
Company website
Industry: Hospitality
Company Size: 201-500 employees
Headquarters: South Melbourne, VIC
Type: Privately Held
Taking a passion and building a niche in a highly competitve market
The Challenge: Finding room in a crowded food and beverage sector
'Cafes are difficult to scale, they are very labour intensive,'
For Salvatore, one of the biggest challenges has come from taking a passion for food and beverages, specialty coffee, and creating an impact in this highly competitive market. Addressing this has required a unique business model to overcome these limitations. In Salvatore's case, this meant moving into the wholesale side of the industry.
'Melbourne is saturated in food and beverage and therefore, what better way to augment our business than to also supply coffee to the 1,000s of cafes that are opening.'
However, expanding into the wholesale business hasn't been without it's challenges either, many of which are a departure from the skills needed in the food and beverage sector.
'There are many aspects to running a wholesale company that aren't even in the sphere of food and beverage, i.e logistics, manufacturing, hedging - both currency and coffee as a commodity. However, it isn't very labour intensive - there's a lot of thinking involved but fewer moving parts that can go wrong.'
The second major challenge has been the importance of steady cash flow - a lesson Salvatore learnt early in his days running a student cafe.
'I keep telling my guys that 'profit is theoretical, cash is real' - unless you can demonstrate a link between a conversion and cash in the bank you don't really have anything. I spend a lot of time bringing down our cash conversion cycle.'
The Solution: Building a hybrid business with strong vertical integration
'I feel being a hybrid business, we have enough vertical integration that the customer facing side informs the wholesale business and keeps us on the pulse of what's going on at a grass-roots level.'
The Results: Building a job that feels like a hobby
'When you are the sole owner of an SME, you've really got no one else to talk to about your issues. TEC's a good emotional check-in - the discussions that go in that room are incredibly handy and a lot of my ideas are generated out of discussions within that room,'