A Family Affair At Mercadito Hospitality

The Chicago-based multi-concept company emphasizes upscale Mexican cuisine and cocktails.

Brothers Alfredo, Patricio and Felipe Sandoval founded Mercadito Hospitality in 2004 and now operate seven bar and restaurant brands.
Brothers Alfredo, Patricio and Felipe Sandoval founded Mercadito Hospitality in 2004 and now operate seven bar and restaurant brands.

For the Sandoval brothers, the restaurant business is a family affair and a labor of love. Alfredo, Felipe and Patricio Sandoval are celebrating 10 years as the owners of Mercadito, an upbeat Mexican concept with locations in Chicago, New York City and Las Vegas, and additional units are planned. Together, the Sandoval trio—whose fourth brother, Richard, operates his own restaurant empire—have built Mercadito Hospitality, which operates the eponymous flagship venue and oversees a handful of other eateries and bars.

While operations have been focused on the Windy City for the last decade, Mercadito Hospitality is preparing for expansion. The company recently debuted its first Sin City restaurant along with a new Chicago drinks den, and a Philadelphia venue is opening this fall. Negotiations are also underway for additional venues in Las Vegas and a yet-to-be-named East Coast city. Revenues are projected to reach $55 million this year, and beverage sales are a big part of that total, equaling up to half of sales at Mercadito restaurants.

The on-premise industry has become part of the Sandoval family’s DNA. The brothers emphasize food and drinks, as well as the social atmosphere that accompanies dining out. So far, their formula for success is working.

“Our restaurants are very experience-driven—it goes beyond food and drinks,” says Alfredo, the company’s managing partner. “Food and beverage are the most important part of the experience, but we definitely put a lot of effort into the other components—the design, the ambiance and music, the style of service. You need a lot more than good food and drinks to separate yourself from the rest.”

A strong and united management team also helps. Alfredo and Felipe both hold the title of managing partner, while Patricio serves as chef-partner alongside Guillermo Tellez. On the drinks side, Paul Tanguay and Tad Carducci of the consulting firm Tippling Bros. operate the company’s beverage business. Half of Mercadito Hospitality’s key executives are family, and the others are treated like they are. “Everyone who works with me has been with me for years,” Alfredo says.

As the company approaches its 10th anniversary in September, having familiar and trustworthy people remains critical to the business. “We started very small. When I opened the first Mercadito I didn’t think it would go beyond that one unit,” Alfredo says. “Now, we’re focused on building the Mercadito brand to see where we can take it.”

Mercadito Hospitality's flagship Mercadito restaurant has locations in Chicago, New York City and Las Vegas.
Mercadito Hospitality's flagship Mercadito restaurant has locations in Chicago, New York City and Las Vegas.

Building A Brand

The first Mercadito opened in New York City’s East Village in 2004. At the time, Alfredo was involved as a financier, but not in daily operations, as he was working for his older brother Richard. After a stint as director of operations for SushiSamba, where he worked with Tanguay, Alfredo returned to the family business and put his full energy into Mercadito. The company operates two Mercadito restaurants in New York City, one in Chicago and one that just opened in June in Las Vegas’ Red Rock Casino Resort & Spa.

“Mercadito is by far our most successful concept, and I feel that it would be successful in many markets throughout the country,” Alfredo says, pointing to bigger cities like Los Angeles and Washington, D.C. “Our efforts are focused on building the Mercadito brand. I’m taking one deal at a time, but I think it would be nice to operate 20 or 25 Mercadito restaurants.”

Mercadito Chicago is an anchor in the popular River North neighborhood. On a typical Saturday night, the restaurant starts with close to 650 reservations for dinner and will end up serving more than 700 people. The venue emphasizes authentic Mexican fare that’s both upscale and approachable. Mercadito’s menu lists several different types of guacamoles, salsas and ceviches (from $3 for salsa to $28.50 for a sampling of three ceviches), which join an array of tacos, taquizas and specialty entrées ($16.50 to $29.50). Signature dishes include the Estilo Baja tacos, made with beer-battered mahi mahi, chipotle aioli and Mexican coleslaw, and the Tampiqueña, an herb-marinated skirt steak served with roasted Brussels sprouts, pork belly, leek-potato fundido and salsa arriera.

“We’re very creative with our food and drinks, but at the same time we keep the integrity of our ingredients in everything we do,” says Tellez, who joined Mercadito Hospitality last year as a chef-partner after working with restaurateurs like Charlie Trotter and Stephen Starr. “We try to let the flavors and the products speak for themselves. We aim to create a great experience, and the drinks component is a big deal. We have a very close relationship with our team of mixologists.”

Indeed, drinks comprise half of total sales at Mercadito restaurants, led by spirits and cocktails. Alfredo estimates that specialty drinks make up as much as 70 percent of beverage sales at Mercadito. In 2009, he brought the Tippling Bros.’ Tanguay and Carducci on board for the launch of Mercadito Chicago, and the duo have overseen the company’s drinks business ever since. “They create, implement and execute everything with beverage at all of our restaurants,” Alfredo says, adding that by the end of this year they will be devoting almost all of their time to Mercadito Hospitality and do little outside consulting.

Tequila and mezcal take center stage at the Mercadito restaurant units. The venues offer a traditional Margarita, made with El Jimador Blanco Tequila and Grand Marnier liqueur, and the spicy Paloma Diabla, a blend of Maestro Dobel Tequila with grapefruit, lime, agave, habanero and cinnamon. These cocktails join more exotic drinks, such as the Little Market, comprising Olmeca Reposado Tequila, pineapple, guajillo chilis, cilantro and Pico Piquin spices; the Los Hermanos, a blend of Fidencio Clásico mezcal, passion fruit, mint, agave nectar and El Yucateco hot sauce; and the El Pirata, made with Cazadores Blanco Tequila, Negra Modelo beer, pineapple, chili powder and Mexican spices (cocktails are $8 to $13 in Chicago).

