8 Aldaci (Dadá) dos Santos’ Recipe for Success

The Flavors of Building a Culinary Brand-Name in Brazil

Maya Perl-Kot

Figure 8.1 Sabores da Dadá

Aldaci dos Santos, better known as Dadá in her native Brazil, embodied the spirit of a true entrepreneur. Born to a poor, black, single mother in the highly segregated Brazilian northeast, Dadá managed to transcend her circumstances and create a thriving brand name in Brazil’s culinary and entertainment industries. Despite a lack of formal business education, she avoided the typical professional route for women of her background

Figure 8.2 Aldaci dos Santos

Source: Maya Perl-Kot, January 2010.

—becoming a domestic worker, maid, or caregiver—and, instead, utilized her cooking talent to build her own thriving restaurant business. Her unique personality and risk-taking appetite allowed her to develop that vision further into a multidirectional venture that included catering services, high-end party productions, and media products. Dadá became a regional celebrity and an example of an entre pren eur from a socioeconomically disadvantaged background who challenged traditional norms and independently moved up the social ladder.

Defying Demographics

Dadá was born in 1961 in Conde, a rural town on the northeastern Brazilian coast 120 miles from Salvador, the capital of the state of Bahia. For a black woman from a rural area, statistical predictions forecasted a future very different from the one she ultimately achieved; her geographic, racial, and gender groups were all significantly disadvantaged or underrepresented in economic and entrepreneurial endeavors. Still, Dadá was able to become a successful businesswoman: In 2010 she was the owner, head chef, and general manager of two restaurants in Salvador—with over twenty employees in each—offering traditional Bahian cuisine in an upscale setting. She was also the producer of yearly carnival events, the director of a catering service, the co-author of a successful cookbook, and the star of a DVD film about her life.

Although Brazil was not as poor as some of its South American neighbors, with an average yearly income of just under US$10,000, the country was polarized and significant gaps existed between the rich south (where the capital of São Paulo was) and other regions. The northeast was the country’s poorest region, consistently scoring lowest on various social and economic indicators. It also had the highest concentration of blacks: Bahia, at 16 percent, and Salvador, at 29 percent, for the highest state and metropolitan concentrations, respectively.¹ Thus, the state was one of Brazil’s most polarized: The differences between the black and white populations were starkest and most severe across a range of fields: education, employment, earnings, and business ownership.

While Brazil’s illiteracy rate in 2007 stood at 7 percent (14 million of Brazil’s 190 million people), it was 14 percent among blacks nationally and 23 percent in Bahia—more than three times the national rate.² The average length of education across the nation was 8.1 years for whites and 6.3 years for blacks; but in the northeast the median length for blacks was only 5.6 years.³ Nationally, black employees earned just over half the median hourly wage of white employees; but in Bahia they earned just over a third of the national average for whites: BRL8.0 versus BRL4.5 versus BRL3.7 (US$4.50, US$2.50, and US$2.00, respectively).⁴ Unemployment was three times higher among blacks, who were three times more likely to be among the bottom 10 percent of earners.⁵ Finally, social mobility— as measured by intergenerational improvements in education and employment trends—was rare. Illiterate parents were six times more likely to have illiterate children and four times more likely to have children who would be unemployed once they reached working age.⁶ Correlations also existed between parents’ years of education, professions, and levels of earnings (benchmarked against the period’s minimum wage) and those of children. Black Brazilians—who were consistently at the bottom of all of the above indicators—thus had much less of a chance to break away from the patterns of their families.

Women, too, faced significant impediments in business. Their unemployment rate was higher than that of men; in Salvador in January 2010, the difference was 15 percent and 9 percent, respectively.⁷ Even when employed, women typically earned less than their male counterparts. As of 2000, when the national legislated minimum salary was BRL151 (US$85), Bahian women earned a median of BRL150, compared to nearly twice that amount for men.⁸ This was due to differences in occupations: Women were more likely to work in services and without official employment status, while men had more roles in commerce, civil services, and construction—which were all more lucrative.⁹

The poverty cycle was perpetuated by familiar trends: Women were twenty times more likely to be single parents and heads of households.¹⁰ The poorer women were, the more children they had—a fact often related to the gap between urban and rural populations, where large families were the norm.¹¹ For many women in these situations, escaping the familial burdens in order to increase their earnings was impossible.

