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Rocket Espresso's Andrew Meo on selling coffee to Italians

Expat Andrew Meo is selling espresso to Italians after taking over Rocket’s coffee machines.

Coals to Newcastle, ice to Eskimos. Andrew Meo, restaurateur and founder of coffee roaster The Immigrant’s Son, is teaching the Italians a thing or two by selling them espresso machines with his company Rocket Espresso Milano.

Andrew Meo

Meo got coffee business The Immigrant’s Son cranking before he turned his hand to Rocket. His business partner had been importing the espresso machines, but the parent company ECM was on financially shaky territory, so the pair took it on.

Everyone loves a success story, particularly when it sounds like a kind of contemporary fairytale and even more so when it involves a move to an exotic locale. This story is about the owner of a successful inner-city Wellington bistro who upped sticks with his family to move to a little town outside Milan, Italy.

Andrew Meo is the former owner of Wellington’s Pravda restaurant and founder of The Immigrant’s Son coffee roaster. He’s now four years in as general manager of Italian company ECM, which makes Rocket espresso machines. Meo took over the ailing business and turned its fortunes around. Amusingly, the little town he now lives in is called Crema.

In such stories, every move forwards is characterised as a lucky leap into the unknown, rather than a result of hard graft and good planning. But as Meo can demonstrate, it’s not entirely a linear narrative. Self-employed since he was 25, he’s a self-described jack of all trades, master of none.

“I think when you’re self-employed, you tend to look for opportunities,” he says over a patchy Skype connection from his home in the Lomardy region, the coffee machine heartland of Italy.

“I don’t have the same support network and structures in place, so it’s been very challenging. It’s incredibly daunting to sell your business, pack up all your worldly possessions at the age of 48 and send them across the world.”

This no doubt resonates with anyone who has taken the risk of setting up their own business or a serious move abroad in any industry; a step-by-step ascension up the career ladder is generally swapped for  a lateral move, with different and perhaps less obvious benefits.

“Financially, the smarter money would have been doing what I was doing. But working on a new project, managing new budgets, was an exciting idea.”

OPPORTUNITY KNOCKS

Both Pravda and The Immigrant’s Son were doing well when Meo heard about the new opportunity from Jeff Kennedy, a close friend, occasional business partner and the founder of Caffe L’affare. Kennedy had been importing Rockets, high-end Italian domestic espresso machines, but the parent company, ECM, was in shaky territory financially. He put it to Meo that they should team up to buy the rights to build the machines.

“The restaurant was fantastic,” says Meo of life running Pravda. “We opened it when my son was one, and sold it when he was 11. My wife Nicky would run it during the day and I would be there five nights a week, so, as with any restaurant, family life was compromised.”

On family holidays to Italy, the couple often joked – in time-honoured, rose-tinted holiday fashion – about how they’d change their lives one day, if something ever came up. And then it did.

The transition was eased by the fact Kennedy and Meo were joined by a third partner, Daniele Berenburch, whose father had co-founded ECM and sold them the company.

“We’re very fortunate having him,” says Meo. “Getting off the plane and doing business in Italy with my limited vocabulary would have been extremely difficult.”

Meanwhile, Meo’s son Felix arrived at school with the ability to pronounce only buon giorno. He had a baptism by fire and quickly became fluent, and was often pulled in to assist with day-to-day translations as the couple settled in.

“Nicky is getting really good too,” says Meo, who spends much of his time talking to retailers and distributors around the world in English, the common language of business. “Consequently, I’m still the worst of the lot.”

When the new team took over ECM in late 2007, they found its situation worse than expected. The factory had suspended production for six months.

“There were a lot of burnt bridges, a lot of distributors hadn’t had an easy time of late with suppliers.”

Fortunately, a backlog of orders meant they could start production immediately, albeit just as the global recession was beginning to bite.

“Yeah, the world had a bit of a glitch,” Meo says. “But that didn’t affect us. We didn’t go backwards because we hadn’t gone forwards yet.”

The next step was to iron out the firm’s operational issues. The approach Caffe L’affare had taken in New Zealand was to target consumers with the Rocket – even the name was created for our market. The original ECM

Giotto and ECM Cellini models had historical brand recognition in Italy, but were marketed to distributors, using a highly technical voice.

“We looked at making it, for want of a better word, sexy to the public,” says Meo. “It was important for us to target the consumer from a very early stage, and make it accessible to them.”

They looked at the build quality of the machines, particularly when early trips to trade fairs indicated it was beginning to date not only in terms of aesthetic, but performance.

“It had to be better in the market to survive,” says Meo. Seven months later, they launched a new model Rocket with more contemporary lines and technology that enhanced its temperature stability and pressure.

