Mission Inn Owner Eyes Mexican Chain; Frozen Burrito King
Duane Roberts made an initial fortune by laying claim to the first frozen burrito. Now he's trying his hand at another Mexican food venture.
Last week, Roberts opened Las Campanas Restaurant & Cantina, the first of a possible chain, in Rancho Cucamonga. The Inland Empire native said he's in talks for a Las Campanas in Orange County, his adopted home.
"If we do the volume levels we want to do, we will expand," Roberts said.
Las Campanas serves gourmet Mexican fare. Think filet mignon stuffed tacos.
"We're the only restaurant I've ever heard of that will make tacos and enchiladas using choice filet mignon," Roberts said.
Las Campanas also is big on ambiance.
"A lot of it is the experience," Roberts said. "It's like something you'd see in South Beach, Florida."
The restaurant is based on Las Campanas, one of four restaurants at Riverside's Mission Inn Hotel & Spa, which Roberts bought in the 1980s.
Las Campanas means "the bells." The Mission Inn has one of the largest bell collections in North America, thanks to the inn's founder, Frank Miller, who collected them.
Roberts' vision for the restaurant: do for Mexican food what P.F. Chang's China Bistro did for Chinese food, and them some, he said.
Some of the design details: dense, lush landscaping with a wrought-iron gate leading to a patio with a heated floor, a 16-foot, backlit water wall and a water sculpture with a five-foot encased bell, designed by Anaheim water artist Nayer Kazemi.
"It's a showstopper," Roberts said.
The design, which Roberts' wife Kelly managed, took a year. The cost of the restaurant, not including land, is $4.5 million, he said.
"This one has to really generate the revenue," Roberts said.
Las Campanas is the latest venture in a line of them for Roberts, who lives in Laguna Beach and runs his umbrella company, Entrepreneurial Corporate Group, from Newport Beach.
The company has estimated yearly sales of $250 million and owns several thousand apartments, a couple of British food companies, an Indian snack food maker and a dip-making business.
Roberts, conservatively estimated by the Business Journal to be worth $500 million, also is a philanthropist. He's building a new Humane Society building in Riverside and has given "seven-figures" to Pepperdine University, where his stepdaughter, Casey Reinhardt, goes to school.
Reinhardt, a model for the Mission Inn's spa, also was one of the cast members on MTV's "Laguna Beach: the Real Orange County."
Duane Roberts has two stepchildren, Doug Reinhardt and Casey Reinhardt.
The Mission Inn, a historic Riverside landmark, also falls under Entrepreneurial Corporate Group.
Roberts made his initial fortune when he sold his family's food business, Butcher Boy Food Products Inc., to Central Soya Inc. in 1980. His dad started the business in 1950.
Butcher Boy supplied burgers to the first McDonald's Corp. restaurants. It also supplied barbeque beef and a frozen burrito Roberts came up with to restaurants, school districts and food-service companies.
Roberts later went onto to start another food supplier, Fernando's Foods, which he sold in the late 1990s to ConAgra Foods Inc.
Roberts didn't set out to be the frozen burrito king. Instead, he said he intended to be an investment banker on Wall Street. He started college in Riverside but his father, Harry Roberts, pulled him away.
"I quit college," Roberts said. "I started selling barbeque beef."
At the time, the icons of the fast-food industry were building their empires: Bob Wian (Bob's Big Boy), Harlan Sanders (Kentucky Fried Chicken), James Collins (Sizzler), the McDonald's brothers, Richard and Maurice, and Glen Bell (Taco Bell).
"We were at the beginning of the fast-food industry," Roberts said.
Butcher Boy supplied the first Bob's Big Boy in Glendale, according to Roberts. Wian went to high school with Roberts' father, he said.
"My father sold to McDonald's when there was only one in the world," Roberts said. "In those days, we had to deliver six days a week."
Butcher Boy eventually supplied 17 of the 22 McDonald's restaurants around the time when milk shake machine salesman Ray Kroc started licensing the restaurants so he could sell more milk shake makers.
"My father negotiated with Ray Kroc," Roberts said. "The first franchise, which very few people know, but I do, was in Fresno."
Butcher Boy sold its business supplying McDonald's. The buyer didn't end up meeting quality standards and lost the business, according to Roberts.
That's when William Moore, founder of what's now Irvine-based Golden State Foods, took the business away. Now Golden State is one of the leading suppliers to McDonald's.
By 1964, Roberts was president of Butcher Boy. The company became known for its Mexican food, especially frozen burritos.
"We were kicking around what to make," he said. "Our Hispanic butcher said, ‘Why don't you make a burrito?'"
Roberts said he found a tortilla maker in Santa Ana and came up with a frozen burrito that was deep-fried, which today are called chimichangas.
The burritos took off, he said. Butcher Boy sold them for 10 cents. Customers sold them for a quarter. Microwaves pushed sales even higher. The company's largest customer was the Los Angeles school district.
Roberts said he never heeded his father's advice-do one thing and stick with it.
"He was always leery of real estate and the stock market," Roberts said of his dad. "He knew the meat business."
One of Roberts' diversifications: the 105-year-old Mission Inn, which he saved from demolition.
He bought it for a reported $13.5 million in 1985 and reopened it in 1992.
The inn's 1993 opening gala was featured on "Lifestyles of the Rich and Famous."
These days, the inn's 239 rooms are being refurbished at a cost of $8 million. Kelly's Spa, which his wife oversees, was expanded and refurbished for $4.5 million. New electrical upgrades set to be finished soon cost $1.8 million.
The Mission Inn has been profitable for the past six years, Roberts said. But all the money goes into upkeep, he said.
"It's constant. It's a labor of love," Roberts said.
Roberts said his mother inspired him to buy it, though she died before he did.
"She just loved the Mission Inn," he said.
Roberts works from his Laguna Beach home office, his Newport Beach office and in Riverside, where he grew up.
"My heart will always be in Riverside," he said. "It's a very progressive city. We have a beautiful downtown."
Roberts ended up running food businesses in Britain after he signed a five-year non-compete clause in the U.S. upon selling his food service business.
He started with five companies in Britain, now merging into two: a company that makes dips and hummus, and an Indian foods business that makes snacks such as samosas, pastry shells filled with potatoes and onions.
The companies sell to the largest retailers in Britain, including Sainsbury PLC and Tesco PLC, which is opening several supermarkets in OC.
Doing business in Britain is tough, Roberts said. The work ethic isn't the same as in the U.S., he said. Soccer, or football, matches often take priority, he said. Four o'clock is quitting time.
"The culture is so much different," he said. "When we first got there it was like a caste system."
The suit and tie people didn't communicate with the worker bees and vice-versa. It's not easy to fire people, he said.
"Everybody has a contract," Roberts said.
Fired workers get several months to a year's severance, he said.
But business has improved, he said. Roberts has brought over some key managers from the U.S. and is running the companies like American, not European, companies, he said.
"We're finally getting it down," Roberts said.
He said he may even start making Mexican food there.