In the managerial and entrepreneurial dimensions, women were also significantly under-represented. In 2005 only 36 percent of Brazilian entrepreneurs heading their own businesses were female,¹² and those enterprises were usually smaller and had been started for the purpose of survival— rather than opportunity, growth, and expansion. Entrepreneurship was generally reserved for those who had prior experience as managers in the private sector, as public officials, or as independent freelancers in a related field: 75 percent of all entrepreneurs in 2005 reported one of these as their prior occupation.¹³ Women, however, were much less likely to pursue any of these activities. In Bahia, women held less than a third of managerial positions in companies.¹⁴ Public offices were generally reserved for men; and independent businesspeople (who made up 19 percent of the work force in Salvador¹⁵) were predominantly male (with the exception of women providing services, such as domestic workers).¹⁶ When women did start businesses, they reported the reason as survival rather than opportunity more frequently than men (60 percent for women compared to 40 percent for men).¹⁷ Credit and assistance resources to obtain investment capital were scarce, and starting—let alone growing—a business was extremely difficult for Brazilian women.

Entrepreneurship and the Restaurant Industry

Despite these formidable challenges, and against all odds, Dadá opened her first commercial restaurant in the early 1990s. Although she expanded on the concept and eventually developed additional products, the restaurant industry—particularly the Salvador and Bahian markets—remained her primary focus throughout.

In Bahia, restaurants and hospitality (excluding hotels and tourism) comprised a nearly BRL2 billion market as of 2007.¹⁸ These businesses, which numbered over 10,000, employed around 70,000 people across the entire state.¹⁹ Beyond the scope of the specific industry, the overall entrepreneurial environment in Brazil was also difficult. The cost of starting a new business in 2008, as a percentage of average income, was around 10 percent (compared to just 1 percent in the United States) and required a minimum of eighteen procedures (compared to six).²⁰ Micro and small-sized enterprises—categorized, respectively, as businesses with up to nine employees and BRL244,000 in revenue (US$135,000), and 10–40 employees and up to BRL1.2 million in revenue (US$670,000)—had particularly high mortality rates: Between 7 percent and 19 percent of them closed each year; the younger the business, the less the likelihood of survival.²¹ Although low entry barriers made it relatively easier to penetrate the services industry (to which restaurants and hospitality belonged) compared to the industrial sector—as there was no need for machinery or very large equipment—surviving in the competitive environment was challenging. Still, Dadá managed not only to survive that environment and defy the statistics, but also to surpass all expectations and achieve success on a scale rarely attained by people from her background.

Early Influences

To understand Dadá’s success, “one needs to understand [my] early life,” she said. “It is a fundamental part of who I am today, and that’s why I focus on it during interviews. Life as a child was not easy, and taught me about how to be tough in life—and in business.” Dadá was the older of two siblings and grew up with her brother Renato and mother Julia. Her father left when the children were babies, and the traditional community in their small town—who knew every last detail of the affair—made life as a single, black woman incredibly hard for Julia.

From a very young age, Dadá would accompany her mother to work. “Washing pots and pans while Julia was in the field was my first task,” Dadá said, “and the one that introduced me to a new world that was previously foreign: a world of flavors and seasoning rising out of the dishes in front of me.” The rich Bahian cuisine, which combines European, African, and Native American influences, charmed her immediately. It was occupational love at first sight. Her lack of inhibition and timidity allowed Dadá to approach her mother’s employers and ask if she could help the cooks in the kitchen. Gradually, after observing and learning her surroundings, she began preparing food on her own; and it was not long before her inherent knack for preparing unique combinations and extravagant dishes was discovered. At age 10, she prepared her first real meal: a dinner for fifteen guests at the home of a local judge in Conde. As Dadá recalled, “Dinner was an instant success, and I realized then that cooking is what I want to do.”

When Dadá was 13, Julia received an employment offer in Alagoinhas, a nearby small city, to be a full-time domestic worker. But the employers would not accept Julia with two children of her own. Renato, who was only 5 at the time, was permitted to come; but Dadá, the family decided, would not be. When it became evident that the only other alternative was to put Dadá in an orphanage, Julia decided it was time to send her away. They received word of a position for her as a baba, or au pair, in Salvador, a role typically reserved for young girls from the interior. Dadá went to live with a rich family in the big city to take care of their two young children.

