Sodexo North America almost back to pre-pandemic revenue level in 2022

Organic growth in North America for Paris-based Sodexo was 24% in fiscal year 2022, with revenues picking back up to 96% of the FY 2019 level in the fourth quarter, which covered the summer months of June-August 2022 (Sodexo’s fiscal year ends Aug. 31).

B&I led the way with a 45.1% organic increase, “with aprogressive return to the office quarter on quarter and a strong recovery in all the Sports & Leisure activities, firstly in the stadiums and then in the convention centers,” the company annual report noted, adding that “the Government & Agencies and Energy & Resources segments were both up thanks to new business and a gradual return of office workers on-site, neither segments having been significantly impacted by the pandemic.” It added that return to office “gathered pace during the year [and] many clients chose to enhance their on-site food services to attract their staff back into the office. The new food offers, providing more flexible, more

healthy and sustainable meals grew significantly.”

Organic growth in Healthcare was 6.1% for the year, “boosted by cross-selling, progressive recovery in hospital retail sales and Senior occupancy and pricing, particularly in the last two quarters” while Education (composed of both K-12 and college/university business) saw organic growth of 27.9%, “reflecting the reopening of schools and universities from the beginning of the 2021 academic year. However, events and special catering activities remained restricted due to staff shortages and ongoing fears of the pandemic.” It added that in the fourth quarter (i.e., summer 2022),”summer camps and conference activity was solid” while the start of the academic 2022-23 academic year “was helped by an extra day and higher levels of staffing.”

Major developments for the company over the year included more use of technology, announcing last spring that will be bringing eat>NOW brand autonomous grocery stores, high tech vending, and virtual dining concepts delivered by robots to client campuses across the U.S.. In partnership with AI-enabled autonomous shopping solutions vendor AiFi, Sodexo company debuted the frictionless, checkout-free grocery and convenience offering at the University of Denver shortly afterwards and then earlier this year added a unit in the Salt Palace Convention Center in Salt Lake City just in time for the NBA All-Star events the facility.

A few months later, Sodexo announced the launch of the company’s new Everyday mobile commerce solution for rollout on client college campus sites starting in fall 2022 with expansion into the healthcare and other markets set to follow. Its features include mobile and kiosk ordering, digital wallet, personalization, scan-and-go capabilities and delivery for customers nationwide.

Also expanding in 2022 was Sodexo’s partnership with robotic sidewalk delivery firm Kiwibot, with the fleet growing to more than 1,200 robots across 50 Sodexo college campuses in the U.S. by the end of 2022, up from the 200 units on 10 campuses it had a year earlier.

On the culinary and sustainability front, Sodexo is growing its alliances with local firms and expanding its special diet offerings like plant-forward, gluten-free, kosher and halal. It has also expanded its collaboration with the Humane Society of the United States with new initiatives aimed at tackling climate change and reducing the company’s carbon footprint by focusing on increasing plant-based menu options on Sodexo menus at hundreds of universities across the United States. It is part of the company’s overall strategy to reduce its carbon emissions 34% by 2025 in reaction to an internal analysis that showed that at least 70% of its U.S. supply carbon footprint was related to animal-based food purchases in fiscal year 2020.

Sodexo has announced that it will be moving its North American headquarters in Maryland from the location it occupied since 1998 in Gaithersburg to a 276,000 sq.ft. building currently under construction in North Bethesda, where it will occupy 52,000 sq.ft. beginning in spring 2024. The 16-story building, which includes 9,600 sq.ft. of ground level retail and a rooftop conference center, will also house the new headquarters of Choice Hotels, which will occupy 105,000 sq.ft. after it moves in in late 2023.

One major management change in North American operations over the past year was the Sodexo Live! sports & entertainment unit announcing the appointment of  Belinda Oakley as its new CEO, North America. She replaced outgoing CEO Steve Pangburn, who stayed on to help with the transition through the end of March 2023 in an advisory capacity

At the corporate level in Paris in early in 2022, Sodexo named Chairwoman Sophie Bellon as permanent company CEO, a position she has held on an interim basis since October 1, 2021, following the resignation of previous CEO Denis Machuel. Bellon.

Also, as an administrative change, Sodexo says that, fully effective from October 1st, 2022, it has reorganized its On-site Services unit into three geographic zones (North America, Europe and Rest of the World), each led by a zone president, and starting from the beginning of Fiscal 2023, the company intends to report the breakdown of its On-site Services revenues and underlying operating profit by geographic zone rather than by global client segment, along with a secondary level breakout of information by three market segments: Business & Administrations (B&A), Healthcare & Seniors (H&S) and Education.