Daniel Graeff Interview
(The Lucini Italia Co.)
The Lucini Italian Co. was founded by Renee Frigo and Daniel Graeff.
They built their co. on the philosophy that great tasting food comes from only the most cared for, high quality ingredients.
As for the rest of the story, Daniel Graeff fills us in.
Q – With a name like Lucini, it sounds like the pasta sauce should be made in Italy. Is the sauce in fact made in Italy?
A – Absolutely. We make some of them domestically, some of our higher volume sauces, but, the recipe and technique of cooking is proprietary. Really, at the end of the day just the same way an Italian mother would cook in her kitchen, particularly a Tuscan mother. We use what’s called the sofreta method which is the combination of really good olive oil, garlic, celery, carrot, and a couple of other things which are basically the foundation of the Italian kitchen, for most of the sauces that they make. Pasta sauces and otherwise. What we do is, we treat the places that produce for us as a kitchen. We have specific ways of cooking, doing the sofreta, slowly adding in and layering in the flavors. The result is what we believe to be arguably one of the best pasta sauces jar in America.
Q – Did you start this co. or did you take over someone else’s co?
A – No. This was all developed. The origin of Lucini was olive oil. ’97 was our first year, but a couple years before that my wife and I were moonlighting, doing the work necessary to create what became Lucini. And, it started with extra virgin olive oil of high quality from Tuscany. We surmised at that time that there wasn’t a branded, high quality extra virgin olive oil. There was a lot of low-priced, low quality industrial products. The really good stuff either stayed in Italy or was sent in very limited distribution to places like New York or San Francisco. But, more often than not they’d sit and gather dust because they were so expensive based on how inefficient it was to get so little quantities to America. I had been working in France and got turned onto cooking and wine by a colleague of mine. The first thing any Home Chef kind of does is to realize you gotta have a really good olive oil. And so, we were in Napa Valley on my birthday and there’s this famous store called the Oakville Grocery. They have probably a hundred olive oils to choose from. So, we were like, let’s choose one. This will be our olive oil to make great food. We really couldn’t select. They were just like from all over the place and no one was talking about quality. It was very confusing. The expensive ones were in Italian in the back. I didn’t really know what to choose. You don’t want to pay $40 or more for something and have it really to be no different than a $10 or $15 thing. Anyway, that started our journey. Maybe there could be an opportunity here. We just did all the work necessary to create a consumer package goods business while keeping our day jobs. Went to Italy and found producers and talked to these people and were trained by them over time and it all started from there. That product launched in 1998. We’re now the Number One Premium Extra Virgin Oil in America. A few years ago we started expanding to likely related categories such as vinegars. We have flavored vinegars now. We have pasta sauces and soups. We’re also doing a line of organic products. We continue to grow and try to find different ways of really serving up the Italian lifestyle to Americans, the Italian way of eating which is just simple, clean, good food of impeccable freshness and quality.
Q – What were you doing before you were involved in this business?
A – My wife and I were in the music business, in the entertainment business. At the time we started, she was producing videos and commercials. I was working for a guy called Miles Copeland who was a pretty famous impresario in music. He was a music manager. He founded I.R.S. Records. His biggest client was Sting. So, I worked principally with Miles and Sting running their music publishing co. that they had together. But, I also produced soundtrack albums and was music supervisor at I.R.S. We had a film co. so I was the defacto music supervisor for those. Just a lot of stuff, but principally with Miles and Sting developing our music publishing catalog, signing artists, developing them, bands and so on and so forth.
Q – Why’d you leave? It sounds like you had a pretty good job there. Did you get burned out?
A – It was great, but it was also a very high flying lifestyle. There was a really significant event happen. A dear friend and a mentor for Renee who she had worked for was the head of a very big co. There was a regime change there and she lost her job. Particularly in entertainment, when the major person’s job changes hand, they bring in their own people and change things around. It happens quite a lot. So, when this woman lost her gig it forced a lot of hardship on her. She ended up losing her house. We just looked at that and said My God, if it can happen to this person, it could easily happen to us. From the outside everything was great, but, it either one of us didn’t have our high flying jobs; things could turn around pretty quickly. (Laughs). It’s pretty hard as we saw, when you’re a Senior Vice-President of a major co. to get another job, if you lose that one. It’s not so easy. It’s not easy to replace that gig. It’s easier when you’re in your 20’s, at the beginning of your career. But, when you’re at the other part of your career, your choices are limited. Your lifestyle is much different. You’re less flexible. So, that kind of opened our eyes. We just started to really think about how do we control our own destiny? We went to business school together at UCLA and we just started looking at various opportunities. We looked at all sorts of stuff. But, we landed with this olive oil thing and it became the catalyst for all the stuff I described. Really, it’s been the most challenging thing I’ve ever attempted in my life. If we knew what we were getting into, we probably wouldn’t have done it. (Laughs). It’s a good thing we didn’t, ‘cause we ended up making something we’re really proud of.
