Tuesday 23 January 2018

How food giants blended skills to cater for all tastes

With five generations of experience behind them, unlikely partners plan to combine great quality with value. By Donal O'Donovan

They are an unlikely pair to front a food venture. Brian Hogan heads up KSG, the company behind the well known Kylemore Cafes; Patrick Guilbaud's exclusive Dublin restaurant has two Michelin stars and is probably only familiar territory if you happen to be a captain of industry or a socialite.

The two men are old friends, however. Both steeped in the food business, they see their backgrounds as complementary; Brian knows how to cater to the many, Patrick knows how to wow the few.

That's the central idea behind Two and You, a contract catering business that aims to fuse the best of both worlds.

As a business, Two and You is part of KSG, owned jointly by the Hogan family and DCC, a stock exchange listed investment firm.

Patrick Guilbaud's role is as consultant, but the dynamic between the two men means, in practice, it works as a two-hander.

While KSG has the scale to deliver on big contracts day in day out, Guilbaud's foodie contacts and nous puts him at the centre of sourcing and hiring the executive chefs who oversee Two and You's menus and kitchens.

"After 30 years in the business, I know chefs. I also know that if the bottom line doesn't make sense then no matter what it is it can't be done. I bring my expertise, my suppliers and staff," he says.

He clearly also respects the KSG methodology.

"We tried outside catering ourselves, but doing it part of the time, trying to use our own kitchens, it didn't work.

"With Two and You, we can sit in front of any client and say, 'Whatever you want we can deliver,'" he adds.

For Brian Hogan, it's not a question of KSG abandoning its core business.

"I'd like to think it works like the Toyota Lexus model: we can create mass market brands and premium products -- and by doing both, we can deliver efficiencies."

He says the proposition is winning new business, including the coveted contract to feed the 2,500-strong Microsoft campus in south Dublin.

It helped put KSG back into the black last year, generating profits of €540,000 on revenues of €30.24m. About 20pc of sales will come through Two and You this year.

At Microsoft, the uniquely cosmopolitan workforce adds an extra dimension to the challenge. Guilbaud-trained chefs are charged with coming up with a constantly changing, seasonal menu to guard against menu fatigue.

"Each of Two and You contracts is quite different -- it's not a question of rolling the same service across multiple sites," says Hogan.

At the National Concert Hall in Dublin, for instance, the food and drink served under the Terrace Café brand is part of a night out while catering at the Whitfield Private Hospital in Waterford represents yet another new challenge.

While the Guilbaud-led team cater to the diners, Brain Hogan's team is focused on the other customer -- the one paying the bills.

Hogan says the big breakthrough here has been to abandon the old "cost plus" catering model in favour of a new service model.

Under the older contracts, the caterer produced and served food, totted up the cost, added a fee and invoiced the client. The new contract is built around an all-in fee. It puts the onus for cost management back on to the caterer.


Ironically, it means Two and You is delivering a better value service even with the higher end finesse provided by Guilbaud and his team, according to Hogan.

"Of the contracts where we know what was paid previously, we know that our clients now pay substantially less," he says.

Guilbaud, meanwhile, says the drive for efficiency has helped boost the quality of food.

"With the new model, all food is cooked fresh on site. It sounds expensive but it means far less waste," he says.

Even if it's not a "me too" brand, Hogan and Guilbaud are convinced that Two and You has huge potential.

The pair have been to London scoping out opportunities, where they were struck, among other things, by the food culture at one of the big international banks.

KSG, meanwhile, remains a significant player in the food market, with 700 staff serving eight million customers a year across a number of brands.

The Two and You venture is just the latest chapter in the century-long history of the company, where Brian Hogan has been involved since he was a boy. And with son Paddy now also part of it, five generations of the family have served Irish consumers their daily bread.

KSG has changed over the years, from its roots as a dairy in inner city Dublin to the family adding a bakery and gradually moving into retail and contract catering. The company developed as the wider economy grew and became more diverse.

Brian Hogan bought the business from the rest of the family in 1989. Ten years later, he sold 50pc of the company to DCC.

"It took 18 months to put the DCC deal together. I felt we needed a strategic partner to strengthen the business but I was staying in -- so it needed to be a meeting of minds."

Thirteen years later he's happy he made the right decision. "They brought the skills we lacked -- in terms of strategy, with professionalism around things like accounting, reporting and analysis," says Hogan.

It's a sentiment which echoes the decision to co-operate with Guilbaud in Two and You.

The retail business is also going through a radical overhaul, with the launch of two new shop brands -- Coffee Cuisine cafes and Pulse Salad bars.

It's a tough market for that kind of investment, but Hogan says shopping centre units are attractive again in part because upward-only rents, the bane of retailers' lives, have been abolished for new leases, but it's also a mark of confidence in KSGs ability to compete in what is now a brutally competitive market

Hogan says the challenge for the new shops is no different than it is for Two and You.

"If we can go fresh and go local, if we listen to the customers and deliver, then we can compete," he says.

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