The Caterer Interview – Mark Philpott

22 November 2013 by
The Caterer Interview – Mark Philpott

You started your career as a pastry chef in hotels. How and why did you make the move into foodservice? I started to really fancy myself as a manager, so I took a job with Director's Table [the fine dining division of what would become Sodexo] in 1984 as a chef manager, and gradually worked my way through the company until I was managing director in 2000.

I left two years later to set up Vacherin with Clive [Hetherington, co-owner and finance director]. He and I were best friends - we still are, obviously - and we had become very disenchanted with the way the industry was moving.

He worked for another contract caterer while I was at Sodexo, and I worked with fantastic people and had some wonderful clients. But when you don't feel you can be as straight with your clients as you want to be, it eats away at you. Clive and I would both bitch about it, and our respective partners told us to either shut up or do something for ourselves. So we left, and it's been an incredible learning curve.

When you work for a big company and you want to do something, there are many processes to go through before you can get anywhere. If we want to make a policy decision, it can be done. We don't have any investors and there's no funding - the business is completely self-sufficient. We don't have to answer to anybody else.

Were you confident you could pick up the business? We got on with writing down the service levels we wanted to provide, what we wanted to do as people and how we wanted to work. We [later] met up with one of our ex-clients from [creative agency] Imagination that I had stayed in touch with as a friend. It wasn't a sales visit, but a lunch between old pals. He suggested we go along and talk to Imagination.

I told Clive there was no way we would get the contract, but that it would be great experience in doing a presentation bid. Obviously, I had done it before many times with the security of having a big company behind me, but with no other contracts to show them, it was very difficult to quantify our offer. We went along and did a really nice proposal, and to cut a long story short, we got the business. Gary Withers and Guy Stevenson at Imagination really gave us our first chance, and they're still a client today.

What was your growth strategy from that point, once you had your foot in the door? Our growth strategy has always been the same. We've never wanted to be the next Compass or BaxterStorey, but to have sustainable organic growth we can cope with. We've made some very bold statements and keen promises to clients and, for me, it's absolutely paramount we deliver on those promises, otherwise our retention rate would go down the pan completely.

At the moment, we have a retention rate of about 90%, which is something we work very hard on. The 10% we have lost has been due to moves and mergers.

How do you achieve such a retention rate? A lot of companies will win the business, run the contract and then up the service level when the time comes to renew the contract, and I've always told my team that I don't want to do that. We have a process called Sparkle, which is a no-stone-unturned review of the catering where we go back to the client and ask what else we can do for them, where we can save them money and where they need to invest.

I would much rather they be reining us in than wondering what we're doing.

The Sparkle process has taken on a life of its own and it gets bigger every year, but we don't just do it annually. At every invoice presentation we have new products to show clients and new ideas to talk about.

Does this contribute to the all-important relationships caterers build with their clients? Significantly. I was reading an article in Caterer and Hotelkeeper recently in which Chris Mitchell [managing director of the Genuine Dining Co] said there are no unique selling points or that nobody had a USP, but I don't think there are any USPs to be had any more. I'm not sure the buying market can cope with them.
The people we employ are the only things that differentiate any of us as caterers.

Vacherin is notable for operating in quite a tight geographical area. What are the pros and cons of focusing on central London?
The agility and the speed with which we can react is a benefit. We can create a 'family' within the company, but also the resource is all in one spot. If someone doesn't turn up
for work at one site, we can get someone else there quickly to fill in because we have other surrounding sites.

The downside is that it's a very desirable market. Everybody wants the business you've got, and that's why you have to stay on your game. There are lots of good companies out there, and while I'm sure they can all do the job, I think we can do it better.

Your understanding of foodservice is a big challenge for some operators, too. I have friends who work for competitors that want to break into the London market and they can't.

Why is that? I genuinely think the London market is different. The clients, in general, are more knowledgeable about food and they are more sophisticated buyers. They have to be because their workforce is. That's why we launched our healthy eating range: Nutritious & Delicious. I think we were the first, and probably still the only, people to put QR codes on our products to give our customers the full nutritional value of that dish as well as the recipe. Such an important part of our business now is telling people what they're putting into their bodies.

There's a style issue as well. If I go in and see a new client, particularly if it is fine dining, and I see the chairman or chief executive, I always ask what their favourite restaurant is.
I know then what style of food I need to provide or where the parameters lie. It's very easy to do, but if you haven't been to that restaurant, you won't understand what it's all about and you won't have a chance.

