Chartwells has changed how it conducts its business in three significant ways, its managing director tells Jane Renton
Chartwells, the education arm of Compass, the world’s largest catering group, has been quietly repositioning its business in the UK. For a start, in the last 12 months, the number of contract opportunities it has rejected has exceeded the number pursued. Yet Chartwells is by far and away the biggest meal provider in the school, college and university sectors. The education sector remains one of its most significant growth areas, though the company does not break down its UK figures by division.
“We believe we are more than double the size of our nearest competitors…but we really do not look at market size but rather at how we might change and move forward,” Chartwells managing director Richard Taylor tells me.
Chartwells states that the company has spent 25 years helping young people build strong bodies and sharp minds at the 2,000 or so educational institutions where it undertakes the catering operations. But those efforts are intensifying through the launch of schools initiatives such as Beyond the Chartwells Kitchen, its recently-launched health and wellbeing programme aimed at helping pupils, teachers and communities address issues such as childhood obesity, mental health and lack of exercise. That initiative follows on from Global Adventures, a programme introduced into state-run secondary schools a year ago to introduce healthier more plant-based dishes into schools.
“We produce something like 60 million meals a year for children under the age of 12 so we feel morally obliged that those meals should be nutritious and balanced,” explains Richard. “But equally it is also about the influence we can bring to bear on children, parents and teachers to help prevent childhood obesity and all the other problems that creates.”
Again, as part of recent health corporate social responsibility initiatives, Chartwells has given its support to Saddiq Khan’s Mayor’s Fund for London to alleviate holiday hunger among young Londoners from low-income families, an involvement that Richard says he is keen to extend more widely to its other regional locations.
“It was one of the things that shocked me most when I got involved in this business that there were so many children going hungry during the school holidays. It was something I really wanted to get involved in alleviating,” says Richard.
While readers might point out that those three developments are nothing new and have perhaps been pursued by many smaller Chartwells competitors over the years, those three developments, nevertheless, appear to indicate a significant change of emphasis in the way Chartwells intends to run its business. By sheer dint of the scale of Chartwells’ operations, that subtle change of gears has the power to profoundly re-shape the way the market operates. It also sends out a strong signal to government and public sector procurement chiefs that while this may be the age of austerity, there can be no re-run of the race to the bottom that so damaged reputations in the 90s and opening years of this century, or indeed a return of the perfidious turkey twizzler, that terrible icon of abysmal school fare.
“The reason I came into Chartwells was because I wanted to make a difference. We have a responsibility as caterers in this sector to do something not just through the food we provide, but also more importantly through the educational influences we can bring to bear,” says Richard, who spent the past 15 years at Compass in various senior management roles, including at Medirest, Compass’s healthcare business and in various B&I roles.
Those changes coincide as they do with tough economic conditions, though Richard asserts that the market is still buoyant. Market fragmentation and the trend among multi-academy trusts (MATs) towards more outsourcing, has created more, not less opportunity for businesses such as his. Brexit, however, has added a further layer of uncertainty to existing economic challenges.
“I am more worried about the state of the economy than the market, which I believe is actually strong and buoyant,” Richard states.
The economy of course has the ability to derail everyone, including Compass, which has undergone something of an annus horribilis as a result of the tragic of its former group chief executive, Richard Cousins and his immediate family in a helicopter crash in Australia on New Year’s Day this year. Though he was due to step down from the top post in March and his succession already in place, Cousins was rightly highly regarded as the architect-in-chief of Compass’ return to form after a series of past misadventures and misjudgements. As the Financial Times pointed out in a recent article, Cousins’ no-nonsense approach of controlling working capital and expenditure, combined with a strategy that prioritised steady organic growth over acquisitions, enabled the company to pay down debt, reward its shareholders and regain reputation, including its reputation for providing good quality food and service.
But it seems there are new and dangerous economic headwinds. Richard himself warns of the dangers of food price inflation, and the possibility of a hard-Brexit leading to food imports piling up at customs control. Public sector cutbacks are also challenging. Increasingly, labour shortages are likely to become an increasingly urgent issue.
The ability to attract and, more importantly, retain labour seems certain to be a particular issue for anyone working in the public sector, where pay for frontline staff is still relatively low, despite recent statutory increases in the minimum wage.
The fundamental issue is that wide-scale quantitative easing has inflated the assets of the richest 1% of the country, many of whom include the very people who triggered the 2008 financial crash, while relatively stagnant wages and public sector contracts – which are all priced at interest rates of only half a percent – have further impoverished large swathes of the working population. Some of those people work in hospitality and their families are often reduced to attending food banks and holiday hunger programmes to make ends meet. It is a difficult question, but I ask Richard how he intends to balance the drive for quality and more socially inclusive engagement at Chartwells, with such a dystopian economic climate, particularly when it comes to his own labour requirements.
He has already given part of the answer in that Chartwells is walking away from more contract bids than it is participating in. Presumably the terms and conditions frequently being specified suggest that it is perhaps not possible to make a reasonable margin, to provide a good quality service while at the same time providing a decent living for its staff.
“The big change over the past 12 months is that we will not compete in contracts where we do not believe we can provide a proper service. There are a lot of contracts out there that we would not want to be associated with,” he says.
So how will Chartwells ensure it becomes an employer of choice to those who want to work in school catering, as Richard intends? The labour market is highly competitive, after all.
“We want to ensure that people want to stay with us and training is a vital part of that,” he replies.
In this respect the apprenticeship levy is seen as a huge opportunity. It may be viewed by many employers as a levy on existing company payrolls, but as Richard points out, it can also be used as your training budget.
“A lot of companies are not accessing, but what we are trying to do across Compass and certainly at Chartwells is to use it as our training budget.”
That means providing employees with opportunities and a career structure that they might not have otherwise had. It also means opening up the Beyond the Chartwells Kitchen scheme to food ambassadors who are not necessarily confined to chefs or nutritionists.
“We want to educate half a million children next year. We want to offer real change and meaningful impact to children’s lives,” says Richard.
Hopefully that will be a message that resonates with many who enjoy the flexibility of working in school kitchens, the opportunity for longer holidays, especially if they have children of their own, who want to make a difference to children’s lives, and who are not necessarily predominantly motivated by money.
To many in the industry, Chartwells represents a super tanker that is hard to turn. But this super tanker is turning, slowly but determinedly. It is selecting the contracts it wants, rejecting those which could damage its reputation, fighting cost through better productivity and innovation, rather than on price. It seems better-placed to weather the economic storms that lie ahead.