Catering for change

FRIDAY INTERVIEW:Donal O' Brien, managing director of Aramark Catering for change

DRIVING INTO Aramark’s Irish headquarters off the Malahide Road in north Dublin, you are greeted with the instantly recognisable Bewleys logo. Aramark, the company which bought Campbell Catering from Campbell Bewley in 2005, shares its headquarters with its one-time parent company.

According to Donal O’Brien, the recently appointed managing director of the company, the shared location is one of Aramark’s few links with its former partner. “They remain one of our biggest customers, but that’s about it,” he smiles.

Aramark’s entry into the Irish market in 2005 through the acquisition of Campbell, one of Ireland’s longest-established contract catering companies, was one of the biggest developments in the industry for years. Aramark had begun building up a share in Campbell Bewley from 2000 when the two companies entered a joint venture. Once the multimillion-euro deal was complete, the new owners made no secret of their intention to expand and diversify out of catering.

“We were at the table for a number of deals,” says O’Brien. This included contract cleaning and facilities management company Noonan Services, which in the end was sold for over €90 million in a management buyout.

In 2009, Aramark acquired Veris, the Dublin-listed property management company, for €51 million. The diversification strategy reflected the ethos of the parent company. Aramark is one of the largest outsourcing and facilities management businesses in the world, with strong roots in contract catering. Was it a challenge for a small, Irish company to adapt to the requirements of a company at the time listed on the New York stock exchange?

“Campbell Catering was a very strong entrepreneurial business, and we still had the Irish management team in place. The challenge was to adapt to the changes required as part of a new corporate entity,” he says.

O’Brien was central to this transition process. Having joined Campbell Bewley in 1997 as managing director of Campbell Catering, he moved to management in Bewley’s retail side. He then left to join woundcare company Altracel as chief operating officer and the company floated on London’s junior Alternative Investment Market .

A few years later, he was brought back by Campbell Catering chairman Dan Cronin, when Aramark got involved. “At that stage I had good experience around the corporate world, having helped commercialise Altracel. The change from a small, privately held company to a larger corporate body is something I’d just gone through.”

Today Aramark Ireland has 4,000 employees, making it one of the biggest US employers in the State. Its 2010 accountsshow revenues of €186 million, an increase of 16 per cent on 2009 – the first full financial year since the acquisition of Veris.

Though the company refuses to be drawn on the breakdown of the revenue, catering remains the core, responsible for approximately 60 per cent of turnover, O’Brien says.

Aramark has close to 50 per cent of the food service markets, providing catering services to clients as diverse as Guinness Storehouse, universities, private and public hospitals and Government departments. Its current focus is on building its presence in outsourcing and facilities management. It’s a strategy O’Brien admits is borne out of necessity.

“As a food company, we’re embedded in the economy. That economy has shrunk, we’ve shrunk with it. What’s helped us is that we’re offering other services to existing clients . . .”

Crucial has been the acquisition of Veris. Was the purchase of a property-related company when Ireland was in the eye of the property storm a wise move? “We offer transactional services,” he says. “Property management will always exist. Even in the downturn, it has to be managed and effectively run.”

The number of clients buying more than one service from Aramark stands at 10 per cent, a figure O’Brien hopes to increase to 50 per cent. “We see huge opportunity in this sector. Businesses are looking for cost-effectiveness, for integrated services where they’re dealing with one person, not four or five. If something goes wrong, they want to be talking to the person who’s going to solve it.”

But is there not something questionable about a company, particularly a large multinational, trying to muscle in on other sectors?

“Our ethos is not about world domination,” replies O’Brien. “We don’t go for every job – for example the sports entertainment space is something we don’t have expertise in. We pick the jobs we want to go for, or are indeed asked to go for, because the client isn’t getting what they want. We are aware that you need to have the specific skills required for different services and we can offer that.”

Despite Aramark Ireland’s focus on expanding, O’Brien’s own background is clearly on the food and beverage side, dating back to his Campbell Bewley days.

The 52-year-old Clontarf native has an impressive CV. After school, he joined transport company LEP on a management programme which sent him to London for 18 months, followed by four years in Switzerland and Germany. The next step was a position in Canada or the Middle East but, having just met his wife, he decided to move back to Ireland.

“It was a terrible time in Ireland at that point in the early 1980s, but because of the experience in Germany, I had two job offers when I came back. One was with RA Bailey, and I decided to take it.”

It proved to be a wise move. A seven-year career with Baileys followed, in customer service and then marketing, with O’Brien completing a marketing degree at the Irish Management Institute. He was then appointed regional director for Australasia and the Far East, travelling to the region every three weeks.

“It was a fantastic time. It was just at the time when Baileys Irish Cream was on its cycle of internationalisation. We brought it to be number one in the liqueur market in these far-away places. The advertising budget was a couple of million Australian dollars – we were making commercials for TV and cinema.”

In 1990, O’Brien joined the venerable Cork shoe polish business Punch Holdings, a job that also involved international travel. When the company purchased a Swedish company, O’Brien moved to Sweden for a year and a half with his family. It was a key learning experience. “We had to integrate the business, effectively move it to Cork where we set up a new distribution business. Integrating the business was as important as buying it.”

Managing and integrating new businesses is one of the key skills O’Brien brings to Aramark Ireland. “Buying a company is one thing, the key is integrating it. When you read about companies being bought for €250 million and then sold for €10, that’s telling you that no one spent time figuring out that part of it. This is what we’ve been doing with Veris over the last couple of years.”

O’Brien is busy settling in as managing director of Aramark Ireland, having succeeded Joan O’Shaughnessy in May. O’Shaughnessy is remaining on the management advisory board.

Other members are Aramark Ireland chairman Dan Cronin, Joe Carr of Mazars, and former Jurys Doyle chief financial officer Paul McQuillan. It’s a corporate structure that works well, says O’Brien.

“At the end of the day, we can’t control the economy; but we can be in tune with what’s happening on the ground. The key is to anticipate change, adapt to it and then execute it. Knowing how the market is changing is the key to success.”

ONE THE RECORD

Name:Donal O'Brien

Age:52

Position:Managing director, Aramark Ireland

Family:Married to Jackie, with two sons, Robert and Paul

Lives: Ratoath, Co Meath, for the last 13 years. Originally from Clontarf in Dublin.

Hobbies:Rugby and sailing.

Something that might surprise you:He speaks fluent German.

Something that won't surprise you:As someone in the catering industry, he loves to cook. Speciality dish is oven-roasted salmon with apricot salsa, served with mashed potato. "I robbed it from Roly's" he admits.