Redefining ‘Dressing for Success’
Kathy Taggares sold virtually everything she owned to raise enough cash to buy a wholesale food business. Looking back, she says it sometimes takes more guts than money to pull off an acquisition.
Nearly two years ago, she approached the giant Marriott Corp. with an offer to buy Bob’s Kitchens, the Marriott subsidiary that was making salad dressings for Bob’s Big Boy restaurants.
“I’m not sure Marriott knew how minimal my resources were and I wasn’t about to tell them,” recalled Taggares. “But I figured, they can throw me out. What else could they do?”
Instead of throwing her out, Marriott agreed to sell her the company, accepting a combination of cash, a collateralized loan and the payment of the balance through future product royalties.
“I basically bought a $6-million company with $200,000 in cash,” said Taggares, who sold her life insurance policy, her condominium and all her jewelry to raise the money.
Taggares, 36, has worked in the food-processing industry most of her adult life. Two years ago, she decided she was ready to own her own company. She started asking everyone she knew in the food business for leads and found herself looking at companies ranging from a trout farm to a peanut factory.
Through a business broker, she learned that Marriott was planning to get out of the food-processing business by selling Bob’s Kitchens. In June, 1987, she bought the Glendale-based company and changed the name to K. T.'s Kitchens--using her initials. K. T.'s, which has the exclusive right to make all the Bob’s Big Boy salad dressings for the Marriott-owned Big Boy restaurants, also sells the dressings to other restaurants and grocery stores.
Marriott, which has 223 Bob’s restaurants primarily on the East and West Coasts, is in the process of converting them to Allie’s, a more trendy, family-style restaurant, according to a Marriott spokesman. He said he could not comment on the sale of Bob’s Kitchens or the arrangement under which Taggares provides salad dressings for the restaurants.
Taggares said she is not worried about the loss of the familiar Big Boy restaurants because her marketing research has shown that the people who eat at Bob’s restaurants are not the same ones who buy Bob’s salad dressings.
“I think our primary user grew up with Bob’s and now they don’t necessarily frequent the restaurants, but they have this wonderful memory of dipping their French fries in Bob’s bleu cheese dressing,” said Taggares.
About 20% of the dressing she makes is sold to Bob’s and other restaurant chains and food service outlets. The remaining 80% is sold at the retail level and available in virtually every supermarket, big and small, in Southern California. Taggares said she is not sure whether the Allie’s restaurants will be buying her dressings in the future.
The dressing is sold under the Big Boy label in stores and sold to restaurants and others under the Chef’s Award brand. Retailing for about $2.49 for a 16-ounce jar, Bob’s dressing is aimed at the high end of the salad dressing market. It is costly, she said, because it contains only natural ingredients and features imported cheeses from France.
Most days, K. T.'s Kitchens manufactures 10,000 gallons of Bob’s salad dressings, filling 150 jars a minute on a modern conveyor belt system. The company, which employs about 60, is divided into two parts: One side of the factory makes the salad dressings, the other makes refrigerated pizzas.
Using the first year’s profits from her salad dressing business, Taggares purchased a Monterey Park pizza crust company and moved it into her factory. To maximize her investment, she decided to make the entire pizza and not just the crust. The pizza is packed under the Poni and K. T.'s brands.
Taggares, whose lean frame belies a diet consisting mainly of corn chips dipped in Bob’s ranch dressing and her own pizza, said the pizza business is growing much faster than the salad dressing business. This year, salad dressing sales will be about $10 million and pizza sales about $4 million. Last year, K. T.'s posted $8 million in total sales.
When she bought Bob’s Kitchens, Taggares said she faced a major obstacle. The primarily male, Latino workers had a difficult time adjusting to two new female bosses after being supervised by white male, middle managers from Marriott.
There are no middle-level managers at K. T.'s. The company is run by Taggares and her general manager, Joan Paris, a longtime friend and colleague who has worked with Taggares at various food companies for the past 12 years.
The two women said they finally won their employees’ respect by proving that they really knew everything about the food-processing business.
“I’ve done every single one of these jobs,” said Taggares, who frequently fills in on the production line when her workers are absent.
Taggares, who grew up in the tiny, potato-growing town of Othello, Wash., has sold potatoes and french fries and worked as the general manager of a food-processing company.
As a teen-ager, she studied dance in New York and still looks and dresses like a dancer. After working for several large food companies, she was anxious to own her own business and live in Los Angeles.
“I like being the boss, and I thrive on chaos and commotion,” said Taggares, who usually works 10 to 12 hours a day.
She said her greatest frustration is dealing with the constant mechanical and refrigerator breakdowns that plague any food-processing factory. The breakdowns add to the pressure of meeting tight deadlines because she makes everything to order for customers.
Despite the daily aggravations, Taggares said she is looking for new products and acquisitions, with an eye toward items sold in the refrigerated section of the grocery store.
“I make a lot of cold calls to business owners,” said Taggares. “Some are terribly flattered and others think we are trying to buy one of their children.”
Providing insight and tools for the small business owner is the goal of a half-day seminar sponsored by the California World Trade Commission’s Export Finance Office and the Los Angeles Chamber of Commerce. The session, scheduled next Tuesday from 8:30 a.m. to 12:30 p.m., features three speakers: L. Fargo Wells, director of the California Export Finance Office; Benjamin Pelter, author of “How to Prepare a Solid Business Plan,” and Edmond Freiermuth, a business consultant specializing in helping troubled companies.
The session costs $40 and includes copies of Freiermuth’s books. It will be held at the Chamber of Commerce, 404 S. Bixel St., Los Angeles. For reservations, send checks to Pelter & Associates, 8500 Wilshire Blvd., Suite 815, Beverly Hills, Ca. 90211.
Registered investment adviser Libby Agran will discuss “Everything You Wanted to Know About Money But Were Afraid to Ask,” at a National Assn. of Women Business Owners seminar on Tuesday. The dinner meeting begins with cocktails at 6 p.m. at the Petroleum Club in the Los Angeles Hilton, 930 Wilshire Blvd., Los Angeles. The cost is $25 for pre-registered association members, $27 for pre-registered non-members and $30 at the door. For information call: (213) 623-9977.
The April 30 deadline is approaching for nominations for the 1989 Entrepreneur of the Year awards sponsored by Inc. magazine and Arthur Young International. The program seeks to recognize successful business people from the greater Los Angeles area. For information or applications, call (213) 551-7822.