Building The Value Of Corporate Dining

Mike Buzalka

IN TROUBLED ECONOMIC times, belt-tightening companies naturally challenge every cost center, and onsite foodservice is often one of the most obvious targets of scrutiny.

In such an environment, building the value of a foodservice operation to an organization is critical. Here are a series of mini case studies showing how some operators are doing just that.

SODEXHO, INC.
GETTING CLIENT DECISION MAKERS "BEHIND THE SCENES"
It's a depressing fact of life in today's corporate dining segment that clients often lack direct foodservice experience. So how can an in-house foodser-vice operation make a case for something the decision-maker has little sense of?

Sodexho, Inc., has decided to deal with this dilemma directly with a pair of initiatives that expose clients to the wonders of the kitchen and shows them exactly what they'd be missing if they decided to curtail onsite foodservice at their sites.

In one of the programs, called CHEF (Clients Having Epicurean Fun), Sodexho has enlisted a partner with impeccible culinary credentials—the Culinary Institute of America. Together, Sodexho and the CIA have developed a pilot program designed specifically to support retention efforts and recognize Sodexho clients at the same time.

The other, called Master Class, brings together small groups of Sodexho chefs together with celebrity culinarians like Michael Schlow, Marcus Samuelsson and Roberto Donna for intensive training. It culminates in a gala dinner at which clients join the chefs.

The first three Master Classes have already taken place in Boston, New York and Washington, DC. Tom Mulligan, president of Sodexho Corporate Dining Services says they were great successes not only in motivating Sodexho chefs, but also clients.

Meanwhile, CHEF, which is modeled on the CIA's successful Culinary Boot Camp program, brings a group of client decision makers and the chefs from their operations to the kitchens of the CIA. There, they get a hands-on, back-of-the-house look at foodservice operations from a culinary perspective.

"Our goal is to enrich our client relationships by teaming clients with their area chefs, and at the same time build awareness of Sodexho's culinary expertise," says Susan Valenti-Devito, vice president of strategic marketing. "Clients learn about trends as well as practice culinary techniques used every day by Sodexho chefs— that knowledge is key to helping our clients understand the important role our chefs play in their cafes."

The first CHEF class was held for 10 of the contract management company's clients and the chefs from their accounts last October. It was so successful that the company now plans to make it a bi-annual event, to be held each spring and fall.

BON APPETIT MANAGEMENT CO.
MAKING A CONNECTION WITH THE LAND
Most of the food products food-service operators purchase ultimately came from a farm or ranch somewhere. But that "somewhere" presents a psychological dis-connect from Man's traditional relationship with the land and forest. Bon Appetit Management Co. is looking to reconnect that dis-connect with a Farm-to-Fork program that establishes supplier/customer links between the foodservice management company's client locations and local farmers..

The key to the whole scheme is a key link in the supply chain: dependable distribution.

Northern California is one of the United States's most productive and fertile farming regions, yet Bon Appetit sites in the area were as likely to get their product—even "fresh" produce—from thousands of miles away because that was where the company's suppliers got it from. Local farms—some absurdly almost next door to the Bon Appetit cafeterias—were hampered by a simple dilemma: how to get their product from here to there efficiently, dependably and economically.

Enter John Dickman and America Fresh. Dickman is a Bon Appetit district manager in the San Jose region, and America Fresh is the local fresh produce delivery company he found that could supply the crucial missing ingredient connecting Bon Appetit and local farmers. The result: Bon Appetit accounts get superbly fresh produce practically the day after it's picked, and local farmers get a dependable buyer for their products.

The product mix consists of seasonal produce—"awesome stuff," Dickman says— but the advantage for the arrangement is the area's year-round growing season, which means something is always in season. Mainstays include year-round supplies of lettuce as well as root vegetables in the winter and seasonal fruits, berries, asparagus, fresh herbs, melons, and a lot of heirloom types of vegetables not generally available in normal channels. At some point, America Fresh may expand into locally raised meat and poultry also.

Currently, delivery is limited to Northern California units. Dickman says America Fresh is looking for investors to allow it to expand to the rest of the state, and perhaps even into the Pacific Northwest, where Bon Appetit has some accounts. Until that happens, he says the company has few other options.

