Why the pizza segment is positioned to win in the catering space

Oct. 12, 2012

By Erle Dardick, CEO, MonkeyMedia Software and author of "Get Catering and Grow Sales"

In my opinion, the pizza segment of the restaurant industry has always been well poised to win big at catering and the off-premise sales growth. Because "pizza delivery" is so ingrained into the DNA of pizzeria operators, they already understand the subtleties of successful product distribution when their products are going to be consumed outside the four walls of their restaurants.

For decades, these restaurant operators have achieved sales success in the off-premise space in regard to the delivery component of their businesses, and consumers already understand that the pizza segment in general is the expert at delivery service. So, trust between the consumer and their favorite pizzeria is already high because they know the food will arrive on time, every time.

Distribution is a key element toward successfully building an off-premise service experience, but what about the opportunity at hand?

I believe that based on current consumer demand, the pizza segment is in a perfect position to help the restaurant industry define what the difference is between "catering" and "takeout" services. Both of these experiences can be available for pickup or delivery: One customer, selecting from two off-premise service channels using two very different buying decisions. Your customers will buy for different reasons, depending on the need they are trying to fill.

Of course there are the surface items of differentiation that we can all see such as reformulating packaging and menu items. Sure, there is the opportunity to focus on a subset of products for a catering program; for example lasagna by the pan, Caesar salad by the bowl, desserts by the tray, cheese by the platter. And on and on we go.

Catering conversation is different

Although product changes are a critical part of defining a proper differentiation of services, the real work is the re-engineering of the operator's business processes that can include catering sales, catering order entry, catering manufacturing, catering distribution and catering technology systems. The entire conversation with the consumer is completely different when it comes to catering. It's just different. But not in a small way -- in a big way.

Today, pizzerias have all the raw ingredients they need to reformulate their product offerings. In addition, pizzerias have the "distribution trust" from the consumer. They know you will be on time, every time, if your distribution engine is working well.

The challenge with catering lies in building an operational culture centered on growing occasion-based sales. Educating your customers on the different service channels and letting them know that you have alternative services to help feed them where they live, work and play, is the real challenge that pizzeria operators have to face. It will require a deep commitment to internal training and a clear vision of differentiation and leadership.

Once the paradigm shift is made in the minds of pizzeria operators, catering will present the largest growth opportunity the pizza segment has seen in the last 30 years.

I've always maintained that through the establishment of a successful catering and off-premise business, restaurant operators have the chance to increase revenue by up to 20 percent. I believe there is even more potential for pizzeria operators, given their position in the marketplace. A focus on business-to-business relationships will boost their lunch daypart, and that will make better use of idle assets.

When is pizza a "takeout" delivery and when is pizza a "catering" delivery? No doubt, there are a gazillion ideas on this, but I believe it's all about the buying decision of the consumer. That's where the differentiation is.

For pizzeria operators to be rewarded, they will need to take a stand and tailor their products and language around the consumer demand.

Remember, catering requires its own set of conversational ordering, invoicing, accounts receivable and marketing initiatives that create the subtle nuances of running any business. Catering is a different business.

Don't forget to train your people in the language of catering. In the end, they are on the front line and have to keep your customers happy. If you give your customers another reason to buy, and tell the story of catering properly focused on a different demand, your customers will spend more money with you.

Read more about operations management.

Topics: Business Strategy and Profitability , Catering , Marketing / Branding / Promotion , Operations Management , Trends / Statistics

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