Few listened to the Payans when they talked up tortillas.

They proved the naysayers wrong.

November 17, 2006
By Matt McKinney

A few years ago, there was just low-wage job after low-wage job for Jose and Noemi Payan, recent arrivals in Minneapolis. Then they began peddling an unlikely product: fresh corn tortillas.

Today they have dozens of employees, three locations, a fleet of delivery trucks and 250 restaurants on their customer list. They make and sell more tortillas than anyone else in the city.

The Payan family's rise from virtual nobodies to something more like royalty among the city's burgeoning Hispanic and Latino population is a reminder of the familiar narrative of the American dream, especially at a time of heated debate nationally over immigration. They worked long hours, took a few smart rolls of the dice, found fortune.

Jose Payan, a native of Axochiapan in the Mexican state of Morelos, and his wife, Noemi, who was born in Puerto Rico, came to Minneapolis 12 years ago with five children and the sixth on the way.

Their daughter Cynthia, now 20, remembers all of them packed into a one-bedroom apartment on Park Avenue.

"We started out with absolutely nothing," she said.

They were among those who tripled Minnesota's Latino population during the 1990s to 181,959 today, or 3.5 percent of the state's 5.1 million population. It's easy to see the Latino influence along E. Lake Street now, but that wasn't the case 10 years ago.

"No one would give us a loan," said Jose, 43. "They were like, 'Who's going to eat tortillas,' you know?"

Plenty of people, it turns out. The Payan family business, Tortilleria La Perla, grossed about $2 million in revenue last year to surpass Georgia-based La Banderita, the next-bestselling brand in the Twin Cities, with $1.4 million in Twin Cities sales, according to market analysis from Information Resources Inc.

Filling a niche

Noemi and Jose met in New Jersey, moved to Chicago, and then came to Minneapolis on the advice of relatives. When they arrived they took any job they could get, from housekeeping to packaging, finally landing at the D'Amico restaurants, where they washed dishes and cooked.

Noemi said she and Jose would ask each other, how could a city not have a tortilleria?

"In Chicago, they're all over, and some of them are open 24 hours," said Noemi, 42.

She remembers the night she opened the yellow pages, determined to find someone who could help them launch a tortilleria. Their search led them to John Flory, a Spanish-speaking Minnesotan who grew up in Ecuador with missionary parents. Flory, working for the Whittier Community Development Corp., helped the Payans make contacts with banks and city officials, but it wasn't always encouraging.

"One day [Flory] told me, 'You know what, Jose? If I was you I would give up,' " Payan said.

After all, tortillas weren't exactly a staple food for most Minnesotans in the days before Chipotle. And unlike the flour tortillas or hard taco shells sold at supermarkets, La Perla sells the traditional soft Mexican tortilla made of corn. They're used for burritos, tacos and many other meals in traditional Mexican cooking. They come flat, stacked in units of a dozen, warm from the oven and damp with steam.

Finally a banker, Gary Ruhter of Marquette Bank on Lake Street, took serious interest in their idea, but only after he made Jose Payan think like a business owner.

"He looked at me and said, 'How many tortillas are you going to make?' and I said, 'A lot.' And he didn't like that," said Payan. "He looked at me real seriously." So Payan told him the capabilities of the tortilla machine, his work crew and precisely how many tortillas they would make. Ruhter approved the loan.

Rapid growth

Their first location was in the Mercado Central, a 1999 development with several Mexican businesses that helped launch the rebirth of E. Lake Street's business district. The family used a Small Business Administration loan to buy a tortilla machine capable of producing 600 dozen an hour. Soon, even though they worked from 5 a.m. to 8 p.m., they were turning away Mexican customers eager to buy fresh corn tortillas.

The family turned to the Neighborhood Development Center, a nonprofit that works with low-income neighborhoods in the Twin Cities. The center assisted them with financing, and in 2001 they leased space in an Asian grocery store on Payne Avenue in St. Paul, this time buying a larger machine capable of making 800 dozen tortillas an hour. A year later they were running that machine 24 hours a day.

And still it wasn't enough. They went back to the center to talk about expansion.

"When [Jose Payan] started talking to me I said, 'No way, you can't do this that fast,' " said Rachel Dolan, a loan officer with the center. "[Jose] said, 'Yeah, it's happening, and this time I want to buy a building.' "

The Payan family sold $360,000 worth of tortillas at local supermarkets last year, up 52 percent from a year earlier, according to Information Resources Inc. The research firm gathers data from cash registers at Twin Cities supermarkets. The data does not cover retail sales at Wal-Mart or at the three La Perla locations in the Twin Cities, and Jose Payan says his company actually sold $2 million worth of tortillas last year when over-the-counter sales are included.

Minnesota is home to one other large tortilla maker, Mission Foods, which has a New Brighton plant and is owned by Gruma Corp., based in Irving, Texas.

The growing appetite for tortillas isn't limited to Minnesota. The nation consumes 7 billion pounds of tortillas annually. Supermarket sales topped $1 billion last year and fast-food outlets and food service gobbled up another $6 billion, according to ACNielsen.

Last month, the Payan family opened its largest location, a warehouse and factory at 2616 27th Av. S. The $1.8 million factory can produce 2,300 dozen tortillas an hour.

A mariachi band played at the grand opening; Jose Payan and his sons all wore formal suits to greet visitors, including Flory and Dolan and many of the owners of other Mexican food businesses in town.

"I hear a lot of people saying, 'Don't just start a business to serve your one ethnic group,' " Flory said. "I really disagree with that. When you start a new business you need to serve a niche market. And who knows the niche market of what a Mexican family wants and needs better than a Mexican businessperson?"

Source: Star Tribune

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