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VALLEY AND VENTURA COUNTY BUSINESS

For Marcelo's Foods, Labors After Quake Have Borne Fruit

Recovery: Family's multimillion-dollar distribution business in Pacoima was destroyed, then rebuilt as it began--out of a truck.

September 09, 1997|JULIA SCHEERES | SPECIAL TO THE TIMES

Marcelo Martinez was 17 years old when his cancer-stricken father asked him from his deathbed to take over the family business.

As the eldest boy of eight siblings, Marcelo said he felt compelled to quit his law studies at Cal State Los Angeles to manage the fledgling food-distribution company his father began in 1967, five years before his death. Twenty-five years later, that business--Marcelo's Foods Inc. of Pacoima--has grown from a one-man operation run out of a truck into a multimillion-dollar business, triumphing despite near destruction in the 1994 Northridge earthquake.

Marcelo Martinez Sr., who died at 49, founded the company to supplement his primary income as a worker in an Eastside sausage factory and support his expanding family.

When he borrowed $500 for a used milk truck, he didn't even know how to drive, said his son. But he slowly built up a string of Latin supermercados and eateries as clients, dropping off small shipments of Mexican chorizo, cheese and candy in the evenings after returning from his factory job.

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He worked tirelessly, rising at 4 a.m. for his first job and returning close to midnight from his second. He insisted on sending all his children to private Catholic schools, despite the family's limited means.

"My dad instilled the values of hard work and honesty in his children," said Martinez.

Although his initial impulse was to sell the business and go back to school, he gradually warmed to the job and decided to continue in his father's footsteps.

"The first time I had to drive the route myself, I drove past the first store several times before I got up the guts to drop off the order," said Martinez, 44.

His business savvy grew in the following decades.

In 1975 he bought a 16-foot, $20,000 refrigerated delivery truck and hired his younger brother Frank to drive it.

He broadened Marcelo's original product line to include other south-of-the-border specialties such as canned jalapenos, lard, tripe for menudo, corn husks for tamales and pinto beans. And with a staff of bilingual/bicultural employees, the business his father started out of the back of a truck blossomed into a one-stop shopping venue for Mexican food buyers from Santa Ana to Santa Maria.

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A few years later, he moved his headquarters from East Los Angeles to Pacoima, converting a dilapidated office building on Van Nuys Boulevard into a storage and distribution center.

"I fell in love with the Valley because it's so family-oriented," Martinez said. He and his wife, Armida, the company's vice president, have three school-age children.

The move also thrust the company into the middle of a niche market--Latinos make up 43% of the population in the northeast San Fernando Valley.

In 1992, when their No. 2 customer, La Gloria supermarket in Oxnard, went bankrupt, the Martinezes bought it and resold it under one condition--an exclusive deal to supply all the store's poultry, beef, pork and seafood--a nifty deal that assured Marcelo's a steady $20,000 in revenue each week.

Then in January 1994, days after Marcelo's Foods posted record annual sales of more than $7 million, the Northridge earthquake struck.

After the ground stopped shaking, Martinez checked his family, then raced to the Pacoima plant. Most of the buildings along the stretch of Van Nuys Boulevard, only a few miles from the quake's epicenter, were demolished. So was Marcelo's Foods.

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The company that had grown up alongside its owner was reduced to a pile of rubble. It took nearly three years to pick up the pieces.

Although his business qualified for more than $1 million in federal and state disaster funds, bureaucratic snags halted construction on their new distribution center until this past spring.

Meanwhile, the Martinezes were forced to sell their house in pricey La Canada-Flintridge, a new Mercedes-Benz and a Ford Explorer. They moved to a modest abode in Lake View Terrace and bought a used Chevrolet Blazer.

Their 12 employees were laid off and the business was again run from the back of trucks--this time seven refrigerated delivery trucks, which were able to store only a fraction of the merchandise the company had handled before.

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Unable to order giant shipments at discount prices directly from processing plants, Martinez was forced to rely on more expensive local brokers and to raise prices he charged to his customers.

Over the next couple of years, many clients defected to cheaper distributors. Annual sales plummeted 93% to $480,000.

"I lost everything. It looked pretty bleak at that time," said Martinez.

Nevertheless, when the director of a local youth program called Marcelo's in search of a donation of hot dogs for a handball tournament between two rival Valley gangs, Martinez didn't hesitate to chip in.

"I was stunned because all I asked for were hot dogs, and he sent over marinated chicken thighs and carne ranchero--enough to feed 150 kids!" said William "Blinky" Rodriguez, who heads Communities in Schools, a program dedicated to keeping kids out of gangs and in school.

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