When searching for the perfect pastry, look no further than East Los Angeles. Along the streets and just about every other corner, one will find a Mexican bakery to select a variety of items from including loaves and cookies for any occasion. To the average person in L.A., the number of bakeries in the area might seem synonymous to a chain of fast food restaurants, however most of these bakeries are privately owned and only have one storefront.
In the world of business one would guess expanding to multiple locations means more success, yet these companies choose to remain small. El Gallo Bakery on Cesar E. Chavez Avenue, like many of these bakeries, often have a large amount of customers who have been patrons to their business as well as new customers. With this amount of success with the neighborhood and surrounding areas, one would expect that the first option for El Gallo Bakery would be to open a second location to broaden its name and company.
According to Jesus Huerta, owner and president of El Gallo Bakery, the price of expanding outweighs the benefits. “It’s a very competitive business right now, it’s hard to survive,” Huerta said. “Mexican bread is under priced, so the profit and the product is very slim, so it’s hard to survive opening other businesses if you want to stick to the bakery.”
Huerta went on to explain that if businesses choose to expand in tandem with other types of businesses, such as a Taqueria or a restaurant, they would have a larger chance of succeeding in expanding the company. Since El Gallo Bakery specializes in bread and pastries, its products limit the company’s services they can offer to customers. If Huerta were to expand his bakery along with a restaurant, his customers would have a wider variety of options for food, which would lead to creating a larger profit for the business. "We aren't planning are opening more locations for our bakery, but we're expanding to wholesale so our name still gets out there," Heurta said.
While a small business such as El Gallo Bakery makes the conscious decision to stay the size it is, other businesses like King Taco have been expanding for years, and the benefits have proven to be large.
King Taco Restaurants Inc., founded in 1974, began its business from a converted ice cream truck and has become a Mexican fast food favorite throughout the city. Famous for its authentic Mexican cuisine, the local franchise has expanded to multiple locations in Los Angeles County, including its main location on 3rd Street.
“Small businesses such as bakeries try to stay authentic. They want to keep closer to real Mexican foods versus local franchises like King Taco,” said Amanda Papia, an East L.A. resident. If these small businesses opened more locations attached to restaurants, it would take away the value of succeeding in the industry they pride themselves so much for, Papia said. Instead, the smaller businesses grow success through word of mouth from their customers.
"For places like King Taco, the owners probably realized how successful they could be and decided to expand after discovering how popular and successful their restaurant was among residents," Papia said. "They knew customers would follow the business to new and more convenient locations."
What differentiates King Taco Restaurants from El Gallo Bakery and other bakeries is its versatility in the food services industry. Though King Taco serves Mexican food in particular, its food is much more popular among customers. Since the restaurant sells food typically for lunch or dinner, it brings in a larger amount of customers looking for regular meals to consume. El Gallo, however, sells bread and desserts—products customers buy for specific reasons.
The type of food businesses choose to sell isn’t the only reason to why small specialty shops choose not to expand. Another major factor for why some companies choose not to expand goes into what true authenticity is. If bakeries were to work with restaurants, it takes attention away from the food they pride themselves in.
"It all circles back to the idea of authenticity. For lack of a better phrase, small businesses don't want to sell out," Papia explained. "They want to be the best at what they're great at."
Read more by Dale Chong.