Edgar Diaz Built His Dreams on Organic Yogurt, Then He Burned Them Down

Edgar Diaz's life had all the trappings of the quintessential American success story. After fleeing his native Colombia in a harrowing escape from leftist guerillas in 2001, he and his wife settled in Dallas with little money and less English. With a diligence and entrepreneurial spirit that would do Horatio Alger proud, he began working toward his goal of owning a dairy business like the one he'd operated outside Medillin, all the while working menial jobs to make ends meet.

In 2004, they teamed up with a Plano dairy farmer and established Lucky Layla Farms, whose artisanal yogurts and cheeses became a favorite of Dallas' growing foodie scene. He left after five years to launch Three Happy Cows, a purveyor of organic Greek yogurt that enjoyed similar success. The business quickly made the leap from the farmers market circuit to local outposts of Natural Grocers and Market Street. As demand grew, Diaz opened a factory in an unsightly business park on Northaven Road in Northwest Dallas. The products remained delicious.

Then, abruptly, it all fell apart. In March 2013, the Three Happy Cows manufacturing plant was gutted by fire. Investigators ruled the blaze arson, and before long the Bureau of Alcohol, Tobacco, Firearms and Explosives pinned it on Diaz. He was indicted in July 2013 and confessed the following January. He was sentenced yesterday to five years in federal prison and ordered to pay $1.5 million in restitution.

What the hell happened? Why would a successful entrepreneur torch the business he worked so hard to create? If Diaz's biography is an archetypal American bootstraps story, then maybe his demise is a parable about the pitfalls of selling out.

According to court documents cited by The Dallas Morning News, Diaz's attorney said the fire was set because his business was being sold "out from under him."

The truth is somewhat more nuanced, insofar as Diaz appears to have put himself in a position to have his business snatched away. A few months before the blaze, Diaz had teamed up with an investment group comprised of two SMU grads who'd found a similar foodie niche with Impact Granola and Brian Twomey, the serial restaurateur behind The Common Table and the Marquee Grill.

The thought was that they could take Three Happy Cows to the next level, to expand to new stores and new markets, according to a source who has worked closely with Diaz.. That meant sacrificing some of the principles on which the company was founded (e.g. the use of only organic milk) and his losing some control.

Since the fire, the strategy implemented by Twomey et al has enjoyed apparent success. The low-budget labels with the delightfully rudimentary cartoon cows have been replaced by a troika of hipster Holsteins riding a tandem bicycle. The yogurt is in stores as far away as Denver and Memphis. They now have a food truck called the "Sport Mootility Vehicle" and, coincidentally, an unhealthy affinity for cow puns.

Send your story tips to the author, Eric Nicholson.

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