CPL Distribution

As the days get colder and the nights draw in, at this time of year CPL Distribution comes into its own as Britain’s leading supplier of solid fuel products for home use, to supermarkets and other multiple retailers.

CPL Distribution’s market-leading Homefire range of ready-packaged fuels for home fires includes kiln-dried logs, smokeless fuels, heat logs and other instant light products. Homefire is a hot profit generator for the UK’s multiple grocers, meeting the needs of the growing numbers of consumers who want the pleasure of a glowing real fire in their hearth but without the mess and the smoke of a coal fire.

Made in Britain, CPL’s Homefire Smokeless fuel has been the UK’s biggest selling smokeless fuel product for open fires and multi-fuel stoves for over 40 years. It offers all the traditional qualities of a real fire and is slow burning and easy to control, burning up to 40% longer than coal, leaving behind very little ash and producing up to 80% less smoke and 25% less CO2 than house coal.

With the UK Government committed to increasing the proportion of our energy consumption that comes from renewable resources and the Renewable Heating Incentive potentially coming into force in April 2011, sales of CPL’s Smokeless and other solid fuels look set to grow still further in the near future. But before that, CPL is offering a number of new solid fuel products and ancillary items for Winter 2010/11, which are now available through their UK distribution network, including LoCo2al, a direct alternative to house coal which puts the emphasis on reducing the CO2 emitted when it burns. Graeme Wilson, Sales Director of CPL Distribution, spoke to The Grocery Trader.

The Grocery Trader – First of all, Graeme what does your role as Sales Director of CPL Distribution involve?

I’m responsible for our retail sales, our marketing and our websites. In total this amounts to achieving £30 million worth of sales.

GT – Which retailers do you supply?

We supply multiple supermarkets, forecourts, wholesalers and cash ‘n’ carries, DIY and 3,500 independents.

GT – How much personal involvement do you have with customers?

I personally have involvement with our key accounts and attend all annual contractual negotiations. We have two national account managers looking after the day to day. One looks after grocery and forecourts sector, the other handles DIY and wholesale sector. I have a Business Development Manager who looks after our large independent customers assisted by four territory managers.

GT – Do you supply the whole UK? What about Ireland?

We supply mainland UK and have nominated distributors in Ireland, Hayes Fuels in the North and Stafford Fuels in the South.

GT – When was CPL Distribution set up?

CPL Distribution is part of a larger company, CPL Industries, Europe’s largest manufacturer of smokeless fuel, producing 350,000 tonnes per year.

CPL Industries was previously entitled National Smokeless Fuels Ltd, and was part of British Coal, a nationalised corporation. National Smokeless Fuels underwent an MBO in 1994, changing its name to Coal Products Ltd, CPL for short.

To begin with, CPL was purely a manufacturer and sold its products through the coal merchant trade. Two of the largest were Charringtons who covered the southern half of mainland UK, and British Fuels the north, each with some 50 local depots. CPL bought both businesses and merged their existing depot networks into a national network under the name CPL Distribution.

GT – We’ve been talking about retailers. Do you also supply local coal merchants?

We sell a lot of product to domestic users either directly ourselves or through local coal merchants. However, CPL only trades directly with retailers. When CPL Distribution started, we realised the local coal merchants weren’t geared to cover the supermarkets on a national basis and saw the opportunity for CPL to give a nationwide service to the multiples.

GT – How big is CPL Distribution now?

CPL Industries as a group turns over £130m, CPL Distribution contributing £60m to that total. The group has 550 staff, 350 in Distribution. CPL Distribution has 33 regional depots and a National Distribution Centre, based at Worksop in Nottinghamshire. Our head office is in Chesterfield, Derbyshire.

GT – Do you supply the supermarkets direct?

Yes, we supply direct to supermarkets, either full artic loads to regional distribution centres, as in the case of the Co-op, or using our depot network smaller vehicles visit individual customers to deliver 50 mixed units direct to site, as with Tesco forecourts.

GT – How big is the UK market for solid fuels?

The total market is 1 million tonnes per year of solid fuel, 50% of which is smokeless fuel. The market share of smokeless fuel is growing year on year, for instance 15 years ago, smokeless’ share was closer to 30%.

GT – What total share of the solid fuel market do you have?

CPL handles around 50% of the total solid fuel market, and enjoys 75% market share in the retail sector. We’re the only manufacturer producing smokeless briquettes with renewable organic materials.

GT – How does the UK compare with the rest of Europe as a market for solid fuels?

