When life throws you tomatoes, make tomato sauce

While countless food startups fail, Neal McTighe has enjoyed exponential growth of his pasta sauce company since he started making the product in his Raleigh kitchen in 2010.

It’s a premium line sold by several regional and national markets in the Southeast, including Whole Foods, Harris Teeter, Kroger and Earth Fare. Southern Living magazine named the Pomodoro sauce Best Tomato Sauce in 2016.

But last summer, after building a loyal following for his brand, McTighe was threatened with a trademark lawsuit that forced him to change the name of his signature product, Nello’s Sauce, to Nellino’s Sauce.

“I was on the verge of an identity crisis that threatened to take down my business,” McTighe says. “Nello’s is more than the name of my business. It’s been my nickname for nearly 20 years. It’s who I am.”

But Nello also is the name of an upscale Italian restaurant in New York City, a celebrity hangout that had trademarked its name and stated intentions of marketing an eponymous pasta sauce.

A lawyer representing the restaurant sent McTighe a cease-and-desist letter. McTighe planned to fight back until learning that the cost of a strong legal defense could ruin him.

In November, he proposed an agreement in which he would quickly transition Nello’s Sauce to Nellino’s Sauce. The diminutive name is an affectionate nod to his toddler son, Henry. (As an infant, Henry was featured in a “selfie” promotion on the brand’s Facebook page.)

But McTighe retains the right to say “formerly Nello’s” in marketing materials and was allowed to sell the already-labelled product as a way to retain the goodwill of loyal customers and retail buyers.

It was a learning experience for the entrepreneur, one that tested and ultimately expanded his business savvy and his line of pasta sauces.

Growing pains

McTighe knew he wasn’t the only business to claim the Nello’s name. In addition to the New York restaurant, there also is a pizza joint in Arizona – Nello’s Pizza Mesa.

But with “Nello” such an integral part of McTighe’s identity, he opted to stick with the name.

“When I was first getting started, I didn’t know if this would last a few months or a lifetime,” McTighe says. “I felt strongly about the company name. It seemed worth the risk.”

The flagship Marinara sauce is inspired by his grandmother, who first devised the recipe that inspired him to launch the business. McTighe personally sold jars at the Saturday Market in Raleigh’s Boylan Heights neighborhood before persuading Weaver Street Market to sell it in 2011.

As more stores signed on, McTighe developed more flavors, including Hot & Spicy, a classic arrabbiata sauce, and Pomodoro, which includes fragrant notes of lavender and thyme.

He also introduced a limited release, small-batch Nello’s sauce in 2015 that was the first certified biodynamic sauce in the United States. Tomatoes for the product were grown specifically for this project at Whitted Bowers Farm in Cedar Grove.

Jennifer Curtis, co-CEO of Durham-based Firsthand Foods, understands how hard it can be to achieve success with a growing enterprise only to have to change the company’s name. The business, which connects North Carolina’s pasture-based livestock producers with local consumers, restaurants and retailers, was founded in 2010 as Farmhand Foods.

“Smithfield Foods took issue with it based on a brand of pork they market called Farmland Foods,” Curtis recalls of the dispute that lasted from December 2011 to 2013. She said the U.S. Patent and Trademark Office investigated the claim and “did not see a potential for consumer confusion” between the brand names.

Regardless, Smithfield Foods, the self-described “world’s largest producer of pork product” threatened to sue. Rather than risk litigation with a well-financed commodity brand, Farmhand became Firsthand.

“The big takeaway for us was the empowerment that came from choosing our new name rather than fighting to keep our old one,” Curtis says. “The process revealed to us how a brand is so much more than a name, but the whole package of values a company provides.”

McTighe came to the same conclusion.

“Now that it’s done, I can’t help but think of that line, about when life throws you lemons, make lemonade,” he says.

“Well, my life threw me tomatoes,” he adds with a laugh. “I had to take this bad and flip it into good.”

Moving forward

A lot of good has happened since the dispute was resolved.

When Nellino’s made its debut in January, McTighe introduced a fourth sauce flavor, Organic Tomato & Basil. It’s available only at area Harris Teeter stores but will appear elsewhere soon. The rest of the Nellino’s line was added in April to Whole Foods stores in Texas, Oklahoma, Louisiana and Arkansas.

Additionally, while the dispute was bubbling, McTighe introduced a second set of products under the label American Pasta Sauce. Those sauces also are organic, gluten-free and vegetarian but are less expensive. A 24-ounce jar of Nellino’s Sauce typically sells for $8.99 while the same size of American Pasta Sauce is $5.99.

“I wanted a line that would appeal to people with families who want quick dinners and value,” he says, adding it’s a hit with his spaghetti-loving son. “I wanted to interest them with the right price point, then keep them with our flavors.”

With American Pasta Sauce, McTighe says he took direct aim at the Italian-American palate with Roasted Garlic, Marinara and Tomato & Basil. He produced samples quickly for a trade show, which caught the attention of Lowe’s Foods. Jars were on store shelves in time for July Fourth. The brand also is available at Earth Fare, select Whole Foods and the Texas-based chain Central Market.

While Nello’s was first produced commercially in Hillsborough, both American Pasta Sauce and Nellino’s Sauce now are made at a regional, green-certified facility McTighe says is a trade secret.

“I’d be a dummy to not have things covered by trademark now,” he says. “American Pasta Sauce is not a name that can be protected, but the beauty of Nellino’s is that no one else is using it. I’m doing everything I can to ensure that if our son, our little Nellino, wants to run this business in the future, he can.”

Correction: Neal McTighe said he was threatened with a lawsuit but was not sued. A print version of this story incorrectly said the company was sued.

This story was originally published May 2, 2017 at 2:00 PM with the headline "When life throws you tomatoes, make tomato sauce."