Made with love!

Author : Tim Fryer

30 November 2011

When supplying lunch to nearly a million of the UK’s workforce every day, BaxterStorey has to be better than the alternatives. The company’s Chief Executive Noel Mahony told Tim Fryer the secret – ‘make it with love!

Clearly Baxterstorey is doing something right. From its formation 11 years ago as Wilson Storey Halliday, it has averaged organic growth of 15% year on year combined with some acquisitions and is now a business that will turn over £300 million by year end. 98 % of this is in the UK and Ireland although the company has recently made inroads into Europe, predominately in 2011 by supplying to various sites in northern and central Europe for Cisco in conjunction with its FM company Johnson Controls.

However, Mahony believes that the ‘low hanging fruit’ is closer to home: “The latest BHA survey suggested the total market [in the UK for workplace related catering] was worth about £1.9bn and it is probably pretty flat at the moment, growing about 3% year on year. It is unlikely to go backwards because people still need to eat at work. Our perspective is that with 13% of the market in the UK there is still a huge amount of headroom for BaxterStorey to grow.”

But the workplace catering arena is a competitive one, how has BaxterStorey managed to successfully grow within it? “We believe that the market has been ready for someone who has got sufficient size and scale to look after many of the larger contracts but more importantly is nimble and entrepreneurial enough to be able to treat clients and customers as individuals,” commented Mahony. “I genuinely believe that we have got some very tough competition out there. The market is dominated from the food service perspective by the big two [Compass and Sodexo], who have a more rounded facilities management offering rather than just specifically food services. That is clearly where they see their growth market. One step down from that in terms of size are Aramark and Elior, who have again ventured into the broader FM market but not to the same extent as the two big companies.

“Then there are a whole plethora of boutique start-up businesses who have been going for a number of years, some very successfully, but not really anyone with the organisational structure or the resources to be able to operate across the UK and Ireland. We have invested heavily in our structure so that we can operate across the UK, Ireland and indeed Europe if required.

It is principally the customers that BaxterStorey is after and looking to engage with at every opportunity. “We are in a relationship business for both clients and customers both of whom require specific attention. In London alone today we will be serving somewhere in the region of 400,000 lunches,” said Mahony. “So fundamental interest is in the customer and the clients, who will be a combination of senior people in organisations, FM directors, and people who are responsible for execution of FM services. They are the people who are our lords and masters and will be the ones who will decide if we are the people who can provide their food services and meet their objectives.

“However, supply chain is really, really important to us and one of the real niches for our business. Again it is a sector that has been dominated by companies who have traditionally gone out to try and reduce their supply chain, streamline and end up with the one stop offer, where everything logistically is coming through one or two companies. We have completely adopted the opposite end of the spectrum in terms of how we execute business, and if you are a chef coming to join our business we will provide you with a range of suppliers who will be local to where you operate from. We go out of our way to support the general farming community in Britain. Where possible, particularly on some of the key items, we will only buy British. We are not just doing this just to support the British farming community, we believe in terms of products and price they are the best possible products we can get. Clearly from an environmental perspective it obviously helps – and our FM clients are genuinely interested in that as well. We want the shortest possible journey from source to our customers plate. This also, we believe, allows us to employ the highest calibre chefs because chefs like to work with fresh seasonal ingredients, they like to have a degree of autonomy around the food they use and suppliers they choose and we provide them with all of that. I think that we are a company that they genuinely like to work for.”

As an industry Mahony believes that good chefs are an increasingly rare commodity. The reputation of the industry as one of long hours, low pay and high pressure has resulted in fewer young chefs going through the training colleges - a problem shared by other FM sectors like cleaning and security. BaxterStorey therefore believes that the provision of good training is another key element in its service delivery. Each new entrant is involved in the company’s award winning Chefs’ Academy – a formulaic training programme that supports their needs and ambitions in the business. It uses a number of chef mentors like John Campbell, the one Michelin star head chef at Coworth Park and Nigel Haworth of Northcote Manor. Beyond culinary expertise the chefs are trained in such things as the principles of kitchen management, how to be a good executive chef, how to write menus and how to best use local suppliers. Mahony commented: “It allows us to combine fresh ingredients with really highly skilled
people who really care about the product that they serve.”

But, I asked Mahony, when you combine freshest ingredients with well trained chefs are you adding too much expense into what is essentially in many cases a ‘grab and go’ proposition?

“A really interesting point,” Mahony responded. “First of all, I don’t believe it is more expensive at all. We operate in an extremely competitive market at the moment, so rest assured there is no way that BaxterStorey could have achieved double digit growth or would contemplate doing so in the future, if it was seen as an expensive option. Let me explain the way we have tried to adapt the model for food service. If you prepare really good products that have been lovingly made for the customer, then we actually sell more than if we go down the route of having restaurants and facilities that have not so much love and care put into those things – in these cases what actually happens is that the staff choose not to use the staff restaurant at that facility but vote with their feet and go to the whole plethora of high street options outside their facility. So when we are putting a proposition to the client, sure we are saying that we want to put skill back into the kitchen and we want to have really well-trained chefs employed, we want real baristas - we have a Barista Academy as well to train people how to make coffee properly a la the high street. But we don’t just train people how to prepare it, we show them how to sell it as well, so it is the whole customer service experience that is critical."

After taking over a new facility Mahony claims his company will grow that business by an average of around 14%, which means the facility manager is getting greater return on the space given over to the catering function. No longer should the catering space be used for an hour at breakfast and a couple of hours round lunchtime, now Mahony argues that the facility manager wants to make full use of the space all day: "You can create a real ambiance and suddenly have an all day meeting area and really shift that whole piece around what was
traditionally a staff canteen to be a whole restaurant café environment which represents the social heart of the building. I believe that as facilities managers and building occupiers become more focussed on space efficiency it will drive a number of them down that route, and that is what they are looking to us to do. So it is not anymore about us providing good catering, you have to take that as a given. You also have to take as given that we will source locally and that we will provide really good ingredients.

Now what you are interested in as a facility manager, in my opinion, is how can I ensure that my employees will remain within the building, will use the services offered as much as possible, so I can get the best return on the space utilised." Creating the right ambiance can sometimes only need a few adjustments to remove frustrations with using the area – minor adjustments to lay-out or queue lines. So if the facilities manager has achieved the objectives of keeping the staff in the building and therefore more productive, improved morale and made better use of the space available, could the next step be a move to catering service providers renting space from the client for the catering operation?

“If you were to ask me my vision for what is likely to happen in terms of the key commercials as we go forward is that subsidies will continue to reduce in many client sectors," commented Mahony. “There are client sites where we are actually starting to provide a return from the cash paying customer for the privilege of operating. You would need to make sure that the services are appropriate to the customer base and labour efficient so in essence it’s a commercial model where we are paying for the privilege of being there – but this still represents a relatively small amount of our business at present. We are likely to see a significant shift within the next five years whereby food service companies will operate on a concession basis with some clients."

BaxterStorey’s commitment to local sourcing has tied in with the ‘legacy’ approach of the London Olympics, and the company has been rewarded with a contract to supply the main media village for both the Olympics and the Paralympics. This will involve catering for about 18,000 – 20,000 journalists of all nationalities round the clock.