Professional Catering

Should You Hire Now?

2011-03-31T12:56:00.002-04:00

The Paychex CEO, Martin Mucci, was interviewed about the lack of movement in his company's stock. Mr. Mucci stated new business formation was flat. He mentioned 2 statistics which show the importance of small businesses in any business turnaround.

He stated 82% of the Paychex customers have fewer than 20 employees and 98% have fewer than 100 employees.

Paychex stock may be ready to make a move upward as American small businesses stop hibernating and begin hiring again.

Should you be hiring now before the inevitable rise in salaries and wages? The job market is starting to add more jobs and first time unemployment claims are in decline.

If your sales are perking up or your summer pipeline looks promising, it may be the time to hire.

Corn Spot Doubles From March 2010

2011-03-31T12:38:00.003-04:00

In a discussion of record crop planting in the corn market, a CNBC report forecasts high corn prices for 2011. The reason is very low inventory levels due to demand for the grain in the production of ethanol. The graph displayed on air showed a 100% gain in the spot price year over year.

The discussion spread to other crops and cotton is up 145% since March 2010. Expect your linen replacement costs to continue upward.

How can caterers take advantage of the rising grain prices? These record price moves are very well communicated in the press. With all the national press highlighting huge price increases, your customers will be more receptive to menu price increases. In every menu price change, you need to study your competition carefully.

Even the large public companies with futures protection may not be able to outrun this wave. I don't see this as a short term trend. Global demand is on the increase and the rhetoric regarding less dependence on foreign oil implies greater demand for grains.

Get Catering is Coming Soon

2011-03-02T13:57:00.004-05:00

You should get on the mailing list early for Erle Dardick's new book,Get Catering, which is scheduled for a May 2011 release. Erle brings decades of hands on experience to the table. The book is available for free if you are a multi-unit restaurant operator.

Restaurants have been in the party business for years. I'm sure Erle will have many great ideas to increase your catering business. MonkeyMedia offers hosted solutions for food service and food manufacturing operations.

Spring Events Take Us Outside

2011-03-02T13:12:00.005-05:00

I have been reading as much as possible to gain a understanding of what's in store for caterers this spring. Sara Perez Webber covers this topic in this month's Catering Magazine on page 16. She points out the trend toward backyard parties. Rather than renting a high profile venue, many catering clients are using their office property or private home as the venue.

They start with a Down East shellfish dominated wedding menu staged in a backyard in Chatham (Cape Cod). The signs are small chalkboards. The mini lobster rolls sound good to me along with a signature Pomegranate Cape Codder served in a Mason jar. Friends of the bride brought homemade cookies.

[Source: Catering Magazine]

One of the featured outdoor events is a block party affair held on the company's property. The simple menu is loaded with backyard faves: burgers, hot dogs, grilled chicken, bratwurst and ice cream. Again, we see the trend away from the upscale affair to the down home themes.

The last backyard wedding reception example in the article is actually a surprise. This is no run of the mill backyard party. Splurging on the menu, the host offers the guests caviar, Prime Beef, Lobster Tails, Dungeness crab and other high end menu items. Even the tents in the photos looked elegant.

[Source: Catering Magazine]

Urge to Splurge

2011-02-25T14:14:00.002-05:00

As 2011 gets in gear, we find the stock market rising despite rapid increases in many key commodities. They are throwing the term stagflation around on the financial shows and websites. some economists don't see any reason to believe we are in danger of rising prices and unemployment. They cite improvements in the US job market.

My email each week includes a decent number of questions on my view of the impact of higher oil prices on food cost. In a straightforward manner, I let them know my feelings are price increases are guaranteed. Since we now see major ethanol production from corn, the same grain used for feeding livestock and making high fructose corn syrup is being consumed by major energy companies as an additive to gasoline.

Source: Morningstar.com

Look for more clients requesting a touch of luxury in this year's events. The urge to splurge has returned although caviar and foie gras may still be considered extravagant. Corporations and families may order pricier menu items and open their wallets for a few extras at the next party.

