Old brand, new gigs

Piccadilly's food service division moves into school cafeterias and prisons.

Lunchtime at Catholic High School comes with a particular challenge: how to feed an audience of about 1,000 teenage boys in less than an hour. Groups of students file in and choose from hot plate lunches, grab-and-go items and à la carte snacks and drinks. The setup resembles a university dining hall more than a school cafeteria, with students making their selections and checking out with pre-paid electronic ID cards.

Historically, Catholic High's in-house staff has handled the planning, sourcing and preparation of its lunch program, but last year the school made a significant shift by hiring Piccadilly Restaurants to perform the work instead. Today, the shrimp po-boys, fried catfish and cheeseburgers students eat for lunch are prepared by the same Piccadilly cafeterias that have existed in Baton Rouge for decades, including the one in the Westmoreland Shopping Center adjacent to the all-boys school.

“We were trying to offer better value for the dollar, and we were looking for a way to improve the consistency of our lunches,” says Catholic High President Gene Tullier.

As Tullier was mulling how to improve the quality of the lunches and the process by which they were planned and ordered, management from Piccadilly's Westmoreland location reached out to him. The restaurant was attempting to drum up offsite catering business to augment declining sales. It had successfully landed new contracts with the state and with Greek organizations at LSU.

Thinking beyond just meeting and event catering, Tullier asked Piccadilly to submit a proposal for the school lunch business. The Baton Rouge-based company won the contract and hired Catholic High's kitchen staff. Piccadilly began by adding new serving and cooking equipment in the school kitchen to facilitate a broader menu.

Piccadilly's fleet of 80 restaurants across the Southeast also gave it the buying power to contain food costs. The company spends about $50 million per year in groceries. Moreover, it understood how to move a crowd quickly through a line.

“It's been a win-win all the way around,” says Tullier.

Piccadilly might be making life easier for Catholic High but it also seems to have tapped into a promising growth area after years of stagnation. In July, Piccadilly CEO Tom Sandeman announced the company's intention to expand its food service division, which currently includes more than 80 school lunch programs, health care facilities, emergency-response contracts and other accounts. Among its clients are Kehoe-France Schools in Metairie and Covington, St. Louis King of France in Metairie, E.D. White in Thibodaux and Magnolia School in New Orleans. The company is also an emergency-response contractor with the state government and the American Red Cross.

“This makes perfect sense for us,” says Sandeman. “It's a logical extension of the brand. In each of these cases our goal is to provide services that fit the needs of these clients, and they're all very different.”

The company has added a 17-foot-long salad bar at E.D. White and has tailored the menu to an all-girls audience at St. Mary's Dominican High School in New Orleans, where it also provides food service.

Piccadilly's food service division contracts have more than doubled over the last year. Vice President of Operations Chris Sanchez says the goal is to double the number again by the end of 2013.

“We've got the systems in place,” says Sanchez. “Our biggest challenge is in getting the word out because people don't normally associate this type of business with us.”

Known for its comfort food, Piccadilly is one of the most recognizable restaurant brands in the southern United States. It carries particular weight in Baton Rouge, where T.H. “Tandy” Hamilton founded the company in 1944. Hamilton bought a cafeteria-style coffee shop on Third Street named Piccadilly, streamlined the concept and expanded it throughout the city and Southeast.

Eight Piccadilly cafeterias function in the Capital Region. The Essen Lane location serves the highest volume, pulling down more than $3.5 million in sales.

But as beloved as the restaurant is in much of the South, its trajectory over the last two decades has been wobbly. In 1998, Piccadilly, comprised then of 131 sites, acquired 142 Morrison's Cafeterias. Morrison's was a competitor and had its own brand loyalty and corporate culture. The acquisition was costly and unworkable, says Sandeman.

“The cultures of the two businesses were just too different in many cases,” he says.

Sales fell. Moreover, Piccadilly had the added problem of unfunded pensions. By October 2003, the company filed for bankruptcy protection. In February 2004, it was acquired by the Los Angeles-based private equity firm Yucaipa Companies, which trimmed locations and shored up operations, says Sandeman.

Despite its leaner makeup, the challenges weren't over for Piccadilly. When the housing bubble burst in 2008 and the economy tanked, the company's target market was hit hard. Its bread-and-butter customers were low-to moderate-income families, many of whom decided eating out was a superfluous expense, says Sandeman.

But when Hurricane Gustav hit in 2008, the company found itself moving into a new line of work. It was capable of responding fast to large-scale emergencies, says Sanchez.

“We got a phone call from the state, asking for 20,000 meals to be served in the Houma area, and we had 24 hours to do it,” says Sanchez. Despite dozens of Piccadilly locations being temporarily shuttered, the company could still rely on other functioning locations, including one in Gretna, as well as national food service vendors beyond the storm's reach. Sanchez says Piccadilly served 10,000 lunches and 10,000 dinners with only a day to prepare.

“Even though we had done 240,000 meals for the state that year, that experience really gave us the confidence that this was an area we could handle,” Sanchez said.

Sandeman says the responsibility to increase food service contracts for schools, businesses and health care institutions is being pushed down to the management of individual locations. They will earn incentives based on contracts won. The Westmoreland Piccadilly, which had been losing money before it expanded into food service, now shows a positive bottom line. In fact, it is at capacity for outside catering. If it secures new contracts, another location, like Essen Lane, will actually do the cooking, says Sandeman.

“We have the depth, the buying power and the ability to get this done,” says Sandeman. “More than that, everyone has a positive memory of Piccadilly, so what we do in the food service division has to reflect that kind of excellence.”

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