Thursday, June 6, 2013

'Human Cloud' Poses New Challenge to Corporate Food Service

Food service contractors and employed operators of corporate food services may face further diminishment of their customer bases. Operators will have to use technology to counteract the changes technology is forcing on their traditional ways of doing business.

Companies now have new ways to outsource even highly skilled work to freelance workers all over the world, reducing the need for – and cost of – on-site employees.

As reported in MIT Sloan Management Review by Evgeny Kaganer, an assistant professor at the University of Navarra in Barcelona, Spain and three other academics, "A third-generation sourcing ecosystem . . . the 'human cloud' is centered on an online middleman that engages a pool of virtual workers that can be tapped on demand to provide a wide range of services to any interested buyer."

New human cloud organizations can now provide freelance talent for at least 15 major work categories, including content generation, sales and marketing, design and optimization, Kaganer et al say. These are jobs that traditionally are kept in-house, but now may disappear from the office and the food service department’s customer pool.

Human cloud organizations ("platforms") – the middlemen who connect companies and freelancers – saw their revenue increase by 53% in 2010 and 74% in 2011, the authors said. The number of active platforms increased to more than 100 in 2012 from about 40 in 2011.

As rapidly-advancing technology has disrupted other industries, it now is food service management’s turn. Corporate food service operators will have to rethink their business models to stay relevant in this new environment.

For example, a Clarion Group client with $1.5 billion in sales and 4,500 employees nationwide has only 250 employees at its new headquarters, where it is just opening a new food service, and has no food service at any of its other offices. Technology has enabled other Clarion clients to increase sales and profits while reducing on-site headcounts.

The impact of this sharp and still evolving change in the way businesses operate has an impact on both the food service operator and the company it serves. Formerly profitable food services may become unprofitable for the operator, and the company may find it has a choice of either subsidizing its employee food services or reducing their scope.

The solutions will vary from company to company, but all will involve a change in the way the food service operator looks at, and manages, the business. Companies will have to cooperate with their operators as they both adapt to the new reality."

For example, at company with multiple buildings on a large campus, closing cafes in all but the most highly-populated buildings (about 1,000 employees) may be necessary. The other buildings can be serviced by the type of food trucks that now are popular, and successful, on college campuses.

At smaller sites, a mini-café supported from an off-site commissary and staffed by one or two attendants may be a solution.

Vending operators, including some major food service contractors, have begun installing "micromarkets," a c-store-type, compact facility with no attendant. The customer selects foods from refrigerated display cases and shelves and pays for the purchases at a self-checkout kiosk. This option only works in a closed environment with a small population, about 250 or fewer employees.

Clarion Group can help you meet the new challenges of the evolving world of corporate and campus food service.  For information, contact Tom Mac Dermott, president, 603/642-8011; Angela Phelan, senior vice president, 201/306-8613, or Ernie Wilder, vice president, 703/282-4040, or e-mail us at  Visit our website,

Tuesday, June 4, 2013

Clients Often Miss Full Value of Food Service Consultants

Reprinted from FM Newslinks, on-line newsletter of Food Management magazine.

"Food service consultants frequently aren’t used to their full value by their corporate clients," Tom Mac Dermott, president of Clarion Group, a corporate food service consulting firm, says. "Often, we’re brought into a project too late to provide maximum benefit for our client."

"For example, if a corporate food service facility design project is already underway when the consultant is retained, it may be too late to incorporate important features or modify the plan for maximum efficiency and service," he says.

"A corporate food service consulting project also may not deliver full value if our recommendations are accepted but we’re not retained to implement them," he added.

There are three key components to a successful corporate food service consulting project whose objective is improving performance, service and cost-effectiveness, according to Mac Dermott:

Investigation: What’s happening now? What are the services? How are they being performed? Where are the weaknesses that need to be improved?

Research and Recommendations: The consultant reviews operational and financial records of the food service, researches alternatives to the current methods, procedures and systems and develops solutions to remove obstacles, strengthen inadequate areas and increase the value of the corporate food service to the client.

Implementation: The consultant works with the client and the food service operator to implement the solutions to ensure they are successfully established and maintained.

"This last step is where a corporate food service consulting project actually provides its value," Mac Dermott says. "If the consultant’s report and recommendations are just accepted and filed away, the time, effort and cost invested in the project is wasted."

The food service consultant needs to be retained throughout the implementation phase, Mac Dermott says, "because the operator often has a degree of ‘tunnel vision’ and can’t see beyond his own, comfortable way of doing things and the corporate client doesn’t have the knowledge or experience to know whether the needed improvements are being implemented effectively."

