Tradition drives WA’s smallgoods sector

SMALLGOODS have a big presence in our lives, from party platters to continental rolls, in Perth’s many inner-city and suburban delicatessens, and in 2023’s viral ‘girl dinner’.

It is a business with a rich migrant history – largely Italian or German – and one where family dynasties and recipes sit proudly at the core of company branding.

Yet for all the ubiquity of their products, smallgoods producers fly under the radar in terms of their business clout in Western Australia.

There’s a comparative dearth of reporting and feature news about the sector, and a Google search returns few anecdotes beyond those found on company websites.

WA has three distinct smallgoods producer tiers. D’Orsogna sits alone at the top.

Founded in WA in 1949 and with a second facility in Melbourne’s north, it is by far the largest local firm and one of two with a national footprint.

The main competition is in the next rung down.

Mondo Doro Smallgoods, Princi Smallgoods, and Del Basso Smallgoods share similar traits – from scale to heritage – and alongside D’Orsogna produce most of the cold cuts presented in deli windows, as well as pre-packed products.

Re & Sons, and Hunsa Smallgoods are of a similar size but don’t compete as much for deli cold cut space; their game is mostly focused on pre-pack shelf space.

Those in the tier of smaller operators have carved out their own niches mostly based on providence: the German Elmar’s Smallgoods and Westphalia Smallgoods, Croatians at Bibra Lake’s Eurostyle Smallgoods, and The Farm House with its homegrown story.

Delis and small supermarkets are the main customers for the sector, with food trucks, hotels, restaurants, mine camps and catering companies also presenting opportunities.

A few have made it into Coles and Woolworths alongside national players such as Don and Primo, but most appear wary of dealing with the giants over quality and quantity concerns.

British Sausage Company was the only outlet that refused to reveal how many people it employed.

Paddock to Plate WA and Re & Sons could not be reached for comment.

Taste of Europe

Given the connection between Italy and smallgoods, it’s little wonder the bulk of WA’s smallgoods firms were founded in the mid-1900s by Italian migrants eager to build family empires.

Among the more prominent firms is Mondo Doro, started in 1995 by John and Nick Ciampini, and John Rapanaro.

General manager Danny Ciampini is the second generation of his family to steer the company.

“All of our marketing is based around tradition, heritage, legacy, authenticity,” Mr Ciampini told Business News.

“We still practise today some old-school processing procedures and techniques, even though we know there is machinery out there capable of replacing a lot of people doing the laborious work that our employees do.

“Every one of our sausages is still hand-tied. We know there are tying machines out there that can do that for us, but we have tried to maintain that point of difference.

“If we can only make X amount of this product the way we’re making it, we will only ever make X amount of that product.”

On a tour of Mondo Doro’s O’Connor base in January, Mr Ciampini showed Business News through cool rooms full of coppa, salamis and cacciatore at various stages of processing before going to market.

“We make a lot of bacon, we make a lot of hams as well, but our fermentation rooms are really good,” Mr Ciampini said.

“Mondo Doro is probably widely known more for its dry-cured products than it is for its cooked products.

“So … that is the kind of space that we play in.”

Deep in Perth’s southern corridor is the Croatian-style Eurostyle Smallgoods run by Daniel Bicanic, Steve Hlevnjak, and his son, Stiven.

Eurostyle taps the retail market in its own store and the wholesale market through restaurants, food trucks and catering businesses.

Stiven Hlevnjak said a longing for food eaten during European holidays drove many of their customers through the door.

“I find consumers looking for quality and go on holiday and try products in regions like the Balkans, Croatia, Hungary … so there’s always been a real strong support,” he said.

“Croatian style is very smoky, a little bit different to a lot of the Italian producers.

“Croatian and German is a little bit similar I think, but it is more eastern European style; we blend with the Hungarians and Slovenians.”

Elmar’s is a little different to the rest of the industry.

Many Western Australians will know the brand via its former Swan Valley brewery, where plus-sized schweinshaxen – a traditional German pork knuckle dish – was a favourite.

That venture may be over, but the Highgate store founded by Elmar and Anette Dieren in 1988 still draws a crowd and Mr Dieren remains a regular visitor.

“He is in here every day, walking around, having a look, tasting stuff,” Elmar’s manager Mario Sarchinger said.

“That is nice, passion like that.

“Perth is like different countries all in one, so you are going into the city and you are having Japanese, Lebanese, you got Argentinian food … and all the German food, it fits perfectly.”

