AGA Rangemaster Group plc

Introduction

AGA Rangemaster, an international leader in range cooking, is renowned for its portfolio of brands, ‘loved around the world’.

The AGA Rangemaster family Group represents an impressive range of assembled brands.  Known for their pedigree, names like AGA and La Cornue head up this cast, alongside established favourites – Rayburn, Stanley and Redfyre, with next generation -Fired Earth, Falcon, Mercury, Grange, AGA Marvel, Divertimenti and Rangemaster – bringing fresh spirit to longheld values.

This is a brand family that aspires to inspire and the Group strategy aims to connect with more international customers through new product offerings, by building on their exceptional heritage and authenticity. Continued success is largely put down to a pipeline of innovations enabling the range cooker to adapt to modern living.

The Group employs 2,516 people in seven countries with 19% of staff working in the company’s own-brand retail outlets, the rest primarily based in manufacturing operations, together with a small head office team.

Brands such as AGA and Rayburn are vertically integrated. Recycled AGA cookers are mixed with pig iron and smelted down in the furnaces once used by Abraham Darby, emerging following production and enamelling at the AGA factory in Telford, recreated as range cookers and subsequently sold through company-owned shops.

Whilst other group brands may be more dependent on local supply chains, in all cases efficiency and effective process management is vital in ensuring consistent quality and standards are maintained. Savings from efficiencies delivered amounted to £17m savings during the period 2008-2013.

Product Introduction and Distribution

William McGrath, Chief Executive, AGA Rangemaster Group, explains, “AGA Rangemaster has factories in Coalbrookdale, Telford, Leamington Spa and Nottingham. We have research and development centres in Telford and Leamington Spa.

“We have 1800 employees in the Midlands and as a Midlands-led producer of range cookers we believe we add range cookers and cookware to the Midlands’ portfolio of products of excellence. We have spent over £21m on product development over the past four or five years, with a unique manufacturing capability to support our growth plans.

“We sell at the premium end of our markets, using own retail for some lines as well as dealers through a multiple of channels. Nearly two thirds of our sales are made in the UK, with demand closely linked to house moves as expenditure on kitchens peaks after people move home.

“With the level of monthly UK mortgage approvals at its highest level for nearly 6 years the outlook is more encouraging at present.  During the first six months of 2014 order intake has risen 6% with sales up 4%. We continue to launch new products, such as the AGA City60 and the Rangemaster 60 to widen our appeal in target markets. In fact, 50% of AGA cookers sold in 2013 represented products which weren’t even in the range in 2011. The AGA City60, launched at the opening of the new AGA shop in Spitalfields, London E1, is designed for city living and aimed at apartment life and terraced houses and pitched at more accessible price points with a full roll-out due to follow in September 2014.

“Our aim is to make beautiful quality products that delight our customers and which they want to place at the heart of their home. We believe today’s families like to have the kitchen the hub of their activities. We see manufacturing skills as key, not only to our own product, but in terms of our  understanding of the sourcing of components that end up in our finished goods.”

Revenue and Profits

In 2013 Group revenues were £250.4m, up from £244.6m in 2012, with 2013 profits at £1.1m. International revenues accounted for 37% of sales, with £158m sales from the UK, £32.1m from North America, £54m from Europe and £6.3m from Rest of World.

AGA cooker sales volumes grew 10% in 2013, with electric cooker models representing 70% of purchases, whereas they had accounted for just 5% of sales in 2003. Rangemaster sales were just ahead of 2012, with Fired Earth sales up by 5% delivering a profit for the first time in some years, while other cooker brands were slightly lower. The new product programmes in place for 2014 position the range cooker as an urban product, quite distinct from widely available built-in models.

“Whilst outlook is improving, given monthly mortgage approvals, Rangemaster, which has been the bedrock of the brand portfolio during the recessionary period, sold volumes of 60,500 in 2013, well down from 2007 levels of 76,000, so we realise there is still some way to go.  This business is adding more contemporary styling, launching the Rangemaster Nexus, in 2014, following the introduction of the Hi-LITE in Autumn 2013. With 28% of sales being exported, the Rangemaster 1200 Dual Fuel is the first product to gain sales accreditation for China and the brand has been broadened to include refrigeration. It is also continuing to develop its sink lines under both the Rangemaster and Leisure brands, manufactured out of their factory in Long Eaton, which also makes many parts for both the AGA and Rangemaster cookers.

