Acquisitive Middleby seeks chain reaction

Selim Bassoul

Foodservice equipment behemoth Middleby recently dipped into its war-chest to acquire two international catering equipment brands that it believes will provide major benefits for chain customers worldwide. FEJ investigates the rationale behind its actions.

With close to 50 foodservice brands under its burgeoning umbrella, the Middleby Corporation has a pretty solid handle on most categories of the catering equipment market. So much so that one of the most fascinating statistics trotted out by the company is that its products can be found in one of every three restaurants around the world.

The US-listed giant prides itself on its ability to “perpetually disrupt” the industry with advanced cooking innovations that deliver speed, energy savings and green benefits, and central to that is an aggressive but carefully measured inorganic growth strategy.

Middleby is among the most acquisitive — if not thee most acquisitive — manufacturers in the industry and its latest investments reveal a clear intent to provide global restaurant customers with a fully joined-up approach to kitchen equipment procurement.

The purchase of Italian refrigeration manufacturer Desmonis particularly interesting in the context of the need for multi-site operators to be able to prepare, hold and serve food in a consistent and speedy way.

Selim Bassoul, chairman and CEO of Middleby, says the Nusco-based outfit’s technology will fill an important gap in its portfolio and allow it to provide a much more compelling offering to chain accounts.

“Blast chilling offered by Desmon is complementary to our combi oven platform to establish a complete cook/freeze system which increases the efficiency of the kitchen and saves on food costs,” he explains. “Opportunities to combine their undercounter refrigeration lines with Middleby cooking lines to make an integrated preparation and cooking system are particularly appealing to our global restaurant chain customers.”

According to Bassoul, blast chilling is becoming a much more important concept for foodservice operators looking to safely preserve or instantly prepare food without compromising the quality of the final product.

“Our customers are now focusing more and more on fresh and healthier menu items,” he says. “Blast chilling fits well into that growing trend and it is a disruptive way to rapidly freeze food retaining all of the nutrients.”

Desmon, which makes annual sales of around £10m a year, has always specialised in chilling and freezing equipment for the foodservice market, gaining a reputation for its advanced insulation technology and energy efficiency.

Its offering is one of two that Middleby is currently in the process of integrating into its portfolio after the company also moved to snap up Goldstein Eswood, a leading commercial equipment manufacturer from Australia with a turnover of £16m.

That deal is also set to have significant implications for the company’s chain customers around the world.

Opportunities to create an integrated preparation and cooking system are particularly appealing to our global restaurant chain customers”

The Goldstein and Eswood brands are well-established in the Australian and New Zealand markets, featuring in many top restaurants.

Goldstein manufactures a broad line of commercial cooking equipment including ranges, ovens, griddles, fryers and warming equipment. Eswood is a leading manufacturer of dishwashing equipment for the commercial kitchen.

“This acquisition significantly expands the Middleby manufacturing, sales and service capabilities in the Australian and New Zealand markets and enables us to better serve our customers, including the global restaurant chains,” says Bassoul. “We will continue to serve the local market with these brands, while we leverage their established sales and service offices for all Middleby brands.”

Lebanon-born Bassoul has been with Middleby for almost 20 years, taking over as CEO in 2001. His management style is known for taking calculated risks and pushing the envelope of innovations that have changed the industry.

He began his tenure at Middleby by narrowing the focus of the product line to just cooking, then showed a belief in his products by offering customers a 90-day ‘no quibble’ warranty. Since then Middleby’s sales have risen from $101m (£66m) when he took over to more than $1.4 billion (£915m) today.

Along the way, Middleby has introduced cooking innovations such as ‘kitchen of the future’, waterless steaming and touch screen controls. In a recent speech at the Baron Funds Investment Conference, Bassoul spoke about the legacy he hoped to leave at Middleby, including low-cost products that can cook food, charge mobile phones and purify water for the four billion people who live in poverty.

And as the company looks to expand the relationships it enjoys with restaurant chain customers, expect the acquisition of more product specialists in the not-too-distant future.

Selim soundbites

Words of wisdom from Middleby CEO Selim Bassoul during his keynote address at the recent Baron Funds Investment Conference.

— “It doesn’t matter what tools you have, you can succeed. Lead with compassion, leave a legacy.”

— “I had to do something with the way we did business. I decided I was going to disrupt. In 90 days we got rid of everything, and we started looking at cooking. I wanted to help people succeed. We have changed cooking and transformed the business.”

— “Competition is always important. They try to catch up with us but it is difficult. My challenge is that our industry is slow to adapt. The biggest trend for us is water…water is the next oil. It’s going to get very expensive, restaurants use a lot of water, so we created a waterless steamer that steams without water.”

— “The next challenge is waste management. We are introducing a product that will take food waste and make it compost or biofuel, and it is very cheap, the payback is less than six months.”

Latest acquisitions

Desmon FSE
Based: Italy
Sales: £10m
Specialist areas: Chilling and freezing technologies
Website: www.desmon.it
Twitter: @desmonspa
Founded: 1994

Goldstein Eswood
Based: Australia
Sales: £16m
Specialist areas: Cooking equipment and dishwashers
Website: www.goldsteineswood.com.au
Founded: 1911

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