Stefano Ispani is the chief executive of Italian restaurant group Ponti's, which was first started in the 1960s by his father Giuseppe and made its mark as a self-service chain. He tells Kerstin Kühn how he had to adapt the business to a changing marketplace
Ponti's has been around for nearly 50 years. Tell us a bit about the history of the company My father came to the UK in 1957, aged 14, and in 1963 opened the first Ponti's on Elizabeth Street in Belgravia with the help of his uncle, "Zio" Johnny.
It was a traditional English caff - serving full English breakfast and that sort of thing. At that time London was experiencing a massive influx of Italian immigrants and culture and many of them opened cafés and restaurants. The irony was that the Italian immigrants were cooking traditional English food.
They gradually started to introduce Italian elements to their menus - spaghetti bolognese, macaroni cheese, proper Italian coffee - so you had this kind of mix of English and Italian menus. Ponti's up until the 1980s was a sort of a sandwich bar with pasta dishes.
What happened next? Ponti's rode the wave and did well until the 1990s when there was suddenly this amazing food revolution. People started to appreciate good food a lot more and wanted fresh, good quality ingredients.
There was an explosion of new restaurants - Pizza Express started to appear everywhere, Starbucks and Delice de France arrived. All of a sudden people got really tuned into good food and the marketplace really started to change.
Then in 2001, a week before 9/11, my father died suddenly of a heart attack. At that time we had about 17 sites, we'd just ventured into the airport market. We didn't just lose our father but also the heart and soul of the business.
It must have been a tough time, not just for your family but also for the business, especially as you were trying to break into the airport market in the period right after 9/11 Yes it was. The bank at that time turned around and said: "Are you sure you want to open cafés in airports at a time when no one is flying?" But we took the plunge and it ended up being a sort of pyrrhic victory for us.
The good bit was that we opened a site at Stansted, which in the first three years became BAA's busiest restaurant site in its entire xportfolio. The bad bit was that it covered up for us that the traditional tray-slide operation outside of airports was becoming tired and outmoded. So, while we were ferociously successful inside airports, we started noticing cover decline outside where the marketplace was totally changing.
After my dad died, a new MD took over who was in charge of the company for about six years. But in 2007, we noticed that our turnover was going up while our bottom line was going the other way. We realised that customers wanted a very different experience and that we needed to make some radical changes.
How did you react to this changing marketplace? We parted company with the previous MD and I took charge of the business. At this point I'd worked in the company for more than 15 years, working my way up to operations director. I changed the team around and with a reinvigorated team and a revitalised structure, we started the process of coming up with a concept that was relevant to the next generation.
In many ways it was incredibly hard for us. When you have a formula that has worked for 20 or 30 years you ask yourself: "Why change it?" But if you don't keep up with what's going on out there, you become complacent.
What changes did you implement in the business? We came up with two new concepts: Caffè Italia and Ponti's Italian Kitchen. Caffè Italia is best suited to airport and shopping centre locations. It's a counter-assisted service restaurant and has a similar menu to Ponti's but all the food is prepared fresh in the kitchen. It's a really funky environment that has a slightly corporate feel to it, which we think is exactly what people want in an airport or shopping centre because it's secure and fast.
We've converted about three Ponti's sites into Caffè Italias already and have another three in the pipeline. So far we have seen an average uplift in sales of 20% from the old-style Ponti's to the new-style Caffè Italia.
What's your future plan for the Caffè Italia brand? We have a 24-month programme during which we want to convert 14 sites and change them over from Ponti's to Caffè Italia. But we're privately funded so we have to do it out of cash flow and can't do it quite as fast as we'd like.
We're converting the big sites now and are in discussions with landlords in shopping centres about renewing leases and converting sites.
Tell us about Ponti's Italian Kitchen
We asked ourselves how we could possibly compete with the big guys in London. We don't have their marketing spend, resources or property portfolio - nor do we have their name and reputation. So we realised that the only way we could compete was through our people. We had to take service seriously and outdo the competition that way.
We also felt that we needed to concentrate on the culinary heritage of Emilia Romagna, the region of Italy where our family is from - which is the food heart of Italy - and out-cook our competition. We source many of our ingredients from Emilia Romagna and try to get the best possible quality - aged Parmesan cheese, Balsamic vinegar, Parma ham, salami and wine. These are the core values at Ponti's Italian Kitchen, which currently has two sites in central London.
Who are your main competitors? Anyone who does Italian food is a competitor. What we're vying for is the kind of customer who can distinguish between a pasta that's cooked al dente and is authentic and something that is a bit more sophisticated in how it's presented and served.
We don't write on the menu what an espresso is because our ideal customer is a bit more discerning and we don't have to spell things out for them. We're offering a tablecloth experience at a mid-price point, something that's just a notch up from the mid-market.
Which restaurant groups do you admire? The group I admire the most is Caprice Holdings. They operate these really top-end places that are all very idiosyncratic but all have the most amazing standards. My brother-in-law, Patrick Clayton-Malone, co-owns Canteen [with Dominic Lake] and I admire what they have done. They've come at it from a non-restaurant related background and no one else really does good British nosh like they do.
What's the secret to running a successful business? The best analogy for business is sport: it's all about winning. Business is a team sport and you're out to win the affection of your customers. The game is to make sure that they come back to you more often than they go to your competitors. To win, you have to surround yourself with the best possible team, who each need to be the best players in their roles. It's all about the people.
A brilliant idea that is badly executed will never succeed, but an average idea that's brilliantly executed will almost always succeed. You have to get the people thing right, it's 95% of the equation. There's no science to it, it's down to human instinct and you have to find people who have the right values.
How important is the right kind of training? Training is important but working with people is a bit like cooking - if you have a beautiful ingredient you don't need to do too much to it to get the best out of it. You can train people as much as you want but when you have a great human being, their beauty will come out naturally. It's all about their personality and I'd rather rein in a stallion than kick a donkey up the arse.
What's your focus for the future? For Caffè Italia the mission is to convert all of the sites in the next two or three years and add on another five or six new outlets. We'd like to open one more Ponti's Italian Kitchen next year and maybe another two the year after and then see how it goes, and possibly up the ante.
We'd like to work with landlords who are keen to have a non-branded operator, a family-run business like us rather than the obvious, big players. The commitment has to be not to over-expand. I think when you grow too quickly it becomes very difficult to keep up. There's a rate at which you can expand without diluting your core values.
When you get to a point where you have 15 sites that are all the same, you probably can afford to open five more in a year because you have the infrastructure to support it.
STEFANO ISPANI'S BUSINESS TIPS
- Never compromise on the people you work with, always go for the best you can afford
- Never underestimate your customers' discernibility
- Don't forget your roots
- Treat people respectfully - life is a boomerang and things will come back to bite you
PONTI'S FACTSNumber of sites 16
Number of staff 400
Turnover 2010 £21m
Pre-tax profit 2010 £2.25m
Management Philip Inzani, commercial director; Stephen Kane, Alan Taylor and Jeannette Jackson (managing director, Cucina Catering), non-executive directors
More info www.pontis.co.uk