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2013 Revenues: $25 million
2014 Revenues: $39 million
Percent Change: 56%
HHS Culinary & Nutrition Solutions (CNS) topped the 2014 Top 50 with a revenue growth rate of 56 percent. The meteorically rising unit ascended from a standing start less than five years ago and as recently as 2011 had revenues of less than $6 million.
CNS benefits from being part of a larger established organization as HHS (originally Hospital Housekeeping Systems) operates in more than 350 hospitals, providing a range of contracted services from environmental, facilities and clinical/biomedical engineering to linen utilization and laundry management. With the launch of CNS in 2011, HHS added foodservice and dietary to the mix and judging from the results to date, it has been a very successful addition.
“I think we’ll break $50 million easy in 2015,” predicts Keith O’Neill, president of the CNS unit.
“Initially, we had to show that we were a viable entity and prove ourselves by getting into a baseline number of accounts,” O’Neill explains. “But now that we have shown that we can do the job and compete with the big guys out there—raise patient satisfaction, reduce costs, increase quality and do all the things we said we could do—we can leverage the relationships HHS has with those 300-plus hospitals it serves and it has opened the floodgates for us.”
Those relationships come from the quality of the services provided for over 40 years by the parent company. “If our brethren in the other areas are doing an outstanding job, the mindset of our clients is that we will be expected to do that same kind of job on the foodservice side,” O’Neill says.
He cites Community Health Systems, based near Nashville, as an example. “We have 110 partnerships on the environmental/housekeeping side with them but only 10 on the food side. We’re getting ready to pick up 10 more but that still leaves 70 to 80 potential clients that we still have to approach.”
Because some of those clients already have other foodservice contracts in place, CNS will have to wait for renewals before making its move. These accounts are all acute-care hospitals, some with affiliated skilled nursing or behavioral facilities, which is CNS’ primary market.
A key niche within the healthcare market for the company is the smaller hospital where HHS deploys a one-director model to oversee a bundle of contracted services based on systems that the company has developed over many years. O’Neill says these smaller, often rurally based venues are also the places where CNS first deploys the young, talented culinarians it recruits. They build experience in the healthcare industry over the course of a 12-to-18 month stay while the facility gets the benefit of talents it may not otherwise have access to.
“We’ve been bringing a lot of culinary-trained people out of the hospitality business that are tired of the long hours and lost weekends. These are people who are passionate about what they do but can now have a lifestyle where they can raise a family, see their kids and get experience before moving up the ladder in our organization.”
2013 Revenue: $197 million
2014 Revenue: $249 million
Percent Change: 26%
Unidine’s jump in annual revenues from under $200 million to nearly $250 million in just one year was due to a number of factors. While the company’s acquisition of FAME Food Management, which expanded its presence in the education and government segments, helped, “we’ve always looked at organic growth as the real strength of Unidine,” says President/CEO Richard Schenkel. “The acquisition was accretive but a very small amount for 2014.”
Schenkel emphasizes that the company’s basic approach of fresh, innovative dishes prepared by talented associates has been the same from the start almost 15 years ago, and is something increasingly embraced now by the marketplace.
“We’re the Whole Foods of foodservice management,” he says.
Another factor, Schenkel believes, is the “intimacy” his company maintains with clients. “To this day I think our executive team knows all our clients and I think that’s unheard of in this industry.”
Of course, that becomes harder as a company grows and takes on more business, and that is one reason for the recent establishment of two new president positions to oversee the senior living and healthcare/corporate/FAME Culinary units.
“It will allow us to continue that intimacy at the senior level and allow me to be out there more focused on our clients,” Schenkel says.
“We’re never going to be a $14 billion company, that’s not our game plan, but to be a half a billion to a billion” is achievable, he believes.
As for the FAME acquisition, Schenkel says what attracted him was the company’s culture fit, its strong client list on the corporate side and its education business, a new niche for Unidine, which had originally started as a provider to the senior dining segment before branching out to hospitals and B&I.
“It gave us an entry,” Schenkel explains. “This is a ‘you-can’t-play-in-the-business-because-you-don’t-have-any’ market. Well, we now have education facilities and it’s become a very active marketplace for us.”
