Mergers and Takeovers -
Is Big Beautiful?

The past year has seen no fewer than eight major mergers and takeovers involving some of the industry’s leading contract caterers. This is not a new phenomenon and has been happening for a number of years within the catering arena and indeed throughout various industries. What is important is how these changes may affect the delivery of the catering service at client sites and whether there should be a cause for concern.

On the first of January 2005, the consolidated BaxterStorey launched following the merger of BaxterSmith and Wilson Storey Halliday, creating the fifth largest catering organisation within the UK with a combined turnover of £105M and over 200 contracts. Prior to the takeover, WSH had also bought out south-east based caterer CaterLink. This follows in a succession of mergers and takeovers over the past year including OCS and Just Deli, Aramark and Catering Alliance, ISS and Eaton and Compass who have swallowed up Everson Hewett, Goodfellows and Keith Prowse on their acquisition trail. If we cast our mind back just a few years, we will see that all of the largest contract catering firms have been involved in a series of amalgamations, suggesting that this is a core means for survival and growth. Organic growth alone is not sufficient for smaller organisations that are often either squeezed out of the market through competition, or sucked into the bigger picture via hostile takeovers. It is evidently clear why this trend is an attractive proposition to many caterers; it enables growth, entry into new markets, greater purchasing power, and a whole host of new opportunities.

However, consolidation may result in pressure to improve margins to the shareholders of these large catering companies. Often the result is overworked Area Managers, doubts over purchasing arrangements and an occasional decline in catering standards. Consequently, clients may notice such changes as reduced levels of support, hidden earnings creeping into the invoices and general diseconomies of scale that may hinder the whole communication and administration process. Big may not always necessarily mean beautiful and many smaller, independent organisations are often able to offer a more personalised and tailored service but on the other hand do not necessarily have the resources that the multinationals possess.

When embarking upon a merger or takeover, there may be internal problems of integrating cultures and resistance from individuals, which again may create a degree of turbulence with the management of contracts. There will also be anxieties over job security and these mobilisation problems can take months, if not years to settle. The knock on effect in these situations is, of course, your catering service. Caterers will assure you of their commitment to maintaining a high standard of service and the long-term benefits may outweigh any short-term teething problems.

Big can be beautiful but it is dependant upon how the senior management teams handle the changes and ensure minimal disruption to the day-to-day service at client sites. If you have any concerns regarding mergers and takeovers, please contact us via the details below.

Useful sites:
www.competition-commission.org.uk

The Fairtrade Bandwagon

What is Fairtrade?
Fairtrade is an initiative launched in the late 1980's that guarantees a better deal for third world producers. Producers registered with Fairtrade receive a minimum price that covers the cost of production and an extra premium that is invested in the local community.

International trade may seem a remote issue, but when commodity prices fall dramatically it has a catastrophic impact on the lives of millions of small scale producers, forcing many into crippling debt and countless others to lose their land and their homes.

Benefits
Regular income
Guaranteed pay and conditions for workers
Initiatives for a cleaner environment
New housing schemes for suppliers and workers
Improvements to health and sanitation
Increased efficiency (e.g. machinery & transport systems)

The Case for Fairtrade
You may already be familiar with the Fairtrade phenomenon that has influenced the offerings that we see on the shelves in restaurants and food outlets today. But what effects and demands might this have upon your catering service and the requirements of your customers? As a starting point, more and more people are now demanding Fairtrade products over branded products, despite the fact that they are generally more expensive.

The changing customer is becoming ever-more demanding in all aspects of foodservice delivery, including the origins of food, organic food, locally sourced food and the emergence of Fairtrade is indeed one of these trends. Many customers are actually boycotting branded products in favour of Fairtrade and the question that companies have to be asking themselves is whether they should be seen to be promoting Fairtrade or not. This is a much bigger issue for organisations providing food and drink as free issues, which would have significant implications upon subsidy levels. However, it is not just a matter of ethics as a variety of other factors must be considered including quality, supplier links, purchasing arrangements, customer requirements and indeed spending power. From the customers point of view, they need to balance ethics, quality and value for money. With this in mind, food outlets must be looking towards customers rather than offering Fairtrade products as "the right thing to be doing".

