take a short break. When we come back, we'll continue our Food Wednesday conversation on starting a specialty food business. Feel free to join the conversation.
NNAMDIWhat's your favorite local specialty food and how did you discover it? 800-433-8850. During the break, I'll be discovering some specialty foods of my own. It's hard work but somebody's got to do it. You can also send email to firstname.lastname@example.org or send us a Tweet at kojoshow. I'm Kojo Nnamdi.
NNAMDIIt's Food Wednesday. We're discussing specialty food businesses and how you can start one. Ron Tanner is vice-president for communications with the National Association for the Specialty Food Trade. Susan Soorenko is owner of Moorenko's Ice Cream in Silver Spring, Md. And Clare Turner is co-owner of Virginia Chutney Company in Washington, Va. whose fare I have just been sampling in the break. Exactly what was I having there, Clare?
TURNERWell, as I said, we were going to bring you mango chutney knowing from your Guyana days, but we brought spicy plum 'cause that's our most popular chutney.
NNAMDIThe spicy part of it is good and for some reason or the other, it helps a great deal that your chutney works with cheese, doesn't it?
TURNERI know. So it was interesting. A lot of people are not familiar with that 'cause it's rather English, but we sell mostly to cheese stores. And we're in -- that's why we're so grateful to Whole Foods. They put us in the cheese -- it is a good combination. It's like bacon and tomato.
NNAMDIWell, chutney is a food that a lot of people have heard of, but not many are probably familiar with it. Does that make it harder to sell?
TURNERYes. Surprisingly enough, we live in a place called Little Washington in Rappahannock. And there's a famous inn, The Inn at Little Washington.
TURNERWhen I would do demos in Whole Foods, everybody had heard of the inn, but surprisingly few people had heard of chutney so having to explain what chutney is. So with talk shows and magazines, people are getting more familiar with it.
NNAMDIAnd cheese being the thing that goes so well with chutney helps a whole lot. How did you figure out how much to sell your chutney for?
TURNERThat's a tricky thing. Well, my husband does that. We're very much a team. I'm here but it's actually my husband, my son and I. And he goes into his little room and figures it all out. But it's tricky to take in all the different things. And then you have to remember that there's going to be distributors later on, so it's not just the contents and the jar and the label. It's what comes up later.
NNAMDIYou mean your husband who thought this whole idea was ludicrous to begin with?
TURNERThat's quite right. That's absolutely right. Can you -- he's lived to dread that day -- regret it.
NNAMDISusan, how do you figure out how much to sell your ice cream for?
SOORENKOWell, you know, we use the formula of what did we -- what did the ingredients cost, what does the packaging cost, what does the labor cost, what is the overhead, the utilities that we have to pay for. And then we come up with a markup that has enough room in it in the event that we decide to use a distributor.
NNAMDIWhile I am enjoying my Moorenko's chocolate chip run, can you tell us a little bit about what are the dos and don'ts of marketing your specialty food product? What role can the internet play?
TANNERWell, one of the dos and don'ts -- and it's not for the internet to start with -- but is to really determine exactly where you want to sell your products. So some specialty food manufacturers want to sell to supermarkets, some want to sell to restaurants, some want to sell over the internet. So you have to really define what you want to do and how you're going to be selling your product.
TANNERThe internet is a very good way to get the word out about your product. NASFT research says that not much food is sold over the internet. About 10 percent of specialty food consumers actually buy food online. Most of them are going there -- they're reading about these wonderful chutneys or wonderful ice creams online but then they're going to a store to purchase them.
NNAMDISusan and Clare, before I go to the phones, you both sell your products in Whole Foods stores, which would seem to be the holy grail for specialty food makers.
NNAMDIHow did each of you accomplish that? How did -- how important is it to be in a big supermarket chain as opposed to smaller food shops, Susan, as I move on to the coconut almond?
SOORENKOYou know, we've been very fortunate. We started with Whole Foods one market at a time. And once we got into the first market and people started noticing us then other markets came onboard. And once people affiliated with other market chains saw us in Whole Foods they started contacting us. So it really has been a slow march toward brand recognition.
NNAMDIWell, your coconut almond -- is that what we were talking about? The coconut almond is good. I like the chocolate chip even better but -- no, we actually were talking about how do you -- how important it is to be in big supermarket chains as opposed to smaller food shops. And, Clare, when you tell us about that we got a call from Casey in Westminster, Md. who couldn't stay on the line who says, "For those of us who don't know, please tell us what chutney is."
