Shag carpet, asbestos and a two-story mezzanine made of galvanized steel. These are just three of the items that Lobo Tortilla Factory Inc., Dallas, had to remove from its facility before moving in—quite the undertaking for a company that had yet to make a product or sale.
In total, it took 118 trucks to dispose of everything inside of the plant.
“When I first saw the building, it looked really run down,” says John Sommerhalder, Lobo Tortilla Factory’s chief executive officer, “but it turned out really well.”
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| Lobo Tortilla’s corn tortilla packaging area uses manual labor because equipment cannot handle stacks of corn tortillas that are more than 6 ins. in height, says David Cardenas, Lobo’s cofounder. |
That the factory turned out well is an understatement. Despite the mountains of junk that had to be removed, the 127,000-sq.-ft. building possessed many positive attributes. The facility was built in 1963, but sat empty for five years before Lobo Tortilla Factory purchased it, allowing the bakery to get a deal on the property. In addition, the building “is a tank,” Sommerhalder says. The facility’s concrete floor and roof were in good shape, and the layout was ideal for a tortilla plant.
Still, there were a lot of obstacles in the way, including unsuitable utilities and an extremely tight cleanup and startup period.
Fortunately, one of the company’s founders, David Cardenas, had a vision. “All of the ideas I’ve had about building a plant over the years, I’ve been stockpiling them in a file,” Cardenas says. After the junk was cleared, Cardenas opened the file and set about building a dream factory, complete with the latest advancements in tortilla processing equipment technology.
Quick start
Most bakeries—especially tortilla bakeries—start small and slowly expand as business dictates. Lobo Tortilla Factory could not afford this option. The company was founded by Brett Landes, Lobo Tortilla Factory’s chairman, and Cardenas. Despite their partnership on this venture, their backgrounds are far from similar.
Cardenas came to the project with more than 10 years of experience in the Mexican foodservice market and more than 15 years of experience in the construction industry. Landes, on the other hand, has 21 years of private investment experience.
These two divergent backgrounds mixed ideally when it came to launching Lobo Tortilla Factory. Cardenas brought the tortilla experience and Landes supplied the capital to refurbish a plant and stock it with equipment.
Landes and Cardenas first started working through the idea of Lobo Tortilla Factory in early 2004. In May 2004, they brought in Sommerhalder, who has significant experience in venture investing, to consult on the deal. “As we began to work through the details of the deal, we became convinced that there was a big opportunity if you could bring capital to the table, and you could develop a presence quickly,” Sommerhalder says.
Fortunately, the company’s founders had the ability to quickly startup a production facility, and more importantly, the capital to fund it.
To provide the final piece of the puzzle, leadership, Lobo Tortilla Factory handpicked a solid team of executives with business and bakery experiences. This team includes Landes, Sommerhalder and the following individuals:
•Thomas Rowell serves as Lobo Tortilla Factory’s chief financial officer. He has more than 25 years experience in financial management, accounting management, manufacturing accounting, operations controls and risk management.
•Alfredo Elias is the company’s executive vice president of sales. He has more than 20 years of experience in the tortilla industry, including previously serving as a minority owner and sales manager of a tortilla manufacturer in Oklahoma City. At Lobo Tortilla Factory, Elias is responsible for overseeing all aspects of new business development and customer service.
•Matt Landes started at the company as director of operations and quality assurance, but has since expanded his responsibilities to become chief operating officer. Landes has more than 20 years of manufacturing experience, including operations, process improvement and logistics management.
“We have a traditional corporate structure, and it’s a statement to our customers and potential customers that we’re serious about doing business, we’re serious about becoming a national company, and we’re in this for the long haul,” Sommerhalder says.
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| Lobo Tortilla bought all new equipment when the company moved into its Dallas plant. |
Cleaning up, starting up
To launch the business, Lobo Tortilla Factory’s founders settled on a 127,000 sq. ft. plant in Dallas. “The size speaks to Brett’s [Landes] vision and his willingness to commit capital,” Sommerhalder says. “We looked at smaller buildings, but they would not have afforded us the opportunity to grow.”
The timeline to launch Lobo Tortilla Factory was extremely tight, and a little bit risky. The company started to order equipment in August 2004, more than two months before the facility was purchased in October 2004. The company then spent the next 68 days removing asbestos, demolishing the infrastructure, hauling off junk and preparing the facility for tortilla production.
In all, Cardenas estimates that more than 700 people helped get the factory in shape. By the middle of December 2004, the equipment was delivered and staff was hired. By Jan. 9, 2005, the company was commercially shipping products out of a state-of-the-art corn and flour tortilla factory.
The ideal plant
“We bought all new equipment, and we bought from leading-edge suppliers,” Cardenas says. Lobo Tortilla Factory’s commitment to build the ideal tortilla plant is exhibited through its production lines, but it also is detailed in the intricacies and design of the structure and plant layout.
“I knew what I wanted, and what would work,” Cardenas says. “And I had the capital to do this first class. This is my dream facility.”
The plant’s layout features several controlled environments that section off various areas of processing. For example, there is a clean break between baking and packaging, preventing heat or moisture from entering the packaging room. The company also has an air filtration and circulation system that circulates air three times an hour on the baking side and five times an hour in the packaging department.
In addition to controlled environments, the plant also contains a food laboratory and control room. The company uses the food laboratory as a key component to its quality assurance program. The company constantly tests both finished products and raw materials.