Does that mean you spend a lot of time on the restaurant scene? Absolutely, and that's why we need our whole team to be interested in food. It's a foodservice company. We can't have people who just don't care. We have supper clubs and we recently took the team on a thank you trip to Italy, where we went to various restaurants to see what's happening. It's motivational and inspirational. It's crucial that we keep ahead, and when you're entertaining clients, it's always nice to take them somewhere different and introduce them to things. You get that experience at the same time.

Another challenge of operating in London must be the competition from the high street. How do you keep your client's employees in-house? We have to serve it better, and a lot of that comes down to the person who is doing the serving. It can't be faceless. The customers have got to want to go down and have their
coffee made by Marina because she knows exactly how they like it made, and while they're down there they buy a muffin too. It's about
relationships at that level as well.

Is there a growing demand for a branded offer? Big brands don't work. In a coffee environment it might work - I was the first person to put a Starbucks in a corporate environment at Barclays Capital - but it doesn't work in a food environment. If a client says they want a specific style of restaurant, you have to advise them that in the long term it won't be sustainable.

I consider the food that we serve in our staff restaurants and dining rooms like it's our home, and I wouldn't give my family the same thing to eat every day. We have thousands of products that change on a weekly basis, but if you're in a restaurant you probably have a hundred product lines. But most clients see the benefits of a varying offer - ultimately, they like to keep their employees in the building.

Each client wants to create an environment that works for them, and most want to reflect what's happening in the high street, but consumers will see through a bit of branding in a moment. They don't care about the branding as much as they care about getting a decent sandwich.

What other challenges do foodservice operators currently face? One bugbear is procurement departments tendering business on behalf of clients. We've had a couple of fairly hairy experiences with procurement departments that don't understand foodservice. They think they're buying widgets and they're not - they're buying people and all the expertise that goes with food and service.

I wish clients would understand that if they are going to go down that procurement route - and they have a part to play, obviously - they should employ one of the industry expert
consultants or involve their incumbent caterer in the panel, so that there is the necessary knowledge in the room.

Earlier this year you launched front of house division Entrée. Was that in response to a greater desire from clients to bundle up services? We've always wanted to stick to our knitting. We're food, service and hospitality providers. If clients want us to look after cleaning, we're not going to do it. But our reception business is the perfect add-on to catering. It's hospitality; it's hosting people as they enter your building. Also, they work so closely with catering they almost become a team anyway.

We wanted to formalise the service a bit more and sell it. We've had organic growth through existing clients signing on since we launched. We haven't had any individual reception contracts yet, but we would look at them.

The economy has been pretty unforgiving for business. How has it affected Vacherin? We've not only weathered the storm, we've grown as planned. It takes twice the amount of effort, thought and deliberation because it has been a tough market, and I feel sorry for those who have gone by the wayside. One of the lovely things about my relationship with Clive is that he's an accountant, not a caterer. From an accounting point of view, he does an amazing job for us. We're not two caterers trying to run a business, we're two people who are both very interested in food and both know how to play to our strengths. When Phil [Roker, co-owner and commercial director] came on board in 2005, it added another dimension to the dynamic.

In 10 years, from a standing start, you've taken the business to an annual turnover of £11.5m. What are your growth plans going forward? There have been one or two rocky patches where things could have gone wrong but didn't. At one point we had Disney, which was two sites at the time, and about a month later we took on EMI, which was three sites, and then we had a law firm. It was a challenge as we were not a big business. I had a few sleepless nights about that, but it went off very well.
Our growth plan year on year is pretty much the same. We have turned down business and opportunities if we think the company is growing too quickly. We have a five-year plan, but three years that we keep live. In 2015 we want to be at about £15m.

Year founded:
Annual turnover: £12m
Number of sites: 28, all within central London
Number of employees: 257, plus around 50 from Premier Crew, Vacherin's in-house relief staff agency
Key contracts: Disney, CBRE and Abbey Road Studios
Achievements: Second fastest-growing foodservice business in terms of profitability over the past three years, according to Zolfo Cooper Foodservice Growth Report, covering the top 20 fastest-growing independent contract caterers in the UK. First company to sign up to the Sustainable Fish City Pledge.
Winner of two Sustainable City Awards.

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