TURNERThe easiest thing to say it's a savory jam. And so -- 'cause it's like -- it's a mixture 'cause it's fruit and ginger and garlic and onions. But then Indians make it -- you know, there's all different regional things make it slightly different. And actually my son who can be a crashing bore about Wikipedia, he's always fussing about what the definition of chutney is. And no one has actually come up with a set thing so we've now got to rather boring. Just say savory jam but Indians wouldn't agree with that though.
NNAMDISpeaking of definitions, Ron, how do we define what a specialty food is?
TANNERWe have a long definition, but the short of it is it's really a food which is made of high quality, which is made in a limited quantity. And we also like to say they're foods that are made with people behind them. They're not foods which are so called, you know, factory foods which are mass produced. You look at some of the mass market foods and they've got factories that are 40 acres big that are doing things. These are all made by people such as the people you have here and such as the people that are listening to you.
NNAMDIAnd, Clare, what was the process by which you got into the supermarket chain Whole Foods?
TURNERJust sheer luck actually, as that often happens. And they were opening a new branch in Old Town Alexandria Whole Foods and they were looking for a local -- we just happened to be applying at that time. It was just very, very lucky.
NNAMDIBut the part about it, as we got from a call -- or email early about being local is apparently particularly important in your case because apparently Whole Foods was saying, well we have a lot of spices. We have a lot of this and the other.
NNAMDIBut the fact that this was local chutney was important.
TURNERExactly. Exactly. When we filled in all the forms they said exactly.
NNAMDILocal chutney. On to the telephones. Here is George in Montgomery Village, Md. George, you're on the air. Go ahead, please. Hi, George. Well, George may have stepped away from the phone for a while. That gives us the opportunity to talk with Judith in Clinton, Md. Hi, Judith.
NNAMDIYou're on the air. Go ahead, Judith.
JUDITHOkay. Thank you for accepting my call. My question is, how do you go from making recipes for family gatherings -- I make a potato salad and people are always telling me that I should market it -- but I make it from scratch so, you know, I put a little bit of this and a little bit of that. So how do you go from taking what you make from scratch and putting it to a process or procedure where you can mass produce it and still maintain the same taste and quality on a regular consistent basis?
NNAMDIFirst you, Clare.
TURNERWell, that is a very good question and it's almost impossible to do. And we found that I make the chutney, my son and I, like mad scientists. Start with the first batch and we think it's perfect. And but then when you make a bigger amount it's not just multiplied by 10 or multiplied by -- it does change and it's never quite the same.
TURNERBut my husband, who once upon a time was a biochemist and is very sort of precise, he can actually -- he can hardly boil water. And about the only thing he makes is scrambled eggs but he's turned out to be a brilliant chutney maker. And I think part of the -- he can make huge amounts of chutney 'cause he's very precise. And he does what you're saying, but it's not easy.
NNAMDIHe went from ludicrous to mass chutney maker.
TURNERI know. He's a star.
NNAMDIJudith, thank you very much for your call. Good luck to you.
NNAMDIOn to Sophia in South Riding, Va. Sophia, you're on the air. Go ahead, please.
SOPHIAHi, Kojo. Thank you for taking my call. I wanted to ask you, my mother has a company called Najia Ink (sp?) . She makes these absolutely wonderful Ethiopian bread and sambusas filled with lentils. She's pretty much -- she's got her own commercial kitchen in D.C. She also started from home and she delivers to local ethnic grocery stores and restaurants. But it's absolutely almost impossible for her to get stores like Whole Foods and Trader Joe's.
SOPHIAI'm wondering how do you get in there because I have talked to the people. They give you the paper, you know, the -- to fill out and hand in. After that, you don't hear from them.
NNAMDIAny advice along that line, Ron Tanner?
TANNERWell, with Whole Foods in particular they have a person on each of their staffs which is called a local forager who is looking for local products to bring in. So you need to bring those products to that person. But it's up to them whether or not they're going to decide to bring it in. And that's always difficult. Some of it has to do with taste. Some of it will probably have to do with the price of it. And with a bread product like that it also might have to do with whether or not they make some of those products themselves. And they wouldn't want to bring something in from outside.
