Examples of published work can be seen by clicking on the Scribd link below; I am in the process of moving everything to Scribd for technical reasons too dull to go into.
Until such time as I’ve populated scribd fully, please contact me to ask to see other relevant cuttings in hard copy form.
There are a few extra examples linked to or pasted below, which give an idea of the kind of thing I can produce.
+ This first link takes you to the PDF of a feature, written from a trip to Bangkok, about how Thai manufacturers are evolving their products to become more contemporary in style for an international market.
+ I spent a day at a trade show in Birmingham with a copyright lawyer as he investigated claims of intellectual property theft by exhibitors. Reactions vary from embarrassment to bad temper as other exhibitors are accused of copying.
Here are two more, pasted below in text form.
+ A feature about trendy interiors company Alessi
Being famed throughout the world for making quirky, trendy items like lemon squeezers, bottle stoppers and fruit bowls might seem like a great place to be commercially. But for Alessi, this reputation translates to lost potential to show another side of itself – its expertise in making cookware and tableware – to an international market.
Matteo Alessi, managing director of Alessi UK (and great-grandson of company founder Giovanni Alessi), explains: ‘We’re losing a lot of potential opportunities in foreign markets. In Italy, we’re seen as a cookware company with a reputation for quality and attention to detail. But we’re known outside Italy, especially in the UK and US, as a company that makes amusing, design-led accessories.’
The company wants to reposition that perception. ‘Yes, design is our mission,’ concedes Matteo, ‘but we are a housewares manufacturer and we spend a lot of time developing cookware, often in conjunction with famous chefs so that our products have functionality as well as design.’
The problem, says Matteo, is that people don’t realise how good the products are. ‘They will look at them and say “that looks nice” but not buy them. Or, what’s worse, they will buy them and not use them, which is a waste of their money.’
In its bid to be known as a cookware brand, the company is working with people like tableware and furniture designer Jasper Morrison to launch more cookware sets.
It is also trying to shift its distribution to department stores rather than just the gift shops where Alessi is typically seen. ‘Being seen in places like the cookware department of John Lewis, as we have been since 2005, really helps create perception of us as a cookware brand,’ says Matteo.
One of the reasons behind the shift in emphasis is to get away from the overly seasonal nature of sales. Because the brand is perceived so much as a gift supplier, and its retail distribution is focused on gift outlets, its sales tend to peak towards Christmas, with 40% of turnover at retail taking place during the last three months of the year. What the company wants is consumers to buy Alessi for themselves, and to buy for others outside the Christmas period, in particular for weddings.
As part of its bid to get away from its image as ‘the company that makes that lemon squeezer’, Alessi has since 2000 extended its reach into everything from watches to bathrooms, phones and even a car. Tiles and even wallpaper are also on the agenda. Alessi handles the design and communication, while its manufacturing partners (such as Siemens and Fiat) handle the production and distribution. Projects like these have highlighted Alessi’s core skill in design management.
Similarly, it has regularly worked with designers and artists from outside the homewares industry, notably architects, musicians, artists and sculptors. One notable project involved architects being asked to design tea and coffee sets. Some of the resulting products are now on sale commercially and others can be made to special order. They bring a totally new view to product design, such as with the La Cupola coffee pot by architect Aldo Rossi, whose domed lid is inspired by the dome of a church.
Brand of success
Offering everything from a £5 toothbrush to a £20,000 silver tea set, Alessi found it had created what some consumers found to be a confusing offering. A rebranding exercise during 2006 tried to deal with this by placing all the products into one of three sub-brands.
Officina Alessi includes the most sophisticated, experimental and innovative products, as well as small-scale and limited productions.
Alessi expresses the best industrial mass productions, both from the point of view of design and production quality. And the newly-created A di Alessi includes the most ‘democratic’ and accessible products. By adding this ‘affordable’ range to the offering the company aims to extend ownership of Alessi products to a wider audience.
Matteo explains: ‘There are people in their 20s or 30s who like design and think owning Alessi says something about their personal style. We’d like to help them buy into Alessi because as the get older and their earning power grows they will stay with Alessi. This fits with our core aim of taking design to a wider audience and with our new aim of growing that audience.’Story C
Alessi prides itself on its open-minded approach to design, preferring to experiment, even if that means making mistakes, rather than play safe and end up with bland products.
Matteo Alessi explains: ‘The word “design” is abused. A lot of companies call themselves design companies, but they treat design as a spice, something to make the meal taste better. We treat it as a core ingredient. For real innovation there are no boundaries – we say to designers “you design it, we will find a way to make it.“’
One recent example is the Ku tableware launched in 2005 by Japanese architect Toyo Ito. The designer formed the plates so that the effect of light on the glaze gave the optical impression that there were no internal ridges to the item. ‘This kind of thing is hard to “sell” because you need good product knowledge to explain to the customer why it is “different” but it was also challenging from a production point of view,’ says Matteo.
So, how do the production staff – who have to turn design ideas into reality – feel about being asked to make the potentially impossible? ‘Their first reaction is always “no, it can’t be done”,’ laughs Matteo. ‘But actually engineers like to be challenged and we like to put them under pressure to come up with a way to do things. Though you do have to balance the need for creativity with the need for commercial success, our focus is always on the side of creativity. We want to be a mediator between the world of art and the world of production.’
For this reason, Alessi is wary of doing too much market research. Matteo comments: ‘With due respect to consumers, they are not innovative and creative. If you start by asking them what they want, you set so many boundaries that the designer cannot express themselves.’
For example, he says, ‘if you ask a consumer what sort of car they want, they’ll tell you what sort of look they like, based on how they perceive trends, but by the time you bring the product out two years later, the fashion will have changed. If you start with design, the trend is less important and so it doesn’t matter if you take two years to develop the product.’
The strategy of creating a product with no reference to consumer tastes is a risky one, concedes Matteo. ’You don’t know how the market will react. You have a product that you might not be able to make, or make cost-effectively, or a product that the consumer doesn’t understand.’
So, a commercial fiasco then? Yes, says Matteo, but that’s actually a good thing.
‘My grandfather used to say design was like dropping a feather on a table – you never know whether the feather’s going to stay on the table or fall on the floor.
The moment all your products sell well, it means you are too much on the right side of “safe”. If you can keep just on the right side of that borderline, you achieve a product that’s both innovative and commercially successful. If you go beyond that line, the product will be a failure but at least you then know where the line is, and you can start to push it further and further back.
‘Products that are on the borderline, that are a huge success, the more mass market products, will pay for the ones that go beyond the borderline, the ones that economically don’t justify being produced. It’s important to have products like these because they maintain our name for design.’
