Ellis and Paige Winstanley bought the restaurant in 2012 and focused on building the brand from its signature marquee sign
It’s not a stretch to say that Ellis Winstanley was born with an entrepreneurial spirit. In 2017, for instance, he launched Axial Shift, a software platform that incentivizes managers and employees while providing real-time data from point-of-sale systems.
The impetus behind that launch was his experience operating a handful of restaurants that he began buying while he was still in college at the University of Texas. His focus has always been on distressed, multigenerational restaurants that he could restructure, including Cain & Abel’s, which has been a part of the UT campus since 1991, and Star Seeds Café (now just Stars Café), which has been around for about 60 years.
In 2012, Winstanley and his wife Paige bought El Arroyo, a Tex-Mex restaurant that originally opened on Austin’s West Fifth Avenue in 1975. If El Arroyo sounds familiar, it’s not likely because of the restaurant itself but rather its signature marquee sign in front which constantly refreshes messages that are humorous and sometimes snarky, but never negative.
The couple’s initial plan was to grow El Arroyo quickly, but the macroenvironment at that time – just out of the Great Recession – complicated things.
“By the time we got everything sorted out, the industry was changing so fast. It was in the middle of the food truck craze, rents doubled, the Food Network was growing, limited-service was shaking things up, Austin had over six times the food permits compared to its population,” Winstanley said during a recent interview. “There was a mass disruption happening and we didn’t feel like scaling it without a clearer picture.”
So, they focused on brand building instead, zooming in on that single restaurant and that marquee sign. When they first bought the concept, employees were tasked with ideating the messages. Winstanley said they weren’t allowed to go home until they came up with something and the messaging was therefore inconsistent and sometimes inappropriate. They scrapped that approach and became more intentional about what they put on that sign.
“We needed a consistent voice,” he said. “The voice had to be funny, connective, genuine, and humble. These were the characteristics that mattered to us.”
To grow brand awareness, the Winstanleys manually invited anyone who liked a post to like El Arroyo’s Facebook page. At that time, Facebook allotted just 500 invites per day for brand pages, so they laid in bed at night working on this tactic.
Their efforts began to pay off as the brand’s digital presence grew quickly. By 2015, Paige wanted to publish a collection of El Arroyo’s marquee sayings, but the couple was told repeatedly by publishers that the idea was too niche. Undeterred, they filed for an LLC, recruited the help of a Barnes & Noble manager to understand how books are made, found a cheap printer, and published the first book in 2017. It sold out immediately. By the third round of book orders, the Winstanleys were driving around Texas and dropping them off at various retailers. Winstanley, who was just getting Axial Shift off the ground at the time, also hand delivered a book to the main buyer of Barnes & Noble while visiting New York City.
“I was in the city to see some of our early Axial customers and put on some workout clothes and put the book in an envelope to give to him. I didn’t tell him I was a courier, but I didn’t tell him I wasn’t,” he said. “That became our first major account.”
After that, retailers like Buc-ees, H-E-B, Kroger, and Brookshire Brothers signed up to sell the books. By 2019, El Arroyo’s messages were donning coffee mugs, magnets, calendars, coasters, tea towels, air fresheners, and more. There are now nearly 350 SKUs in the El Arroyo store, and seven volumes of “El Arroyo’s Big Book of Signs” that the couple bootstrapped to get published.
The retail business has grown beyond the Winstanleys’ wildest imagination and is now supported by a 15,000-square-foot warehouse and a full sales team. Unsurprisingly, the holiday season is the busiest time of year for these products, with half of the company’s revenue generated in November and December and orders shipping all over the country and internationally.
And, because it has been so successful, the Winstanleys are now planning to realize their initial dream – growing the El Arroyo restaurant. Number two just broke ground in New Braunfels, Texas, and a deal for number three has been signed for a location north of Austin. The goal is to have six corporate restaurants open by 2026. Winstanley expects the new sites to be bigger, with a retail shop, garden, and playground. Those bigger sites are also expected to generate bigger volumes, with the expectation of reaching $7 million average unit volumes.
“Six locations is a good target for now because it’s a good number for critical mass to get full infrastructure in place,” he said. “It’s a good size to put a scalable structure in place.”
Where it goes from there is anyone’s guess at this point, but Winstanley is confident that the brand is now big and strong enough to support even more potential.
“The retail line helped us introduce the restaurant brand. A lot of people don’t know it’s a real place or that the sign is a real thing,” he said. “When they realize it is, we’re able to give them a great experience because we’re executing around the brand we’ve built. We didn’t want to be another Tex Mex place in anywhere U.S.A. We put agonizing levels of detail to make it feel personal for people. It feels like your funny friend that’s humble and self-deprecating – not in an insecure way, but in a super connective way.”
Contact Alicia Kelso at Alicia Kelso at [email protected]
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