SOPHIAWell, the thing is, like I said, it's completely unique. There's nothing like it out there because it is Ethiopian bread and the spices she uses for that and also especially the sambusas with the lentils, there's nothing out there. However, it's just what is the best way to -- who did you say was the person to talk to?
NNAMDIThere you go. That's the best way. The local...
TANNERIt's a local forager which would be in the Whole Foods -- it would be in their corporate office. It would be for their Mid Atlantic region, which is down here. So you would need to see where that office is located and find out who the local forager is, which you should be able to find on the Whole Food's website. And that would be the person to send it to 'cause that person is in charge of bringing in probably 100 to 150 foods from the local area.
SOPHIAOkay. All right.
NNAMDISophia, thank you very much for your call. Susan, I have tasted of the chocolate chip, the coconut almond and the fresh ginger and they are all delicious. But you've got about six other flavors that I probably won't get the opportunity to taste during the course of this hour, so tell us what they are.
SOORENKOWell, those are the ones that made the first cut, the ones that you tasted. And we have black raspberry chocolate chip, chocolate malted, honey sunflower seed, white chocolate mint and cinnamon cappuccino here in the studio.
NNAMDIAnd, Clare, I tasted the spicy plum chutney. What other flavors do you offer?
TURNERWe've got the mango you'll be glad to hear. The hot peach we've got and rhubarb, which is not so popular. A lot of people are not sure what rhubarb is. But I think further north, you know. Green tomato we've got.
NNAMDIThat sounds delicious.
TURNERAnd we've got a cranberry and our newest one is called cranfiggy which is -- we thought was clever but it's not -- it's a mixture of cranberry and fig so...
NNAMDISusan, ice cream sales would seem to be easier in the summer than they are in the winter. How does your business plan create a year round market?
SOORENKOI don't know that it does. Well, what helps is that my business is less dependent on my shop. It's much easier for people to buy ice cream when they're already in a warm place in the winter. So if you're shopping, if you're already in a supermarket it's not a big deal to reach out and get a pint of ice cream, whereas if you have to bundle up and run down to the store -- to the ice cream shop to get it you're less likely to do it. So being in the markets has definitely helped even out the peaks and valleys.
NNAMDII make no distinction about seasons when it comes to eating ice cream.
NNAMDIHere is -- let's try George again in Montgomery Village. George may have returned to the phone. George, are you there now?
GEORGEYes sir, Kojo. Long time listener. Sorry about that earlier.
NNAMDIThat's all right.
GEORGEAnd, Clare, also of your chutney, I've been purchasing that for about two years and my favorite is the peach. It's very good.
GEORGESo thank you for making it. Kojo...
GEORGE...your guests spoke earlier about renting out space at a bakery. For some people we have convenience stores and we don't have that -- when we start out some people might not have the option to rent out space. Another alternative that's really helped us out is finding remanufactured equipment. Things like mixers can cost thousands and thousands of dollars and you can save 50 to 75 percent on buying secondhand or remanufactured equipment.
NNAMDIRemanufactured equipment, yes, as a way of cutting costs. Go ahead, please.
GEORGEWe found a local shop that does this called Pinecrest Equipment in Virginia. And we buy everything through them now, walk-in coolers, mixers, meat saws. And honestly, I mean, you can save 50, 75 percent off your initial costs. And that really is a -- you know, a breaking point for most people trying to start out in the business.
NNAMDIOkay. Thank you very much for your call and for passing that on, George. We got an email from Fiona who said, "I just started a food business that you could call a Caribbean Fusion Pastry Bakery. We plan to ship products across the U.S. Do your guests have advice on how to package my product to meet the federal requirements? There is no meat or fish but small amounts of milk and cheese." Any advice along that line, Ron?
TANNERMy advice would just be to see what the federal requirements are. I mean, the federal requirements are fairly simple. I mean, you have to have your ingredients on your package. You have to say where your -- where it is manufactured at and you have to have a net weight on your package. Beyond that there's not a whole lot that you have to do. If you're a certain size you have to put on a nutritional label. But just find out what those requirements are. They are not that hard to meet.
NNAMDIHow about food safety requirements in terms of shipping products?
