Industry Q&A: Gary Nunn, MD, Unox

Significant contract wins in the retail sector with the likes of Asda and Shell have helped catapult commercial oven manufacturer Unox to the forefront of the commercial oven market in a relatively short space of time. Catering Insight sat down with managing director, Gary Nunn, to discover what the brand has to offer distributors and where they might fit into its strategy.

It is eight years since you began bringing Unox ovens into the UK. Prior to that you worked elsewhere in the industry, so how did the opportunity to begin importing Unox arise?

I’d worked for Cimbali and Faema coffee machines, and I set up the service for both of those nationally. Then I had some experience designing restaurant kitchens and I was introduced to Unox by a friend in Italy. I had never heard of the company, so I went out to see what they were about and liked the manufacture base, liked the owner of the company — who was an engineer — and liked that it was privately owned. We drew up a business plan for the UK, sat down and discussed terms with him and went from there really. We wanted to only sell through dealers because in the past we had seen [other manufacturers have] problems going both ways.

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How did you approach the market at the time?

We looked at it in a different light really. I thought the industry was a bit stale in terms of the manufacturer-dealer market place, and from my past experience there was little support — it was just reps calling on dealers, giving a brochure out, having a chit-chat and a cup of coffee and then disappearing for another six weeks. It was also the start of when the internet people were gaining more and more ground. I didn’t like that because we have all got business rates to pay.

I can see the mileage in the internet boys, but it seemed like it was a bad move to be supplying people working out of their bedroom with no rates and who were just discounting product. So we set the market price of the ovens, we looked at the heavily discounted prices of everybody else’s and bearing in mind that probably nobody had heard of us we set out with a very good value-for-money product.

What does your dealer channel look like today?

We have kept our distributor base small. Currently I think we have only got 15 to 17 active distributors and they would probably account for 70% to 80% of our business. I think if we end up with 35 to 40 dealers nationwide I would be happy at that. I am not one for 700 or 800 dealers because I think if you are going to support a dealer then you really do have to it. We don’t think you can do it geographically either, which is why we look at it by market segment.

For instance, we have got dealers that work in the bakery industry and others that work in the retail industry. Early on we realised that the bakery supply people were not the same people as the catering equipment suppliers, so you can quite easily segment the market place. I think that’s helped us grow to where we are today.

Do you genuinely feel there is enough capacity in the market to work with twice the amount of dealers you do now?

Yes, for sure. It is just about finding the right dealers. We look for active, interesting, forward-thinking distributors — anybody that is a little bit left-field that likes to try different things rather than follow the usual set formats of distributorships that we’ve seen in the past. We don’t just want to be yet another brand on somebody’s shelf along with all the other manufacturer drawings. We want somebody who promotes our product and works with us.

How would you summarise Unox’s product strategy for dealers that aren’t overly-familiar with the brand?

We make ovens, extensively, and we have always made ovens. We currently manufacture 87% of each of the ovens. I think we are the only manufacturer that makes its own electronics and we also make all our own plastic mouldings. The only things we buy in are things like elements, thermostats and glass, which comes from Schott in Germany. We have 79 different models of oven, from little convection ovens at £400 up to 40-grid combis at £30,000, and everything in between. We do bakery ovens, convection ovens, manual, fully automatic and we believe in smaller chambers, so we wouldn’t necessarily sell a customer a 10-grid, we’d try and get them to buy a 7-grid and a 3-grid or a 5-grid and a 5-grid. It makes a lot more sense for the customer because they use less fuel and on their non-busy times they can run on one oven.

We also have lots of energy efficient features on the oven. We can download the electrics, so we have demand-related power on the ovens, and we use LED lighting. We also have a range of accessories, such as a blast chiller freezer, a prover cabinet and a deck oven, and they all use the same control panel as the oven sited above them.

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Is Italy the largest market for Unox equipment sales?

No, the biggest market is Russia. We do around €36m to €40m (£31m to £35m) in Russia. We started three years ago. The second biggest market would be Italy and then possibly Germany. I think we are lying sixth or seventh at the moment. Unox currently has nine privately-owned factories now. When we started with the company in Italy eight years ago there were two.

Is the entire product range available to the UK market?