The other German player in the sector is Westphalia Smallgoods. Westphalia’s core focus is behind the scenes, supplying wood-smoked hams and sausages to mining camps, hotels and restaurants.

“As a small company we do not produce massive quantity, but we aim to offer higher quality to our customer … a bit pricey but well liked,” Westphalia director Shenny Lukiwidjaja said.

Homegrown

Margaret River-based The Farm House is among WA’s few regional smallgoods producers and one of the only players without a family tradition in the industry.

Farm House director Ryan Walsh’s background is in broadacre farming and winemaking, with an interest in food preservation and paddock-to-plate produce emerging from his agricultural roots.

“Driving and being on a farm, there was always that preserving element of the food that you made, and the self-sustainable element of growing for yourself and making for yourself,” Mr Walsh said.

The business started in 2010 and he said being a relative new kid on the block presented unique challenges.

“It is a low-margin industry,” Mr Walsh told Business News.

“There is not a lot of room for new growth; it is very capital intensive, and you have to be in it really generationally.

“These Italian guys have been in it generationally and are probably now benefiting a little bit.”

One of the important decisions made by Mr Walsh was to sell his landholdings and step away from the paddock-to-plate model to ensure the viability of the business.

Rising land prices, spurred by competition for residential growth, were a key contributor to The Farm House offloading its farms, Mr Walsh said.

“From an agricultural point of view, the land to farm sustainably under the model that we had wasn’t as sustainable as much as people like to think,” he said.

“Get bigger and yes, vertical integration makes sense, but on a small model it is just not possible.

“It is low margin, it is hard work, but it is somewhat rewarding to put good quality produce in people’s hands.

“I think people are becoming more conscious of that and [are] prepared to pay a bit more.”

Mr Walsh said being in Margaret River had its benefits – being able to ride the region’s artisan branding – and drawbacks, such as distance to market in Perth.

Old ways, new tastes

Most WA smallgoods companies use recipes handed down through the generations, often from before their forebears came to Australia.

There is sentimental value in sticking to tradition.

But consumer sentiment has turned tradition into risk.

Old recipes can contain gluten, nitrites, salts, fats and other additions, which have become magnets for criticism in the modern culinary landscape.

Mondo Doro’s leadership saw the writing on the wall in the mid-2010s amid rising concerns over gluten and its role in coeliac disease.

“About six years ago we went through the process of being an entirely gluten-free premise,” Mr Ciampini said.

“That was about a two-year process to go through all our ingredient mixes or our spice mixes, remove gluten out of everything and go from having used gluten to being completely 100 per cent gluten free.

“That’s the biggest transition in my time that we’ve had to go through.”

Dealing with the increased prevalence of nut allergies was dealt with at the same time, Mr Ciampini said.

WA smallgoods company workforce

• D'Orsogna: 450 employees
• Mondo Doro: 62
• Princi: 50
• Del Basso: 50
• Hunsa: 40
• Eurostyle: 20
• Westphalia: 18
• The Farm House: 8
• Elmar's: 8
• Ludwick & Son: 8

The company discontinued its pistachio mortadella at a time nut allergies, including in Mr Ciampini’s son, were becoming better understood.

“We monitor what’s going on out in the consumer world and what the trends are, and you try and accommodate,” he said.

“But the bulk of what we do and the way we do it and the processes we use pretty much haven’t changed.”

In Elmar’s Highgate store, Mr Sarchinger is on the frontline advocating for smallgoods as concerns around food allergies and additives mount.

“We have no artificial preservatives, no artificial colours, everything is sea salt, no dairy in there, no gluten in there, so if people are coming in and telling me their story it is like ‘okay, so you are safe here,” Mr Sarchinger said.

“We have a customer who is allergic to nightshades [tomato, eggplant, potato, peppers]. I’ve never heard that before.

“Apparently it is a thing and I’ve pointed out [to the customer] that you can eat this, there is no paprika there, there is no tomato.”

Meat’s popularity took a hit recently, too, although that is slowly turning around, according to most smallgoods industry leaders Business News spoke to.

“Pre-COVID, it seemed like meat was on the way out,” Eurostyle Smallgoods co-owner Stiven Hlevnjak said.

“There was a lot of advertising against meat with documentaries and that sort of stuff, and I definitely felt it in my age group.

“COVID came along and all that went out the window.

“Now, if anything it has gone the other way, where there are a lot of people looking for quality grass-fed, ethically raised meats.