"Our corporate food service consultants have decades of experience in all types of operations and know to work with the on-site manager and staff to clear away obstacles, provide training and solve problems as they arise," he says.

Sunday, June 2, 2013

Corporate Food Service: A Benefit or a Convenience?

Companies that once considered low cost meals an employee benefit sometimes now are revising their attitude and thinking of food service as a convenience that should be self-sustaining.

The conversion can be tricky because it inevitably means higher prices and maybe fewer services when the food service has to pay its own way.  In working with corporate clients, Clarion Group consultants have seen the conversions completed with minimal disruption and customer acceptance – and disastrously.

The worst way to convert from subsidized to "P&L" (the operator has the risk of profit-or-loss) is all at once. Customers come in one morning and the price of everything is higher.

In one instance we witnessed, customers in a central city corporate headquarters almost completely boycotted the food service. Sales dropped by two-thirds overnight when prices were increased by 20%.  Nobody protested, they just began bringing their own meals to work or went out to the dozen or so nearby restaurants, delis and fast food outlets.

The losses were so severe that within a month, the food service operator was threatening to terminate its contract. Two months later, a new operator was in place.  Clarion prepared the Request for Proposals and managed the selection process.

The new food service contractor had some advantages.  The dirty work – price increases and service reductions – had been done by the predecessor.  The new operator gave the café a modest facelift, restored some services, introduced a new menu and rejuvenated what had been a mediocre operation into a model food service program.

Customers returned and sales rose to their former level, although prices hadn’t been reduced; they saw greater value in the new operation and meals offered for the prices.

The most effective way to eliminate or reduce the subsidy is gradually.  In cooperation with the food service contractor, a conversion can be made gradually, over a period of two years with minimal, or no, customer backlash.

Companies use long-range planning for the management of their businesses, development of new products or services, advertising and marketing, equipment purchases and the like.   They should do the same when they want to eliminate the food service subsidy.

When you want to shift the burden of profit or loss in your company's or organization's food services, we can help plan a successful conversion.  For information, contact Tom Mac Dermott, president, 603/642-8011, or Angela Phelan, senior vice president, 201/306-8613 or Ernie Wilder, vice president, 703/282-4040, or e-mail us at  Visit our website,

News from Clarion Group Food Service Consultants

The Spring issue of Clarion Group's newsletter is published.  Articles include:

Corporate food service operators see improvements in sales.
The coming health care law may not bite too hard.
What do food service customers want?  "Food quality" tops the list.
.. . and much more.

To obtain your copy and a complimentary subscription send your contact info (mailing address or e-mail address) to

Corporate food service may gain as work-from-home options are reduced

"Maybe the outgoing tide of more employees leaving the office to work at home is starting to reverse," says Tom Mac Dermott, president of Clarion Group, a food service consulting firm. "That would be good news for the operators of corporate food services."

For more than a decade, the percentage of companies’ employees who work from home has been steadily increasing, reducing the number of customers for the on-site food service. Some 63% of employers in a study conducted by the Family and Work Institute now permit employees to work from home at least part of the time, up from 34% in a similar study in 2005.

Recently, Yahoo, the internet search engine and website, announced it will require all employee to work at the office, starting in June. Several other firms have followed suit.

"Some of the best decisions and insights come from hallway conversations and cafeteria discussions," said Jackie Rese, Yahoo’s human resources director in announcing the new policy. "Speed and quality are often sacrificed when we work from home."

While the wisdom of the decision is hotly disputed, not everyone, including some Yahoo employees, are upset. "Deadwood is hiding at home," one Yahoo employee told The Wall Street Journal.

The food service operator can help its host company implement the improvements in productivity that Yahoo is seeking, according to Mac Dermott. "The on-site food service center can be a place where creativity takes place."

"The staff café is a natural gathering place, generally in a central location," he said If it’s configured to permit groups to work and discuss ideas, as well as have lunch or a mid-morning or afternoon snack and coffee, it can be a valuable asset to the company as well as to the food service operator."

"By providing tables and groups of tables of various sizes to accommodate different numbers of people, especially round tables where six or eight people can gather for easy discussion, the food service operator is providing a comfortable site for productive meetings and informal discussions, " he added.

Other ways of encouraging staff café use the food service operator can implement include partitioning off small areas with seating for from eight to 12, which informal groups can use in place of reserved conference rooms, which often are in short supply, he added.

"Making sure the café is wi-fi-enabled and providing flip charts and other communication aides also helps encourage employees to use the café," Mac Dermott suggests.

"Work-from-home is probably here to stay in some version," he added, "but the food service operator can help make working at the work site an attractive option.