Kenzoil maker finds word of mouth spreads his sales

Published on April 29, 2010 - 9:04 am

by MAUREEN MCDONALD-Special to The Detroit News

Howell -- Nearly every Thursday and Friday, Ken Carlsen loads up his 1991 Honda Accord with dozens of bottles of Kenzoil, an olive oil with spices that can be used as a dressing or dipping sauce, and makes deliveries to some of his 75 retailers in Metro Detroit.

Carlsen, 46, the owner of Kenzoil LLC, has tapped into the "buy local" movement at markets and generates more than $125,000 annually in sales. What started as a sideline business while he was a grill chef and waiter at Mongolian Barbecue in Ann Arbor in the 1990s has transformed into a stand-alone business with a commercial kitchen -- thanks to the word of mouth of his customers and friends.

Carlsen's big break came when he befriended a nurse at the University of Michigan Hospital, who pitched the product to Jim Hiller, owner of Hiller's Markets, when he came daily to her unit to minister to his ailing mother. Hiller liked the idea of a salad dressing that didn't contain sugar or vinegar and immediately met with Carlsen.

"Ken was still working out of his house when we started carrying Kenzoil," Hiller recalls. "We helped him launch his business. ... I use Kenzoil all the time. ... It is one of thousands of Michigan products we carry at our markets."

Carlsen now sells bottles of his herb-infused oil to most of Hiller's Markets, 33 Whole Foods Markets in its Midwest region, all 10 Busch Markets and some mom-and-pop stores.

Carlsen said he depends on the aromatic oil to sell itself, even at double the price of name brand dressings (5-ounce bottle $4.99, 10-ounce bottle $6.99).

After he and his two part-time employees chop up 25 pounds of fresh basil a week and peel garlic for the olive oil, he often heads to Eastern Market or the specialty grocery markets on Saturday to grill some mushrooms or slice baguettes for dipping into his spiced oil.

A friend in the produce section of the old Merchant of Vino in Ann Arbor introduced his managers to Kenzoil, which was picked up when the market became Whole Foods.

"Ultimately we would like to have 100 percent local merchandise in our stores," said Kate Klotz, spokeswoman for the Midwest office of Whole Foods, who adds that Kenzoil is one of her better success stories because managers helped shepherd its growth.

"Just a couple years ago we really amped up our 'buy local' problem," Klotz said. "What we found is that local-interest is the best way to run our business. Each store has someone in charge of coordinating local products. We help our vendors grow their business."

Carlsen's biggest challenge now is maintaining the quality of his preservative-free product and the consistency of its packaging as his orders grow. He now makes 25,000 bottles of product a year.

Carlsen concedes the showmanship he uses in product demonstrations was honed while he worked at Mongolian Barbecue. He made small batches of Kenzoil on the side after it became a hit on the potluck party circuit.

By 2000, he was working part-time at the restaurant and cooking up batches of the oil at a church kitchen. He rented his own commercial kitchen and went full-time with the business in 2001 when others were retrenching.

"My best leads still come from Eastern Market," Carlsen said. "People come from all over the region. Customers buy one bottle from me, keep on buying at a market close to their home. The more people talk up the product, spread the word about its quality, the more often stores calls me for demonstrations."

For the moment, Carlsen is resisting the urge to diversify.

"A second product means more inventory, more manufacturing equipment and more attention to shelf displays," he said. "I'd like to get Kenzoil on an even bigger stage, take it to new places."

Additional Facts Kenzoil LLC

Founded: 2001
Employees: 2
Contacts: 10111 Bergin Road, Howell, MI 48843, (810) 991-1380 or www.kenzoil.com
Strategy: Owner Ken Carlsen, a Michigan State University business graduate, relies on promoting samples of his natural mix of olive oil, basil and spices and customer word of mouth to expand to 75 retailers. He demonstrates his product at Eastern Market in Detroit on most Saturdays.
Lesson learned: Expanding your business depends on persistence and good word of mouth among customers.