The restaurant also offers an impressive list of sipping Tequilas and mezcals, including rarities like Don Julio Real, Partida Elegante, El Tesoro Paradiso and Del Maguey Pechuga ($7 to $50 a 1-ounce pour). Rounding out the drinks list is a full roster of Mexican beers ($5 to $9 a draft pour, bottle or can) and a small selection of wines ($9 to $13 a glass; $32 to $48 a 750-ml. bottle). “We always try to push the limits of what we can do, to be creative and innovative while following the restaurant concepts,” Tanguay says. “The drinks program has a Tippling Bros. stamp on it. We’re experts in deliciousness, so we’re able to come up with balanced and drinkable cocktails. That’s our focus.”

The Little Market cocktail at Mercadito is made with Olmeca Reposado Tequila, pineapple, chili, cilantro and Pico Piquin spices.
The Little Market cocktail at Mercadito is made with Olmeca Reposado Tequila, pineapple, chili, cilantro and Pico Piquin spices.

Mixing It Up

While the company is concentrating on Mercadito moving forward, the Sandoval trio also operates other venues, including the globally influenced restaurant Tavernita and its attached Spanish-themed Barcito, the cocktail lounge Double A, Little Market American Brasserie and Municipal Bar + Dining Co., all in Chicago. These established venues join more recent Chicago additions, like the cocktail lounge Tippling Hall and Mercadito Counter. The company will also add a Tippling Hall in Las Vegas and a Double A bar in Philadelphia later this year.

Tavernita has become a drinks destination in Chicago’s River North neighborhood. The venue is known for its worldly food menu, but cocktails are a highlight thanks to Tanguay and Carducci, who added kegged cocktails nearly three years ago. “When we came up with the keg cocktails, we saw a huge potential to do craft drinks at a very high rate of execution,” Tanguay explains. Tavernita offers five kegged cocktails ($10 to $12), such as A Fancy Italian Black Tai, blending Mount Gay Black Barrel rum, Averna amaro, Grand Marnier liqueur, orgeat, pineapple and lime. Handcrafted specialty drinks ($10.50 to $13) include the One-Thumbed Gypsy, made with Leblon cachaça, The Bitter End Moroccan bitters, red pepper and saffron syrup, and lemon.

While beer and wine aren’t huge players at any Mercadito Hospitality venues, Tavernita has one of the most encompassing lists for these categories. The restaurant pours nine draft brews from craft producers, including local brewers Goose Island Beer Co. and Two Brothers Brewing Co., and offers 12 bottled labels, from Bud Light to Lagunitas IPA to Xingu Brazilian Black lager ($4.50 to $25 a draft pour or bottle). Tavernita also boasts 12 wines by the glass ($10 to $13.50) and more than 30 bottled wines ($36 to $270 a 750-ml. bottle).

The brasserie Little Market also offers varied beer and wine menus. Serving European and American fare, the venue pours a wide array of imported Belgian and French brews ($5 to $29 a bottle) and lists several European and American wines ($9 to $17 a glass; $34 to $400 a 750-ml. bottle). Standouts include the 2009 Fisher Vineyards Mountain Estate Cabernet Sauvignon and the 2011 Coudoulet de Beaucastel Côtes du Rhône.

Located above Mercadito Chicago, the drinks haven Double A emphasizes spirits. The bar lists some 75 Tequilas available for sipping or full bottle service, along with a variety of vodkas, whiskies and rums ($9 to $50 a 1-ounce pour; $215 to $3,150 a 750-ml. bottle). Double A also offers myriad cocktails, such as A Slow Indian Burn, made with Altos Tequila Reposado, pineapple, grapefruit, lime and garam masala spices ($12 to $13).

The new concept Tippling Hall is also all about drinks. Menus were unavailable at press time, but Tanguay says his goal with the venue is to make bars fun again. “We’ve had enough silliness trying to teach people; we just want to let them have fun,” he explains. “The mustached mixologist is overplayed. We’re going for a little bit more casual and approachable. And we’re focusing back on what’s most important—hospitality and taking care of our guests.”

Barcito offers drinks and modern Spanish bar fare in a casual environment.
Barcito offers drinks and modern Spanish bar fare in a casual environment.

Friends And Family

Family is at the center of Mercadito Hospitality’s operations, and creating an open and friendly atmosphere is the company’s key design principle. Alfredo describes his restaurants as experience driven, and to create the ideal experience, he urges guests to interact. “The layout of all our restaurants is very much the same,” Alfredo says. “We avoid freestanding tables because it automatically makes people put their backs to others. Our layouts are all banquet seating so people are sitting next to someone. People are always facing each other, and we encourage sharing.”

Servers are also expected to interact with guests by explaining different parts of the menus and recommending drinks. The company tries to update menus every three months, changing seasonal items and adding new dishes and drinks to keep things fresh. Alfredo estimates that 25 percent of the menu changes quarterly, a factor he believes is critical to his restaurants’ longevity.

After spending several years working on new projects, Alfredo says the time is now right to put his energy into building Mercadito into a restaurant with a nationwide presence. The concept has four locations in operation and is working on opening two more. In addition, the company recently unveiled Mercadito Counter, an abbreviated deli-style sister to the main concept, and the Chicago food truck Mercadito Wheels. Alfredo believes the restaurant can go far beyond these outlined plans.

“I’ve refocused my efforts,” Alfredo says. “Tippling Hall will probably be the last concept I open that isn’t Mercadito.” He adds that the beverage component will remain front and center. “We put a lot of effort into the drinks business,” Alfredo explains. “Beverage is as important as food, and we take it just as seriously.”