It is impossible to look at catering equipment supplier Nisbets’ business without seeing big numbers.
The turnover of the company now exceeds more than £230m a year, it trades with 500,000 customers around the world, boasts a portfolio of 20,000 product lines and employs 700 staff. And all this from a business that started out in the back of a car boot when Andrew Nisbet spotted an opportunity to equip local catering students with aprons and basic chefs’ tools.
The story of its growth over the past 30 years would be impressive in any sector, which is probably why nobody else in the catering equipment supply market has ever been able to match it for sheer scale.
Yesterday the company opened a new chapter in this tale by acquiring a controlling stake in Gloucestershire-based Space Catering (UK) Ltd, a move that brings further diversification to a business that is already famously multi-channel.
Nisbets made its name in catalogue sales, showed that it was possible for a direct mail company to transcend its success into the e-commerce world, and, more recently, invested in establishing retail stores in the UK’s biggest cities. It also has wholesale operations in the shape of RB Distributors and Uropa Distribution, which supply to the trade. The acquisition of Space, in theory, now provides it with a new string to its bow: a route into scheme work and fabrication.
In many ways, it could be viewed as the next logical step in its UK journey. Nisbets has mastered the volume catering equipment game like nobody else and its model of providing customers with an easy way to source the catering products they need, at a competitive price and as quickly as possible, is tightly honed.
The acquisition of a design and project delivery business provides it with instant access to a different tier of the market that would have been painful to get into organically.
Will it be an isolated investment or does it mark the start of a wider acquisition strategy within the distributor sector? History would suggest it’s the former, but as a cash-rich company it clearly has the financial clout to be in charge of its own destiny.
The fact that Nisbets doesn’t have an incumbent distributor business of its own to fold Space into could actually work to its advantage. While Space founder Mike Mellor will leave the company in the summer, the rest of the senior management team, including Ian Bidmead and Louise Chuter, are set to remain in place.
Bidmead yesterday stated that Nisbets will run the business at “arms length”, which suggests it recognises the value of retaining the identity and stability that have brought the distributor to where it is today. That can’t be said of other acquisitions that have taken place within the sector over the years.
Is Space’s project and turnkey capabilities the defining factor in Nisbets’ decision to splash the cash? Probably not. The opportunities it brings in terms of customer acquisition and cross-selling is surely just as compelling.
Space’s client list includes names such as Tesco, Wetherspoon and a raft of big operators and kitchen buyers from across the leisure, education and B&I sectors. Nisbets must be licking its lips at the prospect of potentially selling tableware, supplies and sundries into this base.
Equally, when customers visit its stores or call its telephone lines asking for help with a new kitchen, it’s got a readymade place to send them.
The concept of a volume-heavy player like Nisbets owning a distributor operation is by no means unprecedented — its nearest rival Lockhart has had its own design and project business for years — but it once again serves to show that the perceived structure of the catering equipment market continues to be challenged by those looking for growth.