Partnering for International Nondues Revenue

By: Douglas R. Kelly

The National Restaurant Association had an education program that was ready to go global, but it couldn't expand by itself. By working with an experienced partner and staying flexible, the association increased revenue and established roots around the world. (Titled "Passport to International Markets" in the print edition.)

You've just arrived in a foreign country, and you're famished after a long flight. As you walk into that cool-looking little place with the menu posted in the window, you wonder about the food. It smells terrific, but the place is a little loud, chaotic, and, well, different from back home. Do they know what they're doing here? What kind of food standards do they follow, and who checks up on them? Should you just ask them to make everything well-done?

Multinational restaurant companies like Yum! Brands, Darden Restaurants, and McDonald's know customers think about these things. That's why food safety is serious business in the industry, and it's also the reason why the National Restaurant Association has offered a food safety training and certification program, ServSafe, since the mid-1970s. In the nearly 40 years since, NRA has awarded more than 3 million Food Protection Manager certifications through the program.

As multinational restaurant companies have expanded their operations into more countries during the last 10 years, they have increasingly pushed for food safety standards abroad to match the high standards maintained in the United States. "I think [that was] the objective of the chains," says Paul Hineman, executive director of the 480,000-member association. "So that when they had taken either a franchise partner or did corporate international expansion, guests would get the same level of experience in safety for food handling and preparation."

Getting food safety right is just good business for these companies. "A company like Taco Bell, for example, has very high standards in this country and in any country in which they operate," says NRA CEO Dawn Sweeney. "So they want to make sure, in terms of a brand protection standpoint, that whether you eat at a Taco Bell in Chicago or at a Taco Bell in Shanghai, you're going to have a similar food safety experience."

Those issues suggested that NRA had a market opportunity to expand ServSafe internationally. But doing it right required an understanding of different countries, different standards, and different pricing. And they would need to find a partner who could help the association make the ServSafe program an international success.

Global and Local

Though some food industry processes are commonly practiced across national boundaries, each country presents unique challenges. Taking the ServSafe model global would require knowledge of, and experience in, the food industries in these countries—which NRA had only just begun to acquire through sales of some of its products in Canada, Australia, Mexico, and parts of Latin America and Europe. By 2008, it became clear that the organization needed a partner with greater depth of experience in local markets—the cultures, the customs, and the issues particular to each location.

The first step in identifying that partner was to put out a request for proposals. The process included asking potential partners several key questions, including:

  • How would this initiative align strategically with your organization's mission and goals?
  • What is your organization's capacity to engage globally?
  • Do you have a long-term commitment to impacting global food safety?
  • What is your experience in stewarding and protecting a valuable brand?

Ecolab, a sanitation and food safety product and service provider, was already on NRA's radar. The St. Paul, Minnesota-based company was partnering with the association in other areas, and it brought skills NRA needed for the food safety program, says David Gilbert, NRA's chief operating officer.

"Before we partnered with Ecolab, we had sold some products internationally," he says. "But we hadn't invested in making customized, dedicated versions of these. And we didn't have feet on the street, that local awareness, or the channel of distribution or delivery of training. We didn't have any of that, and we didn't like that because our food safety brand is beyond simply great content. It's the delivery, the follow-up, the partnering with these companies on how to do it."

Sweeney credits Ecolab's track record in global markets but also says the company shared NRA's worldview. "As it came down to the decision-making point, it was very clear that Ecolab really was aligned with us in terms of a vision of food safety and certification in general around the globe," she says. "And they really understood the differences in the markets and where various countries and markets are on the continuum of developing food safety programs."

Under the terms of the partnership, Ecolab administers the program globally and has exclusive rights to sell ServSafe outside of the United States. NRA, as owner of the intellectual property, is the subject-matter expert and provides the product and materials, which Ecolab purchases at a discounted price for resale.

When the partnership began in 2009, NRA and Ecolab first identified markets that had the greatest potential for ServSafe training and certification. The size of a market had a direct bearing on this process.

"We have to make a determination in each market on whether the opportunity justifies the cost of translation and program start-up costs, which are specific to each country due to local regulatory requirements," says Jim Miller, executive vice president of Ecolab and president of its global services and specialty sector.

There was low-hanging fruit among NRA member companies that were asking for ServSafe, or some variation of it, for their international affiliates.

"We spent close to a year developing a strategy to go to market, doing our research to understand the initially targeted countries," says Hineman. "Some of that initial research was done by [member company] chains that needed specific solutions, and some of it was based just on pure market opportunities. It took a year to lay out and plan a strategy, and then, starting in 2010, we began going after certain countries and certain chain opportunities that we were partnering with, some of our larger multinationals."

Countries targeted for that first year were the United Kingdom, Germany, and Spain, as well as parts of the Middle East and Africa.