Diary Dates 2005

The must-attend list in 2005 for all professionals in catering, facilities management and procurement:

Bournemouth Hotel & Catering Exhibition
8-9th March, Bournemouth International Centre
www.hotel-expo.co.uk

International Food & Drink Exhibition
13-16th March, ExCel, London.
www.ife.co.uk

The Total Sandwich Show
27-28th April, Business Design Centre, Islington.
www.dewevents.co.uk

The Facilities Show
17-19th May, NEC Birmingham.
www.thefacilitiesshow.com

Local Authority Caterers Association (LACA) Conference & Exhibition
14-15th July, Hilton Birmingham Metropole
www.laca.co.uk

Food & Meat Expo
7-8th September, Telford International Centre.
www.foodshow.co.uk

FM Expo
11-13th October, Earl's Court 2, London.
www.fmexpo.com

On Monday 7th February, restaurants across the UK will unite to support UNICEF's Asia Tsunami Children's Emergency Appeal.

Participating restaurants have committed to donate a percentage of their day/night's takings to support relief efforts in the Indian Ocean.

The initiative is the brainchild of Philip Howard, chef-proprietor of the two Michelin-starred London restaurant The Square.

Find out how you can help to support the children whose lives have been devastated in Indonesia, Sri Lanka and the Maldives.

E-mail: philh@unicef.org.uk
Call: 020 7312 7680
www.unicef.org.uk

More Gains for CCB

Catering Consultancy Bureau are delighted to announce several new contract gains.

Brangwyn Hall - contract auditing
Brangwyn Hall is a prestigious conferencing and concert venue located in Swansea. Managed by the council, the Brangwyn Hall plays host to a number of local and national events, including the hosting of the Welsh Labour Party Conference. Catering Consultancy Bureau (in association with Panache Consultancy) undertook the initial tendering of the catering during 2004 and awarded the contract to Midshire Catering who commenced at the outset of 2005. Delighted with the service provided, our remit has been extended to provide auditing services for the duration of the contract to ensure compliance and the continued commitment to achieving KPI's.

Shropshire County Council
Catering Consultancy Bureau have been commissioned to undertake a research project to continue the high standard of school meals service within the county of Shropshire. The project involves customer research, healthy eating initiatives, marketing and branding of catering services and developing a philosophy for business retention and expansion.

Your Fave...
Mouthwatering Roast Beef

Ingredients
1 sirloin of beef on the bone, weighing 5-6 lb (2.25-2.75 kg) - this would be the equivalent of 3 ribs.
½ onion, peeled
1 level dessertspoon mustard powder
1 level dessertspoon plain flour
freshly milled black pepper

Method
1. Preheat the oven to 240C/475F/Gas 9.
2. Place the beef, just as it is, upright in a roasting tin, tucking in the half onion alongside it.
3. Combine the mustard powder and flour, then dust this all over the surface of the fat, and finally season with a few twists of freshly milled pepper. This floury surface will help to make the fat very crusty, while the onion will caramelise to give the gravy a rich colour and flavour.
4. Place the joint in the oven - it will have plenty of fat so do not add extra. After 20 minutes turn the heat down to 190C/375F/Gas 5, and continue to cook for 15 minutes per lb (450 g) for rare, plus 15 minutes extra for medium-rare or 30 minutes extra for well-done.
5. While cooking, baste the meat with the juices at least three times. To see if the beef is cooked to your liking insert a thin skewer and press out some juices: the red, pink or clear colour will indicate to what stage the beef has cooked.
6. Remove the cooked beef to a board for carving and leave it to rest for at least 30 minutes before serving (while it is resting you can increase the heat in the oven to finish the roast potatoes if you are serving them).
7. This resting period allows most of the juices which have bubbled up to the surface of the meat to seep back into it, and the meat itself firms up to make it easier to carve. Some of the juices will escape, though, and these should be poured into the gravy.

CCB's Commitment to Continuing Professional Growth

As full members of the Foodservice Consultants Society International (FCSI), Catering Consultancy Bureau are required to contribute towards Continuing Professional Growth in order to demonstrate capability and professional standing and to contribute towards the development and progression of the catering industry.

CCB Managing Director, Peter Pitham, has recently been awarded certification for achieving the required level of Continuing Professional Growth points throughout 2004. These points can be gained as a result of:

- Passing the FCSI competency exam
- Attending professional seminars
- Preparing and delivering presentations
- Authoring articles and books
- Authoring reviews on software and books
- Completing educational courses
- Attending trade shows
- viewing educational videotapes or multimedia self-study programmes
- reading on-line articles provided by FCSI
- providing service to FCSI and/or other industry groups

So why is CPG so important? Pitham says 'The development initiatives are so important as they rectify my standing as a consultant. For all people know, I could have been an electrician yesterday and decided to set up a catering consultancy today with no background or experience. Membership to the FCSI and the achievement of CPG points gives our clients the confidence that they are dealing with a qualified and professional organisation. It gives them a comeback and it maintains our focus for providing leading-edge solutions.'

If you would like to know more about the FCSI's commitment to CPG, please visit:

www.fcsi.org/continuing_growth.html