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146: How Beko Has Built a Culture Around Convenience and Health

Written by Rob Stott

November 22, 2022

Beko Sazi Bugay Independent Thinking Podcast

The commitment to creating products that promote convenience and a healthier lifestyle for the consumer (and world) at Beko is one of the things that sets the brand apart. Every aspect of their products — from the way they’re built to how they perform — is grounded in those two key concepts. Sazi Bugay, VP of Product Management for the brand, shares how Beko has built a corporate culture that truly promotes those ideas, and how retailers can leverage it in their own stores.


 

Rob Stott: All right, we are back on the Independent Thinking Podcast and real excited today, a brand that I go back to, I knew the Beko brand, but my real interest and excitement around everything you guys have going on dates back to a chance meeting in Berlin at a show called EFA and a wonderful keynote that… we’ll get diving into it in a little bit here, but we’re bring it to today. And Sazi Bugay, VP of product Management for Beko US. Appreciate you coming on representing the Beko brand here and doing a podcast with us.

Sazi Bugay: Rob, thanks for having me. It’s great to join you. And then I’m going to walk through everything that you’re interested in, so get on.

Rob Stott: Well, it’s a great brand and one that I think the message you guys have of sustainability and… I’m jumping ahead. And just exciting to see how that really flows through everything you do from the product side to just the corporate mission and everything. For anyone that doesn’t know the Beko brand, you’re going to get to know them today. So strap in, it’s going to be a fun one. But before we get into all that, I’m going to pump the brakes on my own excitement, try to keep myself contained here. But tell us a little bit about yourself. Let our audience know who Sazi Bugay is, and your background, and path through this industry.

Sazi Bugay: Thank you. Thank you, Rob. Well, I’m so far a 28 year veteran of the industry. Started off with the washing machine plant of the company, after different various roles at the plant, and so the planning, production, all the different areas, also the liaison onto the central headquarters. I moved back to HQ about eight years after I started to the product management and global product management side of the business. Then we were developing, at that time we were maybe five or six plants, now we have come up to a place where we have 30 production locations around globally. And then of course when everything is growing and then we focused our eye on North America, and we wanted to also invest in and then look for the opportunities. And back in 2006 when we decide to invest in the US an opportunity came and I found myself here developing our other brands for multifamily operations through our distributors.

And years went by, in 2015 company decided after the development of the company’s products here in the US, we decided to form North American headquarters here in the US and we chose Chicagoland to be in the middle of the action. So since 2016 May, Beko US has been formed, and since then I’m in the Chicagoland and running at the headquarters, and enjoying the product life and enjoying developing products, and innovative products for North America to be different than the competition, especially on the sustainability energy and useful technologies bringing to the north and suited the markets.

Rob Stott: Although you picked a cold market to sit in, at least in the winter, it’s got all four seasons, that’s for sure. So I know we’re here what, mid-November as this podcast publishes. So you bracing for winter? Winter is coming.

Sazi Bugay: No complaints. No complaints. All my life I’ve been too in a colder temperature, so I think I’m better in the colder temperatures than a warmer so far.

Rob Stott: I love it. Well, you mentioned the expansion into the US. For those that don’t know the Beko brand, Arçelik the parent company based out of… talk about the parent brand and all that.

Sazi Bugay: Arçelik is a global manufacturer of appliances based in Istanbul, Turkey. Again in the globalization and then owns a number of brands, Beko is the number one brand that is owned by the company and globally being sold at 130+ countries. Also we own couple of German brands, Grundig is another brand that we put position higher than Beko in Europe, which doesn’t exist here yet so far in the US. And globally we also own Hitachi brand out from far East on the Asia Pacific zone, so we own all Hitachi branded product, production, and product distribution outside of Japan. And also we have operations in South Africa, and various places, Europe, Asia, India, and globally expanding where we could do as much as possible.