While most homeowners have seen their home equity decline since the 2006 peak, we have also seen a major reduction in personal debt. Credit card companies are back with the mail offers of 0% balance transfers (along with 3 to 4% upfront fees). Small businesses will take advantage of these offers. I'm not sure if the trend of credit line conversions to term loans will end soon.

If businesses get access to credit lines back, we may see much higher spending on sales and marketing oriented events.

WSJ Wine Article

2011-01-22T19:19:00.003-05:00

The Wall Street Journal had a great article,Snooty? Not Today's Wine Drinkers, on January 20th.

The report stated:

The economic downturn was toughest for the U.S. wineries that sell wines for $20 a bottle and up.

Industry-wide, though, restaurants are selling more wines by the glass and have cut some bottle prices on their wine lists.

American wine consumers are now talking more like the French wine lovers I worked with back in the 1980s at Sodexo. People are comparing excellent tasting wines which sell at a decent price point. The consumer wants great taste and great value.

Contest for Caterers

2011-01-16T19:12:00.002-05:00

The folks at CaterBuzz have a contest where the winner gets free tuition to this year's CaterSource Conference in Las Vegas.

Mid-Winter Opportunities

2011-01-16T18:55:00.002-05:00

When we lived in Montreal in the late 1980s, winter parties helped keep morale high during the frigid winters. We enjoyed the New Year's Eve bash at a catering hall taking advantage of a tremendous $100 per couple package. The same caterer promoted Valentine's Day by offering the New Year's Eve guests a special early booking special.

This helped the caterer with a big cash infusion from a very satisfied and spirited group. Although the Valentine's Day party was less elaborate, we all had a great time and eagerly spread the news by word of mouth.

Montreal is a hockey town so Super Bowl Sunday is not the all out party day we have here in the USA. We were fortunate to be living in Montreal during a time when they won a Stanley Cup. Hockey parties were available almost every week.

Here in Washington, DC, our area saw record snowfall last year in February. The snow basically eliminated Super Bowl, Valentine's Day and President's Day weekend festivities. Everyone is hoping for better weather this year.

Holiday Catering Season 2010 Report

2011-01-16T18:48:00.002-05:00

I want to thank Marilyn Chapman for her excellent report from the front lines.
Marilyn was very generous and I encourage everyone to benefit from her great advice:

This holiday season was one wild ride. After last year's shut down of corporate business we went into the 2010 Holiday Season not knowing what to expect. This was accentuated by the fact that both Christmas and New Year's fell on weekends. We knew from experience that meant we had lost a whole weekend in December.

We normally establish a minimum of $2,000 in food costs for Saturdays in December and New Year's Eve. This year we eliminated the minimum food cost and treated the Saturdays in December as normal business days.

The only events we booked early for December were Weddings which revolved around the holidays, a new trend that we had not anticipated. Corporate and social parties came in so late that we did not hire our contingency office and kitchen help.

When the inquiries came in we decided to stretch our resources and take virtually all the business available when we normally close a date at 10 parties per day. This involved working doubles, promoting Serving Staff to Supervisors, renting trucks and counting every piece of linen and skirting each weekend.

At the same time deliveries exploded and the kitchen staff worked overtime to meet the demand. New Year's Eve did not sell out due to several cancellations so celebrating Christmas and Weddings is acceptable but New Year's Eve is less so in a rocky economy. We made it work as we always do but there is no way we could have written the Business Plan for this one!

Marilyn Chapman
Wedding Event Coordinator

Delectables Fine Catering, Inc.
"The Bay Area's Most Prestigious Caterer"
969 Virginia Avenue, Inc.
Palm Harbor, FL 34683

E-mail: info@delectablescatering.com

http://www.delectablescatering.com

Phone: 727-781-1200
Fax: 727-789-3401

Local Caterers Seem Busy

2010-12-21T08:47:00.002-05:00

Last week, the Penn Quarter neighborhood in Washington DC was crowded with a fantastic mix of people. There was a Wednesday night hockey game and the theaters were all packed. I noticed several restaurants with private party signs in the window. The majority of these events were very well attended and people seemed more upbeat than last year.

