Mark This! is a podcast in which we peel back the corporate curtain to reveal the cool and innovative people, programs, and projects that are happening all over Aramark’s varied lines of business. These remarkable initiatives happen because we have remarkable people behind them--building opportunity, building innovation, and building community.
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Mark This! Podcast: March 2025 Avendra International
Host: Heather Dotchel (she/her), Corporate Communications
It is time to Mark This, a podcast in which we peel back the corporate curtain to reveal the cool and innovative people, programs, and projects that are happening all over Aramark's varied lines of business. I'm Heather Dotchel.
As a member of Aramark's Communications team, I see and hear amazing things that are happening across our company every day. These remarkable initiatives happen because we have remarkable people behind them, building opportunity, building innovation, and building community. As our long-time listeners know, we like to share facets of Aramark's enterprise that people might not be familiar with. Today we are going to explore Aramark's Avendra International, which is a leading partner in strategic procurement and supply chain management, serving a diverse array of organizations, including hotels, hospitality and leisure resorts, healthcare, and educational institutions worldwide.
To explain what this means and how it works, Walt Sheffler, President of Avendra International, and Ian Murphy, Senior Vice President for Supply Chain and GPOs Europe, are joining us. Welcome to the program. Walt, can you introduce yourself to our audience, please?
Sure. I'm Walt Sheffler. I've been with Avendra since the inception, and I've spent my entire career in the hotel industry with a variety of roles from property management to corporate finance, and eventually ending up in the procurement discipline, and have been part of the Avendra journey since 2001 where this concept came together.
Ian, I'd like you to share your professional path with our listeners too, please.
Good afternoon, good morning, good evening, wherever you are in the world. Nice to meet you, Heather. So, Ian Murphy, Senior Vice President for Avendra International in Europe. I've been with the organization now just short of two years. My career has always been founded in procurement, so I started early in my days in automotive procurement, working for a big truck manufacturer in Europe. I then spent a decade at a competitor, and then for the last two years I've kind of had the great pleasure of looking after our procurement activities for both the managed services and also the GPO businesses in Europe.
We launched Avendra International this past September 2024, and previously, Avendra had existed as a North American company. Walt, can you explain the difference between the original Avendra and the international version, as well as how we moved forward globally?
Sure. This is a great opportunity for Avendra, which transformed from Avendra to Avendra International. And historically, Avendra's geography covered Canada through Panama, and we have many clients throughout that geography that also operate hotels throughout the globe. And one of the tremendous benefits of Avendra becoming part of Aramark is Aramark's global footprint. And after Aramark became very familiar with our business and the concept of what we do and how our business operates, they afforded us the opportunity to be able to take Avendra and overlap the Avendra business model, wherever Aramark operates today around the globe. And this is just a tremendous opportunity for Avendra to service our clients who operate beyond North America and are in Europe and Asia, and we can have this consistent high quality Avendra service model available for our clients that started in North America.
Heather, what I'd add to that as well is, when I joined the business two years ago, it was really clear in Europe we owned a number of great GPO businesses, but all of them had different brands and identities and different business models existed in different markets.
So originally in its inception, Avendra International was going to be our European brand to enable us to bring those great brands that we already owned in Europe together under one umbrella brand. What then transpired was actually, why just stop at Europe? And actually, Avendra International can become a global brand for us. So never in my wildest dreams when we first decided that we were going to launch Avendra International did I think it would become a global thing for us, but I think Walt and the team in the US really saw the opportunity to really drive that consistent business model around the world, but also to have an identity that we could all relate to and sit under. So, I think it started off as a European, bring our brands together, and soon became the global brand that we now launched the market late last year.
So, I'm going to follow up with you, Ian, on this with a couple basic questions for those listeners for Mark This who might not be very familiar with this world. First of all, if you could explain what GPO stands for, because I think that that's probably an acronym we sling around without pausing. And then what is strategic procurement? I know these seem basic, but what makes us leaders with this and what differentiates us?
Yeah, yeah, great questions. And I guess the people that work in the world of GPOs, it's kind of second nature us, but I recognize for a lot of people it's an alien concept. So, hopefully I can give you a bit of an overview of how it all works. But effectively, GPO stands for group purchasing organization, and the reason organizations like Aramark like group purchasing organizations to be part of their business proposition is effectively, these group purchasing organizations buy very similar things to what are Aramark business purchases. And in the simple world of procurement, the more you purchase, the better the terms you get. So effectively, what we're trying to strive to do with our group purchasing organization businesses is to get clients to also combine their purchases with the Aramark purchases, so that we effectively go to our suppliers with bigger and greater volumes, which brings efficiencies for Aramark, but also brings efficiencies for our GPO clients as well. So effectively, you can see it's a bit like a buying group, so we're aggregating our Aramark volume plus our clients' volumes together to give us the biggest possible volume to take to market.
