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An Old Favorite Gets a New Spin : Marketing: La Pizza Loca has found success catering to the Latino market. Now the restaurant chain, based in Buena Park, plans to take its concept to Latin America.

March 07, 1995|HOPE HAMASHIGE | SPECIAL TO THE TIMES

BUENA PARK — When Alex Meruelo opened his first pizza restaurant, nobody else was making fast-food deliveries in his neighborhood. The perception, he said, was that the heavily Latino area of Huntington Park was simply too dangerous.

But Meruelo, a Cuban American, disagreed, and since 1986 he has defied that conventional wisdom and, in doing so, has built a successful business. His La Pizza Loca restaurant chain now has 54 outlets with more than $22 million in annual sales.

The company, based in Buena Park, serves Latino enclaves across California, Texas and Florida, and now it has its eye on another market: Latin America. La Pizza Loca's first international location will open in Guatemala City in July, the first of 10 planned in the Central American nation over the next four years.

"Guatemala is not the richest country in the world," Meruelo said Monday. "But neither is the Hispanic population in the U.S., and we are making money making pizza for them."

Beyond Guatemala, La Pizza Loca has already signed franchising agreements in El Salvador, company spokesman Tony Tavantzis said, and is aggressively seeking opportunities across Central and South America.

Tavantzis and Meruelo attribute the company's success to its business strategy of making a product especially suited to Latin taste. Though pepperoni, the customary topping on Italian-style pizza, is the most requested by his company's customers, Tavantzis said, carne asada, refried beans and chilies are also available.

The company also regularly creates special meals with the average Latino family in mind, Tavantzis said. That means keeping in mind that Latino families are typically larger than white families and offering two pizzas for a low price.

The company also considers other cultural differences, he said. For example, unlike its competitors, La Pizza Loca never offers discount coupons through local newspapers.

"Hispanics don't like to use coupons because they consider it degrading," Tavantzis said. "We just offer the best price without coupons and offer specials."

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When the company makes its move south of the border, its business plan will be identical to the one that has served it so well in the United States, Tavantzis said.

Competitors in the Mexican-style food industry say that strategy is likely to serve the company well.

"Hispanic consumers like things geared toward their tastes," said Ray Perry, president of El Pollo Loco, a fast-food restaurant chain that serves Mexican-style chicken dishes. "Specifically, they like products from their homeland."

Though pizza originated in Italy, Perry said La Pizza Loca has succeeded because it grasped quickly that selling successfully to the Latino market means developing products specifically for the intended customers.

Perry added that other pizza chains, even though they may advertise in Spanish, have made few efforts to create products with the extra spices that appeal to the Latin palate.

Mexican food has become increasingly popular with U.S. consumers in the 1990s. Salsa is now a bigger seller than ketchup in the nation's supermarkets, and Mexican restaurants are grabbing a larger portion of the fast-food market.

Typical American restaurants in growing numbers are adding Mexican entrees such as tacos to their menus in response to customer demand, industry surveys show.

La Pizza Loca is not counting on that trend, though, for its continued growth. In fact, it is sticking to its initial plan of focusing on a single segment of the fast-food market, rather than seeking to broaden its appeal.

The company has made an effort to let consumers know, through advertising in the Spanish-language media, that it is Latin owned and operated and that, when customers call to place an order, they can speak in their native tongue.

Having people who are fluent in Spanish available to take phone orders has been a key ingredient of La Pizza Loca's success, Tavantzis said. As anyone who has ever learned a second language knows, communicating over the phone is much more difficult than speaking in person, said Tavantzis, a Chilean immigrant who came to the United States in 1981.

"In person," he said, "you can gesture and point if you need to, but you can't do that on the phone. So lots of non-English speakers don't feel comfortable ordering takeout."

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