Dadá’s new employers provided her with board and paid her BRL130 ($US73), less than the minimum salary at the time. That was more money than she could hope to make anywhere else, and she was thrilled to be able to buy simple things and clothes for the first time ever. While tending to the babies, Dadá spent as much time as possible in the kitchen, assisting the cooks. That was how her new patrons learned of her nascent skills: her dishes were spectacular and became renowned among the couple’s circle of family and friends.

The Business Building Blocks

Several years went by, and the family’s babies were now old enough to no longer require a full-time caregiver. The couple worked primarily in real estate and, when they had an opening at a commercial beach-front location, they offered Dadá the opportunity to open a lanchonete, a small cafe, where she could cook and sell food to tourists. Dadá was thrilled and set up shop in the port of Barra, Salvador’s main tourist area and the city’s central carnival icon. She dressed in the customary Bahian outfit for black women and sold traditional delicacies—but with a twist. While many women were vending similar products in the area, Dadá altered the recipes to create new combinations. Her cooking gained an exceptional reputation and, together with her hospitable and entertaining personality, drew attention and business to her lanchonete. “I became known in the neighborhood, and everyone kept telling me to open a restaurant—to use the skill I had been given,” Dadá said. However, “Just as I was gaining confidence and really contemplating the idea, a personal challenge arose.”

Renato, Dadá’s younger brother and only sibling, was killed in a car accident. And shortly thereafter her mother Julia was diagnosed with cancer. Dadá abandoned the cafe and life in Salvador to care for her, but Julia passed away 3 months after Renato. After she had lost all of her immediate family, Dadá decided she wanted one of her own. “I felt alone in the world, and, although I wanted nothing more than to have my own business, I also had to sacrifice if I wanted a family,” she recounted.

Dadá reached out to an old boyfriend—one she knew from her years growing up in and visiting Conde. Several months later, the two were married; and daughter Rafaela was born in 1985, followed by Daniella in 1992. But life back in Conde was frustrating for Dadá. It held none of the growth potential that Salvador did.

Her husband was not fully convinced, but Dadá managed to talk him into moving back to Salvador, promising that the area would hold more opportunities for them. She contacted an old friend and asked to rent a room in the favela (shanty town) of Alto das Pombas. Her old employers, who were still fond of her, agreed to let her return to run the lanchonete. Her husband found employment in construction and, while he was at work, Dadá took Rafaela with her to the cafe. She kept her, quite literally, under the table and nursed her in between dealing with clients and cooking.

“Life wasn’t unbearable; we managed to keep afloat. But that wasn’t my goal in returning to Salvador,” Dadá explained about that period. The cafe, by virtue of its location and purpose, was limited to specific dishes, and she did not have a free hand in making creative new dishes. Moreover, she had to pay remittances to her old employers—approximately 40 percent of the revenue—which significantly affected her profit. “The desire to do something more, something bigger, simmered in me.”

The First Restaurant

After another year in the Barra area, Dadá was already a neighborhood celebrity, known for her effervescent personality and tasty food. Living in an extremely limited space allowed the family to save some money, and they were finally able to move into a larger home in a better part of the same Alto das Pombas neighborhood. That was when Dadá’s entrepreneurial spirit truly emerged. The house had a big backyard that was largely unused. In the year-round warm Bahian weather, it would make a perfect restaurant space. “It would also allow [me] to save additional rental costs and stay at home with the girls as they grew older,” Dadá said. Everyone around her, however, was skeptical.

Dadá began strolling through bookstores on her way to Barra and browsing through cookbooks on international cuisine. She used all of the family’s disposable income to purchase spices and expensive ingredients at the market, and experimented with different dishes at home as she developed her soon-to-be menu. In 1987, she opened O Cheiro da Dadá: Comida Baina e Francesa (“The Smells of Dadá: Bahian and French Food”).

Dadá bought four tables, plates and silverware for ten, twelve additional plates, and opened her restaurant for business. But she did not remain idle and waiting; she publicized her restaurant. She also approached her old employers and asked them to recommend her to their friends, all of whom were among the local social elite. She marketed her restaurant to an upscale clientele as a chic, bohemian place to visit in the middle of the favela. Salvador was an important center for artists, musicians, and authors from all over Brazil—and attracting the artistic community, she knew, would prove integral to her success.

