This week’s Green Scene column in Crain’s Chicago Business: Entrepreneur turns regional heirloom recipes into local, organic food products

Lee Greene is betting consumers seeking locally-sourced foods that are reminiscent of a sense of place — or terroir — will latch onto her line of condiments and other items that hearken back to some of the original immigrants that settled in the Midwest.

Her three-year-old company, The Scrumptious Pantry, has seen sales increase fourfold in 2011. She won’t disclose dollar amounts, but she says revenue is up 50 percent so far this year compared to last year.

Moving forward, it’s going to be tough to stand out on the increasingly crowded shelves of local — and pricey — artisanal food products. But Ms. Greene is hoping her game plan is different enough to draw attention.

Lee Greene

She went back in time about 200 years to track down heirloom regional recipes for pickles, ketchups and dipping sauces that could be updated to appeal to contemporary palates. Ms. Greene uses ingredients that grow in abundance in the Midwest — such as cranberries from Wisconsin — and put photos of the farmers growing the mostly organic ingredients on the packaging to show there are real people involved in the small-batch formulas being created. Then she adopted flavor profiles that echo different ethnic backgrounds of immigrants who settled in the Midwest over the last couple centuries.

For example, one of her three ketchups is made from cranberry and juniper berries and has rosemary and red beet juice mixed in. Those flavors tap into the Slavic and Russian heritage of immigrants in this region, she says.

Ms. Greene, a native of Germany, learned about sustainable farming when she worked as a hands-on manager of a biodynamic vineyard in Italy after completing a business degree there. She ended up in Illinois a few years ago when she came to visit her father, who lives downstate. Ms. Greene, 37, hardly expected to stay, and now she’s committed to sticking around to make her startup a success.

Scrumptious Pantry products are now being sold in 10 states and in more than two dozen locations throughout the Chicago area. Future plans include a line of East Coast heirloom products and projections for revenues to be in the multi-millions by 2015.

Crain’s met with Ms. Greene to talk about the challenges of getting a small-scale production company off the ground and finding financing and markets to keep it growing.

Crain’s: Going to business school in Italy and working in a vineyard doesn’t seem like a natural path to creating heirloom ketchups and pickles in the Midwest. How did those connections happen?

Ms. Greene: I wanted to learn how quality, sustainable food was made and what the challenges were for small farmers. I had enough of the consulting world and power point presentations.

When I came to the U.S. I first started importing high-end food from Italy, but then I got interested in the local food. I found there was an interest in regional food, but not many people were making products with regional flavors and immigrant heritage attached to it.

Crain’s: You talk about terroir — a term used widely in vineyards that refers to a uniqueness of the land and the grape that grows there — and how that should be extended to food. How are you incorporating that idea into your products?

Ms. Greene: Instead of terroir, I refer to what I’m doing with regional food as an heirloom process. Heirloom has three components: one is the quality of the ingredients, grown by a farmer who knows his land. Second: it’s about how you prepare the food. You can kill it if you use industrial ingredients for large-scale production, so we are making small batches with high quality production. The third element is choosing recipes that are connected with the region and use ingredients that are local. The idea of terroir or heirloom would take a red beet that has a certain flavor in this part of the country and use it in a recipe that brings out a characteristic of the region.

Crain’s: How many local farmers are you working with and are they involved in making the recipes?

Ms. Greene: I’m working with 12 farmers in Illinois, Wisconsin and Ohio. I read a lot of historic recipe books for inspiration from the 1750’s to the 1850’s. I was hoping to find great farmers that have great old recipes, just like I found in Italy. But not many farmers were making old recipes. A lot of them used their own tomatoes for really good salsas, but there was nothing heirloom about that. So instead we took some of those old recipes from the books and updated them to match the integrity of the ingredients we were working with and created products that work with how people eat today.

Crain’s: What are the biggest challenges to reach store shelves?

Ms. Greene: The biggest problem I have in the Midwest is the same for others that are trying to scale. Once you ramp up, you need to find a partner and there aren’t many small and mid-size co-packers (who do the bottling and packaging). If you’re in the middle and you need to make 2,000 bottles of ketchup a month, it’s just not here. Food manufacturing is so specific and many co-packers are so specialized they make one product in large scale so we can’t get on that production line.

Then try to find someone who accepts fresh produce.

I finally found a great little Amish processor downstate that’s making and packaging our products. But it’s a six-hour drive to run a production down there. This guy is fairly automated, but it’s very expensive. Add that to the cost of my mostly organic ingredients, which is about double the cost of non-organic. My margins end up much lower because I still need to line price with other premium products.

Crain’s: How did you get financing to get your company off the ground?

Ms. Greene: I eat a lot of rice and beans. Seriously. Bootstrapping. Doing some consulting work on the side to get some cash to pay for my personal bills. After the positive reactions to our products last year, I took a convertible loan this year to invest more in marketing and ramp up production. But looking for financing is one of the other core activities of mine.

Crain’s: Do you think there’s enough consumer demand for food products that tout locally-sourced and organic ingredients so that small businesses like yours can succeed?

Ms. Greene: I’m convinced that there is enough demand for products that are small-batch, sustainable and sport love and attention to create a sustainable niche to support businesses like The Scrumptious Pantry. We have to do a lot of tastings and we’re getting tremendous feedback from the shows we’re at.

It remains to be seen though, if consumers will embrace the concept for these kind of foods to become major game changers and structurally change the grocery market. I would love for that to happen but I’m not yet convinced it will happen in a timely fashion.

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