Shopping Center Business

MAY 2016

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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PACIUGO GELATO 222 • SHOPPING CENTER BUSINESS • May 2016 ing used to test a new cash wrap design, new seating areas and the company's new product lines. The Ginattas want to keep some of their attention focused on manufacturing, so they have opted to rely on much of Paciu- go's store growth through franchising. Just like the quality of its ingredients, though, Paciugo is being just as picky about the quality of its franchisees and the quality of the real estate where they allow their stores to be located. The company has put a lot of emphasis on partnering with franchisees with operating experience; it only seeks franchisees who have been suc- cessful with other brands in new markets. "Our franchisees really need to have the resources to take care of the custom- er, train their employees correctly, find the right employees and operate the unit to the best of their ability," says Vincent Ginatta. Since Paciugo is still relatively small, it is seeking multiple units in new markets so it can cluster stores and have strong mar- ket penetration. The company has iden- tified several markets where it is hoping to expand. It is looking for expansion in Florida, Georgia and the Northeast. It is seeking expansion in California, where it has existing franchisees. Its home state of Texas is another growth area. For the immediate future, the company is focused on shopping centers for its growth, as the real estate is relatively easy for the compa- ny to assume and build-out, and it can as- sist franchisees more uniformly with real estate needs. Due to the company's size, Paciugo prefers to work with national and regional landlords. As well, because gela- to is more of an impulse or convenience purchase, it wants to be in locations that are convenient and where consumers are already headed for other purposes. Because Paciugo is a premium brand, it is seeking locations that fit that audience. While it is a fair price point, it prefers to be in centers that have premium brands of clothing, shoes and other strong oper- ators. The company needs strong traffic numbers to succeed. As well, a demo- graphic that has been exposed to more international foods plays well to Paciugo's brand. "While we've demonstrated that the brand has strong broad appeal, we cannot go into centers that do not have sufficient traffic," says Vincent Ginatta. "The right position within the center is also import- ant to us. We take a close look at what is available before choosing a location." Paciugo Gelato sources its ingredients from all over the world. It sources many from small, artisan companies who spe- cialize in one ingredient. Most of its nuts come from Italy — hazelnuts come from Piedmont, the almonds from Sicily. It finds the best exotic fruits in Central and South America. Paciugo also takes care to craft the product in the right manner. For example, the company squeezes all its cit- rus by hand so that it is not over squeezing the rind, as a machine would. By the man- ufacturing process, which allows more air into the product as it is frozen, gelato has one-third of the fat of ice cream and con- siderably fewer calories. The company

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