Anyone who has shelled out three bucks for a hot dog at Veterans Stadium, slipped pocket change into a campus vending machine for a can of Diet Coke or poured themselves a cup of coffee at the Wharton School's Steinberg Conference Center is already a customer of Aramark, Penn's newest dining services provider.
And as a $9 billion Fortune 500 corporation with 200,000 employees and business in 17 countries around the world, the Philadelphia-based food, facility and management support company has impressive credentials.
Over the summer, the University entered a 12-month contract with Aramark to examine and revitalize Penn's floundering dining services, which have lost campus clientele to alternate off-campus food vendors over the past few years. Aramark has since taken over where former provider of four years Bon Appetit Management Company left off, adding specialized dining hall offerings and expanding on-campus retail options, including a Subway franchise, slated to arrive Sept. 30.
And while some students expressed skepticism last week about whether Aramark can repopularize the campus dining experience, University officials, citing years of fruitful interaction with the company on a frequent yet more limited basis, say they are convinced that Aramark is a sure thing.
The Wharton School was the first at Penn to hire Aramark for its conference center. Following on that agreement's heels was Penn's 1999 contract with the corporation for vending services, resulting in 150 machines around campus set up in conjunction with Coca-Cola.
Campus Dining Services Managing Director Peg Lacey said the University's vending contract with Aramark has been successful so far.
"Even though we're only in our third year, we see no reason why it shouldn't be extended," Lacey said.
Aramark also controls dining and facilities services in Penn's health system, and for the past two years has been in charge of concessions at Franklin Field and the Palestra.
"Their relationship with the University has grown over the last three to four years in a number of areas where they have the expertise," Vice President for Business Services Leroy Nunery said. "But the contract with dining services is the single biggest chunk so far, affecting the most people on a daily basis."
Feeding hungry college students is nothing new to Aramark.
Aramark is currently in control of dining and facilities services at over 400 academic institutions, including New York, Boston and Duke universities and the University of Chicago.
"We pride ourselves especially in our long-term relationships with schools," Aramark spokesman Sean Clements said. "For example, we've been working with Baylor University for over 30 years."
One of the company's draws for Penn was its MarketMatch program, which resident managers at Penn say will make continual modifications to dining services by obtaining feedback from the student body and studying the entire University area.
"We want to view ourselves as flexible partners," Aramark Campus Services Resident District Manager Mike Cenicola said. "What may work at one institution may not work at another."
In addition to higher education, Aramark serves businesses, conference and convention centers, correctional facilities, health care systems, public school districts, parks and tourist attractions, the international sector and sports and entertainment venues, including Philadelphia's Veterans Stadium, New York's Shea Stadium and Boston's Fenway Park.
Of course, Aramark did not start off as one of Fortune magazine's 50 Most Admired Companies, but had rather humble beginnings in peanut vending out of the back of a truck over 50 years ago, according to the company's Web site.
The business developed into Automatic Retailers of America, or ARA, in 1959, and soon expanded from the West Coast and Midwest to the East Coast with the acquisition of Philadelphia's Slater Company, the largest food business in the country at the time.
Over the next two decades, ARA entered the leisure service market, began book and magazine distribution with the procurement of the District News Company and eventually moved into uniform, health care, environmental and childcare services.
A quarter-century old, ARA came under new ownership in 1984 through a management buyout that placed nearly three-quarters of the company under the command of current Chief Executive Officer Joseph Neubauer. When the trend towards outsourcing started to boom in the late 1980s, ARA jumped on the bandwagon. In 1994, ARA became Aramark, and it has been growing ever since.
Aramark bought Service Master Management Services for $800 million in October of 2001 and earned $8.8 billion in 2001 sales reflecting the acquisition.
Fiscal Year 2001 sales were at $7.8 billion, and the company's net income was $176.5 million.
Even in the face of the past year's low employment levels, drops in convention and tourism attendance and spending levels, and dampened NBA and NHL playoff activity, Aramark has managed to continue to report increased profits.
The company's third fiscal quarter report in August boasted consolidated sales of $2.24 billion, a 13 percent increase from last year's figure. Among its various services, Aramark reported the largest increase in food and support services -- the most predominant of its three lines of business -- which rose 19 percent.
"The fourth quarter is, historically, our strongest," according to Neubauer in the corporation's August press release, and this year will likely follow that pattern, weather-permitting, now that the threat of a baseball strike has been quashed.
Plus, Aramark's contract with Penn was just one agreement of many in its busy 2002 summer season -- the company acquired Harrison Conference Centers and University Hotels, took charge of food service at the new Seattle Seahawks stadium, renewed its contract with the Houston Independent School District and more.
Aramark has proven to stockholders and Fortune magazine its economic viability and outsourcing know-how. Now, with the University's dining services in its hands, it has one year to prove itself on Penn's campus.