Back at ECM headquarters just outside Milan, other changes were afoot. The team consolidated the manufacturing, management and sales functions under one roof, and Meo introduced some of his own office traditions, namely an open-door policy and stricter adherence to deadlines. Since then, the company has grown by more than 60 percent and makes 4,000 machines a year. It exports to 37 countries and is being courted by both old and new distributors.

In mid-2010, it released the top-end Evoluzione model, featuring a full rotary pump. The fact it was one of the first manufacturers to do so further strengthened ECM’s reputation for progressiveness and brand innovation.

This shift in the wind bodes well, and the fact the company is once again a recognisable name in the industry, after a couple of years “knocking on doors until we were blue in the face,” says Meo, is a huge source of satisfaction for him.

Culturally, he says, Italy is not a hard place  to do business, just a different take.

“You have very traditional family-run businesses, and then cutting-edge design companies. In a way, it’s similar to New Zealand, where you have fantastic design but also businesses that don’t think outside the square.

“The interesting thing is that in Italy you’ll walk into a traditional factory, and it’ll be full of cutting-edge technology, whatever industry it is. They invest heavily in their businesses. Because Italy is such a big export nation they need to be competitive.”The Meo familyThe Meo family

The Meo family now calls a small town Crema home.

COFFEE CULTURE VULTURE

The stereotype of old Italian workmen indulging in a bottle or two of lunchtime vino rosso still holds true, says Meo, but so does their reputation for attention to detail and design quality.

“The standard of workmanship is incredibly high. They don’t do things by halves, whereas we come from a pioneering country with a ‘she’ll be right’ attitude. They don’t have that, and as a result can be a little conservative.”

The idea of someone arriving from a small Pacific island presuming to tell the Italians how to make coffee is ironic, in a bringing-coals-to-Newcastle way, but Meo says there’s no reason to be snobbish about our coffee pedigree.

“We have a new coffee culture, a vastly more sophisticated one. When you see a sign saying Allpress, Caffe L’affare and Supreme, you know you’re going to get a good cup of coffee. Because at first nobody was doing anything with coffee in New Zealand, those brands set up cafes with barista training and coffee roasting. Italy might be the home of espresso, but there is a lot of bad coffee being used, cheap coffee.”

In export terms, New Zealand and Australia are small markets that outperform; surprisingly, we buy more of Rocket’s high-end domestic espresso machines per capita than anywhere else.

The range of cultural factors affecting each market has also been part of the company’s learning curve. In New Zealand, our zest for good coffee and the comparatively large size of our kitchens makes a huge difference. In Germany, Rocket’s biggest market, they like high-end gadgets and specialist shops with lots of different models are the norm, whereas the US has an internet sales model where pricing is the most important factor.

Surprisingly, Rocket doesn’t sell many machines in Italy. Meo says every apartment has a bar where people have their morning espresso, but it’s not something to have at home.

London, on the other hand, with its high proportion of antipodeans and reawakened passion for gastronomic craft, is destined to be “massive” over the next 10 to 20 years. Following on the heels of trailblazers like the UK’s Monmouth Coffee, and the New Zealand-owned cafes Flat White, Milk Bar and Sacred, which now has six shop fronts, Allpress recently set up an outpost in Shoreditch, a hopeful sign that last orders are about to be called on Starbucks’ oversized takeaway cups of frothy milk.

TAKING IT GLOBAL

The newer markets of Singapore, Dubai and Hong Kong also have a lot of potential.

“We have people doing really interesting things with espresso in non-traditional markets. We’ve seen good growth. It’s still in small numbers, but I find those markets more encouraging than the obvious ones. You can’t apply the same rule to everything.”

The idea of an authentic family company with both heart and soul and financial acumen appears to be the bedrock of Rocket’s business model. One of Meo’s strategies is to seek out and work with ‘new age’ coffee companies that roast their own coffee, and care about staff training and customer education, rather than the old-style retailers who import everything and “would be happy selling toasters”.

They are also trying to align their pricing throughout the world to give the brand more credibility. Meo says the days of going to Asia to buy a cheap camera are gone.

“We work hard to discourage price dumping. We’re trying to sell a premium brand, so we want it sold at its recommended retail price. Long-term, the dealer’s margins are eroded,  so we need to look after that.”

In July, Rocket also started producing commercial machines for the first time, a widening of focus Meo hopes will give the company greater balance in unstable times.

“I’m happy with what we’ve achieved in four years, but the market for domestic machines is not that big – at most they retail at €1,600. We’ve always been a small producer of handmade machines and vulnerable is not the right word, but if, say, New Zealand or Australia have hard times with retail spending, we really see it. With commercial machines, we’re reliant on a larger section of the market.”