June 16, 2014

Blending family and business

From deep within the Victorian Mallee, the de Pieri and Carrazza clans are as renowned for blending family and business as they are for blending a great beer. Mildura’s popular brewers and restaurateurs, Stefano and Donata, talk to Business View about achieving the right mix.

Mildura’s popular brewers and restaurateurs, Stefano de Pieri and Donata Carrazza discuss successfully integrating family and business.

“It has a beginning, a middle and an end… it must also express something intangible, a bit like art, where the sum of the parts produces balance and flavour in total harmony. It must please and stimulate even if you don’t know exactly why.”

Brewery owner and hospitality entrepreneur Stefano de Pieri is waxing lyrical about what makes a good beer. But he could be talking about his own personal and business life – a poetic odyssey that took a country boy from Treviso, Italy to the heartland of political intrigue in Melbourne, to the rich warmth of Mildura in regional Victoria, where Stefano, his wife Donata Carrazza and their extended family have left an indelible mark.

After pursuing a diversification strategy for some years, theirs is a business in transition as they begin the process of divesting some of their businesses to allow them to streamline their investment activity and focus heavily on the brewery – an interesting time for any business but particularly for a family business.

Their most well-known business is the restaurant Stefano’s – one of only four Victorian regional restaurants to be awarded three hats in The Age Good Food Guide awards, and named by Gourmet Traveller in 2007 as one of the world’s best gastro experiences. Housed in the original cellars of the Mildura Grand Hotel, the restaurant – which is owned by Donata’s parents, Don and Anna Carrazza – will be renamed Jim McDougall in Stefano’s Cellar when head chef Jim McDougall takes over later this year.

Then there’s Stefano’s Café Bakery which in addition to the usual bakery fare is a retail outlet for Stefano’s preserves, olive oil, cookbooks, Murray River salt flakes and Table Top Grapes. Run by Donata’s sister and brother-in-law, Maria Carrazza and Mario Mammone, it’s set to be renamed 27 Deakin as Maria and Mario fully take the reins.

But it’s the Mildura Brewery where de Pieri and Carrazza will focus their considerable talents. Housed in the original Astor Theatre and purchased by Don and Anna Carrazza in 1989, along with the Mildura Grand Hotel, today the state-of-the-art brewery produces six permanent naturally brewed beers, along with unique seasonal brews, all inspired by local produce, landmarks and themes. The beers are distributed throughout Victoria and South Australia through a range of partnerships, including a distribution deal with Woolworths’ BWS stores, which stocks one of their beers and Dan Murphy’s, which stocks three.

The brewery includes a pub, a Theatre Club for private functions and Projector Room for smaller soirees.

While de Pieri and Carrazza’s son and daughter Domenico and Claudia are still studying, Domenico does regular tastings on behalf of the brewery in the Melbourne CBD and both kids work in the family business when they’re home from university.

Says Carrazza: “With a family business you really understand the strength of the people you’re working with – and their frailties.”

In a transition period, this level of understanding is more important than ever.

In the blood

For Carrazza, family business is in the blood. Her father started working as a porter at The Grand in 1956 as a fresh faced 15-year old Italian immigrant, buying the premises 33 years later. “I grew up in hospitality and have many memories of catering jobs for big weddings, late nights and hanging out with glamorous and interesting people,” she says. “Stefano and I have a lot of respect for my father, whose work ethic and courage in business have been extraordinary. He has mostly taught us not to give up if something’s worth fighting for; his tenacity has helped him survive the many ups and downs of business.”

For de Pieri, the family business epiphany came after an intense period navigating the political rapids of the Victorian State Government. After stints as private secretary to then Minister Peter Spyker, he joined the Department of Ethnic Affairs in 1984 and later became a ministerial adviser working for Victorian premiers John Cain and Joan Kirner. In 1991 he threw himself into his ambition to become a Member of Parliament. “Perhaps I underestimated how hard it was,” notes de Pieri. “When I didn’t achieve internal party pre-selection I just walked away.”

It was a salient lesson in the importance of maturity for de Pieri, and one he’s carried over into his hospitality business. “If I had stayed around for longer I’d no doubt have had more opportunities further down the track,” he says. “Politics and business are both games of endurance and brinkmanship, and the lessons I learned have served me well in enduring the challenges of hospitality.”

And there are challenges aplenty. The first is successfully integrating family and business life.

