Situated deep inside Hobart’s sprawling UK HQ in Peterborough is a small office that, to the unacquainted, would appear to be just like any other.
But the branding on the side of the dishwashers and glasswashers contained inside gives a clue as to why this office carries particular significance.
It is from here that Hobart Independent — a separate division of the company set up by the current director of Hobart’s main warewashing business, David Riley, nine years ago — is embarking on a strategy to extend its coverage of the UK market with the help of the dealer channel.
Unlike the main Hobart UK operation, Hobart Independent sells exclusively through dealers and distributors, and the two brands it manages — Ecomax and Bar Aid — have been designed specifically for those channels.
Building trust among dealers was never going to be easy for a manufacturer that employs one of the largest direct sales teams in the industry, but the creation of an entity to negate that conflict is clearly delivering results.
The division now trades with 230 dealers, has recently expanded the size of its team, and is already on track to exceed last year’s sales performance following a rip-roaring start to 2012.
Although Hobart Independent has dabbled in cooking and food prep equipment over the years, the more recent refocusing of the business around a warewashing portfolio appears to have given it renewed impetus.
Stuart Bester, business manager for Hobart Independent, says sales were up 40% year-on-year in the first quarter, an increase that is partly down to the recruitment of new channel sales managers in the North-West and Scotland. He is hoping to add another member of staff later this year to cover the central region, by which time the business may have reached a record turnover.
Bester insists that its German-built midrange line Bar Aid — which features models typically priced between £1,300 and £3,000— is a primary factor behind the growth, with dealers reporting solid sales into bars, pubs, independent restaurants, schools and public sector authorities.
“For the money you pay for these machines, it is a fantastic product,” he says. “The under counter machines certainly compare to the top-spec dishwashers out there. They are all double skinned, they are all insulated, they have all got integral softeners, and they have all got four-stage filter systems, so it is a fantastic value machine for the equivalent brands that people are up against in that market place.”
Bester expects Bar Aid to account for 75% of Hobart Independent’s revenues this year. “We will probably do in excess of £3m, which is a lot of single tank machines. And there will be about £1m from Ecomax, so we’re looking to do about £4m overall. Between the ranges you are looking at 200 machines a month going out the door.”
Building relationships with dealers reluctant to engage with an organisation they perceive to be in competition with naturally presents Hobart Independent with its sternest challenge. but Bester is happy to reiterate the message that Hobart Independent only sells through partners.
“We have built up trust — it’s the dealers that don’t know us which are really the ones we have got to work on,” he says. “With Hobart Independent we cannot sell and will never sell direct to the end-users with our products. Even if my local pub comes to me and says, ‘you must be able to do me a deal, can you sell me a machine?’ we won’t do it, it is as simple as that. It has to go through a distributor.”
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Additionally, Bester points out that dealers do not need to fear competition from Hobart UK’s sales staff in the way they might have done in the past due to a restructuring of internal sales incentives.
This now means that if a customer doesn’t have the budget for Hobart’s flagship Premax range, for instance, then rather than walking away from the deal they can pass the lead onto Hobart Independent and if a Bar Aid or Ecomax unit is sold into the site by a dealer instead then they will receive the credit for it.
“Although the Hobart sales guys don’t work for me, don’t sell for me and can’t sell my machines, if one of my machines goes in on their area, they will get the figures for it, so it has taken that barrier away,” says Bester.
At Hotelympia earlier this year, Hobart Independent exhibited for the first time — on its own away from the main Hobart stand. While it only occupied a tiny space, Bester insists it was a major statement about the division’s identity as it seeks to expand its dealer network.
In recent years the division has typically drawn the majority of its business from the south of England, but efforts are now being made to find new dealers in places like Manchester and Scotland, while Bester says there is a gaping hole in the Birmingham area and Midlands that it is eager to find partners for.
“There are a lot of dealers that we deal with who dabble a bit, so we can probably bring those on, and then there are probably dealers out there which don’t even know that we do a product solely for the dealers. So there are lots of new dealers out there and we are looking at new dealers all the time.”
Hobart Independent may still be dwarfed by its parent’s operation, but the division’s ascent is making people sit up and take notice — both inside and outside the company.
Discounts, spares and pricing…
Although Hobart Independent’s product range is sold exclusively through the channel, dealer partners continue to ask for more in the way of support and that is something the division is aiming to address in 2012.
Business manager, Stuart Bester, acknowledges that Hobart Independent still has “a long way to go” to convince dealers that it is able to offer a channel-friendly services proposition but he insists it is committed to improving that aspect of the business in the months ahead.
“We need to be more aware of how we service the machines for the dealers because if a dealer places a warranty call on a machine and we go in and repair it for them and stick a Hobart sticker on it then the dealer is probably not going to be too happy about it. It might be one of their customers and they want to service the machine in the future. There are lots of things they are asking for, such as parts lists and training, and those are the kind of things we need to take the next step towards really."
Bester maintains that progress is being made, though, pointing to the fact that Hobart has broken from tradition by giving dealers discounts on spare parts, while overnight deliveries have been halved from £150 to £75 for distributors.
Additionally, Bester reveals it is exploring requests for being able to offer warranty-only purchases and supply partners with showroom models, while work has been done to simplify its pricing structure into three tiers and establish an internet sales policy that allows dealers to make minimum 20% margins.