The Big Dipper
Salsa Success at Garden Fresh Gourmet
(page 3 of 4)
In the early days, I understand you had some trouble with the IRS that turned out to be a blessing.
Jack: I actually had an IRS audit [for the restaurant] and the guy from the Treasury Department gave me [the late IRS division chief] Tony Latella’s number and told me not to tell anyone he gave it to me. Tony came in and we just hit it off. He wouldn’t let me pay him. … We got through the audit, and he said, ‘I’ll stop doing my [consulting business] and for a small percentage of the business, I’ll come in there.’ And he did, [as CFO]. … He brought a lot of structure from the IRS. So a lot of things I did, moving quickly, the entrepreneur thing, he was the grounding unit.
Things changed dramatically, too, in 1999, when you swept the awards at America’s largest spicy-food show. What was the reaction?
Jack: I think they were actually insulted. The salsa capital of the world used to be New Mexico, Colorado, California. I mean, that is the mecca of salsa. Detroit? Ferndale? Unheard of. I think the rest of the industry was [saying], ‘Who are these guys from Ferndale, Michigan?’ Since then, we’ve won 300 awards, national and international.
Beyond the awards, how did word about Garden Fresh spread? You’ve never done print or TV advertising.
Jack: We’re big into [product samples]. We wanted to get in people’s mouths.
Like those people at the supermarket with food on trays?
Jack: That’s how we advertise. That’s where we spend our money. We’re the biggest supplier [of salsa] to Costco nationwide. We spent $1 million at Costco last year on demos. Ten percent of what we make we spend on demos.
You’re also making salsa, dips, and chips for some other very big names.
Jack: Whole Foods has us doing 25 private labels. And [Jimmy Buffett’s] Margaritaville Foods.
From day one, your mantra has been ‘all natural.’
Jack: We buy fresh [ingredients]. We wash it. We clean it. But we don’t add any preservatives or additives or chemicals of any kind.
That presents some obvious challenges with food safety.
Jack: We went through the school of hard knocks. We had to make our product as clean and cold as possible. … You’re allowed by the FDA to have 200 parts per million of bacteria on your equipment. Your kitchen table probably has 100,000. I won’t let production start unless we have zero.
Still, when you were first shipping all-natural salsa, storeowners must have been skeptical.
Jack: I was told I couldn’t do it. I had a six-week shelf life. I was told all retailers wanted four months. But we thought, ‘It’s because your stuff doesn’t sell. If you get something good in there, you’re going to turn it.’ If you can’t sell something in four months, you shouldn’t even have it on the shelves.
And now you’re filling shelves with all kinds of products. You bought Michigan’s largest hummus company in 2006 and then a Grand Rapids chip operation in 2007. How’s it going?
Jack: We’re the No. 1 [all-natural] salsa company in North America — twice as big as No. 2. We’re the No. 8 dip company. We’re the No. 7 hummus company. We’re the No. 7 chip company. That’s what I’m really proudest of. Because no other major company, all these billion-dollar companies, nobody has that lineup.
Sales are projected to hit $90 million this year, and you’ve recently hired some experienced executives. Yet you’re still very hands-on around here.
Jack: I spend most of my time in the test kitchen. That’s my contribution.
Annette: I have at least 30 managers. I don’t really have to be here, but I enjoy it. So I kind of oversee production, each production department. Like this week, I worked in guacamole, stuffing the cups, putting the lids on, palleting, dating, anything, just to keep the crew going because we’re kind of short on people this week.
Looking ahead, you know more conference-room buyout offers are in your future. Have you thought about what you’ll do?
Jack: We’ve had offers to move to different parts of the country and all these incentives … from communities [in Michigan] that wanted us to move. [But] I grew up in Ferndale and they’ve been great.
Annette: We don’t want to move anyplace else. We have a nucleus of employees. If it weren’t for the employees, we wouldn’t be sitting here right now. We feel like we owe it to the people who have stood by us.
Jack: It’s like a big extended family. At the end of the day, there’s no backstabbing going on here. It’s amazing what we’ve put together with a family atmosphere here. That’s the reason I love coming in.