And the other reason why these group purchasing organizations are very attractive to likes of Aramark is, in these situations we don't take title to goods for the products that we purchase for these group purchasing organizations. So effectively what we're doing is just giving them access to our purchasing terms. So we buy a 100, you buy one, you can now have access to the same terms for 100, but you still interact with the supplier, you still contract with the supplier, you're just taking advantage of our contracts.
Participants, when they get introduced to a GPO environment, they think that they have to buy the same items that say the main clients or other clients are purchasing. And in most cases, and probably most frequently in Avendra, they are not purchasing necessarily the same type of items, but they may be in the same family. So most manufacturers will have different quality tiers of products and they have different varieties of products. And the benefit of having these large national or even global type relationships with these manufacturers and suppliers is that we get access to a broad range of products.
And in the hospitality space, we're servicing hotels that are from economy, ranging all the way up to luxury or even uber luxury, and it still gives them the opportunity to benefit from the scale and aggregation that we're able to pull together. Although, they're not required to purchase specifications of Aramark or another hotel companies. In our environment, they set their own product specifications based on what's appropriate for their clientele. And then in turn, we will either have those items within our contracts or we will add those required items to our contracts to create that leverage, and in turn, continue that aggregation that Ian had mentioned.
Often, these GPO customers are buying from suppliers or products that we're not aware of. So the opportunity is both ways. So often, we find opportunities for the Aramark business to buy different products or different solutions that we may not have even had visibility of or even be aware of. So, I think you can see this as an awful lot of data that brings insight and intelligence that then enables us to be better for our clients, but also gives opportunities that often sometimes procurement functions miss. So yeah, we've seen many opportunities both ways, it's not just as what alludes to how Aramark buys well, and therefore everybody else should do the same. This is very much, there's various different opportunities out there for all of us.
Yeah, so it's a partnership. So Walt, you mentioned specifically hotels. Can you talk about what industries Avendra International serves?
Sure. So, predominantly the majority of our business is within the hotel environment. However, we also service the club segment. So we probably have an excess of 750 independent country club type environments. And they may be golf clubs, they may be city clubs, and oftentimes they're heavy users of food and beverage, but also in the golf environment, similar to many of the hotel resorts that we service, they have golf courses that require a lot of expense, whether it's associated with agronomy or whether it's associated with golf carts. Ian sometimes refers to them as golf buggies, but we've got contracts with these manufacturers. Agronomy is a huge expense in the golf arena in order to keep those golf courses looking pretty green, they require a significant amount of agronomy expense. And again, other categories that we're able to leverage, pull all the volume together, go to market as one, and create this beneficial pricing.
The other area that we also focus on and that we've just started to recently focus on is theme parks. So, this is another segment that we hope to expand further into for these self-op themed parks. And where appropriate, we've really started to think about how we can work with our sister divisions and potentially bring in facilities management or workplace experience. So, the whole collaboration between the GPO business and the managed services business is really coming together and it's a tremendously exciting time for Avendra International.
Well, speaking of excitement, Ian, I'm going to turn back to you. Avendra International announced its acquisition of the Spanish based company, Quantum Cost Consultancy Group. How does this enhance Avendra International's offerings?
Yeah, I think it plays to all the things that Walt's talked about really, which is, clients are asking for global solutions more and more every day. And one of the things that we recognized in Europe was that we had capability for GPO business in certain markets but we also had gaps. So Spain was a big gap for us, it was a big market for us from a managed services perspective, but it was an area where a lot of hotels have a high proportion of hotel properties but didn't really have a solution to satisfy that market from a GPO perspective. And a number of big clients of Avendra's were asking for us to have capability within that market.
So, we went on a process probably for about 18 months, talking to a number of GPO partners in that market, a lot of the big players, and we kind of decided that Quantum was the right business for us for two reasons, mainly. One, their market reputation. So we did a lot of insight gathering with their key clients to understand how they were perceived in the market.
