Philippa Turrell talks to MD Stephen Johnson about record sales and its 24-carat gold tap
Few companies would let the marketing opportunity of an anniversary slide by unnoticed, but that’s exactly what happened to Quooker UK. Last year marked its 10th year of trading but it has taken nine months before the business has even had chance to recognise and celebrate its achievements. Managing director of Quooker UK, Stephen Johnson explains just how busy the company has been: “We had an exceptional year last year. We grew at 35%. We delivered in excess of 15,000 pieces. This year has been record growth again. We are 45% up to the half year, so we are projecting in excess of 23,000 units this year.” He admits these figures have far exceeded his expectations, adding: “When you don’t know the market potential and what segment this will occupy, it’s very, very difficult to predict. We can look at the parent company, in Holland, who supplies 30,000 units to a population of 19million. So, it says there is great potential here. But, yes, it surprised me.” Now, to commemorate the milestone, Quooker has just launched a limited edition, 24-carat gold finish for its Fusion taps and matching soap dispenser, with only 250 models available.
Establishing the sector
Owned by celebrities such as James Dyson and Nick Grimshaw, the family-owned Quooker business was established 25 years ago in the Netherlands. It created a patented method of delivering boiling water, which was originally designed to replace a kettle. The point of difference, Stephen Johnson explains is that water is kept pressurised in a stainless steel vacuum and delivered in an aerated flow to prevent burns and scalds. And although, Quooker wasn’t the first to the UK market with a steaming hot water tap, it remains one of the only models to deliver water at 100C.
Quooker has worked hard in developing the steaming hot water sector, introducing the product’s features and benefits to consumers. So much so, the steaming hot water tap sector now boasts around 16 players in the market. But does it help having this amount of competitors to help grow the market? Stephen Johnson says: “I think there is an argument that it will help grow the market and inevitably it does. I think the difficulty is that the products do different things. So when you buy an oven, an oven will heat to a certain temperature. And,actually, if you buy one oven over another oven, there might be certain refinements; one might bake better or you might get a better finish on it – but the difference between the products isn’t fundamental. We would contest with a boiling water tap, if you fail to deliver at the temperature of a kettle, you are not going to replace your kettle and that’s what we would try and promote to our clients.” He says the importance for the company lies in explaining the need for a tap to deliver at 100C, over its competitors who don’t: “So we have to go on a huge marketing drive to try and make sure our clients understand it”.
Certainly Quooker hasn’t been reticent in marketing its boiling water tap to dealers and consumers, over the past 10 years and even through the tough economic times of the recession. It frequently appeared in print ads, across trade and consumer press and recently invested £1.5million in a TV ad campaign. Now it has further plans to increase its spend in TV to £2.5million. Johnston says: “I think we have been responsible for widening the market and growing awareness of the sector with the end user. I’m not sure there are many other hot tap or boiling companies who promote to the end user as we do. I think we take some responsibility for that.”
Competing with customers
All of Quooker’s marketing, Johnson says, is focused on driving consumers into displaying kitchen showrooms. But recognising a dealer may not want to sell just a tap, it also sells models directly to consumers for retrofit purposes. It has been a move that has seen the company come “massively” under fire, with suggestions, it is competing directly with its own customers. These are allegations that Johnson categorically denies: “That, to me, is really frustrating because our whole business model is about supplying to dealers “. He continues: “We want our kitchen dealers to sell it with a kitchen but we also want to service clients at home that don’t [want to buy] a kitchen. The kitchen dealers don’t actually want to sell an appliance in its own right, to be honest with you. They are busy selling kitchens.”
He explains how the direct retrofit sales operate to complement showroom sales and help make Quooker more accessible: “What we do is offer for a retrofit client, a free installation service. That’s a service we put through our dealers. All they do is pass us an order. We contact the client. We install it and then they get their margin on it.”
