‘Our products are desirable and the retailer can make money’
Italian appliance brand Bertazzoni’s split from distributor GDHA left many debating its motives. Tim Wallace asks CEO Paolo Bertazzoni (pictured) and UK and Eire managing director Maurizio Severgnini why changing its route to market was necessary and whether the move is paying dividends
The origins of Italian kitchen appliance manufacturer Bertazzoni go back to the 19th century when founder, Francesco Bertazzoni, was on a draughty train through the Alps and noticed wood-burning stoves were being used to keep passengers warm.
He seized on the idea, and by 1909 his sons had built their own factory in Guastalla, near Parma, eventually going into mass production using techniques first seen in the motor industry.
The company has come a long way since then, now producing not just full-sized cooking ranges but built-in wall ovens, gas, electric and induction hobs, hoods, fridges and dishwashers. Last May, it also took the bold move of ending its distribution agreement with GDHA and setting up a permanent UK subsidiary in the Wirral.
But as I sit down to chat with chief executive Paolo Bertazzoni and UK and Eire managing director Maurizio Severgnini, it’s those continued links with the automotive industry that the company particularly prides itself on. “Cars are part of our tradition in this part of Italy,” Mr Bertazzoni tells me. “There’s a shared culture. Some of our engineers have worked in the Ferrari factory – it’s only 40km from here. They brought with them part of that experience. We all know about Ferrari, Maserati, Lamborghini, Ducati… it’s a land of engineering.”
The relationship even goes as far as agreeing a deal to use a superior type of paint normally only used on Italian cars. “We were not happy with the quality of the kitchen industry standards,” Mr Bertazzoni reveals. “The result was a slight orange peel effect, but the automotive paint was giving us a much better result.”
My meeting comes as the pair develop ambitious plans for the UK, despite continued uncertainty over Brexit. They’re also happy to explain the reasons behind their split from GDHA and why they believe the Bertazzoni brand has a bright future in the UK…
Q: Why did Bertazzoni set up its own UK subsidiary?
Paolo Bertazzoni: We had a good relationship with GDHA, but we needed to align the strategies of the two companies and it was not easy. We want to come closer to the end user. It’s very important for us to achieve that by having direct access to the market.
Maurizio Severgnini: In the past three years, the brand has performed reasonably well, but we weren’t able to achieve its full potential in the UK. So we took the strategic decision to open a UK subsidiary. My appointment as MD, last May, coincided with that. We’ve also opened subsidiaries in France, the Nordics and the Netherlands.
Q: Did you feel like a small fish in a large pond with GDHA?
PB: Yes, certainly, being two manufacturing companies with different history and positioning. We felt we had to go upmarket to stay on a certain level of price, positioning and customer. It wasn’t easy for us to convey our strategy to them.
Q: What impact is the decision having?
MS: We now have an HQ and showroom in the Wirral, and our own team that can directly service the market. And, most importantly, we are now having direct conversations with our trade partners and consumers.
The numbers for us in the UK still have room to grow, but some of the dealers who’ve come on board with direct accounts have delivered, in a few months, the same turnover that they did in the whole of last year. It’s proof that our strategy is the right way forward.
Q: Are you hoping to grow your UK retail network? ]
MS: We already have around 80 dealers with direct accounts, but then there are those that sell the brand less frequently and buy through distributors. The target is 150 dealers, but equally we’re also talking to some distributors to give us the reach. It’s all about coverage in the right places. We don’t want to be market leaders.
PB: The route to market is a very clear commercial policy, so all the interests of our dealers are respected. We do not need to push a huge amount of product and sell it whatever it takes. We sell it because our products are desirable and the retailer can make money.
MS: We create a demand and dealers appreciate adding value to their business by dealing with us. We have a very clear commercial strategy, enabling our business partners to earn the correct amount of margin for the products. Which is not the case with many other brands in our market.
Q: Where do you see the biggest potential for the brand?
MS: Just looking at the range cooker category, where we are strongest, we don’t have total territorial coverage yet, which means there are plenty more consumers that have the opportunity to access our brand. We will retain our core focus on range-cooking appliances, but also have plans to expand our presence in the built-in market, both in the UK and worldwide.
Q: What’s your view on Brexit?
PB: I think everyone will come to their senses. The disadvantages of breaking up are so clear that nobody will go down that road. Neither party could afford it. Hopefully our politicians will find a way to make it work for us as businesses and for us as people.
We’d have been better to stay together, but that is just my opinion. I know Britain is an island and has always had a very independent approach to things. I’m sure this is a serious setback for us, because the influence of Britain was very important and very fruitful. So we’ll see how this will develop.
Q: Some appliance suppliers, such as Smeg, are saying things won’t improve for three or four years…
PB: For us, growth is possible. For people, or companies, that have been in the UK, like the German brands, and Smeg of course, there are more uncertainties. But we have progress ahead of us.
MS: We’re now starting to put our roots down and we’ve got plenty of growth to come. Normally, in a storm, it’s the big trees that suffer. The little ones survive. We don’t ask the retailer for a massive amount of capital expenditure. We don’t tie up their cash in stock, on products that might sell or might not. There are a lot of benefits in dealing with us. It’s not just the discount you give, it’s the total package you offer. And in a world where competitors are pushing volume at all costs, which creates pressure on the margin a retailer can make, it gives a reason to choose Bertazzoni.