Tessemae's, Essex-based natural salad dressing maker, goes for national brand exposure
Six years after Tessemae's sold its first bottle of lemon-garlic salad dressing at the Whole Foods in Annapolis, the Essex-based "all natural" brand is attracting attention from national grocers, hotel chains, fast-casual eateries and even reality TV producers.
The three brothers from Annapolis who run the company have long been convinced they have a winning lineup. The dressings, ketchup, mustard, garlic spread, marinades, and now mayonnaise, all grew out of an olive oil-based homemade dressing their mom — nicknamed "Tessemae" — made to get her kids to eat vegetables.
The past year alone has more than validated the company's business plan, said CEO Greg Vetter. Sales have shot up from $25 million a year ago, though the company declined to disclose anticipated 2015 revenue because it is negotiating a possible investment partnership.
"We just completely went at it full steam ahead," Vetter said.
After getting its start selling dressing in 2009 in several Whole Foods stores, Tessemae's products were picked up nationally by Safeway. About a year ago, Costco launched the company's soy ginger flavor dressing in an economy size.
The company has since gained an even stronger foothold through both national and regional grocers. The list has grown to include Kroger, The Fresh Market, Weis Markets, Wegmans, and regional grocers Gelson's in Southern California and H-E-B Grocery Stores and Brookshire's Food & Pharmacy in Texas. At Courtyard by Marriott hotels, Tessemae's "Classic French" flavor dresses the hotel chain's hummus bowl dish.
Tessemae's says its products are striking a chord with consumers moving toward healthier diets and seeking "all-natural" products. The salad dressings use no thickening agents and are gluten-free. Running its own manufacturing plant allows the company to try new ideas and closely mange quality control and delivery, Vetter said.
"We are at a perfect time with the market in general," Vetter said. "Everyone is looking for really good, real food. And that's such a rare thing right now. We're seeing there's a shift to people starting to care about what's in their products."
For Vetter and his brothers — Brian Vetter, executive vice president of nonretail sales, and Matt Vetter, executive vice president of operations — opportunities such as Marriott represent the next frontier.
"Response has been great, which might lead to other collaborations," said Nina Herrera-Davila, a Marriott spokeswoman, who said the dressing is used on a seasonal dish with ingredients such as spinach, hummus, cucumbers, avocado and olives. "The Courtyard team is extremely happy about the relationship with the local vendor."
Tessemae's has invested in equipment that will allow it to produce and package small portions of dressings and condiments, enabling them to be combined with vegetable platters or other items through partnerships with other manufacturers. In addition, Brian Vetter is pursuing customers such as Marriott, Chipotle Mexican Grill, Chick-fil-A, and institutions such as airports, universities and cafeterias. Tessemae's also hopes to replace condiments made by Heinz at M&T Bank Stadium with its own.
"Especially since Heinz is from Pittsburgh," Greg Vetter said.
Future growth also could be fueled by a partnership the company is working on finalizing that would bring an investment from a "notable brand," Greg Vetter said. He said it is not a sale or majority stake.
"We're just kind of trying to align ourselves with really good brands that know how to grow really good brands," he said.
Vetter, who used to worked as an employee benefits broker in Annapolis and played professional lacrosse for the Chesapeake Bayhawks, started the company after throwing out a challenge to his mother, Teresa Vetter. He asked her to go into business with him if he could get Whole Foods to sell her dressing.
She agreed, thinking it would never happen. A meeting with a store manager who tried the recipe won Vetter a regional review, then a chance to become a vendor. The retailer has been expanding its Tessemae's offerings, and notified Vetter recently that it plans to sell all 21 products, including dressings and condiments, at its stores throughout North America.
Selections of 14 dressings are sold now in all 44 Whole Foods stores in the Mid-Atlantic region. Those stores are working with the company to add its barbecue sauce and mayonnaise by the end of the summer.
"We've seen solid, sustainable growth … and have been comfortable growing their lines to all the stores," said Lee Robinson, Whole Foods' dairy and frozen buyer for the Mid-Atlantic.
He said the dressing maker often sends people out to do in-store demos, which helps build the brand.
"They're great ambassadors for themselves, and they've grown the consumer base by making connections," Robinson said.
And they offer an alternative that's not only gluten free, but dairy free, Paleo, vegan, free of genetically modified organisms and has no added sugar, which, he said, "our consumers are interested in, and as a company we like to support."
Wegmans plans to start carrying Tessemae's dressings in about a month in all Maryland and Virginia stores along with its refrigerated natural and organic products, though the chain is still deciding which varieties — at least four — to sell.
"It has all of the attributes that we know appeal to our customers, but the two that stand out for us are: It's local, fresh [refrigerated], and their flavor profiles are unique and interesting," said Jo Natale, a Wegmans spokeswoman.
Another big break for Tessemae's came recently when Kroger agreed to carry eight dressing flavors and roll them out to 2,100 stores. Vetter recalls going to a meeting with Kroger executives earlier this year with a strategy: aiming to get the products in only the highest-volume stores. Typically, he said, retailers judge a products' success based on overall sales, which can be hurt by the sales at lower-volume locations.
But instead, he was surprised that Kroger representatives were the ones making the pitch.
"They proceeded to sell us on why the country needs our dressings in 95 percent of the Krogers in the country," Vetter said.
Doug Baker, vice president of private brands for the Washington-based Food Marketing Institute, said it's not surprising the dressing maker has had a warm reception from so many grocers.
"Retailers are looking for companies like Tessemae's," Baker said. "As consumers continue to embrace private brands and trust private brands, that also allows the retailers to innovate."
Consumers' tastes are shifting, too, he said. They want to easily understand ingredients, specific health attributes, or unique flavors or varieties.
Tessemae's, with headquarters and a plant in Essex, now employs about 150 full- and part-time workers and gets help from the extended family as well. Mom Teresa Vetter contributes as official taste-tester, while their father is director of "good karma." Greg Vetter's wife works on branding, and "everyone else is in a support role," he said.
The dynamics of growing a family-run business that prides itself on an unconventional operation could soon be the subject of reality TV, Vetter said. Last summer, he and his brothers were approached by an agency that creates such concepts. The business owners are negotiating with two networks, he said.
"It's a matter of everyone coming to the table with an agreed-upon format," then filming a pilot for a show that could start in the fall, said Vetter, who declined to disclose the networks. "The overarching theme is about the Tessemae's story and us trying to change the food world in an unconventional way, and the highs and the lows and all the fun stuff that comes from operating your own brand and manufacturing company.
"If the format is right, and it tells the right story, then we're on board."