With this in mind, designers are given enormous creative freedom. Perhaps the great example of this is the creation of the Philippe Starck Juicy Salif lemon squeezer in 1990. ‘We didn’t ask him to design a lemon squeezer,’ recalls Matteo, ‘we asked him to design a tray. But he decided to design a lemon squeezer instead – and one that didn’t squeeze lemons any better than existing lemon squeezers, and one that was four times the price!’
It was a situation where a more commercially-obsessed company might have got shirty with the designer for not sticking to the brief. As Matteo says, ‘If we’d stopped to think about it, we might have thought it was a risky thing to do. But we want our designers to have total freedom because that’s the only way to achieve innovation. If a designer you trust thinks you need a lemon squeezer, you have a lemon squeezer!’ The Juicy Salif has since become not just a best-seller but a design icon.
Though Alessi has often worked with famous names (like Starck, Michael Graves, Aldo Rossi and the like), it is equally happy to work with unknowns, knowing its own name is ’big’ enough to successfully market a product. One example of this is the Fruit Loop, a modernistic fruit holder launched in 2005 and designed by an unknown Australian designer. ‘We liked the idea and we wanted to produce it, so we did,’ says Matteo, simply.
This is indicative of the company’s attitude to fashion. ‘We don’t aim to set fashion. We don’t think “are we setting trends?”. Design is a mission, not a marketing tool. We’re about achieving excellence in design.’
Some Alessi products have certainly influenced other products, for instance the Michael Graves kettle design from 1985 has influenced kettle design generally. And some of the plastic items from the 1990s were quickly followed with similar products from other companies. But Alessi’s not about setting fashion, insists Matteo. ‘The less you focus on trying to set a trend the bigger the chance that you will actually do so. We’re fashionable because we won’t aim at being fashionable.’
This approach leads to product longevity. ‘If you focus on what the market wants now, it won’t be lost lasting, but excellence in design is timeless,’ says Matteo.
‘Look at the chaise longue that Corbusier designed in 1929. It was made because he wanted to make it that way, and it’s still selling.’
So is anything really new? Alessi’s current product range includes, among other examples, a citrus basket designed in the 1950s, a tea and coffee set designed by Carlo Alessi in 1945, an espresso maker designed in 1982. There are even an ashtray, toaster and cup that were designed in the 19th century. Matteo says: ‘We’ll reinterpret old designs, we’ll even copy them, as we did with a tray that’s based on a tray found in the ruins of Pompeii. We’ll update pots and pans with a new finish or colours. Sometimes we’ll ask the original designer to revisit a product 20 years later. But we’re not just revamping an old trend – there’s always a new approach, a different version.’
Though products vary in their popularity from market to market – stainless steel products sell particularly well in Germany, for instance, and the plastic items do well in the UK – the company’s ideal of good design works everywhere. ‘We work with designers from around the world but you can always recognise an Alessi product. No product appeals to all countries – there will be differences in shape or material for instance. But really beautiful, really well-made products appeal everywhere because they transcend trends, whether the trends are driven by fashion or regional cultures.’
A family affair
As a long-established family firm (founded in 1921 by Giovanni Alessi), Alessi is now facing the challenge of how to successfully pass on the business to the next generation. There are 15 fourth-generation Alessis, of whom Matteo is the first to have joined the business. But is there room for all the others, what will their job be, what level of seniority will they have, what qualifications do they need? Those are issues facing a lot of Italian companies. The Alessis have a policy whereby essential qualifications include being aged at least 18, having a Masters degree, being able to speak a second language and having two years’ commercial experience elsewhere.
The latter is important not just to the business but also to the self-esteem of the young Alessis. ‘Having experience shows not just the family but also yourself whether you are any good,’ says Matteo. ‘Otherwise, you never know if people say you’re good because you are good, or because you’re the son of the boss.’
Once they do join (and about eight of the fourth-generation Alessis might want to join the business), there is no guarantee of a directorship, with promotion being based on performance.
+ Indepth profile about the Italian tableware industry
Italian tableware and cookware companies are increasingly promoting their history and tradition, knowing that foreign competitors offer not only better prices but also improving quality and design. Sue Fenton talks to some of the companies that look to the past while planning for the future.
Speak to any Italian company and the word ‘heritage’ keeps coming up. This is partly because many Italian companies remain family-owned, even after several generations.
Take, for example, Alessi, founded 1921 and now on its fourth generation. Matteo Alessi, great-grandson of the founder, points out that, as companies are handed down through generations, so too are the workers’ skills, and it’s not unusual for the same families to work for the companies over generations. There are also links between families – Matteo’s grandmother came from the coffee-making rival Bialetti family – which makes industrial rivalry a rather less vicious affair than often happens.
The company has its own museum and is a member of the Italian association of company museums and archives. The collection, as well as being loaned to curators of other museums, is used as a reference point and place of inspiration for designers.
Matteo believes that, with Asian production now such good quality and design catching up fast, Italy has to bring its heritage like this to bear when promoting its products.
‘You can’t replicate history. Though we use Asian production for certain products that we can’t make cost-effectively here, to enable our aim of bringing designs to the widest possible public, we aim to keep what skills we can here in Italy.’
Similarly, Alberto Barazzoni, managing director of Barazzoni and grandson of the man who founded the business in 1903, points to local manufacturing as being important for those companies that want to protect the wealth of their own communities. The very purpose of cookware, he says, is to represent ‘the ancestral desire of man for fireside, home, the beloved’. Yet this fundamental is combined with ‘the maximum expression of technological refinement. We want to invest in upwards quality, technology and innovation rather than in delocalisation.’
Its own brand of heritage, says Barazzoni, is in the sense that product development stems from the pleasure of food, aromas, tastes, the home and the ‘joy of living‘.
There have been big investments in automation but the company says ‘creative genius’ is vital too. Products have to be beautiful, functional and unique.
Like others, Barrazoni wants to keep production in Italy by focusing on high-end sales through innovation and design. ‘We want to increase the value of Made in Italy – it’s not only symbolic of innovation and design and quality but also of a lifestyle.’
This attitude has helped generate healthy exports to China, where wealthy consumers prefer non-Chinese made products and enjoy the idea of family, tradition and good designs.
Barbara Ingignoli, design director at Barrazoni, adds: ‘Products should be modern objects of desire as well as cooking accessories. They should communicate energy. Experimentation and technical innovation go hand in hand with design.’ Like other companies, it experiments with new shapes, new materials (in this case triple-layer titanium) and different lids – and has won design prizes with, for example, the Carlo Bellini-designed copper Butterfly range.
