15 Alicia Escobosa’s Catering

Sustaining a Business

Roberto Tolosa¹

Figure 15.1 Alicia Escobosa Logo

At the beginning of the 1980s, in Culiacán, Mexico, Alicia Escobosa managed her household and took care of her children while her husband was away for work. Whenever she found spare time, she would prepare some dishes for acquaintances and casual customers as a hobby and, occasionally, as an extra source of income. “Cooking had never been my strongest skill, and as a newlywed I often wondered whether I would even have enough time to cook for the family,” Alicia commented. “But as time went on, I realized that I had good taste and cooking skills.” The daughter of a locally renowned author of a cookbook, Alicia became known for her exquisite taste and delicious courses.

In the summer of 1992, a tragic accident led to the death of Alicia’s husband. Suddenly, she was left with five young children to raise and support. “I was faced with one of the greatest challenges in my life. We had invested most of our life savings in a new house, and all the children were in private schools.” In addition to helping her husband manage his business, Alicia had held a few teaching jobs. When she got married and moved to another city, she was less than a year short of earning her bachelor’s degree. “I had no choice but to work hard to give them the best I could provide.” After assessing her options, Alicia realized that she would have to commit fully to the food service business to raise enough money for her children. Her kitchen at home was a standard residential kitchen; but it was all she had, and it would have to do.

The Beginnings

Alicia started out by simply receiving small orders for family gatherings and small events, working on her own and occasionally hiring part-time workers. The plates were basically fixed and delivered, and customers served the meals themselves. “Initially, I felt uneasy charging people for the dishes, as my customers were mostly relatives and good friends,” Alicia recalls. During the first years, she used small family-owned cars to transport the food and equipment.

Even though the small business relied on word of mouth to attract new clients, it became well known for its superior food quality and genuinely caring service. Soon Alicia started getting calls for larger weddings, conventions, and conferences; and she saw the need to expand, first by hiring full-time staff. As she recalled, “in my first years, most of the changes made to my business were small but constant, as I adjusted the business to the growing demand and the general environment.” Some of her clients were also not skilled enough to serve the prepared food at their events or would make mistakes and spoil the food. At this point, Alicia noticed the great potential in her blossoming business and set out to become the premier food caterer in the region.

The first thing Alicia realized was that clients were eager to receive a full catering service instead of simple food delivery, and that they would be willing to pay a premium for it. In addition, they often wanted the event preparation to be as streamlined as possible. If the food arrived in poor shape because a waiter mishandled it, the caterer would be blamed, not the waiter. (Contrary to industry standards, caterers in Culiacán did not come with a team of waiters, but rather hired third parties.) As Alicia noted, “the quality of our service is just as important as the quality of our food.” This meant that, even though it was outside the scope of her business, Alicia would have to meet with decorators, waiter captains, sound technicians, and even security guards to anticipate any contingencies and to coordinate the course of each event. “Recently, I have even been hired for a number of weddings as both an event planner and caterer, even though planning events is not necessarily my core focus.”

Supplies are key to any business, especially one focused on food preparation. Fortunately, Alicia’s business was located in one of Mexico’s agricultural centers. With warm, sunny weather year-round, the city of Culiacán proved to be a very fertile ground for various crops and forms of livestock, giving Alicia’s catering service cheap and ample access to high-grade, export-quality produce. Over the years, Alicia fostered a strong business relationship with a number of suppliers who specialized in areas such as vegetables, seafood, or meat and poultry.

Alicia also frequented large stores, such as Sam’s Club, to purchase ingredients not easily found elsewhere.

Toward the end of the 1990s, after some years of proving to the market that her catering business had superior quality, taste, and hygiene, Alicia’s company was successfully established as the top choice for premier events in the area.

Another important acquisition came in 1999, when Alicia took the savings she had accumulated for expenses larger than simple kitchen equipment and bought an SUV to transport food, equipment, and staff to the events. Before that, the only cars the catering team owned and used were smaller sedans. Not only did this allow for less frequent and thus faster trips between the business premises and client locations but, more importantly, the SUV allowed Alicia to travel to Arizona and California to access more food and equipment options.

Previously Alicia had been unwilling to make trips to the U.S. without giving her children the same chance. With enough seats for her children to go on vacation and sufficient cargo space to bring back new equipment, she traveled more frequently, she established key contacts, and her business began to see a constant influx of the latest catering equipment and high-quality durable ingredients, like spices or sun-dried fruits that could be stored, further setting Alicia’s catering apart from that of her competitors.

