How Siete’s grain-free tortillas are approaching $ 200 million in sales

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A teenager in South Texas, Veronica Garza thought she would never be able to enjoy a family dinner again.

Diagnosed with lupus, her grain-free diet took many foods off the table that she had grown up with her Mexican-American family.

“There was this feeling that I was really missing a very important part of my heritage, of not being able to [eat] meal that I loved, ”recalls Garza, now 40.

She particularly missed her grandmother’s tortillas, so she started making her own with almond flour instead of corn or wheat flour – heretical to some, and certainly a deviation from the recipe. of his grandmother. But after many weekends spent testing the recipe with his mother in the kitchen, Garza finally felt confident enough to put his tortillas on his family’s dinner table.

Her family didn’t just approve: Miguel, her brother, spent years trying to convince her to start selling them. In 2014, the two brothers and their mother co-founded Siete Family Foods, which now makes a line of Mexican-American grain-free foods, from tortillas and fries to taco seasonings and dairy-free queso dips.

The Austin, Texas-based company expects to hit $ 200 million in annual retail sales this year. Its products are sold in more than 16,000 stores in the United States and Canada, including retail giants like Walmart, Target and Whole Foods.

The whole family works for Siete: seven of them, hence the name. Veronica is the president and chief innovation officer for the company. Her mother, Aida, takes care of the purchases. Her father, Bobby, a longtime lawyer, works in Siete’s legal department.

His four siblings too, including Miguel, 34, CEO of Siete. His “digital goal,” he says, is to grow Siete to $ 1 billion in annual revenue by expanding into restaurants and convenience stores.

All seven members of the Garza family now work for Siete.

Source: Siete Family Foods

But his “overriding goal,” he says, is to make the company with nearly 100 employees still feel like a family business. The core values ​​of the company are, as he puts it, “family first, family second, business third”. And he wants to help other Latinx entrepreneurs along the way.

It’s easier said than done.

“We have to be crazy” to start a tortilla business

In early 2014, Veronica and Miguel Garza entered Wheatsville, an Austin-based grocery cooperative. They handed the shopper a plastic bag full of freshly made tortillas and insisted he try one while they were still hot.

“As soon as he tasted them, you could tell in his eyes that he was excited about them,” says Veronica. “He immediately said, ‘OK, we’ll take them.'”

Wheatsville took it a step further: Store employees advised the Garzas on starting a food production operation, registering the business, and creating a brand and logo for hire. a small commercial kitchen nearby.

The Garzas first called their company “Must B Nutty”, after the almond flour in their tortillas. And given the siblings’ professional degrees – an MBA for Veronica and a law degree for Miguel – they “have to be crazy to start making tortillas and make a business out of it,” Veronica says.

The commercial kitchen, which they shared with a chocolatier, helped the Garzas cook and squeeze up to 30 tortillas at a time, filling up to five industrial refrigerators a week before delivering them to Wheatsville.

“Around May 1, 2014, we put our first two cases of product [on] the shelf “in Wheatsville,” says Miguel. “By May 2, they had sold all of this product.”

Veronica Garza and her mother, Aida, baked tortillas in Austin’s commercial kitchen when Siete started out.

Source: Siete Family Foods

Wheatsville Grocery and Wellness Manager Niki Nash remembers watching Garza’s tortillas fly off the shelves – worth around $ 40,000 in just eight months – and realizing that Siete was on to something.

“Especially here in Texas, tortillas are everything,” says Nash. “We would literally see people walk into our stores, you know, with little tears in their eyes, like, ‘I can finally eat tacos again! “”

However, other grocery stores have been more difficult to convince. Miguel’s biggest target was Whole Foods, headquartered in Austin. But convincing the national grocery chain wasn’t as easy as walking into a store with a bag of hot tortillas.

“In fact, Whole Foods has told us ‘no’ many times,” he says.

The tide finally turned, Miguel says, when a customer mentioned Siete’s tortillas to Whole Foods co-founder and CEO John Mackey.

A Whole Foods spokesperson confirms word-of-mouth marketing worked: in early 2015, Siete launched at Whole Foods’ flagship store in Austin.

Help other Latinx entrepreneurs along the way

Maybe Siete’s timing was lucky.

In 2019, the non-profit Tortilla Industry Association trade group estimated the country’s annual sales of tortillas at $ 16 billion, Hispanic food market sign steady growth during the last decade. Analysts also predict the market for gluten-free and grain-free products will nearly double to reach reach $ 7.5 billion by 2027.

The company has already taken advantage of this momentum to raise funds, $ 90 million from private equity firm Stripes Group in 2019. “The Garza family had found a way to disrupt a market segment that hadn’t seen real innovation for quite some time,” said Karen Kenworthy, a Stripes partner. Group which sits on the board of directors of Siete. .

But Siete isn’t the only game in town. Competitors like Unbun Foods, Tia Lupita, and Thrive Market also sell grain-free tortillas. Industry giants like General Mills and Frito-Lay all their gluten free products, and grain-free isn’t exactly a major stretch.

“Don’t give them any ideas,” Miguel jokes, before taking a more serious tone: “I have a lot of confidence in our ability to be competitive in the market.”

Part of that means setting yourself apart from your competition. Miguel’s Strategy: Emphasize the Mexican-American heritage in Siete’s branding. It promises customer authenticity, he says, and helps the Garzas use Siete’s success to open the door for more Hispanic and Latino entrepreneurs.

For years, the family has hoped their business could inspire other start-up founders and remove the barriers Hispanic and Latin founders face when seeking investment. Last year, a Crunchbase report found that only 2.4% of all venture capital funding since 2015 had gone to companies with black and Latinx founders.

In April, Siete took a more direct step, announce an annual award of $ 25,000 for other Latinx-owned food companies. It’s called the Juntos Fund – “together” in Spanish.

Last month, after receiving more than 100 nominations, Siete awarded its first prize to CocoAndre, a Dallas-based chocolatier and horchata maker. Something about the business sounded familiar to me: CocoAndre is run by a Mexican-American mother-daughter team.

In other words, says Veronica, the fund is already giving Siete the opportunity to live out her mission – family first.

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