La Tortilla Factory grows its national footprint while staying true to its roots

Some people weren’t born to follow.

José and Mary Tamayo embarked on a pathway of innovation in 1977 when they opened La Tortilla Factory in Santa Rosa, CA. It was Sonoma County’s first taquería—but the Tamayos distinctively dubbed it a “Mexicatessen”—and it put the family on the map. Patrons could order burritos and tacos from the storefront deli, and in the back, they had a machine and bags of masa to produce each day’s fresh corn tortillas.

It was the first step toward steady, ongoing expansion of a successful family tortilla business that continues to thrive today. Along the way, La Tortilla Factory popularized the notion of “better-for-you tortillas,” launching fat-free and low-carb versions that captured national attention in the 1990s. More recently, the company was first to market with tortilla products that are both Non-GMO Project Verified and certified-organic, taking an on-trend, clean-label position in the category. La Tortilla Factory has also pioneered the signature use of 50 percent wheat and 50 percent corn in select products.

Today, a highly automated, 75,000-square-foot tortilla bakery has replaced the storefront Mexicatessen in Santa Rosa, but La Tortilla Factory is still a family business, now managed by the third generation of Tamayos.

And in an astute blending of the old and new, the company brought in a new executive team in 2015 to work side-by-side with the family and fuel growth—but without compromising the strong family business culture the Tamayos cultivated through the years. “I think it’s our biggest challenge—and it’s one of our biggest commitments,” says Jeff Ahlers, president and CEO.

This move helped catalyze the most-recent wave of innovation. To celebrate its 40th anniversary in 2017, La Tortilla Factory made its first expansion into the snack market with its 50/50 Non-GMO Corn + Flour Tortilla Crisps line of chips, as well as launching a new line of Non-GMO Gluten-Free Cocina Fresca sauce starters.

Serendipity in Sonoma

In the 1940s, as part of the Bracero Program, José Tamayo emigrated from central Mexico to the U.S., working on the railroad for many years.

José embraced his new home, met and married Mary, and had five sons. They settled in the Midwest, but by the 1970s, all five sons had moved to the West Coast to earn their degrees. “My grandparents followed them,” says Sam Tamayo, vice chair and José and Mary’s grandson. “The brothers wanted to find a way to put their business degrees to use.”

In a stroke of serendipity, the Tamayos established their Mexicatessen in Sonoma County, which by the late 1970s—along with its neighbor Napa County—was poised to grow into an internationally renowned food and wine destination.

The Tamayos’ business grew, and soon began distributing La Tortilla Factory branded products to local grocery stores. They invested in vehicles to expand direct-store delivery (DSD) throughout the area. In 1980, they moved into a new, larger facility, and by 1985 had expanded into flour tortilla production.

In 1988, a decade after launching La Tortilla Factory, José and Mary were ready to retire and hand over control of the company to their sons Carlos, Willie and Mike, with Tico and Bernie also helping out early on. The family decided to close the restaurant and focus exclusively on the wholesale tortilla business, moving into a 15,000-square-foot building in 1989.

“Mexican food was really coming into its own,” says Sam. “It was becoming mainstream. Our market here in Northern California was still fairly wide open. My dad and my uncles created a lot of great relationships.”

Better-for-you pioneers

In 1990, Mike attended a session at AIB International and walked away with the inspiration to create a fat-free tortilla. Two years later, La Tortilla Factory launched a whole-wheat fat-free tortilla, which also conveniently had a low carb count. These moves attracted health-oriented consumers. In 1996, when cookbook author Fran McCullough mentioned the tortillas in “The Low Carb Cookbook,” La Tortilla Factory saw considerable traction on a national level. This led to creation of a first-to-market Low Carb Tortilla, launched nationally in 2000.

“The biggest watershed moment of our company’s 40-year history was the decision to strategically divert outside the norm of the category—to think differently about how we could drive the market,” says Sam.

In line with this new better-for-you strategy, La Tortilla Factory removed all hydrogenated oils, trans fats and high-fructose corn syrup from its products. By 2003, the company had expanded into offering organic tortillas. Then, in 2006, La Tortilla Factory brought the first gluten-free tortillas to market, made with a blend of whole-grain ivory teff and millet.

Innovation continued, and in 2008, La Tortilla Factory launched a line of Hand Made Style tortillas, made with a blend of corn and wheat flours. These tortillas have emerged as the best-selling products in the company’s lineup.

Organic recently saw renewed focus with the 2015 launch of a new line of organic, Non-GMO Project Verified tortillas, and a Non-GMO Project Verified Low Carb Tortilla a year later.

“Part of La Tortilla Factory’s success has been recognizing key better-for-you issues, evolving with them and remaining relevant,” says Sam. From fat-free to low-carb and now clean label, La Tortilla Factory has always been one step ahead of the trends.

“We were the first to market in many niche segments that are now mainstream,” says Meredith Kucker, director of marketing and innovation.

In 2017, the company added new Non-GMO Gluten Free Tortillas. Including cassava flour in the formulation helps it better replicate the sensory qualities of a flour tortilla.