TANNERI don't believe there are any food safety requirements in terms of shipping products. Most of the food safety requirements have to deal with the actual manufacturing of the products. If her product needs to be refrigerated obviously she needs to find somebody who can take it in a refrigerated means and that can control that refrigeration.
NNAMDIHow long does it take before you make a profit selling specialty foods? I know one answer for that is longer than you'd think, but is there any average of time that somebody should be patient for? First you, Clare.
TURNERI'm told it's about six or seven years, which is just about working out what we're -- what is happening to us. We're about at that point now. It's a long time. You don't think the -- at the beginning you think, oh we'll do it quicker but I think that is the answer.
NNAMDISusan, in your case?
SOORENKOWe're at ten years and we're just now starting to peek above the waterline.
NNAMDIRon Tanner, is there an average so to speak?
TANNERThe average is probably six to seven years but I think that many people that go into the specialty food business are doing it because of the love of specialty foods, not so much making money. It is not a business you're going to get rich in. There are some companies that go out there, get started. They may end up selling their company for millions and millions of dollars.
TANNEROne of our members that did that was Vitamin Water, another was Ben & Jerry's. So there are these big success stories but most people just want to have a nice life. They want to support their family. They might be on a farm. They want to support the farm. And they just want to make enough to keep their business going and keep their lifestyle happy.
NNAMDIHere's Neil in Baltimore, Md. Neil, you're on the air. Go ahead, please.
NEILGood afternoon, everyone. How are you?
NEILAll right. Question for you. I'm in the process of getting Tree Frog Hot Sauce -- yes, shameless plug -- off the ground in Baltimore. I grow all of my peppers. I'm beginning to look into labeling and bottling and website and all the little hoops that I'm going to have to jump through. What are the differences between state and federal regulations in terms of where I can brew? The ingredients are pretty simple. Again, it's all homegrown except for the vinegar and the mango. Should I gun straight for federal or should I start off state and then is there really any difference?
TANNERThe federal requirements will really just be for the labeling, not so much for the manufacturing of the process. So I would just kind of rely on the state and start doing it there.
NEALAnd again, that's Tree Frog Hot Sauce.
TANNERAre there tree frogs in your hot sauce?
NEALNo. It is tree frog free. No tree frogs were harmed in the production of this sauce.
NNAMDIWhy do you name it Tree Frog Hot Sauce?
NEALYou know, we all have our totem critter. There's howling wolves and lone wolves and dragons and eagles, and I've been a climber my enter life. I'm a little fellow. I climb things and I stick to it, and I've been told I'm colorful. So that's what I went with.
NNAMDITree Frog. Good luck with Tree Frog Hot Sauce, Neal. We've got to take a short break. If you have already called, stay on the line. We will get to your call. If you'd like to join the conversation, the number is 800-433-8850. What's the biggest obstacle keeping you from starting a specialty food business? 800-433-8850. Go to our website kojoshow.org. You can ask a question or make a comment there, or send us a tweet @kojoshow, and there's always email to email@example.com. I'm Kojo Nnamdi.
NNAMDIIt's Food Wednesday. We're discussing starting a specialty food business. We're talking with Clare Turner, co-owner of Virginia Chutney Company in Washington, Va. We got an email from Orlena who says, "My husband and I absolutely love Virginia Chutney, each and every flavor, although most excellent with cheese, are also excellent to cook with. We use it to add a wonderful flavor to anything, but especially fish or chicken." That's one of the uses of chutney we haven't discovered yet. You can cook...
TURNEROh, that was very nice of them. That was very nice of them to say that, yes.
NNAMDIYou can cook with chutney. Also with us is Susan Soorenko, owner of Moorenko's Ice Cream in Silver Spring, Md., and Ron Tanner. He is vice president for communication with the National Association for the Specialty Food Trade. Ron, this year is the 60th anniversary of the National Association for the Specialty Food Trade. How have specialty foods changed over the years. What was so most popular say in the 1950s compared with what's popular today.
TANNERWell, it's interesting. We're actually putting together an exhibit that we're going to be showing at the Fancy Food Show here in Washington on 60 years of the NASFT, and when the NASFT started back in 1952, some of the big products was a company called Bigelow Tea which is still around and still is a NASFT member. They had a product called Constant Comment Tea, which was one of the biggest items back in the 1950s.
