Raring to grow
Bob Jantzen appears bemused. It is the third time in two days that someone has asked the president international for Aramark's food services if he finds service in the UK inferior to that in the USA.
It could it be that we Brits are a little obsessed with our lack of have-a-nice-day culture, or it could be that Jantzen is just being polite. "I just don't see any real difference. It could be because I'm wearing a suit and I walk in with the executives of the company - I don't know," he says.
Jantzen joined Aramark in March, but he has been in the business for well over 15 years, much of which has been viewing operations on a global level. Before his stint at US contract catering company Fine Host, he headed up international business with Marriott International, which later sold out to Sodexho, becoming Sodexho Marriott Services last year.
So how does the food service industry differ in the USA? It's that old chestnut - size. In the USA, Jantzen points out, it's not unusual to be catering for 6,000 people at one site. And while the trend towards operating individual stations such as pasta or Thai food is much the same, US caterers are just geared up to do it in more depth, for less dosh.
"It's all about economies of scale. You can do a lot of good concepts and change them around more. It's got to a stage where there are companies that will provide almost everything you need to establish a new food concept in a box. It's easier for caterers; and it's cheaper," Jantzen says.
Another idea that contract caterers borrowed from across the Atlantic was the use of high-street brands, such as Burger King and Pizza Hut, in business and industry operations. Now if this concept appears to be waning in the UK, it doesn't hurt to know that, apart from becoming a bit of a hit with universities and colleges, it seems to have as much life as a limp lettuce in the USA.
"It had a much shorter life than we originally thought," Jantzen concedes. "For the expense of putting these in, it made more sense to have a less costly alternative which is easier to take in and out, such as in-house brands."
As in the USA, food service in Europe is a mature business in which consolidation has left three main players dominating. And while Aramark is the big cheese in the States, it's less so in Europe, ranking third in the league behind Compass and Sodexho. There's no hint of sarcasm in Jantzen's tone as he says of his rivals: "You have to admire them - they're everywhere."
This makes growth difficult for any player. But facilities management is one area, commonplace among the US conglomerates, that still has a bit of leg room in the UK and Europe.
"In some of our bigger sites in the US we do all the facility services. It is generally a trend in the US. We have the capability to do this in the US but not in the rest of the world," Jantzen admits.
Aramark hopes to grow its range of services in Europe through acquisitions as well as by developing its own divisions outside catering. To do this with panache, the company needs deals akin to that made earlier this year when it swallowed US company, ServiceMaster Management Services. This was a major coup for Aramark, arming it with a range of services and contracts such as grounds maintenance for massive companies such as Hertz and Delta Airlines. But grabbing similar chunks of the European market in this way could present quite a challenge.
"The big guys have already swallowed up the companies. To simply say we want to be as big as Compass or Sodexho in Europe would be foolish. We're looking at anything that's available to see if it's the right kind of fit," says Jantzen, emphasising that acquiring simply for the sake of scale is not part of the strategy.
European ambitions
So what exactly is Aramark's strategy then? In a nutshell, it is "significantly" to grow European business. Such ambition in an already consolidated market hints that France's biggest food service company, Elior, could be a target for a merger or takeover. As the largest operator in France, and fourth in the UK, Elior would be an obvious choice for Aramark. British companies that have already merged with Elior include Nelson Hind, Catering & Allied, Brian Smith and High Table. Jantzen makes no secret of the fact that France is a key area on Aramark's hit list, and as far as major acquisitions go, he says that after Elior there really isn't much left.
Another area that Jantzen is keen to develop in Europe is contracts in education and healthcare operations. This is particularly important given that some 76% of Aramark's revenue relies on its business and industry sector. And when the economy is less than healthy, business and industry is the most vulnerable sector.
A downturn in the industry had been a long time coming and was exacerbated by the events of 11 September, says Jantzen. In the USA, the downturn has struck at the heart of food operations in convention centres, where attendance has plummeted. He adds: "Most caterers have done what they need to adjust to this downsizing. Everyone is now in a pretty tight position."
What's left is three big competitors going for a reduced market, but that's just fine with Jantzen. "Everyone wants to be on top of the heap, and when you're not there you want to be there. That's fine; it just makes us hungrier."
Aramark
Aramark provides services in 17 countries and has about 200,000 employees, of whom 11,000 work in the UK. Some 76% of Aramark's sales come from business and industry.
Worldwide sales 2001: $7.79b (£5.08b)
Worldwide sales 2000: $7.26b (£4.73b)
Worldwide pre-tax profit 2001: $176m (£115m)
Worldwide pre-tax profit 2000: $168m (£110m)
UK market: 4.6% of Aramark's total sales
Bob's jobs
Present: joined Aramark in March 2002 to direct business development and management for business in 16 countries outside the USA, including the UK, Germany, Canada, Spain, Mexico, Korea, Japan and Ireland.
Previously: chief executive officer of Fine Host, a US contract food service management company.
Longest stint: 14 years with Marriott International as vice-president of sales and marketing, senior vice-president of international business and, ultimately, president of corporate services.
Before hospitality took hold: earlier career spanned sales and brand management, positioning Pepsi-Cola and Procter & Gamble.
First job: officer in the US Army, where he held the rank of captain and worked in military intelligence.
On the spot
Where is Aramark's bread buttered at the moment?
As well as the UK, it's Germany right now. We've got well over $200m (£130m) worth of business there, but most of it is in business and industry. We need to diversify into education and healthcare.
What is the biggest challenge in Europe? We want to be everywhere; and that's tough, because we're not one of the big boys. We want to get into major countries we're not already in: France, Scandinavia, Italy.
What's the biggest difference between the US and European food service industries? Only the size of the average account.
Is the impact of 11 September still affecting the industry? The downturn was already there. However, it accelerated it, and there continue to be travel-related problems in the sports, recreation and convention businesses.
Why did you quit the army? I was in military intelligence. Vietnam was ending. If you're not in the combat arms you don't have the chance to be a multi-star general. Doing the routine things in peacetime wasn't appealing to me.
