Accent on simplicity

The dust now appears to have settled over Electrolux Foodservice's absorption of two of the UK's largest equipment manufacturers. The big Swedish-owned group, best known for domestic appliances like vacuum cleaners and washing machines, took over Stott Benham, at one time Britain's largest commercial kitchen business, and Crypto Peerless, a leading name in food preparation and warewashing, in 1988.

The factories of both companies were eventually closed with the products they made substituted by equipment produced at other Electrolux factories in Continental Europe. The UK business is now a cog - albeit an important one with annual sales of around £30m - in a large international machine.

As an £8.7bn turnover group selling domestic and professional equipment in over 100 countries, Electrolux claims to be world's second largest producer of professional foodservice equipment, with market leadership (depending on how one defines the market) in Europe. Total annual sales of all professional appliances in 1998 stood at 11,574 Swedish kroner (around £858m at current exchange rates) split 50.9 per cent foodservice, 22.1 per cent refrigeration, 20.6 per cent laundry and 6.4 per cent cleaning equipment).

Before its UK acquisitions, Electrolux had only a minor presence under its own name in UK foodservice, mainly dishwasher and food prep sales through Crypto Peerless. It had also taken over Italy's Zanussi (in 1986) but this was operated as a distinct brand. In the UK, it has its own separate operational structure and dealer-based marketing policy although it under the same managing director (Kevin Davies) as Electrolux Foodservice.

The phasing-out of two venerable UK manufacturers helped secure access to well-established UK customer bases, but at what cost? "It was very difficult," admits Andy Bettany, sales and marketing director of Electrolux Foodservice. The changes meant a painful period of job losses and culture change but he believes that rationalisation on this scale was fundamentally necessary to create a modern business clearly focused on its key clients, whether distributors or end-users.

The company is now past the dislocations of the past five years and is, Bettany believes, leaner and keener. It is well-represented in all the key product areas, from food prep and refrigeration to prime cooking equipment and warewashing. Only exception is beverage equipment which Bettany feels has increasingly become the province of ingredient suppliers.

Bettany also believes that the company's main competitors, most of which have also made structural changes in the past 10 years, now have some way to catch up. "We are now miles ahead in terms of developing a truly international group," he claims. "We have now got a complete infrastructure and sorted out the basics like IT, management, marketing and logistics. We have now made things very simple and in the process we have become a company which is very easy to deal with."

One example cited by Bettany is the ability to do seamless across-the-board deals on a wide range of equipment. Thus a client wanting a complete kitchen does not have to deal with one part of the group for kitchen equipment and another for refrigeration (as happens, for example, with Hobart/Foster within the PMI Group, Falcon/Williams within the Glynwed group of Welbilt/Viscount within the multi-brand Berisford Group).

In another words, the major surgery which has gone into creating Electrolux Foodservice has contributed to the building of a comprehensive one-stop shop. The company intends to simplify all aspects of the customer relationship - it issues its complete product price list in CD-ROM format from January 1, 2000.

There have, Bettany admits, been a few missteps on the way. When Electrolux began its advance on the UK foodservice market, it consolidated its acquired servicing businesses under the name ECS to operate as an independent profit centre and offer across-the-board maintenance of all types and makes of equipment.

In hindsight, the strategy appears to have been misjudged. Multi-appliance servicing is still operated to a degree, but the prime focus is now very much on the group's own products and on helping prime customers. The service business is now integrated with Electrolux Foodservice and Zanussi Professional.

Electrolux Foodservice