“I reckon meat consumption is at an all-time high.”

There is plenty of opportunity created by changing tastes.

Cooking shows, social media and Google have fuelled consumers’ passion with food, which has led to the rise of the charcuterie board.

“Entertaining has become something a lot more people are doing now at home,” Mr Ciampini said.

“You look at grazing boards or you look at a charcuterie board; more people are doing them now.

“They are experimenting with them, and they are putting good smallgoods products on it with good crackers and a good selection of fruit and nuts and cheeses.”

Meanwhile, the antipasto platter was back in vogue in restaurants, Mr Ciampini said, and of course smallgoods were a core ingredient in the popular continental roll.

Modern pressures

While the sector has adapted to shifting market demands, long-running and emerging threats remain.

Westphalia’s Mr Lukiwidjaja said slow population growth, a perception of processed foods as unhealthy, lack of butchery schools in Perth, and disinterest from young jobseekers weighed heavily on the industry.

But one Australian tradition, he said, was sticking.

“People still like to do barbecue, as well for breakfast sausages,” Mr Lukiwidjaja said.

Mr Ciampini is WA’s only representative on the Australian Meat Industry Council’s national smallgoods council.

He said a trend away from fresh deli cuts toward pre-packaged cold cuts since COVID had increased competition for shelf space in supermarkets and led to packaging issues.

“Convenience is definitely the new trend and people are prepared to pay a premium for it,” Mr Ciampini said.

“It has created more competition because there is only so much racking, and the other big challenge that is presenting with us at the moment is around the new packaging laws.

“All of us smallgoods manufacturers are now looking at creative ways to package our product with an eighty per cent recyclability rate, and that is proving challenging and very costly.

“There are a lot of people that will buy a really nice-looking packet with a really ordinary product inside it, whereas we make a really good product in a pretty ordinary package at the moment.”

Farm House’s Mr Walsh added the sector’s mature status, supermarket discounting, capital intensiveness and low margins among industry pressures.

“We make everything on site; we slice it, we ship it, and we pack it on site,” he said.

“With that comes challenges and increasing costs, and slightly higher premium on products, which is often hard to achieve.

Another sticking point for the traditionalists in particular was around visual demands of Australian consumers, according to Mr Ciampini.

“In Europe, you will buy a salami that is completely covered in mould,” he said.

“The more mould on it, the more attractive it is,” Mr Ciampini said.

“In Australia, it’s not acceptable.

“We need to culture that bacteria in order for the product to ferment, but then we will wash down all our salamis before we’ve packaged them and remove all the mould so that it is more visibly appealing.”

Pride in produce

Family and providence are central to most of the smallgoods brands on WA’s shelves today.

Mr Sarchinger may not have the Elmar family name, but his pride built up over a long career in the German institution’s products is clear.

“When I came to Australia, and I saw about smallgoods, and tried a frankfurter or Aussie banger I was wondering actually what’s happening here,” he said.

“Different areas and different tastes, but at the end of the day, that’s what we have in Germany and (Elmar’s products) is the authentic stuff.

“I love to eat my stuff, so if I don’t like what I produce, what’s the point of making it?”

Down in Bibra Lake, Stiven Hlevnjak said he wouldn’t push his children to follow in his footsteps.

But he did believe it was a good job with a good future should they choose to do so.

“No kid wants to grow up and work hard,” Mr Hlevnjak said.

“But I think the passion for loving and producing a quality product or a food, eventually you start doing it and then you start dealing with customers providing a service and a product, and I think you get enjoyment out of that.

“There is a lot of work, and it is not something that will ever be replaced by AI.”

It is not all about family, however.

Mr Hlevjnak said building customer loyalty through high-quality products and good customer service was key to success in the sector, and a point of difference in luring consumers to shopfronts instead of supermarkets.

The industry, once stubbornly private, is finding working together can be fruitful.

“I have found that a lot of local producers, whether it’s butchers or producers, I think we have really built a lot of great relationships in the past five years,” Mr Hlevnjak said.

“If I was to hear someone say to me that they’re going to so-and-so butcher down the road, and I know that butcher and I know they do a good job … I think that’s a good thing that you are supporting a local butcher.”

That push to work together has been aided by AMIC, which Mr Ciampini said built consumer trust in the industry.

“We still get together every quarter and we sit as a national body and discuss all things smallgoods related,” he said.

“The consumers … know they are buying a product from a processor that is a member of a national body that is doing things properly.”