A hit with coffee

In just eight short years Phillip Di Bella has developed a multi-million dollar business selling fresh roasted coffee to more than one thousand cafes across Australia. By Nicola Card.

WORKING IN a Brisbane café inspired Phillip Di Bella in 2002 to chance his arm in creating a coffee roasting and distribution business that now turns over $47 million and has secured a place as one of the leading coffee suppliers across Australia.

The remarkable success of the Di Bella Coffee business was a little unexpected. Back in 2002, his initial objective was to build Queensland’s number one boutique coffee company, based on nine years’ experience in a Brisbane café, and having gained a marketing degree.

Di Bella said "I thought it was time to go it alone, to give it a shot. When I came into the market place I said what I am going to offer is what no one else in Queensland does – a great brand, a great product and consistency.

"My worst possible scenario was losing five thousand dollars cash that I was prepared to invest for basics such as packaging, initial labels, buckets and scoops."

Initially he was the jack of all trades – undertaking the roasting, invoicing, storage at three different locations and distribution to several more. Once the business was established, he decided to sell his home to fund commercial premises and, camping in a spare office, began clocking up a 120-hour working week.

One of the market trends that has worked strongly in Di Bella’s favour is that people want to buy freshly roasted coffee rather than imported coffee. Coffee is at its best within 48 hours of roasting.

Di Bella said: "So I took the approach that that I would walk in [to prospective cafes] and say that coffee is at its best fresh – this is what’s different about our product. We’re buying direct from farmers overseas, and you don’t need sugar for our coffee; it’s been formulated to blend with milk. I pointed out to the consumer all the competitive advantages."

The formula proved successful and Di Bella first turned a profit in 2005, when sales quadrupled. The following year they shot up 225 per cent which gave Di Bella the impetus to expand out of Queensland.

"People believed in me and the product and, once I had the momentum, I thought where to from here – let’s go to the coffee capital of Australia which is Melbourne so we took off. Now we are in Adelaide, Sydney and Tasmania too."

With roasting warehouses in Brisbane and Melbourne, Di Bella coffee is sold in more than 1000 venues throughout Australia. The company is a $47 million dollar operation selling enough coffee to make 75 million cups per year.

Di Bella wants to increase this to more than two million cups of coffee each week by 2012, with new roasting operations in Sydney and Adelaide. Di Bella also supplies a special brew to Xpresso Mobile Coffee Franchises.

Crop to cup

Each year Di Bella imports 750,000kg of premium, hand-picked green beans which are sourced directly from farmers in Central and South America, many of whom Di Bella has met personally. He also buys from farmers in New Guinea, India and Africa. "We have our own Fair Trade system called direct trade, or Crop to Cup, a philosophy that focuses on fair-trade practices and the eradication of child labour. We don’t deal with the brokers."

Fresh coffee comes at a cost: Di Bella invests about $750,000 in each roasting house which is equipped with state of the art Italian drum roasters. The roasting process takes just 18 minutes after which product is cooled and packaged at the rate of 25 kilograms a minute.

Marketing to the cafes doesn’t come cheaply either. "We invest heavily in cafes. We work off a financial analysis document of thirty weeks which is the time it takes before we make any money out of that cafe. If they are doing big volumes we’re putting in equipment for them: barriers, machines and umbrellas.

"What happened is some smart person thirty years ago decided to get a competitive advantage they would give away a free coffee machine. And it’s something that everyone started to do."

Each coffee machine can cost around $8500, which makes for a sizeable investment across hundreds of cafes.

Customer focus

The company employs a staff of 75, including Di Bella’s wife, Gianna, who manages finance and operations. "The denominator from day one was to be customer and people focused – we’re in the people business. I work off the PACII theory: Passion, Accountability, Consistency, Inspiration and Integrity. We call it the Di Bella bus and make sure we have the right people on the right seats. Same with customers, the wrong ones will cost us money. We judge them on our PACII theory. It’s a winning formula that we’ve been able to nail."

Di Bella himself drives business development and has capitalised on social media by employing a person full-time to twitter and blog on a daily basis to promote the brand.

"Our website is informative, it’s our business card, our marketing card – we have education videos, YouTube and blogs. We record ten thousand hits a month on our website and 8500 hits on my Di Bella coffee for online purchasing." Di Bella is keen to present addresses to students and others.

"I tell audiences about my theory of success – it is about developing the habit of doing what others are not prepared to do. That is the common denominator to make you successful over someone else. I also tell them my definition of my success which is to achieve goals in four areas: personal, professional, financial and physical. It’s a basic message – the ability to plan for what you want to achieve – to map out in your life what it looks like."

Di Bella’s ambitions are not limited to Australia. "In five years time I’ll not only have roasting warehouses in every state in this country but also I will have opened operations in Shanghai – that is happening in the next three months and the foundation for India is going down next year."

After two trips to China Di Bella established an office and says "The only hold up is how to get the money out of the country and how to secure intellectual property so we don’t end up losing our business like so many have over there."

Australia’s model will be duplicated in India where 70 per cent of the 1.4 billion population is aged 40 or under – and drinking coffee.

"And [within a few years] I will have completed the big project that I’ve been working on for two years – instant coffee in a can, an instant already filtered espresso coffee that can be drunk heated, ambient or cold. Sixty-five per cent of people in Australia are still drinking instant coffee and it’s a product we haven’t touched yet. Really the sky is the limit."

For further information visit: www.dibellacoffee.com.au

-- to read entire article, please visit publisher's site to subscribe --