If the last few years have been a slog for those in the business of making and selling commercial catering equipment, 2014 definitely brought some much-needed respite…for most companies anyway.
Over the past 12 months, the industry has seen it all: distributors starting up, distributors exiting the market, mergers and acquisitions, senior executive changes, and all sorts of other developments involving manufacturers and brands eager to strengthen their foothold in the UK market.
2014 started off with distributors urging manufacturers to take a more discerning approach to trade discounting in a bid to halt falling margins blamed on internet sales.
Traditional kitchen houses feeling the heat from web shops offering product at what they perceived to be below recommended prices said manufacturers needed to do more to recognise dealers that deliver added value through the provision of services, support and showrooms.
Colin Chettleburgh, boss of Broadland Catering Equipment, was one of those to voice his concern, acknowledging that pressure on margins from internet sales was an issue. “We have to recognise that the market will decide what is the right way to sell, but it is very difficult to provide the right quality and quantity of advice and service on one hand and compete on price with web sales on the other,” he said.
Inevitably, the distributor landscape witnessed further consolidation as some business owners looked for a way to exit their ventures while others embraced the opportunity to expand.
Laundry specialist JLA, which made a spectacular entry into the catering dealer channel with the acquisition of no fewer than four distributors in the space of a few weeks last year, added a fifth quarry in the shape of Harmony Business & Tech.
Backed by private equity firm HG Capital, JLA believes its efforts now make it the largest independent kitchen house in the UK and arm it with the resources to provide all-inclusive support to customers.
“The critical nature of the equipment used in laundries and kitchens is similar and we are finding that customers welcome the fact we can now offer advice and support in more than one area of their business,” said JLA’s’s CEO Stephen Baxter about the company’s decision to develop its catering offering.
Harmony wasn’t the only Cumbrian distributor to encounter a change of ownership after Catering Partnership and Northern Shire FM joined forces, while elsewhere Catering Solutions was sold to Exordia Training.
Gloucester’s Space Catering Equipment opened an office in London and later bought Holmes Catering Equipment out of administration, and Bradford-based Airedale flexed its muscle by purchasing Weymouth’s South Coast Catering having also earlier set up a new company fronted by the former owners of Design Catering Equipment (DCE).
The assets of DCE, meanwhile, were bought by Paul Rawlinson — one of its original co-founders who sold the business three years ago — after he gained backing from Francis Catering Equipment in the West Midlands.
One of the biggest collapses of the year was in Birmingham where CPS Catering Equipment went into liquidation with debts of £368,000. Manitowoc was hit hardest by its fall after it was left to write off almost £32,000, while Middleby, Foster, Lincat and Interlevin were also stung for several thousand pounds.
Commercial kitchen safety remained a hot topic throughout the year and not just because of legislation relating to air quality and F-gases. There were several examples of the fate that awaits companies and individuals that breach catering equipment safety regulations, especially with regards to gas safety.
Richard Stowe, director of Black Country Ranges, was handed a suspended prison sentence and 240 hours of unpaid community service work after magistrates found him guilty of carrying out illegal and dangerous gas work at restaurants in East Anglia and Essex. The court heard how he even removed parts of a gas range to prevent its usage until bills were paid and installed a device to disconnect the range remotely from his mobile phone.
BIM remained an issue that grew in importance as dealers, consultants and suppliers began to evaluate what the future of public sector commercial kitchen design might look like.
Tim Tindle, MD of Falcon, said it was important for manufacturers to be able to provide BIM models and for distributors to be able to design projects within a BIM framework.
“The early majority have now got an awareness that it is going to happen, but there is a great rump of the industry that is still relatively unaware that you need to be BIM-compliant by 2016 — which means being BIM-compliant today because 2016 buildings are being planned or built now,” he said.
Finally, it is impossible to look back on 2014 without thinking of it as the year when Nick Clegg’s pledge to provide every primary school child with a hot meal led to the government financing £150m worth of kitchen refurbishments up and down the land.
Naturally the scheme was plagued by reports of the initiative being under-funded, schools borrowing from other budgets and suppliers suffering stock shortages, but all in all few distributors could argue with the boost it provided.
As the market begins to ponder what 2015 might hold, there will be plenty of companies wishing for another UIFSM-type initiative all over again!