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Couple's gamble pays off: Food marketing plan now includes manufacturing.

March 25, 2011

By William Pack

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An entrepreneurial spirit and the demands of a growing family convinced Kathleen Gilland Mayes and her husband, Matt, to take a big risk in 2007 and jump into an unexpected line of work — food manufacturing.

The succeeding years have not been easy for the Mayeses and their company, MaGi Foods.

The Mayeses originally planned to just market the Louisiana Purchase brand, but a commodities market explosion that could have put the company out of business instead convinced Kathleen Mayes to take on the manufacturing end of the business.

So MaGi bought the necessary equipment and set up shop in San Antonio as both manufacturer and marketer of the Louisiana Purchase products.

Gradually, Mayes found her footing as a manufacturer and markets have opened up. Louisiana Purchase sales have been growing for three years and, with new markets in the Northeast, could grow by 50 percent this year, putting the company in position to produce a profit in 2011, said Matt Mayes, the company's sales and marketing chief.

“We're getting there. That's what's exciting,” said Kathleen Mayes, who previously had worked for a slipper manufacturer but more recently had been involved in corporate finance before acquiring Louisiana Purchase.

“In my opinion, this is the American dream,” said Kathleen Mayes, MaGi's owner and president.

Mark Ahrens, a certified business adviser for the University of Texas at San Antonio's Small Business Development Center, agreed more growth is possible.

Even though it's in an industry with tight margins, MaGi offers a different food product that could maintain its appeal as consumers continue to search for ways to cut food costs, Ahrens said.

The Louisiana Purchase line of products features traditional Louisiana fare such as jambalaya and red beans and rice that can be made on the stove in 20 minutes or microwaved. It currently offers 14 food products, including family-sized portions of dirty rice and jambalaya that the Mayeses have added.

Mayes said her young family loved the Louisiana Purchase lines even before she and her husband bought into it. The product has less sodium content and less fillers than comparable products, making it healthier than the competition, said the couple.

“It's a meal in a box,” Kathleen Mayes said.

She was looking to get into a different line of work because of the conflicts between her corporate schedule and the demands of her growing family. When the couple heard Louisiana Purchase was available, they considered their options before putting their savings together and investing in the Louisiana Purchase trademark.

“We knew we wanted to work together,” said Matt Mayes, a former H-E-B buyer who now works as Amigos Foods' national sales director in addition to his work for MaGi. “We wanted to build a family business and a San Antonio company.”

But then the commodities crisis arrived in 2008, forcing up the prices of food companies' feedstocks at the same time the recession kept companies from passing cost increases along to customers. The money crunch and other manufacturing issues left MaGi at a crossroads: Get out or get more control over the process.

With a line of credit from Frost and later a capital loan from microlender Acción Texas-Louisiana, MaGi purchased manufacturing equipment and weathered the storm from the commodities explosion. Since then, it has doubled its staff to a total of six employees and tripled the size of its San Antonio warehouse to take in the manufacturing and packaging units.

Alma Valdez, an Acción loan officer, said providing loans to customers with little experience in the fields they are entering can be risky. But the financials the Mayeses presented and a description of where they wanted to go showed the company had growth potential.

H-E-B and Central Market distribute Louisiana Purchase products, and Kehe Food Distributors has gotten the food line into grocery chains throughout the country. It also is sold in military commissaries across the U.S.

The Mayeses said that, with six straight months of record sales, the company is talking to lenders about equipment loans to improve efficiency and is planning for growth in both existing and new markets.

Read more: http://www.mysanantonio.com/business/article/Couple-s-gamble-pays-off-1307283.php#ixzz2GwEDvHii