BEHIND THE SCENES: John Grettenberger President and CEO, LorAnn Oils
John Grettenberger, 53, is president and CEO of LorAnn Oils, a manufacturer/distributor of premium flavorings and essential oils. The company was founded 55 years ago by his grandfather, a pharmacist, who sold peppermint, clove and similar oils to pharmacies. Today, from its headquarters in Lansing, the company supplies retail and wholesale customers throughout the U.S. and overseas.
How about a quick overview of the company?
When people hear LorAnn Oils in this town they probably assume that the oil in our name has to do with some sort of lubricant. But our origins come from pharmacy and essential oils, the kinds of oils found in a peppermint plant or in orange or lemon peels. The business was started 55 years ago by my grandfather, who was the pharmacist in Okemos. When I started working here in 1993 there were about 15 full-time employees. Today, we have 42 full-time employees and another 10 or so part-time. We’ve had modest, but steady, growth every year and that’s kind of how we like it. We haven’t taken great risks that might get us into a lot of financial trouble.
What does it take to succeed as you manage the business from one generation to another?
There have been tremendous changes from my grandfather’s age; particularly in food manufacturing. We have invested in our production operations systems and personnel to meet and exceed the latest food-quality standards. We are an SQF (Safe Quality Food) certified facility, which means that companies around the U.S. and throughout the world can look at LorAnn Oils as a very legitimate player in the food and flavoring business.
Doesn’t that mean ceding some measure of family control?
The SQF certification process was one of the first where we brought in outside managers. We now have a quality control manager and an SQF manager. It’s very important for the company. Our IT needs over the years have grown to the point where we needed to add an IT manager. These have added a lot of value to our operations, although they don’t add direct sales or anything like that.
As you expand your plant in 2017, what will help support LorAnn’s growth?
We need more space for production and for office personnel, including our quality and IT managers, our service staff to handle orders and, most importantly, our senior sales people need to grow. A couple of years ago we made a stronger push for international sales and hired an expert in that area. Because our international department is growing we need more production space, and soon we’ll need more help.
You’ve indicated that you sell in 30 different countries. How challenging is the global market?
We have a unique product that is well-liked by a lot of loyal customers. We had never made a concerted effort to sell internationally, but over time, in Canada and Mexico, in particular, and in Europe, people and businesses heard about our flavors and started to buy them.
And the U.S. Market?
We have to be price competitive, particularly as we sell to large companies like Walmart, Michaels and Hobby Lobby. In addition to good pricing, we have to be able to deliver on their orders. The quickest way to lose large customers is to fulfill orders incompletely or have production be delayed.
What about competition? Who else out there is selling 1-dram bottles of flavorings?
It is competitive, but because of our expertise and our investment in the plant and equipment over the years, we can produce more efficiently than almost anybody else, especially when you are talking about bottling little tiny bottles of flavorings. We try not to compete directly with people like McCormick or very large flavor houses who sell flavors by the drums very cheaply to large food manufacturers. Our flavorings strive to be unique – stronger than most other flavors. They really are professional strength products, which we’ve brought down to consumer sizes.
Also, we have a greater breadth of flavor choices and essential oils. And, the third factor is our customer service. We retain the old-fashioned tradition of no minimum order. We let our customers order what they need, when they need it and we ship the orders quickly.
All of this happens here in Lansing. What are the advantages and disadvantages of working here on Aurelius Road?
I’ve never thought of Lansing as having any significant disadvantages for us. You might say that our facility has been a disadvantage for us. We keep running out of space and have to keep adding on to the building.
For some businesses that wouldn’t be their worst problem.
We look at it that way too. It’s a positive. Just down the road from us is a major UPS hub. We are a big customer and they are here picking up once or twice a day. We are centrally located enough in the U.S. that it’s not a big deal shipping to the East or West Coasts. There are some challenges with our international trade where we ship to the coasts and then it goes out.
And you are able to find the workers you need?
Yes. But it’s getting tougher to find highly skilled people. It used to be that the production part was very manual labor and low skilled. Today, the people working in our production environment have to be quite sharp. They have to run complicated equipment. They have to fill out a lot of paperwork with each step of the process. There are quality control checks that we have to follow. It’s more complicated than it has ever been.
You serve both the retail and wholesale markets. How do they differ?
First and foremost, it’s the way we package the flavors. We have small sizes that are intended for retail display — small 1-dram bottles (.125 fluid ounces), formats that are appropriate for display and easy to ship. Our challenge is the growth of sales through the Internet. Many of our customers who had brick-and-mortar stores have moved to just selling through the Internet. They find that they can be more effective, or just as effective, than when they had a little shop.
The other part of our business, selling to manufacturers, is strong and growing. Mostly we sell to those independent manufacturers who still make candy by hand or who make flavored popcorn by hand or bakeries who do specialty cupcakes and wedding cakes and things like that by hand.
Do you see this as part of the trend toward local foods?
I’m glad to see resurgence. It’s working in our favor. I love to support those operations personally and we’re glad to help them businesswise. We are hoping that not everything turns into a chain restaurant or chain bakery.
For LorAnn Oils, what would be missing if you weren’t the CEO?
The main managers, Carl Thelen, our chief operating officer, and I bring an entrepreneurial work ethic. We both wear a lot of hats. In my case, I’m doing sales, personal management and benefits. I’m doing accounting work.
And talking to the media . . .
There’s no press person to turn you over to. With Carl on the manufacturing side, he’s got an equal number of hats to wear. Frankly, as we grow, Carl and I will have to divest ourselves of some of this and hire additional people to help us with these tasks.
This conversation with John Grettenberger has been edited for space and clarity.