Two hit by recession pin hopes on their sauce start-up

Career agita struck Lizbeth Lane in Tredyffrin Township with all the gut-churning discomfort of a hot-sausage sandwich after a bowl of spicy chili.

Feeling the pain were neighbors Michael Dernoga and Ridgely B. Francisco.

Dernoga, in health-care management for more than 30 years, was out of a job. Francisco, an art director for the same amount of time with advertising agencies and then as a consultant, was finding work "trailing off" in what he says is "a youth-oriented business."

Two men - in their 50s and in a quandary over their futures - did what so many in distress do: They turned to food. Unlike most people, they are hoping it becomes a fattening experience - for their bank accounts, that is.

It was more than a year ago that Dernoga and Francisco started talking about ways to reinvent themselves, and about how their shared passion for food could play a role. Each is the primary cook in his household.

Dernoga's daughter, Melanie, 11 at the time, urged her father to open a restaurant. Referring to all the recession-inspired vacancy signs she had noticed on commercial property, she told him, "There's space available."

But opening a restaurant was more expense and risk than the neighbors of nine years had the stomach for. Instead, they decided to base their business on products they contend - and food-industry experts concur - fill a culinary void.

Their all-natural, gluten-free "simmer sauces" went on sale six months ago under a brand name influenced by the thing that brought Dernoga and Francisco together: their street.

The Lizbeth Lane Gourmet Cuisine line currently consists of four sauces to which sauteed meat or seafood can be added: lemon piccata; Mediterranean tomato; Marsala and tarragon; and roasted red pepper and basil cream. They are sold at LizbethLaneCuisine.com and more than 20 gourmet and specialty shops.

To the frustration of Dernoga and Francisco, a presence on the shelves of Whole Foods and Fresh Market, the ultimate in specialty shopping to many foodies, remains elusive.

That's somewhat of a relief to George Latella, a professor of food marketing at St. Joseph's University who has advised Lizbeth Lane Gourmet's founders on their business-plan preparation. For such an early-stage company, big retail accounts could mean volumes Lizbeth Lane might not be prepared to handle from a production standpoint or a financial one, Latella said.

Regarding the latter, he noted that larger markets often will order a great deal of product - and demand to be reimbursed for what doesn't sell. Access to the kind of funding needed to make good on those credits is often impossible for emerging small businesses, Latella said.

Consequently, the message he preaches - in class and to clients - is one of patience and preparation: "I'm real big on slow, steady growth."

Slow is not a speed Francisco does well. He attributes that to all those deadline-driven years in advertising.

For Dernoga, the big adjustment has been going from a career focused on patient care - where immediate response was expected - to a business in which, to the vendors he hopes to persuade to carry his sauces, he might very well be "the lowest item on their to-do list."

Yet here they are, peddling sauces in 16-ounce jars for $7.99 each that were first concocted in skillets in their own kitchens, as dinner for their families, and now are made in vastly bigger batches in a Lancaster factory.

With a label promising "a gourmet meal in 15 minutes," Lizbeth Lane sauces are designed with three types of consumers in mind: busy professionals, parents with loads of child-ferrying responsibilities, and people less than confident in the kitchen.

Latella said Dernoga and Francisco should spend the next few years building Lizbeth Lane's following in the natural-foods and gluten-free markets, pursuing sales through specialty-food stores and online.

Besides catering to a niche market with growth potential, Lizbeth Lane sauces have another crucial thing going for them, Latella added: "This stuff just tastes good."

Proof of that, Laure Stasik said, is the customers who keep returning to her gluten-free grocery store in Scranton and her website, seeking more Lizbeth Lane sauces.

"It's flying out the door," she said, estimating sales of 72 jars in two months.

Products free of the gluten protein found in wheat, barley and rye are in high demand because of celiac disease, said Stasik, a registered nurse and dietitian who has the autoimmune digestive disorder, which affects an estimated one in 133 people, rendering them gluten-intolerant.

She hopes Lizbeth Lane expands its offerings, especially to include an alfredo sauce.

Dernoga and Francisco do have expansion plans but are not ready to divulge specifics. As recipes go, they seem an effective blend, with Dernoga bringing business acumen and Francisco the creative talent. The latter designed the company's website and its logo, a cozy-looking house perched on a lane against a moonlit sky.

Having invested nearly $30,000 in start-up capital with the unflagging support of their wives, each of whom has her own career, Dernoga and Francisco said their company was not yet profitable.

One of its early advocates is nonetheless impressed. Melanie Dernoga, now 13, is "really inspired" by her father's efforts at building a new career.

Though a sauce fan, she most definitely is not. Her favorite dish by dad?

"Pasta with chicken - and a little bit of Parmesan," she said.

For Francisco, Lizbeth Lane is the fulfillment of an inspiring message he once saw on an office sign about two types of people: dreamers and doers.

In leaping into the sauce business, he concluded: "I'm 59 years old, career is winding down, you better do something, and stop dreaming about it."