Inflation was fairly tame in 2010 and salary increases are expected to be modest. The large federal labor pool won't be getting a raise this year. The cost of housing has been declining from the peak years and many people are stretching the miles on their vehicles. Frugality may be showing up in larger bank balances and lower credit card bills. At least in the DC Metro area, it looks like party time.

We can expect more modest splurges with more people participating in the festivities.

Gas prices are higher than last year which may signal stronger economic activity in the larger economy. The DC Metro area received our first snow this week. Many local merchants remember the very rough February in 2010. We need the snow falls to be more manageable if the winter is to stay business friendly.

Feel free to comment and let us know how the conditions are in your area.

2010 Ends With High Gas Prices

2010-12-17T21:22:00.004-05:00

As we wind down the year, the price of gas is trending higher. It's normally a time for lower gas prices. Analysts attribute the higher prices to the recovery in China. We have seen many companies reduce both inventory and personnel in the past two years. Maybe good news will come in the form of higher gas prices.

Locally, I was invited to 3 holiday parties and I was able to attend two. It would be unfair to characterize the menus as upscale but the food quality was very good. At both parties, the hosts splurged on baked goods. There were fewer alcoholic beverage choices. Both parties were served buffet style.

Neither of the two parties required guests to pay for a ticket. I'd guess the menus were priced in the $25 per person range. These were short duration affairs (2 hours). One caterer used very small plates to manage consumption. At the other party, the plates were actually too big for the majority of guests. There were limited seats available at the tables and the plates proved awkward to those left standing up.

I filled up my gas tank just after the Monday night party. The cost was $45 for the tank. Hopefully, the US economy heats up enough to keep the momentum positive in 2011. With plenty of pent up demand in many sectors, the chances are good for a better year ahead.

Holiday Party Season News

2010-12-15T12:02:00.003-05:00

Yesterday, I located three interesting news articles covering the company holiday party season. On Yahoo Finance, they had an article covering the mood on Wall Street. The parties have returned at most firms but the trend is for less extravagance and some banks are making employees pay for the holiday parties.

Yahoo News covered a clip from ABC News with a more detailed coverage of holiday party trends and tips. The headline Workplace Holiday Parties reflects the focus on stay in parties. Susan Solovic offered tips to keep the party cost low. She recommended using a caterer and hosting the party at the office instead of booking a local restaurant. In addition, Susan mentioned a growing trend for the office party is a pot luck format.

They quoted an increase from 62% in 2009 to 64% in 2010 for companies hosting the party at the office. Most respondents mentioned a simple theme for the festivities. The list of tips included: Pick A Location (office instead of a restaurant), Pot Luck with decorations, Pick a Planning Committee (get employees involved), Limit the Parties to Just Employees (save the cost of serving guests),
Choose a Time (lunch is going to cost less than dinner), Control the Bar (hire a professional bartender), Create a Unique Experience (blow off the party and volunteer to feed the homeless), Check your coverage (social host liability issues), and Make Attendance Voluntary.

Yahoo News also mentioned a report from CNN regarding increasing Wall Street austerity. The clip featured two columnists from the Daily Beast with a few very good points. Lauren Streib, Daily Beast Reporter, mentioned "Goldman Sachs had a great year but bonuses are still down" and John Carney, who writes the Net Net Column, specified "division by division they are throwing smaller parties".

While they were answering questions from the CNN interviewer, several CNN style text boxes flashed on the screen. One box said "Bonuses down 22% to 28%" and listed the NY Comptroller as the source.

They pointed out the obvious to Manhattan caterers saying some banks "used to throw lavish parties" and the "last two years they haven't thrown any parties at all". With a hint of nostalgia, they reported "a lot of restaurateurs and hotels are hoping that the heady times come back".

