COMPANY PROFILE: Founded by Lee, Donato Toce and Nick and Danny Palumbo in 2002, Gelato Messina began with one store in Darlinghurst, Sydney and 20 flavours. It has since grown to a business with 350 staff and 15 stores around Australia (and one in Las Vegas).
IRW: How did 2016 go for you guys?
DL: “It was a pretty big year. It was the first time that we had opened multiple stores at any one time. We’re usually a slow burner. We are completely company-funded, we don’t really borrow money and we’re completely company-owned, so we don’t have to grow at the speed of a franchise model where we’ve got investors hanging over us saying, ‘You gotta grow’.
We’ve been traditionally slow at growing, we normally open one store at a time but a couple of opportunities all came at the right time and in September, we opened three stores in one hit. It was challenging opening up multiple stores – we did Circular Quay, Tramsheds and Newtown at the same time, which was not intentional at all.
It didn’t feel great to us, because we’re always worried about people’s perception of us opening multiple stores at any one time. People sometimes think we’re a franchise model and we definitely don’t want to be seen like that. We just don’t want people thinking we’re compromising on product. That was a challenge.”
IRW: And what did you guys learn from that experience?
DL: “We learnt we don’t want to do it again! We’re just not built like that. We’ve got mates who own multiple site operations and they’re all ready to go – they have guys that do just one job and they’re very good at opening sites. They’re built for that and we could be build for that, but that’s not our goal. We’re not growing for growth’s sake. We’re quite happy with our little plot of land and going the way that we are. We found [opening the sites] a bit stressful, because we were worried we were going to drop the ball on things. In some ways, we’re very much in our infancy in terms of multiple site operations.”
IRW: It’s interesting you say that, because you opened up a store in Las Vegas two years ago before even moving to Western Australia or South Australia!
DL: “Vegas in itself was a challenge, trying to do it in a way that is still aligned with how we want to do business. It’s not like we went to Vegas and just handed the keys to some franchise operations and they just did it – it wasn’t a licence deal. We partnered with some guys from Australia, so again, it was about letting go and we’re not very good at that.
I think it was the owner of Shake Shack who said, ‘The bigger you are, the smaller you have to think’ and that’s a very true philosophy for a business like ours, because as we get bigger, the more we fear being perceived as big. Even though we know that what we do is like no-one else in the world – especially in terms of the depth and detail that we go – we don’t want to be perceived as someone who just mass makes product without much care.
The bigger you get, the better deals you get on product and ingredients, so therefore you can use cheaper things, and that’s not really something that we do.”
IRW: How many stores do you guys have at the moment?
“I think that after we do Brisbane in March and including Vegas, we should have 14. And then we’ll have Penrith in Sydney later this year, which will be 15.
Going out to Penrith is interesting for us, because it’s a bit further than our other store in western Sydney, Parramatta. It’ll be interesting to see how we go there. We’re very much an inner-city brand. We’re intrigued by it.
Often the way you do business in those sorts of places is different. We’ve gone into cities and done pop-ups where we’re not well-known – it’s a different ballgame. It can be very different culturally. Some flavour profiles might not resonate or local news and pop culture may be very different. For example, we might do a flavour that relates to the GWS AFL team out west, which would have no impact in Coolangatta. Or our customer base might be of a different ethnic background and sometimes a certain flavour might work better in certain places. For example, at our Star Casino store we have a huge Asian customer base and matcha green tea sells really well there but in other stores it doesn’t sell.
IRW: Are you planning to eventually open in the other states?
DL: “Yeah we’d love to. It’s just that we don’t look for a franchisee, we look for a partner. The only reason we haven’t gone to Perth is because we haven’t found [the right partner]. We found some guys who wanted to do it but circumstances changed. We don’t go out there looking for someone, they tend to come to us and we meet them. Then if they’re the right fit, we’ll open with them. We don’t have someone [in our business] going round looking for sites.”
IRW: Tell me about the new farms that you guys recently bought.
