Ex-CEDA chairs debate distributor evolution

The Commercial Kitchen ‘Connecting Our Industry’ debate was the first time all five of these ex-chairs of CEDA shared a stage.The Commercial Kitchen ‘Connecting Our Industry’ debate was the first time all five of these ex-chairs of CEDA shared a stage.

At this year’s Commercial Kitchen show, Catering Insight editor Clare Nicholls chaired a discussion on what it means to be a distributor today, bringing together for the first time five ex-chairs of CEDA: Mark Drazen, MD, Caterware; Nick Howe, MD, Court Catering Equipment; Peter Kitchin, MD, C&C Catering Equipment; Iain Munro, then-MD of ScoMac Catering Equipment; and Jack Sharkey, MD, Vision Commercial Kitchens:

Following a 6 month branding research project, CEDA has now updated its corporate identity and has given a fresh outlook to how its members can classify themselves. What is your reaction to this?

MD: It’s just an evolution. We looked at the word distributor and we agreed that what a distributor maybe meant even 15/20 years ago is vastly divorced from what we all do now. Effectively the companies that exist in today’s market and still flourish are those that realised we have to add value, that if we don’t add value then as a company we are probably going to die.

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JS: I looked up the definition of what distribution is, and it says an entity that buys non-competing products or product lines, warehouses them, resells them to retailers or end users or customers. That’s not what CEDA members are all about. They offer a huge amount of added value, whether that’s to the customer or to the supply chain. So I think the strapline that CEDA has come up with of ‘connecting our industry’ is very much more reflective of what the trade association is now and what a lot of the members do.

PK: Everything’s changed. I joined my business in 1981, when many manufacturers were direct selling and doing scheme work, and dealers like us just did pots and pans and the odd fryer or cooker. But things have moved on now, and we do the whole thing; we do multi million Pound schemes and all CEDA members do them very well.

IM: CEDA has traditionally had this old boys’ network view and I think what CEDA is now doing is bringing that specialist added value all round. It’s not just about a club of individual businessmen who wanted to have like-minded discussions. Now most of these businesses in the CEDA membership are now working nationally and also working in specialist market sectors. So it needed a message that now presents that more encompassing ethos and connecting the disjointed bit between the manufacturers and the end user.

NH: The new branding is going to allow all our members to pick and choose when the general public get to see what’s available. They can choose what’s most appropriate for their business and that’s going to help them develop their own particular market, whether that’s in design or it’s in project management or just service and installation. It’s a really exciting time going forward.

What does the term ‘distributor’ mean to you?

NH: I’ve always considered ourselves to be a distributor and I probably always will. We’re not a manufacturer, per se, and we’re not a box-shifter. But over the years, our business has changed. And we have now developed into a design side, a project management side and an installation side. But we distribute manufacturers’ products. Therefore we put them into the projects that we sell and therefore there is still that element of distribution in it. We’re the conduit that takes the product into the marketplace.

MD: I’m not sure any more whether I consider myself a distributor. I consider myself a supplier of catering equipment and wrap up everything that involves and the resources that we have to employ to enable that to happen. The day when we could expect to move a box, make a profit and do very little for it will no longer be supported by a customer or probably a supplier. They don’t want to sell products direct and as companies we’ve all stepped into that role to provide those resources to enable us to continue and grow.

JS: The word ‘distributor’ kind of becomes a label and that’s what we call ourselves but it’s not actually what we do. We add on to the services that we give to our customer in terms of supply, specification, advice, installation, training and then long-term after-sales service. As a company though we’re probably actually going slightly the other way, because we have just launched a new division to the business which is all about the supply of lightware, and that’s probably taken us more back to the traditional distribution point.

PK: We do ourselves down. When I go on holiday with my wife and someone asks what we do, I say we buy and sell catering equipment. My wife goes mad, she says you do so much more than that. And we do. Here sitting on this table we probably turnover more than £50m worth of catering equipment. And when you look at CEDA the turnover goes bigger and bigger. We don’t just buy and sell, but we do just buy and sell, but I think we do it very well.

