Hanley’s is shipping its first 1,000 cases of salad dressing later this week to Wal-Mart stores in Louisiana, Mississippi and Arkansas.
The local maker of all-natural dressings inked a deal last year with the Bentonville, Arkansas-based retail giant, and will begin supplying Wal-Mart stores with four of its five dressings: Sensation, Strawberry, Avocado and Creole Ranch.
It’s a huge step for the mom-and-pop company, which was founded by husband and wife team Richard and Kate Hanley in 2012. Nearly five years later, they remain its only two employees and still do much of the mixing and packaging of their product by hand.
“Never in a million years we thought we’d be in Wal-Mart,” Richard Hanley says. “But when they come calling you can’t say no.”
All 120 Wal-Mart locations in Louisiana will carry Hanley’s. A handful of Wal-Mart stores in Arkansas and Mississippi will also make space on their shelves for the product. Depending on how well the dressings sell, the company’s orders could grow.
Selling to a high-volume, low-margin store like Wal-Mart is a big upfront cost to a local producer like Hanley’s. Just producing enough product and repackaging it in cases of six bottles instead of 12, as Wal-Mart required, was a big out-of-pocket expense. Hanley’s also has to sell its dressing to the company at a much lower price than usual. But Hanley believes it will be worth it.
“They kind of twist your arm on price,” he says. “But the volume they do makes up for it and that’s the big difference. They move about five times more than any other store.”
Wal-Mart isn’t Hanley’s only potential new customer. Also this week, the company’s dressings are being taste tested by travelers on a Royal Caribbean cruise ship headed to Puerto Rico.
“If they get good feedback we have the potential to get into more ships,” he says. “Royal Caribbean alone does between 700,000 and 800,000 gallons of salad dressing every year.”
Since its founding, Hanley’s has been growing annually at a rate of between 10% to 20%, but has been hampered by its manufacturing capabilities. Recently, however, the company signed a deal with a Slidell manufacturer, which will enable the company to produce much larger quantities of its product.
“We still have the LSU Food Incubator, where we do our small batches and (research and development),” he says. “Then we have another manufacturer in Slidell and they can handle nationwide growth. They have 2,000-gallon tanks.”
Hanley’s dressings should start appearing on Wal-Mart shelves in April.