Catering is a growing business in the restaurant industry, as brands seek new revenue channels in an intensely competitive environment, and as consumers demand convenience where they live, work and play.
But extending your restaurant off premise requires more than just extra staff and larger dishes. During last week’s National Restaurant Association Show in Chicago, Blue Plate Catering’s Executive Chef, Paul Larson, and VP of Sales, Jennifer Perna, shared the top considerations for anyone looking to grow beyond their four walls.
For Blue Plate, off-premise catering makes up 90 percent of their business (versus on-premise catering, which is geared toward smaller crowds). Perna said the location can literally be anywhere, even if there is no water or outlets. The venues “make or break” the experience, so if their business wants to be considered for certain venues’ events, for example the Chicago Museum of Art, they need to “woo” them.
“It’s important to identify venues in your market and try to get on their preferred list,” she said. “That is an important first step.”
Types of off-premise catering
There are a variety of off-premise catering options, including takeout/pickup; drop off/delivered; third party; food trucks; and full service. The panelists said third party partnerships are growing (Blue Plate works with Seamless, for example, and there is also GrubHub, etc.) and should be considered.
“These are tech-friendly companies and they’re focused on this (catering) format and they meet results,” Larson said. “Start looking at these companies to get your product out there.”
How to become an off-premise caterer
Perna said if you want to jump into catering, there are some things to keep in mind, including knowing that it’s not always a fair game. “Not every competitor will follow the rules,” she said. “Depending on city/state requirements, a legitimate caterer will have the following:”
- A business/retail food license;
- Caterer's liquor license for the city;
- Caterer’s off-premise license for the state;
- State business authorization;
- Special event liquor license;
- Health inspection;
- Insurance coverage.
As a benchmark, Blue Plate sticks closely to this revenue breakout: Food at 38 percent; beverages at 17 percent; service, 18 percent; rentals, 20 percent; miscellaneous such as entertainment and valet parking, 5 percent; and delivery, 2 percent.
“You may not want to get into the service side of the business. That is a different animal to manage. Just remember that food and beverage is where you’ll make most of your money,” Perna said.
The focal point of any restaurant's business stream, of course, is the food. Catering got a bad rap in the 1970s and 80s, Larson said, with cheap, buffet-style food that was disconnected from brick-and-mortar establishments. But that has changed; customers want what they can get in your restaurant.
“If you’re a restaurateur, you have to make sure your food is catering friendly. If one of your signatures is pomme frites, can you pull off the hot and crispy version on a catering site? Develop your menu to make sure you can,” he said.
To help define food costs, Larson tracks prices from January through December and aims for the peak price.
“We’ll sell a wedding a year out and I don’t know what the market is going to do. I price everything at its highest point, that way I know it is most likely going to be covered,” he said.
The basic components, he suggests, for a plated meal include:
- Protein: 6 oz.
- Vegetable: 3 oz.
- Starch: 3-5 oz.
- Sauce: 1-2 oz.
For a buffet, factor in how many people are going to eat, how long the service is and the demographic, and stick close to 1 pound of food per guest.
Beverages tend to be the most profitable component of catering, but they’re also tricky as liquor sales are determined by local laws. A caterer must decide if they want full-bar service, beer and wine only, mixer packages (soft drinks, water, juices and bar fruit), client-provides/corkage availability and package versus consumption. Blue Plate sells by package, or by the hour, rather than consumption.
Blue Plate's packages include both food and service because those are the two things people remember most, Perna said. That doesn’t mean service is for everyone looking to expand in the off-premise space, however.
“In my opinion, service and staffing is the hardest part of off-premise catering,” she said. “It’s the biggest challenge for caterers and the biggest shock for clients. I don’t think people are used to the cost of service, which is about 50 percent of all costs, on average. But we are a moving restaurant.”
If you offer service, consider:
- Where do you find service and culinary staff? Many of these employees have other priorities besides their catering job and it’s hard to keep them focused, Larson said.
- What staffing standards will you set? “We invest tons of money in training. It’s imperative to us. These people are your brand, they’re representing you and you want them to look the part,” he said.
- Standard staff uniforms and appearance.
- Finally, staffing agencies could come in handy if you’re too busy to manage all jobs. “This is a tenuous place to be, to have others representing your brand. But sometimes it’s necessary,” Perna said.
Why develop off premise and how to do it right
With so many logistics, why bother developing an off-premise presence? The panelists break down the pros, including:
- Supplemental income;
- Deliveries typically occur around 3 p.m., before busy in-restaurant time;
- Brand exposure;
- It keeps your staff employed, and busy, when the restaurant crowd is slow;
- More money.
If you’re sold on these benefits, Perna cautioned to do it right. Catering should never be thought of as an afterthought. “It’s a lot of work and it reflects your reputation and your brand,” she said.
Research the competition and see what others are doing with off-premise business. Consider expenses, such as samplings, to get the word out. Invest in food photography/videography to showcase your offerings. And, leverage your marketing and social media presence to spread the word.
Finally, the panelists said, be mindful of the guaranteed challenges that come with this new channel:
- Catering requires constant training with a “secondary workforce,” or employees who have other jobs or priorities. “This makes it hard to maintain consistency and attract staff that meets high client expectations,” Larson said.
- Figure out how your restaurant food will translate to 300 people.
- Expect an irregular business cycle.
- Don’t let your catering business hinder your restaurant’s reputation. “Give it 110 percent,” Larson said.
Photo provided by Wikimedia.
Alicia Kelso has been a professional journalist for 15 years. Her work with QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.