Supermarket push saves Vittoria chief Les Schirato’s business

Coffee snobs used to mock Les Schirato for selling his Vittoria range in supermarkets. Not any more.

Vittoria chief Les Schirato at his home in Turramurra, NSW. Picture: Hollie Adams

Coffee snobs used to mock Les Schirato for selling his Vittoria range in supermarkets, but that move — made during the last big downturn — helped to save his business during the current COVID-19 pandemic.

Schirato is Australia’s coffee king, running the $250m Vittoria Food & Beverage business that he and his family own, selling Vittoria coffee to supermarkets such as Woolworths, Coles, IGA and other independent outlets.

Until early March, Vittoria was also found everywhere from hotels and restaurants to casinos and was served in the Qantas lounge and on the airline’s flights.

That side of the business ground to a halt when the coronavirus shutdown hit Australia and the world three months ago, and Schirato was forced to draw on the lessons he learned keeping the business afloat back in the 1980s — days he thought were gone forever.

“Overnight we lost all our food services business, pubs, clubs, ­casinos, hotels and restaurants, Qantas. So many closed up and we were not getting paid as well,” Schirato tells The Weekend Australian. “It was literally half our business gone straight away. There’s no doubt I drew on some of my previous experiences … and my son actually started listening to me as well.

“But all the millennials have learned a lot in this period, a lot more than you can teach.”

Schirato is joking when he refers to 38-year-old Rolando that way, though his son had only just been born when Schirato was trying to save the business in the early 80s during a credit squeeze. It was debt laden and Schirato would have dinner at the factory every night for almost a decade working to save Vittoria, paying back the banks and also slowly buying out other shareholders.

What helped then, and now, was a move in 1981 to sell vacuum-packed coffee firstly in Woolworths. It was taking a premium product to the masses and ever since Schirato has copped it from critics who say mass producing coffee meant accepting a drop in quality.

Schirato rejects that notion and talks about the high quality-control standards at Vittoria’s factory in Sydney’s west.

“A lot of competitors who gave us grief (being in supermarkets) have tried to do it now,” he says.

“Our philosophy has always been getting good quality to as many people as possible, across all the different formats.”

Schirato says Vittoria experienced a 23 per cent surge in sales for its beans and packaged ground coffee in supermarkets in the past three months as consumers switched to drinking more coffee at home during lockdown.

It was a strong result for a business that already had a market share of about 36 per cent in pure coffee and 42 per cent market share of coffee beans sold in ­supermarkets.

Rolando Schirato says: “We saw some panic-buying early on and, while we didn’t benefit from that quite like toilet paper, having out-of-home coffee dropping off we had more people enjoying good coffee at home instead.

“Sales have continued to be higher than our expectations. It has saved our bacon in some ­regards.”

The coffee capsule market still presents a significant opportunity and Schirato admits his company had moved slower than others in that segment of the market.

But he is now confident Vittoria can quickly increase sales, forging ahead with a launch in Woolworths of a new range of 18 different blends of coffee capsules that are manufactured in Australia and, for the first time, also fit in the popular Nespresso machines.

“We have been working for a long time developing our range and machinery and production and we think this now puts us in a position to be the number one capsule brand in Australia within 12 months,” Rolando Schirato says. “We should be targeting the same market share we have in ground (coffee) and beans.”

The younger Schirato admits the past three months has been a big learning experience. The family’s famous “war room” at its headquarters, where technology built in house to track sales and industry information would be fed back, was abandoned as management began working remotely.

Some staff had to be made redundant with no sales work in the field to do, but the federal government’s JobKeeper scheme meant more were kept on than management thought possible. A deal for more funding from Vittoria’s bank was also struck.

Rolando Schirato says he is seeing some signs of a comeback with the economy starting to open up again, which means some employees have been rehired. “Cafes have surprised us,” he says. “It might be 70 per cent down but they’ve held on at a level greater than we expected.

“A lot of suburban cafes have done really well as people sought a bit of normalcy and got out of the house.

“We’re seeing cafes increasing now and other channels. There’s some more confidence out there. We’re lucky that we went into this pretty conservatively as a business, and I think we’ll eventually emerge stronger. There’s pockets of light at the end of the tunnel.”