Alex Meruelo hopes to someday be known as the pizza king of Southern California's Latino community.
The energetic, boyish-looking 27-year-old founder of the Buena Park-based La Pizza Loca restaurant chain is off to a good start.
Since founding his company five years ago, Meruelo has assembled a chain of 26 pizza delivery outlets in mostly Latino neighborhoods of Orange and Los Angeles counties. Serving up pizzas with chorizo and jalapenos, as well as more traditional toppings such as pepperoni and achovies, La Pizza Loca's sales hit $10 million last year.
With nine restaurants scheduled to open this year, Meruelo is projecting sales of $15 million in 1991. Already, La Pizza Loca ranks as the sixth-largest independent pizza chain in the nation, according to Pizza Today, a trade journal.
"I've always liked eating pizza, and I noticed that it is increasingly becoming part of my diet, much like the rest of the Hispanics around me," said Meruelo, a Cuban immigrant.
Meruelo hasn't been the only one to notice the growing Latino market. In the past year, Pizza Hut, a Pepsico Inc. unit, has begun expanding aggressively in Latino communities.
"Our objective is to make our products, our pricing and our services relevant to Hispanic customers," said Roger P. Rydell, a spokesman for Pizza Hut. The chain has also been doing more advertising in Spanish-language media, he said.
Beginning last year, Pizza Hut began opening restaurants in heavily Latino communities in Los Angeles County. The outlets is test marketing some additional toppings, such as jalapeno, at those restaurants. In some restaurants in Texas, the chain has added chorizo, a type of Mexican sausage, to the menu.
"We're responding to special requests and taste preferences of our customers in various parts of the country," Rydell added.
Meruelo came up with the idea for his business during conversations with friends in the mid 1980s. These friends said they wished they could buy a pizza with Mexican toppings like jalapeno and chorizo, as well as more traditional toppings.
Meruelo, who was then operating two small restaurants in El Monte, specializing in charbroiled chicken, was convinced he had discovered an untapped market. He sold those restaurants in 1985 and used the proceeds from the sale to open a pizza restaurant in Huntington Park, a predominantly Latino community. He named the restaurant La Pizza Loca, a take-off on the El Pollo Loco fast-food chicken chain.
La Pizza Loca was an instant success. Within three years, he had opened 10 restaurants in Los Angeles, Glendale, Lynwood, Santa Ana and elsewhere. The restaurants employ 700 part and full-time people, nearly all of them Latino, he says.
Home deliveries account for more than 70% of La Pizza Loca's sales. Borrowing an idea from large chains like Domino's, La Pizza Loca guarantees delivery within 30 minutes or the customer gets the pizzas free. Another marketing gimmick is that the chain offers one free pizza for each pizza purchased.
Until recently, Meruelo has shunned publicity from newspapers and TV stations that wanted to hold him out as an example of a successful Hispanic businessman. "We didn't want to tip off our competition while we were just starting up."
In May, Meruelo opened his first La Pizza Loca franchise restaurant in Huntington Park. He also moved his company's headquarters from Huntington Park to Buena Park last year.
But one industry analysts says Meruelo's move to franchising comes at a bad time.
"The market is nearly saturated. As a result, the pizza restaurant business is very competitive," said Gerry Durnell, publisher of Pizza Today magazine in Santa Claus, Ind.
In the last three years, the number of new pizza restaurants has far exceeded demand, he said, adding that an industry shakeout is likely during the next few years.
But Meruelo doesn't seem too worried. "As the years pass," he said, "more and more Hispanics will earn a better living, and I expect them to spend their money on food with strong Hispanic flavors."