When Dutch technology brand Philips acquired the Saeco Group two years ago, taking renowned coffee machine maker Gaggia with it, many of its competitors were quick to seize upon the inevitable turbulence that ensues whenever a major change in company ownership takes place.
Issues over everything from stock levels to after-sales support reared their ugly head during what was a bumpy transitional period, eventually leading the brand to ask its long-term Irish distribution partner, Watermark, to step in and take charge of affairs in the UK.
Right from the start, Watermark set out to quell the market’s concerns, open dialogue with distributors and reassure customers unsettled by events.
“Any problems that there may have been before have been rectified,” insists Watermark boss David Lawlor. “There would have been a situation in the past where the distributor that was doing the product didn’t always have stock, so that undermined people an awful lot. They actually went and sold a machine and then went to buy it off the importer and the importer didn’t have it! From a distributor’s perspective they are just going to say, ‘you know something, I can do without that drama’. But we have multiples of everything in stock so there is nothing we can’t supply and we haven’t yet been unable to fulfil an order immediately.”
What has also followed since Watermark gained responsibility for the UK market is the steady redevelopment of Gaggia’s channel sales infrastructure, including the appointment of dedicated regional distributors and a new Watermark office in Buckinghamshire containing a showroom for dealers to showcase equipment to customers.
It is now looking to kick on further by aggressively expanding its distribution strategy over the next 12 months in a bid to improve the brand’s coverage throughout England, Scotland and Wales. Lawlor insists the firm is sensitive to the issue of over-distribution and won’t recruit in locations where it already has a solid partner presence.
However, parts of the map, including the North-East, East Anglia, the South Coast and South Wales, currently look barren and it’s these regions that are likely to command Watermark’s attention.
“What we are looking for is representation in every county and I think because customers are best served by somebody locally on the ground, we are looking for somebody within a relatively short distance that can give that level of customer service to the final user,” explains Lawlor. “I think that would strengthen the brand immensely. If we have 15 or 16 active distributors at the moment, we should be looking to at least grow that by seven or eight this year.”
Raj Beedle, owner of West Yorkshire-based Gaggia distributor Caffee Shop, agrees there is enough demand to warrant the hiring of more distributors. Beedle, who ran Gaggia’s UK operation prior to the Philips takeover, believes the move will help plug any gaps that emerged after that period of turbulence.
“People have to fill in those vacuums, so that is what is happening now, I think. Slowly people are getting back to knowing that there is support everywhere, and it becomes more credible then,” he says.
Andrew Tobin, owner of Cornico Cofee, has been working with Watermark for the past two-and-a-half-years, supplying Gaggia equipment to customers in Cornwall and Devon.
He hopes Watermark will be able to manage the expansion without creating any over-distribution: “It doesn’t do anybody any favours if there are too many distributors. People get into a bidding war or price war for coffee machines and start trying to undercut everybody. At the moment we are quite lucky as there is nobody else in this neck of the woods. I hope it stays that way.”
With products such as the D90 Alti, which allows the espresso shot to pour directly into a take-away cup due to the raised height of the group heads, as well as the all-encompassing Deco, designed for use in a busy cafe environment, Gaggia currently boasts a formidable line-up of products.
Watermark claims new and existing sales partners will have free rein to serve their customers without any fear of it encroaching on their turf.
“We don’t sell direct to end-users per se, so if we get a lead in an area then we will hand that to our distributor in that area, and that distributor will be responsible for making the sale,” says Lawlor. “They will earn the margin on the sale and they will obviously be in a position to sell the customer additional products and services like coffee, after-sales services and service contracts.”
Although the coffee equipment market remains one of the most competitive in the business, Lawlor is confident that a brand he openly refers to as a ‘“sleeping giant” once again has a proposition that makes it attractive to work with in the UK.
“Gaggia is a very strong brand and it is trusted by an awful lot of people,” he says. “The big benefit it has over a lot of the others will be its reliability, low cost of ownership and its long life, as well as sublime coffee brewing. There are a lot of coffee machines out there that don’t last longer than five years. Gaggia’s will last over 10 years.
Do you fit the bill?
If you fancy becoming a licensed Gaggia distributor then there are a few things you’ll need in your locker, according to Watermark, the company responsible for growing the Italian coffee brand’s sales network in the UK.
At the top of the list is organisation, reveals David Lawlor, managing director of Watermark: “Distributors have to be well-organised, have a genuine interest in the product and are enthusiastic for it. They don’t necessarily need to be the biggest guy in the world because you often find that smaller distributors who are focused and interested will outsell bigger distributors that don’t share that same level of focus.”
Lawlor insists that if distributors can demonstrate those qualities then working with the brand will bring its fair share of rewards. “What trade partners need is no hassle and no drama. Gaggia delivers that. It means they will look good in front of their customers and they’ll make money from their customers. That is the key reason why people are so loyal to us,” he insists.