A.G. Ferrari

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A.G. Ferrari

By Anna Wolfe - 12/12/2016

The only constant is change. And in recent years, there has been plenty of it at A.G. Ferrari.

A.G. Ferrari CEO Jarett Peppard

In July 2013, local investment firm Murano Group acquired the San Francisco Bay area specialty food retailer, which had been family owned by three generations of the Ferrari family until it was sold to Dallas-based private equity firm Renovo Capital LLC in 2011. In March 2014, Jarett Peppard was hired as CEO to revitalize and restore the venerable brand as a true neighborhood market-café and purveyor of authentic, high quality specialty foods and wines.

Peppard, an industry veteran with more than 20 years' experience in food retail, previously worked at Balducci's and Sutton Place Gourmet, and most recently, he spearheaded strategic development and planning for Safeway's bakery, deli and prepared foods departments nationwide.

"It has been whirlwind," he says of his tenure at the helm of A.G. Ferrari, which has corporate offices, a warehouse and commissary kitchen in Alameda.

One of Peppard's first tasks was to build up the ranks and assemble a team that could execute on the retailer's vision. "The team that was left was a skeleton crew," says Peppard. "The team was in place to maintain, not to move forward."

Among the key A.G. Ferrari team members that remained was Greg Smith, an operations specialist with more than 30 years of experience with the retailer. The company hired a new corporate chef, a sommelier/wine consultant and others to help with the turnaround.

At A Glance:
Founded: 1919 by Annibale Giovanni "A.G." Ferrari
Owner: Murano Group
Locations: Five in the San Francisco Bay Area
Employees: Approximately 70
Website: www.agferrari.com
Phone: 310-559-4770 (SoMa in San Francisco)
Size: Each of the stores range in size from approximately 1,700 to 2,400 square feet. Most have indoor and outdoor dining.

"We've assembled a great group of people," says Peppard. "This is my first time as CEO. One thing as CEO — it's most exciting to create the culture. We have a great group that's passionate about what they do."

A New Look, New Tastes
The A.G. Ferrari team has been busy. When asked what has changed since he came on board, Peppard says, "It has been easier to talk about what hasn't changed.

A.G. Ferrari expanded its prepared foods program.

"We are culinary driven and emphasize ... authentic and crafted food that's made using simple ingredients that are craveable. That's been consistent."

He admits in the almost three years he's been at the helm, there has been a "tremendous amount of change." The five stores feature updated store designs and a new prepared foods menu for in-store dining, takeaway or delivery, and an expanded wine program.

Revamping the venerable store brand has been a team effort that also involved outside vendors. The transformation has impacted all the outward facing areas of the business — the look and feel of the stores, the website, the retailer's store brands and more. "We worked with a couple of groups in San Francisco and solicited input on how best to transform from a legacy brand to where we are today. We pushed the envelope," says Peppard. "We wanted the change to be obvious.

Signature sandwich options include a broad range of Italian deli items, including Roast Pork Loin that's made with fried capers, marinated fennel, salsa verde and basil aioli; Prosciutto & Burrata with arugula, lemon aioli and balsamic glaze; and Turkey & Fig with jam and ricotta.

"It is much more contemporary and reflects not just American culture but Italian culture," says Peppard about the updated branding. "It is impactful; it has a presence. It does pull you in," Peppard says, adding, "I'm proud of the work the team has done."

A Star is Reborn
The 98-year-old retailer has had a store brand for years, and like the stores, the line received a modern makeover. Previously packaged in hues reminiscent of Tuscan yellow, the store brand's packaging has been updated in contemporary hues of cream and gray. And the products inside also have been updated, and in some categories, products have been added.

A.G. Ferrari has refreshed its Italian wine program with the goal of having a broad representation showcasing all 20 Italian wine regions and an emphasis on interesting wines that are also excellent values.

The line includes Italian-made durum wheat pasta, Florentine biscotti, artichoke spread, Ligurian pesto, Tuscan Kale Pesto, coffee, Grissini bread sticks, seasonings, wines, chocolates, snacks and Taralli, a round and knotted cracker alternative from the Puglia region, and more.

Products have evolved throughout the years, and some of it is consumer-driven. For example, when interviewed by TGR, the team at A.G. Ferrari was working with a couple of manufacturers in Italy to create a new line of tomato sauce. "Historically, these were starter or base sauces, and they weren't seasoned," explains Peppard. "You would take them home and season. Today's consumers are looking for finished sauces" that can help them cook a gourmet meal in minutes, straight from the jar.

