San Antonio Express-News (Sunday)
Love of ‘conceptualizing ideas’ leads to thriving juice bars, hemp cafe
David Padilla has deep roots as an entrepreneur. His grandfather was one of the first businessmen to operate a movie theater in Honduras.
“I grew up in that environment of entrepreneurship, business hustle,” he said.
Padilla, who was reared in San Antonio, put that hustle to use while a student at St.
Mary’s University when he founded a company that rented venues to stage concerts and throw parties. He went on to devote 15 years of his career to the nightlife industry — opening Zen Bar Ultralounge across from the Majestic Theater — before deciding “this is not what I want to continue doing.”
Today, he runs two locally based retail businesses with a focus on health and wellness: Jugo, a chain of juice shops selling smoothies, acai bowls and cleanses; and Archie’s Coffee Lounge, a café on the Northwest Side that also offers wine, cocktails and hemp products such as CBD. Many of the hemp products are made by another of his companies, Structure Health & Wellness.
The businesses operate under his private equity fund, D Cap, which includes many of his family members as investors, he said.
Padilla has ambitious plans for Jugo and Archie’s. In coming years, he hopes to open 40 to 50 locations of each brand across Texas. Then he will consider further expansion by franchising or licensing the brands. He gained experience with franchising by helping expand the Burger Fi chain across Texas, requiring him to
travel throughout the state.
“I got a quick lesson in franchising because we had to open 12 to 15 Burger Fis in two years,” he said. “It really prepped me for this chapter of my life, which is scaling concepts that I believe are scalable.”
Jugo had two stores in San Antonio when Padilla took it over it in 2019. He went on to “reimagine and rebrand the whole thing,” he said. Today, it
includes five stores in San Antonio and two in the Dallas-Fort Worth area, with two more under construction there.
He entered the hemp industry in 2018 with investments in a CBD manufacturing company. He opened Archie’s in January on the Northwest Side. The shop has the feel of a classy, relaxing café. The idea, he said, is to educate coffee drinkers about hemp products.
“People are curious, and they associated CBD with marijuana. How do we change that?” he said. “With my food and beverage background, I thought, ‘OK, let’s do coffee. Let’s make it where the customer comes in for a coffee experience, and then we capture their attention with the CBD products and are able to educate.’ ”
Padilla recently sat to discuss his entrepreneurial background,
Texas’ hemp industry and his advice to those starting out in retail development. The following has been edited for brevity and clarity.
Q: Tell me how you entered the business world while still in college.
A: I always had that inspiration to start a business, to have ideas. In college, I started a production and promotion
company. We worked with Sunset Station back in the day, produced concerts. We would rent out the area that I think is a nightclub now. We’d rent it out and throw parties. I did that in multiple venues — sports events, concerts.
Q: How does a college student get into that?
A: I was motivated by my upbringing, the entrepreneurial surroundings. I saw that college students wanted to go have fun, party. I saw a business opportunity and just made it happen. You know, I’ve just always been a lover of conceptualizing ideas.
Q: How do you juggle so many businesses?
A: I have an amazing team. There’s absolutely no way that I would be here right now without the friends and family that have invested and trusted in me. I have a corporate team of about six people that just do everything that they can, feel the same way that I do about the business, treat it like they’re owners of the company. We’ve created a culture, I think, that younger people are attracted to. We’re very small, so we’re able to influence the culture and continue to learn and grow.
Q: At Archie’s, do you sell THC products like delta-8?
A: Yeah. It’s a hot topic in Texas. We do sell all of those products. Our manufacturing company is called Structure. We make all the oils. We make all the lotions and balms. Everything that’s FDA-approved we actually manufacture. A lot of the edibles, like the delta-8, all these things that are really popular, we source from Colorado. Some stuff from Oregon.
Q: I’m amazed that THC products are being sold in Texas. Are you afraid that the Texas Legislature will outlaw it?