Q – Is it expensive to launch a co. like this?
A – The investment is significant. I would even say to do it now, to be us now, it’s pretty much prohibitive. There’s too many organic and specialty food where we exist; there’s too many big players now. They’re themselves targets of acquisition of big cos, trying to take their space. It’s just a different environment. It’s not as wild where you could be a Hippie with a recipe or you could be somebody who loved Italy and knew this wasn’t being brought to America – and start it. I think it would be very challenging and cost prohibitive. I don’t know that it’s as possible as it once was. I don’t want to shut down someone’s dreams because I really believe in my heart, that you can do anything you set your mind to, that’s reasonable. It’s not like I’m gonna go bat .500 for the Yankees, with no baseball experience. I do think it’s possible, but, it’s certainly much harder than it was when we started. There’s just less open.
Q – The pasta business is very competitive isn’t it?
A – Yes, sir.
Q – I’ve seen maybe 10 or 12 different pasta sauces on the supermarket shelves. That includes local and national. Are there more?
A – Oh, there’s dozens. There’s hundreds that range from some regional person whose mom had a recipe and they started it or a restaurant locally that’s selling their sauce or gravy as some people call it, down to like Big League players, or cos. that started small are now pretty big. I would say those 10 that you see in the store, hopefully we’re within one of ‘em, it’s a lot of work and effort and investment to get there and it’s incredibly competitive within those 10 and those 10 had to beat out probably another dozen cos.
Q – What does a jar of your pasta sauce typically sell for?
A – Anywhere from $7.99 to as much as $9.99. We don’t really control the prices. We don’t control the prices at all. We sell what we sell to our customers whether they’re distributors or directly to a grocery store locally through centralized buying. They then plug in their own margins on there. So, we suggest a price to people. What certain retailers have found is there able to get a higher price for our product just because of its quality. We really try to discourage a certain set price. Usually, the average price is $8.99.
Q – What goes into the positioning of your sauce on a grocery shelf?
A – Each of these stores, big and small, whether they’re a thousand store chain or two thousand stores or just three, they have a buying office. They have buyers whose job it is to certain categories. You go make a presentation to that buyer and in some cases they have the power to say Yes or No right then. Or, they have to take it to a Buying Board, like all of the buyers get together and nominate these 3 things and everybody decides based on the merits that this is the thing we’re going to do. They meet maybe once a month.
Q – Once you’re on the shelf, how do you get the public to take notice of your product?
A – Well, first getting on the shelf is decided by that same buyer or their buying panel. We can make requests and suggestions. Now that we’ve had success we can say ‘Look, this is what’s worked in other places, but, you guys know best about your own store. They’ll place us typically from the top shelf, to eye level is ideal, to maybe one shelf just below eye level. As far as drawing demand, it’s tough for an entrepreneurial co. or the smaller co. even though we’re not what we once were, we have a lot more pull in the stores with what we can do, ‘cause we’ve been successful. Nevertheless we’re competing against big, big rivals and they have significant marketing programs that they do, and price reductions. But, the stores all have these promotional programs that you can buy into from one level or another and often are required to be on the shelves. You gotta promote it somehow. So, you can promote it in a store and that’s the best thing we’ve been doing and something we’ve done since the beginning, supporting the products on the shelves. We’ve done some advertising in different magazines. In the end, we’ve really relied upon word-of-mouth and favorable mentions in food magazines. And – that’s been very effective for us. But, these are unpaid endorsements. You can’t pay to have a Food Editor write favorably about you. They’re doing it based upon their own opinions about you. So, it’s not easy to go that route, but we’re able to because of the quality of our product. People genuinely like and recognize what we’re trying to do. That generates word of mouth.
Q – How far up the ladder would you like to take your sauce and your co?
A – It’s a family business. We really take it as our mission to bring high quality, affordably priced food products in organic and specialty to America. We’re a little more than 10 years old in that mission and we think there’s plenty more to do and we’re gonna try to grow the co. as large as we can, as long as we can meet our standards of originality, authenticity and integrity of the products at reasonable prices for what it is.
Official website: www.lucini.com
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