Internet dealer Fridge Freezer Direct is dedicated to bringing the biggest discounts and very best of customer service to foodservice businesses in need of commercial refrigeration and catering equipment – and it has been doing so for the best part of a decade. So what does it really take to thrive in an online market place that routinely finds itself under fire and trying to justify its value? Andrew Seymour travelled to Leicestershire to find out:
Right, let’s get straight to the point: online catering equipment sales is a subject that divides opinion in this grand old industry. Internet dealers generally haven’t been showered in compliments and affection from a traditional catering equipment dealer community that has had to wrestle with margin erosion, market saturation and growing costs over the years.
Accused of bringing down prices, running operations from bedrooms and offering negligible levels of service, one wonders if operating an internet business in the kitchen equipment sector should come with a health warning.
So it comes as no surprise that when all this is put to Cory Greenhough – co-founder and managing director of one of the market’s most-established online dealers, Fridge Freezer Direct (FFD) – he takes a deep breath and admits he has “quite a hefty opinion” of the situation.
While you could not blame the boss of an online-only business for wanting to launch into a vehement defence of the internet-driven sales model, he is level-headed enough to accept that there are reasons why these perceptions exist.
“I can understand why a historical legacy catering equipment distributor that has been in the game for 30 years would say that, I get it. But it is a different landscape. Should you be pointing the finger at internet companies and saying ‘it is your fault that margins have dropped’ or should you be saying ‘have I done enough to change my business model?’
“Look at companies like M&S, Debenhams and Woolworths who have all struggled on the high street but were the leaders 30 or 40 years ago. It is sad, but whose fault is that? I think they just carried on with the same business model thinking they were just going to make hay while the sun shone and didn’t think about the rainy day or what they needed to do to stay the market leader. I know that is easy for me to say because my business is internet-based and that is where we started from. I am probably going to be having the same conversation, pointing the same finger in 20 or 30 years, when the millennials who were born into technology come along and whip our backsides!”
Greenhough cites FFD’s 10 years in business as evidence that it is doing something right, pointing out that no company would be able to succeed for that period of time if it didn’t do the fundamentals of customer service correctly, irrespective of whether it’s an online business or not.
The company was born during a recession, which Greenhough insists is often a sign of a business that has a solid base. It never borrowed any external finance to set up and has “stealthily” built its turnover year upon year.
“The overheads and budgets that we work with have always been very strictly monitored and it has stood us in good stead,” he said. “It is why we have been able to weather the storm over the last 12-18 months, it is why we are still here 10 years later and it is why we are going to be here for another 10 to 20 years at least, or certainly until I don’t want to work here anymore or come to retirement age.”
Alongside FFD, which specialises in commercial refrigeration, the business comprises two other website domains: 247 Catering Supplies and UK Grease Traps Direct. It makes no secret of the fact that all three are related – it is clearly stated on each homepage after all – and will happily build multiple item orders for customers that require it as they are connected at the back end.
The Hinckley-based outfit is currently in the process of completing a mammoth website redevelopment project aimed at making its sites easier to navigate and engage with. Once it is finished, the company will feel justifiably entitled to raise a glass in celebration, having previously endured two painful major website builds over the past 7 years.
On the first occasion the contractor in question suffered a staff exodus. A job that should have taken 6 months to complete ended up spanning 18 months and five project managers, leaving FFD with a website it was desperately unhappy with. The second time around, the developer it used went bankrupt midway through the project.
“It was a really tough time but we got through it and it made us a better company,” reflected Greenhough. “We have got a good name in the industry and our reviews say a lot about us. Our staff also say a lot about us. Two-thirds to three quarters of our staff have worked for me for over half the time the company has been operating. We have a really high retention of staff and we spend a lot of time training them.”
The irony that the one thing letting this online business down is its website is not lost on Greenhough. But the latest incarnation should alter that once and for all. Customers will see a cleaner, more engaging design with improved speed and ease of use. Time and energy has been spent creating educative content, not just around the product but how warranties work and the support customers can expect. “That is what we are really going to town on,” he said. “We have done that in the past, but we are really doubling down on it at the moment.”
So why has FFD never folded all three of its domains into a single online proposition, as most of its competition have – or indeed gone the other way and created three separate limited companies?
“We have thought about it but there is no real need. The biggest downside to [the current structure] is what if somebody wants a fridge, a fryer and a grease trap? But typically a customer making a purchase of anything from £600 to £800 upwards is going to phone us up and then it is not an issue because we can build an order.”