A: I am in tune with what is on the horizon from the Legislature. I’ve got a great law firm that keeps me up to speed. I think manufacturers and producers
of these products are abiding by (the law). If it’s hemp-derived in Texas, then it’s legal. So delta-8, delta-10, they have found a way to pull the cannabinoids, if you will, and make these products from hemp. Once you really dig into it, hemp and cannabis are very similar. If I put them in front of you, you wouldn’t know which is which. The main difference is the content of THC, and cannabis is higher, and the content of CBD, and hemp is higher.
Now the breeding is so technical. There’s so much technology that you can pretty much get to wherever you want. I think no matter what happens, there’s going to be a demand for these products. What I’m hoping for, as a business owner, is that if there is legislation and regulations, it’s very clear-cut — that it allows the good players, the people that follow the rules, to continue to be successful.
Q: You mentioned how CBD exploded in popularity around 2018. Do you feel the industry has settled now?
A: I do. I feel like there was market saturation immediately. It was like a gold rush. Everybody’s like, “This is the new marijuana.” And it really wasn’t that. The demand for CBD has definitely, I think, gone down. A lot of the bigger players have taken over, just based on the money they have, the backing, the marketing, the international distribution that they’re capturing. I knew I couldn’t compete with that, so I needed to really focus on San Antonio. And then further than that, Texas is my extreme focus as to: How do I get the brand recognition that I’m seeking without having to worry about competing with the outside-of-Texas big companies that are trying to get licenses here?
Q: It seems like acai was another thing you didn’t see much 10 years ago.
A: Maybe five years ago is when I first was introduced to it. I call it a healthier alternative to what’s out there. It’s not going to be the healthiest thing, but it’s definitely a healthier alternative, obviously, with the
fruit and the super foods — dairy-free, vegan. It’s just a safe food to have as a snack. Now, in San Antonio, were educating on acai. People don’t really know what acai is. Is it ice cream? Is it sorbet? The fun fact is that we have a 70 percent retention rate. So if you come into Jugo, 70 percent of the time it’s going to be a regular customer. That’s what we’re seeing in the data. I’m a big data person.
Q: Could you talk about how you use data?
A: I need to know what’s going on in the stores. I have a (chief financial officer) that prepares (profit-and-loss statements) for me. That allows me to make movements across all of the brand. It allows me to see what’s working, what’s not working in a location, picking where my next location is going to be — based on the information I’m able to get out of our point-of-sale system, information we get from the marketing that we do. We do a lot of data collection in that regard. Through e-commerce, where are people ordering more? Do we target that territory more with our online marketing?
It’s important to scale. I’ll need data if and when I decide to actually license or franchise these concepts because I’ll probably need to raise money, potentially go to private equity, potentially partner with someone who’s done this on a bigger scale. And, obviously, they’re going to need all the information.
Q: So you’re exploring franchising right now?
A:
There’s a difference between franchising and licensing. I’m exploring which way I will go, but my primary goal right now, for the next three to five years, is to get to about 40 to 50 stores in Texas and then go that route for franchising, licensing. I think I need a little more history before I even explore that, because I’ve seen that happen so many times, where people decide to franchise or license and then it just wasn’t ready for that.
Q: What advice would you give to someone who wants to do what you’re doing, creating retail concepts?
A:
I would say to make sure they’re ready for a lot of hard work, sleepless nights. Make sure they have a plan, a financial plan, that encapsulates more than just opening the store, that has a runway for increasing sales. I would say to keep it simple. The more complicated you make it, the more you will have to be aware of the details, and the more you will have to train your staff.
I would say location is extremely important, so know your audience. It’s a dynamic industry, so you’ve got to be solution-driven, because things change. You never know. COVID came up. Who knew that was going to happen? And how do you adjust to that?
One of the bigger things that I didn’t do, but I would tell my younger self, is find a mentor. Find someone that’s done it and attach to them and really learn and soak it all in.