El Rey Mexican Food Products Inc. had humble beginnings – in a 2,000-square-foot combined tortilla factory and grocery store that opened in 1978.
However, by the end of this year, the company will have five El Rey stores, a grocery stand in the Milwaukee Public Market, a tortilla factory and a 50,000-square-foot wholesale distribution center.
When Olivia and Ernesto Villarreal married and moved to Milwaukee’s near south side in 1969, there were only a handful of places to buy Mexican groceries and ingredients in the city..
Ernesto’s father, Octavio, had a small grocery store in the neighborhood, but had a difficult time stocking items with any regularity because there were no local suppliers. The other small mom-and-pop type stores had similar problems, Olivia said.
“All of their supplies came from Chicago,” she said. “They would drive down to Chicago at least once a week.”
Some of the supplies the grocers were buying included corn tortillas, a staple of Mexican food and a cultural icon.
Ernesto and his brother, Heriberto (Beto), decided to open a supermarket that would carry Mexican and other Hispanic products. Corn tortillas perish quickly, and if the family was able to have a local supplier, the family would be able to get the product to market more quickly.
“The first order of business was to open a corn tortilla plant,” Olivia said. “That’s the basis of all of our business ventures. It’s financed all of our retail outlets that are in business now.”
In 1978, the brothers and their wives opened Super Mercado El Rey at the southeast corner of South Cesar Chavez Drive (South16th Street) and West Mineral Street.
“We were bringing in products from Chicago – cilantro, chiles and other things you couldn’t get in Milwaukee,” Olivia said.
It started small, but Super Mercado El Rey received a huge response from Milwaukee’s Latino community.
By the end of the first year, both Ernesto and Beto had quit their full-time jobs at Mercury Marine. Olivia and her sister, Cris, who married Beto, both formerly worked at the Bank of Commerce.
“One by one, we started leaving our jobs,” Olivia said. “Within a year, we had all left our jobs to concentrate on El Rey.”
After its first year, Super Mercado El Rey moved to a larger space across the street, at 1023 S. Cesar Chavez Drive. The space has been expanded twice and now houses a café, in addition to the grocery store.
A few years later, the family opened a tortilla factory on South Fifth Street to make corn tortillas and tortilla chips. In 1999, the factory moved to larger quarters at 1530 S. Muskego Ave.
Today, the factory also makes corn chips, tamales, hard tortillas and tostadas. The products made in the tortilla factory are sold in El Rey supermarkets, other grocery stores and to restaurants through the wholesale market.
The 20,000-square-foot factory is operating at capacity, Olivia said, making tortillas 365 days per year. The family may buy a new tortilla machine to increase output.
The tortilla factory makes more than 1 million tortillas every year and is indicative of El Rey’s growth, which has come equally from its retail operations and wholesale sales.
Wholesale sales began taking off in the 1980s, when Mexican food gained popularity and chain restaurants such as Chi-Chi’s began moving into the Milwaukee market. The Villarreals started selling Hispanic food products to those restaurants at wholesale prices, Olivia said, because they were known as a source for fresh tortillas and other Hispanic foods.
El Rey’s wholesale business is still growing.
Last year, the Villarreals bought a 50,000-square-foot building at 710 W. National Ave., which is being renovated as a new wholesale distribution center. El Rey currently uses the second and third floor of its store at 1320 W. Burnham St. for wholesale business, and an El Rey grocery store occupies the first floor.
The new wholesale building should be open within days, Olivia said.
Moving wholesale operations out of the building on Burnham Street could re-start the Villarreal’s stalled plans to create apartments above the grocery store, Olivia said.
“We’ve had plans for apartments above the (former) Sears store for years,” she said. “We had some challenges, but we may revisit the project again.”
El Rey’s retail growth has followed the growth of Milwaukee’s Hispanic population, which has risen steadily since the 1980s.
In 1995, the Villarreals opened a second El Rey store at 3524 W. Burnham St.
“Our No. 1 goal was to cater to Hispanic tastes,” she said. “We followed the population trends. But 35th Street was going out on a limb then.”
The Villarreals now own three stores on Milwaukee’s south side, as well as a stand in the Milwaukee Public Market in the Historic Third Ward. They will open two new stores this year. A new store at 916 S. Cesar Chavez Drive will replace the original Super Mercado El Rey on May 5. Both stores will remain open for a time, but the older store will eventually be closed and redeveloped into offices and retail space, Olivia said. In late May, the family will open another new store at 823 S. Layton Blvd. in a former Walgreen’s store.
Olivia and Ernesto have four children – three of them and two spouses also are working in the stores. Beto and Cris have two children and one spouse working in the business.
“Ernesto – he’s down here all the time,” Olivia said. “He’s always talking to people. You’d never guess that he has stores that sell $61 million in products. He knows which person had which child when. He listens to the people, who tell him what they want.”
The company’s response to customers’ needs has become as detailed as importing beers from different regions throughout South and Central America.
“They’ve got their basics,” Olivia said. “Now, they want some of the luxury items too.”
El Rey Mexican Food Products Inc.
Locations: Three full-service stores at 1023 S. Cesar Chavez Drive, 3524 W. Burnham St., and 1320 W. Burnham St., and a tortilla factory at 1530 S. Muskego Ave. The company operates a grocery stand in the Milwaukee Public Market and will open two additional stores in May at 916 S. Cesar Chavez Drive and 823 S. Layton Blvd. The company’s new wholesale distribution center opens this week at 710 W. National Ave.
Industry: Grocery stores, corn tortilla factory
Sales: $61 million
Leadership: Ernesto and Beto Villarreal and their wives, Olivia and Cris.
Employees: 325 now. The two new stores will add 50 employees.
Vital Factors:
• Serve underserved markets – The Villarreals saw a market and need for a full-service grocery store that would sell Mexican and other Hispanic products in Milwaukee. As the city’s Hispanic population grows, so are their stores and the demands for their products.
• Freshness – Instead of trucking them in from Chicago, the company decided to make its own corn tortillas in Milwaukee.
• Respond to customer feedback – The Villarreal family often works at cash registers and bags groceries. As new Hispanic populations from South and Central America arrive, they request new products. By responding to those customers and stocking the products they seek, El Rey is expanding its marketshare.
• Going wholesale – The family is expanding wholesale operations to serve restaurants and other grocery stores as Mexican and other Hispanic foods were growing in popularity.