Coffee maker and cookware maker Bialetti, which was founded in 1918, agrees: ‘Modern aspects like coffee culture and attention to technology rank alongside historic values such as quality, simplicity tradition, durability and safety.’
Similarly, Lagostina’s current advertising campaign – and the basis of its aim to become a world leader – is based on historical and traditional values first espoused by the company’s founder in 1901 – of friendship, family and art. Mark Penrose, international product director, says: ’Our brand identity is based on the values of history and local production.’
Catering cookware supplier Piazza. founded in 1880, is still based in the house, with the Alps picturesquely rising behind, in which the current owners’ grandfather was born, and is determined to keep production in Italy.
Like other long-standing companies, Piazza still has products in production that date from its early years. Now run by fourth generation Ferdinando, Enrico, Cristina and Paola, the company says it makes investments in R&D and production technologies, but maintains its heritage of respect for work, attention to detail and typical Italian know-how.
Managing director Enrico Piazza says: ‘We might not be able to compete on price, but we can on quality and production capacity. There’s also a quality of knowledge that the Chinese cannot compete on. It’s us that have invested over the years in new ideas, like silicon pastry moulds, stainless steel ice-cream scoops and hollow welded handles.’
Another form of heritage comes from the toy maker Nuovo Faro, which was founded 60 years ago. Its core product line has always been miniature versions of ‘adult’ kitchen accessories like coffee makers, ironing boards, tea sets and furniture. The items derive from a tradition, now largely disappeared, for children to be encouraged to help out around the house. For 10 years every new product was made in both adults’ and kids’ sizes, but from the 1980s safety concerns meant objects like mini-power tools had to be scrapped. Some of these child-sized items continue to be sold, though, such as coffee makers.
The Omegna area, visited by TI for this feature, has a tradition of iron working, metal and wood, making tools for the kitchen. Companies here now have evolved from a 19th century tradition of that used variety of metals from copper, silver and pewter, now mainly stainless steel.
As examples of this heritage, Alfonso Bialetti created the Moka Express in 1933, Renato Bialetti was the first to use tv advertising, Lagostina helped make the pressure cooker widespread in the 1960s and Girmi helped make electrical appliances popular in the 1950s.
What these companies have in common, apart from their family traditions, is quality of design and quality of production. In stainless steel, for example, one company cites the fact that the polishing of good steel alone, before any design or even cutting comes into play, can account for up to 80% of the total perceived value.
They value their heritage – many have their own museums or archives where products past and present, including prototypes, are stored. There is more to this than posterity though – having easy access to old designs can often help designers in current product development, not just for inspiration but also to be able to see what did and didn’t work.
A local industrial museum houses 15,000 items, including everything ever produced locally but also prototypes and sketches that never made it to the production line.
In the Cusio area, where many cookware suppliers in particular are based, the local cultural centre focuses on studying and conserving the local industrial heritage. Its museum houses many products considered to be historical objects and icons. The idea of the centre is that initiatives focused on local history can boost the image of the local industry and thus enhance buyer interest in products of the region.
Meanwhile, at the local industrial association, director Paolo Mastromo says: ‘There is a rich tradition of history and industrial heritage. It’s important to foster the history and the heritage behind the product and for us to promote Made in Italy. Behind the production processes are deep-rooted traditions to do with the culture, food and art of their region. These companies are a mirror of their place of origin.’
Davido Parodi, president of the association, says cheap imports over recent years have meant an inevitable shift of production from volume to quality, design led. ‘This challenge cannot be met by lowering prices. It about quality and durability and the products’ ability to cook well. We need to change everyday objects into objects of desire.’
But the focus on this heritage is not at the expense of technology. A project at the local university aims to develop the ‘pot of the future’ and Parodi says much of the strength of Italian companies is actually their enthusiasm for research.
The end result of all this seems to be, says Parodi, that some customers, fed up with the vagaries of customer service and deliveries from Asia, are returning to Italian suppliers. ‘This shows how the market’s changing, You can’t make a 10-year strategy any more, you have to be prepared to make changes every year if necessary.’
Italy’s main trade show, Macef, has been working closely with trade associations and suppliers to promote the ideas of Made in Italy and Italian heritage at the next show, in January.
Despite claiming to be either the biggest or second biggest show of its kind in the world, according to the time of year, the show sees value in focusing in on local production and is launching a new Gourmet section to promote the association of food – plus local culture, industry and handicrafts – with tableware.
General manager Paolo Taverna explains that the show will focus more than ever before on tableware because ‘tableware and housewares are among the most ancient of arts‘.
The spring show, at a new state of the art exhibition centre, will have a new slogan, Abita, con Gioia (Living, with Joy).
There will be a section called Shop Village, where suppliers will set tables to express different moods and give ideas to retailers for their displays.
All this will help local suppliers, says Taverna, pointing out that despite the mood of optimism, there are still obstacles for the industry to overcome.
‘There’s only so big a cake and it’s not getting bigger. Suppliers have to strengthen their positions by pushing their brand names higher. The main problem is the end of the chain, the retailers. Many shops have staff who are not able to present and sell well. Even in Milan you can see shops with windows crowded with everything. Consumers are not made welcome and assistants are unable to explain why a Chinese-made pan is cheaper.’
Memories and crafts
Marco Migliari, an architect and design lecturer who liaises with Macef organisers FMI, talks about how history gives Italian production an edge.
‘Italy’s regions are rather like businesses in that they bring together various skills, both industrial and craft related. Advanced technology and craft skills go together and make products more interesting.’
Many of them are family firms, which have helped the development of their own region, he says.
Foreign competitors are now trying to copy not just the design but also the craftsmanship. That’s the problem we face nowadays. We can’t deal with it by reducing prices, we need to work on the region’s values, the interactions between culture/industry, cuisine and tradition.
Some areas need to be more open to ideas, to innovate more. So we put designers in touch with companies to help them come up with new designs.
It’s the connection between the products and where they were made that make Italian design unique, believes Migliari. ‘It’s the history characterising certain regions that makes the product interesting, not made in Italy as such.
Local and hand-made production may be what makes Italian products unique in future. Quality is linked to history and memories, the link between craftspeople and their history. We want to create a relationship between designs and tradition to make a different way of looking at objects.’
Case study: Lagostina
One company is marrying its heritage with modern marketing communications methods to achieve its aim of becoming the number one high end cookware brand in the world in the next three years.