Rob Stott: What’s it like… You know, talk about the move over into the North American market, obviously you guys, as you’re doing that, there’s a lot to consider and things like that. What’s the adjustment been like? Or, I guess really what I’m curious, how different is the appliance market here in the US compared to internationally, or Europe?

Sazi Bugay: Well, first of all, I have to say everything is bigger.

Rob Stott: Yep.

Sazi Bugay: This is the main thing. So whomever is in the North American markets from Europe or from other parts of the world, the appliances are bigger, the needs are different. The cultural use of appliances are actually totally different. Of course, voltage is different, and also regulatory burden is so different than Europe. And then within the US it’s also different. The west coast, east coast, south and west, everything is different. So you have to really adjust and know, learn, and go throughout the country. And I don’t know whether it’s okay to say, but I traveled a lot in the US to understand, went into homes to understand differently how consumers are behaving, and how they’re interacting with the appliances.

As an example, for example, well the Northeast and the Pacific Northwest is very high on electricity, but down in south they literally cannot really find if you’re… You need to have that 36 inch range, or the 48 inch range, you have to have those sizes because the homes are big over there.

Rob Stott: Yeah.

Sazi Bugay: However, one thing is common is the needs of the people don’t change, the way that we live almost differs. However, the major thing is here, the frozen goods, or frozen food, how much US is consuming compared to Europe. The other thing is actually the ice making and cultural ice culture here is unbelievably… So really in order to be in the marketplace, you have to really solve this ice equation. And it’s very difficult for a country that does have maybe one or two cubes of ice in a bottle or in a glass when you ask for it. So the understanding here, much different, but we have adjusted, that’s why we came forward. And then we learned about the market, and then when we were ready we decided to put Beko in. And Beko was introduced in 2016 with a full product lineup. So we didn’t just come with just cooking, we didn’t come with just refrigeration, so it was a time. And then necessary investments were of course previously approved before we arrive.

Well, as we go by lots to learn, entering the country from the east coast doesn’t mean that you know everything from the west coast. So a lot has passed, the company has evolved, and so far we’re happy with the development. We’re bringing a lot more new products, more focused on sustainable and energy products. Products. And we know that the energy crisis will not going to go away, the globalization and at the end of that… energy need to run our lives will be so much different and we need to understand the control of it. So it starts from, I believe, HVAC overall because that’s where we are breathing, we’re living, but then our appliances also purposely should also help us to get to that level.

Rob Stott: Yeah. No, I mean, I think you guys are in a unique position being relatively new to the North American market compared to a lot of other brands out there. But I think all brands are having to learn how the consumer is changing priorities for the consumer are changing, and all of those things at once. And it’s a lot to take into consideration, but-

Sazi Bugay: Correct.

Rob Stott: … it’s resulted in some pretty cool innovations for you guys. So I mean from the time you’ve entered the market to today, is there anything that a product or a category maybe that you’re sort of most proud to see how it’s innovated over that time?

Sazi Bugay: From our products, product segments, of course dishwashers and refrigerators are the main ones that I would like to emphasis on. Not to mention, I’m not going to take off others because other innovation is coming on the other segments. However, when it comes to dishwashers, we know how important it is for US culture and also everybody has to have it definitely working, dishwasher. But the needs here is time is important, temperature is important, sanitization is important, the cleanliness, the shininess, and all are important. While it is a closed box, everybody has taken granted that this is a dishwasher, it washes and dries.

So by focused on some different needs of the customers, we noticed that there’s an improvement point on the spraying power, how we can manage the spray power, how we can put the water to different corners or all the way all corners. So we came up with last year, this corner intense technology on our dishwashers actually sweeps the whole bottom pan of the bottom side of the dishwasher rather than it’s just circulating and then missing the corners. So that’s why we call it corner intense.

