Phoenix bakery profits by speaking Spanish

updated 6:06 p.m. ET July 24, 2005

PHOENIX - The stainless steel counters and tidy shelves filled with bagged coffee beans at Panaderia Taza are standard coffeehouse decor, but the pastry case isn’t filled with muffins and scones.

It’s lined with conchas, Mexican sweet breads, and empanadas, triangle-shaped crust filled with fruit or custard. And the coffee is Mexican brand Cafe Combate.

Panaderia Taza is a coffeehouse targeted specifically at Hispanics, a market growing so rapidly here and elsewhere in the United States that the bakery’s owners plan to franchise it soon.

“We just want to be ahead of the curve,” said Peter Conforto, president and chief executive of Masa Men, the management company that opened Panaderia Taza in June.

Ethnic markets and mom-and-pop bakeries have long been tucked in urban shopping centers, but with Hispanics making up the fastest-growing segment of the U.S. population, entrepreneurs like Masa Men and others are looking to build slicker models that can be franchised.

Expandable, franchiseable
Conforto and the other two executives at Masa Men see an opportunity to create an expandable business model specifically catering to Hispanics.

Masa Men is run by Conforto, who was a Blimpie International franchiser and is currently opening a chain of tea shops called Tealuxe; Lee Cohn, who has opened a series of 1950s-themed Ed Debevic’s diners; and Todd Belfer, who co-founded RA Sushi Bar Restaurants, an upscale group sold to Benihana Inc. in 2002.

Although the Masa Men executives started in non-Hispanic food markets, they see a big opportunity. A quarter of the Phoenix area’s population is Hispanic and the demographic is growing quickly nationally. And Conforto said they have found that the Panaderia Taza products seem to appeal to a wide section of Hispanics, whether recent immigrants or third-generation Americans.

Masa Men started as the Arizona franchise holder of Pizza Patron, a Dallas-based chain that targets Hispanics with bilingual signs and staff and relatively inexpensive pies, with stores generally located in neighborhoods that are at least 40 percent Hispanic.

Started in 1986, Pizza Patron had just four stores two years ago but expects to have 80 by year’s end and to expand nationally as the Hispanic population grows, said Andrew Gamm, the company’s director of brand development.

Matt York / AP Maribel Quiroz makes polvorones on July 19 at Panaderia Taza in Phoenix. Panaderia Taza is a coffee house targeted specifically at Latinos, a market growing so rapidly throughout the United States that its owners plan to franchise it soon.

Visits to bakeries
The executives at Masa Men got the idea for Panaderia Taza while opening their initial eight Pizza Patron locations. A baker leased the space next to one store, and Cohn, a Masa Men managing partner, saw an opportunity.

He began visiting bakeries in town. They were full of customers, but Cohn thought he and his partners could execute the concept with cleaner stores and better service.

“If we did this and we did it a little better than anyone else ... raised the quality level and the service level, we could possibly build a chain out of this,” Cohn said.

What emerged was Panaderia Taza — “the cup bakery” in English. It includes a bakery that makes Mexican pastries, which tend to be more breadlike and less sweet than European-style pastries. And it serves Mexican coffee and drinks like cafe con leche, coffee with milk, and mezclado con azucar, sugar-sweetened coffee. The house music is a popular Spanish-language radio station.

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