Yes, it is. We try to keep two of every model in stock in the UK if we can. The manufacturing base in Italy works on a lean manufacturing principle, so we order on Sunday, it is made on Wednesday, and shipped out of the factory on Thursday. We receive it the Monday after, so it’s turned around in a week basically. We have just done a 100-oven order and that was out in five weeks, plus a week for transport. Specific ovens may take a bit longer. We do a hybrid oven, which uses gas and electric power, and that takes about three weeks to build, but generally we are a week if we don’t have one in stock.

What are Unox’s core USPs?

The USP of the company is the smaller cavities. Our biggest seller worldwide is a 5-grid. We are currently running at 8kW on a 5-grid oven — it’s a rocket ship! And all the ovens are single-phase or three-phase up to the 7-grid. If the customer hasn’t got three-phase supply they can go up to a 7-grid, which again is a USP. It opens up lots of opportunities where people don’t realise they haven’t got the electricity. All the doors are reversible as well, so if we come across a situation where it is delivered to site and somebody has not done the drawing correctly we can change it around in about an hour.

What does the product roadmap look like this year?

Last year we launched some back-to-basic manual ovens, with just time, temperature and thermostat, because we were seeing a lot of people moving away from the all-singing, all-dancing expensive electronic programmable machines. The gas version of those will be out this month. They were actually designed for the African market where they have a lot of problems with regular electricity, but we have brought them into the UK for the people that just want a manual combi. It is the same build specification, just manual.

Our latest range of ovens was launched in August last year, so those models have only been out since September. They now have filter systems made under licence by Brita included in the price and the oven monitors the actual flow of water. We have also got a combined detergent and rinse aid product, rather than using a separate detergent and rinse aid.

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Are your combination ovens the biggest seller?

We actually sell more bakery ovens, but for combi use. Asda takes our bakery ovens for doing chickens because they get more chickens on a tray. Costco takes bakery ovens for chickens because they get six big chickens on a bakery tray whereas they can only get three or four on a gastronorm tray. Garden centres will probably take a combi and a bakery oven for the different product ranges, so it’s a variety really.

How much of a challenge is it trying to build a business in the combi market when you’re competing against someone like Rational which accounts for half the market?

You do get tired of hearing about it, I have to say! They have done a tremendous job and all combi manufacturers that knock Rational are silly really because if they hadn’t have invented it all those years ago we wouldn’t be anywhere near it because we wouldn’t be in business. It is a good oven and a good company and they have done it well. We are catching up. I think that in terms of international sales we are the second biggest in the world to Rational now, but there is probably a €100m difference between us and them!

Where do you stand in terms of working with dealers that are strongly allied with Rational?

I think if you have got somebody who is actively selling Rational as a dealer then they understand combis, so although it might sound a bit perverse it makes our sale easier. If somebody is just badge collecting and they have got Rational, Convotherm, Hobart, Electrolux or whoever then we don’t even go there because they are not really a combi seller. But anybody who is actually specifying and working with Rational on a good basis, we would obviously like to be there as a second alternative.

And we do offer different things to what Rational have, such as the variety of the range and the fact that we can use our blast chiller freezer as a base unit, which they don’t have. We have a stone deck oven; they are not strong in bakery where we are. And we probably have around 30 small convection ovens that go into cornish pasty shops, garages and places like that. Sometimes, though, you just have to accept that you will enter into a relationship with a distributor and not sell a combi because they are heavily involved with Rational, but that is not a problem for us.

What has been the biggest highlight for you since you began selling Unox in the UK?

It was nice to get the Asda contract. There were 22 manufacturers in there and the process took about 18 months. It was exhaustive testing. That was four years ago and we have still retained it. They regularly do between 150 and 200 stores a year and depending on the size of the store they have between three and five ovens. It was a nice one to get for a small team because at the time there were only three of us. A lot of work went into that.

Costco takes four ovens per store and any that break down from their old estate we just replace. We also did Shell last year, again through a dealer, and that was quite interesting. Then there are the unusual ones: the person that wants to steam goat for a new goat concept or something. It is interesting to see those sorts of people come through with different ideas. And it’s also nice to see our dealers grow larger and get more contracts as our business with them grows.

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