Of course with the corner intense, we brought in other features such as a filter, automatic self-cleaning filter, which is actually not new, but actually it’s not been used widely. And an ionizer, we borrowed the idea from our refrigeration because we observed that many consumers having a single or two people homes, they don’t use their dishwashers every day, but they keep their dishes somehow dirty inside the dishwasher and they complain about the smell. So that’s why we said, well, anytime that the customer opens the door doesn’t want to have the smell there. We have this choice of ionization so that it takes out all the smell ions, doesn’t give any harm to the consumer life and health, but it just takes to odors away and as long as the cycle is activated. So we brought these features to our products on dishwashers.

And in refrigeration we have this one feature that we noticed that there’s an unbelievable food waste here we throw away from our products, from our homes from our refrigerators. We leave them there, we forget them that we bought, we over buy it, over purchase it, and because you go the a store maybe once a week, or once in every two weeks. So that means some of the vegetables and fruits are rotting, so we came up with this developed with this special humidity controlled crisper with the sunlight addition inside, we call it Ever Fresh Plus that keeps the temperature, it’s constant, and humidity regulated so that the fruits and vegetables stay fresh up to 30 days.

Rob Stott: That’s crazy. Well, first of all, the way you just went and talked about… You look at a dishwasher from the consumer side of things, and to your point, it’s that appliance that sits there has dishes in it, and once we decide to run it we run it and they get clean. But it could sit there for a while. But the level of detail and how you’re thinking about inside that space and how to innovate it, and then obviously the advancements on the refrigeration side. So cool to hear that from someone that is knowledgeable about the product side of things and seeing what you got to do.

Sazi Bugay: More to come.

Rob Stott: It’s unbelievable. Yeah, it’s so cool.

Sazi Bugay: We also tackle the ice issue and I’m happy to say that we have one product, actually not one but a series of products that can have tons of ice building. We noticed that people are going to either grocery stores, or gas stations, or Seven-Elevens to get their 10 pound bags just to have just before the party, so it was an inconvenience. Where do you put that ice? If the bag is clean, we don’t know, but we put it in our freezer with our other foods. So the aim was on the company, we said that when we are developing to North America, we have to have minimum 10 if not possible, 11 pound per day ice making capability.

Rob Stott: Wow.

Sazi Bugay: So we kind of have that product in our French door products, we’re proud of it, it’s just been tested and it’s really nice. And then sometimes we get calls, “How can you slow it down?” But we’re thinking about that too, but people that who love ice, then that’s coming up so…

Rob Stott: No, that’s cool. It just goes to show that there’s still obviously lots of ways to innovate in this industry, in the appliances space, and you guys are doing it. And for the listeners that have been paying attention, one of the things that they would notice is that one of the things that is obviously top of mind and a priority for the Beko brand, and I know it goes back to the parent company, but that is sustainability, and making sure that is front and center in not only what you do from the product side and how it helps the consumer at the end, but obviously throughout the process as well. So I want to let you dive into that and tell us what does sustainability mean to the Beko brand, and why is it such an important part of the company’s DNA?

Sazi Bugay: Certainly, certainly. Well, we are people of consumption. We buy something, we use it, and we consume it, we throw it away. Apparently, we don’t get to think about what’s happening after we throw that part away or stuff away. So it starts from how you look at the world evolution, how you look at the materials use, how we can use the resources much better. And therefore, Arçelik has switched to this sustainability approach way many, many years ago by actually creating self-sufficient production locations so that we don’t have to borrow energy, or borrow water, you know purchase water, from municipalities to produce our own products. So it starts from the production mentality.

Then the design is very important. When I entered the company 28 years ago, we were designing back from container backwards. Now we’re starting from the carbon footprint, what carbon footprint is actually, we’re not just talking or thinking about the size of the product, we’re also thinking about how much the carbon emissions in the production, as we use in the product, and afterlife of the product when we send it to the recycle center or dumpster.