In the UK, half our solid fuels are smokeless. In Northern Europe the market is traditionally dominated by wood logs and lignite (Brown coal), this is simply coal that hasn’t been underground as long. In the last two years we started exporting our smokeless fuels into Germany, France, Ireland and we have enquiries from Italy, the Netherlands and surprisingly Spain, Malta and Crete to satisfy the British ex-pat communities.

GT – What are the UK regulations about people burning solid fuel in their fireplaces? Can you only burn smokeless fuels in certain areas?

The current smoke control zones in the UK are listed on www.smokecontrolareas.co.uk. It’s ultimately down to local councils to nominate smokeless zones in their area. As a general rule smoke control regulations apply in most inner cities and town centres.

As the law stands, the onus is on the consumer to comply. Retailers can sell non-smokeless products anywhere, because the consumer may purchase in a smokeless zone but reside in a non-smokeless zone. However if CPL or a merchant delivers direct to the consumer, the merchant is obligated to check if the consumer is in a smokeless zone.

GT – We’re concentrating in this article on solid fuel for heating, but do you also supply barbeque charcoal and BBQ lighters?

Yes, CPL markets a full range of barbeque charcoal and other products under our Supagrill brand. These include lump wood and briquette in 3/5/10kg sizes, Instant Light Lumpwood in 2kg and 4kg, Instant Light trays and party trays, lighting fluid and gel. We are also a leading supplier of restaurant grade charcoal to both cash ‘n’ carries and direct to the catering industry.

GT – Can you talk us through the products in the Homefire range?

It’s a very long list. Homefire Smokeless in 5, 10 or 20kg is our core smokeless product. We also sell traditional house coal and have recently launched Homefire ecoal, Britain’s first and only smokeless fuel made with 30% renewable material. Both Homefire and ecoal produce 25% less CO2 than house coal when burnt.

We also supply under our Homefire brand netted Logs, Heatlogs made with 100% recycled waste sawdust, kindling, instant light fire logs, which are waxed sawdust logs and instant light ecoal.

Our Homefire kiln dried hardwood logs come in carry bags and pre-pack boxes. The carry bags sell well in B&Q and other DIY outlets. The boxes, because they can stack, are more suitable for stacking in store.

GT – Which of these products are suitable for sale in supermarkets rather than forecourts?

Within the last 18 months CPL has undertaken market research including focus groups and interviews with consumers who indicated that they would ideally wish to buy our products from the homeware section of their supermarket. Hence we launched our in-store range, which includes instant light products such as Instant Light Ecoal and Firelogs and light your own 5kg versions of the forecourt packs of all our fuels. We give people a choice of how to light their fire from the traditional way using our mini kindling and firelighter products, or ecoal instant light, where you simply light the bag.

GT – Can you tell us about LoCo2al? How does it fit into your range?

In response to our market research, we’ve launched LoCo2al, a non-smokeless fuel to imitate coal. LoCo2al, which is manufactured with 30% renewable material offers the same burning characteristics as house coal – easy to light, similar long yellow flame, but with the added benefit of emitting 20% less CO2 than traditional house coal when burnt. We’ve launched LoCo2al this winter in Sainsburys and B&Q initially, and we’re anticipating strong demand from other retailers.

GT – What are your new products for winter 2010/11?

We have a new product, Homefire ecoal instant light 4.5kg. This product is aimed at the growing number of occasional users. It’s very simple to use, you simply place the product on the grate and light it, no firelighters or kindling required.

As it’s an in store product, the bag needs to be kept dry. To cater for forecourts this product is also available as a Weekend Fire pack with three 4.5kg instant light bags inside a branded waterproof outer. The Weekend Fire Pack provides consumers with three nights worth of warmth. Both products are available now.

GT – How has the market for solid fuels changed recently?

There’s been a major change in the demographics of domestic heating in the last two years, with considerable growth for our products in retail outlets. The previous ten years saw a 10% annual decline, but in the last two years, the big rise in oil and gas prices prompted a sudden clamour for stoves. The multi-fuel and wood stove manufacturers previously sold 80,000 stoves a year, but sales hit 150,000 in 2008 and 2009.

Stoves are trendy again, and different consumers are coming into the market. The traditional fire user’s average age is 55-75: the new consumers are 35-55, much younger, using their stove for secondary heating, occasional social use or as a fashion statement.

GT – What impact has the recession made?

Strangely it doesn’t seem to have affected us. It would seem that people are having more big nights in, and solid fuel burning’s now fashionable. Importantly for us, the new consumers are looking for greener, cleaner fuel products from retail outlets rather than the traditional coal merchant. They want it as and when they need it and in convenient pack sizes.