In order to stay on top, Alicia decided to renovate all of her equipment, replacing her standard equipment with professional- and industrial-grade gear. Although she had considered eventually relocating the business outside her family’s house, it was much easier to improve her current plant rather than undergo a more aggressive investment. At this point, only the portable equipment was the latest models, and the business plant still used some consumer-grade stoves and appliances.

Growing the Business

Despite her success, Alicia knew there was still room for improvement. Many aspects of her business operations had never changed and the workplace needed to be professionalized. She looked everywhere for opportunities to develop new ideas or improve the business.

In January 2005, Alicia attended Catersource, a professional catering conference in Las Vegas, Nevada, to learn the latest organizational and logistical designs. As with any other company in the catering business, Alicia and her employees had to work long hours for prolonged periods of time, especially when there were four events to be served in three different cities on the same day. Any logistical advances that Alicia learned or devised were instrumental in increasing the scale of her business.

“At the catering conference, I had the chance to compare every part of my business to other professional catering businesses around the world, and to see where I could improve the model,” she recalls.

In April of that year “Alicia Escobosa Banquetes” catered for one of the larger weddings in town. Alicia coordinated the preparation and serving of a four-course dinner for 900 people, featuring Chinese and Thai fusion food to represent the bride’s heritage. Later, at three in the morning, late-night snacks were served to 600 guests, and a post-wedding reception was held the next day for an additional 300 guests. “It was a very beautiful wedding, and people loved the food we served,” Alicia remembered.

Later, the results came, and the source of the bacteria was identified as a batch of blue cheese shipped from Finland.

With the business back on track and following through with her initial plans for the summer of 2005, Alicia expanded the business fleet with two pick-up trucks and planned for the most ambitious expansion to date.

With this in mind, Alicia began the expansion, revamping the office and storage space and scrapping the whole kitchen to replace it with top-of-the-line equipment and a professional design that would optimize worker productivity and ensure the best food quality.

The house, with a floor area of close to 5,400 ft², underwent major changes and was divided into a house and a workplace. Approximately 3,200 ft² was designated for the business, two thirds of which was dedicated to food production. “By the end of the renovation, I had 8 industrial cooking ranges, a gas deck oven for up to 24 pans, separate cold and warm food kitchens, and a walk-in cooler.”

Before the renovation, all the business growth had been financed through business earnings. As Alicia put it, “the business had always provided enough return to be able to expand with its own profits, but suddenly I was over $100,000 dollars short. I decided to take on a loan and set my business new challenges.” The renovation ended up costing US$120,000 for new equipment and remodeling, US$60,000 of which was taken as a loan, leveraging the business substantially for the first time. All the profits were always reinvested, making Alicia’s company a healthy business.

After a rocky and eventful year, the catering business was back much stronger than before. At the time of this expansion, Alicia usually employed from forty to fifty employees to prepare the food, although the number would rise when catering larger events. (Waiters, who were hired from different places, were not included in this tally.) Two years later, in 2007, another vehicle was purchased—a van for personnel transportation— for a total of one SUV, one van, and two pick-up trucks. Occasionally, cars or pick-up trucks were rented for specific events, including passenger buses for fifty people and refrigerated trucks for out-of-city catering.

Continued Professionalization

Growing from a small endeavor, the business began with no money to spare for what would have been considered secondary tasks at the time, such as advertising. Alicia’s catering always relied on word of mouth as the most effective advertising medium for her business, with virtually no paid advertising. She always said that “our best publicity is our own satisfied customers.” And her healthy relationships with her clients paid off in many ways. On some occasions, clients flew Alicia to certain restaurants in the United States, just to let her see and taste the specific entrées the clients wanted for their special occasions. Often, Alicia was allowed into the restaurant kitchens and received detailed explanations on how to prepare the dishes, along with a few helpful tips, all adding to Alicia’s cumulative knowledge. Other times, chefs from Mexico City’s most prestigious restaurants were flown to Culiacán to work with Alicia’s team for specific clients. During these visits, Alicia had the opportunity to benchmark her business against external players. “Alicia Escobosa Banquetes” continued to utilize no advertising but relied instead on its well-established reputation and public exposure, which always enabled the company to excel. With the local media praising Alicia’s company as the top catering choice for any event, her main advertising tools were food quality and customer satisfaction, which Alicia viewed as essential catalysts for effective word-of-mouth promotion.

