Sales: EUR 3.38 billion ($2.7 billion) (2001)
Stock Exchanges: Italian
Ticker Symbol: AGL
NAIC: 722110 Full-Service Restaurants; 722410 Drinking Places (Alcoholic Beverages)
Autogrill SpA is the world’s leading operator of travel restaurant facilities. Based in Milan, Italy, and more than 57 percent owned by the Benetton clothing family, Autogrill operates some 4,300 restaurants, cafés, and other catering facilities in highway service areas, airports, train stations, city centers, and shopping malls. The company’s sales come primarily in Italy (30 percent of sales) and North America (52 percent of sales), where the company has been market dominator since its acquisition of HMSHost, acquired in 1999 for $929 million. The rest of Europe, including France, Spain, Germany, Austria, Greece, Portugal, Switzerland, and the Benelux countries, adds nearly 18 percent of sales, and represents the company’s main expansion focus. Through HMSHost, Autogrill has operations in Australia and New Zealand and plans to expand into other Asian Pacific markets. Autogrill has developed a number of restaurant brands and concepts. Spizzico is the company’s fast-food pizza format, with 160 restaurants. The 140 restaurants in the Ciao chain offer a free-flow cafeteria dining concept. Acafe is the company’s coffee bar formula introduced at the beginning of the 2000s. Snack Bar, with 404 outlets, is usually combined with the company’s Market format, with 363 locations, offering fast-food and convenience grocery. The company also operates traditional restaurants under the La Galleria brands. Internationally, Autogrill operates additional brands, such as Passaggio in Switzerland, while rolling out its core brands in those markets as well. In addition to its own brands, Autogrill operates a variety of concessions, including an agreement to open up to 500 Burger Kings in Italy; and, largely through HMSHost, franchises for Starbucks, TCBY, CPK ASAP, Sbarro, Chili’s Too, Chocolate Factory, Dunkin’ Donuts, Cinnabon, Pizza Hut, and KFC Express. Formerly a part of Italian government-owned Società Meridionale Finanziaria (SME), Autogrill has been traded on the Italian stock exchange since 1996.
Birth of an Italian Fast-Food Leader in the 1970s
Autogrill’s history traces back to the development of Italy’s roadway network in the postwar years. As more Italians took to the road, the need arose for service areas and restaurants to serve the increasingly mobile public. Many of these restaurants were simple affairs, such as a small roadside stand opened along the highway between Milan and Novara in 1947. By the 1960s, traffic had increased to the point where the stand was transformed into a major service station and restaurant, called the Autogrill Pavesi. That restaurant was to provide the model for the future Autogrill chain, with the restaurant housed on a bridge across the highway. Pavesi itself was to grow into one of Italy’s most prominent roadside restaurant chains.
By the 1970s, Italy’s highways and freeways were dotted with restaurants, many of which were operated as parts of large-scale chains. Yet vehicle use plummeted with the Arab oil embargo and the ensuing financial crisis, which saw drastic increases in gasoline prices throughout Europe. Many of the countries roadside service restaurant chains were struggling financially. In 1997, the Italian government, through Società Meridionale Finanziaria (SME), took over three chains, Motta, originally founded in 1928 as a bar in Milan, restaurant chain Alemagna, and Autogrill Pavesi, and reformed the operation as Autogrill SpA.
At its debut, Autogrill operated some 270 restaurants along the country’s highways. The company soon adopted the Autoglili brand as its primary roadside brand, replacing the Motta, Pavesi, and Alemagna names. Autogrill also began developing its new brands and restaurants, as well as targeting other operating locations. In 1982, the company moved into Italy’s city centers, launching the Ciao restaurant chain, a self-service cafeteria style concept featuring Italian cuisine. Ciao was to develop into what the company called a “free-flow” concept, which caught on well with the Italian diner. By the end of the century, Autogrill operated nearly 140 Ciao restaurants.
During the late 1980s, Autogrill began developing a new restaurant concept, based on the fast-food experience then beginning to take hold in Europe. While many observers remained skeptical about the chances of success of the fast-food concept in a nation devoted to its cuisine—indeed, McDonald’s initial attempt to enter Italy met with less than spectacular results—Autogrill’s fast-food concept was built around pizza. Dubbed Spizzico, the new restaurant concept was launched in 1989, with a first restaurant in Piemonte. Spizzico proved appealing to the Italian consumer, and by the end of the century Autogrill operated some 150 Spizzicos in Italy.