Lagostina began life in 1901 as a cutlery maker and later developed into cookware. It is now a leader on the domestic Italian market and has a strong position in some export markets, helped by becoming part of the French Groupe SEB cookware giant last year.
When seeking to expand its markets with an advertising campaign, the company decided to refer back to the core values espoused by its founder, Emilio Lagostina.
As international product director Mark Penrose explains: ‘People like to identify with a brand and in doing so they don’t want ephemeral things. Where consumers find real values in a brand, that’s what creates growth.
So in relaunching the brand we tried to put ourselves in the consumers’ shoes by remaining true to the dream of Emilio Lagostina, who stood for commitment and friendship. These are values that touch consumers emotionally, that give the brand depth and vision.’
The company sought to convey these values in its marketing campaign via an operatic soundtrack and imagery that depicts the ideas of art, music, family, friendship and cooking together – as Penrose puts it, ‘everything true and deep in Italy‘.
The aim is to make consumers deeply attached to the brand and in doing so to add a feeling of ‘chic’ to the otherwise dull cookware industry, thus revolutionising the shopping experience.
The response has been excellent, says Penrose. ’It shows enormous promise for the brand reputation. So far we have launched in the 26 countries where Groupe SEB has its distribution and are getting big listings in South European countries and are hard at work in Anglo-Saxon markets.’
ARTICLES ABOUT TRENDS
Three features on here, two in text form – in the process of moving everything to scribd.com
This feature discusses the return of dinner parties as an alternative to eating out, arguing that fine dining no longer has to be expensive. the new eating out
Published in Furnishing magazine
Amidst a great deal of ‘colonial’ and ‘ethnic’ style furniture, notable mainly for its similarity to other suppliers’ offerings, there were some eye-catching contemporary items at the annual Tendence Lifestyle show in Frankfurt in August, reports Susan Fenton.
Luckily for those seeking contemporary furniture, there was a special section devoted to his category, in the Interior Design section.
If there was a single identifiable trend it was probably ‘texture’, which showed up strongly in much of the new items on show, but even then there was a wide range of different textures, thanks to the many and varied mediums used. New products included leather, plastic, fibreglass, wood and metal.
Notable were the spangly fibreglass chairs from Finn Stone, red leather chaise longue from Italy’s Hi-Tek, a cunning chair disguised as a coat hanger from Germany’s Details and an unusual office stool from German supplier Aeris, which bounces up and down, and sideways, as the user moves about. And fellow German Muller [umlaut on u] Mobel [umlaut on o]‘s multifunctional Mobil line, made of 3cm lacquered sheet steel, can be used either as a table-cum-dresser or as a bench – in other words you can put things or people on it.
It was easy to avoid the more traditional furniture, as it had its home in separate Country Home and Bel Etage sections. But if you did stray into these areas, even here it was possible to find pieces that went beyond the conventional. For instance, massive hand-carved pieces from Hungary’s Art-Holz, which are individually made to order from a native tree.
Many of the suppliers had taken the ‘lifestyle’ route to presentation, offering not only furniture but also the accessories that go with it, ranging from rugs to bed linen to waste bins.
If there is no single clear trend, is there agreement as to what constitutes ‘contemporary’ furniture? The single word mentioned by most suppliers was ‘function’ – perhaps an obvious word to use in the context of furniture, but the idea is that while making products fundamentally useful, designers can explore forms that go beyond the conventional.
Finn Stone talks of a ‘vigorous greed for innovation in material and shape, and explosive colour combinations‘, with a belief that function can be achieved in even ‘weird and wonderful forms‘.
There is a very different answer from Germany’s Aeris, which says the purpose of contemporary furniture is to hone functionality to the extent that it improves the wellbeing of the user. ‘Our goal is to create an intellectual working environment which also allows people to be mobile – as nature intended. In order to be productive and at the same time enjoy a sense of well being, your body needs the freedom of natural mobility.’
Fellow German Accente also uses function to create fashion – its new Loft sofa collection contains 20 seating ‘elements’ ranging in size from 120 cm to 220 cm, which the customer combines to make their own ‘lounging place‘.
Sales and marketing manager Francois Benner said: ‘The living room will become more and more a private place, to read a book or look watch a film, while guests are now received in the dining room. So the style of contemporary furniture has to be classical and timeless, with comfort and design playing a major role in interior decoration.’
published in XOP International magazine
When we asked industry experts from both the USA and Europe to describe current growth in the garden accessories market – or ‘outdoor living’ as it is known – the word ‘phenomenal’ kept coming up. Susan Fenton finds out more about this growth and looks at some key trends in product design for this vibrant market
When the world’s largest housewares trade show adds a new category for ‘outdoor living’ products, it adds more evidence to the theory that the garden is becoming an extra room of the house, which is good news for garden accessory suppliers.
According to the organisers of the International Home & Housewares Show, held in March in Chicago, “outdoor living is no longer the sole province of those lucky enough to live in the world’s warmer climates”.
Phil Brandl, president of the International Housewares Association, which runs the show, said: “Outdoor living has grown phenomenally, along with the renewed emphasis on home, hearth, family and friends. People are taking their entertaining outdoors and as they move outside, they are taking their notion of indoor fashion and style with them.”
It is for this reason that the show added a new sector, Patio Park, which covered the patio, lawn and garden, and other outdoor products.
First-time exhibitor Southern Patio saw the show as a “new opportunity which will help is to expand our exposure”, said Gary Miller, president.
Also hoping to expand its market presence is Bradley Technology of Canada, which makes ‘smokers’ for smoking food, and is aiming to expand beyond its established presence in the hunting/fishing and gourmet markets and into the garden arena.
Cross-merchandising is an aim for several suppliers. For instance, getting product into supermarkets or into housewares stores was key for those currently selling into garden centres. And selling different product lines to existing customers, for companies such as Fiskars, which offers garden tools, resin furniture and outdoor pottery.
Market research company Mintel predicts that there will be continued growth in garden accessories. It estimates an annual growth in the American market of 3% or more, depending on the weather and the economy. The company explained: “One of the reasons for the interest in gardening is the fact that many Americans have expanded their living spaces to include the outdoors, making outdoor rooms, and moving a lot of their entertainment to the outdoors. This reflects in part the concept of ‘nesting’ or ‘cocooning’.”
Trade federation Gardenex predicts that the garden decoration sector will continue growing in the UK, too, after five years of steady expansion.
“The garden is becoming more a living room, decorated with furniture and lighting, than a place for planting,” said the organisation’s PR consultant Peter Evers. “Gardeners are buying more sophisticated products. They are also looking for traditional products (made of natural materials, for example) and for original and funny items to personalise their garden.