The charm was in the place’s simplicity, as laundry ropes hung above dining tables, combined with a sophisticated menu that Dadá kept improving by reading and accumulating more knowledge. In addition to being a restaurant, O Cheiro da Dadá was an entertainment and cultural experience. And it soon gained fame and recognition as such. Local news teams and reporters would frequent Dadá’s house, and she became the model of a successful black woman entrepreneur who had risen from poverty independently against all the odds.

Horizontal Growth: Increasing Volume

Two years went by and, while the four tables had increased to six and the business was thriving, Dadá wanted to expand its dimensions beyond the backyard and open a restaurant in a commercial space. Her next big move was an ambitious one. Antonio Carlos Magalhães, the long-time governor of the state of Bahia and a highly influential public figure (often dubbed “The King” among Bahians), announced that he was renovating Pelorinho, Salvador’s historic colonial downtown neighborhood. The plan was an attempt to modernize the neglected area and attract tourism, and many businesses vied to be part of this potentially lucrative project.

Dadá asked to see Magalhães, who had already heard of her through acquaintances and colleagues in the state government. Dadá met with him and showcased the business potential of an authentic Bahian restaurant in the heart of the new tourist center. Her appeal was both well substantiated and well presented. Magalhães was not only convinced, he was won over. He issued a grant from the state agency for small businesses for US$20,000. Dadá borrowed an additional $50,000—with the same agency acting as a guarantor—and, in 1993, opened Temperos da Dadá (“Dadá’s Flavors”), her first commercial restaurant.

Temperos da Dadá was no longer a small-scale operation. Its twenty tables could accommodate up to 100 people. Now Dadá needed help in the kitchen and, naturally, a full front-of-house staff. She hired people whom she knew and trusted, including skilled servers who could represent the establishment professionally to tourists and upscale patrons. The restaurant was a huge success and drew a diverse but consistent crowd. Dadá became a public figure; newspapers wrote about her restaurant, providing publicity and free advertising. She continued to develop her key differentiator—cuisine that was Bahian in nature but infused with international influences. She entertained different themes, including French, Italian, and African, among others. With cultural icons such as author Jorge Amado and musicians Gal Costa and Caetano Veloso all frequenting the restaurant, Temperos da Dadá became a symbol of downtown Salvador and was operating at full capacity— hosting around 300 patrons daily, nearly year round.

As Temperos da Dadá gained momentum, Dadá received word of another wonderful opportunity: to open a restaurant in São Paulo, Brazil’s capital. A close acquaintance alerted her to a vacant spot with the necessary infrastructure in a good location and a team of individuals with whom she could work. Despite the anticipated logistical difficulties, the potential was irresistible. São Paulo is Brazil’s largest and wealthiest city. Making it there could mean national (and international) fame. Dadá applied for a loan and decided to pursue this new venture. She opened the second Temperos da Dadá in 1996 with a local partner.

Meanwhile, back in Salvador, demand was exceeding supply and Dadá began considering opening another local restaurant. After a careful analysis of the city, she chose Orla, Salvador’s beachfront, as the next location. She again networked with Magalhães to assist with her liquidity limitations and borrowed money to fund the initial investment. The Orla branch, which opened in 1998, was smaller but still popular.

Differentiation

Dadá divided her time between the two cities, traveling frequently and spending long periods in São Paulo. Her restaurants succeeded because, despite offering a traditional Bahian menu, they created a completely innovative experience: the food was authentic but upscale.

Dadá’s differentiating factor was the ability to upgrade what people thought of as everyday food into an exquisite experience—and charge prices similar to (or even higher than) many foreign cuisine competitors.