The company’s equipment ranged from stainless steel utensils to insulated food transporters, vacuum packagers, and food shredders. There was a refrigerated room, where all the food was stored, and a number of freezers, used mainly for seafood and desserts, among other items. Industrial-grade cooking ranges would together handle up to twenty different preparations at once, and there were enough ovens to cook up to twenty turkeys at the same time. Portable kitchens and other equipment owned by the company allowed for a catering capacity of over 1,500 people.

Kitchens were often set up at event sites under marquees ranging from 775 to 3,500 ft². Under Alicia’s coordination, up to 1,500 people were served in less than 40 minutes, with 90 percent being served in the first 20 minutes. In Culiacán, other caterers typically served to only 500–750 people in the same time frame. Alicia always based her success on her employees, and they received pay notably higher than the prevailing industry wage. Ninety percent of the company’s employees were female, with men hired mainly for carrying and transporting equipment. In addition, 70 percent of these female employees were single mothers or had families to support by themselves. While most worked in household services before joining the company, some had prior cooking experience and a few had university degrees. Of the business’ employees, Alicia recalled that

Figure 15.2 Alicia’s Team at a Mobile Kitchen Set Up at a Catered Event

Source: Roberto Tolosa, September 2009.

Standard wages ranged from 35 to 70 Mexican pesos per hour (about US$2.80–5.40), depending on factors such as production stage and time of day, compared with the regional minimum wage of US$4.15 per day.

Years of a healthy relationship with her employees led to a low turnover rate and a high rate of satisfaction for Alicia’s company. In general, a caterer’s work schedule is unstable and can include some periods of very intense and hard work. Thus, it may not fit all personalities. But those employees who liked it stayed for years, adding to the company’s human capital. As a result, Alicia’s employees were able to take complete charge of some smaller events from production to delivery and serving without Alicia’s assistance, as long as she mapped out the guidelines beforehand. This allowed her to leave the city for important business activities without disrupting the day-to-day operations, giving her the opportunity to travel to the U.S. to acquire special ingredients for an important event, meet with clients at their favorite restaurants to sample the courses they wanted her to produce on a mass scale, and also take courses and attend conferences while still keeping the business running.

Historically, few competitors, if any, operated in the same upper-level market or in the same quality and price range as Alicia. Most caterers offered lower priced and less elaborate banquets, practically serving different markets. In 2006, a gourmet restaurant opened and began offering a professional catering service, effectively posing the first same-level competition Alicia had seen in two decades. In late 2008, another local caterer was reported to have started offering similar menus.

Increased competition also prompted Alicia’s team to focus more on differentiating her business from others. This effort translated into more menu choices and increased quality of service.

Moreover, Alicia was careful not to repeat the same course arrangement twice, always changing and switching menus and recipes to keep the dishes new and fresh. Weddings, the company’s main focus, were planned as far as a year in advance, so that couples and families would receive all the attention and preparation necessary. Over the course of the months leading up to the wedding, couples enjoyed complimentary tastings to discover their options and fine-tune their preferences.

Before Alicia’s expansion, her customer base largely comprised her relatives and close friends, but as word spread more people approached her. Companies and the state govern ment began to hire “Alicia Escobosa Banquetes” for their important events and conferences. “I now have informal agreements with a number of companies, to whom I cater for their annual meetings and largest events year after year,” she says. While all the events catered were in the same state, some customers were people or companies from out of state visiting Culiacán for a specific function. As Alicia specialized in high-quality service with a high mark-up and targeted high-end customers, payment rates remained high every year, with a collection rate typically over 98 percent of earned revenues.

Over the years, Alicia managed to turn a spare-time hobby into a professional catering business considered to be tops in the region. Along the way, she always found moral and economic support from her close relatives. “When my husband passed away,” she said,

Looking back at how it all started, it is evident that Alicia’s business had a deep impact on the catering industry. When she was getting started, the entire industry seemed also to be in its nascent stage, with very few large conferences, weddings, or events being catered with full, multiple-course meals. Events larger than 500 guests were rare in the 1990s, and most of those were fairs, conventions, and other types of event that either had multiple vendors or offered a selection of hors d’oeuvres at most. Alicia’s team usually catered multiple events week after week, many of which boasted over 1,000 guests. As competitors joined in, customer choice greatly expanded, with a full range of caterers offering options spanning from low-budget food preparation to gourmet offerings like Alicia’s. Throughout the journey, Alicia’s leadership also helped shape specific aspects of the business, such as constantly renovating the necessary equipment with higher-grade, more functional, or more aesthetic components, or maintaining an ever-expanding array of menu choices, extending over multiple world cuisines, to create the ideal blend for each customer.

