Until recently, Cedabond was one of the catering equipment industry’s most enigmatic associations.
However, following the appointment of Phil Martin as chairman and executive director in December 2012, he and his board of directors have set about transforming both its image and its proposition. As the buying consortium announced that the first 6 months of this year had been its best on record, Catering Insight caught up with Martin.
What was the original premise behind the creation of Cedabond?
Cedabond was created in the 1970s and was the brainchild of a number of catering equipment distributors, all CEDA members, who thought it would be a good idea to pool their resources to create a buying consortium. The aim was to be able to negotiate beneficial contracts from manufacturers and suppliers, offering members special discounts and rebates.
At first, not all CEDA members were interested so a decision was taken to invite non-CEDA members to join and a separate company was incorporated in 1977. Today Cedabond is a UK-wide buying and marketing consortium of more than 100 leading catering equipment distributors, and turns over in excess of £40m.
How has Cedabond changed since then?
Just as the foodservice equipment market has changed, and the way in which equipment purchasing has changed, so Cedabond has had to evolve.
When it started, most of the hotel, restaurant, and contract catering groups had their own design and planning departments and purchasing teams. But over the last 10-15 years these teams have all but disappeared and the market has moved towards kitchen designers and distributors who carry out that work for the end user.
What have been the biggest challenges over the last few years, particularly during the recession?
The last 5 years have been particularly testing, what with the financial downturn – not just in this country but across Europe. The situation has seen capital expenditure shelved and replaced with a ‘make do and mend’ attitude that has been driven by the end user.
All sectors of the catering equipment industry have been forced to take a look at their operations and, as a result, have had to change focus in order to survive. I think that if you ask them, most will tell you they have become better-run companies because of the recession.
How did you meet the challenges?
Over the last 3 years Cedabond has been forced to adapt to the changing market and we now spend more time talking with and meeting both our members and our suppliers to ensure that our proposition works in a positive way for members and suppliers. At the same time we have greatly reduced our overheads and increased the income to our members. [[page-break]]
What parts of your proposition excite members and suppliers the most?
I think it’s the fact that it doesn’t matter what size our members’ businesses are because every member benefits regardless. Our members work in a very competitive market where margins are tight, but being part of Cedabond means they have the advantage of an increased margin from the best suppliers, and at the year-end the dividend paid back to them is excellent.
Suppliers like Cedabond because we monitor our members to ensure that they comply with strict financial criteria. That means that suppliers can check their bank accounts on the seventh of every month, safe in the knowledge that all invoices from Cedabond members will be paid in one transaction.
What makes Cedabond’s proposition different from other buying consortia?
Cedabond is a not-for-profit company. It is owned by its members and 100% of the income derived from its suppliers goes back to the members. We work closely with both our members and our suppliers to ensure that they both maximise the benefit that comes from being part of the Cedabond ‘family’.
What challenges do you face going forward and how do you see Cedabond developing?
Like all companies we face challenges every day and are always looking to increase the benefits to members and suppliers. We are constantly considering proposals that are aimed at reducing operating costs for our members and our suppliers and in recent times we have also been approached by other like-minded consortia within foodservice with a view to working with them.
Do you see buying consortia becoming more popular and if so, why?
Yes, and I think the growth of consortia can only be a good thing. It has highlighted the benefit to all companies involved and also gives people the choice to tailor the service to what is right for their individual business.
Is the continuing growth of internet retailers a threat to Cedabond and if so what are you doing to combat it?
We all use the internet every day and we all buy from the internet and there is nothing wrong with that concept. Indeed, a lot of our members buy and sell on the internet and many of our suppliers sell via it too.
However, at Cedabond we support our members so that they can grow and improve their business and they in turn offer valuable help and support to the end user. They make sure the end user has the right piece of equipment in the first instance and that it is fit for purpose.
They will even take care of the little, but nevertheless crucial, issues, such as making sure that a product fits through the door and will go up the stairs if necessary! They will check that the end user has the right services in place to allow the equipment to work properly and, perhaps most importantly of all, they will be on the end of the phone if something goes wrong. That’s what being a catering equipment distributor is all about and that’s something that the internet just can’t do.
If a dealer or supplier hasn’t yet considered talking to Cedabond, why should they do so?
If a dealer wants to join Cedabond the first thing they should do is to contact us through our website. After that initial contact, either our financial director, Barry Hallam, or myself, will visit the dealer to talk through the benefits that membership offers.
Not everyone’s requirements are the same so we like to sit face-to-face and explain how these would translate for their own business. We have a very strong supplier base at the moment which we are constantly reviewing. In fact, Barry is just putting together a report following a questionnaire he sent out regarding suppliers.