The recent SHFM National Conference included a very special panel discussion. What made it special was not so much the topics as those discussing them: a group of executives not often seen sharing the same stage. But there they were, taking questions from Barbara Kane of Ecolab: the heads of corporate dining operations for the contract management industry's "Big Three" companies: Mark Bickford of Sodexo, Rick Postiglione of Compass Group and Frank Kiely of Aramark, along with Kathleen Ciaramello of Coca-Cola and Kirk Tanner of PepsiCo.
Among the topics they discussed were the impact of acquisitions on company operations and customer relationships, the emerging technologies expected to impact onsite dining and the major threats to traditional onsite dining from changing work habits and external forces such as online ordering/delivery services. Here are a few excerpts of the remarks made by Bickford, Postiglione and Kiely.
Different corporate clients are focusing on different key initiatives—sustainability, food safety, health and wellness. How do you manage their varying needs?
Frank Kiely, Aramark: I’ll tell you what, it’s not easy. Ultimately, people want the best program they can get and the best price they can get. From our perspective, it's looking at our customers and understanding how they act and how they behave and then developing programs that meet those needs. One of the biggest I’m seeing now is the ability to recruit and keep talent, how do you keep people on board and deliver experiences to the Millennials who are coming into the business?
Rick Postiglione, Compass Group: It’s always about the customer, right? So I think our job is to continue to know the customer better than our clients do. We customize our approach as we look at where they come from, what their geographical profiles are and how we communicate to them through the generation gap. It’s totally about customization for those individuals.
Mark Bickford, Sodexo: I think the key point is really about understanding what the needs are. One day I could be in a corporate office and it’s absolutely, 100 percent about employee engagement. That’s what is driving that organization. And then I go to a manufacturing company and it’s absolutely 100 percent about safety and zero accidents and that’s their focus. We have to ensure they know we have the programs to meet their needs and then tailor them to their specifics much like what Rick said about customization. I think all our organization have solutions, but we need to show how they specifically apply to you and I think that’s a very important part of the process.
What do you see as the next big threat to the foodservice industry?
Postiglione: I think the competitions always been there as it relates to the street. A lot of times we talk about competition amongst ourselves, but when our customers aren’t buying with us they go someplace else entirely. I don’t think you’re going to see drones deliver sandwiches to your desk tomorrow, but if you look at what’s happening with Amazon Fresh and so forth, they’re always going to penetrate the market. But frankly, I want to flip the question because I think it’s really up to us, because we touch our customers every day, so we have to continue to create an environment in which they don’t want to go outside. The competition has always been there. I do admit that there’s been a lot more penetration than in the past, but it’s always been there.
Bickford: We don't know what technology is going to do and what the workforce is going to look like. In our business model, we obviously concentrate on foodservices, so if five, 10 years from now individuals have the flexibility to work wherever they want to work because technology makes it so easy, what is that going to do to our overall business model? There is that potential threat out there, but maybe more flexibility as well. We talked about employee engagement and attracting talent and the retention of great employees and those were the things that became more important in the dot com era, when you had a lot of people with a lot more flexibility.
Growth Through Merger and Acquisition
What from a global perspective are you seeing outside that is not in the states yet but that we’ll all benefit from?
Postiglione: In the UK they have something called Chip & Pin, a credit card security system and they’re already doing mobile payment directly. It's in programs like that that we’re behind and they’re way ahead of us. But it’s coming here and coming real soon.
Kiely: A big thing recently in our business is a lot of solid work around menus. We just brought one of our vice presidents in to work with us on how to standardize the menu and make it easier for the front line to manage the business and cater to the customer.
Business in the past 10 to 15 years for both manufacturers and contract management companies has been about growth through merger and acquisition. And it really doesn’t seem to be changing. How does that affect your business in both a positive and negative respect?
Bickford: I’ve gone through six acquisitions and I don’t think it’s going to stop any time soon, but I think from a positive perspective when corporations go through those acquisitions it certainly gives us the opportunity with those organizations to be able to provide more options, more services, so there’s certainly a growth opportunity from that. I would say, though, from the negative side and from my own personal experience, our business is a lot of things, but it’s also a relationship business, and more often than not, we find the company who acquired the other company saying, "we need to find a billion dollars of cost savings," and they usually start with foodservice—of course!—and cut out the catering and sometimes ax the jobs and relationships we have with our client. That disruption is a big negative.