Crystal Food Services plans to team with several prominent restaurant chains for a nationwide expansion after severing ties
with Marsh Supermarkets Inc. early next year.
The locally based catering and food-service company will report directly to Boca Raton, Fla.-based Sun Capital Partners, which acquired Marsh for $88 million in September. Fishers-based Marsh had acquired Crystal, now Indiana's largest caterer, in 1995.
Crystal President Jack Bayt, who founded the company with his brother Dan in 1976, said he initially wanted to buy it back after Sun bought Marsh.
But now Bayt says Crystal can align with Sun to gain national buying power and add recognized restaurant brands to its operations, which include event catering and food management at venues such as arenas, museums and zoos.
Sun owns several chains with hundreds of locations across the United States, including Fazoli's, Bruegger's, Sweet Tomatoes and Real Mex.
Teaming up could help push Crystal's annual sales past $200 million, Bayt said. That would place it among the top 10 firms of its kind in the United States, though still a fraction of the size of Philadelphia-based Aramark Corp., an industry giant. Crystal now does $80 million in sales, which includes $22 million from catering.
"We're trying to figure out how all the parts and pieces are going to fit," said Bayt, 50. "My vision, and Sun likes it, is to turn Crystal into a national player."
Crystal already operates as a separate entity, but reporting directly to Sun instead of Marsh will give the company a larger platform for growth, said Marsh spokeswoman Kathy Lussier. She said the change will be finalized in three to six months.
"Because Sun owns all these other restaurant and food-service groups, it just makes perfect sense that they align directly," Lussier said. "It gives them a competitive advantage when they're looking for other contracts."
Sun Vice President of Communications Richard Hurwitz declined to comment on the realignment, saying the company does not discuss operating plans of its portfolio companies.
Working with Sun's national brands will enhance Crystal's operation and give it more credibility with potential customers, said Don Ball, vice president of the National Association of Catering Executives, a professional association headquartered in Columbia, Md.
"We're catering to people who come from all regions, so it's important for us to provide products and services that are recognizable to those guests," said Ball, who directs food services at Washington Duke Inn & Golf Club on the campus of Duke University. "When you have national names, it gives people a level of comfort."
He said Crystal's grand plans for expansion are possible because of such partnerships.
Crystal would remain legally separate from the restaurant entities, but Jack Bayt and his brother, who presides over Crystal's catering business, would coordinate partnerships.
The companies would share services and resources and cross-market product lines, Bayt said. Examples might include offering Bruegger's bagels for office catering or Fazoli's pizza at zoos. And Crystal could serve food from the restaurant concepts at other venues it manages.
The company would retain its headquarters in Indianapolis, where it manages food services at the Indianapolis Zoo, Indiana Government Center and Indiana Roof. The company also caters at the NCAA headquarters, Crystal Riverwalk in Broad Ripple and The Fountains in Carmel.
Crystal's potential for growth had been hampered in recent years by financial problems and uncertainty surrounding Marsh, Bayt said. Shaking free of that mess should be helpful.
"Decisions for Crystal won't be made based on what the grocery guys think, and that's big for us," he said. "It's been a hindrance for us the last several years."
Crystal and other divisions such as O'Malia's Food Stores had not gotten much support needed for growth from Marsh in recent years, said Danny O'Malia, a former Marsh executive whose job was eliminated after Sun took charge. O'Malia, who chose Crystal to cater weddings for two of his daughters, said Sun's ownership offers hope for Crystal. "They're definitely in a better financial position with Sun than they were with Marsh," he said.
The private investment firm has more than $3.5 billion in equity capital under management and has managed or invested in 135 companies since it was founded in 1995.
Bayt said Sun has offered Crystal executives an ownership stake in the new entity, a move he sees as a sign Sun wants to grow the company instead of quickly reselling it.