Leading the line: Nick McDonald plots Lincat’s growth

Nick McDonald is possibly under-playing the situation when he says there has been a “level of stability” about Lincat over the years.

The man from whom McDonald seized the baton, Steve Mitchell, led the business for the best part of 20 years prior to his retirement in December 2013 and before that the ship was captained by John Craddock, the company’s original founder.

For many of Lincat’s 200 employees, McDonald’s appointment would have been the first top-level managerial change they’d encountered, although in truth US giant Middleby’s acquisition of Lincat in July 2011 means most would have had some taste of corporate transition.

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“I think the stability we have had is important,” acknowledges McDonald. “We have a pretty well organised company here and what we need is more of the same. Achieving a level of continuity and stability will take us forward to the next phase of growth.”

With such value attached to maintaining the status quo, it is little surprise that there are no plans for the sort of sweeping adjustments that some regime changes bring. That is probably helped by the fact that McDonald has been warming up for the post by serving as deputy managing director over the past year — but more so because the company’s strong position doesn’t warrant it.

“I think the only change in emphasis from the MD’s point of view is that Steve was very much a production manager and I am a sales and marketing man,” says McDonald candidly.

“So my focus will be much more outside than inside. We have got a well-oiled machine in the factory, there is nothing I can really teach our production director and his team about manufacturing catering equipment — that would be foolish. What I can do is bring my years of experience in sales and marketing to the fore and support Tony Aston, the sales director, and our product teams and export teams in developing more sales. The emphasis there will be very much at the heavier end — that is where a lot of the growth has been in recent years and undoubtedly that will continue both in expansion and national accounts.”

It is certainly not lost on anybody connected with the business that McDonald presides over Lincat at an interesting period in its history.

The group also includes IMC and Britannia, and while they function as separate entities with head offices elsewhere, Lincat itself has taken on responsibility for the manufacturing and sales of the FriFri range of premium fryers and the Q90 range of heavy duty cooking equipment. Both were previously built at factories owned by Middleby brands in Italy.

The transfer of these businesses is a glowing endorsement of Lincat’s manufacturing pedigree today and further recognition from Middleby that the UK has become its European centre of excellence for catering equipment production.

“When you think that Italy is undoubtedly the centre of the European catering equipment industry, to have two quite significant businesses come from Italy to the UK is a bit of a coup quite frankly and that is something we are pleased to have done,” says McDonald.

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Export is seen as an area of massive growth potential by the firm, and with FriFri and Q90 adding further weight to the cause it is not inconceivable that the £5m in sales that Lincat made from its overseas business last year will soon be smashed.

UK sales are where it’s really at, though, accounting for the vast majority of the £30m turnover Lincat recorded in 2013. These days its core product range spans some 450 different items but you have to glance back at its product development activities over the years to understand how it got to where it is today.

The company started out making small countertop light duty equipment, such as fryers, griddles and boiling tops, which many distributors today will recognise as the nucleus of its Lynx 400 and Silverlink 600 ranges.

The 1980s brought a step-up into the 600 series market as a range of gas products were also added, while the 1990s saw the diversification into categories such as trolleys and hot cupboards, spawning lines like Panther and Seal in the process. Water boilers also started becoming an important business area for Lincat and today remain one of the company’s most successful categories.

The end of the 1990s heralded the launch of the Opus 700 series, Lincat’s first attempt at a heavy duty range and a line of equipment that it since credits for opening the door to the national pub groups and retail chains. Shortly after that it also became the Rational OEM partner in the UK for combi steamers and has held the licence for more than 13 years.

McDonald says the introduction of Opus 700 was an important chapter in its history. “When we set out to design Opus 700 we were conscious of the perception that everybody had of Lincat as a specialist in light duty equipment,” he says. “If anything we over-engineered rather than under-engineered the design of it so that people couldn’t say, ‘oh, yeah, that’s a bit tinny isn’t it? That’s what we would expect.’ So there is a lot of welding, thick gauge steel, heavy duty components and so on.”

