Profiles

Australia’s Coffee King: Vittoria CEO Les Schirato

When it comes to establishing market dominance, getting in early can have its advantages. In Australia, the strategy seems to have worked for Vittoria coffee. As one of the first espresso-style, roasted coffees to hit Australian retail shelves in the 1980s, the company enjoys around a 40 per cent volume share of the retail roasted coffee market, if you include its sister brands Aurora and Delta, according to industry research firm Ibis. Not counting its exports, Vittoria sells around 5 million kilograms of coffee a year to Australia’s coffee loving public. It’s particularly impressive, considering that Australia is emerging as one of the most competitive markets in the world for coffee roasters. Some estimates say that over 1000 coffee roasters are fighting for a slice of the market. Leading the helm of Vittoria’s parent company Cantarella Brothers is its CEO Les Schirato, a man coined by local mainstream media as Australia’s Coffee King. Schirato has led the company since the early 1990s, when he bought out the original Cantarella brothers, one of whom, Ozario, is his father-in-law. He took over at a time that the company was reeling with debt, and today enjoys a turnover of $210 million a year, according to figures reported in 2014 by Business Spectator. Cantarella brothers currently trades as Vittoria Food & Beverage.
Being at the top, in a market characterised by smaller roasting companies, makes Vittoria an easy target. Schirato says he is well aware of the criticism that larger roasters sacrifice on quality. He says that – if anything – Vittoria’s size is a major advantage in the upmarket coffee business.  “I think getting in early has helped me identify how it works, and that it’s important not to turn your product into a commodity,” Schirato tells GCR Magazine. “Smaller roasters like to say that supermarket coffee is no good. I think it’s a big mistake. I have never had the same amount of control over the quality of coffee as I do now. Our standards for green coffee are really high, we measure the moisture content on every shipment. Smaller roasters just don’t have the kind of buying power we do.” Schirato says that the proof of Vittoria’s quality is not just in its retail success, but with the more than 5000 cafés, restaurants and hotels that it services around Australia. Vittoria provides coffee for more award-winning restaurants than any other coffee company.  “We wouldn’t be able to do that if we didn’t have the quality right,” says Schirato. “I meet boutique roasters who have been in the business for six or seven years and they think they know everything. I think it’s good that there are a lot of small roasters, I want to see more roasters in the coffee industry because it will move people over from drinking instant coffee. But I think smaller roasters do themselves a disservice [when they criticise larger companies]. It’s easy to say we’re big so we don’t do quality, but that’s where they make their biggest mistake. We take measures that they haven’t even heard of yet.”    Where most smaller roasters, or even mid-size roasters, pale in comparison to Vittoria’s success is in the company’s dominance of supermarket shelves. Leading Australian business publication Business Insider called Schirato’s early work in the 1980s to bring espresso-style coffee onto retail shelves as a major “game-changer”. “Australia today has such a sophisticated coffee culture,” says Schirato. “When I first started selling espresso coffee, the market just wasn’t used to it.” When Australia’s supermarkets wouldn’t accept Italian espresso coffee on their tea and coffee shelves, Schirato had to resort to “tricks” to get his product into their shops. He convinced supermarkets to sell Vittoria coffee in 1-kilogram bags in the fruit and vegetable section, as an “ethnic” food. “It was only when our sales figures started to become high, that they started to take notice,” says Schirato. Vittoria’s dominance on supermarket shelves is the main factor that sets it apart from other family-owned coffee roasters that share a similar history with Vittoria. When a wave of Italian immigration hit Australia in the mid 20th Century, a handful of companies started locally roasting espresso style coffee, including the likes of Grinders Coffee, Genovese and Mocopan.  
Brothers Orazio and Carmelo Cantarella founded their business in 1947, and started the Vittoria Coffee brand in 1958. Schirato started working for the company in his teens, and today clocks over four decades with Vittoria as he reaches his 60th birthday next year. Still a family business, Schirato and his wife Luisa own a 51 per cent controlling share, while Luisa’s sibling, Clelia Cantarella, owns 49 per cent. Schirato recalls that it was a big gamble buying into the company. In the 1980s, Cantarella Brothers had accrued massive debts, and were paying swelling interest rates that were hitting 22 per cent. Schirato had to borrow in this risky economic environment to buy out his in-laws. Schirato says he learned important financial lessons from this history. “It’s one of the reasons I have kept the company debt-free,” he says. “Controlled growth is really important.” The company’s family arrangements have caused some tensions over the years. Schirato and Clelia ended up in court in 2011 to resolve disputes over a $20 million subsidiary.
