Healthier Diet Feeds Bottom Line
Mexican food entrepreneur Mark Roth owes his latest product innovation to his cardiologist. After heart bypass surgery in 1992, Roth’s doctor told the 60-year-old he should avoid his thrice-weekly breakfast of eggs and chorizo, the tasty but fat-laden Mexican sausage Roth learned to love in his days as a supermarket owner catering to Latino customers in El Monte.
No chorizo? It was a life sentence for the guy who founded El Burrito Mexican Food Products Inc. in 1980 to meet the Southland’s growing appetite for salsa and other spicy cuisine. So he did what any red-blooded, chorizo-addicted entrepreneur with an ailing ticker would do: He came up with a meatless substitute that looked and tasted like the real thing.
Roth’s quest to eat heart-smart has turned his Industry-based company in a new direction as well. The maker of traditional Mexican specialties such as masa and guacamole has joined a wave of food processors cranking out meat substitutes and lighter Mexican fare for non-Latinos.
Added to his lineup just two years ago, soy-based products such as meatless “Soyrizo” now account for 30% of El Burrito’s nearly $5 million in annual sales. Roth has expanded his offerings to include a spicy meatless taco filling and soy-based “Neatloaf.” Supermarket chains, including Whole Foods, Wild Oats and Gelson’s, carry the line, while the company also manufactures private-label products under the Trader Joe’s, Frieda’s and Melissa’s brands. More varieties are in the pipeline, and the fellow who never met a fat he didn’t like now finds himself catering to cholesterol counters, vegetarians and the crunchy granola set.
“I knew the product would appeal to meat lovers, but the response from vegetarians has been tremendous,” said Roth, now 66. “That’s when I realized this market is really wide open.”
While Roth’s market research began with his own stomach, his instincts led him to a market niche that’s expected to top $1 billion by 2001. Sales of “meat alternatives,” which include things such as veggie burgers, tofu hot dogs and soy sausage, hit $334.8 million for the 12 months ended in February. That’s up 32.5% from the previous year, according to Spence Information Resources, a San Francisco-based natural products market research firm.
It’s a category that’s catching on with aging carnivores, youthful animal lovers, vegetarians and other health-conscious consumers who want the guiltless pleasure of devouring something that tastes like meat but isn’t. El Burrito Soyrizo contains no cholesterol and has about 60% fewer calories from fat than chorizo, but it costs about three times as much, retailing for about $3 a pound.
“These products are booming in the mass market because people are taking a more proactive approach to their health,” said Karen Raterman, editor of Natural Foods Merchandiser magazine. “People are a lot more aware of the benefits of soy . . . and the products are better tasting” than they used to be.
Keeping an eye peeled for growing niche markets is nothing new to the enterprising Roth. The son of an immigrant Austrian grocer, the North Dakota native moved his family in 1960 to California, where he was struck by L.A.’s fast-growing Latino population.
So he bought an ailing El Monte supermarket in 1968 and stocked it with every Mexican item he could lay his hands on. Then he reached out to the surrounding Latino community. Roth didn’t speak a lick of Spanish, but he knew enough about merchandising to double sales within the first month. He later would begin making fresh tortillas and salsa to supply his own customers and those of neighboring supermarkets in a seat-of-the-pants operation that eventually became El Burrito.
Roth had a lot of help with product development in those early years, when shoppers basically told him what to put into his salsa.
“Mrs. Garcia, Mrs. Hernandez, Mrs. Guerrero, everybody had a recipe,” said Roth, recalling the days of chopping cilantro in the back of the supermarket, which he sold in 1987. “My customers really developed the product for me.”
But Roth was on his own in concocting a meatless chorizo after he tasted and rejected other vegetarian brands on the market. Product development at big food manufacturers often involves scientists and fancy equipment. At El Burrito, tucked in the back of a cramped industrial park near a rail spur, the test kitchen was an 8-quart blender, a frying pan and a stomach strong enough to handle some of the early experiments.
“It had the consistency of oatmeal in the very beginning,” admitted Roth, who began work on the soy chorizo in late 1995. “It was a lot of trial and error.”
Protein-rich, low-fat soy was the logical foundation for a vegetarian chorizo. But finding a version that would mimic the color and texture of sausage proved to be an exacting chore. After a couple of dead-ends and a trip to Mexico to investigate a soy-based product made there, Roth latched onto dehydrated granules made by agribusiness giant Archer-Daniels-Midland Co.
Long dismissed as a meat extender, soy is enjoying something of a renaissance among even mainstream food manufacturers, who slowly are moving beyond the ubiquitous soy hot dog, according to Don Parker, sales manager for SPI Group, a San Leandro-based distributor of soy and other specialty nutrition items.
“Companies like El Burrito are demonstrating the real possibilities of soy,” said Parker, whose company helped Roth find the right mixture for his products. “We’re seeing a lot more innovation. . . . The whole market is set to take off.”
After Roth had the meatless-chorizo texture down, finding a vegetarian sausage casing was a snap. Ditto for the flavoring. But the next big hurdle was getting the chorizo to last longer than a few days in the refrigerator case.
“Our biggest frustration was shelf life,” Roth said. “The product had a lot of the same properties as meat, so it would spoil really fast.”
The cutthroat food business is so rife with imitators that Roth declined to reveal how El Burrito has achieved shelf lives of 90 to 120 days for its preservative-free soy products, saying only that handling, packaging and the spice combination all are important.
Even with a solid recipe in hand, there was still the matter of where and how to manufacture the stuff. Roth initially planned to contract out the sausage making. He figured he’d save a bundle on new equipment, plus he could build nationwide distribution by choosing partners in other big U.S. markets.
That strategy quickly proved unworkable, even in his own backyard. One local food processor dumped the job after securing a more lucrative contract from a bigger customer. Another, which processed meat products, balked at the sanitation safeguards El Burrito demanded to ensure the integrity of its vegetarian product.
“That’s when we realized that we were going to have to make it ourselves,” Roth said. “We just couldn’t gamble with the quality.”
A $150,000 Small Business Administration loan helped with the equipment purchase. And in 1997, two years after that first lousy batch in the blender, Roth’s breakfast dream was ready for the market. But like any small food purveyor, El Burrito’s biggest challenge has been securing cooler space in major supermarkets, where rampant consolidation has made it tougher for small food companies to get their products on the shelves.
“It’s a concern for the whole industry,” says Nancy Chapman of the Soyfoods Assn. of North America. “Supermarkets will put in a product if customers ask for it. But how do you get them to ask for it if they’ve never tasted it and [small companies] can’t afford to advertise?”
With the help of a food broker, long-standing industry contacts and some innovative guerrilla marketing, Roth has managed to place his product in some well-known chains.
For example, Ralphs supermarkets began carrying the brand after the chain’s buyer tasted the soy products at an industry golf outing sponsored by El Burrito. Other grass-roots marketing efforts include entering the soy foods in contests such as the annual California Restaurant Assn. competition, where El Burrito’s SoyTaco meatless taco filling won the 1998 Innovator Award.
At an age when most people are thinking about retirement, Roth is planning a whole family of soy products to give his 30-employee company more visibility and shelf space. His cholesterol level, once 260, has been cut nearly in half. He credits soy foods with giving him a new lease on life, nutritionally and professionally, and he has no plans to slow down any time soon.
“My whole life is food,” he says. “What else would I do?”