Finishing on a hopeful note: "Everyone's hoping those years return."

It is interesting to note the Wall Street reports tried to convey a sense of renewed sensitivity to the lackluster economy by these investment bankers. New York caterers will need to keep things festive but somewhat subdued to match the new reality.

Special Events Catering Industry

2010-11-15T11:01:00.003-05:00

The economy continues to make a slow but somewhat steady bounce off the canvas. With people paying down credit card debt and buying with cash instead of debt, we can expect the consumer to remain value conscious. Employment statistics mask the true unemployment which is higher than 10%. Still we see employers ready to hire in 2011. Most businesses run lean and mean and hiring will be modest.

There are many reasons to be thankful and profitable companies may want to show their employees a good time this holiday season. The winning formula for landing these parties is a flexible menu with plenty of options. Try to get your hands on 2003 numbers. From everything I read, I see the average sale per guest in sync with numbers from 2003. If you think of where the economy was in 2003, you'll remember a year of transition. They referred to the business climate as the "Goldilocks economy" since it was neither too hot nor too cold.

We see a bit of heat in the stock market and real estate markets have ended the free fall price drops in most areas. People feel better when their investments are increasing in value. Even though the value of most portfolios and real estate holdings are below peak levels, 2010 numbers have been positive.

Luxury restaurants are still seeing below par sales levels so you should be careful if you market exclusively to the affluent. These prospects have a tremendous number of options available in most metro areas. On a positive note, the cost of premium wine has plummeted. My dentist loves California Cabs from boutique vineyards. He told me he is paying over 60% less for many of his favorites.

Hopefully, we will all benefit from the solid gains in 2010 this holiday season.

CNN Reports on Average Wedding Cost

2010-11-14T12:17:00.006-05:00

CNN quoted the WE TV wedding report this week regarding the average cost of a wedding in the USA. The cost of a wedding was up 22% over last year. This is a $4,000 increase from last year's low.

I decided to visit the WE TV website and research the wedding price trends. They began tracking the average cost of a wedding in 2005. The graph below is from their site and it shows a solid 4% increase in 2006 and 2007. The biggest move down occurred in 2008 (the S&P 500 index peaked in October 2007).

Source: www.wetv.com

The 2010 mid-year average is still 10% below the 2005 number (see chart below). As the wedding caterers adapt to these shifting trends, it is important to remember the economy in 2005 was helped by access to relatively cheap money through home equity loans. Parents could go to the bank and borrow the money for their child's wedding at very attractive rates.

The WE TV graph above shows average wedding costs from 1990 and 1999 citing the Christian Science Monitor as their source. I find the modest increase during a period of solid economic growth of particular interest. The increase from 15,200 to 18,900 over 9 years is a 24.3% growth spurt. This is a 2.45% average annual rate.

The 2010 average, which is 10% below the 2005 number, seems to be a better starting point for comparisons. I'd expect future growth to model something closer to the 1990s.

Compulsory Gratuity Charges

2010-11-13T14:45:00.002-05:00

This month's Cornell Hospitality Report has a well written study of compulsory tipping on prix fixe menus, by Shuo Wang and Michael Lynn, entitled The Impact of Prix Fixe Menu Price Formats on Guests' Deal Perception.

In their Executive Summary, the authors state: "The chief implication for restaurants is that even with a prix fixe menu, guests are making value calculations at all times, and the service charge is one of those value issues-one that seems to stick out in customers' minds."

For my international readers, you may want to put the 15% standard USA gratuity in proper context. Generally, I have always been put off by compulsory tips. Even though I normally tip higher than our 15% standard, it really hits me negatively when I'm required to tip 20%.

The study shows required tips below the 15% standard are perceived as good value. Most diners expect to pay the servers an extra 15%. Building in a 12% mandatory gratuity, allows these guests to provide an extra 3% or more at their discretion. Asking for 18 or 20%, makes additional tips for extraordinary service unlikely.