So that has been… And this is called, and in Europe we call them carbon credits. These carbon credit calculations are very important, and then any new investment we start from these. So the idea from engineers from thought process to the retailer, from sales, this is all connected. Having said that, making our production locations carbon neutral was the first step. I’m proud to work in a company that actually has full carbon neutral facilities. However, we’re not done there. We have to make all of our processes, all of our life cycle of the product as much as is carbon neutral as possible. So in doing so, from the gas that you use in refrigerator, from the materials that you use in any appliance, it does have to be recyclable, upcyclable, or reusable. I call it returnable.

Two production centers in our home country have this recyclable centers that without the brand, with any brand, we get these products, we recycle them, we separate them, we take the glass out and the glass is crushed and reused. The plastic is crushed and reused, and the metal is crushed and reused. So everything is being reused so that we give back to the environment. So that’s very important part of our life, it’s in our DNA and also in our management system. We also look for KPIs based on this, how much we did. Very good example, actually two examples that I will tell you about.

One of them is that we just launched, actually we introduced at KBIS this past year and we just launched the washer that is top materials made of up to 60 or 70 water bottles, that we use, we throw away. So there is a crush material, there’s a recycled material, plus there’s the material from our water bottles that have been crushed and added in so that we can reuse that plastic to make it useful of course to some degree to our products. And another one is, this is going to be big in the US, is elimination of EPS that is styrofoam. There’s already work is going on, small domestic appliances have removed this, but large appliances have not. So I think that there’s a big potential in front of us that we can, anybody, if all the industry can remove this material from their packaging, it really will be everything will be 100% recyclable.

Rob Stott: And this is on, you’re talking about the product development side right now, which is, if that’s not impressive enough, I don’t know what it is. But it goes further too because it goes into not only how these products are made in the manufacturing process and all that, the kit and caboodle over there, but then too to what these products do. So the example that comes to mind, and I referenced EFA earlier, there was a conversation back, I think it was EFA 2019 when the clothes washers, the washing machine with the microplastic filters that was talked about and introduced, and it’s what these products do too. So there’s the construction side, but also what they do in practice for the consumer and for the environment. And talk about that a little bit too.

Sazi Bugay: Yes. Thank you for reminding that. Actually another subject that we are working on as a whole company, microplastics or microfibers is not the result of the appliances… appliance problem it’s the clothing problem. It’s the cloth manufacturer’s problem. However, seeing all this clothes that we wear, we wash and dry, we create those microplastics and we’re using synthetic materials in our wearables, and now it used to be all cotton in the past, now synthetic and manmade material came in. So these go and wash out and then eventually these go flow into oceans. And in oceans as you know the fish consumption, the fish eat these and then come back to us with the fish that we… and then goes into our mainstream. So if you look at the cycle, it’s huge.

There are other factors that create these micro fibers, but as an appliance manufacturer we took the responsibility at least to look at what we can do. And then attacked on the clothing industry because we know from also drying when all those fibers are coming out, the same thing is coming out during washing because there’s a greater mechanical action inside the washing machine when the washing action is taken. So we’re circulating the water, we’re taking that fibers out. As a matter of fact, every cycle it comes about in grams, but if you add it up, it’s too much. So we hear information from here and there that our kids or everybody has in their blood streams you see the microfibers. So anything to eliminate this going forward for the future generations will be our responsibility.

So far the final tests are going, we started selling the product in Europe by the way, but it has to be a complete cycle. We cannot really have that microfiber filter to be thrown to the garbage. We have to find a way to recollect them and reuse them to somewhere else and control the dumping of it. So that whole system needs to be developed here as well. So it’s going to come, there are some states in the US forcing this, or enforcing the commercial clothing right now, it’s going to start. And then like the electrification movement, I think there will be a more focused on environmental in the US issues, and then these issues will help and will force all manufacturers to come up with very creative ideas.

So it’s not done yet.

Rob Stott: Right.

Sazi Bugay: We’re not done yet. All, I want to say this, we use top load washers that have been maybe made normal since 50, 60 years ago, but it’s their main duty was just to wash, so we’re now going to the protection of the environment, protection of our resources.

