Playing the Long Game

Glenn Holland’s relationship with Australian household hardware chain Bunnings began quite unexpectedly. At the time, he was producing taps and mixers and the retailer, impressed by his product, reached out. However, at the time he was in the process of closing his factory and moving the entire setup to China. “We could no longer compete in Australia bringing parts out and assembling here. We had to move the whole operation,” he recalls.

“I said to Bunnings, ‘Look, great opportunity. We’d love to get on board with you, but I’ve just pulled the plug now and shut the roller shutter on the factory we’ve got. Moving to Shanghai. I’ll get back in touch with you.’ And I did.”

When the two parties eventually reconnected, not only did Bunnings commit to buying the taps, but they also asked Glenn to source a wide range of private label plumbing, kitchen and bathroom products for sale in its stores. While it was not his area of expertise at the time, he decided to take on the challenge and founded Kinetic Sourcing Group (KSG).

Starting From Scratch

“They put a lot of trust in us and a lot of faith. They took a chance,” he says. “But we had to make sure that we could walk before we could run. We tried to play the long game, play it slow and make sure that we were going at the right pace.”

Glenn knew he didn’t want to buy off-the-shelf products because he was well aware of the issues that could arise. “We couldn’t put Bunnings in a situation where they would’ve been embarrassed in the market by having intellectual property or compliance issues with their home brands,” he stresses. “So we started from scratch and built the product from design up at our end and then hit the ground in a measured way.”

Both parties steadily became more confident in the relationship and things started to really crank up in the third year. “Now we ship over US$100 million to Bunnings,” he shares.

It hasn’t all been plain sailing, however. More recently, the take-off of online retail has stirred up the distribution landscape, impacting KSG. “It was already very strong in other parts of the world, in the US and Europe. I think it took the pandemic in Australia for everyone to switch on properly and to understand it,” Glenn reflects.

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“Our successful partnership with KSG spans over a decade. We’ve become a natural extension of its business, adding continuous value with our local expertise, drive for results and integrated source-to-shelf solutions.” – Jarrad Wescombe, COO, ACM New Zealand

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“But that puts a lot of pressure on when your main customer is a big-box DIY retailer, and Amazon and the online marketplaces are really putting pressure on margins and customer expectations of value. It’s a whole new ball game in that space.”

Bunnings has since launched its own online marketplace in 2019, which has helped tackle this issue. Named Marketlink, it gave its customers access to more than 8,000 products, many of which it had not previously sold.

Filling Gaps

KSG has also developed a few of its own niche brands along the way, such as Evekare, an assisted-living aged-care product range that it established to fill a gap in the market. “No one had paid attention to this area or put any design into it for probably 25-to-30 years. It was all very clinical and hospitalised,” Glenn explains. “The appetite for products that didn’t make a house look like a hospital was pretty strong so we put some time and energy into it.”

The range has drawn great interest from all around the world, particularly the US and Europe. “Two years down the track, we now have a product range in Walmart, Walgreens, a little bit in Lowes and Home Depot, as well as B&Q in the UK,” he shares. “So, this brand has just taken off out of nothing just because there was such a lack of inspiration in that space for a long time.”

However, the biggest opportunity for KSG over the next few years remains with its core business in the Australian market, according to Glenn. Forecasts suggest that there will be enormous growth in home building renovations over the next two-to-three years, but this coincides with a shortage of people to carry out the work.

“There’s a distinct lack of tradies – builders and tradesmen are at capacity,” he says. “That means the DIY market will get a boost. So there’s a big growth phase coming up here if we can capture that properly.”