The business will likely stay in the family, as Schirato grooms his son Rolando for leadership. While Schirato can take credit for Vittoria’s dominance in Australian supermarkets, he gives his son Rolando credit for putting Vittoria on the world coffee map. Rolando was the brains behind getting Hollywood legend Al Pacino to star in Vittoria’s print and television advertising campaign in 2010, as the first time Pacino has ever endorsed a product. “The Pacino ad really put us on the map,” says Schirato. “And what a great thing for Australia. I don’t think people really considered that Australia had a sophisticated coffee industry. Now, I think people understand.”   Schirato explains that getting the Hollywood legend to do his first-ever advertising campaign wasn’t just a matter of putting forward the highest bid. Rather, Rolando spent months writing to Pacino’s agents, explaining the Vittoria story to appeal to the actor’s Italian heritage. The television ad was shot in New York City by Academy-Award winning Director Barry Levinson. “It was a great coup for us,” says Schirato. “[Pacino] could have just sold himself to the highest bidder. I asked him why he didn’t and he said at this point in his career, if he was going to advertise a product, it wasn’t just going to be for money. He wanted a product he could relate to.” Rolando landed a second celebrity coup when Vittoria’s sister brand Caffe Aurora contracted Rico Rodriguez, who plays Manny in the popular television series Modern Family, to star in another advertising campaign. With moves like this, Schirato is confident that his son Rolondo will be able to take over the family business. Schirato says that keeping the business in the family has many advantages. “Without a doubt, we take a long term view,” says Schirato. “It’s probably had more of an impact of what we say no to, than what we say yes to.” For instance, Schirato refers to Vittoria’s strategy of sticking to 100 per cent quality Arabica coffee. Although Robusta is an acceptable inclusion in Italian espresso, Schirato says maintaining a fully Arabica blend has ensured they put nothing but quality into their mix. “We don’t want to compromise on quality for short-term profit,” he says. While sticking to these founding principles, Schirato says Vittoria is now looking to the future of where the company will head. Coffee capsules have played heavily in this space. Euromonitor figures estimate that in 2013 single-serve systems accounted for around 18 per cent of the global coffee market share, an 84 per cent jump on the year prior. In this realm, Vittoria has teamed up with the inventor of the original Nespreso capsule Eric Favre of Mocoffee to introduce the Espressotoria system into the Australian market. Although mainly sold online and in boutique Italian shops, the capsules hit the shelves of major supermarket chain Coles this past April. The move might be another game changer for Vittoria soon in the single-serve space. Vittoria already operates one capsule manufacturing plant, and is preparing to open a second plant in the middle of this year. Once it’s operational, Schirato says it will be the largest coffee capsule packaging line in Australia.    In addition to coffee capsules, Schirato also sees ample market potential outside of Australia’s borders. “We have a huge export market, and we’re expecting it to increase dramatically,” he says. The most obvious market is Asia, one that many Australian companies are targeting thanks to close geographic location, and ample opportunity for increased coffee consumption. Schirato confirms that Asia is probably its largest target market, with Cantarella Brothers operating an office in Hong Kong. A perhaps less obvious market for an Australian roaster to target is the United States. Schirato says that despite economic woes and ample local roasting companies, Vittoria is finding a strong consumer base in the US. “There is a groundswell of people here who are starting to become interested in up-market coffee,” he says. “We see a good opportunity  to start at the top end.” Vittoria has already found a niche market among top end restaurants and hotels in the US, and it recently opened up an office in Los Angeles to facilitate oversees expansion.
Schirato says he hopes Australians will take pride in a locally-owned coffee company making its mark overseas. In bringing the brand abroad, Schirato says that despite his four decades of experience, his time in the coffee industry is a constant learning experience. He says he hopes that as the Australian coffee industry grows, other roasters will take a similar approach in continually improving the industry. “What a great industry we have in Australia. However, we should not be so arrogant to think we know everything,” he says. “I’ve been in the industry for 40 years, and I’m still learning about coffee.” 

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