Small school services division eyes top spot in contract feeding

Nation's Restaurant News, March 10, 1997 by Paul King

When Marriott Management Services' School Services division landed the contract to provide foodservice for the Tulsa, Okla., School District in 1995, it reached a watershed.

The smallest division of MMS, for the first time in its history, landed an account that had an enrollment of more than 25,000 students. That securing of what School Services' vice president of sales and marketing Greg Miller calls a "mega-district" means that School Services is ready to vie for supremacy in contract feeding in elementary and secondary schools.

"Schools Services makes up only about 10 percent of Marriott Management Services, so we are a very small division," says Naomi MacKenzie, division president. "However, we are growing very rapidly. We believe we can double our size in a very short period of time."

School Services may be small when compared with other MMS divisions, but it is still larger than most contract companies. At the start of the 1996-97 school year, the division had 350 accounts, serving 3,200 schools in 37 states. School Services employees serve more than 1 million meals a day, and the division generates $450 million in sales annually.

Nevertheless, MacKenzie and her team have set an ambitious goal for the year 2000. Just last month the division announced its "20-20 Express" program.

"The `20-20' stands for 20-percent growth each year for the next four years, which would make us 20 percent of the total MMS," Mackenzie says. "it is a tall order and an ambitious goal."

It is not, however, out of the realm of possibility, adds Miller, because school districts are becoming more and more amenable to the idea of outsourcing food and support services. Most significant among them is the Chicago Board of Education, which last year became the largest district in the nation to outsource its foodservice. The nation's third-largest school system is phasing a contracted foodservice, splitting a continually growing portion of the system to Marriott and Aramark Corp., Marriott's chief rival for school accounts.

"Our goals for this year are to secure contracts with three to five more mega-districts and 40 to 50 core districts," Miller says. Core districts, he adds, are districts with enrollments ranging from 5,000 to 25,000.

He notes that School Services already has targeted eight mega-districts, in cities such as Houstons, as possible acquisitions in 1997.

"Privatization gives the superintendent and educators a chance to do their jobs," says Michael Thompson, Ph. D., superintendent of Tulsa Public Schools. "We are not equipped to manage foodservice well. Teaching math and science, those are the kinds of things we get paid to do.

"The profit margin in foodservice is so small that many programs are in the red, and there is often no money to provide the training and support the department needs," Thompson adds. "Our foodservice is operating in the black, and I believe the larger the district, the more valuable and cost-effective outsourcing becomes."

MMS began its concerted effort toward gaining a larger market share of school foodservice in 1992, when MacKenzie was asked to head up the schools division.

"When I arrived, the division was doing well but I saw the potential for mush more growth," she explains. "I think we have positioned ourselves well to continue to grow. The team is focused, and we clearly understand what our goals are."

MacKenzie came over from Healthcare Services, where she began as a dietitian and foodservice manager in 1971. She rose to the position of area vice president in health care under Tony Alibrio, and in 21 years in the division she lost only one client.

"My orientation to life in general is a constant consciousness of good nutrition," says MacKenzie when asked to explain why she left health care for school foodservice. "Nutrition impacts the learning of children. I believe school foodservice is more dynamic than health care because children are the ambassadors of the future. We have to prepare them properly."

MacKenzie also believes she has a personal stake in the matter. She says that being the single parent of two adopted daughters "gives me an interest in the school environment."

As a registered dietitian, MacKenzie is dedicated to the propagation of proper nutrition. That is one reason Marriott School Services decided in 1995 to roll out a test of a "Healthy School Meals" program at 12 of its school district accounts.

Marriott was responding to a decision by the U.S. Department of Agriculture to implement stickers guidelines for school meals. The guidelines, which are designed to provide less fat and more fruits, vegetables and grains in students' diets, went into effect nationally July 1, 1996. Any school district participating in the National School Lunch Program is required to abide by the revised guidelines.

"Marriott wanted to be at the head of the line in meeting the changes," MacKenzie says. The benefit to Marriott, of course, was that when the new guidelines went into effect, it was able to implement them in all of its accounts.