Business Partners
To sell B&I self-ops on their services, contractors must assure them that standards will not be compromised
By Allison Perlik, Senior Editor -- Restaurants & Institutions, 10/1/2004
The saturation of contractors in corporate foodservice runs anywhere from 80% to 95%, say companies whose hold over the business-and-industry segment has continued to grow over the past two decades. Eventually, most predict near-total contractor domination in the category.
“It will take us awhile to get there, because it’s really going to come down to the small-account and multitenant strategies. Maybe there will always be one or two who say they’ll never do it, but I think it will continue to grow,” says Mark Toomey, division vice president of sales, corporate services, at Gaithersburg, Md.-based Sodexho USA, which serves more than 1,300 B&I accounts nationwide.
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With only a handful of self-operated programs left in the corporate arena, contract feeders make it a point to stay familiar with them, often maintaining relationships with key personnel to stay top of mind if and when self-ops decide to make the switch. Sometimes, companies get lucky and make contact at just the right time; more often, self-ops submit RFPs (requests for proposals) to a number of potential vendors as they weigh the pros and cons of making a change.
To the contractors, their own advantages are clear-cut and generally unparalleled at the self-op level. They point to management support, depth of resources and culinary innovation as major selling points that address operator concerns about quality, service and cost. In a nutshell, they say, it’s all about expertise.
While managers at self-operated B&I accounts often lack industry knowledge and must divide their time across varied duties, contractors can provide layers of dedicated management personnel whose sole charge is to keep foodservice running smoothly.
Regional player CulinArt, which runs about 100 accounts (50 of which are B&I) from its headquarters in Lake Success, N.Y., says its operations’ success depends on more than just site supervisors. The company’s strategy calls for multiple district and regional managers who can visit accounts often and work hands-on with staff.
“[On-site] managers will always have less objectivity because they always have their heads down looking at their account,” says Tom Wigginton, CulinArt vice president of corporate development. “We have to look at outside ideas and trends to keep things fresh.”
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Contractors’ deep wells of resources, especially for “Big Three” companies Sodexho, Philadelphia-based Aramark and Charlotte, N.C.-based Compass Group North America, extend beyond leadership teams. On demand, these companies can supply experts in areas such as marketing, recipe development and even health-related issues, still very much a hot topic across all foodservice segments.
“The problem with B&I is boredom from both sides: customers eating in the same place every day and our associates trying to come up with new specials, promotions, menus,” says Jim Kallas, president of the Midwest division of Compass-owned B&I specialist Eurest Dining Services. “One person is an island if you are self-op. No matter how many seminars you go to or how many magazines you read, it’s not like having the depth of a company like Compass with 1,500 Eurest operations to learn from.”
Under Control
The three concerns contractors most often hear from self-ops
reluctant to come on board are the fears of giving up control,
losing company culture and displacing employees. Contractors
often must show prospective clients how they will address each
of these issues—as did Compass with Motorola and Sodexho’s
Wood Dining Services with Schering-Plough—before making
a deal.
Anxiety about relinquishing control is easy to overcome, says Sodexho’s Toomey, pointing out that standards of operation and the right for clients to oversee these standards can be built into contracts. Likewise, Wigginton at CulinArt notes that many service agreements come with 30-, 60- or 90-day out-clauses that clients can invoke with or without cause.
“If you’re willing to stake your business on your results on the level that you can be pushed out at any time, you go about business a little differently ... and it brings comfort to the client that they have total control over their destiny,” he says.
Concerns about a culture fit often are the greatest stumbling blocks with self-ops, says Jay Leyden, vice president for business development with Aramark Business Services.
“It comes back to integrity and flexibility. We’re not cramming solutions down their throats. We’re there to work with them and keep things that are critical to their culture, but change and enhance areas where we can add value with a new service or twist that improves customer satisfaction,” he says.
Thinking Small
Finding solutions for relatively small accounts and bringing
them on board remains a key focus for contractors in the B&I segment.
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“It’s the $64,000 question,” says George Ardelean, executive vice president of sales and marketing for Jackson, Miss.-based Valley Services Inc., where about 13% of the company’s 200-plus contracts are in corporate services.
Business clients with populations of fewer than 1,000 typically cannot support profit-and-loss (P&L) formats and therefore constantly seek ways to reduce the management fees and subsidies they face.
Most contractors are working on their own methods of addressing these issues. At Aramark, where Leyden says a significant portion of business is fee-based rather than P&L, the company commissioned research on trends in downsizing and telecommuting and developed corresponding programs it calls Right-Size Solutions.
The ability to develop a variety of retail brands also helps. Sodexho’s dedicated Retail Brands Group, which includes 10 proprietary concepts, gives the company an advantage in this arena, Toomey says. Another example is Compass Group’s Outtakes program, a modular sandwich-and-salad concept that adds or subtracts components based on a venue’s size and population and can be augmented with a vending bank.
For small accounts as well as larger clients, the company’s philosophy is to concentrate on the big picture.
“We always look at the contract as a whole,” Kallas says. “We try not to focus on the positives or the negatives; we look at the total job.”
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