UK Industrial Strategy

“Government can do a lot by creating the framework and beating the drum. Looking at the sectors chosen so far to make up the Industrial Strategy’s 11 sectors, many are there as they need to work closely with government because of the nature of their industry.

“If we were to add any others then rather than ‘luxury’, we should consider adding ‘lifestyle’ or ‘home life’ – which has always been a bit ‘Cinderella-ish’, but which is nonetheless important to the way people live their lives. If you look at Ikea they provide a well-designed product at a good price.
At AGA Rangemaster we have been looking at cookers and kitchens and the different stances on the kitchen in Germany and England. The German kitchens of the ‘50s fitted in well with the ‘miserable, brutalist high-rise living’ that they wanted to build at that time.

“But how do we actually want to live at home today and in future? How do you create nice domestic living space that is driven by the way people actually want to interact with each other and have the things they like around them?

“This is something we could be usefully working on together as a group of companies coming from a range of sectors. We do need to play to our strengths and design and innovation is certainly one of them. We need to be looking at where we can create niches that we can grow and sell into.

Industry and Academic Collaborations

“Academia needs to be given every encouragement to get closer to markets and work with corporates.  Knowledge Transfer Partnerships are a good example of where government has created a framework to encourage this and at AGA Rangemaster we have had productive collaborations with Birmingham City University on several of these with some useful results. But we need to stop being so obsessed with the bureaucracy. We are killing off initiative and enthusiasm through the micro-management of not very much money. These should be administered more like a PhD with one Supervisor from academia and one from industry, setting their tasks and goals and then letting them get on with it. Too much time is spent over-engineering the process with ‘accountability’ simply a euphemism for bureaucracy.

“Universities with an applied focus, like Birmingham City University and others, should have a sensible budget to spend on more initiatives – for example providing businesses with more access to facilities, becoming engaged in joint initiatives which in turn lead onto real challenges looked at through applied knowledge exchange and research. We need to put some millions into this and then let people get on with it. All the meddling is even worse than ‘short-termism’. If you’re not getting results then change the manager.  Quite simply there is no alternative to industry and academia working together doing real projects. Enthusiasm and energy are the key to delivery of results and free thinking is required. This doesn’t necessarily happen between the hours of 9-5pm.

Legislating Change

“Government can stimulate the agenda and legislation is one powerful way of doing this. Government should embrace this. For business this forces a process involving balancing the design of optimal and practical business solutions to reach compliance. It can lead to radical innovations. In AGA Rangemaster there are examples where legislation has driven innovation and could drive demand. With our Eco Connect system, for example (see case study), if government decided that a percentage of the energy used in all homes needed to be generated from renewables then we would create a new market that many businesses, including ourselves, have already been investing in. But when the government took its foot off the pedal on renewables demand fell away almost overnight.
“In North America new regulations coming into force September 2014 have driven an overhaul of our production line-up to deliver to new environmental specifications and refocused our brand on enhanced accessibility,” says William McGrath.

(*In 2012 government cut the feed-in tariff for energy from renewable sources to 16p per kilowatt hour, compared with 21p in 2011, with this subsidy duration cut from 20 years from the earlier 25-year duration previously open to them. This cut followed the 2011 cuts which had been more drastic reduced from from the original 43p pkwh to 21p leaving the industry off balance with installations of falling from 27k per month to 12k per month.)

AGA – An enduring design icon

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As a Birmingham-based business, AGA grew out of the ideas of Abraham Darby, a Bristolian who moved to Shropshire.  He started the industrial revolution having been awarded a patent by Queen Anne in 1707. Abraham Darby’s process involved smelting iron ore with coke to make cooking pots.

The Patent provided a public policy statement that could apply to today’s circumstances – emphasising the need to develop product leading to import substitution and export growth and to supply better quality options for the less privileged.

 

 

Leamington Spa

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1830 saw the birth of the modern cooker, thanks to Sidney Flavel who invented a cooker with different ovens heated from the one heat source.

“It was the first time that the cooking pot had not come into contact with the heat source. It was hailed as the ‘end of sooty food’, and all the great and the good of the time, including Queen Victoria, had a Kitchener.  It was feted in all quarters, winning one of only a handful of Gold Medals at the Great Exhibition. As a cast iron cooker the Kitchener was an early forebear of the AGA,” says William McGrath.

