Tom Erd had the rare opportunity to show off his spices at Mayor Daley's surprise party. Unfortunately for him, it didn't go exactly as he would have hoped.
There is something nostalgic about being referred to as a ‘spice merchant.’ The phrase conjures visions of brightly colored goods and trinkets laid out in Far Eastern bazaars. But that is exactly how Tom Erd describes himself.
Along with his wife Patty, Erd runs the Spice House, a specialty spice shop with five locations across Wisconsin and Illinois.
Above the door to Evanston’s Central Street branch are emblazoned the words ‘since 1957,’ homage to Patty’s spice-infused lineage.
“My wife’s dad and mom, Bill and Ruth Penzey, started it in 1957,” in Milwaukee, Erd said, the same year Patty was born. “So she’s been working at the Spice House since she was 8. That’s how she would get her allowance, you had to go work at the store on the weekends.“
Erd’s arrival in the family business came via a detour through the steel industry of Milwaukee where he worked cutting mining shovels.
It was an unstable profession. “When mineral prices would go down, nobody would mine, nobody would buy mining shovels. So I’d always get laid off,” Erd said. “And then when mineral prices would go up, they’d call me back and we’d be working overtime.”
Once Patty and Erd started dating, he would spend the downturns working in the family store. “After 10 years at a place, even working part-time, you learn it pretty good,” Erd said. “Especially if you are the boss’s son-in-law.”
Forty years after opening the original store, Bill and Ruth Penzey lost their lease in the early 1990s. The Penzeys were resigned to closing up shop, but Patty and Tom urged them to instead move their business to a vacant space across the street.
The inspection was not, however, an unqualified success. “It was a rat-hole,” Erd said. They estimated the costs of materials alone to make it licensable at $30,000.
For Bill Penzey, the cost was not worth the reward. “He said, I’m 63, I have plans for my $30,000, and it ain’t putting it in someone else’s building,’” recalled Erd.
Instead, the Penzeys gave the couple the store sign, the counter and their blessing. “We didn’t have that kind of money either,” Erd said. “But I had a friend who was a plumber and I had a friend who was a carpenter.”
The newly renovated store opened in 1992.
Today, the business is split into two corporations; one covering the Illinois locations and one based in Wisconsin.
The Central Street store evokes the storied legacy of spice trading, with maps, charts, barrels, and even faux crate-patterned packaging on certain blend sets. It is a vision that strongly bears the hallmarks of Erd’s passion for history.
“My wife’s dad was more of a philosopher he was more into the cerebral aspects of taste,” Erd said. “He was convinced that the blends would turn out better if you said a prayer while you were mixing them so you get an idea what kind of guy this was.”
“I just like the history of it. Because it goes back so long,” said Erd, growing animated as he sat in his office overlooking the store floor. “What they were doing with ginger in 900 B.C.? Or why did the Queen of Sheba send Solomon, this is 936 B.C., send Solomon a caravan of spices? What’s that? Was he building a restaurant?” He adds with a smile, “Some people say being a spice merchant is the second oldest profession.”
The idea to expand into Illinois had already taken root in the 1980s when, before the time of the credit card machine, stores only took cash or checks. “Week after week Saturdays and Fridays we would see a lot of checks coming in with Northeast Illinois addresses on them,” Erd said. “So we thought, well, if we wanted a second store it would be around here.”
After four years, Patty and Erd had saved enough money to test drive a second location near Chicago. “We thought the best place for us would be in Old Town,” Erd said. “We were talking to the realtors and the landlords and you know coming from Milwaukee we asked them, ‘Are you talking about American dollars?’ because it was shocking.”
Their search quickly moved north to the more reasonably priced streets of Evanston. “We signed a four-year lease figuring if we muck it up we can just move back to Milwaukee,” Erd said.
While many companies withered in the recession, the Spice Shop continued to show marginal sales growth year-over-year.
In 2008, the Illinois arm brought in $2.58 million in revenue. By 2011, the number had risen to $3.48 million.
Although the store’s fiscal 2012 year does not end for another two weeks, Erd estimates that the Spice House is on track to be up by around 2 percent from last year.
“We did fine during the recession. It did not hurt us at all,” Erd said. “I think it’s because during a recession, more people cook at home, and more people see that $8, $9, $12 for a jar of spices at the grocery store and go ‘No, I could go to the Spice House and get an ounce for a buck twenty-nine.’”