GT – What difference did the cold winter of 2009/10 make to your sales?

As you would expect, the cold weather certainly helped sales. However, we saw significant growth in our underlying sales for 2009/10, which were up 15% on the previous year. With the cold weather effect left in, the increase was nearer 40%.

GT – Which of your products can people use to heat solid fuel-burning range-style cookers and stoves?

We would recommend that on a solid fuel range cooker, consumers should use our Ancit smokeless fuel or BriteHeat Plus, from their local coal merchant, both of which are specifically designed for use on cookers. However, this is a very small part of the overall market and not generally of interest to retailers.

GT – How ‘green’ generally is CPL as a business?

We come from a position where solid fuels aren’t considered a green industry, but we are investing heavily in new products which incorporate renewable materials. Ideally we would like to get renewable content to 50%, but we need to make sure we don’t compromise heating performance in the process.

Additionally, we’ve passed the B&Q Audit of corporate responsibility and low CO2. We’re looking at modifying our vehicle fleet to reduce the emissions and powering our head office from wood pellets.

We are also moving into the 100% carbon neutral wood fuel sector. Last year we invested in a kiln in Ilkeston, Derbyshire for our kiln-dried logs and this season we have started selling wood pellets.

GT – Talking of logs, how are wood fuel sales holding up?

Sales of wood for fuel are getting stronger, with 1 million tonnes sold every year. Consumers buying habits are also becoming more sophisticated with increasing demand for kiln dried logs which burn hotter and are better for the appliance. Unfortunately, it’s an unregulated industry, prompting the government to ask HETAS, the solid fuel regulatory body, to devise criteria to grade products.

GT – What proportion of your sales go through supermarkets and related outlets such as forecourts? What is the seasonal peak sales period for solid fuels for heating?

Half of CPL Distributions sales are to supermarkets and forecourts. The season runs from October to the end of March, peaking in December – everyone wants a fire in their grate at Christmas.

GT – Where in the store should retailers merchandise these products for best results? Are there any rules about where to display them, especially in forecourts?

In forecourts, solid fuels should be outside in a bunker. The only rule here being that the person at the till must be able to see the pumps over them. Inside the store, they should be in the household aisle where you would usually find matches, firelighter, etc.

GT – Which retailers are your products currently stocked in?

We supply Tesco, Sainsburys, the Co-Op, Waitrose, Budgens, Londis, Spar, BP, Esso, Shell, Moto, Welcome Break, B&Q, Focus, Nisa and 3,000 other independent retailers.

GT – How quickly can you supply stocks to customers?

We can supply major customers in three to five working days through our fleet of 180 delivery vehicles.

GT – Are you doing any promotional activity to encourage consumers to use solid fuels for home heating?

We do the usual POS and in store promotions addressing the growing ‘lifestyle’ market, and promoting purchases of our products through the retail sector.

GT – Do you promote your products online?

Yes, we have three websites. We’re also planning a new corporate website to show the breadth of what our company offers, which will be live by the end of the year.

GT – What changes will the imminent Renewable Heating Incentive bring about in people’s usage of solid fuels if/when it comes into force?

It could mean a tax on CO2–emitting fuels, making these more expensive. We want to get ecoal and LoCo2oal registered as low CO2 fuels so people who burn these fuels earn benefits under the Incentive.

I think we will also see the UK following the lead of other European countries, with a shift into wood based products such as wood chip or wood pellets for domestic heating and hot water purposes.

GT – Are you planning to bring out more products to comply with the Incentive? Can you tell us about them yet?

Yes. The first bags of Homefire Wood Pellets were manufactured in October and are available now in 15kg plastic bags. With the distinctive Homefire branding this product fits nicely into our range. We are also investing in a fleet of specialist delivery vehicles so that we can provide users with bulk deliveries of pellets which can be blown into bunkers. CPL see’s wood pellets as a product offering great growth potential and we are keen to be active in this market from the outset. Wood Pellets is quite a departure from 200 years delivering coal, but with our expertise in manufacturing and logistics we are determined to make this a successful venture for ourselves and our customers. We will shortly have a new dedicated website, woodpellets2u.co.uk to support this growth.

GT – Finally, where do you see CPL’s solid fuel products going from here?

We will continue to invest in new product development, using more recycled and renewable materials. We’re trying to increase the renewable proportion in our products to 50%, and plan to bring out something revolutionary in the next three to five years.

CPL Distribution Ltd   Tel: 01246 277001   www.cpldistribution.co.uk