 

Why did AGA become such an icon?

AGA researched the process leading to the development of the AGA cooker as an icon working with a team from Birmingham City University. “It turns out that between the first and second World Wars affluent people no longer had a cook, and following that they no longer had a maid, at which point the housewife went into the kitchen  – and where she went the children followed – so the kitchen needed to be larger than it had been previously.

“The nature of the home was moving from the Germanic scullery to become the heart of the home and the AGA Rangemaster Group continues to sell this idea, in particular within Fired Earth at present.

“There was a group of people in this instance had both the vision and the infrastructure to drive this process. They were, we discovered, major figures of the 20th century, involved in bringing about this home re-design.

“They showed the world the importance of great design, perfectly cooked food, economy and ergonomics – all within the kind of modern kitchen setting that had never been seen before. In fact from 1935 – in developing and launching the New Standard AGA cooker – they shaped the future and changed the way people lived. It was their influence that made the kitchen the most important room in the house and made good food cooking a new national interest,” explains William McGrath.

The team included –

T. Wren who was the Head of AGA Heat Ltd and its parent company, Allied Ironfounders. He was an innovator, a visionary, a Second World War Spy.

Raymond Loewy –a US industrial designer working on AGA and Rayburn re-design, as well as styling the Greyhound bus and designing the logo for Airforce One.

Douglas Scott – an industrial designer who designed the Rayburn and the Routemaster bus, re-designed the AGA cooker and introduced the standard Model C AGA cooker.

David Ogilvy – responsible for the classic AGA ad of the young child looking up at mum while leaning on AGA whilst mum works at the Aga cooker – showing the AGA was not too hot to lean on, whilst mum was in heels so clearly not a hired employee. This was radically new in its day and our current advertising echoes these great moods and thoughts. David Ogilvy was the first AGA salesman and marketing consultant. aga-kitchen-vintageHe was the inspiration for TV’s Mad Men and a Second World War spy.

Dorothy Bradell – an interior designer who worked at V&A.  She redefined how Britain saw the kitchen designing the AGA kitchen and roomsets in the ‘30s and ‘40s.

“Dorothy Bradell’s ideas have evolved, like the AGA, so that now we have an AGA that can be switched on and off remotely, in the AGA  iTotal Control.  Rangemaster is the ‘diffusion’ brand for AGA Rangemaster  Built from experience, the focus is on ensuring a great cooking experience.

 

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“Is it true that men learn nothing from history?

To paraphrase a quote from Macauley, “We should learn from our ancestors and not slavishly follow their course but consider what they, in our circumstances, would have done,” concludes William McGrath.

Sustainable Design

Aga Rayburn developed a unique sustainable solution targeting customers emerging requirements through the development of a new Home Energy Management system bringing together various elements, including boiler, stove, central heating, range cooker and solar panel, to configure these to work together to maximise use of renewable energy.

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Smart eco-design innovation Aga Rayburn – Eco-Connect Panel

To make this possible, the Aga Rayburn research team in Telford created the Eco-Connect system.  This clever, neatly-sized device acts as  a heat exchanger enabling the water cylinder in any home to connect with different energy sources, such as a wood burning stove, a wood burning, solid fuel or oil fired Rayburn cooker (and central heating system) and other sustainable energy sources, such as solar thermal (hot water) panels. Aga wood burning stoves have energy efficiency ratings of over 81% and the Rayburn 680 KCD, for example, is an oil fired boiler and central heating system with 92% efficiency for its A-rated condensing technology.The innovative Eco-Connect Panel has the ability to interconnect different appliances ensuring that energy is intelligently drawn from the greenest source at all times.  The Eco-Connect panel senses the temperature of the water in the system and whether it needs ‘topping up’ always opting for the most sustainable source whether that might be the stove, Rayburn or other source.

Marketing Manager, Nigel Morrison, said, “We are the first to market with this sort of product and within the first few months there has been an enthusiastic response to the technology and it is selling well across the country.

“With systems of this sort vitally dependent on technical details, one of the key technological challenges has been enabling connections between Stoves as vented systems, and cookers, such as the Rayburn, as sealed systems, something that had not been possible prior to this. “