“There is also a trend for city dwellers to want to get back to nature. They decorate their balcony/terrace as a pleasant open-air place to live. New urban buyers of garden supplies have little experience and most are women between 30 and 40 years old. Consequently there is a demand for easy to use gardening equipment.”
Peter Marsh, director of the Garden Industry Manufacturers’ Association (GIMA), said: “Growth in this area has been phenomenal – even higher than the rate of growth in garden furniture, which itself is healthy.”
Sales of what is called ‘sundries’ or ‘dry goods’ in the UK rose by 10% last year and 20% in each of the two previous years and the association believes that a high rate of growth will continue.
Significantly, as accessories continue to rise in popularity, sales of plants remain static. “Plants used to form 50% of garden product sales but now it’s only 40%,” said Marsh. “It’s accessories where the new ideas are coming through and contributing to growth. People are spending time and money in the garden without actually gardening. The garden has become an outdoor living area.”
DIY centres are estimated to account for 37% of the garden business, garden centres 23%, the rest of the market being shared by supermarkets, hardware stores, mail order/catalogue shops etc.
The growth is attributed by Peter Marsh at GIMA to two factors – first the change in demographics which means that more middle-aged people (the keenest gardeners) are retiring earlier and have money and leisure. Second, the continuing boom in television gardening programmes, which have, said Marsh, a huge impact.
“A BBC programme once featured soil testing kits, which are normally a fairly slow-selling product, and our members were immediately inundated with requests for these products. Television has such a big influence – getting a product on a TV programme is better than advertising, by a mile.”
The future growth, said Marsh, might not continue to be as high as the 10% or 20% of recent years but it will certainly be above the rate of inflation.
“The demographics continue to be in the industry’s favour. And there seems no sign of television companies making fewer gardening programmes. The only thing that spoils it for the industry in this country is the weather.”
The other issue facing domestic European manufacturers, said Marsh, was the rising tide of low-priced but good quality goods from the Far East.
There are broadly similar trends in the rest of Europe. Erwin Vahlenkamp, director of Dutch supplier Beriva, said: “There is room for growth across Europe, though the economy’s not helping at the moment.”
He said a key trend at retail was the growing use of shops within shops. “As shops want to strengthen their offering of accessories, they don’t necessarily want to do this by simply buying products. We are having requests to build shops within shops, to recreate an entire product range and display concept inside garden centres and shops.” This is a trend also identified in the USA by Mintel, which says that many mass merchandisers are opening garden centres within their stores.
Daryl Palmer, director of Westwoods, one of the UK’s largest accessory suppliers, said: “The whole accessories market is a very diverse area and is expanding, particularly summer accessories like bamboo torches and oil lamps.
“People want more atmosphere, more ambience, in the garden especially when they’re eating outside. And they’re spending more.”
The industry, he said, has been growing strongly for about four years. “When people started moving away from plastic furniture they started upgrading everything in their gardens, and that really kick-started things. Once someone spends more on a dining table for the garden than they would spend on a table for the dining room, then they no longer flinch at spending for the garden.”
Palmer said there had been particular growth in “fun” items like fairies, dragonfly figures and so on.
Retailers agree about the growth in the market. Wayne Kelly, responsible for garden accessory buying at the Co-op (see separate article) said: “It is growing rapidly, thanks to the growing popularity of gardening, due to television programmes and the number of new home owners. The demand should continue to be healthy, with the strongest sales are in the more decorative areas such as hanging baskets, accessories and garden candles.”
What are the trends?
If there’s one thing that typifies the garden accessory sector it is sheer diversity. A walk round the garden halls at the recent Birmingham and Frankfurt shows revealed everything from copper-sculpted water features to bird feeders, from oversized flower pots to slow-burning real-flame candles, from a brick-laying device to a cooling neckband. But certain trends do emerge.
One key trend is for a ‘natural’ approach, either through the use of natural or authentic materials (whether water, fire, stone or wood) or through the use of products that are environmentally friendly. Peter Marsh at GIMA commented: “Natural stone is growing very fast, as are products that replicate natural materials, for instance concrete decorative items that have the appearance of wood.”
Ornamental Stoneware’s Simon Giraud said: “Painted stone is in decline, but the growth is in natural stone or stone with a metallic finish.”
Batu Bali’s founder Stephanie Little also says natural materials are important. The company uses volcanic stone, limestone, terracotta and soft marble in its range of mythical figures, water fountains, jardinières and other garden ornaments.
Swedish granite is the material of choice at Blatunga, while Rustic Earth says that about 40% of its range of artefacts such as urns, busts and water pumps is genuine antiques. Director David Oakes said: “Some people want the genuine article even if it costs more.”
Oversized pots, he said, were very popular, a sentiment echoed at Capital Garden Products – both companies boast pots measuring 1.2m or more in height. Oakes said: “This sort of thing has real pulling power at retail because it’s not every day you see such a large item.”
Water is another popular natural material. According to Simon Hughes at MA Direct, UK distributor of South Africa’s Focus Features, which offers lightweight fibreglass ponds and water features, “water is the biggest growth area in the garden. It’s been promoted so much on TV programmes, which have really opened people’s eyes to how easy it can be to install.”
The material of choice at Quist is copper, which is used to create delicate, realistic-looking sculptures of creatures like dragonflies, and trees, which can form part of a water feature.
And Dutch supplier Polly’s Wonderproducts has a device that turns water into mist, enabling consumers to create atmospheric water features indoors or out.
The use of real flame is very big. La Hacienda’s Ecoblocks combine this trend with an environmental concern as they are treated logs that burn slowly down. Director Simon Goodwin said: “Natural flame is very popular – it’s much nicer than using electric light and the market is definitely growing.”
Other environmentally-friendly products included the Slug and Snail Gizmo from STV. As part of a range of pest control products, the Gizmo is a new item that enables the user to pick up slugs and snails and remove them from the garden without either touching them by hand or killing them.
And CJ Industries has a special applicator that enables salt to be applied to the roots of weeds, drying them out and killing them without the need for pesticides.
Neal Courtene-Jones said: “There’s a lot of environmental concern among consumers over the use of toxic weed-killers.”
Mark Wassell, area sales manager at Magnet (George Buckton), which makes bird feeders, agreed. “We’re seeing a great care for the environment and this is making bird feeders a huge growth area. Sales are growing rapidly.”
Interestingly, though, despite the move towards natural materials, resin is said to be a growing market too. Geoff Lewis, managing director of Henri Studio, which offers decorative accessories and figurines, said: “Resin is lighter so it’s good at retail because it can sit on a shelf without the shelf collapsing. Its ease of merchanding is a great bonus.”
