As COVID-19 hits minority businesses, how a Bay Area tamale company is getting by
Plus: Feeding front-liners Filipino food
Alicia Villanueva owns Alicia’s Tamales Los Mayas, which has a factory in Hayward. (Courtesy of Alicia Villanueva)
In this week’s podcast, we spoke with small business owner Alicia Villanueva, plus Luz Urrutia, CEO of microfinance organization Opportunity Fund, and Mikkoh Chen, venture director for business accelerator Gold Rush.
How a Bay Area tamale company is staying afloat
By Levi Sumagaysay
In just a few months, Alicia Villanueva’s business has gone from its peak to a pandemic-induced pivot. But it’s better than an all-out bust, and for that she’s thankful.
Alicia’s Tamales Los Mayas last year scored a big contract to sell tamales at the Chase Center, the new home venue of the Golden State Warriors — not bad for someone who started her business by selling tamales door to door in Berkeley after emigrating from Mexico. After landing the Chase Center contract, Villanueva’s Hayward factory was humming, making more tamales than it ever had. She said then that she was “living a beautiful dream.” Then COVID-19 hit, the NBA canceled its season in mid-March, corporate catering gigs dried up and she had to hustle to keep her business going. But she has managed to keep all 25 of her employees, who are fellow immigrants, on the payroll.
“I would be the first to take a pay cut before I lay somebody off,” Villanueva said on a Race and Coronavirus podcast. She has stayed afloat by finding new clients, such as Williams Sonoma, which she said will soon start selling her frozen tamales online. She also was providing tamales for school districts that were still handing out meals even as students were sheltering in place. She has relied on Opportunity Fund, a microfinance organization that helped her business grow and is now offering relief on her debt payments, as well as La Cocina, a Bay Area-based incubator of food entrepreneurs. She also eventually received a PPP (paycheck protection program) loan from the Small Business Administration.
“It was really stressful” trying to make payroll before she got approved for PPP, Villanueva said. She has had to reduce her employees’ hours: They’re all working five hours a day for now.
It’s hard to find exact numbers on this pandemic’s toll on other small businesses. First, the good news: La Cocina, which helps the smallest of food businesses in the Bay Area, said none of its 60 active businesses has closed down. But the Golden Gate Restaurant Association, which surveyed its San Francisco restaurateur members in May, said that of the 10% that responded, 47.2% had laid off all employees.
The California Chamber of Commerce and the California Retailers Association said they did not have numbers to share, while the California Restaurant Association did not respond to a request for data.
Nationally, a newly released report by the National Bureau of Economic Research estimates that 3.3 million, or 22% of U.S. businesses, shut down through April.
“The number of active business owners in the United States plunged from 15.0 million to 11.7 million over the crucial two-month window from February to April 2020,” Robert Fairlie, an economics professor at UC Santa Cruz, wrote in the report, which is based on his analysis of Current Population Survey data. “No other one-, two- or even 12-month window of time has ever shown such a large change in business activity,” he added.
The shelters in place hit minority businesses the hardest, with 41% of black-owned, 32% of Latino-owned and 26% of Asian-owned businesses shuttering, according to the report. Thirty-six percent of immigrant-owned businesses and 25% of women-owned businesses closed down, the report also said.
Coincidentally, minority-owned businesses had a hard time getting PPP, especially during the first round when the aid went to large, well-known businesses — some of which were shamed into returning the loans.
“It is very disappointing because the businesses that need this money the most did not get them,” said Luz Urrutia, CEO of Opportunity Fund, on the podcast. She pointed out that some immigrants and mom-and-pop operations may not have relationships with banks, which were disbursing the loans. According to Urrutia, it was frustrating for Opportunity Fund, which serves mostly minority clients, until it was approved to become a lender (like the banks) for the second round of loan distributions.
That second round of PPP loans appeared to reach more businesses that needed them, with 71.2% of small businesses surveyed by the U.S. Census Bureau saying as of June 6 that they had received some PPP help. But the specifics are elusive. Amid criticism about the lack of transparency about how the loans have been distributed, the Trump administration recently said it will not disclose the size and recipients of more than $500 billion of the $660 billion in taxpayer-funded loans so far.
Urrutia said “far too many minority small business owners still haven’t gotten access to funds, due to a variety of reasons, including expenses not covered, lack of lending relationships, challenges with gathering the necessary documents and/or the very valid concerns about whether the loan will be forgiven.” (For PPP loans, forgiveness will depend on how much of the loan a business spent on payroll.)
As businesses that have survived start to reopen, not only will they have to pivot, so, too, will those who serve them. Before the Opportunity Fund was approved to help distribute PPP loans ($14.5 million to 900 business owners), it partnered with the Silicon Valley Community Foundation to launch a $50 million small business relief fund.
Gold Rush, an accelerator for Asian-founded businesses, is to some extent trying to help businesses outside its network during this crisis, according to Mikkoh Chen, its venture director.
Because many businesses may have to adjust to the new realities of an economy mired in a deadly pandemic, Chen sees Gold Rush’s role in providing a community as more important than ever.
Businesses will have to think about “how to pivot, how to change the business model, how to market better, how to market differently,” he said on the podcast. “How do we really support them in that transition?”
La Cocina is providing support for its entrepreneurs by introducing them to lawyers who can help them push for rent abatement, launching an emergency relief fund, and helping business owners navigate applying for loans, said Geetika Agrawal, program director at the incubator. That has been successful so far, but "the next three months are going to be telling,” Agrawal said, as rent and eviction moratoriums expire and as “businesses are going to increase their costs to keep us safe while looking at lower revenue.”
