The concept is “sectorization.” It involves acquiring what Gary Green, the CEO of Compass Group North America, calls “best in class” companies who serve particular sectors, or industries, and letting the companies retain their name, employees, and relationships with customers. “We had the opportunity to buy some of the best companies in their sectors and largely leave them alone,” says Green, who has been a part of Compass Group North America from the beginning, starting as CFO in 1994 and becoming CEO in 1999.
What Compass Group offered was investment in the business and the handling of “back of house” operations, such as sales, payroll, human resources, legal, and purchasing. The model attracted operators who wanted to grow, become more efficient, and continue to focus primarily on their individual operations and customers.
After the Canteen acquisition, the first company to enter the Compass fold was the well-known, New York area corporate foodservice company, FLIK International, in April 1995.
The same year, Compass Group USA landed its first big contract with IBM. Not only was the account the largest in foodservice history at the time, it was the first time a foodservice company had established a national contract with a client. “It turned a lot of heads in the industry,” recalls Rick Post, Chief Operations Officer for Compass Group USA.
Compass Group USA further expanded its foodservice operators by purchasing Service America in 1996, Daka International in 1997, and Restaurant Associates in 1998. Those, plus the growth of Canteen and the expansion of Eurest (1996) and Chartwells (1997) into the US from Europe, made Compass Group USA a $2.5 billion company by 1999. That was a big jump from the $1 billion company it was upon buying Canteen only five years earlier.