"We went to Southern California and looked at some oganic produce houses that deliver, but the service was sporadic and the prices rather high," he says. By contrast, America Fresh deals directly with farmers and lets them make "a decent buck" while charging Bon Appetit prices that are competitive with more conventional produce supply options.

The arrangement guarantees its own supply because the participating farmers can confidently plant a portion of their fields for customers that have made a commitment to purchase the crops.

Currently, some 20 Bon Appetit accounts use the service daily and another dozen take weekly deliveries. Orders can be transmitted either online or by phone or fax. How fresh is it? Product harvested on Sunday is chilled down overnight in the refrigerated truck and delivered Monday morning. Because of the immediate delivery to user sites, shelf life of the product is longer, since it hasn't spent much time in transport.

Business dining Farm-to-Fork participants include Cisco Systems, Silicon Graphics, Netscape, Tibco Software and Yahoo. Other users include higher education accounts like Stanford University and the University of Santa Clara,

Bon Appetit promotes the program with its own logo and servery signage, as well as pictures of the farmers who have supplied the product. "This way, it becomes local and there's a real connection with the farmer who grew the food the customer is eating,"Dickman says.

This summer, Bon Appetit is also planning to bring some of the farmers into the units to hold mini farmers markets to "give them some face-to-face time with the customer."

Meanwhile, this month, Bon Appetit plan to turn one of its stations at Stanford (the company manages a portion of the university's foodservice, though most of it is self-operated) into a Farm-to-Fork market purveying organic meat, locally grown produce and other similar "natural" products.

ARAMARK CORP
DRIVING OFF-PREMISE CATERING BUSINESS
Two years ago, Greg Robinson thought he found the perfect vehicle for expanding off-premise catering business in his territory. The director of marketing in Aramark Corp.'s North Central region, Robinson had come across an ad from a Colorado-based company called Area 101 that was marketing an online ordering system for catering. "We wanted to go after companies that do lot of catering but use outside companies," Robinson says.

Less than six months later, the new service was ready for launch and Robinson hired a number of sales reps to go market it in the Detroit area. The reps were told to call on administrative assistants Aramark identified as driving significant off-premise catering volume in their companies.

The website was an effective door-opener.

"It was a great way for us to start conversations and show opportunities by ordering online," Robinson says. "But we still found a lot of orders coming through phone, so we eventually changed our focus from getting people signed on to the web-site to letting them know about it but selling the catering business overall."

Now, customers have both online and phone ordering options.

Robinson says the business "really started to snowball in the fall of 2001" as its base of heavy catering users crystalized. Most events are traditional business breakfasts and lunches.

"We've set up an order process with some of our front-line managers who oversee sites from which the client has agreed to allow us to operate, and from that we've started developing relationships that often give us a strong new business within our existing business."

The off-premise catering is kept on a separate P&L from the onsite operations, though it utilizes existing labor and equipment. The only dedicated staff consists of the four sales reps who solicit business for the program.

So far, the program has expanded from Detroit—which remains the biggest market thus far—to Cincinnati, Louisville and Indianapolis.

The sites average around 20 orders a week, mostly for catering meetings and training sessions, though the service has also catered government press conferences and a national media day for General Motors. So far, the largest group catered was 2,000, though groups of 30 to 50 is more typical, says Robinson.

Orders generally have to be in 24 hours in advance. The delivery radius is kept to around 20 minutes.

HDS SERVICES
SPECIAL THINGS HAPPEN AT THE MAGIC TABLE
Sometimes, the best ideas just happen by chance and take on a life of their own. Case in point: the Magic Table that is becoming a fixture at a number of business dining sites managed by HDS Services, Farmington Hills, MI.

On its face, the Magic Table is unremarkable—a simple long table with perhaps a skirted covering. But what it has come to symbolize in customers' minds is what makes it magic.

"Through the course of time," explains Bruce Kane, director of retail development for HDS, "by displaying new bakery items or cooking exhibitions, this table becomes associated with magical food displays. So when customers see us doing something at that table it means something new and exciting is going on in the facility. After our people have used this table two or three times to wow customers, they just automatically gravitate to it as soon as they see some activity there."

