Trends in Commercial Cooling - 2024

2024

TRENDS IN COMMERCIAL COOLING

The distributor’s guide on how to stay ahead of your competition

Thank you for downloading this e-book containing some of the biggest trends within the commercial cooling industry.

Before we get started, I just want to clarify: when we state trends, we are not referring to whether you should invest in black or stainless steel appliances.

Rather, we are talking about general trends in the industry that can help your business, not only staying afloat, but staying ahead in this competitive market.

In the commercial cooling industry, many distributors have recently been facing a tough market due to inflation and high energy prices. It is therefore as crucial as ever to equip yourself with the necessary insights to navigate through the key trends predicted to shape the industry through the coming years, so your company can keep up with developments and stay ahead of competition.

In this e-book, we will share our knowledge and expert insights. As we see it, there are three key trends which every distributor should be aware of in 2024.

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1 2 3

Get on top of EU regulations

EU regulations and classifications are here to stay, and they are becoming increasingly complex. We will therefore look at how you can ensure that your products live up to these standards.

Go digital

Take advantage of digitalization to make your business more efficient and attractive to customers. It’s not as big a project as you may think.

Cash is king – Free your cashflow

Expand your product portfolio without tying money up in stock and warehousing. There is a risk-free way of doing this together with your supplier.

These are the main topics of this guide. I hope it will inspire you to keep up with the development in the cooling industry and stay ahead of competition in the years to come.

Happy reading!

Kind regards, Simon Kiilerich Christensen Area Sales Manager

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#1

GET ON TOP OF EU REGULATIONS

The first trend which you as a distributor should follow closely is the unavoidable changes to EU regulations.

We understand that it can be difficult to stay on top of all EU regulations and classifications in the cooling industry. You could fill up one ring binder after another if you printed them all – and more are coming.

Here are some examples of the most important elements •

Many, not all, commercial refrigeration appliances must have an EU energy efficiency label and be registered in the EPREL EU database.

•

During the last couple of years, the EU has banned the use of numerous refrigerants, leaving only a handful of natural refrigerants with a GWP (Global Warming Potential) below 150, approved for the European market.

•

From September 2023, the regulations concerning ice cream freezers and refrigerating appliances with a direct sales function are further tightened. The EEI (Energy Efficiency Index) can no longer surpass 50% of SAE (Standard Annual Energy consumption in kW) for ice cream freezers and 80% of SAE for all other refrigerating appliances (with a few exceptions).

TIP: All products that have an EU energy efficiency label can be checked in the EPREL database. You can also highlight this to your customers, as the EU energy efficiency label features a QR code that takes them directly to the database. Once there, they can see classification, energy consumption, EEI etc. for any given product.

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New EU energy efficiency labels One of the major topics in the cooling industry is the introduction of relatively new EU energy efficiency labels that have been a requirement since March 2021. The new labeling system was created to make the energy efficiency of products more transparent. One of the keen matters has been to remove the + (A+++) from the scale, so it is now simply A-G. But honestly, it is difficult to compare products even with the new labeling system. When it comes to commercial refrigeration, it is not one model fits all.

There are different types of labels depending on which type of product it is. E.g. if it is a storage cooler or a beverage cooler, and each of these types have several or sometimes many subcategories. This means that it needs to be decided quite early in the process, whether a cabinet is to be sold as a refrigerator, a storage refrigerator, a beverage refrigerator, or a supermarket refrigerator. One model can often be used for more than one purpose, but the testing methods for the different categories are wildly different.

It can therefore be difficult to compare the energy efficiency of products from different categories and subcategories – and if you are used to the old scale, it can also be quite the task. Though the layout of the scale is similar, the criteria behind it is not, and therefore an A on the old scale can sometimes become a G on the new scale. In other words, it is like comparing apples to oranges, which can be confusing for many distributors, let alone your customers.

https://energylabel.org.uk/the-new-label/products-affected/

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Is your head full after just this few information?

