Food Service Companies Are Feeding off the Olympics
Monday, August 04, 2008SUSIE GHARIB: The Olympics could bring more than $2 billion in business to China's catering industry and U.S. food service companies could benefit as well. Philadelphia's Aramark Corporation and McDonald's will serve the Olympic venues. And as Shannon Van Sant reports from Beijing, both companies say the games will help their expansion plans in China.
SHANNON VAN SANT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Chefs in Aramark's dining halls are hard at work. They'll work even harder to serve 3.5 million meals during the Olympics and par-Olympic games. This is the 14th Olympics for the Philadelphia-based company, which provides catering and facility management services for clients around the world. China comprises just 1 percent of Aramark's annual revenue, but Catherine Toolan, executive director of Aramark's Olympic catering services, says that figure will grow.
CATHERINE TOOLAN, EXEC. DIR., OLYMPIC CATERING SERVICES, ARAMARK: The company are investing a lot in terms of building our international management team in China and building people with both international experience and local China experience. It's one of the country's great opportunities for growth and double digit growth.
VAN SANT: Aramark expects double-digit growth over the next five to 10 years and the Olympics come at a key time to help it reach that target, through brand building and staff recruitment. The company entered the Chinese market in 2004 and today employs 12,000 people here. Aramark had to hire more than 2,000 chefs just for the summer games, recruitment that may pay off after the games are over.
TOOLAN: We've worked with the China culinary association and a lot of the culinary schools throughout China and we've developed a lot of links with them and I think that will be very helpful in terms of retaining and attracting talent for our business in the future.
VAN SANT: Aramark will cater several Olympic venues and so will McDonald's, an Olympic sponsor and the official restaurant of the games. The company has opened four Olympic restaurants for athletes, spectators and media. Jeff Schwartz, CEO of McDonald's China, says these games are part of a broader marketing strategy.
JEFF SCHWARTZ, CEO, MCDONALDS CHINA: We're so proud to be a part of that, to be able to support all of China and specifically McDonald's of China. It's we think so important to us because it brings us closer and closer to the consumers here in China and also the great potential of building our brand in China, via brand building ideas and actual new restaurants.
VAN SANT: By the end of this year, McDonald's will have 1,000 restaurants in China. By the end of next year, it will have 150 more and by 2010, 175 additional stores will be up and running. The McDonald's menu offers old favorites and options tailored to the Chinese consumer. Three hundred of McDonald's China restaurants have dessert kiosks and the company has introduced what it calls an entry level menu, which at less than a dollar is still quite a lot for many Chinese consumers to pay for a meal.
SCHWARTZ: It's very, very important to us that as the incomes continue to rise that we remain affordable to all the consumers and especially the new consumers entering the market that consider McDonald's aspirational.
VAN SANT: But these brand building efforts by McDonald's and Aramark could fail if food safety becomes an issue during the Olympics. Aramark says it has worked closely with government bureaus to follow international safety standards.
TOOLAN: In terms of the talent that's here in China and the focus on food safety, that's one of the legacies that I see from these games. And that's not just an Aramark driven legacy. It's very much a legacy that's driven by the government and the bureaus to improve food safety and to ensure food safety for everybody.
VAN SANT: That's a legacy many in Beijing are counting as Aramark and McDonald's fuel athletes performances and the companies quest for market share China. Shannon Van Sant, NIGHTLY BUSINESS REPORT, Beijing.