That activity ranges from exhibition cooking to product displays and merchandising cross promotions. "When we introduce a new menu item to our cycle, we encourage the chef to chop, dice and slice at Magic Table," says Kane. "So when people ask what's going on, we can say, 'We're preparing a new item today.'"

The Magic Table is also usually where customers can find HDS's signature Mrs. T's Cookies (named for Lois Triplett, wife of company founder William), as well as other special baked goodies. It's also where promotions happen. One of the most popular gives away free Pillsbury doughboy miniature figures with the purchase of the company's cookie products.

The Magic Table started out an a fairly unmagic improvisation at the Lear Corp. cafeteria in Deerborn, MI, two years ago. "We didn't have room to put in our signature On Display display cooking station," says Kane, "so we set up a skirted table and began doing the display cooking on it. Somehow, the table evolved into the Magic Table where people expect something special. I think I could sell nails and screws there and people would buy them."

The Magic Table is busy almost every day at some sites, only a couple times a week at others. Currently, Kane is working on a formal logo for the station, along with props like top hats and magic wands.

PATAGONIA INC.
SUPPORTING THE CORPORATE CULTURE
Patagonia, the Ventura, CA-based maker of outdoor clothing, is not only one of the most environ-ment-friendly companies in the country but also one of the most workerfriendly. It regularly winds up on Fortune magazine's 100 Best Companies in America to Work For listing. Yoga classes, surfing lessons, two-month maternity/paternity leaves and take-your-shoes-off casualness define the California cool ambiance at its headquarters operation.

With a company culture like that, no ordinary cafeteria would do. Fortunately, Patagonia has Barbara O'Grady, who runs the small in-house foodservice operation like a cross between mom's kitchen and the Whole Earth catalog.

Operating on a tight budget in a tiny production space with only a six-burner stove and four part-time assistants, O'Grady turns out a succession of soups, entrees and salads that constitute one of the company's most enjoyable perks. Often, she has to improvise meals due to unexpectedly large demand or a short staff (the part-timers have recently run through an especially bad string of health problems, O'Grady notes). "When they don't show, it's usually a good day for rice and beans," she laughs (fortunately, black beans and rice is one of her most popular dishes and the favorite of company founder Yvon Chouinard, who eats in O'Grady's cafeteria almost every day).

On the day FM spoke with her, O'Grady and one staffer (the other was out with a bad back) had to handle an unusually large lunch rush that had ravaged the salad bar. "We spent lunch cutting avocadoes and I roasted some baby zucchini and made egg salad to keep the bar filled," O'Grady says.

On the other hand, hungry Patagonians are at her mercy. "Its pretty much what I want to make," O'Grady says of her menu, "but I ask on regualar basis what they want to eat." There is no advance notice, and daily choices are limited to one soup, one entree and the salad bar.

Fortunately, almost everything O'Grady makes seems popular. Favorites, aside from black beans and rice, include pasta salad with gorgonzola sauce, carrot almond soup and "anything Mexican," especially posole (a chicken and hominy stew) and a salad with chicken, sun-dried tomatoes, lemon and green rice. The latter also comes in a vegetarian version, and O'Grady generally makes sure there's at least one vegetarian option each day for Patagonia staffers who wish to go meatless. She says 15 to 20 vegetarian entrees are sold on a typical day among the average 125 to 175 meals served. Patagonia's onsite staff numbers 325.

Despite her tight budget, O'Grady goes to great lengths to ensure that the product she buys is of the highest quality. It's often organic and as much as possible is from local growers. "It's important to me to get it locally," she says. "We live in a farming community and I want to support our local farmers."

The only times she buys pre-made convenience products is when she leaves for vacation (she's entitled to five weeks a year "and I use it," she says). It's sort of like mom leaving for a couple days and leaving meals for the family to microwave while she's gone so they won't starve.