He points to competitors fuelling the fire. “It’s something that our competitors use and I would have to say, if I was competing with Quooker I’d probably try and put a different slant on it.” And he adds: “We’re here to grow our dealer business. If you ask me would I prefer to supply through the dealer or fit it myself, I’d rather the dealer fitted it – every day of the week. It’s far easier. It’s less hassle.”
And he further illustrates how Quooker is supporting retailers by offering a retail-only boiling water taps for showrooms with its Fusion range, adding it is “the only company, I believe, in the whole sector that has an appliance range that can’t be purchased online. Our new series of product we direct through a dealer only. So if somebody wants to buy certain of our ranges, the only place they can buy it is from a kitchen showroom.”
However, if a customer is purchasing a kitchen from a non-Quooker displaying retailer, Johnson is prepared to deal with them direct. “Why should we be prohibited from engaging in business with them if the dealer is not selling Quooker? What I want to be is accessible to everybody in the market who wants a Quooker.” But he clearly states: “What I will not do is cut out our dealers.” And he claims that “If we ever find ourselves in a screnario where the customer has bought off us at full retail but bought a kitchen from one of our dealers – we give the margin back to the dealer”.
Armed against internet
The policy of offering the Fusion showroom line has also helped protect the business against internet retailers, as Johnson admits there was a time “we had huge difficulty in middle men getting hold of the product, putting it online – buying it through third parties – and not holding the core values of the product really”. And he openly admits “With our initial range, I was bit naïve in the market and how it worked. We would sell Nordic to kitchen dealers, internet dealers, distributors. I just wanted to sell taps.”
But he suggests he felt forced into trading online to move units, as kitchen showrooms lacked in loyalty: “You had dealers that said don’t supply these guys but the dealers weren’t 100% loyal. I still have that issue today. Even with the strategy that we now adopt and give it a dealer-only product and say ‘we are giving you that product exclusively…and I have spent £1.5million advertising this product for people to come into your shop. All we want from you is a bit of loyalty. So the display tap will go on and you’ll go there a week later and they’ll be a Zip tap in there or an InSinkErator tap. It’s not all dealers, in fairness, but it’s a policy that really frustrates me.” However, over the past eight or so years, Johnson has systematically reduced the number of internet dealers to four, to benefit its showroom network.
Specialising in boiling
Quooker has a select range of 10 tap models offering boiling water only or with its Fusion boiling, hot and cold. But with a move towards more functionality in a tap with chilled and sparkling water, will Quooker look to extend its offer? Johnson says the advantage of Quooker is that it is a specialist in the field of boiling water, explaining: “A lot go through distributors or middle men and they are peddling a hot tap as part of a wider portfolio of products. Where we have an advantage is this is all we do. The concept of simplicity of delivering boiling water is fundamental to us. We don’t do fizzy. We don’t do chilled. We don’t do Coca-Cola. What we feel is our competitors feel obliged to bring in all these other dimensions to their tap because it doesn’t boil.”
He believes by focusing on boiling water produces a better product, offering the analogy: “It’s a bit like a washer dryer. There’s no question that a washer and a dryer are better than a washer dryer. “ What clients lose sight of at the end of the day is with the all-singing, all-dancing fizzy/chilled whatever tap they’ve not got boiling. So the end of the process, they’ve compromised on the one thing they started out looking for.”
Doubling UK business
In fact, such is his belief in boiling water being a commodity of every kitchen project, Johnson plans to target all mid to high-end showroom and be specified in at least half the sales. In doing so, he believes he will at least double the size of the business. Johnson concludes: “What we’ve done over seven years is grow a business from 0 Quookers to what will be over 25,000 Quookers this year, with a seamless growth and an exceptional service. One of our biggest challenges over the growth of the company is to maintain that philosophy. We’ve got a business that now turns over £15million and we’ve got an expectation to double that in size over the next two to three years”.
This feature first appeared in the September 2015 issue of Kitchens & Bathrooms News