If anybody still has any doubts, McDonald points out that as of the end of last year, more than 30,000 items of Opus 700 have been sold since its launch, at a total value of £36m. “I think that says something about the quality and reliability of the product range,” he says. “You don’t sell £36m of anything if it is rubbish.”

Induction has now been added to the Opus 700 line and this year will see the company work towards “dramatically expanding” the induction range that it offers.

In order to keep pace with the growth of its product line over the years, Lincat has had to invest in new machinery and factory labour, and expand its production site, although it has never strayed from its Lincoln roots. It has been at its current location for more than 15 years now, although the site was extended in 2000 to 100,000 square feet.

After a wobble in 2008, when the global credit crisis floored the market, the company has posted year-on-year growth. Last year saw a top-line increase of some 28%, an impressive return in a market still very much on the road to recovery.

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It will be a tall order to beat that this year, but the company is confident that it has the business model in place to be able to do it. It currently produces around 1,000 finished items of catering equipment a week, excluding accessories and spare parts, and it is the availability of these products that harbours its USP.

“Our boast is that if you want a Lincat product, we can pretty well guarantee you can get it tomorrow,” says McDonald. “And we work to a forecast, we don’t produce to order. We have been in the business 43 years, so we have got a lot of history, a lot of knowledge of demand patterns, and the stockholding is important. We typically aim to hold around three weeks’ stock and the balance we have to make is that people want a finished piece of Lincat equipment tomorrow but we may have a 13-week lead time on a component. The skill really lies in balancing that and making sure that we have availability.”

It’s a juggling act the company is used to. And one that won’t faze Lincat’s new managing director as he looks to keep the business on the straight and narrow.

Sales talk: Lincat dealer strategy

Where do distributors fit into Lincat’s strategy today?

I personally, and the company generally, have always been strong advocates of the dealer community. We have always had a strong dealer policy and we stick with that, and that absolutely won’t change. We have got a very wide distribution and our philosophy is that if a company exists to make a business out of buying and selling new items of catering equipment then that company should qualify for an account. If a pub or a restaurant contacts us for product then that goes through a distributor. We have a distributor-locating function on the website for example, both for online and offline sales.

Is there a conscious decision to push business through certain distributors that are more loyal to the Lincat brand than others or do you regard everybody as the same?

There are some dealers that are nominated dealers for certain national accounts, so that happens naturally. There are dealers in regions that are strong that we will support with sales leads and so on, but we try to maintain an even-handed approach. We have a progressive and transparent discount structure with dealers that rewards loyalty to the brand and in terms of sales.

How will you grow the business beyond what you achieved last year? Will it come down to expanding the distributor network or pushing more business through existing partners?

I don’t think it is capable of expanding further. We are always alert to new dealers that set up and there is a churn. Sadly some dealers go out of business and there will be start-ups that replace them. If we look at our 50 biggest accounts, they may account for the same sort of proportion of our business today as they did 10 years ago; the names will be different because some companies will have gone out of business, other companies will have developed and taken their place.

How important is the online sales channel to Lincat?

Very important. And we seek to manage that carefully. We encourage reputable online dealers to present the Lincat portfolio extensively. It is a contentious issue and we encourage a level of stability in advertised pricing — there is a limit to what a manufacturer can do, but we do encourage that. There is no doubt that in all walks of life, increasingly people are comfortable buying anything online these days. We all do it and it is going to increase.

There will always be a place for the specialist advice of a dealer putting schemes together and so on, but equally if somebody wants to place an order for a piece of equipment at 2 o’clock in the morning, well I am certainly not working and most dealers won’t be working; if there is an online facility then it is important to us that they have the opportunity of buying a Lincat product that way. It is down to the customer. Nobody is going to dictate to them. We are not going to dictate to chefs and restaurant owners how they should or shouldn’t buy equipment. They will decide.

Lincat in numbers

610: Products in the portfolio

3,000: Items in stock

195: Company employees

100: Staff in manufacturing roles

28%: Sales growth in 2013

£30m: Sales volume in 2013

£4.7m: Amount from exports

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