TANNERAnd then you had people bringing in lingonberry jam, you had a lot of French people bringing is escargot. The industry really started as a bunch of importers who were bringing things in primarily from Europe, and now it's turned into a great conglomeration of all kinds of specialty food entrepreneurs. Of our 2900 members, now about 2500 of them are domestic U.S. manufacturers making everything from, you know, from caviar to jelly beans to ice creams to pasta sauces to almost anything you can imagine.
NNAMDIYes. Some of which I've got in front of me. I've got the (word?) Indian sauce coconut curry, the coconut milk and ginger variety. What is this that I'm holding up here right now that I just took a bite out of?
TANNERThat is wagyu beef jerky from Vermont.
NNAMDII thought that's what it was.
TANNERSo I wanted to give you like a really broad representation of everything that we have.
NNAMDIWhat about this?
TANNERThis is a sweet potato biscuit with black pepper from North Carolina.
NNAMDIAnd what are these peanuts?
TANNERAnd those are peanuts with honey mustard from Virginia as well. So lots of different products that are out there.
NNAMDIChutney ice cream, peanuts, coconut curry. I'm having lunch even as we speak. I should mention that the Fancy Food Show starts June 17 at the Washington Convention Center. What happens at the show and who can attend?
TANNERWell, the show is for people who are in the trade, so anybody that works for a store, works for a restaurant, is in the specialty food business can come to that. It's a very, very large show. We're going to have around 2400 exhibitors there, so you've got two of them who are here with you today, so take that and multiply it times 1200, and you'll have the number of people that are there, and we also have about 80 countries that will be participating. The largest country being Italy, but we have exhibits from Jordan, we have exhibits from South Africa, from very many different places.
TANNERSo a wonderful place for people to come, and really the place where buyers from Whole Foods and from Trader Joe's and from the Tea Shop of Williamsburg and from everywhere really come to discover the foods that they're going to bring into their stores over the next six months.
NNAMDIWe regret to say it's not open to the public, so stop with the fake ID saying that you work in the food business and can therefore attend. It's not open to the public. But Susan, you're getting a booth at the Fancy Food Show for the first time this year. What are you hoping will happen as a result of being there?
SOORENKOI guess primarily what we hope is to raise the recognition of our products so that we're not so much oh, really, I've never heard of you before. So that's number one. And then to come in contact with potential customers and hopefully potential distributors.
NNAMDIClare, you have been there before?
TURNERWe have. We have.
NNAMDIWhat has it done for your product in your view?
TURNERWell, I think it's just like Susan says, you know, it shows that we're one of the players. Sometimes you feel like David and Goliath, just in our little booth with these huge, you know, big companies, and they have spent thousands on their booths, but it's very interesting, and we've had some amazing lucky people coming -- just walking by and we'd have never of met them and they'd never have met us if we hadn't been there.
NNAMDIOnto the telephones again. Anne in Alexandria, Va. You're on the air, Anne. Go ahead, please.
ANNEHello. I was lucky enough to be introduce to Moorenko's from friends up in Silver Spring, and I was in my Giant in Alexandria the other day and saw that Moorenko's now had like five or six flavors in Giant, and I was just interested in how kind of the -- it's more expensive than some of the other pints of things in Giant, and whether that's the same as having things in Whole Foods which has a more higher price point and a more rarified shall we say customer. Like how that's going trying to get into a bigger distributor like Giant.
NNAMDISusan, I may have asked you this before, but how do you figure out how you price your ice cream?
SOORENKOWell, we know, you know, there's a difference between what we charge for our ice cream and what our retailers charge for the ice cream. So we have to go with what's gonna cover our expenses and allow us to move forward, and then it's up to Giant to figure out what their constituency will be willing to pay.
NNAMDIDoes that answer your question, Anne?
ANNEYeah. Because I just wondered like is that where you want Moorenko's to go, is more mainstream like that?
SOORENKOYou know, that's a good question, and we do consider that and philosophize about it a lot, but it's also -- it was also an incredible opportunity that they came to us and said that they wanted to sell our ice cream, and they're also trying to acknowledge local producers and, you know, local businesses. So, you know, if we're gonna be on that train, we kind of have to be on that train. So we were glad that they wanted to try it, and we're glad that they picked us to experiment.
ANNEAnd I'm glad they did to. I get your marshmallow ice cream, which is like a favorite in our house.
