Nashville food producers broke records when quarantine began. Now, they're at a 'standstill.'

Ric Ousley started making salsa in the 1980s because nothing he could buy was hot enough to satisfy his "pepperhead" cravings. Benny Marshall makes cobblers using an "old world" recipe from his great-grandmother. Karen Bess made her first jars of jelly as wedding gifts for friends.

"When people think about foods to eat in Nashville or any other city, the first thing that comes to mind is the restaurants," said Bess, owner of Honey Child Jellies. "There are so many people out here doing some really creative businesses that have to do with food that don't connect to a restaurant or a grocery store."

For many of Nashville's small food businesses, 2020 has been the best sales year ever. With restaurants shuttered thanks to the COVID-19 pandemic, Americans have turned to local creators selling everything from spreads to pies to tortillas to break out of their normal routine.

"We just killed it at the farmers' market," said Marshall, owner of Cobbler Creations. "Our worst day this year was like our best day last year."

As regulations for businesses and restaurants have relaxed – and as Americans have eased off from the panic-buying days of the spring – sales have gone back to normal for most food producers. Throw in the financial burdens caused by the March tornadoes and a business world turned upside down by the pandemic, and many of those businesses are now stagnating.

"March and April, my grocery store sales went up about 70%, but since then, it's leveled back down," said Tom Bailey of Prof. Bailey's Pimento Cheese. "Now that it's back to normal, we're treading water at best."

Like many area food producers, Bailey sources his product using cheese, peppers and onions from local farmers. Part of that's practical, as small businesses don't have access to large food suppliers like Sysco or US Foods. Most producers, though, pride themselves on using the freshest ingredients from local farmers.

After tornadoes ripped through Middle Tennessee in March, many of those farmers ceased production for months.

"The tornado knocked out my two main suppliers, and so, until the end of July, I was having everything I used shipped in from Louisville," Bailey said. "I was basically operating at a loss for all that time."

For Bess, who lives on Holly Street in East Nashville, the tornadoes created a more immediate problem. Her house and her kitchen at East End United Methodist Church were "decimated," meaning she's had to restore both her business and her home simultaneously.

"With the tornado happening, my business was at a standstill," Bess said. "I had to find a new commercial kitchen. We are still dealing with construction companies and insurance trying to get our house back to normal."

Small food businesses got a boost from an unlikely source in March: the COVID-19 pandemic. With practically all restaurants and entertainment venues shuttered, Nashvillians flocked to farmers' markets to find new foods to explore.

"God is so good to me," said Alice Salazar Heffernan of Santo Nino de Atocha Tortilleria. "He doubled my sales."

Bess called the farmer's market bump a stroke of luck at a much-needed time. For producers like Bailey, who wholesale their products to grocery stores, there was an even bigger bump: American grocery sales shot up almost 27% from February to March, according to the U.S. Census Bureau.

"2020, to us, it's been the greatest year ever," said Ousley, who sells Ousley's Ouch Salsa at Nashville-area Whole Foods stores. "Our sales have gone way up because everybody has to be quarantined, and everybody's cooking at home, so everybody is buying stuff."

Even from a strictly financial perspective, the pandemic has brought new challenges. Bess said that adopting COVID-safe delivery for her supplies has raised production costs by 15 cents per jar of jelly. Bailey estimated that his cheese costs have increased by 60%, and he said he spends more time than ever searching for new suppliers.

And while the quarantined-induced sales bump has carried these producers through a tumultuous summer, it hasn't lasted through the fall. A Nielsen study found that while American retailers saw food and beverage sales grow 31% in March 2020 compared to 2019, that growth fell to 11.5% in August.

"The pandemic, in terms of things going out the door, hasn't been that bad, but the cost of everything has gone up significantly," Bailey said. "We're all scrambling to try and just hold our own."

It's especially frustrating for business owners like Marshall, who originally planned to expand his frozen cobbler business regionally at the start of the year. When the year began, he was in talks with financiers to become the "Colonel Sanders" of frozen cobbler by expanding sales to stores like Publix, Kroger and Whole Foods beyond the Nashville area.

"We were sitting on 'Go' in March, and you know what happened," he said. "Can't win for losing, sometimes."

Bailey had hoped to stop selling at farmers' markets and focus entirely on wholesaling from 2020 on. After such a chaotic year, he's only just now refiling paperwork to expand sales with Whole Foods.

"The main effect is that the business isn't growing," Bailey said. "A couple of people have just up and quit, but not nearly as bad as with restaurants."

Both Bailey and Marshall left stable office jobs to break into the food industry. So what's kept them around during a year of chaos and unpredictability?

"It sounds hokey as crap, but when someone goes, 'Here's my favorite pimento cheese,' that actually is kind of thrilling," Bailey said. "I suppose it's like a grandmother watching their child get a tiara at a beauty contest or something."

For many, the rapidly approaching new year represents the prospect of stability and even growth. Bailey and Marshall want to put their expansion plans back in action. Ousley is perfectly happy keeping his products on shelves in Middle Tennessee.

Bess said her goal is just to make it until 2021, when she hopes there will be progress on a COVID-19 vaccine and more ways for customers to shop safely.

"I am hopeful, because the alternative is kind of not acceptable," Bess said.

Cole Villena covers business at The Tennessean, part of the USA Today Network — Tennessee. Reach Cole at cvillena@tennessean.com. Follow Cole on Twitter at @ColeVillena.