Most of the cafeteria business is conducted over the 11:30-2:00 lunch period, though she also serves a modified breakfast generally consisting of baked goods. The kitchen also stays open until 4:00 p.m. for those looking for an afternoon snack. For this, she usually bakes cookies and once a week she makes "something special," such as a lemon bar or chocolate cake (see? we weren't kidding when we said this was a "mom's kitchen" kind of operation).

O'Grady is becoming an institution at Patagonia. She started in 1986, left for five years when her family moved out of the area, but returned and took the reins of the cafeteria. Even her daughter worked with her for a while in the kitchen.

ARAMARK CORP
MARKETING TO HISPANIC CUSTOMERS
The ever-more-diverse nature of the American workforce has prompted numerous adjustments on the part of companies catering to their needs. Perhaps the largest adjustment has had to be done to accommodate the ever-growing number of Hispanic workers in the B&I segment.

That's the rationale behind Aramark Corp.'s new vending initiative, Viva el Sabor, which combines authentic Hispanic (usually Mexican) snacks and beverages with bright, easy-to-read, bilingual signage on the vending machines.

The products offered range from salty snacks like pork skins, plantain chips, spicy roasted nuts and beans and corn snacks to fruit bowls, soy and rice (often flavored) milk and canned nectars like guava, pineapple and mango. Favorites include Polvorones, a type shortbread cookie, and Sponch, a marshmallow cookie resembling a giant Twinkie. Rounding out the selection of some 100 line items are American-made products favored by Hispanics, such as Fanta brand carbonated beverages, and mainstream American snacks like Doritos and nachos.

The program is the result of a series of focus group meetings with representative groups of Hispanic workers in Chicago and Washington, DC. The goal is to provide vending options that appeal to the customer base at sites where there is a preponderance of Hispanic workers. Dozens now use the program, including the ConAgra Poultry production plant in Gainesville, GA, where the workforce is 85 to 90 percent Hispanic.

Account Manager Tony Smith says Vive el Sabor has helped increase customer satisfaction with vending options (the only onsite foodservice available) at ConAgra. "It's important to provide a nice line of products that appeal to the people who work here," he says. "We try to tailor what we offer to the population. In a site like this, most of the machines have these specialty products, while at other places, where there is a smaller percentage of Hispanics, we offer only selected items."

Other Aramark sites using the program include Tyson Foods in Cumming, GA, Emmpak Foods in Milwaukee, Edsalk Manufacturing in Chicago and Pillsbury in Minneapolis. Currently, Vive el Sabor is limited only to production factories with significant numbers of Hispanic workers but Smith says he can see applications down the line in other segments such as schools in districts with large Hispanic populations.

NEW YORK TIMES
DRUMMING UP EXTRA CATERING BUSINESS

Executive dining rooms stand empty most of the time, and that costs money. So if an in-house dining services operation gets an opportunity to leverage extra revenue out of the space when it would otherwise be standing idle, that's usually gravy that drips to the bottom line.

The New York Times headquarters in Manhattan has such an executive dining area. Recently, Times Food Service Director Ritchie Pecci hads an idea. He had been participating in some educational gettogethers with other customers of paper products broker Dennis O'Reilly.

These networking and socializing events generally took place in hotels or restaurants, depending on the group's size, but—Pecci realized—they could take place anywhere where there was space for a speaker and audience and some catered food and beverage. Such as...the executive dining room at the New York Times?

Why not? The meetings were held in the evening, when the Times dining area was empty. He already had staff and production equipment. And, indeed, he could not only provide food and drink that was at least as good as a hotel or restaurant, but much better atmosphere.

So he approached O'Reilly, who was intrigued.

"These are fairly informal get-togethers, where I may invite a group of security directors, IT people, or directors of mail operations, and I generally have a speaker addressing a topic of interest to the group, and a nice buffet," explains O'Reilly. "I do it to show appreciation for my customers and to solidify my relationships with them, The Times space is great because people like going up there."

The cost of the event is generally split between O'Reilly's brokerage and a sponsoring supplier.

But this way, Pecci's department gets the revenues. "I like this concept becasue it's a way of bringing back money to one of my customers," O'Reilly says.

The sessions generally involve 40 to 50 people once every month or so.