The plant’s control room is a work in progress. Once online, the company will operate and monitor the plant from a small control room perched above the plant, providing a birds-eye view of operations. The company armed its equipment with Ethernet capabilities, allowing total process monitoring from the control room.
The plant’s compression and boiler room serves as the “heart” of the plant, Cardenas says. Because about 80% of the company’s systems are pneumatic, Cardenas insisted on installing a hospital-grade unit. “This system is the best in the country,” Cardenas says. “We’re able to filter our air down to .005 microns—that’s hospital instrument air.”
The company also installed aluminum air lines, a significant upgrade from copper or standard air lines. “It costs a lot more, but when it takes care of your equipment, you have to use it.”
Plant walkthrough
Lobo Tortilla Factory started production in January 2005 with one flour and one corn tortilla line. Today, the company operates three flour and four corn tortilla lines. The company’s production growth strategy called for the first two lines to be installed in the middle of the plant, and each subsequent line “blooming out” from the middle, Cardenas says.
The company also ensured that there was substantial clearing space between each line to allow maintenance, sanitation and fork lift traffic to freely move around the facility. “Even when the plant builds out, there will be excellent throughways and aisles on the perimeter of the production area,” Cardenas says.
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| Lobo Tortilla Factory operates four corn lines and three flour lines. |
And, the plant is prepared for more production lines. The company’s seven production lines represent less than 50% of the plant’s total capacity. The production process begins outside with two 120,000-lb. silos (one storing corn and the other flour) emblazoned with the Lobo Tortilla Factory logo. PLC controls operate the silos, and three lines supply and return flour and corn from the silos to the production floor and back. Two of the lines supply ingredients, and the other one serves as a return line, preventing flour from sitting inside the line during idle production periods.
Corn tortilla processing
The company’s state-of-the-art wet corn milling process is completely automated with the latest advancements in equipment technology. The system starts by delivering fresh corn to the cooker, where lime is added. In the cooker, the lime penetrates the corn, which allows for hydration. After the corn is cooked, it is dispersed into a quenching tank with cool water. This system is equipped with an automatic temperature probe that ensures the product has stopped cooking.
Next the corn is transferred via pump to one of eight vertical tanks. The vertical tanks save the company valuable floor space while still producing a capacity of 80,000 lbs. of corn a day. In the tanks, the corn steeps from eight to 12 hours. During this process, the corn has to be continually agitated, which traditionally is done with large paddles.
However, Cardenas says these paddles cause friction, and over time, destroys the kernels. To prevent this, the company uses air bubbles to agitate the corn without damaging kernel integrity. After the corn has steeped, the pH is checked, and the corn is washed and transferred to volcanic stone grinders, which process the corn into masa.
For certain customers, the company operates a dry corn process, which is much simpler than the wet corn process. As part of the dry corn process, bags of dry masa are put in a horizontal mixer, hydrated and mixed for two minutes, which produces masa.
The company’s four corn tortilla production lines process as many as 7,000 dozen tortillas an hour, in sizes ranging from 4.5 ins. to 6 ins. The masa is sheeted, die cut and baked in 23-ft. ovens for about 30 seconds.
Flour tortilla production
The company’s three flour tortilla lines process 4-in. to 13-in. tortillas. The company mixes dough in one horizontal mixer and two vertical mixers. According to Cardenas, the vertical mixer works best to develop the dough on the company’s high-speed line. “It develops the dough, which is a stickier dough compared to what runs on our other lines, in half the time.”
After mixing, dough is divided and rounded before pressing. The company pre-presses its dough balls, which increases cycle time by allowing the final presser a smaller range of motion. The pre-press also helps the dough adhere to the Teflon belt, which prevents the tortillas from sliding backwards during final pressing. The final press has a temperature of about 390°F, and starts the baking process before products enter a serpentine oven for about 20 seconds.
After flour and corn tortilla products are baked, they enter a cooling conveyor. Flour tortillas go through a cooling room that is kept at 56°F. This room cools tortillas for about six minutes. “If you don’t cool it, and you put it in the package while it’s hot, then the package acts as a microwave, which starts the molding process,” Cardenas says. “This cooling room helped us go all summer without mold, which is a big thing in Texas.”
After cooling, products are transferred to the atmospherically controlled packaging room. The company’s flour tortilla packaging is completely automated, with stackers, baggers and sealers. The corn tortilla packaging area still uses manual labor because “equipment manufacturers haven’t developed systems to handle stacks of corn tortillas that are more than 6 ins. in height,” Cardenas says.
Market strategy
Since Lobo Tortilla Factory opened its doors in January 2005, the company has built a solid foundation of institutional business, such as non-commercial foodservice operators and contract manufacturing. The company also is building solid relationships with local and regional distributors. Up next, the launch of a retail brand, which the company hopes will gain it even greater penetration in the U.S. market.
Company Profile Lobo Tortilla Factory Inc.
Headquarters: Dallas
Plant size: 127,000 sq. ft.
Production lines: Three flour and four corn tortilla lines.
Key personnel: Brett Landes, chairman and cofounder; John Sommerhalder, chief executive officer; David Cardenas, cofounder and consultant; Matt Landes, chief operating officer; Thomas Rowell, chief financial officer; Alfredo Elias, executive vice president of sales.
Distribution area: About 30 states throughout the United States.