Caterers often ask for the additional 18% in their menus and contracts. I encourage you to read the Cornell study. You will be rewarded with excellent insight and a few suggestions for turning the compulsory gratuity to your advantage. In our value conscious society, an aggressive tip strategy could hurt you in the word-of-mouth arena (both in social media sites and regular discussions in social networks).

Self-Catering Experience

2010-10-14T11:15:00.002-04:00

We recently planned a party for my Mom on her 80th birthday. There were 30 guests. After exploring our options for a catered affair, we decided to use a local restaurant/catering company for the food service. Since many of the guests lived in the neighborhood and would have required transportation to the caterers location, we decided to host the party.

The element of surprise was over once we hit the day of the party. Our decoration team was in full swing and the house was transformed by 3 PM for the 6 PM party.

Many of the guests do not drink alcoholic beverages due to age and medication restrictions. We purchased lots of non-alcoholic beverages and a selection of beers and wines. The food cost was the major expenditure.

Overall, we were very happy with the food presentation. We spent $80 on the cake and everyone felt the baker hit a home run. The caterer features a family style Italian menu. We ordered Cold Antipasto, Garlic Bread, Chicken Marsala, Ziti with Sausage, Broccoli Rabe, Garlic and Oil, Stuffed Shells, Eggplant Parmigiana, and a Fruit and Cheese Plate.

Everyone was happy, there were plenty of leftovers, we saved about $12 per person and we paid zero for service (vs. 18% at the location). Disposable plates, forks, knives and spoons kept cleanup to about 1 hour for 6 of us. Given the number of seniors and children, this option worked well and saved us money. Since the party, the restaurant has benefited from positive word of mouth and several guests said they would use this company's catering option in the future.

Running Out Of Food

2010-10-12T12:07:00.005-04:00

Marilyn Chapman gives us a bird's eye view of a Cocktail Wedding Reception (a hybrid of a wedding reception and a cocktail party) in her recent post. She focuses on guest perceptions and reality. Since a wedding reception often includes many traditional activities, guests expect a cocktail hour to be a logical start.

Beyond the cocktails and hors d'oeuvres, most weddings include either a buffet or a complete meal served by wait staff. Many guests will expect to snack on appetizers before the main meal. Managing these expectations can be a challenge.

Marilyn addresses the lower cost expectation:

There is also a common but false perception that Hors D' Oeuvres should be less expensive than a full meal. I routinely have to explain that the Hors D' Oeuvres are made from expensive ingredients and are labor intensive. We explain all this in advance as we have learned that the absolute worst thing that can happen at a wedding is to run out of food.

She brings up a common fear of many wedding hosts - running out of food.

Is it OK to tell your guests the hors d'oeuvres are the main course? If you communicate, your guests may feel comfortable with the concept. You will need to address the expectations of a champagne toast and wedding cake. People do enjoy these traditions.

You may want to add other activities which capture the attention of all the guests. Try to focus on the traditional activities while adding a few contemporary ideas. The flow of the event can help create a logical stop point for hors d'oeuvres service.

I agree with Marilyn regarding the relatively high cost of hors d'oeuvres. Often, these items use seafood and tender cuts of meat. Making a full meal using these offerings is an expensive option. If you were planning to have a cocktail hour anyway, the marginal cost is much less than the cost of a traditional wedding reception. Stretching the cocktail hour (a time period 3 to 4 times longer) will increase the consumption of these expensive alternates.

The Cocktail Wedding Reception Requires Careful Planning

2010-09-15T07:55:00.001-04:00

Marilyn Chapman shares her insight from the front lines:

The trend for Cocktail Wedding Receptions is definitely gaining in popularity but is somewhat problematic from a Off Premise Catering standpoint. The typical Bridal Client does not understand that a Cocktail Reception with "finger foods" is designed for a short, stand up party with a full liquor bar where the guests generally leave to dine elsewhere.