Question was also cast over the popularity of natural products by Daryl Palmer at Westwoods. “I’m not sure people do prefer natural-looking products. Artificial materials can be very popular. There is big growth in LED lighting as the price comes down significantly due to technical advances.”
Another trend is products that tell a ‘story’ through characters or relate to spiritual or historical matters.
Ornamental Stoneware offers a range of Easter Island figures and a new range of oriental-style characters called the Retrievers. Fictional characters, they each tell a story with religious or spiritual overtones. Simon Giraud explained: “People are very interested in calm and tranquillity – there’s been a lot of interest in feng shui, for instance. This season we are focusing on oriental and mystical themes.”
The Olde English Bronze Company offers a range of six bronze figures, called Hoblins, retailing at up to £895 each. Designer Julian Jeffery said each character has its own ‘story’, which appeals to the growing number of consumers who are looking for ‘something different’ and don’t mind spending a lot to get it.
The theme of authenticity and spirituality is lightened by some more gimmicky and fun products. For instance, the Crazy Daisy from Germany’s Special Design Products, a plastic daisy that sits on top of a garden spray hose and that swivels and dances amusingly under the pressure of the water.
The idea of fun is also reflected in licensed character products such as the Disney Garden range, weatherproof figures and birdbaths that can be used outdoors or indoors.
GIMA’s comment that being in the modern garden does not necessarily mean gardening is backed up by the selection of products in the Outdoor Vision trends section at the Frankfurt Ambiente show in February. This section, which selected trendy new products from various suppliers, focused on the idea of the garden as a place for leisure rather than work, with a wide variety of seating from bean bags and bar stools to lounge chairs, hammocks, cushions and faux rocks and capacious wicker seats. Many of these were products you would not necessarily expect to find in the garden – they could equally well be used indoors.
But there are some products that offer pure utility. A good example was the Bricky, from the Drywall Emporium, which is a product designed to help amateur gardeners build brick barbecues without making a mess. “It’s every gardener’s dream,” said chief executive Noel Marshall. “It enables you to do a job simply.”
Another utilitarian product is the Cobber, a cooling neckwrap from Bodycool Industries, which is also said to be ideal for active gardeners during hot weather.
Lighting, of course, a utilitarian product type, continues to be of great interest with more money being spent on this type, according to Gareth Pritchard, director of Western Wood. “The cheap end has slowed down. People are starting to appreciate patio lighting and they want something that will last, so they are prepared to spend money on them.”
Trends around the world
Some of the strongest sectors are gifts and decorative ($1.65 billion), containers ($1.31 billion), lawn decorations ($851 million), (water features $720 million) and outdoor lighting ($550 million); these are some of the forecast sales figures for 2004 published in a recent edition of Nursery Retailer. According to a survey by Garden Center Merchandising and Management the top 10 hard goods sold in garden centres are (in descending order) containers, mulch/fertilisers, statuary, seasonal products, wind chimes, fountains, pest/disease control, giftware, trellis/arbours, garden tools. This is the largest market for garden products. Sales of garden products in the US have seen strong growth in the last 10 years with leading home centres and discount stores taking an increasing share of the lawn and garden market. Nursery retailer puts Home Depot at No. 1 with sales of nearly $8 billion.
A report from 2002 says the strongest hard goods sectors are garden furniture (E1.2 billion), Power garden tools (E784 million), garden stone (E980 million), garden wood (E600 million), garden buildings (E596 million), pots/containers (E631 million) and ponds and equipment (E316 million). Germany remains the most important European market for garden products. As elsewhere, the DIY retailers and discount stores have been increasing their share of the market.
The 2003 Promojardin report puts the market at E5.8 billion. France is the second largest European market for garden supplies, accounting for about 25% of the total European turnover in this sector.
Between 1998 and 2002, the French market for garden supplies increased by 21%. During this period, the best performing sectors were garden decoration and leisure goods, fertilisers, motorised cultivators/lawnmowers and fencing products. In 2002, the market rose by 6%.
In 2003 VBTB estimated the market at E2.5 billion. Stone in the garden and decorations, pond products, garden furniture and wood in the garden are all strong product areas in the Dutch garden hard goods sector.
Market data from Gardenex
Story D [this story can be cut as much as you like - I include it in full as it is quite interesting]
Research by Mintel sheds light on the changing nature of the garden market. We asked Mintel some questions about the American market, which is so often an indicator of what will happen elsewhere.
Why the growth in gardening?
Gardening is closely related to home ownership and type of home. In 2003,
home ownership was at an all-time high, at almost 69%, and numerous people – often women – lived alone, with ample gardening space. Even those without gardens often have access to decks, patios, and other outdoor spaces, an important consideration for manufacturers and retailers.
The typical gardener is white, female, aged 45 to 64 and with an annual household income of $75,000 or more. This bodes well for the future of gardening, as Baby Boom women either fit the younger age bracket (45 to 54) or are transitioning into the older one (55 to 64).
The continued growth in the number of households and in home ownership levels provides a slow, but steadily increasing base for gardening product sales. The gardening market is forecast to increase 21% at constant prices from 2003 to 2008 as homeownership rates continue to increase and consumers increasingly focus on improving their outdoor living space.
How big is the growth?
The gardening industry grew 35.1% between 1998 and 2003. The growth has varied yearly, partly because the industry is tied to economic factors and the weather. Sales can also be influenced dramatically by personal factors including income and time pressures. The growth from 2002 to 2003 is estimated to be 2.9%. This is higher than for related products such as power tools and barbecues because during difficult economic times or extended periods of bad weather, consumers may postpone buying an outdoor grill or power mower, and refrain from doing extensive plantings, but are likely to continue the upkeep of the outside of their homes.
Although DIY lawn/garden care and professional garden services both increased in 2003, sales of plants, seeds and bulbs were lower as many gardeners decided to maintain, rather than improve or enlarge, their gardens.
Where do consumers buy?
Competition is stiff, and the home centres and mass merchandisers, which have expanded their garden offerings, have taken a significant hold of this market as shoppers migrate from garden centres and traditional feed/seed stores. Consumers often combine their purchases of garden supplies with purchases of tools, decorative items, and other products, thus they may feel better served by hardware stores and mass merchandisers, which have wider selections.
A growing number – 52% – of households shop for gardening supplies at home centres such as Home Depot and Lowe’s, at the expense of hardware stores.