DL: “We bought a hazelnut farm in Seymour in Victoria, which was in some ways, the next step for us. It wasn’t something that was on the roadmap, it was something that come out of nowhere.
We’ve learnt how to farm hazelnuts and learnt that it’s hard work! We pulled up the existing plants and replanted a different variety that roasted perfectly. It was on par with the hazelnuts we were getting from Italy, if not better. We learnt that the varietal and the way you roast are equally as important to making amazing hazelnut gelato.
Then late last year, we also bought a dairy farm. We’ve got a bunch of jersey cows and we’re trying to buy more. We’re going through that process of understanding it all and how we can apply that to our business.Then we realised we could put chicken coop on there and be our own supplier of eggs. We’re going to put a beehive in there, too. That was interesting – our business partner in Melbourne, who’s a very city corporate guy, became a farmer.
It’s a really nice story that we know where our food is coming from. We’re probably some of the only people who do that here. But we’re also learning how to value-add to our product. So once we get the herd we require, we’ll have enough milk, so we’re currently talking about Messina milk products.
It’s a different model to being a dairy farmer, where you just produce milk and you sell it to someone. We have this opportunity to take a product we can get at a cheaper rate than what we’re buying now. And then when we’ve got excess, what do we do with it to turn it into a product that we’re proud of? It doesn’t necessarily need to be ice-cream. It could be a bottled milk product. Who knows? It’s pretty fun.”
IRW: What are some of the other benefits of owning your own dairy farm?
DL: “Yeah, it does give us better control. It also means for example, it’s going to be jersey milk and the whole philosophy is we’ll milk them once a day rather than twice a day – they’ll be happier cows, you’ll get a better product, higher fat content, jersey milk grass fed totally organic.
Is that really going to make a difference at the end product in the gelato? Probably. Is going to notice compared to the great product we already make? I don’t know, but we know that we’re making it from the best product that we can. I think the noise at the moment in the food game is from everyone is talking the same story – ‘We use the best product, the best process, everything’s made from scratch’. Everyone is saying the same thing, but not everyone is doing it. It’s like a marketing ploy.
So we’re interested in the process of walking the walk and talking the talk and I think we’re doing it now. Is anyone going to notice? I don’t know, but we’ve got an opportunity where we can actually do it.
We sell ice cream, it’s full of sugar. We don’t pretend anything. But I still think people are interested to know that we care about the source of our food and quality of our milk. They’re not going to go, ‘Is ice-cream good for me?’ It’s a luxury. If you eat 10 buckets a day, you’re going to die.
In the end, gelato is a treat. You need to understand that it’s not a health food! And this whole ’99 per cent fat free’ and ‘no whatever’ is total shit. But if you respect the process, ensure your ingredients are the best you can get, and you don’t eat it for breakfast, life is good.”
DL: “We’ve got two store openings in Australia, but we are very much talking about the next step for us in the US, which will probably LA. I’m going to head over in a month or two. We’re looking around and we’ve got a concept we’d like to think about over there. But in order to do that, we need to relax and calm down a bit in Australia.
The plan is to deliberately not open up any other stores here. We’ve got nothing planned outside those two in Penrith and Brisbane. I want to consolidate our events business. We want to make sure we’re not dropping the ball on anything as we get bigger, and really develop the content side for the business – we have two full-time content producers producing videos right now.
We want to do the States and the West Coast has the right weather for us. If you go to New York, we’d love to do it, but it’s snowing three months of the year. I think in LA, there’s some really good respect for Aussies everywhere in terms of our food and coffee operators. It’s not a novelty – Americans genuinely think Australians really care about their produce and the food we create. We think LA is the next port of call for us and if we get the processes right and things go, well then New York is definitely where we want to be.”
IRW: What have you learnt about America since opening up in Australia and how are the consumers different compared to here?
