on the Compass Group - a New Player in Privatized Food Services
British Company Moves into Canadian Institutions
The Compass Group, a British Company that is a major player in world wide institutional food services, has taken over Beaver Foods in Canada from Cara Operations. Compass has previously been known in Canada as Restauronics.
The takeover of Beaver Foods gives Compass a huge foothold in the Canadian food service industry. Beaver had revenues of approximately US$200 million and more than 1000 accounts in high schools, colleges and universities, remote camps, business and industry. Compass also entered into a 10-year contract with Cara to use products from their subsidiaries, Harvey’s and Swiss Chalet. The purchase of Beaver tripled Compass’s operations in Canada.
The Compass Group is a very, very large operation. On its web site (www.compass-group.com) Compass advertises itself as “the world’s largest foodservice company with annual foodservice revenues in excess of £7.3bn. Compass group has over 250,000 employees working in more than 80 countries around the world…the Group also owns Forte Hotels.”
Compass provides food services at offices, factories, railway stations, airports, universities, schools, healthcare institutions, offshore and remote sites, shopping malls, and roadside facilities. In 1998 they gained their first worldwide foodservice contract with Philips Electronics to feed 270,000 staff.
Compass Targeting Education and Healthcare Facilities
Compass, as part of its strategy is targeting international growth and “market segmentation.” Market segmentation means, “to adopt a segmentation strategy targeting key sectors of the food service market (e.g. business and industry, education and healthcare) with different operating company identities.” According to a recent press release, Compass has purchased the American firm Morrison Management Specialists, the second largest contract caterer in the American healthcare market. Compass has said it intends to use the knowledge it gains from purchasing this firm “to pursue the healthcare market elsewhere.”
Compass Group is also the Official Catering Service Supplier to the 2002 Winter Olympics in Salt Lake City where they anticipate serving 125,000 daily.
Another subsidiary of the Compass Group is Chartwells. Chartwells is a major provider of educational food services in North America, however, it is not clear from the business news releases what role Chartwells will play in be managing the former Beaver Operations in Canada. They have taken over at least one Beaver contract. Given Chartwell’s background, their involvement seems likely. Chartwells says:
“As the educational dining services by which all others are measured, Chartwells enriches the campus dining experience worldwide. Chartwells services both public and private institutions and deliver consistent value to two distinct educational segments: k-12 and Colleges & Universities. In fact, Chartwells provides quality dining services to more than 200 college and university clients and over 270 k-12 schools.”
Compass Targeting Growth in Public Sector
Compass has been aggressively buying up institutional caterers around the world. As the following quote from their website indicates, they see their growth in public institutions. “Compass Group operates in strong and growing marketplaces. Worldwide estimates indicate that the total global contract foodservice market alone is worth over £170 billion. As less than 30% of this marketplace is contracted out, the opportunity is enormous!”
There is at least some indication that Chartwells can work with unions. The American Federation of State, County and Municipal Employees (AFSCME) reports that last year Sodexho-Marriott lost the contract for a university in New York State after a yearlong battle with the Hotel Employees and Restaurant Employees International Union. Chartwells was given the contract and immediately notified the union that they recognized them as the bargaining agent for the dining workers. Marriott already has contracts in some of our institutions.
Summary
Compass Group/Chartwells is an enormous, international food services organization with an aggressive growth strategy targeting public institutions including schools, colleges, universities and health service organizations. With their acquisition of Beaver foods they have tripled their activities in Canada.
We will find ourselves in bargaining with this group increasingly as their Beaver contracts come due. We will also be competing with them as they lobby aggressively to privatize food services in our public institutions.
CUPE Research Branch
opeiu 491