48% shop at mass merchandisers, such as Wal-Mart, Target and Kmart. The increase in sales through mass merchandisers reflects the fact that retailers saw the potential for increasing sales their during peak gardening seasons and expanded the space devoted to these products.
43% shop at garden centres, usually small local operations. The income of garden centres/nurseries has declined and some have been put out of business as consumers do more of their garden shopping in other channels, in which they are able to buy a wider array of other products as well. In order to remain viable, some nurseries and independent growers have expanded their offerings of lawn furniture, garden accessories, gardening-related books and gifts, crafts, Christmas decorations and food.
33% shop at hardware stores.
21% shop at supermarkets/drug stores, which stock garden supplies to attract impulse shoppers who are there for food shopping.
14% shop at seed/feed stores, many of which deal in bulk products and may not provide the service or smaller packages desired by home gardeners. But they have retained a loyal shopping public until 2002, when the percentage of households using these outlets fell as consumers used other outlets.
8% shop via mail order. The popularity of mail order has decreased since 1998, due to the growing availability of garden products through other channels.
Consumers also purchase garden supplies and plants directly from growers through venues like farmers’ markets, while, at the other end of the spectrum, high-end department stores feature garden centres.
Most of my interviews that were on here are now at scribd.com – please click on the link from the main Published Work page to see them.
Meanwhile, below are a couple of articles in text form that I have not yet scanned as PDFs from the magazine pages.
An interview with the owners of London store lifestyle store Skandium
Published in Canadian magazine Retail News Canada
Imagine having to close your flagship city centre store because the landlords had imposed unacceptable new rent conditions, then having to carry out a costly refit of your new premises, and then having to have the street closed to traffic so the unwieldly 10m-long floorboards for the new store could be got off the truck and through the door!
It’s a scenario that the owners of London’s leading Scandinavian lifestyle store, Skandium, have recently had to cope with. It was, as marketing director Chrystina Schmidt put it, “rather exciting”!
Skandium had been at its present site, a stone’s throw from London’s major shopping area, Oxford Street, since it was set up in September 1999. But the high cost of renewing the lease made the owners decide to move to new premises not far away and, after a total refurbishment, the store was due to open on May 4.
Chrystina says the task of opening on time and within budget was a huge challenge and one that involved long hours and lots of planning, but she says the result, thanks to shop designers Lewis-Granaiola and contractor Cheshire Contract, is “fabulous”.
At 400m2, the new store is double the size of the existing one and will enable the business to stock a far wider range of product.
There will be glass from Swedish glass works Orrefors and Kosta Boda; and tabletop from Boda Nova, Eva, Menu, Rosendahl and Stelton. Skandium will also offer furniture, fabrics, wallpaper, fitted kitchens, lighting and jewellery, all from Scandinavian designers.
And the new store will feature shops-in-shop for houseware brand Iittala and the blind, rug and furniture supplier Woodnotes.
The Skandium story started after Chrystina, a photographer from Finland, and Magnus Englund, her partner, a fashion retailer from Sweden, moved to London and spotted a niche for a store selling design classics and contemporary items.
Scandinavian products, says Chrystina, have an allure that comes from their social and historical context. “Functionalism and simplicity was used to improve the welfare of the people. They are well made and ergonomically sound yet beautiful, witty and colourful.”
Magnus and Chrystina went into partnership with Christopher Seidenfaden, a Dane. Their aim was to offer a complete lifestyle presentation retailing furniture, lighting, glassware, ceramics, textiles, kitchenware, books and magazines.
Money was tight, says Chrystina, so “we improvised and did it on a low budget. Our target customers were people who would be used to high standards in all aspects of their lives and we were terribly nervous about whether people would accept a low-budget shop with high-profile design classics.”
Their inspiration was Paul Smith, the fashion designer. “His clothes have quirkiness and personality, and his merchandising is entertaining and accessible. We wanted the same accessibility. We mix merchandise in a way that’s pleasing to the eye, such as magazines and sweets with china and glass design classics, kitchenware with toys and lighting.”
There is a strong visual and conceptual resemblance to Ikea but Skandium’s prices are at the high end. The store’s strength, says Chrystina, is that its merchandise has a story to tell. “They are made by a certain designer or created for a certain project, so the products are not anonymous.”
While Skandium features contemporary products alongside design classics, “we don’t do fashion”. Best-sellers include items that were designed decades ago, such as the Alvar Aalto vases.
After getting established as a retailer (and finding it had, and still has, little direct competition) Skandium expanded into contract work and interior design services and has launched a wedding list service.
It has also opened shops-in-shops in the department store Selfridges in London, Manchester and Birmingham. As UK agent for the Finnish textile brand Marimekko it also operates a standalone Marimekko shop.
Skandium employs 30 staff and Chrystina says the ideal employee is someone “well-presented and well-spoken, who’s willing to muck in and can keep calm when five things are happening at once”. They also need to be able to build up a rapport with customers. “Good retailing is not just selling. The sale comes out of a relationship with the customer.”
Chrystina’s attitude to customer service is that: “If anything goes wrong we try to resolve it, but I don’t believe that the customer is necessarily always king.”
Chrystina cites the case of a customer who took two years to collect a customised rug for which she’d paid a non-refundable deposit (the shop staff had tried for a year to contact her), and was then indignant because it had been sold to someone else.
As a newcomer to retailing, Chrystina was “shocked” to find out how much work was involved. “It was 24 hours a day, seven days a week and it knocked us out. But it’s very exciting and it’s a fantastic feeling when customers say they love what we are doing.”
The company is considering franchising the Skandium concept abroad if suitable retail partners can be found.
A Q&A format interview published in XOP International.
Barbecue market is hotting up
Increasing the current growth in barbecue sales at retail without relying on the weather as the only way of maintaining consumer interest is the job of Richard Board, category controller of the gardening business unit at British DIY store and garden centre chain Focus DIY. He talks to Susan Fenton.
Is the barbecue market growing?
Yes, we have seen significant year-on-year growth, particularly this year.
Is the growth due to the long hot summer?
It’s not totally due to the weather. It’s also influenced by people’s lifestyles, by their desire to live out of doors and create a living area outside the house. People want decking, lights, wooden furniture, planters, shrubs – it’s an entire ambience.
What is causing this interest in the outdoors?
I think it’s possibly due in large part to the extensive press and television coverage about cooking and outdoor lifestyles in general. It’s made people more aware of the potential of their garden as a living area.
Can the growth be sustained?
Next year we are looking to maintain a similar level of growth that will not be dependent on the weather but will be caused by innovation. If we kept our range the same every year sales would not rise unless we happened to have a really hot summer again, so it’s important to plan something quite innovative.
