The Game Changers

In the middle of a small west Yorkshire village, right by the moors, is not necessarily where you’d expect to encounter a company that has arguably done more than any other to shake up the catering equipment market over the past couple of years. But that is exactly where you will find JLA, the service company which has been making a splash since it added a catering equipment division to its laundry equipment service empire in 2013.

Two years prior to its formal entry, it had dipped a toe into the market with the formation of a warewashing division, but its catering equipment debut really got going with a bang thanks to an acquisitive strategy that saw seven dealers bought out within an 18 month period. These were: Carford, Red Squared, CKM, Proton Washrite, Harmony Business & Technology, Newco Catering Equipment and Comcat Engineering.

“At the beginning we were platform-building,” explained JLA’s CEO, Stephen Baxter. “To do that we needed service engineers, product knowledge and supplier relationships, because the market was new for us. The engineers we’ve brought onboard are all fantastic and it’s really good to have them within JLA.

“Our ambition is to build on a great first 2 years in the catering market. We have created a nationwide breakdown response network that provides excellent customer service. It is clear that both existing customers and new customers alike are seeing real value in our differentiated propositions that focus on blending machine supply with best in class breakdown cover.”

We think that blending sales and repair is unique in this market and we found it was the same in the laundry sector.

Currently, the group’s catering division is posting revenues of £25m, with 220 employees, including 120 engineers. This is already a third the size of its laundry mainstay, which was founded in 1973. And these figures are only the start for the ambitious group, as it has set itself a target to triple the catering division to £75m revenue by 2020, which will entail employee numbers increasing to 400, featuring 250 engineers within that total.

“Our plan is to continue to grow organically and through acquisition to triple the size of our catering business in the next 5 years,” explained Baxter. “Aspirationally, I don’t see why that rate of growth can’t continue beyond 2020.”

To more than double the engineering capacity within the initial time frame, the organic growth will be enabled through JLA hiring more engineers itself, and, while more buyouts may be on the cards, Baxter believes it may be at a slower pace than seen so far. “Any future acquisitions will be complementary to our business,” he added. “The scalability is there because the market is massive.” The company is well funded to continue this growth, as HG Capital, what is claimed to be Europe’s fastest-growing private equity group, has owned a controlling stake in the business since 2010.

One of the main focuses of JLA’s catering business, and the model it has successfully brought over from the laundry sector, is its Total Care proposition. This comprises machine supply and breakdown cover for the end user in one monthly payment. It means that equipment is provided with no upfront payment and includes wear and tear repair within the breakdown service, so that operators do not have to pay any repair bills outside of their monthly fee.

“We blend asset sales and breakdown cover, because that is what customers are asking us,”

detailed Baxter. “They would like the best equipment possible and the fastest time to fix. We think that blending sales and repair is unique in this market and we found it was the same in the laundry sector. We created significant growth there because of this link proposition.

“In growing our catering business we’re directly responding to customer requirements. The critical nature of the equipment used in laundries and kitchens is similar and we are finding that customers welcome the fact we can now offer advice and support in more than one area of their business.”

JLA prides itself on its engineers carrying out repairs within the first visit to an end user, and aims to have an 8 working hour response time – which it backs up by offering a £100 guarantee if its engineers are late. It has invested a lot in a dedicated onsite contact centre at its headquarters to provide this 7 day a week call-out service, with the latest telephony and parts deployment software ensuring that calls to its service line are dealt with promptly and the spares in each engineer’s van are remotely inventoried and dispatched. The precise organisation even goes as far as subdividing the inside of each van into labelled containers for each part.

Furthermore, JLA’s spares supply is provided by the First Choice Group.

“Our vision is to continue to lead the industry in reducing the time to fix for our customers. This is about more than just the initial engineer response time. What customers are interested in is how quickly their equipment is back up and running. This involves smart diagnosis, access to parts and clear communication throughout the process,” said Baxter.

“The message when we spoke to customers was clear: ‘Answer the phone quickly, turn up when you promise and fix my equipment first time.’ We’ve invested, and continue to invest, in the best people, logistics and systems to make this happen.

“Total Care gives our customers the peace of mind that they’ll never have to pay for another repair bill and never have to wait for an engineer to turn up. In a busy kitchen environment these are the things that make a difference.”

Furthermore, the firm’s engineers can provide repair services to equipment not purchased through JLA. Its response breakdown contracts are available in three levels of breakdown cover that can be chosen with or without preventative maintenance visits.

The Professional Response package includes all labour and a 15% discount on parts, Rapid Response comprises all parts and labour, while Ultimate Response adds an 8 hour response to the all parts and labour package. Pay-as-you-go emergency breakdown and repair response is also available on demand.

“We have a proposition that changes the game in after sales. We’ve spent 2 years getting those ingredients right and now we can move even faster than we have done before.”

The firm additionally offers a suite of compliance and safety services that include gas safety checks, annual services and preventative maintenance visits, canopy checks and extractor cleaning.

JLA has also devoted resources to building up a large sales and marketing function, with a team at its headquarters dedicated to building and maintaining long term relationships with operators. It even has a ‘Vision Room’ onsite where strategy discussions can take place.
 

This long term view is something that the company believes is not particularly compatible with design and project work. “There’s always an element of design work, but in the main, design and build projects are too remote from the end user – you have to work through architects and contractors and it doesn’t lead to a long term relationship,” detailed Baxter. “We want an after sales relationship with breakdown cover at the centre of it. Not having an ongoing daily relationship with our customers is not in our business model.”

In terms of the equipment JLA sells or provides as part of its Total Care package, it partners with well-known suppliers which manufacture private label kit for the company. This is then stored at the firm’s headquarters. The JLA-badged products are mainly in three core categories: warewashing, prime cooking and refrigeration. “We have commercial relationships and the beauty of private label is that it’s in our name, so we use the best in class,” said Baxter. “We provide our supply partners with sales volume.”

He reported that the business will be looking to expand its refrigeration offering. “We started off with what we think is a core range for our customer segment and as we get bigger we will grow that range. These markets are huge, so we feel there is enough room for expansion.”

This refrigeration focus going forwards could take the form of increasing the skill mix within its engineering team, as well as further improving the density of its service network coverage to cut the travel time to the end users. “Nationwide we will be looking for engineers to allow us to reduce the time to fix,” said Baxter.

JLA wants to continue on its upward trajectory in the catering equipment market and is confident that catering could even overtake its laundry division.

“Fundamentally we are going to change how this industry works,” Baxter predicted. “At the moment there is fantastic equipment and excellent manufacturers, but because there is no national true service business, a breakdown often requires two visits to fix.

“We have a proposition that changes the game in after sales. We’ve spent 2 years getting those ingredients right and now we can move even faster than we have done before.”

And with JLA’s progress so far, who would bet against it achieving and even surpassing its lofty targets?

Source: Catering Insights November 2015 cateringinsight.com

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