When Cantina Royal opened in 2010 on the edge of North Third Street in the Williamsburg neighborhood of Brooklyn, younger, hip crowds had not yet settled into the enclave en masse. The former Domino Sugar Factory hadn’t yet been converted into glassy lofts and the industrialized waterfront hadn’t yet been transformed into a sprawling public park.
Julio Mora, a chef from Mexico City, is the force behind the former restaurant, which pivoted to a consumer packaged goods (CPG) business in 2020–but more on that later. Mora arrived in Brooklyn via Los Angeles–broken-hearted from a recent split and eager to break into the American restaurant industry–fittingly, the original logo of Cantina Royal was a bleeding heart. While working as a head chef at a restaurant in SoHo, a customer challenged him to concoct a salsa that met her high expectations for spiciness. Up for the test, he began experimenting with what would eventually become his sampler line of hot sauces.
In 2010, Mora officially opened the restaurant and a year later met his future business and romantic partner, Diana Beshara, who worked as an actress at the time. Their partnership started with an overhaul of the restaurant’s menu. Soon after, Beshara was managing the restaurant’s catering and events, flexing her newfound natural aptitude for business. Cantina Royal began selling the hot sauce sampler, initially named 303 after the hotel room number where Mora lived for 25 years following an earthquake in Mexico.
At first, the sauces were created to supplement the restaurant’s income. But over time restaurant customers requested them, and momentum built for the product. The business soon decided to rename the sauces to match the restaurant’s identity.
Turning points and adaptations
By late 2019, Mora faced a steep increase in rent costs, heightened by the rising profile of Williamsburg and the restaurant’s coveted location by the East River waterfront. Their landlord was eager to capitalize on these changes. With a longstanding restaurant in the area, Mora and Beshara’s plan had been to operate there for as long as possible.
They had to change something to match the scope of their rising demand. Beshara reflected, “We learned everything the hard way. At this point we weren’t a company. But we were bringing in more revenue with the product.” Without the equipment necessary to produce, bottle and seal that volume of sauce, Mora enlisted additional labor. Even with more helping hands, some steps required creativity: To secure the tamper seals on the bottles, they used the heat from a hair dryer.
At the beginning of the COVID-19 pandemic shutdown, the restaurant kept its operations going and offered takeout while also preparing meals for hospital donations–a “pivot born of circumstance.” But things started to look bleak when the building’s owners felt a greater urgency to secure a tenant in the space.
With much transformation well underway, Mora and Beshara–by then no longer romantically linked–realized the benefits of pivoting to CPG. Renting a kitchen to manufacture the sauce, for starters, would cost a fraction of renting and running a dine-in space. Managing fewer entities to pay would also shift the focus back to the food itself.
Mora said, “The restaurant business is like a sheep. You are making wool, but you have all the coyotes and wolves–like taxes, fines, landlords, Seamless, GrubHub. As a chef, the salsa is what I love. I can play with flavors and products.” In addition to Mexican chile peppers, the hot sauce’s core Mexican profiles incorporate traditional ingredients like cumin, tamarind, epazote, and cilantro while the newer recipes include ingredients such as Carolina reapers and tarragon.
Restaurant as incubator
As Mora and Beshara quickly learned, the experience that comes from running a restaurant doesn’t necessarily translate to running a successful CPG business. The greatest challenge has been tapping into the labyrinthine corporate structures that exist–think grocery stores–and navigating them with limited connections. As a smaller independent business, Cantina Royal has built these over time. Establishing relationships with distributors, suppliers and other players in the supply chain became essential steps for the business to grow.
However, they enjoyed some advantages from operating a restaurant in a competitive city. As a restaurant, they learned to negotiate prices and entered the CPG business with an advantage in sourcing, drawing on years of experience evaluating and negotiating with suppliers. Also, running the restaurant allowed the duo to test the product with customers in real-time and continue to develop the flavors. Still, some factors remained out of their control. For example, prices shot up exponentially in 2020 due to delays in shipping and the limited production of high-demand goods such as garlic.
Amid these uncontrollable factors, a unique opportunity arose.
The YouTube talk show “Hot Ones” approached Beshara with an invitation to feature their Tamaulipeka tamarind sauce. They requested 250,000 units of the product—a formidable task given that at the time it took Mora about 40 minutes to make one case on his own.
The first of the company’s three appearances on “Hot Ones” became a way to tap into seed money in an unconventional way. Rather than relying on individual investors before a product launch, Cantina Royal earned revenue from an existing product and keep the proceeds within the business.
Accessing stories and building connections
Pivoting fully to a CPG business allowed Mora and Beshara to focus their efforts and fold in their various backgrounds into the business. Mora, who continued to create the sauces by hand, named and tailored each to tell a personal story—all but one fashioned from Mexican chile peppers. “You’re accessing communities, you’re accessing stories,” Beshara elaborated.
In turn, Beshara applied her professional acting training to help tell the stories behind the goods and market them to both new customers and dedicated patrons of the former restaurant. She herself has a connection to Brooklyn, having been born in the borough to Syrian and Colombian parents.
From its beginnings, the entrepreneurs have sold the products at markets to connect with customers and to get feedback. Face-to-face time with potential customers proved, like with any business, incredibly valuable in learning how to market and sell. Another strategy could involve sending out discovery boxes of products and showing up at farmers markets in communities of all sizes. “Your customer will tell you how to sell it,” Beshara said.
Cantina Royal, which was formerly tied to a very specific place in Williamsburg, has expanded in the last four years to have a national and international reach, appearing in markets in Denmark, Singapore, and Australia. Potential markets now include rural communities and demographics far from New York City, so gathering feedback from customers is even more essential.
Like many businesses before it, Cantina Royal grew from a local restaurant and a loyal base of customers. Mike’s Hot Honey, for example, started when a pizzeria employee started drizzling his concoction of honey and chile peppers onto pizzas. Another success story is Rao’s Homemade pasta sauces, which originated in a Manhattan restaurant in 1992. Earlier in 2024, Campbell’s acquired Sovos–the company now manufacturing Rao’s–for $2.7 billion.
Continuing evolution
Despite not having prior experience in packaged goods, Mora and Beshara had the tools to pivot to a CPG business: Experience in management, food production, sourcing, community ties and personalized marketing. They also learned not to get attached to “perfection” or even to a specific aspect of the business. That’s because operational systems, brand identity, marketing, and the product line itself can–and will–change over time.
Cantina Royal utilized the strengths of their founders, along with a third-culture identity of its partners with roots in Mexico, and the distinct character of Brooklyn, to stand out in a saturated market. Their story shows that CPG businesses can celebrate the uniqueness of their founders. This type of business needs a variety of talents and backgrounds to fill a need in the market. With a combination of resilience, perseverance, and strong identity, new CPG businesses can evolve despite challenges, while staying true to their origins.