The Business Herald’s markets and banking reporter.

Hot taste of Mexico catches fire

The rise of Mexican food is adding some spice to the Kiwi restaurant scene, writes Christopher Adams

Conor Kerlin says he spotted a gap during a visit to NZ in 2004. Photo / Dean Purcell
Conor Kerlin says he spotted a gap during a visit to NZ in 2004. Photo / Dean Purcell

When Mexicali Fresh opened its first store on Auckland's Princes Wharf in 2005 its maiden customer posed a worrying question: "What's a burrito?"

The American family who established the business hadn't expected the first year of running the restaurant to be such tough going.

"Being from the States we just figured everyone knew about Mexican food and it was quite shocking at first," says co-founder Conor Kerlin, a Californian native.

Making matters worse was the onset of winter, he says, which resulted in a downturn in trading in the Princes Wharf area.

Kerlin, whose stepfather John Buell ran Mexican restaurants in the US for three decades, says Mexicali Fresh began gaining real traction only when its second store opened in Newmarket's Nuffield St in 2006.

"It took a couple of years for people to experience Mexicali and kind of get used to the food."

Mexican has been one of the dominant trends in Auckland's quick service restaurant scene over the past couple of years.

Mexico, a restaurant chain, opened its first site in Britomart in early 2012 and now has four restaurants in Auckland and Hamilton - as well as another store in Sydney - and is aiming to have 12 New Zealand outlets by mid-2015.

The Original California Burrito Company opened in Auckland's Commerce St in 2011 and expanded at breakneck pace to have around a dozen stores operating in this country and Australia by earlier this year.

Over the past few months, however, all its New Zealand sites have shut - except two run by franchisees in Ellerslie and Manukau - after bank funding for the business dried up.

Mad Mex, a taco and burrito chain with more than 30 Australian outlets, opened its first New Zealand store in Wellington in March and established two more in central Auckland and Botany Town Centre this month.

New Zealand master franchise holder James Tucker, the entrepreneur behind the Habitual Fix food stores, plans to open more than 30 Mad Mex sites in this country.

Other eateries include Jalapeno's Mexican Grill in Auckland's O'Connell St, Taqueria in Ponsonby Rd and Mexican Specialties in Ellerslie.

And Restaurant Brands is once again showing interest in bringing US chain Taco Bell to New Zealand.

Nick McCaw, Mexico's co-founder, says that in the past couple of years Mexican food has become a valid alternative for diners who might once have chosen Indian, Japanese or Thai.

"It was a natural thing," he says. "New Zealand was just catching up [with other countries]."

But while it has seen a lot of growth in recent years, Mexican cuisine is by no means a total newcomer to the local restaurant sector.

Aucklanders have been eating at Victoria St's Mexican Cafe since 1983.

The Mexican Cafe's general manager, Jeff Langford, says other Mexican restaurants operated in the city through the late 1980s into the early 1990s, including Pancho's in Elliott St and Guadalupe in Karangahape Rd.

The Mexican Cafe had very little competition through the early 2000s up until Mexicali Fresh's entrance into the market in 2005, he says.

Kerlin says he spotted a gap during a visit to New Zealand in 2004.

Mexicali Fresh - which offers Californian-style Mexican fare and operates a production-line food preparation system similar to Subway's - now has five stores across Auckland. Kerlin says the company could potentially open 40 to 50 stores in New Zealand over the next five years.

And the company has begun franchising stores, with those in New Lynn and the North Shore's Constellation Drive run by franchisees.

Langford says the increased competition the Mexican Cafe now faces is a challenge.

"We have to stay light on our feet and fluid and be prepared to move and evolve with the times."

Langford says it helps that the Mexican Cafe has a large base of loyal customers.

"We've got second and third generations of families that have been coming here for decades," he says.

Conor Kerlin says Mexicali Fresh began gaining real traction only when its second store opened in Newmarket's Nuffield St in 2006. Photo / Dean Purcell
Conor Kerlin says Mexicali Fresh began gaining real traction only when its second store opened in Newmarket's Nuffield St in 2006. Photo / Dean Purcell

Kerlin says Mexicali Fresh made a decision to expand slowly, reinvesting profits back into growth.

"So much of it is just the systems and that's something we've worked tirelessly on," he says. "[Original] California Burrito, I think they saw that Mexican food was really hot in the market and they just tried to duplicate so fast."

Late last year, iHug co-founder Tim Wood bought a 37 per cent stake in Mexicali Fresh.

Kerlin says establishing a board of directors - which includes himself and Buell, as well as Grant Stapleton, the co-founder of the Hue chain of hair salons - has really helped Mexicali Fresh to grow.

"We not trying to have 200 stores and we're not trying to be on every single corner," he says. "We're also being really selective about who we franchise to."

Mexico is going in the opposite direction to Mexicali Fresh.

All of its stores are company-owned and McCaw says he has no plans to franchise the business.

"It's just extraordinarily hard to maintain quality, service and consistency - and take the best care of your brand - when you've got stores that aren't yours."

McCaw says Mexico has placed a similar level of focus on the decor of its stores as it has on its menu, created by head chef Javier Carmona.

The result is a rustic Latin ambience, replete with various portraits of Mexican artist Frida Kahlo staring down at diners.

McCaw says Mexico is also reinvesting profits in expansion and will open its sixth store in Ellerslie on January 14 and its seventh in Christchurch in March.

The company is also assessing possible sites in Wellington, as well as regional centres such as Dunedin and other parts of Auckland, including Howick.

McCaw says the timing of Mexico's entry into the market certainly helped its success. "We were in the right place at the right time with a very cool product."

Sarah and Otis Frizzell, owners of The Lucky Taco, aim to create home taco kits. Photo / Kellie Blizard
Sarah and Otis Frizzell, owners of The Lucky Taco, aim to create home taco kits. Photo / Kellie Blizard

Lucky Taco truck owners have big plans for spicy creation

Otis Frizzell has much bigger ambitions for The Lucky Taco than just the mobile takeaway truck the business is centred around.

The artist and radio personality and his wife Sarah got the idea for the venture after experiencing the Los Angeles food truck culture during a visit to the United States in 2011. The couple decided they wanted to replicate the concept in Auckland and after attending a cooking school in Mexico City - and clocking up more than 3,000km of travel around the Central American nation sampling tacos - the business was born.

The Lucky Taco now has a regular spot next to the KFC on Ponsonby Rd and the truck also attends private and public events.

The Frizzells recently set up a commercial kitchen in the garage of their Auckland home, which Otis says is more convenient than renting kitchen space to prepare food for the truck. It has also provided the opportunity to start producing retail products under the The Lucky Taco brand.

Frizzell, the son of Kiwi artist Dick Frizzell, says a hot sauce created by Sarah is being used by chef Al Brown in his restaurants, including Depot and the Federal Delicatessen in Auckland's Federal St.

The aim is to create home taco kits that could compete against those marketed in New Zealand under the Old El Paso brand.

"Realistically we're here to take on Old El Paso for home taco kits - our steak marinade, our hot sauce and our salsa in a box ... and you can have Lucky Taco at home," Frizzell says.

They are also looking to bottle Hochata, a cinnamon-infused Mexican rice milk drink sold from the truck.

Frizzell says he's taken a year-long hiatus from his art to build The Lucky Taco, while Sarah has quit her job as an advertising art director to focus on the business full-time.

"It's been our only income for the last six months but we're paying our mortgage and we've built a kitchen," he says. "I'd have to call it a success. We're fortunate enough that it's paying for itself."

- NZ Herald

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