New York City-based taco chain Los Tacos No. 1 has announced a strategic investment from private-equity firm TSG Consumer Partners, a move that has prompted apprehension among some of its dedicated customer base.
The financial specifics of the deal have not been disclosed, nor has the extent of TSG's stake in the company. However, the investment has ignited worries among loyal patrons that it could lead to increased prices, diminished portion sizes, or a departure from the authentic experience that has defined the brand.
Founded in 2013 with a single stand in Manhattan's Chelsea Market, Los Tacos No. 1 was established by Christian Pineda, Tyler Sanders, Kyle Cameron, and Jacobo Ackerman with the aim of recreating the Tijuana-style tacos they grew up with. The chain has maintained a focused menu, featuring tacos such as carne asada, adobada, and nopal, and has operated in minimalist, standing-room-only spaces that emulate traditional taco counters.
This deliberate simplicity and commitment to authenticity resonated with customers, enabling the company to expand to 10 locations across Manhattan. They also operate Los Mariscos, a sister seafood concept, at Chelsea Market.
TSG Consumer Partners, founded in 1986, manages approximately $14 billion in assets and has a history of investing in high-growth consumer brands, including coffee chain Dutch Bros and restaurant chain Yard House. TSG managing director Colin Welch stated that Los Tacos No. 1 has cultivated a rare and strong customer connection.
TSG plans to support "thoughtful growth" for Los Tacos No. 1, aiming to introduce the brand to a wider audience while safeguarding its food and distinctive taco shop atmosphere. The founders, including CEO Christian Pineda, will continue to oversee daily operations and strategic decisions. The founders expressed that TSG shares their vision of bringing authentic tacos to more cities.
This potential for expansion has generated excitement among some customers, who draw parallels to the growth of other New York-based eateries. However, a significant portion of the customer base has voiced concerns on social media platforms, fearing that scaling up could compromise the core elements that made the chain popular. Some have already noted price increases at existing locations and anticipate potential "shrinkflation."
For now, the company maintains that its immediate plans involve maintaining the focused menu and operational leadership, with the stated goal of expanding without sacrificing the quality and authenticity that Los Tacos No. 1 is known for.