Restaurant investors ride the crest of a Mexican wave
Mark Leftly and Laura Chesters report on a cuisine that is now seen as 'the next big thing'
Mark Leftly is political correspondent at The Independent on Sunday and associate business editor across the Independent titles. He writes a weekly column, Parliamentary Business, published on a Wednesday, that covers politics and the City. He is a multi-award winning reporter and was named Press Gazette's business magazine journalist of the year prior to joining The Independent on Sunday.
Sunday 28 July 2013
Felipe Fuentes Cruz rolled out 100 tortillas stretching 65ft as he attempted to make Britain's biggest burrito just off London's bustling Oxford Street. The head chef of the Benito's Hat Mexican food chain piled on 65kg of chicken, 5kg of tomatoes and more than a pound of coriander to the music of a mariachi band in a record-breaking effort that took seven hours to complete.
That record lasted less than three months when, in February last year, 10 Bristol University students made a 77ft burrito in just 26 minutes.
Although Benito's Hat can no longer lay claim to building Britain's most colossal burrito, this was a canny marketing ploy that enabled the chain to take full advantage of the surge in demand for Mexican food.
In May, the private equity firm Calculus Capital invested £1.1m in Benito's Hat, which also serves tacos, salads and margaritas. The money will be used for a host of new casual restaurants, the first of which – and fifth overall – will open in the capital in September.
Among other Mexican restaurants laying their sombreros in new locations are Santander-backed Tortilla, the award-winning Chilango and Wahaca, co-founded by the former MasterChef champion Thomasina Miers.
"Mexican food is very different, very fresh, very convenient, very fun, eat-in, eat-out," says Calculus's investment director, Rick Jones, who also points out that the fresh ingredients mean these chains can cash in on the craze for healthier food. "And it's about five quid for a burrito, which ain't bad."
Mexican food has been popular in the US for decades, but initially struggled to attract Brits who were happier munching on a sandwich or a burger. The other co-founder of Wahaca, Mark Selby, says: "I think there was a splash of Tex-Mex restaurants 20 years ago which tainted the market for Mexican food here. It was seen as more about getting drunk on tequila rather than the food itself."
However, Brits have become more experimental in their tastes in recent years, moving from being a country that was derided for its cooking to training some of the best chefs in the world. As a result, an inexpensive style of food – one with depths of flavour due to variations that include choosing from 3,000 different chillies – has finally started to catch on.
Edmond Schama, a restaurant expert at the leisure property firm Shelley Sandzer, says: "I think, principally, we have come from a low base where Mexican food has been mass-market supermarket product or value restaurants.
"Trailblazing casual dining restaurants, such as Wahaca, are seen as full-flavoured, relatively exotic and it's social – the sort of food you have with company and accompanied with a drink."
Banks, private equity funds and rich individuals are all looking to pile money into what Claire Madden, a partner at the private investment firm Connection Capital, has identified as "the next big thing". Last year, Connection was one of the parties that chased Barburrito, the £4m revenue Manchester-based chain that has expanded into Leeds, Liverpool and Nottingham.
Founders Morgan Davies and Paul Kilpatrick eventually settled on Business Growth Fund as their partner. The venture capitalist invested £3.25m to help Barburrito triple its number of restaurants to 18 during four years and to back the duo's "mission to take the ultimate burrito experience to the rest of the UK".
The only problem with this grand ambition is that Barburrito faces plenty of competition from other Mexican chains that have exactly the same goal – or at least want to serve up the biggest burrito on this side of the Atlantic.
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