Gettin' Jiggly With It

The Turning Point

Still far from fluent in English and unfamiliar with Los Angeles County, Sobrino didn't know where or to whom she should pitch her new--hopefully, more prosperous--idea: three-layer gelatin in single-serving cups. But after locating nearby Latino communities, she discovered several independent bakeries and shops. She whipped up 300 cups a day to present to proprietors, but lackluster responses varied from "What is this?" to "We only know Jell-O." Then, salvation: A small shop allowed Sobrino to leave her product on consignment. "I came back after my delivery route," she recalls, "and I had a message the same afternoon saying, `Please come back, seƱora. Your gelatins are sold.'"

It seemed dreamlike. In 1983, after success in local stores, an executive of the Boys Markets grocery chain (which had begun carrying LuLu's gelatins) sent a food broker Sobrino's way. The broker sent her gelatin to California grocers, but maintaining volume sans a production facility was impossible. And without preservatives, her product began to mold after a week. Nothing a little research and a move in 1985 to a larger space in Gardena, California, couldn't cure. She prepared for future growth by upping her employee and broker count, and in 1988, approval for an $800,000 SBA loan gave her the green light. "I prepared a business plan--gave [the SBA] everything they wanted," Sobrino says. "They trusted me, which gave me the opportunity to grow to the [Huntington Beach] building I'm at now."

But buying another new facility threw Sobrino into a financial tailspin. She couldn't move entirely out of the plant in Gardena--unless she wanted to disrupt production and risk losing all her accounts--so she was forced to pay both mortgages for nine months. After finalizing the move in 1990, she purchased new equipment, increased her staff again and invested in a new product line, Fancy Fruit frozen fruit bars. You could say she was a tad overextended.

"It took five years to get out of [debt] because I had signed several leases and loans and was in very bad shape," says Sobrino. That's no lie: No longer able to pay the mortgage and unable to find a buyer because of the property's proximity to the Los Angeles riots, Sobrino lost her Gardena facility in 1992. She also had to forfeit her home, send her furniture to Mexico and move with her young daughter from a second failed marriage into a one-bedroom apartment. She couldn't even purchase a ticket to visit her father in Mexico before he passed away.

"I couldn't pay [my present plant's] mortgage for several months," she says. "I said, `I'm showing you my export business. I'm showing you the employees I have. It's either payroll or you.'" Somehow the bank and many of Sobrino's suppliers believed her when she said sales were coming--and their instincts proved right. Buried under Sobrino's debt were all the pieces of a profitable company: a good-sized production facility, diverse product lines, plenty of equipment, plenty of staff and big-name grocery stores selling the products. All that remained was to wait and make loan payments--for five long years--until the day finally came when Sobrino was making money and not handing it right over to the bank.

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This article was originally published in the January 2000 print edition of Entrepreneur with the headline: Gettin' Jiggly With It.

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