From the smallest provincial pub offering a modest snack menu to the largest professional catering establishments in the country, virtually everybody in the business of hot food sales relies to on a microwave to some degree.
The integral role that microwaves have to play in the catering sector today is the reason why the market is able to support the ambitions of almost half a dozen major brand names as well as a slew of low-end suppliers competing aggressively on price.
But the landscape is changing. The disappearance of Sanyo and subsequent arrival of Daewoo into the UK market place has added an extra twist to proceedings during the past year, internet sales channels continue to pile pressure on pricing, and a shift in end-user buying preferences is leading to marked polarisation.
“The microwave market is dividing into two groups of ovens: light duty models with outputs of 1000-1100W and heavy duty applications of outputs between 1800-1900W,” observes Kurran Gadhvi, marketing manager at Valera. “Sales of models with 1300-1500W are declining dramatically.”
Gadhvi says there is also another key product development to note: “Over the last couple of years new models coming into the market have been available with a 2/3 GN size cavity capacity compared to the 1/2GN capacity models from all the leading brands.”
The flexibility that microwaves offer, and their evolvement into multi-purpose cooking devices, have undoubtedly reinforced their position as a staple part of the equipment estate. That’s certainly something that RH Hall — the UK agent for Sharp and distributor of Maestrowave and Panasonic — strongly agrees with.
“We have seen many operators use a bank of commercial microwaves, sometimes as many as 10 in every managed pub brand outlet,” says managing director Ray Hall. “The range of foods that are now available for microwave regeneration continues to expand year on year and the quality has become excellent.
“Although the basic commercial microwave still has its place in the kitchen for the essential cooking functions, such as re-heating frozen or chilled food at lightning speed, the emergence of multi-function microwave-based products and the improvement of pre-packed full meals has seen a major change in the market. Food companies and equipment companies that work together have emerged to create innovative products of high quality, both in terms of the food and the equipment.”
Given that the majority of serious catering establishments are likely to have one or more microwaves from the outset, the obvious opportunity for suppliers remains firmly in replacement sales, either because a customers’ existing unit has run its course or because it needs to be upgraded to a more suitable spec.
“Replacement business probably accounts for about 80% of total commercial microwave oven sales, so it is the key driver,” remarks David Watts, general manager of Samsung Professional Appliances.
Samsung’s portfolio extends from 1100W models up to 1850W heavy duty models. 2013 has already seen the launch of Samsung’s revamped entry-level SnackMate model, which is priced at just £300. The manufacturer says the model is ideal for helping distributors win business in lower volume sites, such as cafes and hospital wards.
Watts believes that securing the all-important repeat business comes down to demonstrating product reliability and robust after-sales service. More recently, he says, power consumption has found its way onto the agenda, too. “Energy efficiency is increasingly important and commercial microwave ovens score very well here compared to other forms of cooking, so it is a business opportunity,” he says.
Panasonic also points to the replacement market as an important source of sales. It derives a large chunk of its business from the pub sector, but a deliberate focus on strengthening its dealer network this year appears to be paying dividends.
“Much of our business growth has come from that, so it is clearly a strategy that works,” says Iain Phillips, sales and marketing manager at Panasonic. “There have been two drivers for our successful sales this year: the ongoing replacement market — as operators return to buy a Panasonic again — and those that are choosing to upgrade to a Panasonic having tried cheaper models.”
Over at Bradshaw, 2013 has heralded the introduction of the North Somerset company’s most efficient and highest power microwave running off a 13-amp plug yet. John Marks, sales manager at the Menumaster importer, thinks it is a sign of things to come in the sector.
“In the coming years we will see more powerful commercial microwaves running from a 13-amp socket and units with more versatile cooking capability,” he predicts.
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Bradshaw, too, attributes its growth to a mix of replacement business and new openings, along with continued emphasis on high-speed combi microwaves. Like Watts earlier, Marks is adamant that having a reliable and cost-effective service operation to support products in the field is imperative for any branded player.
“Current pricing models do not necessarily reflect the levels of support needed and therefore buyers often discover that the initial low price ends in a higher ongoing cost,” he says. “Buyers of microwaves often overlook the servicing of their equipment to meet EHO requirements. They also often buy under-specified equipment to reduce costs. Current prices reflect the competitive nature of the business and buyers should check on the true cost of their purchase to include the additional downstream costs that they will incur.”
One company that continues to benefit from the level of replacement activity taking place in the market is Cavity Protection Systems, which provides special liners that slot into microwave chambers to maintain the oven and simplify cleaning.
The company reckons its sales have shot up by 75% in the past two years, culminating in a recent move to expanded premises and an investment in new systems to support the business.
