- BRW Lists
Published 30 June 2010 13:54, Updated 05 August 2010 04:18
Di Bella Coffee
Phillip Di Bella
60.96 per cent
BRW Fast 100: 2009 (ranked 53); 2007 (42); 2006 (23)
BRW Young Rich: 2009 ($47 million); 2008 ($28 million); 2007 ($19 million); 2006 ($14 million)
Phillip Di Bella knows a thing or two about rapid growth. His business, Di Bella Coffee, has been ranked among the fastest growing in the country three times. Sometimes, however, even for the most ambitious, growth can be overwhelming.
“Last year – and I’ll never do this again – we put on 45 new accounts in eight weeks,” he says. “It nearly killed us.”
Di Bella’s core business is wholesaling coffee roasted in his Brisbane headquarters. Each new cafe or restaurant he supplies is expensive in the short term, requiring expenditure of about $10,000 to cover coffee machines, cups and promotional umbrellas and barriers. As well, money doesn’t begin flowing back to Di Bella Coffee for at least 30 days, he says.
After putting on so many accounts in a short period, Di Bella found himself stretched. “We learned from that,” the 35-year-old says. “We’re stopping our growth at 15 new accounts a month nationally now. We’ve found that 15 is the magic number. Above that we suffer financially and resource-wise. It’s too quick.”
Founding his company as a young Brisbane boy in 2002, Di Bella wasn’t immediately successful.
“Nobody wanted to know me,” he says. “I’d been in the industry. I’d worked for nine years in a coffee shop that roasted its own coffee. I went out on my own and for the first six or 12 months everyone was like, ‘not interested’.”
Instead of focusing only on the quality of coffee, Di Bella says what eventually set him apart was his attention to the people side of the business. Training cafe staff in coffee making, as well as providing equipment maintenance, is common practice among coffee providers now but Di Bella says in Brisbane in the early 2000s it was lacking.
It didn’t take long before this approach took off. In 2006, the same year that he made his debut on the BRW Young Rich with wealth of $14 million, Di Bella began wholesaling to the sophisticated coffee market in Melbourne. In 2007, also in Melbourne, he opened a retail venture, Di Bella Roasting Warehouse, in partnership with one of his employees, Joe Molinaro.
Sales to the public, from both the roasting warehouses and online, make up about 20 per cent of revenue, but it is a direction Di Bella is focusing on. Sydney and Adelaide both have their own retail outlets under construction. Di Bella likens them to the micro-breweries of the beer industry. Customers can come in for a coffee, ask questions, go on tours or learn how to use their home machines.
“Tangibility is the biggest thing that I do,” Di Bella says. “When you walk into Melbourne [Roasting Warehouse] you can see the roaster there on display. You can watch everything in action. The smell is a big drawcard.”
“A lot of my colleagues want to get snobby and secretive,” Di Bella says of other suppliers. “We don’t. I’ve got no secrets. We get customers tasting. We get them being part of what we’re doing.”
Hitting revenue of $15 million in the 2009 financial year, Di Bella says he is on track for another 30 to 40 per cent growth. He now supplies about 1200 cafes in all states except Western Australia and he has China in his sights. Or rather, China has him in its sights.
In 2009, Di Bella got a call from a representative of the Lord Mayor of Shanghai. “The government was looking to get involved with coffee because Starbucks was going nuts there and they’re not big fans of Starbucks,” Di Bella says. The representatives were keen on encouraging a player into the wholesale market.
“They came over here and knew all about me,” Di Bella says. “They sent delegations without us knowing. They had video footage of our operations. It was quite insane. They said we want to talk to you about business in Shanghai. I got on a plane within a week and went and had a look.”
Despite some unfinished negotiations concerning foreign tax rates (“they want to keep the money in the country, they’re very smart”) Di Bella hopes the ink will dry on final agreements within eight weeks. He says Shanghai is going through a mini-Italian revolution, with great demand for cafes serving gelato, pizza, red wine and, of course, coffee.
“It reminds me of Melbourne,” he says. “It’s like Shanghai – the whole 23 million of them – want to become Melbournised. We’ve got about 200 clients ready to use our product.”
It seems all bets, and lessons about fast growth, are off when talk is of China. Not one to shy away from an emerging market, within five years Di Bella hopes to see $50 million in annual revenue from his China operations alone.