February, 2006

So Tyler Brulee, the London FT newspaper's style colossus and globetrotting "bun lover", lists this Melbourne bakery next to New York's Dean & Deluca and England's ethically aware Waitrose supermarkets in a round up for the New York Times in 2005. British chef Sally Clarke described its founder to me as "...like a British rose in Melbourne, though of course very much Australian. She's deeply passionate about her food and you know, we all miss her here".

Both are talking about Phillippa's, the Melbourne bakery and foodstore that rubs customers excitedly and other bakers raw with envy, founded by Phillippa Grogan and celebrating just over 10 years of business. I spoke with Phillippa and her partner Andrew O'Hara in Melbourne about steering a bakery business through the stages from a small idea to a smooth running sustainable business....

Dan: I was just thinking how good the shop looks. How does it feel, after 10 years?

Phillippa: Well, it's a bit of a shock that it's come up so quickly, but it sort of feels good though. But it's going along well. And the response from the customers who have been coming along from day one, though nobody is counting years, but they're pretty excited. And it took a while to get the shop really buzzing. Perhaps you really have to have a knack to get retail working. We reduced a lot of our 3rd part lines, and sell hardly anything bought in. It's mainly just what we make here and we've expanded our range. And that just works.

Dan: What stops you getting jaded, ten years is a fair chunk out of your life?

above, Phillippa Grogan outside the Armadale shop, where the original bakery was situated.

Phillippa: Well, I did feel very jaded 6 years ago, very disillusioned. The business had grown and, inevitably when you reach a certain point, you think you still have to be in complete control. So I wasn't doing the creative stuff, the product development, the marketing and all that. I was pretending to run the business with 40 or 50 staff, two premises, with Andrew working 6 nights a week. He kept telling me to stop, and I kept saying to him "How do I stop"? I really didn't know how to do it, that isn't my skill. My skill is on the creative side.

Dan: So what was the point where you held up the white flag? When you say you were pretending, what was the point when you realized that had to change?

Phillippa: When I had Sophie, when I was trying to do it all [compressed into] 3 days a week, that's when I thought "this is b***, I can't do this". I just felt things were slipping because I wasn't paying attention to the things I should have been paying attention to because I was trying to do the things I wasn't very good at anyway. My Dad is involved in the business, and he's more of a businessperson, and for a long time he used to say, "well, we'll just get somebody in to run the business". And we used to do a lot of talking about that. Then finally, one day, we had a serious talk about it, and Dad went off and found somebody in 3 weeks who just turned out to be fantastic. He used to run a shoe manufacturing company and understands the intricacies of family businesses. And I just said, "I want to see serious profitability because I know this business can do much more than it is". I didn't even talk about sales. I just said, "I want to totally reduce the staff turnover, I want happy staff, and I don't want Andrew to work nights". So he comes along and the sales line goes up, Andrew is banned from nights and staff are much happier.

above, Phillippa's Spelt Sourdough, showing flour rings from the wooden proving basket

Dan: Was it a bit scary? Here, you had given someone else control...

Phillippa: Well, we'd tried other things to educate ourselves, had consultants in. Consultants don't take responsibility for the company, they'll just "chop, chop" here and there...

Dan - It can cause morale problems as well...

Andrew - The thing with consultants is that they have to show a result. And it was pretty easy to show a good financial result simply by cutting into the staff costs....

Phillippa - Straight away I knew that this guy that Dad had found was going to be good. He's older; he'd been a CEO... And when he came in here he saw that the brand was very strong, but we were surrounded by all of this "simple-to-fix" stuff. And for him it was work he could do with his eyes shut, but he got a lot of pleasure out of it. He scored points every day, and he could really drive it, and we were quite easy to work with.

Dan: So tell me, what has been the most difficult thing about taking the bakery into this stronger position. When you travel up and down the coast I see Phillippa's bread everywhere. At Piedmonte's [a local supermarket] in Fitzroy you see lots of Phillippa's bread there. Getting it to this point, into the "comfort zone" perhaps, how difficult has that been?

a scorchingly hot loaf, straight from the oven at Phillippa's