DL: “A lot of it is not predictable. One big example is the number one flavour here by a country mile is salted caramel and white chocolate. It’s double anything else we sell and in the States, it’s the fourth slowest flavour out of 40 flavours. That has nothing to do with anything.
It made me realise the US is hard to predict. It’s hard doing business there. The service side is quite different, too. Here, people would rather use our queuing service. You come to the front, you have a taste if you wanna try a flavour and we serve behind you – we just move it along to get through people.
In the States, people would rather wait longer and know where they stand in a queue so no-one’s jumping in front of them. We could get through them faster, but it freaks them out. They can’t get their head around the fact that you could possibly get served [in our way] or there’s reason in the chaos. They’d rather wait in line, where they can see the end.
There are little intricacies like that that we’ve learned about. We’ve learnt a lot about how to get our product over there and use local ingredients. In the States, we were making something like a mix of the dry powdered stuff here – the skim milk powder, the sugars and stuff – then send it over, where we would use local fresh fruit products from California and wet it, turning it into a product by churning it into ice-cream.”
IRW: How did the collaboration with Tim Tams come about?
DL: “They approached us first and I thought they were going to tell us to stop making our Tim Tam Slam flavour, but they were interested in how we come up with flavours and doing something together. We went through the process for over a year and we made it clear that if we were going to do it, it needed to represent what we did and we needed to be part of the process coming up with the flavours.
They were really great. So they sat with us and we ate heaps of ice-cream together and we ate heaps of biscuits together and we met their food technologist and development team.
We never thought a biscuit like Tim Tam would taste like gelato, but there needed to be some correlation [for us]. We wanted the flavours needed to be as representative of us as possible, but we also knew the limitations of a biscuit. We thought we’d have to find a compromise where we were happy and they were happy, but it was actually a really nice process. The Tim Tams team at Arnotts are really good people!
They understood what we were about. This was a bit step for us. We weren’t sure about it.”
IRW: The Tim Tams are available all around Australia, aren’t they? You’re only open in Sydney Melbourne and Queensland, though…
DL: “We asked the same question. Is anyone going to care outside of Sydney and Melbourne? But they made the point that in those cities, people who don’t know about us would want to know and a lot of barriers are already breaking down by digital, so a lot of people know who we are around Australia – not everyone, but the Tim Tams people felt confident.
It’s marketed as a Gelato-Messina-inspired Tim Tam. It’s a gelato-inspired product that happened to have our name on it and we’re the ones to help come up with the flavours.
The one thing I was worried about was the whole, ‘they’ve sold out’ thing, but then we thought about it and we went, ‘You know what, everyone loves Tim Tams, it’s a great product, everyone’s bought them at some point. And if we’re going to ever do a chocolate biscuit, this is it. So stop being stupid, let’s go for it’.”
IRW: What have you learnt about building a community since coming on board at Gelato Messina?
DL: “We were an early adopter in building our community with social media because that’s all we had at the beginning. You had to learn quickly how to use Facebook to do that. When I came into Messina, food and Facebook was in its infancy. We wanted to be very honest, we wanted to project our sense of humour and fun, so we were posting updates about flavours and coming up with names. It was just us having a laugh.
No-one was listening at first, so it didn’t matter if you offended someone or if the humour didn’t translate. No-one cared, because no-one was listening, but then people latched onto it and it just developed from there. I think we created a community around talking to our customers. This is still something we do.
People will email in with a compliment or a complaint and we talk to them like friends. We don’t go, ‘Dear Sir, thank you so much for your feedback’. We go, ‘Hey mate, that was awesome’. Or if someone complains we go, ‘Fuck, we really fucked that up, I’m really sorry. Let us help you out.’
If someone is rude to us, we go, ‘Piss off. Don’t talk to my staff like that and don’t speak to me like that.’ People get stuck in this rule that that’s them [the customers] and this is us, but in the end, we’re all humans.
It’s normal. It’s like how you talk to your friends. If your friend talks to you like shit, you’ll talk back to them like shit or get rid of them. It’s the same thing.”