Despite that, the store was not entirely untouched by the downturn. Erd acknowledged that the Spice House “lost a bunch of restaurant accounts.” But he maintains that the gains in home cooking more than covered the deficit.
In large part the store relies on the last months of the year, the strongest in the store’s calendar, for its success. “November and December probably equal all of January through May,” Erd said. “The two busiest days in the year--day before Thanksgiving and the second Saturday in December.”
But those numbers are difficult to improve on. “It’s hard to be up even 1 percent,” Erd said. “I mean, you’re maxing out. You have all your people working all the overtime they can. You just can’t do anymore.”
Despite the store’s consistent strength, competitors have been circling the wagons for years.
A decade ago, Penzey’s Spices, a rival spice shop set up by Patty’s brother, opened a store in Chicago to a great deal of media fanfare decrying the start of a ‘spice war.’
Reflecting on the move today, Erd says the reality was far milder than the frenzy. “He’s done a lot of damage to us in Milwaukee where he’s surrounded us on three sides in really close proximity,” Erd said. “But that store in Oak Park didn’t hurt us. It was more of a symbolic challenge than anything else.”
The family feud has since petered out. “He’s on this side of the tracks, we’re on this side of the tracks and we’re both happy,” Erd said. “We have dinner at her brother’s house for Christmas and Easter so we’re on speaking terms. That wasn’t always the case, but we’re on speaking terms.”
However, Penzey’s is not the only competitor on the Spice Store’s horizon. “They are starting to surround us everywhere,” Erd said. “And on the Internet it’s ruthless.”
The Spice House’s recent forays into the social media waters have met with mixed success.
“We advertised on Facebook for about three months and it was an utter failure,” Erd said. “My wife posts every day and we get a lot of responses off the posts. I think as far as social media is concerned, I don’t know that we get any business out of it but I know that if we don’t do it we’d probably lose some business.”
“The only way I can think of staying ahead of the other guys is just by trying really hard to have better stuff,” Erd said.
The process of finding and selecting the ‘better stuff’ is labor intensive. “To get the good stuff, you can’t just go to one big warehouse and this warehouse has better spices than that warehouse,” Erd explained. “It doesn’t work that way.”
“It’s hard because a lot of times you know these brokers will have full lines of spices but I’ll only want two or three,” Erd said.
Brokers are also more interested in working with bigger companies. “They’ll always want to sell things by the ton or by the half-ton. And I want 200 pounds,” Erd said. “I have to talk them into selling to me because we are so small.”
The store can only really afford to buy one commodity in its full metric ton glory, pepper. “Yeah I know it’s boring, but whole peppercorns in a bag is still the number one seller,” Erd said. “Everyone needs pepper.”
Of the store’s 311 unique blends, 250 contain pepper, many as the core ingredient.
The Spice House also tries to keep up with the changing tastes of consumers. “When Jamaican food was really popular, everyone wanted to make Jamaican jerk,” Erd said. “So we had to go to Jamaica and figure out how to do it.”
“Before that, in the ‘80s, there was this guy called Paul Prudhomme, a famous Cajun chef. And everybody wanted to cook Cajun,” Erd said. “The guys that really set the pace are the guys on T.V. and the guys writing the books.”
But responding to a new trend is never fast. Instead, the process relies on a painstaking trials and experimentation that can last from a few months to a year.
“Really, until probably it’s two or three months old it doesn’t go in the blend book, go on the website, go in the catalogue,” Erd said. “Because it changes so much.”
When it comes to looking to the future, there is little in the way of a retirement plan for the pair.
“We don’t have kids so it makes it very difficult to have an exit plan,” Erd said. “Do you give it to the managers? A store manager doesn’t have the money to buy a business. I mean, He’s working on his car payments.”
In the past, a private equity group expressed interest in buying out the couple and expanding the business to 20 or 30 locations, but the deal was never finalized. For Patty, business is too personal. “Her identity is the Spice House,” Erd said. “It’s her family you know? And if we sold it she feels like she’d lose her identity so the timing wasn’t right.”
For now, the pair continues to focus on day-to-day operations and expanding the educational component of their business.
Over the last decade, Patty and Erd have built up a lecture circuit of local libraries around ‘The Lure and Lore of Spices.’ The past two gatherings earlier this year had turnouts of 187 and 92, respectively.
“It’s very popular,” Erd said. “I guess we are fortunate there is just enough history and aphrodisiac and pirates and food knowledge to make it really interesting to just about anybody.”