What can you tell me about those plans for innovative products?
It’s commercially sensitive so I can’t give details, but what I can say is that we will be trying to offer aspirational products. If you look at the basic barbecues that have been on sale this year, there were very few fashion-led, aspirational, ones, and that is something we are going to see more and more of, particularly in terms of shape and colour.
What price range do your barbecues cover?
Entry level is about £39 and they go up to £200. There’s certainly potential in the market as a whole for even more expensive products but that would be moving away from what we’re about, which is catering for consumers right across the board. For us, there’s no such thing as a ‘typical’ consumer.
There are a lot of really big barbecues around. Are consumers trading up?
There’s no doubt that there’s a market at the top end. This year we had a five-burner gas barbecue selling at £200 and we were very pleased with the sales – it sold out. It showed us that for many consumers, £200 is not too much to pay.
Having said that, our customer base cuts right across the board, so all types and sizes of barbecue sell well. There’s certainly demand for entry-level products. We have high sales both at the top-end and at entry level.
But we won’t be doing the five-burner again next year – we felt it was a step too far because there are only so many people who would find such a large barbecue desirable – at that size it’s almost a professional cooker. But we will be doing two-, three- and four-burner products to appeal to those people who want something more sophisticated than the standard lead-in price barbecue.
Is the trend towards gas instead of charcoal?
We have gradually seen more and more gas barbecues, and by value gas is a higher proportion, but of course this is because gas barbecues cost more. People are very interested in the appearance, the ‘surround’ of the barbecue – they see it as a piece of furniture. For these consumers it’s the look of the thing – they want an attractive piece of furniture with a function. What is interesting is that there is a move towards having a nice barbecue fuelled by charcoal because many people prefer the flavour of charcoal-cooked food – and you tend not to get a flavour with gas.
How do you predict trends?
We look at our own experience of what has been selling well, we take advice from our market research people and when we visit suppliers we take their advice. Some suppliers are better than others at trending, particularly the big global suppliers, who tend to be better at it than the smaller ones. Overall, all this gives us a pretty good idea of what the trends are going to be.
Do you buy existing ranges or have your products made especially for you?
We tend to buy existing designs, but we might have them modified, for instance by adding an extra hob instead of a cooking tray, or changing the height of the trolley. Fundamentally, the first designs come from the supply base.
How many suppliers do you use, and which ones?
It varies but usually no more than five to keep it manageable. I can’t tell you who they are as that’s commercially sensitive, but they tend to be a mix of British and foreign suppliers. By buying abroad we get the savings from buying direct, but it’s important to have the flexibility of a British-based supplier because this helps us manage demand better as they have stock on hand and so can deliver very quickly if necessary.
How do you choose suppliers?
Barbecues are like any other product in this respect. We are looking for someone that shows innovation, that offers the right quality and offers workable price points that give us enough margin. And we need to be sure that they will deliver on time.
At what time of the year do you buy?
We select the range in late summer for delivery from January onwards.
How do you promote barbecues to the public?
We don’t market the benefits of barbecue ownership as such – that’s up to the manufacturers and suppliers to do, and they seem to do a good job at it. Certainly, their activities help retailers like us in terms of increasing awareness of the market. What we do at retail level is photograph the products in an aspirational way and make sure customers know we offer value for money in all our product range.
Focus Wickes is the second largest UK DIY retailer in terms of turnover. Through its Focus and Wickes branded stores, the group offers an extensive range of home improvement products to both DIY and trade customers. There are 282 Focus stores around the UK.
Focus aims to be the store of choice and convenience for DIY and gardening products in each of its local markets. Focus stores target DIY customers seeking to undertake light home improvement and maintenance projects and offer a comprehensive range of DIY and gardening products.
Products from its gas and charcoal barbecue ranges are included on the company’s website, which allows consumers to buy on-line.
This pdf is typical of the regular news sections I produced for Progressive Party magazine.
The link at the bottom of this page takes you to just one of the daily news bulletins I wrote while working for six months at Newsco Insider. Once on the website you can search for any other bulletin up to the end of March 2010 – I did all of them with a couple of exceptions for days off.
To save you following the link, immediately below is a typical example of the stories I did for the bulletin.
Potential for more deals in food sector, says dealmaker
St Albans-based Premier Foods’ £205m sale of its meat-free business and the ongoing saga over bids for Northern Foods have highlighted the potential of deals in the food sector. That’s according to dealmaker Russell Healey, a partner at Sevenoaks-based private equity investor Foresight Group. He told Insider that about ten per cent of current deals are food-related in some way.
And while not many deals are as large as the Premier or Northern deals, there are interesting opportunities to be found as owner-managed businesses come through the downturn, he said.
Healey cited the example of Hampshire-based organic baby food company Plum Baby, which grew by 30 per cent per year, while Foresight was investing in it before selling it to Darwin Private Equity.
“It’s businesses like this that we’re interested in – movers and shakers in a fairly moribund market that’s otherwise about unappetising bottles and jars.”
Healey thought the statement by Quorn purchaser Exponent and how it intended to expand the business could mean further acquisitions on its part, which would further raise interest in the sector.
The criteria for Foresight to invest in a business, said Healey, were a fast-growing business with a strong brand, product differentiation, a niche market and a passionate management team.
“Of the 40 to 50 deals we see per month a good chunk – probably four of five – are in some way part of the food sector eco-system,” he said.
Healey believes there has been a marked improvement in the quality of deals coming through, in all sectors. “Twelve or 18 months ago we were seeing distressed situations, with companies looking for emergency funding, wanting to take money out without necessarily having a desire to grow the business.” And to an extent, he observed, the Quorn sale is “more about cleaning up the balance sheet than investing for growth”.
But, he added: “What we’re seeing as a theme increasingly now is entrepreneurs looking for cash out – seeing an opportunity to de-risk their personal situation by bringing in institutional investors and taking advantage of the entrepreneur’s tax relief. They’re not trying to get out altogether – typically they want to sell a quarter to half of the business and take some cash out while still investing some to grow the business.”
Healey said some private equity firms were “nervous” about such opportunities, fearing the business owners lacked confidence. “But we find that as long as we do the due diligence, that’s no reason to be put off. Some of these opportunities can be quite successful.”
There was also a growing appetite for smaller deals, especially in situations where the businesses concerned had been unable to get bank funding.
“The banks have been sitting on their hands to a certain extent – though they’re starting to come back. That’s helped us with our £15m planned exit fund, which wouldn’t have done as well as it has, had the banks been operating as they were two or three years ago.”