The Conversation: Sophie Bellon, Chairwoman & CEO, Sodexo Group

Sodexo is strongly associated with food coupons offered with monthly salary. The humble paper coupon, though, has since evolved into an app. Besides offering discount coupons at restaurants and supermarkets, or helping avail a host of services such as health & wellness and upskilling, Sodexo is also among the largest food services providers at offices, hospitals and schools across 53 countries. In conversation with Ajita Shashidhar, Sodexo Group chairwoman and CEO, Sophie Bellon, delves into how the services industry in general and her €18.1-billion company in particular have transformed since the pandemic.

THE NEW WORKPLACE

Workplaces, schools and other institutions are back in action in a hybrid way. How has the services industry evolved to cater to the new reality?

Two years ago, it seemed businesses would disappear. It seemed unlikely that people would come back to offices. However, in reality, our business is recovering fast. The transformation we had anticipated before the pandemic is happening faster — factors such as personalisation, digitalisation, importance of the consumer, and importance of health through the way one eats, preference for vegan recipes etc have taken over. In the word crisis, there is danger as well as an opportunity. We have all felt the danger, now is the time for the opportunity. In many countries, clients' lives have become complex due to inflation and labour shortage post pandemic, and we see them relying on services companies such as ours to come up with employee retention tools — more vibrant workspaces and superior food experiences.

The crisis has been tough, but it has also opened up a huge opportunity. Outsourcing is growing faster. Our revenue is back almost to the 2019 levels; our client retention rate has been the best since 2005.

Globally, in the services business, sub-services were not seen as important. Now they are important because without our team, hospitals couldn't have been ready. When schools reopened in some countries, our team was there to help reopen the schools. In fact, the French President said kids have to go back to school, because if some kids don't eat lunch at school, they don't eat a proper meal. It meant a lot since it reinforced what we do when we feed kids at schools is important.

How has the workplace evolved?

Two years ago (during peak Covid), companies were ok with people not coming to work. Several tech companies said people could work from home, but realised very quickly that it was not possible. There is a shortage of skilled talent in most sectors and companies want to do everything to retain them. Employees are also asking for better experiences. In a hospital, for instance, doctors and nurses want good food, they want to spend time with colleagues, and are seeking more experiences.

As a service provider, we have to create those experiences. We design workspaces in a way that everybody feels good, is efficient and wants to come to work. We have upped our food services because when you are at home you have to prepare your own food and that takes time. Earlier, clients were price-conscious when it came to food, now it's more about value. They are ready to pay more.

Also, there is a lot of focus on sustainability. We need to do things differently. We have to cook differently, use less energy, source differently and locally, and at the same time come up with a variety of menus. Digital is playing a big role in keeping consumers excited and enticed, especially in schools and universities. Health is a big deal now. In India, Sodexo has recently signed up with the All India Institute of Ayurveda to design therapeutic menus.

You mentioned that digital has played a huge role in winning consumers. What are the other benefits?

Digital helps us analyse consumer data and understand their habits, what they like and what they want. If we can track that, it will help us add value. The person who serves you on your hospital bed, takes care of your kid in school, that person is becoming more and more important. And for him/her to serve you better, data becomes crucial. We have more than 100 million consumers globally. We are partnering with Saas players and designing solutions that will enable us to put ourselves in consumers' shoes.

How have services in manufacturing locations evolved in the last two to three years?

In manufacturing sites people don't want regularised menus. They want a food court or café experience. There is labour shortage globally, it may be more in Australia and in the U.S., but it's there in other parts too. Organisations are partnering with companies such as Pluxee (Sodexo's benefits and rewards services arm) to address the issue by offering a host of benefits to employees. The benefits are not limited to just food, they also extend to wellness services as well as skilling and upskilling. In India we offer food services, as well as benefits and rewards services. When employees are working from home they can order something from a restaurant, or groceries from a nearby store.

Since consumer needs are varied, we realised we need to offer our services under various verticals. Earlier, we were all about one brand, Sodexo, but today while Sodexo is our umbrella brand, we have Kitchen Work in the U.S., and Modern Recipe in the U.K., where we focus on creating premium recipes. We have also bought a couple of food production units, including Fooditude in the U.K., which focuses on premium meals for tech companies. In the U.K., firms are willing to spend £10-15 per employee per day for these premium menus. We prepare the food in the production unit and deliver it every day.

Uncertainty has become a way of life. Is there any difference in the way you do business today?

We need to make the right choices. We need to make the lives of our teams simpler. We have an objective to communicate well to the rest of the team and also check year-after-year whether we are delivering or not. If there is a problem we need to change.

We are trying to put authority and P&L closer to the business in the particular region and country. We are trying to localise as much as possible. However, that doesn't mean we don't have a global strategy. We have exited a number of countries, as we needed to make choices. We realised we were doing a revenue of just $20 million in some countries, which would at best be $30-50 million in the next five years. That is the size of two contracts in a university in the U.S. So, the question we asked in those markets was whether it was worth spending that kind of time and resources. We have embraced a philosophy to do less but do better.

ADVANTAGE DIGITAL

You are embracing digitisation on a war-footing. The way you are serving clients is also changing. This would have opened up job opportunities within. How are you dealing with it?

We spend a lot of money on training and upskilling our staff. If we don't, retaining them in our workforce would be difficult. We also need to engage in hiring new talent as there are so many new roles coming up for which our teams don’t have skill sets. We need to bring in different expertise into the organisation. We are looking at new talent in supply chain management, digital, data-analytics and sustainability. There is scarcity of skilled talent, but how do we attract? That's where the employee value proposition comes into place.

Since you are a woman leader at the helm, it will be interesting to hear from you what's stopping companies from having more women in leadership roles?

There are a lot of unconscious biases. We have been raised in a certain way. We are told girls need to do certain things and boys should do certain things. The girl has to smile, be nice and take care of the family, while boys need to be strong. This conditioning transcends into the professional arena, too. We need to break stereotypes, step back and understand why we think like that. We have to educate people within the organisation about the importance of breaking these stereotypes. There is a need to build a business case around diversity, equity and inclusion.

Gender balance is crucial. At Sodexo, we did a study and looked at business units with gender-balanced teams and those with male-dominated ones. We realised gender-balanced teams do a much better job of achieving KPIs of growth, profitability, client retention, development, engagement and brand image.

Employees also want to be part of an inclusive organisation, which includes not just gender, but also people from across age groups, cultural backgrounds and sexual orientations. We have a role to play to make that change happen. In business what gets measured gets done. If you want to grow your business, be more profitable, you measure it. You put in place initiatives, and measure them. Even in diversity you need to set objectives and measure them. But these things don't happen overnight, it's a journey. You should never stop this journey; else you will go backwards.

What's your vision for Sodexo India?

We are at a revenue of $300 million in India, and we are recovering well from Covid. I want the country to touch $1 billion soon. We only have the U.S., the U.K., France and Brazil in that league. I want to see India there, too.