NNAMDIAnne, and thank you for your call. Onto Dominic in Hyattsville, Md. Dominic, you're on the air. Go ahead, please.
DOMINICHi, Kojo, how are you?
DOMINICGood. You guests do a very interesting show. After I was laid off three years ago, I decided to, you know, begin applying my gardening and kitchen talents, and I raise heirloom garlic, and I've been selling at a farmer's market. Because garlic's not a frequent demand item, I decided to expand my product line with products that related to garlic, like my mom's tomato basil sauce recipe, my garlic antipasto recipe, my father's jalapeno hot sauce recipe. So I submitted for an application for either an on-farm home processing license, or a processing license, and all went well except for my zoning.
DOMINICIn Price George's County, the home occupation classification does not allow for home food processing. So I can make certain items such as my British style food conserves, which is a family tradition, and my grandmother's biscotti recipe, but it's not really related to my garlic vending. So then I priced canning kitchens which have been cost prohibitive as well as co-packers, which want to make a large quantity, more than I can handle, and it's still somewhat cost prohibitive. I guess the food processing licenses issued by the state of Maryland have been tailored for people like me, but the zoning regulations are not prohibitive, so basically one hand is not washing the other, and my question is have you experienced similar zoning issues, and what are my cost feasible options?
NNAMDICan you offer any advice along that line, Ron Tanner? The difference between the zoning licenses and the processes licenses.
TANNERYeah. I'm afraid I don't really know. You're probably gonna have to go out and get it produced somewhere outside of your home, and have to be confident enough in your product that if you're gonna go to a co-packer and they have a minimum run of a thousand jars, which is often what that is, you just have to be confident enough that you're gonna be able to sell at before the product goes bad.
NNAMDIWell, Dominic, there are several people who are seeking the kind of advice you are seeking, so I'm going to combine them all. We got an email from Jason who says, "Thank you for addressing this topic today. I've been a home cook all my life, and professional chef for the past four years. I make great food and have plenty of people interested in buying it. I even have access to a commercial kitchen at my job. Can your guests tell me the first one or two or three steps to take to start packaging and selling food?"
NNAMDIThen we got this email from Karen. "Do your guests know or recommend or Steven Hall's books? He edits an online magazine about this topic at specialtyfoodresource.com." And I guess a lot of people want to know what resources are there out there for them whether they are books, or are there resources online that can help them in being able to start a business at this time. I'll start with you, Ron Tanner.
TANNERYeah. Let me start by saying we are doing the Fancy Food Show here on June 17 to 19th, and as part of that, we do 20 different educational programs. We have a program that takes place on Saturday called "The Basics: The Business of Specialty Foods," which is an eight-hour program. That will really teach you what you need to do about starting your business, about pricing your product, about who you're going to be selling to, and then we also have a program on Sunday called "Start-up Sunday" where we have four different sessions which talk about how you get started in the business, how you can start with your manufacturer, and what you need to do with labeling, what you need to do with pricing.
TANNERSo anybody who is in the area here and if you do have a business that you're starting, you can come to the fancy food show, and I would recommend that you look at those educational programs and try to attend those in person, and if you attend those in person, they are available online as well.
NNAMDIDominic, thank you for your call. Good luck to you.
DOMINICThank you, Kojo.
NNAMDIWe got an email from Debbie at Banana Loves Muffins, who says, "I'm trying to launch a vegan banana muffin business while also having a full-time day job. I'd like to find someone who can bake my product for me, but I'm having a difficult time finding a baker. Do you have any suggestions for finding a reliable, preferably local, contract baker?" Even if no one around the table at this point has a suggestion, Debbie, I'm sure you'll probably hear from someone who will. Know any bakers, Clare, that you...
TURNERNo. Unfortunately, that's the one thing we don't do, baking.
SOORENKOI've had any number of people with the same question. I haven't a clue.
TANNERI don't know any more than anybody else does.
TURNERSomeone will call in.
NNAMDITalk about labeling your product. What's required and what do you recommend including on the label, Clare?
TURNERWell, I didn't realize how incredibly important the label is. Everybody tells you that, but it's actually crucial. The people see the label first, and it sounds a bit extreme, but it's almost more important than the actual contents in some cases. But there are strict guidelines which Ron will tell you about what has to be included, and you need to find out exactly what they are and follow them through, but the look of it is absolutely critical.
