Tuesday, November 13, 2007

Local food service firm lands Baltimore hospital deal

Pittsburgh Business Times - by Kris B. Mamula

A Homestead food service company has landed a third hospital contract, continuing its push into a market the company considers underserved.

Cura Hospitality, a division of Eat 'n Park Hospitality Group, will take over food service at Mercy Medical Center in Baltimore on Dec. 1, said Cura President Mitch Possinger. The five-year contract is valued at $4.5 million annually.

"We think there's a niche opportunity for us there in small- to medium-size hospitals," Possinger said. "We think we have real transferable skills."

Cura's specialty is contract food services for senior living facilities, such as Longwood at Oakmont and Sherwood Oaks in Cranberry. That work is a nice match for the clinical expertise needed at hospitals, Possinger said. Depending on the region, between 50 percent and 70 percent of hospitals nationwide manage their food service in house, creating an opportunity for growth.

Helped by the Mercy contract, Cura anticipates 15 percent revenue growth in 2007 to $65 million. The company employs around 1,500 people and plans to add around 150 people next year, most outside Pittsburgh, Possinger said.

Cura has provided contract food services to Windber Medical Center in Somerset County since 2004 and also serves Westfield Hospital in Allentown. A bid proposal for a large Pittsburgh hospital is pending, Possinger said, but he declined to elaborate.

Cura will continue to market to senior living centers, which are increasing as the region's population ages and the concept catches on, Possinger said. A variety of housing options for seniors are being offered, with cafes, coffee shops and restaurant-style dining rooms replacing the conventional cafeteria tray line, Possinger said. Cura is poised to capitalize on these trends, he said, especially in the eastern Ohio market, which the company has targeted for growth in 2008.

Food management at prisons, hospitals and other institutions is the less glamorous face of the industry, said Ed Manley, president and COO of the International Food Service Executives Association, a trade group based in Las Vegas. But institutional food management can provide steady income with a work force that tends to be more stable.

"It's not a big dollar," Manley said, "but it adds up to good money at the end of the day."