But secondly, they also have significant global scale. So as we talked about in the press announcement, they've got about $500 million of scale across predominantly Spain, Mexico, and the Dominican Republic. So, the acquisition really helps accelerate our capability in Europe, they're really strong in the hotel segment, that's where they were born out of their parent company, so they're really strong in that core channel that Walt talked about. They give us a presence in Spain that we didn't have before, and also I think that scale pretty much doubles our purchasing scale in the Spanish market as well. So, fills a gap, is in the sweet spot of the channel where we really want to grow, and gives us significant leverage opportunities for the Spanish managed services business as well. So ticks a number of boxes.
But yeah, I'm super excited by the business. I spent a lot of time with them over the last 12 months through due diligence. Not only do they deliver those things we talked about, but they also have really strong talent and capability in that organization. And I think, I'm sure we'll come on to touch on it in a minute, but that's really the part sets our market and Avendra apart is our people, and that was one of the key criteria for the acquisition of Quantum.
Walt, anything to add to that?
As Ian mentioned, and I couldn't emphasize it enough, the people is the key to our whole success, because whenever our customer facing individuals, they are the representation of Avendra International. So when they're engaging with clients or they're engaging with suppliers, they are the perception of what the client or the supplier perceives to be Avendra International. And having the high quality associates that we have today and adding additional high quality associates just really strengthens our offering throughout the globe. And having been with the organization since its inception, it's just so rewarding to see all this great stuff going on. And the investment that Aramark has made has just been tremendous.
I love that you and Ian keep going back to our people. People first is incredibly important to us. Obviously, it is essential for our customer care model. Can you give us an example of a partnership solution that came from our people really digging in and meeting the challenges that our partners had?
Sure, Heather. At Avendra, we offer a very unique service model, and we define it as at property and above property. And we have field-based associates that on a daily basis are out visiting hotel and they are offering assistance, they're introducing new programs, they're identifying cost savings opportunities for these hotels when they're visiting. But more importantly, they're collaborating with what we call our account management team, which is operating at above property. So the account management team are working with regional management teams for these hotel entities, as well as with the corporate offices. And in essence, we've got some tools we've developed where the above property people are able to communicate that hotel company's priorities to the field service people who are visiting those individual properties. So, if they know that sustainability is a really important topic, when the people that are visiting that hotel brand's properties, they know that they can assist with helping on identifying more sustainable products for them to purchase, they can review their sustainability scores as well. And we can re-emphasize important for that hotel entity from the above property to the at property.
And this type of service model that we offer is unique within the industry. And has really found us to be very successful in helping support and almost to a certain degree, help augment the hotel management teams by re-emphasizing those topics that are very important at the property level.
And Heather, I'd reemphasize what Walt said by, I spent 12 years at a competitor prior to joining Aramark, and the thing that really profoundly struck me in the US but also for our European colleagues is that genuine desire and care for the client, and that genuine desire and care to make sure that we're looking after a client day in, day out. And as part of my onboarding and I see every day as we go out and visit clients in Europe, that understanding of the customer, understanding of their needs, that ability to be able to offer solutions to be able to fix their problems. And to really, that can-do approach to fixing the customer's requirements is absolutely the thing that sets us apart. I think when I look across our competitors, it's very transactional in relationship. It's about volume and scale, it's not about the customer.
And I think what we plan to do as we continue to expand Avendra international around the world is to have that customer-centric approach in everything we do because we can all compete on volume but actually, I think this is where we can really differentiate ourselves. And I think me and my team have learned a lot from Walt and his team and their experiences in this, and we're really trying to replicate and follow that model across Europe. But it will absolutely what we'll do as we go beyond Europe into Asia and other markets. So yeah, there's some really talented people in that team that often don't get the recognition they deserve because their knowledge and experience of our business and their ability to influence the customer is second to none.
That's fantastic. It's a recurring theme again and again in these episodes, where we talk about how important our people are and putting people first. So, it's always nice to hear when your company's that concerned.
We're a service company. I mean, that's really, we provide a service. And to Ian's point, the products are available and having good prices for the products is really table stakes. But it's this additional service that we provide through our associates that really separate us from the competition.
Yeah, and Heather, I think it is an easy thing to say but I think I quite fortunately have experienced two of the biggest players in this market. And when you join an organization where hospitality and people are at the forefront of that business model, and then you see what those people do for our customers day in, day out, it's not just a thing to say, it's things we actually do and it's things that I get the privilege to see every day. And I think when you've seen an organization and the way they operate, then you can really see just what a difference it makes.
And that seems the perfect place to end. Want to know more about Avendra International? Visit our newsroom on Aramark.com to access more information. I'm so glad our listeners could join us again, and we thank Walt and Ian for helping us to Mark This.
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