Md. Salad Dressing Company Finds Tasty Recipe for Success

Sometimes a brilliant idea for a new business has been there all along, right under the nose of a would-be entrepreneur. Such was the case with Tessemae's, a profitable, three-year-old salad dressing company in Annapolis that has already racked up $3 million in sales.
 
The all-natural salad dressing is flying off the shelves at Whole Foods Market in Harbor East and its stores in more than 20 states, the grocer says. In three months, it will be in Whole Foods across the country. To keep up with demand for its lemon garlic, cracked pepper and poppy-seed grapefruit dressings, the 18-person firm is planning to more than triple its staff, adding 50 employees in sales, operations and manufacturing. The company recently moved its manufacturing operations into a new 36,000-square-foot facility in Essex and expects to quadruple sales next year.
 
Out of the kitchen

But this fast-growing business began, literally, at the kitchen table of the Vetter household, some 20-odd years ago.
 
"We literally ate this dressing every single night growing up,” says Annapolis native Greg Vetter, whose official job title at Tessemae's is "older brother."
 
“We'd say: 'Needs more salt', or 'Needs more lemon'. It was always a topic of conversation. It's always been a part of our lives," Vetter says.
 
Greg Vetter, his two brothers, and his wife are involved in the family business. So are Vetter's parents, who serve as official taste testers and directors of good karma.
 
But it wasn't until one evening in February of 2009, when Vetter came home from work and found a two-liter bottle of his mother's salad dressing missing from his refrigerator, that he considered making the beloved family salad dressing recipe into something more. One of Vetter's neighbors and buddies, having been served the dressing before, took the liberty of 'borrowing' it from his refrigerator. This served as his "aha" moment.

And into Whole Foods
 
Out of loyalty to his mother, Vetter consulted her first. "I said to her, 'If I get us into Whole Foods, will you go into business?' Vetter recalls. About a month later, after barraging the Annapolis Whole Foods with phone calls to request an in-store demonstration of the dressing, he was granted one. The demo did the trick, in spite of what Vetter describes as a less-than-professional presentation. He says he walked into the Annapolis Whole Foods store carrying a Tupperware container of salad dressing already poured over the lettuce.
 
Whole Foods, notoriously selective about their vendors, granted Vetter access to demos only during the grand opening week of its Annapolis store, in May of 2009. In thirty minutes, he went through his entire stash—four cases of lemon garlic dressing. Demand for the salad dressing hasn't slowed since that week.
 
"We just really enjoy how they think outside the box," says Julian Schmied, associate produce team leader at Whole Foods Market, Annapolis. "They have an Italian dressing, but it's made differently. You can actually see the herbs, the olive oil."
 
Schmied calls it "an awkward-looking dressing” in which oil separated from the rest of ingredients.
 
"They went with it [the separation] and really sold it," Schmied says. "What started as a quarter shelf has become our best-selling dressing."
 
Staying true to its all-natural recipes and maintaining a commitment to the all-natural grocery chain that best represents its niche brand has proven a successful model for Tessemae's. And though it wasn't planned, the business's launch date, during a recession, proved to be good timing as more folks eat at home.
 
Creative presentation
 
Would-be vendors knocking on the doors of Whole Foods hawking salad dressings with all-natural ingredients and snappy names are probably a dime a dozen. In Tessemae's, Whole Foods saw something more.
 
The salad dressing production industry actually benefited during the economic downturn, according to IBISWorld, a national market research firm. During the depths of the recession, from 2008 through 2009, industry revenue rose an average of 5.4 percent. Credit for the strong sales goes to cost-conscious consumers, who did more shopping at supermarkets and didn't dine out as much.
 
IBISWorld predicts the industry will continue to rise, though as the economy recovers, consumers may dine out more, leading to slower revenue growth. If and when that happens, products like Tessemae's are likely to squeeze out competitors. That's because increasingly, health considerations are driving consumer demand for salad dressing. With its all-natural ingredients and appealing flavors like lemon garlic, cracked pepper, and poppy seed grapefruit, Tessemae's fits the bill. 
 
Local advantage

It also helps that Tessemae's produces their products locally, as the local food movement has become extremely popular among consumers who tend to shop at natural food groceries. It comes as no surprise, then, that a store like Whole Foods was drawn to Tessemae's.
 
"Whole Foods is a tremendous retailer that offers small local companies an opportunity to succeed,” says James Zografos, a director at Chicago area specialty foods distributor KeHE Distributors. “They keep their nose on the local pulse which adds to their image."
 
 
Staying niche

In spite of the lightening-speed expansion, Tessemae's isn't bent on being all things to all stores. Instead, it has an informal, semi-exclusive relationship with Whole Foods. "We have turned down Wegmans, Fresh Market, Vitamin Cottage, and Target. It doesn't align with what we're trying to accomplish," Vetter says. "We're in a niche.”
 
According to Vetter, right now it's not about forging new partnerships but rather nurturing the ones they have. Instead, Vetter's goal is for Tessemae's to become Whole Foods' top-selling vendor.  
 
"Why would we want to ruin the relationships we have?”

Elizabeth Heubeck is a Baltimore-based freelance writer, covering topics as diverse as parenting and public health. She writes for several local print and web outlets, universities, and medical centers. She has written for Baltimore Fishbowl, the Baltimore Business Journal and Newsweek. 

All photographs by STEVE RUARK. Click "enlarge" to see photo captions.