Loadhog innovates for huge growth

“Last year we turned over £5 million. We have a vision of £30m turnover by 2017 and £7.5m of that is going to come from products that don’t exist today.”

So says Loadhog managing director Ed Stubbs.

But then nothing about Loadhog is typical.

It operates from a large open plan office and factory in Sheffield with a bright and airy Ideas & Innovations centre, and all in a city more usually associated with the decline of heavy industry.

And what about some of the rules by which the company is run? That it is employee owned and can never be sold. That no one has a job description. That 25% of sales must be generated from products that are less than four years old. That staff must invest £1,000 in company shares within a year of joining. No one has ever had to be compelled, Ed tells me.

But surely the least typical thing is the growth plan, which in a time of austerity, is almost unheard of.

This clearly stems from the culture of the company, as Ed explains.

“We are a growth orientated company that can never be sold. It puts responsibility on the people that work here, makes us think long term. It places the emphasis in the business where it needs to be – in innovation. Supporting this, we invest over 5% of turnover in R&D. We are not interested in me-too products, we will innovate and add value.”

The company, which spun off from Gripple – the wire joining specialist – invests heavily in patents, insures them and will fight to protect them if they are infringed. It hasn’t happened yet, but Gripple has taken action in the past.

“We seek to generate new IP and patent and protect IP. Knowing we have protection allows us to invest in manufacturing in the UK and marketing worldwide,” explains Ed. “That said, we pride ourselves on making sure the added value is identified and understood. There is no point having patented products that don’t deliver value.”

The company has invested in a large and stimulating space for the development of ideas and innovations and tests these thoroughly. It places great emphasis on building working models, rather than carrying out research solely in virtual reality.

So, the culture of the company is pushing Loadhog on this ambitious growth strategy and its emphasis in innovation, problem solving and investment in people, premises and technology in Sheffield provides the base. But what specifically will drive the stellar growth that is expected?

A number of specific growth areas have been targeted with products in development and/or ready to be rolled out to new markets.

An established Loadhog staple, the Smartstak – a packaging system for transporting glass bottles in bulk comprising a plastic pad (SmartPad) and a pallet top frame system (SmartFrame) – is one area highlighted for growth as it has significant applications worldwide. A lot of glass is made in Eastern Europe and Russia, the US market (beer bottles) is huge, as is South America.

“We are working in all of these markets,” says Ed. “Some will be product sales and others will involve pooling and washing the products.”

It is important to note the products are not simply slabs of plastic slung between bottles. They have been designed in partnership with key customers to make sure they don’t just ‘do a job’, but deliver substantial reliability and cost savings over a long period. 

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It is perhaps this attention to detail and close focus on the customer that has led Loadhog into product pooling and washing.

Loadhog has 2.5 million SmartPads in use worldwide and anticipates up to 8 million in use in five years time, with 4 million in pools and 3-4 million purchased by customers.

“The reason we are pooling products is that it has been an important part of the solution for the customer, there were issues there that needed to be solved. We are a provider of bespoke pools for specific customers and we have developed a very good business by investing in good people and tracking systems,” says Ed.

“We’re very pleased with the results. We have a responsive pool and can go from two shifts a day to 24/7 when needed. We are now in our seventh year of pooling in the UK and damage and loss is less than 0.5%.

“For us, pooling is more about people than technology. We have our people visit every single retail stores, of one of our key customers, four times a year, no other pooling company does that. The best way, we feel, for us to get product returned is not through monitoring, reporting and penalising, but to go and talk to the customer, make sure they are onboard and have ownership.

“Pooling is capital intensive initially, but becomes cash generative in the long run, and it is healthy to have that mix in the business.”

On the transit packaging side, Loadhog plans to extend its product ranges, and sees a number of opportunities, with the main challenge being to make sure they “back the right horse” in terms of maximising return.

Loadhog is working on a transit restraint system in partnership with a Sheffield-based company. This is a back-of-lorry solution increasing load security and stability. It is expected that the Health & Safety Executive will soon launch a new enforcement standard in response to tightened regulations on what is an acceptable level of restraint in the back of vehicles.

The company also sees openings in construction, and is developing a range of specific products with a steel contracting company. Every multi-storey construction site has to have minimum levels of protection around the sides to stop people and things falling off. This can be cumbersome, expensive and difficult to install and is often removed when workers need access. 

“We are developing a plastic system that can move position to allow people to work in the area while retaining protection,” says Giles Moore, Loadhog’s sales and marketing manager. “Companies in the construction industry are thinking about how to replace traditional materials like concrete and steel with modern, lighter materials.”

Such is Loadhog’s thirst for innovation, don’t be surprised to see many more products on the horizon. Given the company’s structure and growth plans, the cycle of innovation needs to be both fast and continuous for Loadhog to thrive.

It is interesting to meet a company with such an individual philosophy and who would bet against them securing the ambitious growth they are aiming for? Certainly from the point of view of those working in the logistics and materials handling world, the company’s approach to solving problems, and their attention to detail in designing and delivering products means they deserve a look.