IT’S THAT TIME AGAIN – A FEW ITEMS ARE GOING UP IN PRICE JUST A BIT…
(SORRY! IT’S NOT ALL BAD NEWS THOUGH.. READ ON!)
For some reason this seems to come round in 3 year cycles for us. Not sure why, but it’s probably because the changes we make are often significant and can take a while to have an effect. Will explain a bit more below. We’ve never liked the idea of regular or annual prices increases and we always try to stave off price increases as long as we can, but at some point the time comes.
We’ve decided not to increase everything on the menu. We’ve just picked the items that we think have some room to move or are more affected by the factors set out below. In fact, when it comes to scoops, only the tiny and the 1 scoop have increased by 50c. We are going to be as upfront and transparent about the reasons why below.. so here goes. It’s long.
INCREASING COSTS ASSOCIATED WITH SUPPLYING AND PRODUCING OUR OWN INGREDIENTS
The main reason for the price increase is the cost of production we incur as we move to supplying our own high quality ingredients. Some of you may or may not be aware but we now supply and produce a lot of our own staple ingredients.
For example, we supply our own milk from our very own dairy farm. We also have a hazelnut farm, we make our own chocolate, we produce our own dulce de leche, and farm our own strawberries. It’s something we are enjoying and truly believe in, but the reality is, it’s a very costly and labour intensive way to produce gelato.
WE’RE PRODUCING OUR OWN MILK
The biggest expense by far is our milk. As of about 3 weeks ago we became completely self sufficient when it comes to milk supply (thats about 10,000 – 12,000 Litres per week).
We now have a dairy farm which runs a herd of approx. 350 Jersey Cows and we are very proud to say we produce some of the most amazing milk you will taste.
Jersey Cows are renowned for an exceptionally high quality milk. In fact, it’s regarded as the best milk you can get.
Our cows are completely pasture fed on grass, lucerne, and clover. They are never grain fed, and although we are not ‘certified organic’ we follow organic best practice so our cows are as happy as can be. They are only milked only once a day which means they are less stressed and as it turns out, results in an even higher quality milk (with more cream), which is exactly what we are after. The volumes are significantly less than you would get milking 2-3 times a day (about 40% less), which is fine as we are not at the mercy of the big milk processors like the poor dairy farmers we are hearing about in the news.
To put it into perspective however, we have doubled our milk costs overnight – instead of paying about $1 a litre, we now produce 1L of milk for $2.20.In short, we produce a lower volume of milk thats rich in cream and of super high quality. We produce only what we need but this comes at a significant cost. Overall, we think it’s worth it. Sounds kind of crazy we know, but the quality really is incredible.
Read more about our dairy farm
WE’RE GROWING OUR OWN HAZELNUTS & STRAWBERRIES
For the last 3 years we’ve also been progressively planting and increasing the production capabilities of our Hazelnut Farm in Victoria. Within approximately 4-5 years we should be completely self sufficient and producing a mix of 3 hazelnut varieties that we think will result in some pretty spectacular products. We will not only supply hazelnuts for our gelato but also a bunch of side products we have been working on including our own high end hazelnut spread (ie. our version of nutella basically). We’ve invested heavily in this project, but it will take years to reap the rewards. It’s something that we’re committed to however, as producing high quality, pesticide free, Australian hazelnuts would be a dream come true. We’re also growing and picking our own strawberries in Dural NSW.
WE’RE MAKING OUR OWN CHOCOLATE, NUT FUDGES AND DULCE DE LECHE
Producing our own chocolate from scratch has also become a reality. We are sourcing single origin cocoa from a farmers co-op in Ecuador and we’re actually making our own chocolate to our own specific requirements. We bought a machine called a ‘ball refiner’ that not only allows us to refine our own chocolate, but we now make our own nut pastes, nut fudges and other related products at Messina HQ.
On top of that we bought some other special equipment which allows us to make real Argentinian dulce de leche which is something we’ve talked about for years.
The equipment is expensive and requires specialised skills, but we feel the product we are making is world class. In fact, we’ve had quite a few Argentinians message us in tears after tasting it. It’s something we are quite proud of and we are confident we are producing the real deal. Sometimes we need to pinch ourselves to be honest.
THE COST OF BEING CASHLESS
About a year ago we made cashless payments ubiquitous across all stores. We launched our Messina App (used for seamless integrated payments and loyalty) and also made standard credit card payments possible. Although ‘cashless’ is often lauded as an efficient and therefore cheaper way to do business, it’s proven to be rather the opposite for us.
We are what’s described as a ‘high volume, low order value’ business which means we do a lot of very small transactions (usually under $10). As such, we get caught paying very higher credit card transaction fees. We made a very deliberate decision not to surcharge initially and then review over time to see what effect it was having. It’s cheap. Most hospitality businesses are surcharging now as a matter of course, but we’ve decided to hold off for now as we think these modest price increase will cover things for now.
Although we truly believe the quality of our gelato is easily commensurate with the prices we charge, we also like to be mindful of pricing our products fairly and sensibly. As such, when we do look to increase prices we always do a quick analysis of what everyones charging to make sure we are reasonable. We make the best product we can but we definitely don’t want to be the most expensive guys on the block. Attached is a chart showing where we sit in the overall landscape for gelato and ice cream stores. We’ve removed names to protect the innocent!
As the delivery market grows, more people are choosing to sit on the couch and spend many nights lying dormant in front of Netflix with a tub of Messina. That means a large percentage of our take home tub sales are incurring significant delivery fees that eat into prices that we set years ago before delivery even existed. As a result, we are needing to adjust prices to accomodate this. We like to call it the ‘laziness levy’.
PRICE COMPARISON CHART:
AS MENTIONED ABOVE, WE DID DO A THOROUGH RING AROUND STORES IN NSW, VIC AND QLD JUST TO CHECK IN ON HOW OUR PRICES COMPARE. YOU CAN SEE OUR FINDINGS BELOW.
New prices across all stores are (some have gone up, some have remained the same):
tiny – $4.50
1 scoop – $5.30
2 scoops – $6.80
3 scoops – $8.80
500ml tub (choose up to 3 flavours) – $14.80
1ltr tub (choose up to 4 flavours) – $24.80
1.5ltr tub (choose up to 5 flavours) – $29.00
misto plate (5 tasters) – $18.00