“Our sales are being driven by the fact that, more often than not, our sister company, Regale, is being asked for a cavity liner to be supplied with the purchase of a new microwave as opposed to post-purchase because catering operators are now realising the benefits,” explains managing director Pat Bray. “It saves time during the daily cleaning routine, diminishes the chances of downtime and can prevent the need for expensive repairs.”
There are some who question whether microwave technology can be developed any further than it already is, since the ability of the top machines to heat food rapidly and guarantee a uniform delivery of heat is already assured. A lot of manufacturers have therefore instead focused their efforts on making sure their service and support networks are fully optimised.
“New models are being launched but often the main changes are cosmetic,” notes Samsung’s Watts. “Innovations are more about the way commercial microwave ovens are used. For example, they are excellent for steaming vegetables as they cook more quickly and the vegetables retain more of their nutrients than with conventional boiling methods.”
Daewoo, which only begun selling its own-brand microwaves to the UK trade last year, claims it is pleased with the progress it has made from a “standing start”, insisting sales results have “exceeded expectations”.
Like Samsung, one of its main priorities this year has been to beef up its entry-level offering. In the last couple of weeks it has launched a new ‘one touch’ oven. “This 1100W microwave is ideal for garages, self-service and back-bar environments,” says Daewoo’s sales director Simon Drought. “All the user has to do is press the button once for 30 seconds, twice for a minute up to three minutes, and the microwave will automatically start to cook for the period of time selected — the only other button being a cancel button.”
While there may not be huge sums of money being thrown at microwave R&D, Hall at RH Hall argues that the key brands are continuing to invest in product innovation.
“The Maestrowave iWave range is a good testament to this and the V5 now produced has advanced bolt-ons with e-reporting services,” he insists. “The New Combichef 7 with menu creator uploading is also a good example of the latest technology available. Innovation is being recognised by the main established brands that we work with. The lower priced imports are offering old microwave technologies that are very basic in their functions.”
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Manufacturers all say they see a clear three-way sales split between domestic microwaves that are used for commercial purposes, cheap Chinese imports and branded products.
While domestic microwaves aren’t built to cope with a commercial workload, and can even potentially represent a serious food safety risk, there is very little the industry can do to stem their sale into the market without the advent of any legislation.
Samsung’s Watts is hopeful that the drawbacks of using insufficient machines in the commercial arena are finely starting to sink in with buyers: “Chinese imports are low priced because of poor component and build quality. However, end-users are becoming savvier about the life-time costs of their catering equipment. Although cheap imports are still attractive for some, increasingly quality build backed by factors like our three-year warranty are winning sales. Within our segment prices are stable.”
Bradshaw’s John Marks believes that so long as people can trawl the internet in search of the best price, cost is always going to be a pronounced factor, but he says the real challenge lies with educating end-users to buy the correct microwave for their individual needs.
“All too often you see people buying cheap, low-powered microwaves and expect them to be the main workhorse in the kitchen and then wonder why they are failing,” he says. “We educate our distributors so that they are in a position to advise their customers of the correct oven for their needs. Box-shifters, as we call them, do not do this and where possible we always try to avoid them,” adds Marks.
Bray at Regale and Cavity Protection Systems concurs: “Sadly there are still those in the market that will sell on price rather than customer requirement and, as a result, there are many operators that have a low output microwave that is only capable of re-heating desserts or sauces, yet their needs are for an 1800W+ workhorse. The biggest challenge is the education of operators in the correct use and care of their equipment so they don’t just ‘guess’ at the settings, which can lead to over-cooking, excess steam, water and food splattering.”
Any suggestion that the commercial microwave market is highly sensitive to price, though, is rejected by Panasonic’s Phillips.
“If that was the case, Panasonic would never sell an oven!” he says. “The Panasonic microwave is the most expensive on the market, and it always will be as we maintain our price position while others compete by discounting. We have no competition at this level and there is no-one with comparable quality, therefore those operators looking for a premium model will buy a Panasonic.
“Of course, there are different sectors within the market and some operators will always opt to buy a budget model, but the ‘serious’ operators realise the real-life cost and value for money that you get from buying a quality piece of equipment.”
Phillips, like several experts in the field, says that education remains the microwave oven industry’s biggest challenge. “Firstly, educating operators in the differences between commercial and domestic microwave ovens and secondly, demonstrating to them the capabilities of the commercial oven; it’s not just for re-heat and defrost!”
Valera’s Gadhvi agrees that the end-user market would benefit from greater education on the technology. “We see more customers who know what a microwave does, but do not know how the microwave heats food,” he says. “So we see more food heating issues due to the lack of microwave product knowledge, as microwaves are now sold by general catering product companies as opposed to specialists.”
For a product category so heavily linked to speed, suppliers have no choice but to keep up the pace.