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Harrison Catering Services: Kids' stuff

24 August 2006
Harrison Catering Services: Kids' stuff

Next month sees the introduction of new nutritional standards for school meals across England and Wales, a major development in the current crusade to improve the quality of what our children get on their plates.

Many school caterers may feel cause for alarm, but not Geoffrey Harrison, managing director of Harrison Catering Services. "We're already very far down the road when it comes to balanced diets," he says. "We've reached a target of 98% of the food we serve being cooked from fresh."

Harrison has the contract to provide meals for nursery, primary and special schools in the London Borough of Lambeth - 64 sites in all, 55 of them primaries. The company took over the contract from ServiceTeam and, after two years, meal take-up has risen from 53% to 68% (far higher than the London norm of 40-45%). The council has already taken up its option to extend the arrangement by two years, with one year of the three-year contract still to run.

This is certainly a far rosier picture than that painted by Jamie Oliver and his exposure of the school meals service in Greenwich last year. Fried food, processed meals and, of course, the infamous Turkey Twizzler created a media frenzy and left parents around the country deciding that their kids might be better off with a packed lunch.

While Harrison agrees that the poor state of some school meals needed to be highlighted, he believes there were several unfortunate reprecussions from Oliver's TV series. "Jamie Oliver approaching this issue was a good thing," he says, "but there were a lot of people cooking better food in schools before then. There was already a growing body of opinion that felt that tendering contracts on price alone was flawed."

There was also, Harrison says, a mistaken fixation on the food cost per child. "If you make sponge by buying in all the ingredients - flour, eggs, butter and sugar - rather than buying in a mix, you might be able to save one penny," he says. "If you use a potato rumbler rather than buying in ready-peeled potatoes, you save another penny. But suddenly, if you are the caterer spending 35p or 36p on food, rather than 37p, you are branded the baddie."

Most damaging, though, in a sector where operating margins are very tight, was the resulting drop-off in meal take-up, a decrease that will actually make improving the quality of food far harder. "The route to salvation in school catering is through volumes," Harrison says. "It's not complicated - it's bums on seats."

He draws this conclusion from his vast experience in the sector. Before setting up Harrison Catering in 1994, Harrison was managing director of Fairfield. Before that, he worked at Sutcliffe Catering and, in 1983, was responsible for establishing and managing the first privatised school meals service for the London Borough of Merton. As well as Lambeth, Harrison Catering now looks after school meals in Ealing, Wandsworth, some of Southwark and, most recently, Windsor and Maidenhead.

So how has Harrison been able to improve meals and increase take-up in Lambeth? First, he says, you need to get the support of head teachers - "which should be easier now food is part of school inspections", he says. Second, you need to gain the confidence of parents. To this end, the company invites parents to sample food, and monitors feedback from teachers.

To improve meals, Harrison pushes for as much food as possible to be cooked fresh. In Lambeth, he says, he was lucky to inherit a team of dinner ladies whose craft skills were already good, but a programme of workshops with the company's chefs continues to improve their cooking.

In Lambeth, the vast majority of schools also have their own kitchens, which allows food to be cooked fresh each day. A small minority, however, still have their meals delivered - a situation Harrison dislikes. Does this mean he wants to establish kitchens in every school? "Our game plan is to put the best meal in front of every child each day," he says, "so the answer is probably yes."

The question of who would finance such a reinvestment in school infrastructure is a difficult one. "We could ask for a 10-year contract in exchange for us giving £2m to kit out kitchens, but that has got to be paid back from very tight margins," he says.

Not the easiest
On the subject of margins, there's no question that the state school education sector is not the easiest business landscape for a catering company to operate in. Recent stories such as that of Initial pulling out of the tendering process in Bracknell suggest it's hard for caterers to make a profit.

But Harrison says large companies are under different pressures from his own. "They're often public companies with shareholders - there are group issues of purchasing," he says. "But we want long-term relationships with our clients. We're a privately owned, family business and we're not interested in making a killing."

The contract in Lambeth turns over more than £3m, serving 10,000 meals each day. Parents are charged £1.45 per meal, which the school collects. Of Harrison's fixed costs, payroll (the contract includes some 240 dinner ladies) represents about half the contract turnover, while the net food cost per child per day is 60p. Consultant Vic Laws estimates that Harrison receives about £1.85 per meal, meaning that - less payroll, food and other costs (about 13%) - the company would make about 8.5p per meal, giving a gross profit margin of about 4.6%.

And what of the future - would Harrison's life be made easier if packed lunches were banned? How does he compete with the high street? What effect will the guidelines have on viability? We will examine these questions over the next 12 months but, for the time being, Harrison comes out fighting.

"Successful businesses work in competitive areas and the packed lunch is just another competitor," he says. "And while schools have been looking at ways to imitate the high street, if we're really going to change the way kids eat, we have to make the alternative better."

Of course, the new guidelines aim to do exactly that. But Harrison warns that some boroughs can't transform children's palates overnight. "You can insist on a balanced diet, but you have to be careful if kids don't recognise the food," he says. "People are looking for easy answers by introducing nutritional standards - but it won't be the quick fix they hope."

Harrison Catering Services Set up in 1994, Harrison Catering Services operates in the business and industry (most notably with Carphone Warehouse and Ericsson), private education and state education sectors. The company's activities are split between education and industry, biased about 75% towards education. State school meal provision makes up about half of total business.

Including all business, company turnover is more than £30m. Net profit margins are 2-3% - "similar to other medium-sized catering companies", says Geoffrey Harrison.

Ask an expert
Richard Wedgebury, principal consultant, Alexander John Richardson & Associates, advises:

Taking over a London borough's school meal service with a turnover of around £3m could be a serious financial burden for any catering contractor. At the same time, it could also make some serious money.

Contracts like this are doomed if the sales approach has been too gung-ho. Serious losses have been sustained by companies which have miscalculated at the tendering stage.

There is an additional risk factor arising from the new nutritional standards. Prophets of doom are talking about a further downturn in uptake when new, healthier menus are launched. The fear is that pupils will vote with their feet.

School meal catering is all about uptake - if it is going down, then there are unlimited problems - but Harrison's experience should work to get schools to adopt a whole-school approach.

Without the individual school's support, the journey will be an uphill one.

Food costs need to be no more than 65p to make sure that the total cost does not move into subsidy.

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