Panasonic is a name that everybody will have heard of thanks to its endeavours in the consumer electronics and technology world, but it also punches pretty hard in the catering market. Here’s what you need to know about its commercial microwave business in the UK.
10. There’s more to Panasonic than plasma TVs
Panasonic might be best known for its audio-visual products, but there is no doubt that its commercial microwave business benefits from belonging to such an internationally-recognised conglomerate. The story of Panasonic started way back in 1918 when Konosuke Matsushita invented a two-socket light bulb. Within 20 years the company was manufacturing 600 products and employing 3,500 people.
Today, it manufactures 14,000 separate products and global headcount exceeds 350,000. It first began selling commercial microwaves into the UK market in the early 1970s. Interestingly, the seven company ‘principles’ that Matsushita set out when he founded the business, such as ‘fairness and honesty’ and ‘untiring effort for improvement’ are still cited by the company today.
9. Microwaves: it’s a freaky business
Panasonic’s commercial catering business in the UK is headed by sales and marketing manager Iain Phillips and currently focuses on microwaves. From an operational point of view, the division is something of an anomaly within the Panasonic group. That’s because in other departments Panasonic separates the sales and marketing functions, whereas Phillips runs the P&L, negotiates the sales contracts and buys the stock from the factory on a monthly basis.
“Commercial microwaves is a bit of a freaky business under the Panasonic umbrella,” he says. “Power Tools is the same and it has worked really well there. They have one guy that understood this freaky business that didn’t really fit in with the rest of it and they did very well from that. Commercial Microwave took the decision to do the same about four years ago.”
8. Geared for gastronorm kitchenware
Panasonic has streamlined its commercial microwave portfolio in the UK over the last few years and now leads with nine flagship models. It prides itself on the power and capacity that it can offer customers, many of which use their units up to 200 times a day. One important differentiator for the company is that it claims to be the only manufacturer producing a microwave that can accommodate a full-size gastronorm 1/1 container.
“I think we have competitors that are quoting a gastronorm cavity, but they are taking the height, which isn’t actually how you measure a gastronorm dish. Ours can fit in a 10cm 1/1 gastronorm and the shelf even comes out to allow you to get up to a 20cm full-size gastronorm dish in there, too,” says Phillips.
7. Defined route to market
Given that Phillips’ task every month is to sell out all the product he buys in from the factory, Panasonic operates quite a structured channel model. Its three primary wholesalers are Axon, Regale — which it classes as its number one wholesaler — and RH Hall. “We have a very defined route to market,” he says. “And it is important that we keep it that way because I am very loyal to the people that we deal with and in the main they are very loyal to me, and that is important because then you have a foundation of trust.”
6. May the best wholesaler win
Phillips insists that having three strong wholesalers on board and offering an open pricing policy allows dealers the opportunity to purchase from which one they want. “The great thing for dealers is that they can shop at the different wholesalers, they’ll know who has these things in stock, and it is then down to their customer service. If Regale or RH Hall offers a better service than Axon, or the other way around, that is where the business is going to go.”
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5. Mine’s a microwave
Aside from the business that is supplied to dealers through the wholesale channel, Panasonic draws a large chunk of its UK microwave sales from direct customers that it serves in the pub sector. Its heavy duty 1856 model remains a popular seller in that market segment, propelling it to market leadership according to Phillips. “We supply more microwave into the pub groups than anybody else,” he declares. “I say that based on the fact that we deal with Mitchells & Butlers, Greene King, Whitbread, Spirit and Punch Taverns. We don’t do Marston’s or Wetherspoon, but those two in number of sites don’t add up to the rest.”
4. Winning market share
Panasonic’s commercial microwave business has performed strongly in the past four years, growing 10%, 6%, 11% and 10% respectively. The growth is even more remarkable when you consider the company hasn’t launched any new products in that time. “Any business that has grown 10%, 6%, 11%, 10% has to have gained market share because catering isn’t doing that, even taking out the Olympics. It is a fantastic story and one I am very proud of,” says Phillips.
3. A launch at last
Giving that microwave launches happen at a fraction of the rate at which Panasonic unveils TVs or video cameras, it is little surprise that the prospect of a new product being rolled out is a big deal for the company. It will return to Hotelympia next year to showcase what Phillips describes as a new mainstream product with “genuine innovation”.
Plans are also in the pipeline to launch a different cooking product at some stage, which will give the portfolio an extra dimension. Phillips won’t say much at the moment except: “From what I have seen already, it will make a big splash. Knowing where we are going and what we are going to attack, the next three years are going to be a very exciting time for us.”
2. Priced at the high end
Phillips insists there are three “very definite price points” in the microwave market. “There is the OEM; then Samsung, Daewoo and I suppose at the top of that Sharp; and then above that is Panasonic. We are completely on our own at a price point and anybody that buys us understands the value that it is not the invoice price, it is the cost of the purchase. Spend a few more pounds at invoice and you will get that back. I was sat with Greene King recently and we did some calculations based on their asset register and they are looking at a microwave in a fully bang-on commercial environment lasting between five and seven years. That is impressive for me.”
1. Service when it is needed
Keep a microwave clean and well-looked after and it will last a life-time. So says Panasonic. But in the event something does go wrong, the brand can call upon a substantial service network across the UK. There are around 40 engineers based around the country who handle local repair jobs, while chain contracts are managed by Northamptonshire-based Marren.
“The reason Marren do all of our national account work is we don’t get any complaints,” says Phillips. “When it comes round to renegotiating the contracts with the likes of Whitbread and M&B, service never comes up. The product is reliable and when it goes wrong we have got the right people in place to fix it.”