FFD offers access to more than 20,000 products through its sites and has a “broad spectrum” of customers, which Greenhough insists is “intrinsic of the internet”.
It does a huge amount of work with the public sector, including colleges and hospitals, but it also receives orders from cafes, bars and privately-owned pubs through to multi-site chains and everything in between. Some customers spend a couple of hundred pounds, others significantly more. Last month it took an order for £20,000 from the founder of a new food concept. “We really haven’t got a typical customer,” says Greenhough.
There was a time when the business spent all its energy obsessing over Google rankings, but Greenhough says things have moved on. “Clearly you need to be found to be able to do business and I think that is what we have been very good at. Where we have been let down is we didn’t have the website to back it up when we were found. But everything is there: the reviews are there, the staff are there, the products are there and the relationships with the suppliers and manufacturers are there.”
He says the company does not hold a burning ambition to be the cheapest in the market for price but acknowledges that it “does need to be in the ball park”, adding: “I think there needs to be a reasonable spread of everything. I think if you are selling on price, it is not what people are always looking for, particularly with our type of ticket value item. We need to be found and we need to be competitive, but we also need to excel at service. Our reviews say that we do. We know how to handle customers, we know how to handle prickly customers and we know how to take care of customers that keep coming back and spending money with us. We just need to keep reinventing ourselves, stay dynamic and react to what customers say.”
It would be remiss to move on from a discussion about market pricing without bringing up the CMA’s investigation into online resale price maintenance, which concluded in 2016. FFD was caught up in that probe and, reflecting on it now, Greenhough claims that “nobody whatsoever won out of it”. “I think it is the worst thing that has happened to this industry, certainly in the 10 years that I have been in it,” he said.
He thinks the gloves have completely come off in terms of pricing and it has had a detrimental effect on industry profit margins. Market saturation – he calculates that at one point in time you could find anywhere between 50 and 100 companies selling catering equipment online – has merely compounded the situation.
“I think it is sad for the industry. Has it been a painful and negative thing? 100%. But it will recover from it – commercial sense will take over, we will find ways around it as an industry, as individual businesses within the industry, and I believe what doesn’t kill you makes you stronger.”
Another more pressing challenge that it faces – indeed the whole industry faces – is that the online giants, Amazon in particular, have set such a high bar for customer engagement. Consumers are now accustomed to being informed about every step of their transaction, from the point at which their order is dispatched to exactly where it is on the journey and when it will be delivered.
“We are in an industry that is still telling customers it is a delivery between 8am and 6pm and sometimes you can’t even tell them the day. Some of our suppliers go out on a 2-day drop and customers are quite rightly saying ‘really?’ Unless we exclusively sell our own product – and others in the market obviously do – we rely on our suppliers and that is where some of them are still at.”
A glance at FFD’s website confirms that it works with most of the market’s most prominent refrigeration and catering suppliers. As it has never had to incur any storage costs, because the majority of transactions it facilitates are drop-shipped directly to the end user, it openly concedes that it has been guilty of adopting a “scattergun approach” over the years, but that is poised to change.
“We are going backwards from that now – particularly with the not so well-known and the non-proprietary brands,” explained Greenhough. “If the price is there and the product is moving, it doesn’t mean to say we are going to keep working with them because we need to have the delivery service, the product needs to turn up as many times as possible without having damage, and it needs to turn up when it is supposed to be there. We need to measure that expectation and manage that expectation for the customer.”
Ultimately, said Greenhough, Fridge Freezer Direct wants to be part of the contingent setting the standards around technology and ecommerce best practice.
“This industry still isn’t fully on point with it, from lots of different angles. I want to be a part of making that change. The internet is not going anywhere. Ecommerce is not going anywhere, but how we handle that business is going to be the driving force of how it defines things moving forward.”
Office move to spur expansion into new areas
The nature of the online sales model means that Fridge Freezer Direct isn’t overly involved in scheme work, but that could potentially change in the future. Its relationship with sister company, Empire Drinks & Refrigeration, already gives it access to a fleet of qualified refrigeration and catering equipment engineers and it admits to taking a growing interest in the project side of the business.
Co-founder and MD Cory Greenhough recognises that the business needs to be more “dynamic and multi-talented” in its offering, be it through providing CAD design, specification, installation or after-sales service.
And once its current website redevelopment project is complete, its attention will turn to relocating its current premises – which it has massively outgrown – to a new site with warehousing and showroom facilities. “That will be the springboard for a heavier focus towards project management and project design-based work,” he said.