Compass/EAT Club deal brings synergies in technology, operational platforms and geographic reach to the combined organization

The largest contract food services company in the country, Compass Group, is not standing pat in the face of changes accelerated by the COVID-19 pandemic that is transforming how onsite dining services is offered. Among expected changes is the move toward a more flexible workplace environment that will in turn require a more flexible approach to offering foodservice.

That flexibility will undoubtedly require dining service providers to offer more remote order, meal delivery, expanded hours and multiple service points. While Compass already has established footholds in all of these areas, it also knows it can’t stand still.

Hence its recent deal with California-based “virtual cafeteria” firm EAT Club, which offers individually ordered and packaged meals in one synchronized delivery for companies that don’t have a dedicated dining option in their buildings. In March 2020, EAT Club was serving a client base of about a thousand companies with about 25,000 meals a day in California’s Bay Area, including premier names like Google and Postmates, when the COVID-19 pandemic hit, forcing some of its client sites to close and hampering the company’s business model, which relied on producing food in its own commissaries as well as partnering with some independent restaurant operators.

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Nevertheless, EAT Club’s technology offers an already developed platform on which Compass can build a mobile delivery service for corporate clients—and potentially clients in other markets like healthcare, senior living and education as well—and leverage it across its system. In fact, EAT Club recently began serving its first K-12 client, a private middle school, “so it really is a flexible model,” notes Doug Leeds, EAT Club’s CEO, who will retain that role at Compass, where the company will be integrated into the Compass Digital Labs unit.

“EAT Club’s technology integrates the front-of-the-house ordering experience and back-of-the-house production and logistics,” explains Leeds. Under EAT Club’s model, employees at client companies send their own orders. Then, on the production end, which includes both EAT Club commissaries and its restaurant partners, “we have a suite of technology tools that allow them to understand what food is being ordered. They are then individually packaged, consolidated into the different [site] orders and then handed off to us for delivery,” Leeds says.

EAT Club offers individually packaged meals for employees at sites without their own onsite dining capability.

Going forward at least initially, Compass kitchens will be producing the food, he adds, though both EAT Club and Compass independent restaurant partners may be integrated into the system at some point. “We have great relationships with restaurant partners in California, as Compass has great relationships with restaurant partners across the country, so this is something that we’re going to expand to, but we’ll start with Compass” in terms of meal production, Leeds says.

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“On our side, we at Compass have been looking at the offsite/onsite delivered food model for a few years,” offers Compass Digital Labs CEO Jugveer Randhawa. “We’ve done pilots with robotic delivery, we’ve done on-campus delivery in education, we’ve done in-building delivery in B&I, so what this presented to us was a turnkey capability that would allow us to hook it into our food production infrastructure and serve what we believe is going to be a very much more fluid work environment going forward.”

As an example, he cites large corporate campuses “where you may have buildings in which an on-premise café that doesn’t make sense anymore, so what we can do with the EAT Club capability is, we can deliver [food] from head offices to satellite offices, for instance, and bring in a more efficient model without sacrificing any food quality or variety or food experience.”

EAT Club’s technology suite includes not just the front-end customer side but also food production and logistics, as well as the payment/billing platform. Actual delivery at this point will be handled by Compass as campuses where the meal production is “almost within walking distance” of drop-off points, Randhawa says, “and we’re working through the logistics, but controlling as much of [delivery] as we can is most important to maintain high QA standards.”

While the ultimate goal is to take the initiative continent-wide, including Canada, the initial rollout will be in California, followed by expansion to New York and then major metro areas across the country, Randhawa says.

“Providing a high-value, high-quality offering is always where we’re focused and this gives us the capability to adapt quickly without sacrificing our offerings,” he adds. “It also gives us access to new markets EAT Club was serving while adding to our existing operations. For example, we will be able to add this on to some of our divisions that do grab-and-go type meals to offer more robust offerings.”

Leeds notes that EAT Club’s service requires a very small minimal order size of just a couple of dozen meals to be viable, “so most offices of any size can take advantage of it.”

The EAT Club platform also potentially helps Compass expand offerings across more of the day, beyond just lunchtime, Randhawa notes.

“A lot of what we’re working on is the breakfast daypart and the afternoon dayparts and I think this [acquisition] opens that up,” he says. “We’ve always been looking at expanding the day in general and I think this only adds to that. It also helps push us well into the bulk-delivery world, and with the infrastructure and technology Compass has, we are very excited to bring this to our clients.”