Hot

–by Jonathan Eisenthal

When he joined forces with AURI, Grand Rapids, Minn., entrepreneur Steve Olds had 150 distributors and had sold about 26,000 bottles of Steve’s Pepper Sauce. Since beginning work with AURI in 2010, he’s grown his network to 250 retail outlets and now packs 600 bottles of sauce a week.

Olds first started creating his vegetable-based hot sauces in 2005. Five years of experimentation led to the current formula. The volume of feedstock has grown by leaps and bounds—from 200 pounds of peppers in the beginning to 1.5 tons now. He hand processes about 50 pounds of onions an hour when making a batch of the sauce.

Helping take a business national

Olds first came to AURI for help with product stabilization (ensuring it could last on grocery shelves and maintain its appearance for an extended period of time), and AURI will serve as a resource for him as he grows his business.

“When I came to AURI I wanted as much help as I could get,” says Olds. “And now it’s a relationship that I imagine will continue for as long as I’m in business. I want to take this line of products, this brand, to the national level.

“Whenever I have a question I just pick up the phone,” says Olds, referring to AURI Senior Scientist of Food and Nutrition Charan Wadhawan, who helped Olds troubleshoot his product’s shelf stability problems. “And when there is something AURI doesn’t do themselves, they’ve got a very nice network of expert resources.”

Accessing AURI’s network of resources, AURI Project Manager Becky Philipp set Olds up with the Center for Rural Entrepreneurial Studies at University of Minnesota, Crookston. Students there arranged a taste test comparing Steve’s Pepper Sauce to Tabasco® sauce. Of 20 participants, 18 preferred Steve’s Pepper Sauce. The whole thing was captured on video and posted to YouTube. Now, Steve’s Pepper Sauce distributors use the video and the information about the taste test to help convince prospective consumers to start buying Steve’s Pepper Sauce.

When Olds came to AURI, he was already a successful entrepreneur who had run a restaurant in Grand Rapids and had many of the basics of starting his business squared away, which meant he was ready to move on to even more complex issues. The latest is lining up the right laboratory to perform the Scoville Test: the standard scale for measuring the “heat” in hot peppers.

Steve’s Pepper Sauce is an example of how AURI can help a business that is mid-stream in their development, explains Philipp, who manages AURI’s work with Olds and ensures the objectives of his project are met by the organization. “His passionate commitment was already there. AURI helped him get to the next step,” says Philipp.

Olds’ product can now be found throughout the Midwest including North Dakota, South Dakota, Wisconsin, Iowa, Illinois and Missouri. His most devoted fans are still concentrated in the northern tier of Minnesota. Steve’s Pepper Sauce can be found at restaurants, grocery stores, and liquor stores in Grand Rapids, Minn.; Hibbing, Minn.; Virginia, Minn.; Forbes, Minn.; and in meat markets across the Iron Range.

“I will help him scale up,” says Wadhawan about her ongoing work with Olds. “As he expands, he will need a copacker—a contractor to manufacture his product according to his formula with his labeling and packaging. I can help him identify the right one.”

Olds looks forward to a long and fruitful relationship with AURI.

“There is no book on how to launch a sauce,” says Olds. “What I’ve found out from AURI in a week would have taken me a year on my own.”

Idea to reality:
Steve Olds had already launched Steve’s Pepper Sauce in 2010 and sought out AURI’s assistance in order to grow the business.

AURI’s role:
AURI Scientist Charan Wadhawan helped Olds by providing nutritional analysis, ensuring his product was shelf stable, sourcing ingredients and equipment, and connecting him to needed resources. She will continue to connect him with AURI expertise and other resources as he expands his business.

Outcome:
Since beginning work with AURI in 2010, Olds has grown his network to 250 retail outlets and packs 600 bottles of sauce a week. His consumer audience now reaches Minnesota and several other Midwest states, and he is working on expanding further in the Twin Cities market and nationally.