Autogrill had come to dominate the Italian roadside market by the early 1990s. In addition to seeking new operating sectors, the company now began to eye the international market for its future expansion. In 1993, Autogrill took its first step beyond Italy, forming a 50-50 joint venture with Spain’s Cepsa in order to take over that country’s Propace roadside restaurant chain. That same year, Autogrill entered France as well, a market that was to grow to become Autogrill’s second largest international market. The company continued to invest in its Spanish subsidiary, acquiring the Hermesa y Arhos restaurant group in 1995. Through the mid-1990s, however, the company’s international presence remained minor, representing just 5 percent of its sales in 1996.
International Leader in the 21st Century
The privatization of much of Italy’s nationalized companies began in 1993 and stepped up in the mid-1990s. Autogrill, then operated from within the larger GS Supermarkets group, came up for sale in 1995. The Benetton family, which had already built up one of Italy’s most successful retail empires, had become one of the most prominent purchasers of former government-run businesses. Through its private holding company, Edizioni, the Benetton family began amassing a diversified portfolio of service industry operations, worth more than EUR 7 billion by the end of the decade. Edizioni was awarded its bid for GS and Autogrill, and the restaurant group was promptly spun off as an independent company, and placed under the leadership of CEO Paolo Prota Giurleo.
Autogrill went public in 1996—although Edizioni maintained a 57 percent controlling share of the group. With limited growth prospects in Italy—the company already operated nearly 400 restaurants and other catering outlets, the company now turned in earnest to its international growth. Autogrill’s initial aim was to create a pan-European empire of roadside restaurants by expanding beyond its existing French and Spanish operations. An early triumph for the company came with the award for a highway concession along the Athens-Lamia-Thessaloniki highway in Greece. By 1997, the company had launched its restaurant, elaborating on its long-held bridge-like structure, and incorporating not only a Ciao restaurant, but its Spizzico, Market, and Snack Bar formats as well.
The year 1997 was to become a turning point for Autogrill’s international growth as it rapidly expanded into nearly all of the major European markets. Most of the company’s foreign expansion came through acquisitions of existing roadside operators. Such was the case in Germany and Austria, which the company entered after it bought up some 14 restaurants from the Wienerwald group. That year, also, Autogrill acquired Sogerba from British group Granada, which had acquired 70 restaurants, including the 43-restaurant Côte France chain, one of the largest operators of roadside restaurants in France, with its acquisition of Forte.
Autogrill’s acquisition drive continued in 1998. The company acquired AC Restaurants & Hotels, a group based in the Netherlands that operated 38 AC branded roadside restaurants together with 12 hotels in the Benelux market, as well as seven Le Chesnoye restaurants in Luxembourg. Later that year, Autogrill reinforced its position in France when it acquired Frantour Restauration, the 50-strong chain of railway restaurants, bars, snack bars, and cafes owned by French national railway body SNCF. These acquisitions helped the company claim the European leadership of the highway and freeway restaurant sector, with nearly 650 restaurants and catering outlets. By the end of 1998 more than 25 percent of the company’s sales, which topped L 2.3 trillion ($1.24 billion), came from outside France.
In 1999, Autogrill continued to consolidate its European position. After finalizing the Frantour acquisition, the company turned to Spain, where it bought out Cepsa and took full control of the Procace joint venture. The company also negotiated an exclusive 20-year master franchise agreement with the Burger King Corporation to introduce as many as 500 Burger King restaurants into the Italian market.
Yet Autogrill’s biggest triumph came in August 1999, when it reached an agreement to acquire Host Marriott Services, the catering division of the Host Marriott Group, in a cash and debt deal worth $929 million. Renamed HMSHost under Autogrill, the acquisition doubled the company’s revenues and established it as the world’s leading highway restaurant group, and one of the world’s top three commercial restaurant groups. HMSHost also gave the company a strong position in the North American airport concessions market, with restaurants in some 60 airports, as well as concessions for such noted landmarks as the Empire State Building, and franchises including Sbarros, Starbucks, Burger King, TCBY, and Pizza Hut.
Autogrill seeks to offer the best selection in restaurant services for people on the go. The achievement of this goal, precisely, excellent customer service, allows Autogrill to create shareholder value.