SOORENKOYeah. We spend a lot of time -- I know it may not look it, but we spend a lot of time deciding about our labels. We've gone for something that looks like a third grader has put it together so that you...
TURNERWe did that too.
NNAMDIYou did that too, Clare?
TURNERYeah, we did.
SOORENKOYeah. So that you...
TURNERWe changed our labels a lot (unintelligible) .
SOORENKOYeah. So that you understand when you see it that it's homegrown. But, you know, and then there are the requirements, and those -- the information about the requirements frankly comes from your local department of health or department of agriculture, and they'll be there to inspect you, so you can ask them what has to be on the labels.
TURNERAnd they're very, very helpful.
NNAMDII'm looking at (unintelligible) all-natural coconut curry Indian summer sauce. It's got a green label with a blue border. That tells me there's curry in there.
TANNERYou need to define your product on the label, and you're defining your product by the logo that you use. You're also defining it by any colors or any pictures that you use as part of it. So I think that's what Clare was saying. It's very important to make your label stand out, because when somebody is walking through a Whole Foods, or they're walking through a Safeway Store, I think the research says they take about three seconds to look at your product and decide whether or not they're going to pick it up. So you really have to catch their attention very quickly. And then the quality of the product will get them to buy it again, but the label is often what's going to get them to buy it the first time.
NNAMDII'm gonna start with you, Ron, and go around the table on this one. What is generally the hardest part of running one's own specialty food business?
TANNERI believe the hardest part is wearing all the different hats, because you have to be a manufacturer, you have to be a buyer, you have to be a marketer, you have to be an accountant, and then you have to go out on Saturday and Sundays to some store and put your chutney in front of people. So I think just having that balance in your life and being able to be good at all that is the most difficult thing.
NNAMDIWell, Clare Turner has ludicrous to help her -- well, not Ludacris the hip-hop artist, but...
NNAMDI...her husband's comment was they said it would be ludicrous at first, but he's been a great help in this business.
TURNERNo. He has been. But I think -- we often talk about it's hard working as a family, that the best part about it is the working with the family , and the most difficult part, of course, is I sometimes want to kill both my husband and my son.
NNAMDIWorking with the family.
TURNERYes. But it's such an emotional journey. I don't think I've ever done another job which is so emotional. You're very, very involved in your own -- like we had the caller saying that, you know, their product was unique. Well, we all think our own product is unique and special and we love people saying wonderful things, but we actually can't take any criticism of any kind. So that's not very strong of us.
NNAMDIWhat do you say, Susan? What's the most challenging, the most difficult part of running your own specialty food business?
SOORENKOCash flow, yeah.
NNAMDITrying to maintain the cash flow even as you run...
SOORENKOEven as you grow, you know, because you've got to finance the growth. And so you might have a fabulous summer, and then all of a sudden you have a fabulous winter and the money's not, you know, it's not keeping up with it. But that's a real balancing act to triage your expenses and make sure that you can sail your boat through to the next spring.
NNAMDIAnd I think Ron in Germantown, Md. wants to say that the business plan is the most important. Ron, you got about ten seconds.
RONYeah, hi. Yeah. I had a specialty business manufacturing sausages, and had I know what it cost before going into this, I probably would have never done it. I've done business plans before, but I'm glad I went ahead and just plunged in.
NNAMDICash flow, cash flow, cash flow. Business plan. I'm afraid we're out of time, but thank you very much for your call, Ron. The other Ron, Ron Tanner, is vice president for communications with the National Association for the Specialty Food Trade. Ron, thank you for joining us.
TANNERGreat, thank you very much.
NNAMDISusan Soorenko is owner of Moorenko's Ice Cream in Silver Spring. Susan, thank you for joining and for bringing the ice cream.
TURNERIt was a pleasure.
NNAMDIClare Turner is co-owner of Virginia Chutney Company in Washington, Va. Clare, thank you, and thank you for the chutney.
NNAMDI"The Kojo Nnamdi Show" is produced by Brendan Sweeney, Michael Martinez, Ingalisa Schrobsdorff and Tayla Burney, with help from Kathy Goldgeier and Elizabeth Weinstein. The managing producer is Diane Vogel. Our engineer today was Andrew Chadwick. Natalie Yuralivker is on the phones. Thank you all for listening. I'm Kojo Nnamdi.
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