From office moves and showroom openings to partner consolidation and product launches, it’s fair to say that life at Electrolux Professional has hardly been dull over the past year.
Now, the company has appointed a new head of region in the shape of Darren Lockley, its former national sales manager. Catering Insight caught up with the new man at the helm to discuss distributor sales policy and growth plans.
How much of Electrolux’s catering business goes through distributors these days?
That’s a pretty easy one to answer: it’s 100%! Even the national account business is channelled through distributors. They sometimes will select their distributors, but we try and channel them through our Approved Partner list anyway. Any new business that is created is channelled through our partner network, there is nothing that is taken direct.
Talk us through Electrolux’s distributor strategy for the UK…
We launched the Foodservice Partner Programme midway through last year, which was pretty clear and defined, and all of our partners received information on what the strategy is, the benefits to distributors, and what we ask of them as well. As a result of that we have actually limited the amount of partners that we are working with because we have identified the ones that we want to work with and which want to work closely with us as a manufacturer. The programme has been out in the market since the middle of last year and it’s evident that we are firm believers in everybody knowing where we stand, what is on offer and what we can do for them.
How is the Foodservice Partner Programme structured?
It is a three-tiered structure featuring Approved, Business and Club partners. Each tier is based on criteria that we set for the partners, but it isn’t solely based on turnover. One of the things that changed quite dramatically with the programme is that the benefits aren’t just linked to their turnover with us. The benefits are obviously enhanced the further up the programme you go, which includes aspects such as the discount levels and marketing support that we offer. It is a fairly clear agenda.
What is the lifetime of the programme? Will it get tweaked?
I think it will get tweaked depending on changes to the market and channels. We will, of course, have to take into account certain changes and adapt the programme to suit those. I’m sure the benefits will also evolve. I don’t think anybody a number of years ago would have looked at the impact of things like the internet, and we will have to consider adapting the Partner Programme as other avenues and channels grow. One of the things that will come from the programme soon is a quarterly meeting that we will hold with our Approved Partners so that they can have some input into what they think we should be doing to benefit them.
How many distributors do you typically trade with? And do see yourself as a company that prefers to channel business through a network of very close partners or a company that wants to work with as many dealers as possible?
In the last 18 months we have probably halved the amount of distributor accounts we had because a lot of them simply weren’t very active. We are trying to create a bit more exclusivity around the brand through our Approved Partners — and with our Business and Club Partners, which have got the opportunity to grow with us and move up a tier. 80% of our turnover comes from our Approved Partners, of which there are just over 20, so as you can see we have brought it down to encourage the growth but manage any conflict at the same time.
Is the door still open to new dealers that may want to work with you or feel they can bring something different to the table?
The key there is that they offer something different. I think what we have got to do, or rather what our strategy involves, is to define either products or markets that we are not as active or present in at the moment and initially work with our existing partners to address those. If there isn’t an opportunity to do that with anybody then we will look to find a channel to serve that market best, so long as it does not create any conflict.
Electrolux offers solutions for each major product category in the catering equipment market. What’s new for 2014 that dealers should be excited about?
I think the biggest thing to impact this year is the full range of the Thermaline equipment. We had a part launch last year with the Made To Measure range, but with the Modular, Made To Measure and the Pro Thermetic we will have the full range of Thermaline equipment available. As with a company of our size, the level of innovation will continue. Earlier this year we launched a high capacity fryer and there will probably be some extension to the refrigeration range this year. Product development will be defined by what the market requires because Electrolux is certainly good at reacting to that.
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Internally you underwent a fairly big change last year following the closure of the Birmingham office and relocation to Luton. What has this meant for the business?
It has been a positive experience. By bringing both the foodservice and laundry organisations together under one roof we have created the one organisation and we have been able to share best practice between both parts of the business. Obviously the biggest highlight of bringing it under one roof is the benefit of the Innovation Centre, which has been key to a lot of the good stuff that has happened in the last six months or so. To have that option and ability to bring customers and our partners’ customers to the centre gives people a real sense of what Electrolux is all about.
Even though laundry and foodservice have come under one roof internally, do you view them as two separate sales channels?
There are still two separate sales teams and we have two separate partner programmes with different sets of criteria. That doesn’t mean that we don’t have some partners that cross both — though not necessarily to a level that is going to affect each one adversely. One of the things we ask for in partners is some dedicated resource to the product range so that we don’t affect the laundry distribution side or vice versa. As long as a company is geared to working for both foodservice and laundry, we will work with them on both sides.
The growth of online sales has rocketed in recent times. Where do internet sales channels fit into your strategy and how are you managing potential pricing conflict between web dealers and traditional dealers?
In terms of a conflict, yes, it happens, but I have to say it is probably not exclusive to the internet channel or a traditional partner channel, because a lot of partners are a cross between the two. I think it is up to us to work with our partners to help them and define that policy. To be fair, we have had a pretty good increase in our sales from dedicated internet partners, but we have also had a greater level of increase from our traditional partners — of which a proportion of those have transactional websites as well.
Whatever we do needs to encompass our offer to the market by via whatever channel. The criteria of the partner programme brings a lot of that into line. As I said, the programme is not just about turnover it is about route to market, the level of equipment partners are purchasing from us and their commitment to us in terms of what products they lead with.
Innovation Centre welcomes 300 faces through door since launch
One of the biggest pluses to emerge from Electrolux Professional’s relocation to the group company’s main headquarters in Luton has been the launch of a huge Innovation Centre complete with kitchen test facilities, prep areas and meeting rooms.
When it was launched last year, Electrolux told dealers they could use it as a free resource for their own customer and business development activities.
And the uptake so far has been extremely positive, says the company’s head of region for the UK and Ireland, Darren Lockley.
“I think we have had 300 people through the doors since it opened in October and I would certainly encourage our dealer partners to use it a lot more,” he says. “The results are there to be seen. I have witnessed some of the demonstrations and enthusiasm that comes from our own staff in the Innovation Centre, as well as the dealers and their customers. It creates a really good environment. The more people that can utilise it and benefit from it, the better it will be.”