You've almost certainly eaten food served by Compass Group North America – even if you didn't realize it, which is just fine with Gary Green, CEO of the Charlotte-based foodservice company.
“We're probably the biggest company in Charlotte that no one knows about, but we're quite happy with that,” says the 51-year-old Birmingham, England, native. “I think that is the British influence of understatement.”
With 2007 revenues of $8.2 billion and 150,000 employees, Compass North America is the nation's largest contract foodservice company. It came to Charlotte in 1994, when its British parent company, Compass Group PLC, entered the U.S. market by purchasing Canteen vending of Spartanburg, then a $1 billion company.
Compass since has grown through about 70 acquisitions, though it operates nowhere as Compass. Instead, its specialized, separate divisions serve different sectors, catering the Kentucky Derby, the Oscars and sports venues across the country, including Time Warner Cable Arena and Lowe's Motor Speedway. They also provide food at schools, hospitals, workplaces and museums.
Green, a 22-year Compass veteran, came to town as CFO in 1994 and became CEO in 1999. He spoke with the Observer last week at the company's office near the old Charlotte Coliseum. Remarks have been edited for brevity and clarity.
Q. How did Compass end up in Charlotte?
While I'd sort of like to have a better business reason, the truth is we moved here because it was the nearest city (to Spartanburg) with two direct flights to the U.K., daily. We did have a lot of encouragement from Bank of America, who we did our first deal with, which I was always impressed with – that they were so keen to get us into Charlotte.
Q. Were you surprised that you went into food service?
I was really lucky to get into it. It's just a great industry. It's certainly something I'd encourage my kids to be in. There's so many facets of it. It's also a business. People can go from being in the kitchen to running the whole conglomerate. And, it's something you can relate to.
Q. What kinds of companies have you targeted for acquisition?
There's probably two main criteria. Have a reason: Does it get you into a marketplace you didn't have expertise in before? But just as important: Does it have a great management team? If you buy a great management team, over time, you get a much better return than buying a company with a low-quality management team for a cheaper price … We buy companies to keep the people. We're a great believer that you can't cut your way to greatness.
Q. How do you keep up your standards?
We're very much a chef-led company. That's part of our culture. Food is high on our agenda, from a quality and a taste point of view.
Q. Do you get to taste-test a lot of the food? Are there benefits, tastebud-wise, of running a food company?
Um – yes. I think it's a benefit. The problem is, every day I probably have some of the greatest food in America put in front of me. So keeping your weight down is a challenge. All our officers, you go away on a business meeting, they will be in the gym in the morning, working out.
Q. What is the reason for Compass' growth in the last year?
I'd like to think that it's because we're giving our customers what they want. But also, in a weaker economy, I actually think there's more incentive to outsource (food service) rather than do it in-house. So we should be able to do better and at a more cost-effective price than any in-house operation.
Q. What about rising food prices?
It's no use pretending it's not an issue. But we have volume and we have scale, so when we go and negotiate prices in the marketplace, we have some leverage. In addition, there's other things you have to do. Every day we prepare food, there's food wasted. If we can just cut that in half, it can negate all the food price increases.
Q. What do you see as the next big trend in your business?
I do think sustainability is with us. My kids and the next generation are far more aware of sustainable and green issues than we were. We have a sustainable seafood program. We've got cage-free shell eggs. We've got low-carbon diet footprints … We were certainly being pushed (on that) by a number of the universities, and Silicon Valley … it's good the younger generation are more concerned with that.
Q. What are some of the concepts that help keep you focused and moving forward?
We put a lot of time into recruitment. But then I think when you've got people, whether it's from recruitment or acquisition-wise, you need to give them a bit of space. If you've done the recruitment right, they should know how to do the job. Because we've done that, I think people want to join us. And they've repaid our faith in them.
Q. It sounds like freedom as a corporate tenet, in a way.
Freedom within a corporate framework, yeah. And hopefully (employees) will have fun. I think that's still allowed. We as a group of officers, we like each other and we have fun. Because when times get tough, you need to be close.
Q. You've said you're operating in all the sectors you want to be in, so how do you grow?
The education and healthcare marketplace is significantly less outsourced than the business and industry workplace marketplace. So there's a lot of potential in that area.
Q. How do you like living and working in Charlotte?
I love doing business in America. Everybody's so can-do. That is so refreshing compared to the normal conservative nature of business in the U.K. My kids were 1 and 3 when they came across, but they've got good American accents now. If they got lost in the mall, they wouldn't put ‘em with me. This is a great place to bring up a family. I've lived all over the world, and I love Charlotte.
Q. Those direct flights still help, too, I imagine.
Luckily, there's still a direct flight, because I'm on the (Compass) Group board. I have to go back to London (every month). So yes, the direct flights are very important.
Q. What are some of the things you like to do when you're not working?
At the weekend, I don't do anything but spend my time with the kids. I'm away all week. I do a lot of traveling. You're probably going to find me at the side of a sports field watching the kids play soccer or lacrosse, with my coffee in my hand and my baseball hat on. I'll do some hobbies when I retire. But until then, I think it's only fair to them, if I'm away so much, I spend the weekends with them.