He believes the needs of the education market dovetail with Unidine’s strengths in fresh, healthy food production.
“Look at what Michelle Obama is pushing in schools: fresh and wellness,” he says. “We think that with our platform we can continue to grow in education.”
Despite that, Schenkel says the healthcare segments of senior dining and hospitals will continue to drive the bulk of the company’s expansion, especially the acute, behavioral and rehab hospital markets, which he describes as “yearning for what we provide.” He says he expects “double-digit growth” in healthcare over the coming years.
One recent coup was landing the Northeast Georgia Health System with its three hospitals and two senior living facilities. Unidine also recently added Franciscan Hospital for Children, in Brighton, Mass., and Southeast Hospital, in Cape Girardeau, Mo. Recent geographical expansion has seen Unidine penetrate the Carolinas, Texas and Missouri. It is now in some 20 states overall.
“We feel this company will be in the Food Management Top Five within the next five years,” Schenkel boldly declares.
2013 Revenue: $239 million
2014 Revenues: $298 million
Percent Change: 25%
Guckenheimer’s impressive revenue growth in the past year was achieved in the corporate dining market, a segment anecdotally still in the dumps from the economic downturn and hampered by ongoing skepticism over the value that investing in onsite dining can deliver.
But you wouldn’t know it from Guckenheimer’s results. The company not only plies the supposedly treacherous B&I waters just about exclusively but must battle the three major corporate contract firms, as well as more regional and local boutique providers, for business in the segment’s most prized niches: high-end companies in select high-growth industries like technology, biotech and gaming.
Investing in a national sales force certainly helped land more new accounts, but what has made the biggest difference, according to CEO Randall Boyd, is the product Guckenheimer delivers, the great frontline talent that produces and serves that product and how those offerings fit with current trends.
“What we offer is very timely: fresh food made from scratch within a wide range of offerings, from wellness-focused to eat-on-occasion delicious,” he says. “Our growth has been driven because the market has a lot of focus on food that’s good for you and that’s resonated a lot in the marketplace with new accounts. It’s food to come to work for.”
Boyd also notes the “great talent hunt” factor. “Companies we serve are focused on attracting and retaining talent, and we are a component of their offering of amenities to their prospective employees in a very competitive environment because it is an amenity-rich time in many industries.”
While Guckenheimer has certainly added new business over the year, organic growth in existing sites has also been strong.
“We position the food as a strategic element of the environment that companies have for their employees to have sustainable high performance,” Boyd notes. “The clients we partner with are those that believe the food is an important ingredient in their success.”
“We believe our food can help to nourish inspiration. If you give people the right kind of food at the right time, it enables them to maximize whatever they’re doing. For example, if you are going to make a presentation to your board of directors, you probably ought to eat something different than if you’re getting ready to fly to London overnight.”
“We help design food and create information for our customers that teaches them the impact of the food they are eating on their performance. We think it’s a lot more than just feeding somebody lunch. If that’s all they want, we’re not their guys.”
Boyd adds that Guckenheimer’s services also enhance the growing desire among companies to promote wellness among their employees, making onsite dining an attractive bang-for-the-buck proposition.
“We believe it can impact their group insurance costs, their absenteeism, productivity and we believe we can be a factor in that,” he says. “We believe food is the missing ingredient in corporate wellness programs, and we work with company fitness programs and human resources to help educate their employees and drive quantifiable outcomes.”
2013 Revenues: $162 million
2014 Revenues: $201 million
Percent Change: 24%
Metz Culinary Management President/CEO Jeff Metz is proud of the fact that his company’s impressive recent growth spurt all came organically. “Back in 2011 we had bought a small company in Georgia with about 18 healthcare accounts just to give us a bit of a stronger footprint down in the South, but since then we’ve just been growing organically.”
Metz currently operates in 19 states, all east of the Mississippi.
“For me it’s about really having a strong nucleus of support around each of our operations to build our reputation,” Jeff Metz says. “This past year we’ve seen a lot of growth in the South.”
He cites Florida A&M University, New College of Florida, Polk State College and Hillsborough Community College as accounts added in the Sunshine State in just the past year. Another prominent recent pickup is Maryville College in Tennessee, which Jeff Metz says “will be a great place for us to sell from, a real showplace.”