Ours are. But here is the good news…

Good news for all distributors The good news is: you do not have to know all the rules and regulations yourself. You just have to make sure your supplier does. It is therefore crucial that you choose a supplier who not only knows the current regulations but also actively, on your behalf as a distributor, considers which products to take in and sell on the European market.

Even though the maze of EU regulations can be tricky to navigate, they cannot be ignored. By doing so companies risk getting their products stuck at borders, because they do not meet current EU standards.

Ask your supplier Our best advice is to simply ask your supplier about EU regulations and how they handle them. You do not have to know all regulations, but it is nice to be able to answer common questions from customers, so you can help guide them.

You could ask these three questions: • • •

Are the refrigerants used approved for the European market?

Are the products registered in the EPREL database?

Are your products tested by a third party?

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#2

GO DIGITAL

The second trend which you should be aware of is digitalization. As in so many other industries, there are digital tools that can help you free up time and put your scarce resources to even better use. Tools that can help you update product data automatically to avoid mistakes and the time-consuming task of manual data-entry.

In short, there are digital tools that can help you become more effective and look more attractive to potential customers.

One of the phenomena everybody is talking about is ChatGPT and other related AI programs that can be used for generating product texts. But why not use the information that your supplier already has in terms of technical specifications, product texts, documents, and product images? There are existing IT tools that can automatically transfer this information from your supplier to your website.

The manual way of adding new products When you get new products, how do you publish them on your website?

It is our experience that many distributors do this manually by acquiring product images from the supplier as well as an Excel or CSV file with the necessary product data.

If you have a website, you know that typing in the correct product data can take up a lot of resources. Typing, checking, double checking to make sure there are no typos in the data that could confuse customers or make your website look less professional.

Update data automatically and minimize the risk of errors There is an easier way of doing this. Integrating to your supplier's product information directly. They know their products the best and they should be able to feed you all the necessary data, product information, prices, stock info, and product images automatically.

Save time on manual work, so you can focus on growing your business

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The steps in the solution could look like this: • • • • • •

Ask your supplier for a link to a data feed such as e.g. an XML feed Identify the elements in the feed that you wish to feature on your site Talk to your website responsible / developer and map the fields from your supplier feed to the corresponding fields on your website or web shop Choose the interval for transfer of data automatically – e.g. once a day, once a week or other interval Get a developer to integrate the feed to your website Important: Keep the publish / go live functionality you probably have on products on your site today so that you are in charge of which products goes online, when more products are automatically added to your system with the data feed

Once the data feed is integrated, it will automatically import and synchronize all relevant product data to your website – if the supplier makes corrections to the data, it will automatically update on your website as well. This minimizes the risk of errors substantially.

You are of course in control of which products and what data you wish to import to your website. You can pick and choose as you like, so you only show what is relevant for your business and customers.

With this easy way of publishing new products on your website – why not add all the relevant products from your supplier and become more attractive to your customers with a large product portfolio? You could easily go from 20 products in your portfolio to 500+ without spending time on maintaining these products and updating data.

You can even do this without tying up all your money in stock, as you can see in trend #3.

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#3

CASH IS KING – FREE YOUR CASHFLOW

The final trend which we consider crucial for growing your business, is to expand your product portfolio without tying up money in stock. Sounds nice, right?

It is our experience that many distributors like to have every single product they sell in stock, so they can guarantee fast delivery to their customers. However, this will limit how many products you can offer your customers substantially or will unnecessarily tie-up many resources in stock and warehousing.

There is a simple solution to this: let your supplier act as your warehouse.

With a data feed from your supplier, you can easily add 500+ new products to your portfolio and still only keep your bestsellers in stock. The rest can be sold and delivered direct from your supplier when needed, either to your warehouse or directly to your customers.

This trend is of course also valid if you do not have a website. By placing the order directly with your supplier for the products you need now, you keep your cashflow free.

