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Gettin' Jiggly With It

Entering a market dominated by a certain hyphenated superbrand and Bill Cosby's mug is no picnic.
January 1, 2000
URL: http://www.entrepreneur.com/article/18740

Bring up the subject of Mexican immigrants living in poverty, and Maria de Lourdes Sobrino will step onto her soap box and give you a thoughtful lecture. Understand, this relentless woman doesn't believe in being a victim and never has. And in her 47 years, Sobrino has gone from making her family proud to making their jaws drop in disbelief.

You'd think it was a Lifetime drama series, but these are merely snapshots of Sobrino's rise to president and CEO of LuLu's Dessert Factory in Huntington Beach, California. Unlike the ready-to-eat snacks that Sobrino produces, her success didn't come perfectly packaged. But it did come from scratch.

"My family in Mexico calls me the adventurer," says Sobrino, a woman whose smile doesn't reflect the hurt she felt when relatives scoffed at some of the choices she made. Not only did Sobrino stay in the United States after she opened a Los Angeles branch of her Mexico City-based travel and convention management company in 1981, but she also chose to start a gelatin company when the travel business went the way of the peso in 1982. "`Gelatina?' they'd say," recalls Sobrino. "It was like my family was a bit ashamed of me after being a business administrator and in the tourism business."

But don't be fooled. The eldest of five children strayed from the pack long before she built a $9.2 million business based on the gigantic, wiggly ringmolds her mother had made for social gatherings in Mexico. Although the culture in Mexico dictated that children follow their parents' career paths, writing depositions and researching case studies didn't appeal to Sobrino, daughter of an attorney and relative to many more. Instead, amidst earning degrees in accounting and business administration, she opened a flower shop in a nearby hotel, and then another after marrying at 21.

But peddling flora wasn't getting Sobrino any closer to her true goal. "My dream since I was very young was to live in the United States," she says. Leaving floristry behind to start a travel and convention firm handling corporate accounts in San Francisco, Miami and Las Vegas seemed just the ticket.

California Dreaming

By 1981, Sobrino, her husband and their young daughter had transplanted to Los Angeles to open the second office of Mexico & Westside Connection Corp. But 1982 saw both the incorporation and demise of the travel business after the devaluation of the peso devastated Mexico. "It stopped my business completely," says Sobrino.

Her business wasn't all that stopped. Due to a deteriorating relationship and the struggle to raise a 7-year-old daughter at the height of a recession, Sobrino's marriage also halted. Her daughter and now-ex-husband retreated south, but Sobrino remained. "I believed it was a good opportunity," she says, "and I was afraid to go back to Mexico because I thought things there were going to change a lot. And they did."

Attempting to find a strategy for survival, Sobrino sold property she had in Mexico and lived off the money. "I even [did my] shopping in Tijuana for a year or so," she says of the lengths she went to afford necessities on her budget.

But the money didn't last--and despite pleas from her family to return home, Sobrino sought self-reliance. "I needed to make a decision about what I was going to do," she recalls.

Sobrino's answer came in the form of...Jell-O? "As a consumer, I tried buying gelatin cups--because in Mexico, I was accustomed to having gelatina throughout the day." But ready-to-eat gelatin was nonexistent in 1982, and Jell-O, which didn't unveil its pre-made line until 1993, only offered the packaged-powder variety. After combining ingredients herself to create a treat more flavorful than her Jell-O-eating neighbors had ever experienced, Sobrino got that twinge of excitement that often accompanies an impending business.

Once friends convinced her that using her nickname, LuLu, in her company's moniker wasn't too egotistical, Sobrino secured a lease for a 700-square-foot storefront in Torrance, California--a space she laughs about now. "I didn't even have a chair in my office," chuckles Sobrino. "[The chair] was a milk crate."

But a lack of interest in the desserts hurt business. "I noticed after three months that nobody knew what I was talking about--gelatin, ready-to-eat?" Sobrino says. She added tortas, baked goods and coffee to the menu but to no avail. "I got tired of working 10 hours a day and not really having sales."

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.

Time To Gel

When you walk into a Food 4 Less, Vons or other large West Coast chain grocery store these days, you can find any number of the 45 products (including flan, parfait and pudding) Sobrino sells. With projections for 2000 sales for all her companies (LuLu's Desserts and Fancy Fruit Corp., consolidated under Mexico & Westside Connection Corp.) at $12 million and predictions for $30 million by 2002, Sobrino can exhale, spend plenty of time watching television and doing homework with her daughter Monica, now 12. And she can even get some work done, though it's usually after midnight. "I don't sleep a lot," admits Sobrino. And she has plans to soon move LuLu's into a 70,000-square-foot location in Rancho Santa Margarita, California.

Sobrino, who speaks at schools and organizations about entrepreneurship, knows dedication is what separates winners from losers. "I'm a strong woman--what can I tell you?" quips Sobrino. "I enjoy my company, customers and my 100 employees so much now because I fought hard for them."

I'll Take Those Odds

No business is a guaranteed success. As an entrepreneur, you face not only financial peril, but stress that would put most 9-to-5ers out of business--and not all of you make it. Of course, the greater the odds, the greater the payoff, and these are the stories of those of you who prove it.

The Matchup: The Ent. vs. The Odds

Since she was a tot, Maria de Lourdes Sobrino saw red, white and blue when she dreamed big. Bringing with her an indomitible spirit, entrepreneurial dreams and a product from her native Mexico that couldn't be found in U.S. markets, she knew she could find a niche.

Sobrino was launching an untried product--ready-to-eat gelatin--that even giant Jell-O wouldn't attempt for another 10 years. Family and consumers alike had no idea what she was trying to do, and a roller coaster of debt nearly added her to the business failure rate.

"At the beginning, my family in Mexico really felt I was crazy." --Maria de Lourdes Sobrino

The Outcome

LuLu's Dessert Factory, a favorite in large grocery chains, grossed $9.2 million last year and predicts $12 million in 2000 and $30 million by 2002.

Contact Source

LuLu's Dessert Factory, fax: (714) 372-3137, mariasobrino@lulusdessert.com