The HMSHost acquisition not only gave Autogrill a position in a number of new markets, such as Canada, Australia, and New Zealand, it also gave it an opportunity to expand into the European airports sector as well, on the basis of HMSHost’s strong reputation in that market. In 2000, for example, Autogrill gained restaurant concessions for the Bologna Airport and for Athens International Airport, the former directly, the latter through HMSHost. Other airport concessions awarded at that time were for the Los Angeles International Airport and the Salt Lake City airport. Meanwhile, HMSHost became Autogrill’s launch pad for entry into the United States—the company opened its first Spizzico restaurant in New York in 2000.
At the beginning of 2000, Autogrill began rolling out the first Italian Burger Kings, a number of which were combined with Spizzico restaurants in a new dual-brand restaurant concept. At the end of that year, the company continued its international expansion with an entry into Switzerland, buying up Passaggio, the country’s leading operator of restaurants in highway service areas, railroad stations, and airports. The company consolidated its Swiss position the following year when it acquired Flughafen-Restaurant, the concession holder for the Zurich airport.
Autogrill began exporting its brands at the turn of the century, rolling out the Autogrill, Spizzico, Ciao, and Acafe formats in selected foreign markets. The company was also developing new amenities, such as the Toilette Lounge, an extended restroom format. The company also planned to roll out a package of services geared toward the business traveler. Autogrill also moved into the retail sector with the launch of a drugstore at the Fiumicino airport in Rome.
In June 2001, HMSHost reached an agreement to acquire a 25 percent stake in Anton Airfood, Inc., one of the leading refreshment services companies for the airport sector in the United States with operations at 11 airports. That year, Autogrill restructured its operations under a new CEO, Livio Buttignol, formerly with the GS Supermarkets group. With a flattened management structure, Autogrill prepared to continue its worldwide expansion, eyeing growth into new markets in Asia, such as in Malaysia and China.
Autogrill showed no signs of slowing down in 2002. The company reached an agreement to acquire Ristop, an Italian motorway restaurants company with 26 concessions, then purchased a nearly 22 percent stake in Pastarito, the leading Italian restaurant chain with 70 city center-based restaurants. In the foreign market, the company increased its position in Spain with the purchase of 70 percent of Receco, which operated food concessions along the Spanish high-speed rail network. In North America, the company acquired SMSI Travel Centers Inc., a major highway catering provider in Ontario. By then, Autogrill was approaching an empire of nearly 5,000 restaurants and other catering outlets—with no sign of slowing down in the near future.
- First Pavesi roadside stand is established along Milan-Novara highway.
- Pavesi restaurant is rebuilt as bridge structure.
- SME, owned by Italian government, bails out Pavesi and bundles it with two other roadside restaurant operators, Motta and Alemagna, into a new structure called Autogrill.
- Autogrill launches its Ciao restaurants concept.
- Spizzico fast-food pizza restaurant format debuts.
- Autogrill expands into Spain and France.
- SME sells Autogrill to Edizioni, the holding company of the Benetton family.
- Autogrill floats on Italian stock exchange, but remains majority controlled by Benetton.
- Autogrill begins its international expansion in earnest, acquiring 14 restaurants from the Wienerwald group to enter Germany and Austria, and Sogerba, with 70 restaurants, in France.
- Company acquires AC Restaurants & Hotels in the Netherlands and Frantour Restauration in France.
- Autogrill acquires Host Marriott Services, renamed HMSHost, to become the world’s leading travel restaurants group.
- Company acquires Passaggio, the Swiss travel restaurants leader.
- Company acquires Flughafen-Restaurant, gaining concession for the Zurich airport; acquires 25 percent of Anton Airfood of the United States.
- Autogrill acquires 70 percent of Receco in Spain, 22 pecent of Pastarito in Italy, and full control of SMSI Travel Centres Inc. in Canada.
“Autogrill to Grow Italy’s No. 1 Full-Service Chain,” Nation’s Restaurant News, April 1, 2002, p. 43.
Clark, Jennifer, “Autogrill Expanding into Train Stations,” Reuters, June 21, 1999.
Larner, Monica, “The McDonald’s of Pizza?,” Business Week, January 11, 1999, p. 17.
McGeary, Jennifer, “Hitting the Highway,” Restaurants & Institutions, September 1, 1999, p. 28.
“Restaurant Chain Autogrill to Expand in US,” Eurofood, March 28, 2002, p. 8.
—M. L. Cohen