Deli vision
When Just Deli started out in 1996, it was little more than a man with an idea and a computer in his back room. Five years on, the company employs more than 200 staff and is generating a turnover in excess of £8m. The secret? Bringing the best of the high street to the workplace. Amanda Marcus reports.
John Duffield had been in the contract catering business for 30 years before he realised that something was wrong. He began to notice that the marketplace was changing, leaving a gap in food service management that no one appeared to be filling.
In the mid-1990s, he saw that responsibility for catering was moving from HR departments to finance or property managers. Clients were questioning the value of contract caterers which opened for only two hours each day, all the while taking up valuable site space. The drive to cut subsidies, capital outlay and the space used by caterers was intensifying.
At the same time, employees were working harder, no longer fitting in to a half-hour slot for breakfast and a two-hour lunch window, but "grazing" throughout the day. And, influenced by the increasing level of innovation they saw on the high street, employees were asking for healthier, faster products, and even organic food, during those breaks.
These elements were the driving forces behind Duffield's brainchild - a deli with a high-street feel that would be open all day serving fresh, fast food and requiring minimal space and low capital investment. Just Deli was born.
It didn't take long for the business to take off. The company was launched in April 1996 with an investment of only £4,000, using Duffield's home as an office. By June it had secured its first contract, and by the end of the year Just Deli had secured six major clients. Today, it has 42 contracts and is forecasting a turnover of £8.4m this year.
John Brown, from Halliday Catering Services, joined Duffield as operations director a few months after Just Deli's launch. Originally, the partners thought that they would expand outwards from the deli concept into a broader range of services, but the concept has proved so successful that they've remained true to its name, specialising virtually entirely in a "just deli" service.
There are pros and cons to being so focused, admits Duffield. "The disadvantage," he says, "can be that we lose out on contracts because people think we don't manage full staff restaurants, which we can do. But the advantage of offering something different and specialised sets us aside to clients looking for a different approach."
A major influence in the birth of Just Deli was market research which showed that a large majority of people wanted a bread-based meal for lunch. This has been supported by the company's own findings. "Invariably," Duffield says, "where we've combined deli with full, hot bistro-style service, the deli outstrips the rest of the business in terms of performance."
The service is developed around a deli bar concept which offers customers a lunch service based on a wide range of bread and rolls, such as panini, focaccia, maltagliata, pitta and tortilla wraps. Fresh salads, home-made soups and at least one chef's hot dish of the day are also usually available, while a "grab-and-go" chilled food selection provides the basis for a day-long service, including breakfast.
Clients can "pick and mix" from a range of 12 modular options depending on space and requirements. One of these is Innovations, a theatre-style module where a carvery, wok, fresh pasta machine and contact grill can be rolled out and interchanged daily. The carvery unit uses a 13amp plug, so no major investment is required.
The most popular module by far is the made-to-order sandwich counter, which is in every site, followed by the jacket potato bar. If a client doesn't have a full kitchen, a bain-marie can be placed next to the jacket oven with a few hot fillings. The deli also doubles as a salad bar. At a typical subsidised site, as well as sandwiches, offers will include a freshly prepared soup of the day for 75p, and a choice of hot meals, such as chicken breast glazed with honey and mustard (£2) or chunky vegetable burritos (£1.90).
Another major influence in the development of the concept is the predominance of the high street in customer expectations. "We're trying to bring the best of the high street to the workplace, not just the products but the environment," Duffield says. "There's no point taking the end of an office and putting a food counter in there and expecting people to feel they're getting away from work. If we can create a different space, the client gets to keep the staff in the building and reduce costs, while the customer gets a high-street feel but at a better price."
Installation of the deli bar includes physical design complemented by a style that projects the client's image. The emphasis is on front of house and counter design, with minimal kitchen space. The company offers a full range of contracts, all of which are performance-related.
Duffield's ideas are proving a success, with take-up levels way above the industry norm, and the lowest gross margin at any site is 30%. "Average patronage levels in contract catering are appallingly low," he says, "but our strike rate is around 70%, way above the norm - partly because we open all day with a wide range of products."
As an example, Café Vitré is Just Deli's commercial contract at a 2,800-employee business park in Guildford, Surrey, which commands gross margins of 58%. Customers are invited to create their own sandwiches from a wide choice of breads and fillings, priced from £1.50 upwards, or to choose from two specials of the day. A chicken Caesar salad or hot minute steak sandwich costs £4.75, with a full English breakfast at £4.65.
Such a successful start for the business begs the question: where next? Duffield has several ideas, including home meal replacement, more commercial contracts, and maybe in-house vending. Geographically, the business has been concentrated in the Thames Valley, but Duffield is looking further. "We have a rule that a site must be within an hour's drive, either of the office or an account executive's home," he says. "Three of our guys live in Basingstoke, so we'll be targeting Portsmouth and Southampton soon. In terms of business size, we would expect at least 100 contracts in another five years' time, with a turnover of £20m and staff of 500."
As for the founder himself, Duffield remains philosophical. "We always said we would do it for 10 years," he says, "so we have about another five years to go. But that was then. I can't envisage selling at the moment. I look forward to coming to work and I can't see a reason to stop."
Just Deli
Oak Barn House, Sandford Farm, Perimeter Road, Woodley, Reading, Berkshire RG5 4TE
Tel: 0118-944 5000
Web site: www.just-deli.co.uk
Formed: April 1996
Owners: John Duffield (77.5%), John Brown (20%), Craig Lumley (2.5%)
Managing director: John Duffield
Operations director: John Brown
Financial director: Richard Billing
Contracts: 39 existing, three about to open; includes ITN, ICL, GEC, GlaxoSmithKline, Network Associates, Fujitsu, Rank Xerox, Unipart, Marconi, DuPont and Sage
Largest contracts: ITN (annual turnover, £750,000; 1,800 employees), Unipart (£550,000, 1,700 employees)
Staff: 204
Turnover, 2000: £5.6m
Projected turnover, 2001: £8.4m
