Business Spotlight: Seriously Seasoned

PT Gardens is a case in point when a hobby turns a little more serious.

The home garden of Paul and Tammy Spangenberg in Republic is looking more commercial every day. So much so, the Spangenbergs are signing papers to rent a commercial kitchen in Mansfield, and they’re nearing wholesale shipments of their spices and a new line of hot sauces.

“I refer to it as a vast, rolling 0.2 acres,” Paul Spangenberg jokes of the standard residential lot he’s made the most of, with its greenhouse, chicken coup, plum tree and hundreds of herb plants. “We’re farmer, half spice business.”

PT Gardens sells fresh herbs, dried hot peppers, herb-infused finishing salts and seasonings. Six years ago, the Spangenbergs started growing herbs in their backyard, and now the bottled spice mixes have such labels as Dragons Breath, Bacon Salt and Golden Dragon.

Spangenberg says all but the hottest peppers – purchased from an Oregon supplier – are grown by his family, including a teenage son and daughter.

PT’s – of course, for Paul and Tammy – has been a staple at the Famers Market of the Ozarks in southeast Springfield, and retails at MaMa Jean’s Natural Foods Market and Home Grown Foods.

Cut to size
Nearly 30 fresh herbs are on the PT menu, and until recently the bottled flavorings numbered in the mid-30s. Spangenberg and family dialed back this winter after evaluating the sales trends.

“The farmers market is a great testing ground for things,” Spangenberg says. “I let my customers vote with their dollars what I keep making.”

Flavors like rose salt sold in the 40s last year, and garlic salt sold in the 400s.

Now, 20 bottled products are available. He hated to see the rose salt go, made with fresh rose petals. “It’s just glorious stuff, in bread and when I make icing. It’s just a beautiful salt,” he says. “I just couldn’t sell it.”

The kicker: It takes 50 roses to make a bottle, so the price was $30 apiece. “You can’t let go of that too easily,” Spangenberg says.

The most popular remains the Dragon Breath line, from a junior variety to the fiery extreme.

At the farmers market last year, PT Gardens moved 1,000 packs of fresh herbs, such as thyme, sage and chives. They’re regularly available at MaMa Jean’s stores, where they’ve created a hanging herb display.

Slow money
With sales at the farmers market and the health food stores reaching $25,000 last year, Spangenberg obtained a $5,000 capital operating loan from Gateway Harvest LLC in St. Louis. He previously struggled to secure investors for the next serious turn in his former farming hobby. “The investor crowd seems to not want to talk until they see $60,000 to $70,000 in sales,” he says.

Casting a wider net, Spangenberg discovered a St. Louis-based nonprofit investment club for small loans to organic farmers. The Gateway Harvest loan, structured over three years at 5 percent interest, covers packaging and raw materials for the hot sauce line in development. MaMa Jean’s and Home Grown Foods have agreed to carry them, he says.

“We usually focus on people in the St. Louis area, but we didn’t want to pass up this opportunity,” says Gateway Harvest investor Julie Holley.

The club’s loan to PT Gardens is its most recent issued, having met Spangenberg at the February conference of the Missouri Organic Association held in Springfield. Its four members each contribute $5,000 to the fund and make group decisions on the loans, typically $2,000-$5,000.

“A lot of these farmers and small businesses can’t qualify at a bank,” says Holley, who figures a poor credit history was a hurdle for Spangenberg. “We kind of fill in the gap.”

Product liability
The next step in wholesale expansion was obtaining product liability insurance for when the sauces hit store shelves. With coverage through Fortner Insurance Services, PT Gardens’ foods are protected from cases of contamination or claims of illness from consumption – a situation most recently played out for Blue Bell Creameries. The Texas-based company has voluntarily recalled its entire line after discovering links to listeria outbreaks.

“When producing, processing and distributing edible items, this coverage is critical to have in place,” says Elizabeth Mitchell, a commercial lines associate with Fortner Insurance. “The past few years, I’ve seen a growth in the demand. There are more people getting into the organic foods and locally grown. Before that, it was really spotty.”

Mitchell says the insurer has signed five new food vendors the past year, including Circle B Ranch in Seymour.

For food companies with less than $50,000 in sales, Mitchells says annual premiums are typically $500-$750 for $1 million-$2 million of coverage.

While Spangenberg is confident in the cleanliness and quality of his processes and products – “Nobody’s died from hot sauce yet,” he says – the move further establishes PT Gardens in the industry.

“It lends security and lets his clients know he’s responsible and taking the steps to take care of his business,” Mitchell says.

Spangenberg’s wholesale expectations are of the game-changing variety. He projects sales to double or triple.

“There’s a finite amount of product you can pass across the table for five hours at farmers market,” he says.

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