Standards, Languages, and Price Points

ServSafe focuses on training and assessment in five key areas: basic food safety, personal hygiene, cross-contamination and allergens, time and temperature, and cleaning and sanitation. These are known as the five risk factors, as determined by the Centers for Disease Control and Prevention and the U.S. Food and Drug Administration.

A key part of the partnership's early work involved defining how and where U.S. standards differed from a target country's practices and customs. NRA performed a gap analysis for each country—identifying, for example, how regulations in Asia on food-storage time and temperature compare to those in the United States. "In many countries, these regulations are less strict and sometimes purely discretionary," says Gilbert. "This impacts our go-to-market strategies in such locations, shifting the educational focus to emphasize why training is a smart business move."

NRA also had to address language barriers. "We definitely had a strategy around certain languages first, because you can't do everything all at once," says Hineman. "[We benefited from the fact that] the local markets have plenty of people who train and become subject-matter experts and who are already fluent in the applicable languages."

Ultimately, a two-pronged approach worked: "If we had a chain that wanted the program in English and we could do a gap analysis and make some revisions [for the foreign market], we would do that. Simultaneously, we were also developing a number of foreign languages that were appropriate as well," Hineman says.

The fact that ServSafe was to be introduced to a wide variety of nations, and therefore cultures, meant that the cost of the domestic program served merely as a starting point for setting prices for the global markets. "We have a core set of pricing strategies for our products, and we work with Ecolab on [setting prices for particular countries] because, ultimately, Ecolab is the one that brings the product to market. They really understand market sensitivities," says Sweeney.

Hineman says NRA also used its own research to determine what a market would pay. For example, "in India and China, where the training costs are fairly low, the price you can charge there is substantially less than what we have in the United States," Hineman says. "And it varies by volume, of course. We also used some academic channels to figure out what is commonly charged for this kind of training and certification."

Ecolab's Miller cites lower-cost competitors and a highly franchised customer base as key challenges. "In some countries, they have developed training programs that are free or of very low cost that meet their local training requirements—if they exist. And most major foodservice brands outside the U.S. are owned by franchisees, making it very inefficient to sell the program at an individual-unit level versus a headquarter mandate in the U.S."

But price is just part of the picture for a multinational member company, says Sweeney. "Price is obviously a factor, but I would say the incentive for the company is really brand protection," she says. "It's such a bigger issue than the $15 or $50 to certify each person individually, or whatever it may be in a given market. We are not known to be the low-price option; we are known to be the high-quality option. When you're dealing with something as important as brand protection, the most important thing is that the quality of the training and the actual certification be at a high level."

Room to Expand

Taking ServSafe global has been a positive step for NRA, but David Gilbert emphasizes that the program is evolving and dynamic.

"We're excited about our progress to date," he says. "When we learn more about what works and what doesn't, we recalibrate." For example, late last year NRA decided to focus on China and India, "rather than trying to do a little bit everywhere. We want to focus all of our resources on those staggeringly huge opportunities in those countries, more so than we have in the past when we tried to tackle eight or 10 countries simultaneously."

While NRA doesn't release revenue figures for the ServSafe program, Gilbert says it "does bring in additional revenue, and it has met expectations. I fully expect that, in years to come, this will be a significant portion of our revenue given the size of the world versus the U.S. It's not yet, but that's only because we have some [other large NRA businesses] that are very successful."

But Sweeney sees the globalization of ServSafe as being about more than new revenue.

"It's not just about making a sale," she says. "It's about creating a depth of relationship across a company, across a region, across a market. Because at the end of the day, this is a mission-driven program; this is not about selling a food safety program. It's about making sure consumers have a safe food experience in a restaurant where they eat, no matter where it is in the world."

Douglas R. Kelly is editor of the Society of Naval Architects and Marine Engineers' Marine Technology magazine. Email: [email protected]

Sidebar: Going Global With Less Risk

Going it alone works fine for some things, but it can spell failure for an association that wants to expand a credentialing program into new markets. The National Restaurant Association leveraged partner relationships to minimize the risk of taking its ServSafe program global.

"We really focused on the multinationals that are the NRA's partners in food safety domestically," says Chief Operating Officer David Gilbert. "These partners recommended and presented us to these other markets. For example, if we had a big, multinational restaurant company that was committed to a certain number of countries, they would prime the pump in those countries with respect to the development by saying, 'If you build it, we'll buy it from you.' That diminished the risk and helped us focus on the opportunities."

Gilbert adds that NRA's partnership with Ecolab has given the association "eyes" in global markets, which has helped in curbing theft of its intellectual property.

"A key part of our relationship is that they have a responsibility, with objective standards and criteria, to work with us on protection of the intellectual property. It's a little different than what we experience in the U.S. because we're so far away, and the visibility when there's misuse and theft is different. … [I]t's easier to see domestically. But Ecolab is on the ground there, and the ability to be aware of that and to use that strategic partner is a big plus."