The big Interview: RA and Grazing

Sam Hurst’s company, Grazing, had reached what he calls ‘a tipping point’, while chief executive Matt Thomas wanted a quality delivered-in service to complement Restaurant Associates’ high-end B&I offer. Jane Renton talks to the pair about their recent merger…

As a young lad, Londoner Sam Hurst liked to go sculling on the Thames. Just him with his sculls – the short oars used by the lone rower. With hindsight, it’s also an apt metaphor for a businessman clearly accustomed to paddling his own canoe.

Some 15 years ago, the former 10 Downing Street chef, like all good entrepreneurs, identified a clear gap in the market for restaurant-quality food transported from one side of London to offices on the other from a central production kitchen in Bermondsey. Success was built on the fact that invariably, the customer would be none the wiser as to the quality of food delivered in, compared to food cooked on site.

Hurst and fellow entrepreneur Dean Kennett, the founder of Fooditude, now part of Sodexo, each separately pioneered the transformation of delivered-in office food, raising it to an entirely new level. This was something that required Herculean levels of endeavour, and much trial and error, to get exactly right. So, what made him want to forfeit his independence in July to become part of Restaurant Associates?

In response, he returns to the sculling analogy. “I liked rowing on my own, with no-one to bother you,” he says. “But sometimes a coach in a big motorboat would emerge from behind with a loud hailer. The advice given enabled you to raise your game and go faster. Well, that’s where I feel I am now with Restaurant Associates.”

As Hurst points out, it’s often lonely running your own show. So it is good having Restaurant Associates in the motor boat behind “supporting me all the way”.

There are, of course, all the additional benefits of being part of a larger company, enabling one to access all the things that can be difficult for a smaller caterer to do on its own. These include things such as accessing stronger buying power, the ability to take on more apprentices or navigating a sustainable path to net zero – factors that have become increasingly critical over the past four years. “You can’t necessarily do all those things as an SME,” says Hurst.

While the full details of the merger have not been disclosed, it is evident that Hurst remains in charge of Grazing, incentivised to remain and oversee its ambitious growth plans. It seems likely that Hurst – who also spent a number of years in a previous career working as a senior director at an international consultancy based in Zurich, advising hotel groups how to raise both debt and equity – has secured a good deal for his business.

Matt Thomas, chief executive of Restaurant Associates, appears to be equally delighted with the mutual benefits that he perceives the merger will deliver, not least in its ability to help the Compass subsidiary to broaden its market appeal. He also talks of Hurst providing an invaluable voice to his company’s strategic leadership team. “We want Sam to continue to own and support Grazing,” he says. “He believes we can help him, but we also believe he can help us.”

Like all such alliances, timing played a significant role. As Hurst explains, a tipping point had been reached and that came post-pandemic – though it was not so much a dearth of business but rather a surfeit of it.

While Grazing’s delivered-in business had led to growth in excess of 30% last year, with the overwhelming bulk of it being delivered across London on net-zero cargo bikes, his company remained too small to harness the level of demand it was attracting. As a result, Hurst was turning down more business than he was accepting as more and more companies downsized their office space, moving to multi-tenanted buildings with little or no kitchen facilities.

That market evolution, which had been underway for much of the previous decade, became turbocharged after the pandemic. Yes, workers were returning to the office, but not necessarily in the same numbers or for the full working week.

This was clearly a trend that Restaurant Associates had to take heed of. It had already adapted to sluggish Fridays in the office by offering more flexible contracts to those among its own catering staff who wanted to work a four-day week. This was despite a strong growth trajectory over the previous four years and a 100% contract retention rate over the past two and a half, as well as a welcome move away from fixed price contracts to cost plus in its specific market. All of this was also occurring against a more inflationary market backdrop where clients, if anything, are becoming more demanding in terms of value for money, flexibility and support in their respective journeys towards environmental and social sustainability.

It is little wonder, then, to learn that Restaurant Associates had been looking for a delivered-in service to complement its more traditional food and drink offerings for some time. Compass was already running several central production units in the UK through its ESS and Compass One subsidiaries. It operates them as part of its wider business and industry operation too, but Thomas had something more bespoke to Restaurant Associates in mind, alighting on the possible option of acquiring not just Grazing but also its founder and owner. “It began to feel like a shortcut to a long-held aspiration,” Thomas explains.

First the two men, whose paths had not previously crossed, needed to get acquainted. An out-of-the-blue invite to drop by for a coffee at Red Lion Street was quickly extended by Thomas to Hurst and there was an almost instantaneous meeting of minds. They nattered about the industry, their respective sector and how things were changing. “Both of us were doing something different, but what really connected us was the commitment to providing great food with well-trained individuals, as well as the need to keep adding value to the customer experience,” recalls Thomas.

After a few more meetings they got down to the serious nitty-gritty, with Thomas putting forward a proposal that would bring Hurst and his business firmly into the Restaurant Associates fold. “It would remain very firmly [Sam’s] business but with a little bit more firepower and support,” Thomas impressed upon him.

Hurst also shared the belief that there was a genuine meeting of minds, particularly around his own determination to keep building his company in what he describes as the “right way” in terms of sustainability and net-zero, objectives he felt were essential components of Grazing’s DNA. “Matt impressed upon me that he was not there to take us over, to homogenise us and make us like everyone else,” he says. “They liked what we were doing and wanted to help.”

Thomas encouraged Hurst to undertake his own due diligence before tying the knot, suggesting he also talked to other entrepreneurs who had joined the Restaurant Associates organisation. “As Matt proposed, I did my homework and talked to others who had joined forces with them and they all told me the same thing. ‘Look, it’s not like selling out to private equity, with its primary motive of making money as fast as possible for their investors’,” recalls Hurst.

Compass may be a publicly-quoted company, with shareholders to keep on side, but is first and foremost a food company. “Rarely would we want to buy an organisation and lose its entrepreneur,” asserts Thomas. “All of our transactions over the last couple of years involved broadening our capabilities in hugely investible companies.”

But what about Grazing’s existing clients at the time of the takeover? Surely many of them signed up for Hurst’s service on the basis they were getting a small, independent boutique, providing all the bespoke things they particularly appreciated. “We were about to sign a deal with a new client when news of our deal with Restaurant Associates broke and they had a bit of a wobble, but I told them that we would remain a small independent but with the backing of a bigger entity,” reveals Hurst. “They came on board and are super happy.”

Growth and profitability will be critical in the coming years, without which companies such as Grazing and Restaurant Associates cannot continue to provide value for money, innovation and sustainability, while also attracting the necessary talent to keep its wheels turning. And despite the current gloom and doom post budget, the UK market still has huge untapped potential according to Thomas. “We often talk about fighting for market share from our competitors, but there’s a far, far bigger market out there, so we don’t see growth as too much of a problem,” he says.

As for Hurst, he can now secure the business that he previously felt obliged to turn away for fear of compromising on quality. And, returning to his lonesome boating expeditions, we can conclude that success in rowing, as in business, is not just about leadership, which he patently possesses, but also teamwork and having a great coach behind you.


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