She added that “conversations (between businesses and their creditors and landlords) need to be rooted in economic reality.”
For Villanueva, this new, uncertain business environment means adjusting, adapting and hoping for more help. She has long been in talks to sell her tamales at Whole Foods, and it appears that will be going ahead soon in more than a dozen of the company’s stores in California. She is awaiting approval for a disaster loan from the SBA.
“I don’t see when it’s going to be normal,” she said. “Catering is totally different. They want individual plates. Before, my orders were for 300 to 500 people, now it’s 30 to 40 people. Last week, our big order was for 75 people.”
She knows others in the food and restaurant business who have had to shut down despite getting PPP loan help, but she persists for the sake of her own family and those of her employees.
“My son Pedro said, ‘don’t let COVID-19 take away our dreams and 20 years of hard work,’” Villanueva said.
Packing up meals for Bay Area front-line workers and community members. (Courtesy of the Sarap Shop)
The bright side
Filipino Americans feed the front lines while keeping themselves in business
By Martin Halili, Special to Race and Coronavirus
An alliance of San Francisco Bay Area Filipino American businesses and community leaders set a goal of raising $100,000 to provide 10,000 meals to front-line workers and community members whose livelihoods were affected by the COVID-19 pandemic and the shelter-in-place mandates that followed. A little over two months since the launch of the campaign, Filipinos Feed the Frontlines is just a few thousand dollars shy of reaching its lofty goal.
“We created a nice, round number,” said Desi Danganan. “The community has never raised $100,000 before. We set a goal that can be meaningful and possibly attainable. If you don’t set the goal high, you’ll never know if you can make it happen. It’s heartwarming that the community has come together and pushed this campaign through.”
Danganan serves as executive director of Kultivate Labs, the San Francisco nonprofit that spearheaded the program along with 11 Filipino American-owned restaurants. It has been so well-received locally, the campaign will soon scale nationally with a fundraising goal of $1 million.
“We want to feed 100,000 people by the end of the year,” Danganan said.
Kultivate Labs provides support to Filipino American businesses and arts organizations, mostly in the South of Market neighborhood that has been designated by the city as SOMA Pilipinas district. Its programs include the SOMA Night Markets, small business development and pop-up restaurants.
But when the pandemic hit, the nonprofit shifted its focus knowing that its partner businesses would be forced to shut down, and that many SOMA residents would be laid off or furloughed from their jobs.
Additionally, health care workers — many of whom are Filipino Americans — would also be affected by the novel coronavirus as the number of patients grew and inundated area hospitals. (Sixty percent of nurses at Seton Medical Center in Daly City are Filipino Americans, according to Kultivate Labs.)
Filipinos Feed the Frontlines set out to address all three concerns.
The restaurants, which otherwise would have had limited or no business during the shutdown, prepped the food. Front-line workers, and food-insecure individuals and families would be the recipients of free meals.
The alliance has provided food for health care workers at Seton, Alta Bates in Berkeley, Chan Zuckerberg Biohub, Sutter Health Mills-Peninsula Medical Center in Burlingame and UCSF. It partnered with such San Francisco agencies as the Filipino Community Center, SOMCAN, United Playaz and West Bay to distribute meals to the community.
But while the ever-evolving menu is distinctly Filipino (pancit, lumpia, tsilogs and more), Danganan emphasizes that the meals are made available to anyone in need.
“The premise was never to provide meals to Filipinos, but for the Filipino community to feed the front line,” he said.
At the same time, the restaurant owners are given a lifeline during a time of crisis. A $10 donation pays for one meal.
“It’s not a lot, but it’s something,” said Reina Montenegro, chef and co-owner of two vegan restaurants, Nick’s on Mission in San Francisco and Nick’s on Grand in South San Francisco.
“At first I was reluctant to participate,” she added. “I’m 100 percent happy we did it. We’re doing our part for the community, and at the same time it’s helping us out.”
Montenegro had to furlough 15 employees after the stay-at-home orders forced the closure of her San Francisco restaurant, and limited the South San Francisco location to takeout.
She said the Frontlines program, in concert with the takeout business, helped keep her businesses afloat.
“We’re making about 25 percent of what we used to, if that. The program has definitely helped,” she said.
Sarap Shop co-owner Kristen Brillantes estimates that the program has provided up to 20 percent of her business revenue since she had to shut down both a food stand inside the Chase Center and a food truck in the SOMA neighborhood. She and her partner JP Reyes have been pre-packaging and selling food kits since the shutdown.
“The program has been helpful, but the support from the other restaurants has been just as helpful. We’ve been able to co-promote each other,” Brillantes said.
Said Danganan, “The program provides some stability. They’re not making a profit. They’re creating meals that’s keeping their businesses at a level that’s sustainable, that’s keeping their lights on. And they’re feeding as many people as possible.”
Still, one of the participating restaurants was forced to shut down permanently, and there are no guarantees that others might not follow suit.
“A few are teetering on the edge,” Danganan said. “We’re hoping that as the shelter in place is loosened, things will get better. Time will tell if they all survive.”
Danganan said the program has benefited not only from individual donors, but from tech workers and other professionals who spread the word and helped raise additional funds. The majority of donors are local, but the program has also received support from as far away as Southern California, Seattle, Chicago, Detroit and up and down the East Coast.
“Our community doesn’t have that special relationship with a millionaire, that mystery donor who might give $1 million,” Brillantes said. “The program’s success comes from a grassroots effort. We’ve had people donate $10 after they were laid off.”
We discuss the role technology plays in this crisis and its effect on black and brown people, including in a podcast with Rashad Robinson, CEO of Color of Change, a national civil rights advocacy organization.
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