The smells of cinnamon and sugar coming from La Victoria Bakery since 1951 may soon become like Proust’s madeleine, a remembrance of things past. Jaime Maldonado, who took over his father’s Mexican bakery some 15 years ago, says the increasing cost of flour and the competition from new businesses in the neighborhood are putting him out of business.
“I’m broke,” Maldonado said sitting at a table in his bakery.
On a recent Friday night, a few customers trickled in at La Victoria bakery in San Francisco, purchasing small bags of pastries and pan dulce. But, the dark wooden tables carved with flowers sat empty. On a red-painted wall, framed photos of Maldonado in the kitchen and old-fashioned posters of Mexican women give an air of nostalgia.
In the back, Maldonado pointed to a storage room where sugar, flour, and margarine used to be stocked. “I used to keep $3,000 to $4,000 on hand of working inventory,” he said.
Approximately two years ago, “when things were different,” Maldonado explained, he took out loans to renovate the bakery that still looked much as it had when his father worked there. Linoleum covered the floors and the counters were from the 1970s.
“It used to look like Grandpa’s kitchen,” Maldonado laughed. His father started “baking out of his garage,” and grew it into a popular retail site that also delivered wholesale goodies to grocery stores.
Maldonado worked there from an early age and when doctors forced his father to retire in the early 1990s, Maldonado, the son–then 25 years old–gladly took it over. “It was in my blood,” Maldonado said.
Things went well, he said, until the 2005 renovation. Costs surged and by the time he finished, approximately two years ago, three new coffee shops had opened and the customers he had hoped to attract had options. Nowadays his place on 24th Street near Alabama competes with Sundance Coffee one block away, Sugarlump Coffee Lounge and L’s Caffe two blocks away. Their overhead is smaller and their prices higher because all of their sales are retail, where the margins are greatest.
Maldonado, on the other hand, relies heavily on wholesale, where margins are smaller. Even his retail baked goods are less expensive because his clientele generally has less money to spend. So, he’s taken steps to cut expenses. Sandwiches and meat tamales, for example, came off the menu and the less-expensive vegetable tamales stayed on.
His average daily production used to be $5,000 to $6,000 a day, counting deliveries to supermarkets. Nowadays, he’s lucky if he makes that three days a week.
While customers have more options, the price of his ingredients have jumped. Wheat costs, for example, have more than tripled to $29 per 50 pounds. Nowadays, he said, he gets a better price from Costco than going through a supplier.
Wheat Costs Sour Pastry Outlook Across the Country: See here.
At Costco, Maldonado walks to the back, where an employee rolls up the warehouse door. Later at the bakery, he moves $739.50 in flour from the back of his pick-up truck onto a forklift borrowed from a neighbor.
“Those are the things we have to resort to to stay in business,” Maldonado says.
But, he doesn’t see his efforts to save money winning out on the inevitable closing, and he’s already talking to lawyers about the process–even though his siblings and father want to stay open.
“But it’s like if Disneyland is closing, and people say ‘No, don’t close Disneyland!’ Well you open Disneyland, and you’ll see how it really is,” Maldonado joked, adding that he’s not sure what he will do for a living once he closes sometime in the next year. “I’m no dummy,” he said, “and I have a decent skills set.”
The only thing that could save him, he says, would be a great pastry chef walking through his front door and wanting to become a partner. “But no one wants to do that anymore,” Maldonado said.