Operation Operon

25th April 2008, 12:21pm

Born out of a facilities management company that decided to take on the catering itself, Operon Catering is targeting mid-range B&I sites as it seeks to carve a market niche for itself. DAVID FOAD reports

Facilities management (fm) specialist Operon had always outsourced the catering in its contracts until it ran into problems at the Department for Transport headquarters in Horseferry Road, London.
When the client decided to withdraw the catering subsidy the incumbent, Charlton House, made the judgement that the contract was no longer economically viable.

Operon asked Joe Mead in his capacity as independent consultant to assess the catering options.
Mead, who had previously worked with Charlton House, Sodexo and Nelson Hind, says: "I knew Charlton House and if they said it was uneconomic then you had to take it seriously. Operon then suggested they run the catering themselves.

"At first I thought it was asking too much to set up a catering operation from scratch and I said so. Even when they asked if I'd run it for them I turned it down.

"But the more I thought about it, the more excited I became by the prospect of getting back into contract catering."
So in January 2005 the 14 staff TUPE'd over to Operon and Mead took the helm of Operon's brand new catering division. Despite the nil-subsidy, it is now his flagship site despite the close attentions of nearby High Street competitors such as Starbucks, McDonald's, Pret, a pizza restaurant and a convenience store.
"There are about 1,400 people on site and about 700 of those buy directly or are served as part of our hospitality services each day."

High Street ideas

A mix of investment in facilities and a keen eye on the competition allow Mead and his team to keep the site busy.
Part of the dining area has been dedicated to a takeaway counter that sells coffee, tea, soft drinks, cakes, pastries and sandwiches.

The main area includes a deli counter whose look borrows shamelessly from Waitrose's
in-store deli and offers customers the chance to get sandwiches, rolls and baguettes designed the way they want. There is also a soup kettle, hot food counter, a theatre-style wok area plus salad bar.

"We check out the high street places to see what's selling well and the prices and then we take the best ideas and make sure we undercut them. For instance, we make our own granola-style pot desserts and cheesecakes. Both sell very well and because they are premium products we can make a decent profit on them."

Staff restaurant sales could be taking a hit soon, with the Government decision to banish bottled water from its premises in reaction to the negative publicity generated following the recent Panorama investigation shown on BBC TV and the campaign by the Evening Standard.

"We sell quite a lot of bottled water, but we'll have to provide tap water instead when the ban comes in."
From that initial contract, Operon Catering has grown in three years to win contracts not only in the B&I sector but also in education and healthcare.

Some, such as the school wins in Rochdale, have been part of a wider fm contract negotiated by the parent company.
But Mead insists the catering division is fully consulted before such deals are settled and would always have the right not to get involved in unsuitable or uneconomic catering contracts.

"Although we are part of a bigger organisation, we increasingly bid for and win our contracts now."
That is a reflection of the strength of the catering arm within Operon. When it was launched the company had food and drink sales of £250,000 through vending it operated for some clients, while overall turnover was £27m. Three years on catering is worth £6.2m in sales as part of group turnover of £50m.

 Food quality expectations

"With the progress we've made it's not impossible to foresee a situation in which it is the largest single contributor to group sales."
If Mead does achieve that sort of growth it won't be by trying to take on any and every contract that comes up for tender.

"Out future mostly lies in the mid-range B&I contracts where you're not constrained by unrealistic expectations of food quality at the high end or scraping by on the lowest margins at the other.
"But I'm not too prescriptive about these things, I don't need to have a law firm or accountancy in the portfolio."
Growth is definitely part of the business plan, though, and he has just taken on his first business development manager to help him take Operon Catering on to the company's next stage of development.

Operon Catering

Founded January 2005
HQ Wyboston, Bedfordshire
Staffing 160
Turover £6.2m
Sectors B&I, healthcare, schools
Website www.operon-catering.com