Salads change seasonally and include Fregola, Arugula Treviso & Blood Orange with toasted pine nuts, Italian parsley and orange vinaigrette; and Roasted Eggplant Caponata with red and yellow bell peppers, toasted pine nuts, golden raisins, roasted garlic and fresh basil.

Inside the stores, the store brand is the star, prominently displayed thorough the store alongside other specialty food brands. "Historically the distribution was limited primarily here in the (San Francisco) Bay area — restaurants, boutiques and retail shops but primarily at A.G. Ferrari stores," says Peppard.

That too has changed. Earlier this year, United Natural Foods Inc. (UNFI) began distributing the A.G. Ferrari products nationwide. During the 2016 Winter Fancy Food Show, A.G. Ferrari had a meeting with UNFI, its specialty food distributor, at its 3rd and Market store.

"They fell in love with the A.G. Ferrari store, history, products and branding and encouraged us to launch with them nationally," says Peppard.

UNFI is carrying 25 of the items — the top-selling pastas, the spreads, the coffee and the seasonings. In 2017, UNFI will showcase the A.G. Ferrari line at the Fancy Food Shows and its customer tradeshows.

Joseph Roy, supplier relations manager group manager for UNFI, says the "gourmet and upscale" line is ideal for "the foodies who want to try something new." The distributor is marketing items to independent gourmet retailers and upscale supermarket chains. Through UNFI, the A.G. Ferrari brand first launched at King's and Balducci's stores in the New York area. "What's resonating is the authenticity, the true kind of crafted nature of our products," says Peppard.

Authentic Italian is a message that has strong appeal in the distributor's hometown of Providence, R.I., an area known for its Italian-American community. UNFI plans to showcase the products in its Honest Green store, a grab-and-go neighborhood market that is scheduled to open in early 2017 near its office.

The items are appropriately priced, says Roy. "We understand that it doesn't fit all retailers," he adds. "It is not for everyone. It is not going to fly off the shelf or make turns like Ragu, but the benefit it brings to our assortment is tremendous. The enhanced gourmet look, the high quality ingredients, it is definitely worth it."

While the line is not certified organic, it is made with clean ingredients so it is ideal for discerning customers and retailers such as Whole Foods Market, says Roy.

A.G. Ferrari's Taralli, a cracker alternative from the Puglia region, are hand-rolled and made from extra virgin olive oil, 00 flour and white wine.

The Fab Five
Since the remodels, the five A.G. Ferrari stores "are doing incredibly well," Peppard says.

Prepared foods are playing a greater role in store. The team developed 100 proprietary recipes for prepared foods that are made daily at the commissary kitchen. The retailer has established its reputation as offering great sandwiches, such as prosciutto and burrata, and tuna and artichoke. The retailer recently introduced a sampler plate with three of its fresh prepared salads or sides.

"The quality and consistency (of the prepared foods) has been phenomenal, and consumers recognize it," Peppard says.

Heartier meal options include baked ricotta and beef meatballs in tomato sauce and Chicken Cacciatore that's made with eggplant, olives and capers.

The retailer has also seen an increased demand and use of delivery services. In fact, A.G. Ferrari has partnered with three — Postmates, Caviar and Doordash. The delivery of fresh prepared foods, Peppard says, "is simply the most dynamic trend we have been able to spot.

"We've seen a tremendous shift in business in San Francisco. Our customer counts are increasing. We have aligned with the best third-party deliver groups in the city. The exposure that has created for the brand and the revenue has been staggering — 40 percent of our sales increase."

For A.G. Ferrari, using three services is part of providing quality customer service. "It does complicate execution at retail level, but it is about the user preference. We want to make sure we are able to share our products with consumers no matter what app they prefer," Peppard says.

The retailer recently finalized a deal with Amazon where it will be delivering prepared foods, which are ordered via the online giant's website, to customers in the East Bay. Catering, too, has been a bottom-line booster, accounting for 30 percent of the company's growth, he adds.

Know Yourself
In The Gourmet Retailer's State of the Industry Survey 2016, many retailers expressed interest in expanding their exclusives or private-label program in 2017. To those retailers, Peppard offers this bit of advice. "It is going to sound incredibly simple and at the same time vary rare and profound. Know and define your brand first. At end of day, your brand should drive the products, the quality level, the assortment, the packaging. The brand has to be the driver. If you don't take the time to understand that, getting into products or getting out of food products" — is premature.

In 1919, when Italian immigrant Annibale Giovanni Ferrari hungered for the foods of his childhood, he set up shop importing specialty items that could only be found in traditional Italian alimentari and introduced them to the San Francisco Bay area. These rare, hard-to-find flavors and his larger-than-life zest for Italian culture and tradition eventually made A.G. Ferrari into a neighborhood icon.