IM: In my early career starting in equipment supply the manufacturers were then starting to look at other ways of routes to market. Wholesale catering was there to capture the lower end and more localised dealer while the manufacturers to some degree still concentrated on the project work. Since the emergence of wholesaling and the distributor network, the manufacturers have stepped away from offering that full project turnaround and realised they have got to focus on being a specialist around their products, and support the dealers who then add the value.

How has the role of the distributor developed over the last 30 years?

IM: We’ve had to have sales guys that have got more and wider knowledge of operations, fabrication, project management and CDM regulations. We’ve had to grow our teams; it’s not just a salesman doing a local patch in town, it’s a far different activity, a lot through construction tendering. There’s a massive level of skill, you’re not just picking up a project from a consultant. Invariably you are actually picking up a project that has got a whole load of holes in it that need to be filled.

PK: Some of these projects we can be in and out within a week and we’ll be finished. But some of the jobs we work on, you’re talking a year or 18 months. When I started we used to hire equipment, and then we just developed and haven’t stopped developing. Our success has unfortunately maybe been the demise of those who used to do direct selling, they did the scheme work. I don’t think the consultants who do a lot of the big jobs would look at a manufacturer now, they’d go to people like us.

JS: Distributors have changed in terms of the professionalism. As design houses we have to have a very good knowledge and understanding not just about the equipment that we are providing, but also the extraction systems and the legislation that sits around that. We have to know about the M&E services, we have to understand what can be achieved, what is actually possible within that environment.

MD: We’d all like to think we’ve been wise old sages that worked out what a company has to do and then developed that. But if we’re being honest we’ve all been customer and market driven. As our customers grew, they didn’t have the in-house resource. They also couldn’t be bothered going out to tender every time they had a new project. They just wanted to get someone on board and they knew the prices were round about right. From a manufacturing point of view the recession probably helped to a point. A lot of manufacturers ramped down their overhead and we expanded to fill those resources.

NH: The role of the distributor has changed, much like some of our customers. A friend of mine was involved in pubs when our business was in its infancy, and so we used to fit them out. He then moved to a restaurant group, so we got asked to do that. He then went to a hotel group and we got involved with that and we were fully designing by this stage. Then he moved onto being a director at one large contract caterer and suddenly we are involved in contract catering. So our expertise and knowledge had to grow.

What direction do you see the industry going in?

PK: We wouldn’t have been as friendly with our competitors years ago. The wars people had as dealers when they lost work, things have all changed. Also 20 years ago we had no-one with a degree – we’ve now got seven people. That’s how we’ve changed: it’s education, it’s knowledge, and it’s doing the right thing. We always try and be honest, professional and friendly with people. We think it’s the best way rather than shouting.

IM: We are in uncertain times, but I think there’s no doubt that the manufacturer/distributor relationships are going to grow into better partnerships. We are also going to face challenges around staffing issues within the hospitality industry that are going to force us, both manufacturer and designer/distributor to come up with solutions that can cope and manage resource when it’s a bit tight.

NH: We have to think out of the box as to where we get our staff from. All too often you get a certain recirculation of members’ staff moving from one company to the other, and they are not bringing any real expertise to your company, they are just shifting it round, they are not growing our knowledge. We need to look outside our industry to grow it. We are already looking at where we get certain members of our team in different departments, particularly on our servicing side we are looking to young apprentices from the colleges and outside of those marketplaces.

MD: ‘Distributors’ will continue to develop the add-on facilities that we offer. As a result I can see the formation of what you would call ‘super distributors’. Maybe that comes through acquisition and merger, maybe it just comes through being asked to do further roles within the contracting or supply process and taking those on as well. But I can see what we do becoming even more advanced.

JS: Forging stronger partnerships with the manufacturers is going to become more key, and I think adding services as businesses means we will evolve. But the biggest change that we will see in the distribution companies is education, training our people and providing that education in terms of the specific skills that they will need, and looking outside of our industry and bringing in more skillset, and then we can educate those people.

 

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