Today, La Tortilla Factory products are distributed nationwide, as well as in Canada and Puerto Rico.

The executive team has introduced new strategies for brand-building. “We’ve been really trying to be led by our consumer,” says Meredith. “The more we know about our consumer, the more we know she doesn’t eat the same thing all the time. She’s led by health-and-wellness trends.”

Analysis of La Tortilla Factory consumers has led to the idea of lifestyle-based tortillas. “We’ve learned a lot about our consumer. She might buy Low Carb Tortillas for herself and traditional products for her family. We wanted to offer the traditional items with fewer ingredients and the non-GMO stamp of approval so she knows she’s still getting a better-for-you option.”

Snack expansion

Last year, La Tortilla Factory ventured into the snack aisle for the first time with a line of truly unique 50/50 Corn + Flour Crisps, available in three varieties: Sea Salt, Hatch Chile and Churro. The Hatch Chile Crisps include some lime juice in the mix to boost flavor impact. The Churro Crisps are coated with cinnamon sugar; La Tortilla Factory suggests serving them with ice cream to create a platter of dessert nachos (but they’re amazing all on their own).

“We didn’t want just another tortilla chip,” says Jeff. “We wanted to make something unique and memorable.” Using 50/50 corn/wheat flour and going non-GMO made sense from a branding perspective. “While the crisps are different, we connected them to the core values of the La Tortilla Factory brand.”

Meredith notes that the crisps benefit from a nice flavor from the corn flour, and they get their uniquely crispy bite from the wheat flour.

“It’s really a result of us finding a way to stand out and be different,” says Sam.

The company has also launched a line of Non-GMO Gluten Free Cocina Fresca sauce starters with flavor profiles like Barbacoa, Cochinita Pibil, Al Pastor, Classic Taco and Salsa Baja.

Factory dynamics

By 2004, La Tortilla Factory had outgrown its facility, so the company broke ground on its current 75,000-square-foot facility in order to keep up with demand. With the level of automation implemented in the new facility, La Tortilla Factory increased its potential throughput to over 1 million tortillas a day. The facility features six lines dedicated to flour, corn and specialty tortillas. In 2017, the facility was GFSI certified under SQF.

“We run three shifts. We start up Sunday evening, and we run basically nonstop until Friday evening,” says Katie Evans, vice president of operations. “At the beginning of the week, we are starting up with organics and our non-GMO and our gluten-free products. At the end of the week, we run our traditional products.” She notes a quality-control technician is present on every shift. “We bring our sanitation crew in from Friday night until Saturday morning for a full clean.”

La Tortilla Factory uses in-house programs for employee training. “We have an Alchemy system that helps facilitate the trainings,” says Katie, noting that all food safety training is also recorded through the system.

“We are always trying to develop employees from say, a mixer into a machine operator, or a packaging machine operator,” says Katie. “For high performers, we try to develop that path for them—what the next option is, what roles they could move into. We also have promoted a lot of people into our quality department. Operations people make the best quality technicians because they have that advantage of knowing how the manufacturing side of the business works.”

Adequately meeting workforce demand at La Tortilla Factory has been challenging since the Tubbs Fire hit the area in October 2017. It was the most-destructive wildfire in California history, and Santa Rosa was hit particularly hard. The fire destroyed nearly 3,000 homes in Santa Rosa, with total damage from the fire estimated at $1.2 billion. “Some people just didn’t come back,” says Katie.

Katie has done much to streamline operations since hiring on in 2015. “My first project when I got here was installing a shop floor system. We have monitors at the end of each line so that we can measure performance in real time and put that information in the hands of the operators.”

Two silos automatically meter flour for each product run. The company also developed its own system for metering water. Operations staff use handheld devices as part of the shop floor system to guide them through each step of the product run. The shop floor system also monitors the waste from every run in order to identify new opportunities for improvements.

Checkweighers monitor package weights and automatically dictate necessary adjustments further up the line if the products are getting out of spec. Two of the newer lines are outfitted with vision systems, with cameras monitoring the size and color of each tortilla, among other quality-control checks, automatically rejecting any product that doesn’t meet set specs.

While La Tortilla Factory has introduced significant levels of automation, some primary and all secondary packaging is still done by hand. The company is currently looking into its options for adding automated case packing.

The warehouse stores about a one-week supply of ingredients and one week of projected turnover for finished products. Fully integrated enterprise resource planning software keeps track of all inventory in real time.

Maintaining balance

La Tortilla Factory finds itself in a position where it has grown to a more-competitive size, but is still small enough to be nimble. “We don’t want to be so rigid that we can’t deviate and seize an opportunity,” says Sam.

The team structure permits experimentation, notes Meredith—to get an idea out there, to test-market it locally and see how consumers respond, and then consider what’s next. In fact, the team tested its Hand Made Style tortillas at the local farmers’ market one summer before deciding to launch it.

This balance of high-level operational efficiency and grassroots family culture neatly typifies La Tortilla Factory—and will clearly distinguish it as the business innovates into the future.

For more on La Tortilla Factory and how the company gives back to its area community, see “La Tortilla Factory gives back.”