Vertical Growth: Building a Brand

While focusing on the main line of business—her restaurants—Dadá began pursuing other revenue streams. She developed new products within the food industry, but also branched out into services that combined entertainment components with the culinary experience:

• Dadá started and developed a yearly feijoada event. Literally, feijoada in Portuguese is a dish of meat and beans; it also refers to the tradition in which extended families get together on a weekend day to eat the dish. Dadá’s concept was initially a modest gathering at the first restaurant in Alto das Pombas. Gradually she built it into a popular annual summertime event, first at the Pelorinho restaurant and, over time, at ever-larger venues. A flavorful feast followed by an extravagant party, O Feijoada da Dadá took place during carnival season. It started in 1993 and celebrated its 15th year in 2008. With an average of more than 5,000 attendees, each paying over US$200 for the all-inclusive entrance ticket, the event was one of Dadá’s most lucrative activities. Each year she employed around 2,000 people to organize, prepare for, and serve at the event. Volume at these events was substantial: in 2008, guests consumed 2 tons of meat, 1 ton of beans, 20,000 tamales, 15,000 skewers, 18,000 liters of beer, 1,200 liters of whiskey, and 600 liters of vodka.²² The event became an integral part of Salvador’s carnival celebration and received media coverage that constantly increased its popularity.
• Dadá approached her friend Paloma Amado, the daughter of Brazil’s renowned author Jorge Amado, and asked her to collaborate on a cookbook. The result was Tempero da Dadá (Dadá’s Flavor), featuring Dadá’s most popular dishes with Paloma’s commentary. The book was published in 1998 and was later translated into English.
• In collaboration with the State Ministry for Social Affairs, Dadá created a DVD about her life, entitled E aí Negona? (So What Now, Woman?).²³ Part documentary and part plot-based, the DVD featured illustrations of Dadá’s life as a child as well as scenes from her adulthood. The directors interviewed Dadá’s clients, employers, and acquaintances—all of whom provided insights into her unique life, talent, and personality.
• Dadá developed an additional business unit that offered large-volume catering services. She targeted mainly upscale clientele—the same political community and artistic crowd who had frequented her restaurants initially. Although she had established this line of business separately from her restaurants, she still used the connection between the two to her advantage: she exploited the restaurants’ popularity in marketing the catering service, and the economies of scale concept when purchasing supplies and conducting administrative tasks.
• Continuing along the same line of domestic appearances in magazines and on television shows, Dadá contacted a public relations firm and pursued international opportunities. She became a well-known figure in the culinary world, traveling to France, England, Italy, Spain, and New York, among other places, to take part in cooking shows, forums, lectures, or conventions.

The Lessons of Over-expansion

Dadá’s management style was more than hands-on; it was all-inclusive. In the beginning, with only the Pelorinho restaurant to tend to, Dadá was always on site, making all the decisions herself. In addition to designing the menu and cooking, she also took care of supplies, managed most of the staff, and decorated the restaurant. (As an homage to her beginnings in Alto das Pombas, she kept the original decor that became her trademark—laundry ropes with clothes hung above tables—at all of her locations.

Problems arose when her business grew but the organizational structure remained simple and limited. Dadá’s lack of business education eventually caught up with her. The additional restaurants, in Orla Salvador and São Paulo, functioned poorly without Dadá’s constant presence. Volume decreased and did not live up to expectations at either branch. Revenue declined and her profit, determined largely by fixed costs that remained high despite the shortage of clients, fell significantly. Dadá was not well versed in the process of hiring and training managers to do work similar to hers. Rather, she was accustomed to doing it all by herself. As additional ventures—the catering line, productions, appearances, and trips abroad— consumed even more of her time, it was evident that Dadá could not continue traveling to São Paulo or dividing her time between the two Salvador locations. In addition, she was going through a divorce after a long period of faltering relations with the father of her daughters. With the Pelorinho restaurant still her primary source of revenue, focusing on it was the best strategy. In 2000 she both finalized her divorce and closed the two other locations.

Dadá realized that things were less under her control than she had thought. She decided to hire a personal manager, and the ideal candidate was not far away. No one was more qualified than her daughter Rafaela, who had studied business at Salvador’s national university and abroad in Texas, was closely acquainted with her mother’s established operational methods, and knew the priorities that required immediate attention within each business line. Rafaela was eager to apply what she had learned in a practical setting, and quit her office job to come work with her mother.

Developing a Management Style

Rafaela was able to bring structure and organization to the Dadá brand name. She set up operational procedures for hiring qualified managers, outsourced certain activities (such as the preparation of catering orders), and managed Dadá’s time so that it reflected the most important tasks that she had to do herself—interviews, speeches, and TV appearances. Dadá still spent time at the restaurant and never abandoned the kitchen; but she now had more time to balance the various demands of the different business units.

