After 18 years at his family’s business, in 2012 Gehl became president of Contract Comestibles, a company that develops, processes and packages entrepreneurial foods. The products are primarily sauces -- ranging from pasta to chocolate -- and condiments like ketchup and mustard, although products also include hummus, honey, caramels, sauerkraut, kimchi, kombucha, even hummingbird nectar.
The East Troy company originally was founded in 1997 by Matt Nitz and John Delikat, who employed three part-time workers. Nitz, a food scientist, remains today as a partner, specializing in quality control and compliance, and the workforce has grown to just under 30. The 70,000-square-foot facility got its start as a dairy in 1904, and has additions from almost every decade since.
Bite into this slice of life with Andy Gehl:
A growing appetite
Entrepreneurs have always been out there, but there’s a lot more interest in the marketplace for entrepreneurial foods. In the ’60s, ’70s and ’80s, consumers were interested in getting their food for less, which fueled Wal-Mart and a lot of the expansion in big foods. That started to shift in the ’90s with the start-up of Whole Foods and organic foods. Now it’s not all about ‘How cheap can I get it?’ There are health considerations and taste considerations.
When I was a kid, Mexican was a hard-shell taco and that was it. There were no burritos, tostadas, Tostitos. When you thought about Asian food, it was a can of chow mien noodles and it ended there. There was no Japanese food, no Thai, no Vietnamese food. Those things just didn’t exist. Had you ever heard of sushi as a kid? No, and would you have eaten sushi if somebody said, ‘It’s raw fish. Here, try it.’ No, I’m not eating that! No way!
You go into a high school now and high school kids love hot sauce. I wouldn’t have touched hot sauce with a 10-foot pole. I’m German and I grew up with a very dull, conservative palate, as did not just the majority of Wisconsin residents, but the majority of the country. My grandfather had a bologna sandwich for lunch every day for 50 years. When’s the last time you had the same thing for lunch two days in a row and didn’t complain about it?
So the variety in food and the variety of the consumer end of food flavors expanding in the last 30 years has really driven entrepreneurs. If you tried to launch a hot sauce in 1982, you were destined for failure. Now if you come up with a hot sauce, you might make it. Food is still a tough business. Entrepreneurial food is still a very tough business. Like starting a restaurant -- how many fail versus how many succeed?
A matter of regulation
Alongside this growth in desire for unique, different foods has been a drastic escalation in the laws, regulations and paperwork surrounding food and food manufacturing. It all comes down to what is deemed food safety. The most recent is the Food Safety Modernization Act.
In 1980, if you were a food entrepreneur, you would start in your kitchen and sell in a farmers market, and if that went well, you’d clear out a space in your garage and start doing a little more. Then you would get a little 10’-by-10’ down in the local strip mall, bring in a couple of friends and family members to help you and you’d keep slowly growing. Now when you get past what in Wisconsin is referred to as the pickle bill that allows you to make food in your home, regulators ask you, “Where’s your HSA plan? Where’s your GMO certifications? Your kosher regs?” And on and on and on.
If you want to run a small food manufacturing business, you have to have somebody devoted full time to do nothing but paperwork, and if you’re a two-person company that doesn’t work financially. So there’s this problem where consumers are more interested than ever in entrepreneurial food, and the entrepreneurs are having a harder time than ever in getting it going because they’ve been regulated out of existence.
Getting a taste for business
There are a lot of people that get into entrepreneurial food for different reasons other than wanting to become a millionaire. I get moms whose kids are gone and have a recipe they’ve been making for years and have heard “You’ve got to sell this.” I work with professional chefs who have a signature sauce and they know everything about running a restaurant but nothing about bottling that sauce for retail sale. I have a number of farmers that I work with, helping with their CSA (community-supported agriculture) programs. They’ll grow tomatoes all summer and send them as part of their CSA. At the end of the summer, they’ll send their excess tomatoes to me. We’ll puree them, jar them and let them send out tomato puree throughout the winter. Now, I’m coming back to those same farmers -- can we do a bloody mary mix? Can we do a pasta sauce?
Some ideas flame out
One of my favorite recipes -- and it would have sold like hotcakes -- was a brandy vinaigrette. Really good -- until you had to figure out how to flame 500 gallons of brandy. When you’re flaming three, four ounces at a time, that’s manageable. When you’re trying to do 10,000 bottles of brandy vinaigrette, that becomes an issue. We spent some time trying to think if there was any way we could develop a continuous small river of brandy we could flame. Until you sit down and try to figure it out, who knows? But we were never able to solve brandy vinaigrette, so that one never went anywhere.
Making connections through food
We bottle sauce for Two Soldiers and a Marine -- Iraq vets who have a food truck in the Chicago area. They make a great barbecue sauce and have a wonderful story. Their corporate mission is to hire vets and they are very proud of what they’re trying to do and what they’ve done. The barbecue sauce market is like creating another micro-brew at this point -- everyone and their mother has another barbecue sauce. But they definitely have traction and largely because they have a great sauce, but also a great story, and people connect to that and it’s fueled their growth.
Shopping for ingredients
A lot of entrepreneurs come in having made the recipe in their house, having bought ingredients at the local grocery store. Well, I’m going to make 10,000 bottles. I don’t need a little container you bought at the store. I need a 50-gallon drum. I have a customer coming in now who wants to use saffron. That’s very expensive. We’re talking about needing pounds of saffron. We’re at the point where you almost need an armored truck to deliver the saffron. The fun part for me is how do you take this concept and make it a reality?
What’s the cost?
The multinationals are going in and saying, “We’re going to buy $50 million of sugar next year,” and their price for sugar is half of what I pay, even though I’m buying in truckloads. The individual entrepreneurs are buying a couple of 50-pound bags and they’re paying three or four times what I’m paying. Often as not when entrepreneurs meet with me, they’re very nervous about the cost. They’ll say, “When I make it, I don’t have to pay you.” Well, yeah, but I can get your bottles for half price, all your ingredients for half price because I’m buying at scale, a larger scale than you are: tomato paste in drums, pallets of sugar.
What’s it worth?
We work with Becky’s Blissful Bakery. She does high-end caramels, mostly organic, although she does have a non-organic line as well. She does a beer and pretzel caramel that is just to die for, but it’s also a very expensive caramel because she does it the old-fashioned way. It’s not mass-produced. She sells them for $8 to $10 a box. For the people who love her caramel, it doesn’t matter. It’s worth every penny. Now, I haven’t found anybody who hates her caramel, but there are a lot of people who say, “I’d never pay $10 for a box of caramels.” Well, that’s fine.
But everybody has one food they would pay for regardless (of price). Have you ever had good, old-fashioned banana pudding? If I went into a fancy restaurant and they had $14 banana pudding on the menu, I’m getting the banana pudding. Other people would think I’m insane. But there’s something else that they would pay $14 for -- which is why the United States is so interesting, because there’s so many divergent people and divergent tastes.