No dip in the market for this 40-year-old ‘overnight success’
- Chris’ Foods is the market leader in Australia in dips and spreads and a strong seller in Coles, Woolworths and IGA supermarkets, where it makes about 85 per cent of sales.
- The company’s products are now sold in about 1200 retail outlets in the United States with premium dips such as goat’s cheese and truffles proving popular in New York.
- CEO Arthur Xipolitos says the company has put through two price rises to try to claw back some of the heavy inflationary costs, with dairy prices up 25 per cent.
French onion dip still leads the way in Australia for the top company in the dips and spreads market, Chris’ Foods, which is making inroads in the United States by increasing the number of upmarket flavours being stocked at about 1200 outlets.
Chief executive Arthur Xipolitos said on Wednesday that the US was crucial to the company’s plans to increase exports. It has experienced solid growth there in the past few months after an initial foray in 2019 had to be put on ice when the COVID-19 pandemic hit.
“It is a big prize,” Mr Xipolitos said.
It is pitching itself at the premium end of the market, with a goat’s cheese and truffle dip proving popular in Manhattan, while a cheddar and jalapeno dip is a top seller in California. The company is on track to lift overall annual sales revenue by up to 15 per cent in 2022-23, up from $66 million last year.
Chris’ Foods has developed new flavours to attract US customers, and these products have taken off. Mr Xipolitos, who was in New York in November, said it “was a very proud moment” to find its products on the shelves in a string of gourmet food stores.
Chris’ Foods takes an old-school approach and spurns marketing tie-ups with celebrity chefs or social media influencers. Instead, it relies on repeat purchases from loyal customers in Australia at Woolworths, Coles and IGA supermarkets, and a growing export business. It also exports to New Zealand, Singapore, Malaysia and Indonesia.
“We’re not about flash in the pan stuff,” he said. “It’s definitely old school.”
The company operates from a manufacturing plant in the Melbourne suburb of Thomastown, and has a workforce of 135. It was established in 1982 by Christos Tassios and his wife Panayiota. Christos died in 2012 and Panayiota is now the owner.
The company has been the subject of regular overtures from private equity groups and others wanting to pursue a buyout. “It’s not just private equity,” Mr Xipolitos said.
The Tassios family wants to retain family ownership. “It doesn’t go any further,” he said.
Chris’ Foods has a caricature of founder Christos Tassios on its packaging, and that is a powerful tool. “We’ve got Chris as a mascot. We relate it back to the person.”
Mr Xipolitos said the company was the market leader in dips and spreads in Australia, with about a 30 per cent share. Raw material inflation has been a big impost in the past 12 months, and it has put through two price increases to try to claw back some of those costs. These needed to be handled carefully, he said. “The reality is no one wants to pay more.”
Mr Xipolitos said dairy prices had risen 25 per cent in the past year, and canola oil had also climbed. Freight and pallet prices had soared too. Chris’ Foods had steered clear of reducing its pack sizes, which some other consumer goods rivals had pursued in a “shrinkflation” approach. “I didn’t want to hoodwink the consumer,” says the CEO.
The company experienced a small spike in sales during the COVID-19 pandemic as more people entertained at home. Retail outlets in Australia make up about 85 per cent of the group’s sales, and the food service industry – where the dips are sold to cafes, restaurants and catering firms – accounts for 10 per cent. Exports represent the remaining 5 per cent.
Mr Xipolitos said an original push in 2019 into the US made some early gains, but that stopped in the initial stages of the pandemic because of logistics issues. “We got some traction and then everything stopped.”
But it has redoubled its efforts and is now stocked in 1200 stores on the east coast and the west coast. “We kept persevering. It seems to take a few years to become an overnight success.”
He said the export potential was strong. “I don’t really want to put a ceiling on it”.