Alicia took a unique path but always relied on examples along the way. As she saw it, the company’s success was possible because, “in every event, I strive to give my best and exceed the customer’s expectations, and I don’t mind sacrificing profits to ensure the best quality possible.” Alicia regarded the practices of a local businessman who had founded and grown a retail company to over 600 stores around Mexico, and those of a late uncle, who was a generous banker and businessman with a great social impact, as models to follow. Like her, these people always cared about their employees and looked for ways to improve the quality of their lives, providing them with high wages and education for their children. Looking back, Alicia said that “over time, I started realizing the great potential this catering business had, but I never really imagined just how much it did.” She expanded to deliver for top companies, the media industry and national celebrities, renowned speakers and special conferences, distinguished weddings, and high-ranking politicians, including each president of Mexico to visit Culiacán since 1982. During the high season, the company usually catered for 6–8 events in a single weekend, serving over 4,000 people, with a unique menu for each event. Always aware of her com petition, Alicia never stopped innovating and searching for new recipes, seeking great taste and radiant aesthetics, to deliver the finest gourmet food. The company’s equipment was constantly updated, meeting the highest quality and hygiene standards. All the staff had to uphold the most rigorous health and safety standards to ensure that the food was free of harmful agents. When referring to Alicia’s catering, people commonly said that “Alicia’s is a guarantee.”

Despite these achievements, the company still had room to grow and improve. Alicia’s greatest challenge was securing a ballroom where the company would cater exclusively. A number of existing event centers would only use their own caterers, and Alicia would gain a much greater share with her own location. The size of the investment necessary to build a new event center kept Alicia from starting her own ballroom. Although demand for her services outside the state of Sinaloa was strong, high logistical costs and the fact that not enough employees could leave their families for extended periods of time limited the company’s ability to cater in areas outside the base city, with a range of a little over 130 miles to nearby Mazatlán, about the same as a Philadelphia caterer serving in Washington, D.C. The cooks and staff could also further improve their skills, as some had not completed higher education. And while the staff had some degree of independence, being able to carry out small events on planned occasions, tasks such as handling the payroll, keeping records, and other management- and accounting-related activities still fell heavily to Alicia and a handful of employees, thus creating a heavy burden that reduced the time spent at the core of the business.

Over time, however, Alicia was able to find ways to give her employees more responsibilities. One of the assistant chefs, who was an accountant by profession, also started keeping track of all the invoices and expenses. When Alicia went out of town, this assistant chef was able to take charge of the catering team for ever-larger events, eventually turning into the right hand of the business. Another cook became the purchasing manager, spending most of her time procuring materials and ingredients rather than preparing them. But on this, Alicia noted that, “still, these jobs have been defined rather informally and they still don’t cover enough overhead functions to allow me to spend more time at the kitchen and with the customers.” The marked seasonality of the industry was another challenge that hindered the company’s opportunities, with the summer months seeing as little as one or even no orders in a given week.

Recent Developments

In September 2009 Alicia achieved one of those goals, finally taking two courses at the Culinary Institute, one of which focused solely on catering costs and managerial controls. “More than ever, I now realize the importance of preparation and innovation, and I will surely be taking more courses on catering and the food service business.” Alicia also considered producing popular and easy-to-preserve products, such as dressings or jams, and marketing them nationally or internationally.

More recent events tested Alicia’s hard-earned business in novel ways. The number of orders had comfortably expanded by more than 25 percent on average over 5 years. In the second half of 2008, however, the ongoing financial crisis cut families’ discretionary spending and drove them back home and away from Culiacán, where the events were to be held. Even though the initial months of the year brought customary sales expansions, the business grossed a total of 5.7 million pesos in 2008, (roughly US$500,000 at 2008 rates), 10 percent lower than sales in 2007. For the first half of 2009, sales declined 10 percent when compared to the same period the year before. Alicia, with her business focused on event catering, suffered directly from the sudden decrease in the number of events being hosted in the city and the concurrent decrease in willingness to spend at those events, resulting in a decline in sales for the first time in the history of her business. Thinking of how to weather the current and future economic conditions, Alicia began to assess her options.