Spice Girls

By Jeremy Caplan

Every once in a while, a packaging idea comes along that changes a food category. Pringles proved you could stack potato chips in a can. Heinz showed you could sell an upside-down ketchup bottle. Now Katie Luber and Sara Engram are hoping they've hit on a paradigm shift for the spice industry: single-use, premeasured packets that reflect how cooks actually use seasonings--one teaspoon at a time.

When they first stumbled on the concept in 2005, Luber and Engram knew little about business and less about manufacturing. But as food lovers and avid cooks, they were tired of tossing out stale spices in jars that were half full--there's only so much nutmeg you can use in a year. By 2007, The Seasoned Palate (TSP) was shipping its first packages. A year later, the culinary entrepreneurs' Smart Spice brand is about to land in all 273 Whole Foods stores in the U.S. "This is the most innovative thing since the spice grinder," says Perry Abbenante, chief grocery buyer for Whole Foods. "This is the next cool thing." Spices such as cumin, ginger and curry powder will come in colorful cardboard cartons that hold four teaspoon-size packets for $2.99.

Shelf space in a chain like Whole Foods is the holy grail for culinary entrepreneurs. Most fail. Whole Foods evaluates hundreds of new products every month and rejects about 85% of them.

Neither of these spice gals had any prior industry experience. Before meeting Engram, Luber had been an art historian and a curator at the Philadelphia Museum of Art. Engram was a longtime editor at the Baltimore Sun. The pair met through a friend and got to talking about spices. "We started thinking about why they go stale," says Luber, "and about other categories that had exploded over the past 10 years, like tea, olive oil, vinegar and cereal." Sensing an opportunity, Luber and Engram began gathering advice on how to build a spice company.

They chose to go strictly organic, with none of the additives or fillers low-end discounters rely on. They're hoping that style will help: the company's other line, TSP Spices, comes in sleek decorative 12-packet tins topped with colorful labels. And consumers like their story. "People sometimes joke that we're the Spice Girls," says Engram, "but that's a stretch, so I came up with the CardaMoms. Cardamom is the queen of spices, and we're always carting around our kids to things."

The U.S. spice market is worth about $1 billion at retail and is dominated by McCormick, which is also based in Baltimore. TSP has four full-time employees to McCormick's 8,000, so no one is mistaking Luber and Engram as a threat to the titan, whose annual global sales are $3 billion. TSP is hoping for sales on the order of $2 million to $2.5 million in 2008. "It's as if they're the elephant and we're the fly," says Engram.

To operate at a volume high enough to distribute nationally, Luber and Engram contract out most of their operations, from spice importing, labeling and packing to sales and distribution. They have yet to pay themselves a salary. Of the more than $1 million invested in TSP so far, about $500,000 has come from outside investors, the rest from the founders' pockets.

Gaining a significant share of the high-end spice market would be a notable accomplishment for the two career changers. TSP adviser Bob Burke, principal of Natural Products Consulting, who helped strategize for popular brands like Stonyfield Farm, Annie's Homegrown and Oregon Chai, says the two have a reasonable shot at success. "They're quick learners with an innovative concept that they execute with style and flair." Just as Annie's managed to take a bite out of Kraft's lock on the mac-and-cheese market, he says, TSP could eventually nibble out a nice niche in the spice world.