EDC Mason Helps Local Business Work through COVID-19 Crisis
Friday, April 09, 2021
As co-owner of a small, family-run business, Mark Velasco has felt the pain of the COVID-19 crisis like thousands of others across the country. But his family’s business, the Jalisco Tortilla Factory of Shelton, Washington has survived a number of tough periods thanks to a committed family and helpful community. And Velasco expects Jalisco’s to survive COVID-19 too.
“We were prepared to do whatever we needed to stay in business, whether it meant leveraging our homes or 401k's,” he said. “You don't run a business for 22 years and let something wipe you out.”
Learn as they go
The Jalisco Tortilla Factory was started in 1997 by Mark’s mother, Maggie Velasco-Lucero, and step-father, Eddie Lucero. They settled in Shelton in 1978, moving from the Los Angeles area after immigrating from Mexico. Missing their native food and culture, they turned to Mason County for assistance in starting a business making fresh tortillas. At the time, Velasco-Lucero’s plan was summarized by her following quote:
“It has always been my dream to open a tortilla factory in Shelton and show members of the community, both Hispanic and non-Hispanic, that the American dream is alive and open to all who are willing to reach for it! With my partner's help, I plan to make Tortilleria Jalisco a thriving contribution to the community of Shelton and to its greatly diversifying population."
With loan assistance from the Mason County Economic Development Council Developmental Loan Fund, she was able to put together enough money to start a small retail store and factory with one old tortilla machine in a building across the street from their current location. But there was not much to the business plan beyond the desire to contribute to the community, said Velasco.
“Since I was a first generation college graduate, she figured I could develop it, but I had a biology degree, so what did I know about business plans?” he said. “But she got the loans because I think everyone was sold on my mother’s reputation for an excellent work ethic.”
Their first year with the little machine making 150-dozen tortillas per hour taught them a dramatic increase in sales was needed to survive. They turned to the wholesale restaurant market, developing tortilla chips and homemade salsas. Over the following years, they purchased a bigger machine that could produce 2,000-dozen tortillas per hour and moved into the larger, current location.
“By 2007, we were expanding into larger retail like local grocery stores, more restaurants and producing private label products for distributors,” said Velasco. “That helped us get through events like the 2007 flooding or 2008 housing crash.”
Chaos of 2020
It turns out the decision to expand retail operations saved them during the COVID-19 crisis. As restaurants were forced to close, customers built over 22 years were lost overnight.
“We anticipated layoffs, but panic-buying at grocery stores increased demand for our retail products,” said Velasco. “Our delivery drivers came back saying the grocery stores needed more product immediately.”
That trend continued for a few months and as restaurants began to open again, Velasco assumed they were in the clear. But he quickly learned small businesses were getting squeezed out of shipping services by large businesses and federal government policies. Triple the normal trucking rates restricted their ability to receive supplies. Velasco said they were saved by a few local companies like Sorenson Transport Company who did not raise their rates.
“They knew those big companies may pay triple now, but would not be there for him in three months, while we would be,” he said. “I hope more people understand this need to support the small business network of vendors supplying restaurants and small grocery stores.”
Velasco is also grateful for the Economic Development Council of Mason. The organization provided a small business grant and helped them apply for a PPP loan.
“That assistance was lifesaving, allowing us to keep all our employees on payroll, doing whatever we could think of to keep them busy and working,” he said.
Although their market is not totally stabilized yet, Velasco believes there is reason for optimism. They have retained many of their restaurants and added more small retailers they picked up when those customers couldn’t get their products from their normal suppliers during the panic buying. Velasco’s sister, Erica Adams, has spearheaded the launch of a redesigned retail store later this year, adding a liquor license. Opportunities exist as distributors look to diversify, such as capitalizing on the demand for organic foods.
“That fits us perfectly, because Mom was making all her products with non-GMO corn and without preservatives since day one,” said Velasco. “We will push forward with more advertising and promotion, because we know customers are demanding local products.”
That push calls back to his mothers dedication to reach for the American Dream. Velasco thinks back to her struggles, coming to America looking for a better life and building the business from scratch. The sacrifice and hard work washes away when he sees the impact on employees and customers.
“I recently stopped by a customer’s taco stand and saw they redid their menu to feature Jalisco tortillas,” he said. “That told me we are surviving, living the American Dream, because even though we may not have started with the perfect business plan, we did have a plan to stick together, work hard and not throw in the towel.”