The price is right for Lockhart

Things are changing at Lockhart Catering Equipment.

So much so that after a few years of dipping its toe in the water with independently-sourced cutlery and whiteware crockery ranges, the firm has launched an enhanced collection of own-label products.

Given that the Bunzl-owned company is best known as a reseller of branded product from other manufacturers, such as Falcon, Rational, Imperial and Winterhalter, the move to consciously invest in what it refers to as its ‘exclusive brands’ is one that may take some by surprise.

Story continues below
Advertisement

While Lockhart makes it absolutely clear that it has no intention of diluting the branded equipment business, the fact that it made a point of formally unveiling the ‘exclusive’ range at its recent Wembley annual innovation day illustrates just how important it is to the company’s future.

Steve Montgomery, sales director at Lockhart Catering Equipment, admits it is the first time that exclusive brands have been part of its strategy.

“This is a real strategic move for Lockhart and I think it is the first time that we are actually going to market with some very clear messages about what’s in our product range as far as exclusive brands are concerned,” he says. “We are trying to cover all bases, which is the right thing to do, but this is quite a step change for us.”

There are several reasons behind Lockhart’s decision to place more emphasis on this aspect of the portfolio, not least its desire to drive deeper into the regional independent market. More than 65% of its business comes from group accounts, where it is exceptionally strong, leaving it with a huge opportunity to target market share from small, individual caterers.

However, this area of the market is notoriously price-driven, which hasn’t necessarily lent itself to Lockhart’s existing portfolio of branded equipment manufacturers.

“It is not cost-effective to send a salesman out to a very small account if all they have to sell when they get out of the car is relatively midrange to high-end branded equipment,” says Ben Tearall, commercial director at Lockhart. “You are not going to be able to compete in that market; you need a different offer. That is why we have started looking at our product portfolio, what equipment we need, what sort of messaging we need to put out, and how we are going to develop our strategy and win more market share in that end of the market.”

While Lockhart is best-known for its face-to-face sales model, the expansion of its own-label range dovetails nicely with its ambitions to grow both its direct mail and online businesses.

Interestingly, its new managing director, who joins this month as a replacement for Chris Wakeman (who has joined Bunzl’s healthcare division), is understood to have a strong pedigree in direct marketing and ecommerce.

Lockhart’s own-label business currently consists of five main categories, covering tableware, food preparation, refrigeration, chefware and commercial catering appliances. The latter includes tabletop equipment, such as fryers, conveyor toasters, water boilers and Panini grills, all badged ‘Chefmaster’. It is thought that a further 50 products could be added to the range over the next two years.

The fact that the kit is aimed squarely at the entry-level end of the market will naturally lead some observers to speculate on its quality. Lockhart insists it has worked hard on that front, noting that some of the newer products are manufactured by contracting partners which have been in the market place for years.

Tearall says: “We aren’t just going out to find the cheapest label that we can and put it in the market place. We want a chef to pick it up, know it is fit for purpose and think of it as a good quality product that they want to buy time and time again. That is the sort of level we are pitching for.

“Chefmaster is a good example. It has taken us about three years to find the right equipment we want to bring in. Obviously when you are dealing with fryers and Panini grills, the last thing we want is to sell something that only lasts six months. This kit gets a hammering in most places and unfortunately it is often poorly looked after, so we have gone to the trouble of making sure we have equipment that we are happy to put our name on, support, and put out in the market.”

Click on page 2 to continue reading article. [[page-break]]

One thing the new strategy will do is draw obvious comparisons with rival Nisbets, which for several years has made progress in the independent market with brands such as Athena, Buffalo and Polar. Is this move designed to take it into a head-to-head battle?

Mongomery insists it wasn’t a motivation: “The intention is to try and grow our business where there is an opportunity. We are arguably the industry leader with the group account business and we see opportunities to grow our business into the regional independent market sector through direct mail and to do that we do believe we need some sort of products with a fighting price point. It will naturally take us into competition [with Nisbets] but that is not the reason.”

While the new strategy represents an exciting development for Lockhart’s field sales force, it wouldn’t be unreasonable to suggest its branded manufacturing partners might feel a little twitchy about developments.

Tearall admits it would be perfectly understandable but stresses the company has no plans to change its position of being a brand-led business going forward. The expansion of the own-brand range is merely an extension of its portfolio, he says.

“The fact is that [brands] are very important to us and to our customers, and they always will be, hence events like the Wembley one. That wouldn’t happen without partners like that, who come along and attract some major clients. The key to this is that our relationship with our core suppliers is strong and we have proper discussions with them about our strategy, what we have got to achieve, and the pressures on them as manufacturers.”

Montgomery reiterates that message, noting that Lockhart’s exclusive brands are there to grow its market share in a very particular channel and that from a commercial point of view there is absolutely nothing to gain from swapping its existing business over to those brands.

Although internally there is a long-term goal for own-brand sales to become 20% of the business, it will only be deemed a success if that 20% is part of a much larger turnover.

The company knows it needs to ensure that no cannibalisation takes place for the sake of both its supplier partners and its own profit margins. “We don’t see the exclusive brands taking sales off our branded manufacturers because that is not what we want to achieve, it’s purely an add-on,” insists Montgomery. “We don’t want to take business away from brands, we want to grow.”

‘Exclusive’ brand list

Arctica Refrigeration & cooling
Brigade Chef clothing
Chefmaster Cooking appliances
Classic Tableware
Prepara Food preparation
Signature Tableware

Authors

HAVE YOUR SAY...

*

Related posts

Top