Rob Stott: Yeah, that’s the thing that’s at the heart of this, right? Is that it’s a sustainability message, but one that to hear the way you talk about it and how important it is, it’s very apparent that it’s at the core of what Beko is doing. And that I think is what I grasp onto and has stuck with me the years of knowing the brand is just seeing how important it is top to bottom throughout the entire every brand under the Arçelik banner to what you guys are doing, and I mean inspiring it’s-

Sazi Bugay: It’s the company culture.

Rob Stott: Yeah.

Sazi Bugay: Even though I can tell you from my plant here, we had air conditioners, then we removed the air conditioners from the huge plants. What we realized that on the assembly line, when you direct air to people’s feet, when they get the coldness in their feet, that the feeling of being cold is coming from the feet so that they work much comfortably instead of having cooling the whole environment. So that was a very nice difference, differentiator. Everybody was very happy with that. So we were kind of pushing the cold air downwards to their feet because cold air stays in the huge environment that you always… you’re kind of cooling the environment only you need it. You don’t need to cool the whole thing. So those kind of ideas that came in engineering that was added. So again, environment is just one, we are only given this environment where 8 billion people in the whole environment globally, so every manufacturer, every brand owner have to do their own part.

Rob Stott: Well, I want to bring it full circle because this is something I think retailers listening can and should be able to leverage this type of messaging in what they’re doing. So I almost want to throw it to you and ask, in talking in conversations you’ve had with retailers, what are you telling them? What is that message on how they can turn what you’re doing around and leverage it with their customers and in their communities?

Sazi Bugay: So very good question Rob. I have to tell you, it’s not easier to adopt this cultural change. We are in a society and I can do back and forth comparison that nobody cared about the gas prices here compared to where all in Europe, everybody was wondering and looking at the pump numbers. But it has changed and it’s going to change even more. Nobody was caring about their energy bills, how much kilowatts that they’re using, how much their home is using. But it’ll change. So the change will come from the necessities, from the needs. So we just want to be ready by when that change comes and we’re focusing our messaging, all of our technological advancements, we’re marrying up the details in our products to the sustainability. Anything that it comes with health and wellness concept in our products is tied up with the sustainability.

Again, going back to Ever Fresh. Yes, it keeps the fruits and vegetables up to 30 days fresh. You are not traveling all the time to the grocery stores. You don’t have to use the gas that much. You don’t have to spend your time that much and you’re eliminating throwing the foods away. So everything is in a circular way, it’s sustainability.

Now, as I said earlier, packaging is the complete another story because everybody, they love to get the new appliances, but nobody can takes care of the packaging. So that area, and then whomever solves that problem equation together with the inside of the product will be a major differentiator, and we at Beko believe that Beko will be one, if not one of the first companies to do so in the US market very soon.

Rob Stott: No, that’s awesome and I love it because it’s one that it’s cool to hear, especially in a time when you think about what’s important to younger generations and where their attention is, what they pay attention to-

Sazi Bugay: Yes, we think.

Rob Stott: … and where their values are and all. Read any article you want, the things that come up are sustainability, the health and wellness, all that sort of stuff. So you talk about a cultural shift, it could come soon with these generations that are up and coming and where they put their priorities. So awesome to see that it’s been something that has been, not just with this generation but many previous generations, a major priority for Beko and everything that you guys have going on.

So awesome conversation, one that I continue to find so much inspiration in, and love talking to you guys about. So to be able to share it here on the podcast has been a lot of fun.

Sazi Bugay: Thank you Rob.

Rob Stott: Yeah, Sazi, I appreciate it. We’ll be catching up for sure down the road and seeing where you guys are going. Look forward to following all the innovation in the products and what you guys have coming, and seeing you at a prime time before we know it and elsewhere.

Sazi Bugay: Yep, thank you Rob. And it’s been really a pleasure to be here and to be with you. More innovation is coming on its way, so I’ll be happy to talk further on further opportunities.

Rob Stott: We will be keeping our eye out and ears.

Sazi Bugay: Thank you.

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