This is a risk-free way of expanding your product portfolio, as you do not need to invest in warehouses or products that you are not certain will sell. You could spend that money more wisely in developing other parts of your business.

The only thing you need to ensure is that you choose a reliable supplier who has a large inventory and can provide fast delivery to you or your customers.

Position yourself as a strong distributor with a wide product range

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G R O W

YOUR BUSINESS BY 50-100%

If your business model is based on holding stock and delivering quickly to your customers, you need to have the right amount of the right products in stock to keep your customers satisfied.

By choosing a supplier with short delivery times and no minimum order quantity, you can free up cash and warehouse space and hence optimize your business.

Adding to this that by reducing your stock, you will reduce the risk of having outdated products collecting dust in the warehouse.

Let’s take an example In this example we will show you how you can free up cash and space, go from having 6 products to 18 products in stock, and increase your turnover threefold!

If you replace a supplier with six weeks delivery time with a supplier with two weeks delivery time you can reduce your volume of stock by three times. This extra space can be used to expand your product portfolio and hence increase your business. In theory, you can increase your turnover threefold, in practical terms, it is more realistic to double. Even if you sacrifice a little margin, you will make more money.

In the case below, we have used the example of a company that has a warehouse with room for 500 units.

For simplicity, we have created two different scenarios.

Obviously, in a real case you would need to take the variation in sales into consideration, but that will just improve the case of favoring a supplier with short delivery times even more.

Further, many manufacturers have a minimum order quantity, so even if you would like to buy a certain number of units, you may have to buy more products than this at a time.

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Scenario 1 is with 6 weeks delivery time – scenario 2 is with 2 weeks delivery time.

Both scenarios are with a maximum of 500 units in stock.

But in scenario 2 with 2 weeks delivery time, you have room for 18 different products in stock, whereas in scenario 1 you only had room for 6 types of products. Wouldn’t you like to offer you customers 3 times as many products?

Scenario 1: 6 weeks delivery time Average sales per week

Delivery time in weeks

Stock needed when ordering

Product 1

15

6

90

Product 2

16

6

96

Product 3

15

6

90

Product 4

8

6

48

Product 5

21

6

126

Product 6

8

6

48

Grand total

83

498

Scenario 2: 2 weeks delivery time Average sales per week

Delivery time in weeks

Stock needed when ordering

Product 1

15

2

30

Product 2

16

2

32

Product 3

15

2

30

Product 4

8

2

16

Product 5

21

2

42

Product 6

8

2

16

Existing products

83

Product 7

15

2

30

Product 8

16

2

32

Product 9

15

2

30

Product 10

8

2

16

Product 11

21

2

42

Product 12

8

2

16

Product 13

15

2

30

Product 14

16

2

32

Product 15

15

2

30

Product 16

8

2

16

Product 17

21

2

42

Product 18

8

2

16

166

New products

166

332

Grand total

249

498

“In theory, you can increase your turnover threefold”

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ARE YOU READY TO BOOST YOUR BUSINESS? You now have the three trends, which we predict will become game changers for distributors in 2024.

We are happy to share our experience and thoughts about possible solutions – and you do not have to be one of our customers.

If you would like to know more about the different trends or how you could implement them in your specific business, let’s schedule a talk.

During such a meeting, we will: • •

Elaborate on the three trends and answer any questions, you may have Show you examples of how other distributors in the cooling industry have implemented the trends to grow their business

Yes please, let’s book a meeting

Kind regards,

Simon Kiilerich Christensen Area Sales Manager Direct no.: Mobile no.: Office no.:

+45 8725 1345 +45 2373 2456 +45 8660 1933

skc@tefcold.com

About TEFCOLD • • • •

We are one of the market leaders in Europe, with 35+ years of experience within the plug-in refrigeration industry We have helped distributors in 100+ countries deliver optimal products to their customers We always have a minimum of 70.000 units in stock, so we can deliver to our distributors in a timely fashion We have warehouses in 5 countries across Europe to ensure fast delivery

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