The Wedding Reception is a much longer party, often 4-6 hours. The real challenge is to convince the client that based on many years of experience that they require more food for a full length evening reception. If they are going to use Cocktail Foods they will need a large amount of it.

There is also a common but false perception that Hors D' Oeuvres should be less expensive than a full meal. I routinely have to explain that the Hors D' Oeuvres are made from expensive ingredients and are labor intensive. We explain all this in advance as we have learned that the absolute worst thing that can happen at a wedding is to run out of food.

Cocktail foods are not very filling and running out of food can and will happen at a full length evening reception without careful planning. In fact, it will be the Families and Bridal Party that will miss out on the food!

We work very hard to make the event a success which is not about up selling in this case although often the customer does not understand that. I can usually can add a Station - either a Carving Station or Pasta Station with exotic breads for the same budget but the issue is frequently one of their "Vision". This is where I meet with the most resistance and have to tread very carefully.

I advise them to put "Hors D' Oeuvre Reception" on the Wedding Invitation, to consider their male guests with hearty appetites, and to recognize that most guests will have been gone from home for hours preparing for the event. I also strongly encourage seating, if not tables, for a wedding which is most often a multi-generational event. This is where I lose some clients altogether. The "Vision" of a stand up Cocktail Lounge Wedding for 4-6 hours is attractive but just does not work as guests get belligerent and demand seating from the the Catering staff who can not provide it.

Marilyn Chapman
Wedding Event Coordinator

Delectables Fine Catering, Inc.
"The Bay Area's Most Prestigious Caterer"
969 Virginia Avenue, Inc.
Palm Harbor, FL 34683

E-mail: info@delectablescatering.com

Menu Map DIY

2010-09-13T12:52:00.001-04:00

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Landing A Major Catering Contract

2010-09-13T09:54:00.003-04:00

Certainly, the quickest way to grow top line catering sales is through a major deal with a new customer. Most marketing efforts focus on sales to current customers but catering events often do not repeat on an annual basis. The family who spent a small fortune for an elaborate wedding this year most likely won't be back in 2011.

If your home run sale is made with an association or company, you could very well enjoy year after year of steady sales as the relationship develops.

Where are these prospects located? Many companies operate their own dining and catering facilities. In the on-site feeding segment, these self-operated food service departments are your biggest competitor. As companies look for more ways to reduce their fixed expenses, you may find an opportunity to demonstrate how you could turn their cost center into a profit center.

Self-operated food service facilities may be found in nursing homes, health care centers, schools, jails, office parks, office buildings, ballparks, associations and clubs. A company serving 100 meals each weekday represents a potential of 25,000 meals per year. At $6 per meal, you would add $150,000 in top line sales. Picking up a monthly meeting for 100 dinner guests at $25 per meal would add $30,000.

You may find your catering facility empty on a particular day of the week. It would be a be win if you could develop a flexible conference room and market to local businesses with a simple coffee break menu. Instead of 52 no sale days, you could use the rent and break service revenue to help cover your fixed costs.

Realistic Catering Budgets

2010-09-11T12:13:00.002-04:00

If I were preparing a budget for 2011 today, I would take a look at the period from September 1, 2009 to August 31, 2010. Using this full year, I would budget for the exact same baseline sales in 2011. Rather than budgeting 10% growth, my conservative numbers would help me to better allocate the company resources.

Savvy caterers could gain a major advantage by diverting a share of marketing and sales efforts to signing long term contracts. These contracts will typically entail much lower operating margins. The benefits are numerous. At the top of the list would be the ability to employ a stable team. These long term contracts can help you attract and retain talented employees. I would use this activity to meet strategic objectives.

If I were preparing a 5 year plan, the long term contracts would be the major focus of my growth projections.

After the severe change in the direction of the economy, 2010 has been a year where markets continue to seek equilibrium. Many caterers I speak with mentioned 2011 as the year when they expect a return to better business conditions. While I do not own a crystal ball, I see several simple small business related indicators which do not support the optimistic view for 2011.