Taking on the right roles is a key priority for the de Pieri-Carrazzas. de Pieri currently runs the restaurant and brewery, and deals with suppliers, distributors and the production teams, while Carrazza focuses heavily on HR and marketing. “Stefano is an extrovert and I am an introvert. He loves to engage with people and gets a lot of energy by doing so, while I’m really productive working from the home office and storing my energy for shifts where I host the restaurant and train staff,” says Carrazza. “I like details while Stefano likes the big picture and worries about the details afterwards. We spend a lot of time talking things through and bouncing ideas around until something feels right. In this way we complement each other and get good results.”

Understanding each other’s strengths is equally important. “A key issue is that different family members can sometimes have different visions for the future and different levels of energy, which can create tension,” de Pieri says. “It’s important to understand each person’s capacity, but also to ensure that you’re all moving in the same direction.”

With a generational family business, change management is a crucial skill. Carrazza’s father has always been the family and business figurehead. The involvement of younger, more progressive-thinking family members in the business has meant finding a way to draw from the strengths of the past without being compromised by a too traditional approach. “There’s no easy way to change – you have to be patient, but you also have to develop a voice and be able to express your views without causing too much friction,” says Carrazza.

Competing to win

Unlike wineries, where a family may specialise in three or four grape varieties, breweries are far more vulnerable to the changing appetites of consumers. “We have to change and multiply with a market that’s very fickle and mobile,” says de Pieri. “One minute consumers like a strong very ‘hoppy’ beer, the next they want beer with a crazy flavouring. You have to be very nimble to adapt.”

The financial implications of this pace of change are significant, given each new product requires a big investment in design, labelling and bottling. This means de Pieri has to be very strategic in selecting new beers and deciding when to launch them.

“Going forward, our strategy will be to expand our capacity to produce more runs. We’ve invested in our facilities so we now have bigger tanks – and that means bigger runs. We’ll need to support that with a marketing effort for each new flavour which is also a big investment.”

The constant threat of competition in a growing and high-cost market also makes brewing a precarious venture. When de Pieri and his father-in-law started brewing in 2004, they were real pioneers – there were maybe 10 craft brewers in the country. Now there are upwards of 200 and standing out from the crowd is a priority. At the same time, competition ‘at the tap’ within pubs, bars and restaurants is tough with mega-brewers and everyone else competing for the taps.

Selling the story

A key part of de Pieri’s business plan is selling his labels through Woolworths’ BWS stores – but simply getting onto the shelves of a major supermarket distributor is by no means the secret to thriving. For de Pieri and Carrazza, captivating consumers and winning the taps all comes down to telling a good story.

“I come from a highly visual culture, a place where style is important and attachment to location is a primary concern,” explains de Pieri. “So I try to tell stories through my labels of my place – Mildura, in the semi-arid environment of the Victorian Mallee. I want to talk about the place that I’ve chosen to live and invest in after a 16,000-kilometre journey and I’m asking consumers to come on board with me. I’m telling stories that express something authentically Australian.”

Both de Pieri and Carrazza are tireless when it comes to keeping the story fresh and keeping a conversation going as a key tool for engagement with established and new consumers of all their products – from the restaurant through to each individual beer.

Advertising, social media, events, promotions and marketing partnerships are all critical components of the story-telling process, which de Pieri emphasises is a daily effort. “Investment in marketing is as important as investing in your manufacturing and your product,” he says. “We’re always looking for new opportunities to get our message out.”

This has included a book and TV show focused on his food memories from his native Italy and the produce of Mildura called Gondola on the Murray, which aired in 1999; the establishment of the annual Mildura Arts Festival, of which de Pieri remains honorary president; an adjunct professorship in the School of Humanities at the La Trobe Art Institute; and an adjunct professorship in architecture at RMIT University. His involvement in these ventures is about being perceived as a leader in the industry and creating opportunities for connection.

de Pieri and Carrazza’s businesses, and other activities, have played a crucial role in promoting the Mildura region, but they’ve also highlighted the opportunities for small businesses in regional Australia.

For now they’re happy to keep expanding their businesses in their regional hub and selling into Melbourne and Adelaide. While exporting is always a lure, they plan to spend the next 12 months consolidating and making sure they get the most out of a significant investment in new brewing machinery.

But expansion is on the horizon. “Over the next year we’ll put a toe into the Sydney market and look for an appropriate partner to distribute our beer,” says de Pieri.

Meanwhile, the family love affair with beer, Mildura and each other endures.

This article was first published in Business View magazine (May 2014). For more articles and interactivity, download the iPad edition of Business View for free via our new app NAB Think.

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