After several years of Rafaela’s stabilization efforts, Dadá was once again ready to open another branch; and she picked Pituba, a thriving middleclass neighborhood. In 2009, Sabor da Dadá (The Tastes of Dadá) opened for business with the same concept, decor, and menu as the other restaurants. Rafaela developed an operational scheme whereby Dadá’s schedule was divided regularly between the various ventures and still left enough free time to accommodate special demands.

Dadá was the general manager and head chef of both restaurants. In the mornings, she alternated between the two, usually for 6 days of the week (Monday was her free day, as weekends were particularly busy and required her supervision). In her absence, each restaurant had a head sous-chef as well as a floor manager to handle back-of-house and front-of-house issues, respectively. Rather than training managers, Dadá hired experienced people and immersed them in the particularities of her business. Either she or the managers trained the general staff. Dadá herself purchased supplies for both locations (as well as the catering business unit) on a weekly basis.

During the afternoons Dadá either gave interviews, conducted meetings with potential catering clients, or communicated from her home-office with various partners and vendors. Rafaela accompanied her mother to business meetings and screened all calls on her mother’s agenda. All accounting and financial functions were outsourced to a firm that also handled Dadá’s rental and leasing arrangements for the restaurant properties.

With these new standards in place, profit margins improved and Dadá’s overall income increased. The Pelorinho location grossed BRL400,000 (US$225,000), of which BRL200,000 (US$110,000) was net income; and the Pituba restaurant, still in its infancy, grossed BRL100,000 and netted BRL50,000 (US$56,000 and US$28,000, respectively). Revenue from all other products diminished somewhat and stood at BRL20,000 (US$11,000) at the beginning of 2010.

Growth Aspirations

Some additional expansion ideas were in the pipeline: Dadá was again collaborating with Paloma Amado, planning O Dia Dia da Dadá (Dadá’s Everyday), a book that would include more recipes but also provide a glimpse into Dadá’s early life and personal development—based on the success of the DVD that told the same story.

Dadá was also planning to get into the entertainment industry more seriously. Already a recognizable TV personality, she was procuring channels and production companies to start her own cooking show, to supplant her frequent guest appearances elsewhere. In addition, she was thinking internationally, looking into the possibility of opening a restaurant in New York, where demand for international cuisine was strong and where she had good connections to get her foot in the door, having learned the appropriate lessons from São Paulo.

Dadá’s final business aspiration was one intertwined with a personal desire: since her adolescence, she had wanted to start an NGO to house and educate poor children from her native Sitio do Conde. Her roots always influenced her hiring decisions, as she paid particular attention to her employees’ personal and family circumstances and “was particularly sympathetic to women.” Having an impact on the same community from which she came was a life-long dream that Dadá was striving to achieve.

Self-fulfillment

Dadá loved her occupation. “Cooking was my first love, and remained the most important one throughout my entire life,” she said. “My clients are like a husband; getting compliments from them is more satisfying than anything.”

Although she divorced her husband, Dadá remained in contact with him for her daughters’ sake. Family, in general, remained the most central, most important, and most significant aspect of her life. Even years after her mother passed away, Dadá still spoke of Julia as the most influential figure in her everyday life.

Business Challenges: Innovation

Volume at Dadá’s restaurants decreased because of the financial crisis of 2007–2009, which had an impact on many of her patrons as well as on domestic and international tourism to Salvador. The Pelorinho volume fell by around 40 percent, and the catering business was particularly hard-hit. Although Dadá was able to restore the restaurant’s performance, a more fundamental problem was undermining the situation.

As time passed, Dadá’s fame among Bahians created certain business conflicts. The food industry was a fast-paced, constantly changing environment. Innovation was necessary in order to stay afloat and not become outdated. Coming up with these fresh ideas proved to be a real challenge.

Dadá and Rafaela were thinking of campaigns and methods to get things back on track and to keep coming up with new Dadá products to keep the public interested in her market presence. In addition to typical food industry strategies (e.g., weekly buffet dinners and periodic promotions), Rafaela worked on obtaining sponsorships and inviting celebrities to the yearly feijoada, pre-marketing the upcoming potential TV show, and alerting the media to Dadá’s various activities. Although it was a hard task, Dadá remained confident that “what [I have] learned throughout my lifetime will allow [me] to think up new ideas and not only survive, but excel, in business.”