Idea Generation

Siblings bring new technology, attitude to the business of selling tortillas.

Kansas City Business Journal, January 29, 1999 | by Brian Kaberline

 

Corn, lime, water.

The recipe for tortillas is as simple as it is old. It's what you do with those ingredients that makes all the difference.

David Sloan compares making tortillas to brewing beer. There are constant adjustments to be made to account for the texture of a particular batch of corn, the humidity, the desired thickness of the tortilla.

This skill in adjusting quickly, in business as well as cooking tortillas, has helped Sloan Acquisition Corp. -- operating as Li'L Guy Foods -- build a business with sales of just under $2 million last year.

And David Sloan, along with his sister, Christina, and brother, Eddie, are just warming up.

"We're trying to build a big company, but keep the small ideas that a mom-and-pop tortilla factory would have," said David Sloan, president of Li'L Guy.

Li'L Guy is an old business with a fresh face. Don Miranda, a former railroad brakeman and roofer, founded the business in 1965 with Fred Garcia, a former production manager for another tortilla maker, Spanish Gardens Food Manufacturing Inc. The mainstream market had yet to acquire a taste for tortillas, but there was little competition for retail accounts.

"Basically, the only thing you had going back then was Spanish Gardens," said David Sloan, Miranda's grandson.

Working at the tortilla plant was part of growing up for Sloan and his siblings. David swept floors, Christina slapped labels on packages and Eddie studied the craft of making tortillas.

But these strong family ties were tested in the late '80s when Miranda became sick and was diagnosed with cancer. His subsequent death in 1989 set the company adrift.

David Sloan said his mother, Deborah, wanted to be more involved in Li'L Guy while her father was alive, but he was reluctant to yield control or allow her room to pursue new ideas.

Miranda picked Deborah Sloan to take over the company upon his death. But it took three years for her to buy out the interests of relatives and heirs. In the meantime, investments were put off, decisions were delayed and the company stopped growing.

Once she gained ownership of the company, Deborah Sloan began giving her children more responsibilities and promised she wouldn't hold them back.
An aggressive stance

Management of Li'L Guy is quite different now.

David, Christina and Eddie Sloan -- ranging in age from 22 to 27 -- split decision-making power. Their youth is reflected in the company's heavy use of computers and wireless phones, new production equipment and a drive to expand into the St. Louis market.

"I think the quality of his products is the same," Rick Silva, general manager of Silva Foods, said of David Sloan, "but I think he's bringing everything else up to speed. Because in this market, service is everything."

Silva knows what the Sloans are going through. His father started Silva Foods, a Kansas City, Kan., producer of tortillas, chips and sauces and was friends with Don Miranda.

One way Li'L Guy is blending technology with tradition is by equipping its salespeople and route drivers with wireless phones. Christina Sloan said customers with questions can get almost immediate access to their account representatives.

Tiffany Chittam, general manager of Saguaro Grill, likes Li'L Guy's quick attention to service. She said she can call Li'L Guy on Sundays and get help -- a service no other vendor will offer.

"When I need orders immediately, they're down here in less than an hour."

To propel its restaurant business further, Li'L Guy in 1997 bought new, more sophisticated equipment for making tortillas. David Sloan said the new production line allows the company to easily change the product to meet each customer's individual demands.

The payback was almost immediate, he said, with restaurant accounts going from 5 percent of sales to 20 percent in one year.

In addition to expanding its reach in the restaurant business, Li'L Guy is stretching its territory eastward across the state.

At first, David Sloan struggled to get Li'L Guy's products on the shelves of the big grocery chains in St. Louis. The effort fell flat.

Then, one of his veteran salesmen tried a different tack. He lined up nearly 60 smaller stores that were starving for attention, and worked his way up. Soon, the bigger boys were drawn to the table for a taste.

Beginning Feb. 1, Li'L Guy will have its tortillas in National Supermarket locations in the St. Louis area and begin daily deliveries to St. Louis.

"It took us a while, but we were starting from the wrong angle," Christina Sloan said.

Big As Bread

Tortillas are one of the food success stories of the past 15 years. The Tortilla Industry Association estimates Americans ate 75 billion tortillas last year, not including tortilla chips.

Christina Sloan said she knew tortillas were big when she went out to a grocery store, trying to boost sales by offering exotic recipes using tortillas. But the shoppers had simpler uses in mind -- folded around beans and cheese for breakfast, even replacing bread for peanut butter and jelly sandwiches.

The rise in popularity of Mexican food, which should soon overtake Italian as the country's favorite ethnic cuisine, has brought new customers -- but new competition, too.

Large companies have built plants and spent big bucks to establish brand names. The Sloans may watch the big plants, but they aren't about to copy them.

Li'L Guy still starts the tortilla-making process by cooking corn in huge stainless steel tubs. The corn steeps in water for eight hours before it is ready to be ground, mixed and put into a machine that stamps out tortillas like cookies, and cooks them.

David Sloan said many of the national producers use corn flour as the base for their tortillas. They trade taste and what Silva calls "ethnic authenticity" for consistency and ease of production.

Silva said there is a lot of product loyalty in the area market. Battles for sales among old-line Mexican food producers are contests of taste, not marketing firepower.

"There's kind of a code," he said, "that you don't steal customers from each other, that the only way you take customers from another company is through the quality of the product."

By the same token, Christina Sloan said growth is no excuse for forgetting small customers. The company established a small cash-and-carry area in its office to cater to people who walk in the door wondering where to buy Li'L Guy tortillas or sauce.

And, though Li'L Guy has set rules for minimum order size, the rules aren't applied to existing accounts.

Li'L Guy still has customers that may take only $6 to $8 a week in new product, Christina Sloan said. The company keeps selling to these small accounts "because they're the ones who helped us get where we are."

"People have asked us, `What will you do when you're not the Li'L Guy anymore?'" Christina Sloan said. "We'll still be the Li'L Guy at heart."

 

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