- The Washington Times - Monday, July 9, 2001

Sodexho Inc. is hungry for more business.
The Gaithersburg-based food and facilities management company the largest in the country is ready to serve new industries and new clients and expand its services even further.
"This is a business where if you don't want to become a commodity, you have to continuously innovate, innovate, innovate," Michel Landel, president and chief executive of Sodexho, formerly known as Sodexho Marriott Services, said in an interview with The Washington Times.
"Because this is a service business, you can be imitated very quickly, so you have to maintain a spirit of innovation and entrepreneurship."
The $4.7 billion company, the North American subsidiary of Paris-based Sodexho Alliance, is up against food service giants Compass Group of Britain and Philadelphia-based Aramark Corp., as well as hundreds of other regional food service businesses all on the hunt for a piece of the $121 billion noncommercial food service pie.
"It's cutthroat competitive," says James Pond, executive editor of FoodService Director, a New York-based monthly business publication. "Clients are looking for companies that will add value, not just food service."
Sodexho Alliance surpassed catering leader Compass as the largest company in the industry when it agreed to purchase the rest of Sodexho Marriott Services Inc. in May. Sodexho Marriott was formed when Marriott International and Sodexho Alliance merged their North American food-service businesses in 1998.
The Marriott association has been removed from the company's official name, although signs of Marriott still linger at the headquarters building and on executives' business cards.
Mr. Landel says the buyout changes nothing for the more than 110,000 employees of the company, nor does it change anything for the 5,000 locations Sodexho serves.
There are three major markets Sodexho serves: corporations; education ranging from colleges and universities to private and elementary schools; and health care, from hospitals to retirement homes.
"In order to grow faster, it is very important for us to sub-segment those markets," Mr. Landel says. "You need to have different types of offerings, different types of people, different types of programs to serve those clients and customers."
Sodexho serves about 2,000 corporations across the country and in Canada. Locally, Sodexho serves such clients as AOL Time Warner, Catholic University of America and the World Bank. The company's focus remains on growing the segments it's already in and adding new clients from different industries.
"We see a lot of opportunities in other segments like the military," Mr. Landel says. "We believe there is a major trend in the United States for privatization."
Sodexho recently won an $850 million contract to provide food service to the Marine Corp.'s garrison mess hall locations in Arizona, North Carolina, South Carolina, Virginia and the District. The contract win is being challenged by a competitor a common practice in the industry. For now, the contract belongs to Sodexho.
Mr. Pond says the industries with the most growth potential for Sodexho and its competitors are schools, health care and correction facilities.
While food service is Sodexho's largest business, facilities management has become a growing service for the company.
About 15 percent of Sodexho's sales comes from facility management, which includes such services as groundskeeping, laundry, housekeeping and plant maintenance.
"We see a lot of opportunities in this multiservice [business]," Mr. Landel says, adding that the company can cross-sell its services to clients.
Sodexho has several clients for which it handles both food and facility management, including St. Alban's School in Northwest and Suburban Hospital in Bethesda.
"There is still a lot of opportunity for growth, not only in food services but in other services," Mr. Landel says. "We are extremely well positioned because we offer a wide range of services, we have expertise in all markets and we also are present in all the major geographies in this country."
Mr. Landel isn't disclosing the other industries or niches his company is pursuing because of competitive reasons.
"Our goal is to continue to grow in our different segments," he says. "We are the No. 1 company in the U.S. and we want to continue to lead in this market."
Within the past decade, Mr. Landel says, the industry has changed dramatically as companies have acquired competitors and clients have become more demanding.
Despite the change, companies like Sodexho are still dealing with common stereotypes about the school cafeteria's "tuna surprise" or inedible hospital food.
"Although these companies go out of their way to differentiate their meal offerings, the stigmas still exist," Mr. Pond says.
"We work a lot to try to get rid of this image," Mr. Landel says. "We have made major progress in the past 10 to 15 years revamping our offerings. Now we really are trying to understand what the customers want."

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