“This is about relationships and partnerships, and that’s what we’re trying to get in these markets and build a good reputation for ourselves.”
Jeff Metz says the company’s primary areas of growth at present are in the higher education and healthcare segments and in its environmental services business, which recently posted a 25 percent growth rate.
“It’s tough out there,” he acknowledges, “the economy’s still not where it needs to be,” but Metz has weathered the troubled times and prospered by hanging on to existing business, thanks to those relationships Jeff Metz talks about, as well as signing new accounts.
The company retains a number of longtime clients, with some relationships like Misericordia University, in Dallas, Pa., dating back to Metz founder John Metz’s previous contract firm Custom Management Corp.
Weathering a suspect economy is also made a bit easier with the kind of client base Metz serves: institutions like colleges, schools and healthcare facilities that operate in good times and bad. “They still have to feed people, whatever the economy is like,” Jeff Metz opines.
The state of Pennsylvania, where the company started 20 years ago, remains a solid base of operations. Metz counts some 70 school districts in the state alone as clients, but expansion has also reached westward as well as southward, with a hospital client as far as Indiana, while Ohio is replete with Metz clients in a variety of segments, from healthcare (Sisters of Charity Health System), higher education (Ursuline College) and corporate dining (Smuckers).
Metz also keeps up with consumer trends with programs such as its Super Naturals menu concepts, with incorporates the various “super foods” into its formulations to appeal to health-conscious consumers.
2013 Revenues: $26 million
2014 Revenues: $32 million
Percent Change: 23%
President Nicholas Saccaro attributes Quest Food Management’s significant growth over the past year to four primary causes.
First, he says, the company has extensively expanded its satellite program, through which food is prepared at one operational site and delivered to other nearby sites that don’t have the capacity for producing meals of that standard of quality.
“In the Chicago marketplace in particular,” he says, “there has just been a huge demand for fresh, high-quality food that’s served in a more traditional way than individually packaged meals that are reheated on site.”
Furthermore, adds CEO Mike McTaggart, these satelliting relationships offer the host districts where the production takes place a benefit as well because they realize a revenue stream from facilities that would otherwise be sitting idle. “Everybody wins,” he notes.
Second, Saccaro says the company has added a number of large National School Lunch Program (NSLP) accounts in the past year. “One of the things we’ve been able to use to our advantage with all the changes to the National School Lunch Program over the last few years is using a lot of brown box commodities and doing a lot of whole food and cooking from scratch versus reheated processed foods.”
Third, he notes significant same-unit sales increases year over year from existing clients. “I think it’s because we’ve really gotten a lot more focused on simple-to-order, made-to-order experiences for students both in and out of the National School Lunch Program. We’ve also expanded some of the partnerships to be open all day long, and with school schedules, particularly in high schools, changing, we’ve seen the amount of sales before and after school growing.”
Finally, Saccaro cites Quest’s move into providing consulting services to schools that retain self-operation of their meal programs, which adds an alternate revenue stream. “There are limitations in Illinois on how schools can move out of self-operation and into being contracted out, and we’ve figured out some creative ways on the consulting end to provide services like training on the culinary side and adding buying power by extending some of our leverage from our prime vendors to them.”
Quest currently operates strictly in the Chicago metro area, but “we would like to expand regionally into neighboring states,” McTaggart says.
Quest has also become a source of information for districts expressing an interest in exploring leaving the NSLP. “I think people want to find out what their options are and I think our experience with so many different types of arrangements has made us sort of an expert in that field,” McTaggart says.
“We’ve certainly seen more schools asking questions,” Saccaro agrees. “They want to know not only about the financial impact but the community perception impact, what staying or going off the program means. We have districts who’ve approached us about going off the program, but also others who are off and others we’re working with to move them onto the program.”
Both executives stress that Quest is not anti-NSLP nor interested in enabling districts to skirt the responsibility to serve students nutritious meals, even if they don’t strictly meet USDA requirements as defined by NSLP.
Saccaro notes that, for example, almost all Quest sites, whether in or out of NSLP and even satellite sites, have unlimited fresh fruit and vegetable bars.
Ultimately, he says, that decision is up to each district, but Quest is ready to work with the program whichever way it decides.
