Sky-high ambitions

To less ambitious caterers, a contract across five sites to feed 22,300 employees from 143 companies, all of which stipulate different subsidies, sounds like a logistical nightmare. For Will Lewis, managing director of Eurest Airport Services (EAS), the deal with BAA at Heathrow Airport is a dream.

From here he believes that EAS, Eurest's newly formed dedicated division, can eventually launch an attack on airport feeding worldwide, cashing in on the presence which parent company Compass has in 46 countries.

With so much at stake, EAS didn't take any chances during the tendering process. "We wanted to win the contract, so we are taking less," says Lewis, who heard in July that the company had trounced Marriott Management Services, Gardner Merchant, Aramark and incumbent Sutcliffe. What he means is that he has adapted a sales-led scheme. To achieve this, he had to tackle some of the logistical problems.

The seven-year contract is with BAA but embraces all the airlines, retailers and service industries based at Heathrow that want to subscribe. EAS is thus required to feed staff from 143 organisations ranging from airlines such as Virgin, BA, Aer Lingus and British Midland through retailers such as Bally Shoes, Boots, Body Shop and Jaeger, to the police, bus firm Speedlink, National Car Parks and maintenance firms such as Drake & Scull.

Diversity of customer is not the only difficulty. EAS research showed that each firm had different meal subsidy requirements. According to Lewis, previous contractors operated a swipe card system, but only on a 60%-discount-or-nothing basis. On top of this, they charged clients an annual fee of about £256 per card, regardless of whether or not it was used.

To make the system more cost-effective for the subscribers, EAS introduced a "pay as you eat" scheme facilitated by a new till and swipe-card system. The different discounts are shown on menus, marked A, B, C (see panel). At the till, the customer hands over his or her card, which has the discount information stored on it. The card is then swiped through the till and the employee pays the difference. The company is invoiced at the end of the month according to how often the card is used. Lewis claims that this system has already reduced most clients' subsidy bills by one-third. "When you think there are 3,000-6,000 cards in some companies, it adds up to a chunky reduction," he adds.

Of course, no contract caterer is that altruistic; Lewis has to make money. He expects the concession contract, which kicked off on 1 October, to yield an annual turnover of £7m initially, rising to £11m.

To meet this prediction and still give clients a cost advantage, he must ensure that the cards are used frequently. He is confident that this can be achieved by improving the dining facilities, offering plenty of choice and serving quality food. "We will make an income on the margin off that," he says.

In line with this, EAS pledged to invest £2m in the first six months to refurbish the staff restaurants at three of the five sites - Terminal 3, Terminal 4 and the Queen's Building. The other two, Cargo Village and Heathrow Point West, require only minimal refurbishment. There will be further investment in years 3 and 5. "We want to establish restaurants for customers and not canteens for staff," says Lewis.

The first phase of this investment, the refurbishment of the 264-seat staff foodcourt at Terminal 3, completed at the beginning of January, bears testament to this. Compass's high street brands Upper Crust, Café Select and Deep Pan Pizza feature prominently.

"What people see on the concourse downstairs will be in the employee restaurant," explains Lewis. "Employees are more complex than the public because they are here week in, week out, so we need to be innovative and keep changing the products to keep them interested."

There are savings for the client here, too. Through introducing a variety of its own brands into the staff food courts, Lewis believes that he ensures customers aren't forced to buy expensive dishes. The customer is happy and the client's subsidy is once again reduced.

Catering manager Morag King is conscious that the food must also attract all types of customer, from maintenance workers to airline crew. Bearing this in mind, she is already trying to broaden the offering. At the Not Just Jackets counter, for instance, she hopes to offer more than just jacket potatoes and is introducing take-away sandwiches, Scotch eggs and mini potatoes in a sauce. "Baggage handlers don't have time to stop, but want savoury food," she explains, adding that, since opening the restaurant, EAS has served 1,500 meals a day. This is short of the 2,500 meals a day served before they closed for work, but it is early days yet.

Lewis intends to grow the business. Of the 57,000 people who work at Heathrow Airport only 22,300 have cards, but he believes there is scope to win over a further 8,000 customers. In the long term, he aims to sell his ideas to those organisations at Heathrow which haven't yet subscribed.

One myth Lewis is keen to dispel is that he has a captive market. He points out that there is lots of competition from public outlets on the concourse, where airport employees are entitled to a 10% reduction. To counteract this, EAS starts pricing at that level and takes the company discount off that lower price. To cope with shift working, all the restaurants are open from 6am to 8pm, seven days a week, except at the Queen's Building, which is open 24 hours a day.

Besides the contract at Heathrow, EAS has subsequently won a contract to feed the 250-strong project group working on the nearby Terminal 5. So it seems that Lewis' agenda is already bearing fruit. "We see this as a model for the development of EAS. Other business will come up for tender and we are not limiting our horizons to the UK," he explains.

To allow Lewis the time to pursue this business, he has recruited Kevin Mullen from Baxter & Platts as operations manager. He also has experience of working at five-star hotels and hopes to bring that to the market-place.

As the refurbishment of staff feeding facilities gets under way at Terminal 4, Mullen explains that his remit is "to get Heathrow right, then people will refer us to other companies".