Dad's Pies

Getting the product right

When Dad’s Pies was founded in 1981, the humble Red Beach bakery made 60,000 pies a year.  Now, their industry leading Silverdale bakery sells that many every two days.

One of the first decisions husband and wife team Eddie and Erika Grooten made was to change the recipe of the pie.  Eddie says that the original product was “cheap and nasty” and he was confident customers would prefer one made with better pastry and packed with lean meat.  
Of course, actually using quality ingredients costs money and the wholesale price of the pie had to rise from 55c to 85c.  This was a 55% price increase and many regular customers were upset and cancelled their regular orders.  Undeterred, Eddie embarked on a sales drive which involved offering free samples to a wide range of potential customers.  

The Grootens’ instincts were correct – people were prepared a higher price for a quality product and within two years the bakery had increased annual pie production from 60,000 to 360,000. 

Committing to excellence

Growing a business does not mean sacrificing quality.  “In fact”, says Eddie, “if your quality is right, you can improve quality and maintain your margins at the same time.  Some small business owners make the mistake of being too afraid to put their prices up and protect their margins.”  
With the company growing, the Grootens made a commitment to excellence in all areas of the business.  Eddie knows though that it is one thing to set high standards, the real challenge is meeting it every day, especially under pressure.

“Consistently doing it right, whether it is a product or a service, is key for any business,” says Eddie.  “Just being OK is not good enough. There are plenty of people who are mediocre.  Your biggest competition is always ‘just OK’,” he warns.

As well as expanding their product range and investing in technology, Dad’s Pies work hard to ensure they consistently do things right.  To ensure quality and customer satisfaction, every pie passes through a metal detector even though that is not a Food Standards Authority requirement.

The company has also instituted a rigorous daily cleaning regime which exceeds international standards.  Naturally, using more hot water and cleaning products but the resulting quality is considered a sound investment.

The “cheap and nasty” meat pie bakery in 1981 has transformed into a gourmet food business with 54 staff and current annual sales of $12.5 million.

Learning the lessons

Eddie is frank that there have been some painful lessons along the way.  In the early days, he admits that Dad’s Pies lost a lot of money because they were too lenient about people paying their bills.

“Letting people get away with paying you on the 20th of the following month is a mistake.  A business needs a steady flow of cash.  The biggest companies in this country pay us weekly because that’s what we negotiated from day one,” he says. 

This system gives small businesses a safety net.  “If something outside your control happens, the maximum you can lose is one week’s supply.  Your business is not a bank, so why should you finance other companies?” asks Eddie.

Just like the new recipe and new prices, some customers make a fuss about weekly payments but Eddie says a high standard of product and business excellence will see them agree in the end.  “Customers will stay with you if you are excellent.  If you are mediocre, they will go somewhere else,” he says.

Focus on leadership

The final lesson is the hardest for business owners who have built an enterprise up from scratch.  At a certain stage, owners have to accept that they can not be involved in every level of the business any more.  Eddie has the best metaphor – “I had to learn that I literally could not have my fingers in every pie,” he laughs.
This was not easy for someone who has set high personal standards for the business and Eddie admits it was a struggle.  However, he recognised the need to free himself up to be able to focus on leadership.  As a result, he has steadily delegated more responsibility to his staff and now trusts them with the jobs he used to do himself.

Having an established series of tight systems for staff to follow made the transition easier.  As a result, Eddie has freed himself up to lead strategic areas of the business and still be confident that the company’s standards are being maintained.

Dad’s Pies today makes 150,000 pies a week for customers such as BP, food wholesalers and Brumby’s bakeries. The next step is a big one – exporting to Britain.  New challenges await the company which reckons their pastry-clad products are simply “great inside.”