Manitowoc Foodservice Looks Ahead to Life as a Stand-Alone Company

It is anticipated that early in 2016, Manitowoc Foodservice will spin off from Manitowoc Corporation to become a stand-alone, publicly traded company. To prepare for the changes ahead, Manitowoc Foodservice had a busy 2015. The multi-line foodservice equipment manufacturer hired Hubertus Muehlhaeuser to serve as its president in August. A few months later the company announced it was planning to close its Cleveland manufacturing plant and move production of the items made there to other locations. Of course, steps like these are only the beginning for Manitowoc Foodservice. FE&S interviewed Muehlhaeuser about what lies ahead for the company and its customers.

FE&S: Does coming from a different background/industry help in your new role?

HM: My prior experiences in consulting, the agricultural equipment industry and private business complement and prepared me very well for my new role. You might say that I worked along the food value chain, starting from being an executive in the agricultural equipment industry to consulting with various other companies in the areas of food processing and food equipment down to flavor companies. I also not only grew up in corporate businesses but have experience in family businesses, too. In the foodservice industry, there are lots of family-run operations and dealers. A family business possesses an entrepreneurial spirit every company should encourage, and that entrepreneurial spirit is a core value of
Manitowoc Foodservice going forward.

Working in the agricultural equipment industry and consulting also provides a fresh outside-in perspective. For example, the agricultural equipment industry has gone to a more full-line approach when it comes to the equipment that is offered. I believe this strategy is useful for the foodservice industry as well. Kitchen and restaurant operators do not necessarily want to talk to 25 different companies when they could talk to one that offers both hot and cold side equipment and understands the challenges of the entire kitchen, rather than only the individual appliances.

FE&S: Manitowoc Foodservice is in the process of spinning off into a stand-alone company. How will this benefit its customers?

HM: Our target is to spin off in the first quarter of 2016. We can now focus solely on the foodservice industry, reinvesting our profits in our leading brands and bringing new innovations to the market. As an independent company, we have
terrific potential. For example, we not only have strong brands but, most of the time, the leading technology solutions.

FE&S: Manitowoc recently announced plans to phase out production at its Cleveland facility and will shift manufacturing of several key lines to other facilities. How will it benefit the company’s customers moving forward?

HM: We had over-capacity in North America on the hot side. Establishing centers of excellence in Canada and Louisiana will enhance product quality and reduce lead times. It’s never easy to make changes like this, but our workforce has been very helpful. We are managing the move carefully, and it is going very smoothly. We have also looked at this move from a risk management point of view, and we will have parallel production in the Cleveland and receiving facilities until we are satisfied with the quality and the stability of the new processes.

FE&S: Manitowoc’s go-to market strategy has changed occasionally over the years. Describe how you
see the various brands and the company going to market in the years to come.

HM: We had very large, decentralized businesses. That worked for a period of time, but eventually companies reach a size where synergies can be gained by uniting some aspects of the businesses — research and development, for example — without compromising our entrepreneurial spirit. As an enterprise, we will be looking at the entire kitchen, not just individual appliances. The key is to listen to our customers, understand the challenges they face, anticipate their needs and present effective system solutions.

Operators are asking us to help them rethink their kitchens. Some are moving to the centers of cities where every square foot is expensive real estate and equipment must be small, highly efficient and multifunctional. Others want to increase productivity and reduce labor costs. Speed and quality are always appreciated. We have engineered solutions to meet all of these challenges.

In the future, mobile connectivity will be a major trend. If you envision the kitchen as a little factory, which it is, there is a great advantage in leveraging the internet to connect all of the pieces of equipment.

FE&S: A couple of years ago, Manitowoc unveiled KitchenCare, a new approach to service. While well intentioned, that program was rife with logistical issues that impacted parts distribution and service of equipment. What will Manitowoc’s approach to service be in the future?

HM: Aftermarket sales will continue to be an important part of our growth strategy moving forward. We think the KitchenCare concept was, and still is, a good idea. Unfortunately, the implementation was not as good as it should have been. We underestimated the complexity of moving from various IT systems to one. We have corrected that, and we believe service rates and fill rates are back to where they should be. Customers have seen improvements and we are continuing our efforts to further improve all aspects of KitchenCare.

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