By Ron Leir
After building a $14 million a year importing business in the Kearny meadows, Family Food Distributors, Newark Turnpike near Bergen Ave., was delivered a near-fatal blow by SuperStorm Sandy last October, suffering more than $700,000 in flood damage and lost inventory.
But the family-run concern – headed by CEO Patricia Mendez and husband John Rivas – with its “Mama Tere” brand of ethnic foods – has picked itself up, with a little help from neighbors, understanding vendors, and the government, and is working its way back to normalcy again.
The company carried no flood insurance since it’s not considered to be in a flood zone but that didn’t stop Sandy from wrecking its vehicular fleet of five trucks and a van and inundating its offices and warehouses with four feet of water.
“We worked 10 days, 24/7, just cleaning up the damage,” Mendez recalled. Sandy also robbed them of power and utilities.
Vendors loaned them forklifts and other equipment to move out soaked, unusable food from its warehouses and rented them two trucks to resume some operations. And they bought new furniture, carpets and computers to replace those ruined by the storm.
It took them about two months to regain their footing, Mendez said. Two days after Sandy hit, the company applied for a recovery loan from the U.S. Small Business Administration (SBA).
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“We were approved for a low-interest SBA loan,” said Andrea Castaneda, Mendez’ daughter and marketing director, “but the amount has not yet been finalized and we’re concerned. Our suppliers have been understanding but they are running out of patience. We need that line of credit.”
Last Wednesday, March 6, the company got a big morale boost when Lt. Gov. Kim Guadagno and staff from the New Jersey Small Business Development Centers (NJSBDC) stopped by for a tour of the 50,000 square feet warehouse complex and to pay tribute to its can-do attitude.
Guadagno noted that aside from taking a big hit from damage to its physical plant, the company was forced to lay off seven of its 30 employees.
In fact, its financial situation was so desperate, Guadagno said, that when Castaneda asked the company’s accountant what it should do to get the place up and running, they were advised its best option was “to declare bankruptcy.”
But the owners were having none of that. Instead, Guadagno said, the company’s owners “leveraged their homes” and Castaneda’s college account to stay afloat while still incurring debt.
Guadagno offered some hope for relief, saying that once the company does receive the SBA loan, it’s possible that New Jersey’s allotment of Community Development Block Grant funds could be tapped to help offset the loan payback and rehire the seven workers previously let go. There’s no guarantee that will happen, however.
Meanwhile, like hundreds of other New Jersey small businesses clobbered by Sandy, the owners are doing all they can to survive.
Family Food Distributors originated in early 2001 when Mendez, Rivas and Castaneda set up shop in the basement of their then-home on Windsor St. in Kearny, selling Latin American foods acquired from an importer to food outlets in the tri-state area.
Mendez credited the NJSBDC at Rutgers-Newark with guiding the family through an eight-week course on coming up with a business plan and providing follow-up mentoring over the next year and a half to the point where they were positioned to apply for a loan to expand their business to two Bergen Ave. warehouses where they began importing food products from Costa Rica.
Growing volume led to further expansion to the company’s current location at 969 Newark Turnpike where the first shift reports at about 5:30 a.m. and the typical business day doesn’t end until 8 or 9 p.m., Castaneda said.
Today, she said, Family Food Distributors imports “nostalgia” ethnic foods from Ecuador, Central America, Spain and Thailand and ships their products to bodegas and some supermarkets primarily in New Jersey, New York and eastern Pennsylvania, but also about 10% of product goes to stores in Illinois, Minnesota and South Carolina.
Some of the company’s products most favored by their clients include: Van Camp’s Tuna (packaged in oil), its No. 1 seller from Ecuador and Columbia; Del Frutal Peach Nectar from Guatemala; Amor sugar wafers from Ecuador; its own “Mama Tere” Aji hot sauce, also from Ecuador, along with other spices and grains from Latin America.
In 2012, NJSBDC counseled 5,730 small business owners and start-up businesses, according to COO/Associate State Director Deborah K. Smarth, and of those, 632 began new businesses. Last year, she said, the agency sponsored 850 training sessions attended by more than 10,000 individuals. “We helped save and/or create 10,745 jobs, facilitated $64.8 million in total financing for businesses and saw our clients obtain $25 million in procurement contracts (from governmental and private sources).”
In a harsh, post-Sandy world, Smarth said the agency is “seeing 50% of our client portfolio struggling in an uphill battle” to stay in business and “get back the sales [they] missed.” And that’s been reflected in how the agency’s 11 college/university- based centers around the state have been “inundated” by small business owners seeking help, she said.
Small business owners in New Jersey looking to recover storm-related losses are reminded that they have until July 31 to apply for Economic Injury Disaster Loans (EIDLs) to help meet working capital needs caused by Sandy. Loan amounts and terms are set by the SBA and are based on the applicant’s financial condition. Owners may apply online by visiting the SBA website at https://disasterloan.sba.gov/ela.
For more information, small business owners are invited to visit any of the SBDCs or go to www.njsbdc.com or call the SBA customer service center at 1-800-659- 2955 (1-800-877-8339 for the hearing impaired) or e-mail disastercustomerservice@ sba.gov.