Down to Earth

Steve Olds of Grand Rapids, Minn., spent years tinkering with his recipe for vegetable-based hot sauce before settling on an onion and garlic pepper sauce that satisfied his palette. After he shared his sauce with family and friends, he received strong encouragement to bring his pepper sauce to market. Olds, who also owns a printing company and is a former restaurateur, liked the idea of creating a new business out of his passion for peppers, yet he also knew he'd need expertise beyond his capabilities in order to build a viable food manufacturing business.."You have to get that information from someone who knows it or someone who does it," Olds explained. It was unlikely that the manufacturer of his main competitor, Tabasco Sauce, would share secrets with Olds so instead he sought out assistance from the "someone who knows it." That "someone" was the Agricultural Utilization Research Institute..AURI was created 25 years ago by the Minnesota legislature to partner with Minnesota businesses and entrepreneurs who are developing new uses for agricultural products. It provides science and technology services and walks its clients through the entire product development journey to aid the launch of value-added agricultural products. AURI's core services fall into four areas: food products, co-products, bio-based products or renewable energy.."What distinguishes AURI from other economic development organizations is our hands-on scientific assistance," said AURI's Amanda Wanke. AURI offers entrepreneurs like Olds — people with good recipes based on agricultural raw materials — assistance with nutritional analysis, labeling, packaging or some other problem they can't resolve on their own. In Olds' case, he needed help figuring out how to make Steve's Pepper Sauce shelf stable..Stability is a big factor for a new product, Olds explained. People considering whether to buy a new product versus an "old reliable" will not try the new one if they pick up the bottle off the shelf and see the liquid has separated, he said. Olds spent months researching his separation problem on the internet. Once he connected with scientists at AURI, they quickly referred him to a nationwide leader in gum products and Olds learned that his problem wasn't a matter of ingredients but a matter of how those ingredients were being mixed. "If I'd known about AURI off the bat, I would have saved so much leg work and so many late nights looking on the internet trying to figure everything out," Olds said.."We utilize networks to help businesses connect all of the pieces of the puzzle," said Michael Sparby, project strategist at AURI. Businesses come to the institute at varying stages of development. Approximately 40 percent of inquiries come from start-up enterprises. The remainder, Sparby said, are businesses dealing with capacity issues or looking to increase efficiency or output. All are engaged in producing value-added agricultural products. "Once the grain is in the bin, the milk is in the tank, or the animal is dead, our laboratories and scientists assist businesses as they develop products out of those commodities," Sparby said..Sparby is a sort of gatekeeper for AURI, assessing each request for assistance. "Our first cut is, does it fit our mission; does it add value?" Sparby explained. "After that, we assess if the project is innovative." Projects that fit the AURI mission are ones that offer potential to positively impact rural communities in terms of job creation or wealth creation..AURI's scientific services are available to entrepreneurs without cost if the lab work can be conducted in house. AURI has a cost-share program for services that need to be outsourced. AURI also operates a meat laboratory and offers training on hazardous and critical control points for businesses utilizing meat in their value-added products. Critical control, compliance and regulation issues often come into play for entrepreneurs who seek AURI's expertise. So do funding issues..While Sparby and Wanke both admit that AURI's technical expertise is its primary benefit, it does maintain an extensive network of other business expertise toward which it will direct business owners who are looking for funding assistance. Its network includes many community banks, small business development centers and economic development organizations. "Networking and providing connections is an important part of what we do," Wanke said. She called the AURI network an "innovation ecosystem."."I think our assistance is looked upon as risk mitigation," Sparby added..Now that Olds has resolved his liquid separation issues, business is taking off. He started his venture using 200 pounds of peppers annually to make Steve's Pepper Sauce. Now he uses 2,200 pounds annually. All are Minnesota grown..Steve's Pepper Sauce has found shelf space at stores across Minnesota, in Iowa, Illinois and North and South Dakota; he also just located a distributor in St. Louis, Mo. In order to keep up with his new-found success, Olds realized he was going to need funding and a facility to handle the volume. And, he's already turned to AURI for help..AURI connected Olds to a co-packer, an FDA approved manufacturer in North Carolina, which will take on production of Steve's Pepper Sauce while Olds ramps up his facility back in Grand Rapids..AURI also used its proximity to University of Minnesota students (its labs are University-based) to conduct and record a blind taste test of Steve's Pepper Sauce versus Tabasco Sauce. Steve's won hands down.