According to data from Beverage Marketing Corp, U.S. beverage production volume approached 29.8 billion gallons in 2012, an increase of 1 percent over previous years. This data presents a strong argument that beverage consumption continues to rise in the U.S. While catering out of restaurants is another market segment for your brand, there is now ample opportunity to successfully meet consumer demand for beverage options within your existing or developing catering program.
At MonkeyMedia Software and the MMS Catering Institute, we speak regularly about how having a profitable menu mix is crucial for driving incremental catering sales in our restaurants. While our catering menus must focus on providing the best experience our brand can execute, I'd like to focus today's discussion on the attributes that make up a great beverage platform for your restaurant's catering program.
Let's imagine that you are about to cater a business breakfast for 15 people. A strong breakfast catering program must include coffee, tea, juice and water. Depending on your brand, even if breakfast is not in your DNA, you will need to decide if you will offer a catering service for the morning. Often, customers needing catering services throughout the day will call you for lunch and breakfast. You will need to offer a beverage solution that works for both dayparts.
If you cannot manage hot coffee and tea, consider co-branding your morning service with a strong coffee brand to make sure your client does not go shopping elsewhere. If you decide to pass on offering beverage solutions for the morning, then consider eliminating a morning catering program altogether. You just won't be able to do a good job in that catering category without a hot beverage program.
Now, as you continue down the beverage path, consider your packaging carefully as well as your flavor profile. Often I see brands offering "consumer based" beverage products for the boardroom table. While that may work in terms of offering an easy solution, I argue that offering consumer based beverages that are readily available in convenience and grocery stores might be a lost opportunity for maximizing your catering profits. You see, consumers understand the market price for a can of soda, for example. This makes it very difficult to sell a can of soda above market price. This is important because with the dynamics of a catering transaction, we often have to manage the hidden costs of house accounts and distribution. Therefore, we might have a hard time making sufficient profit margins on these products to ensure we have a healthy catering operation out of our restaurants.
There are several ways to get around this commodity-based perception. For one, create a proprietary beverage such as lemonade or iced tea that is brewed in house and has the right label on it promoting your brand. This will allow you to sell "by the gallon" for instance. Providing bulk beverages to clients looking to fulfill a specific need adds a level of differentiation to your brand and locks down your catering program as a turn-key service format.
Of course, you might still need to offer canned sodas; however, your catering sales representatives will really need to explain to your customers why your prices are far above grocery and convenience store ones. This is so that your customers don't feel sensitive to what they will need to pay in order to make it worthwhile for you.
The full-service offering of beverages such as coffee — complete with cups, stir sticks, cream and sugar — juice, iced tea and other beverages, provided to customers in a way that fits the need of their occasion and delivers on the catering experience, will win over many convenience-oriented customers for your catering operations. Saying that, it is crucial that you differentiate your beverage program so that it is as unique as possible to your brand's catering experience. Anything less will result in a price war and a dilution of your brand's catering experience. You can easily lose a customer by overcharging them for a can of soda, for example. Hardly worth the exercise.
Don't forget that marketing will play a strong role in communicating your food and beverage menu mix to your catering customers. In order to really drive higher-margin catering sales, your marketing team should make a lot of noise around it — both internally and externally. Make your catering packages — complete with proprietary beverage pairings — extremely visible to your in-store guests. Build awareness with your in-store customers while your sales teams build awareness with your corporate catering customers.
Your catering sales teams will automatically know which beverages best pair with the occasion-based orders they are taking on a daily basis and they will direct catering clients to the appropriate pairing that fits their needs.
Your catering program should not be about anything else except creating a menu experience that your customers want in order to fill demand. Make a profitable and flavorful beverage solution a part of that experience and watch your customers come back for more services. Keep it thoughtful and differentiate it from your in-store beverage program.
Erle Dardick is a 15-year catering veteran, business turn-around expert and author, and is best known for helping multi-unit restaurant executives create successful catering revenue channels. Erle founded MonkeyMedia Software to provide catering solutions to multi-unit restaurant operators. He also is the author of “Get Catering and Grow Sales! One Monkey’s Perspective: Catering Defined for the Multi-Unit Restaurant Executive.”