In the early months of the recession, most small businesses were contacted by their banks and informed their credit lines were terminated and replaced with term loans. Listening to the financial news today we hear a new term - deleverage. As companies make term loan payments, they are reducing their liabilities. Since these companies are not able to borrow against the term loans (only possible with a credit line), the access to cash is constrained.

Many of these companies will continue to rein in expenses and I do not see elaborate holiday parties this year. Year-round events and conferences will continue to be tightly bid with menus considered modest when compared to the years of terrific economic expansion.

Shifting to consumers, the number of low interest credit card offers (with balance transfer options) has not returned to the 2005 level. Access to home equity has been eliminated for the 1/4 of all US households with higher mortgage debt than the fair market value of the property.

Consumers will always celebrate life's big moments. I'd expect a portion of this market to move from self-catering to hiring a professional. In addition, I see a major market opportunity for off-premise caterers. Rather than using a premier catering venue, many families will use their homes to host parties. The companies who are able to add this flexibility (its tough work) will have an early adopter advantage.

Overall, the 2011 budgets should be prepared with care. Flexible staffs and tight control over fixed costs should be the central focus. Marketing efforts should recognize the reality of an economy in gradual recovery.

Graduation Parties on a Budget

2010-09-10T12:27:00.007-04:00

With many disappointing news items this summer, the mood of the nation remains cautious and far from optimistic. American consumers are reducing credit card balances and reigning in their appetite for risky investments. It looks like the year will end with flat to very low growth for any business depending on discretionary spending increases.

During the summer, I was invited to 2 graduation parties. Both graduates were thankful to land an internship with no pay. The 2010 graduates face one of the most difficult markets since the 1970s. This factor definitely had an impact on the level of spending for graduation parties.

During my conversations, both graduates said they went back to work for previous summer employers. Their internships start this month and they are both considering graduate school.

Although both parties were catered, the menus were basic with a retro feel. We had terrific potato salad, coleslaw, corn on the cob, baked beans and other summer favorites. Grilled burgers and chicken breasts were well received by guests. Overall, it is tough to imagine these families (hosts as well as guests) rapidly changing to Shrimp Cocktails (using U8 shrimp) in the next 5 years.

The secret to winning the catering game in this Upstate NY region is serving well prepared traditional favorites with a few popular ethnic variations. Since the hosts shared the cost per guest with me, I know the gross profit was above average on a percentage basis. Rather than trying to bring back 2005, the caterer is showing a profit in 2010.

Reader Phone Call About Competition

2010-08-15T16:54:00.002-04:00

In response to last month's newsletter, I received a call from Nick in Chicago. Nick is concerned about the number of restaurants who now aggressively market their catering services.

There are on-premise catering operators who also act as dinner houses. Restaurants sometimes treat parties as a separate business with a completely different menu. Other restaurants simply sit a large group in a separate room with the usual a la carte menu offered in the dining room. Finally, there are many specialists (pizza, pasta, Mexican, Chinese, etc.) who offer take-out menus.

All of these catering options help meet the needs of a diverse clientele. It is unilkely you will find a group who prefers a formal meal with an expensive entree shopping around in the take-out segment. These are the extremes. Towards the center of the market, there is tremendous competition. You need to evaluate your chance of success for 2 straight forward options.

Option 1 involves improving quality and raising prices. This strategy can help if you are near the break even point or solidly in the black. If you are below water, you may completely alienate your loyal clients. Option 2 allows guests to select from the current menu as usual or try your new menu. The new menu options would offer higher quality items for a higher price.

There are two options I don't favor in this economy. Both involve smaller gross margins. An across the board price decrease will raise the break even sales threshhold. Optionally, you could increase portion sizes. Substituting quantity over quality is tricky. There are many family style operators with excellent reputations you will find as competitors. Their reputation for generous serving sizes, widespread use of take-out bags and value pricing will force you into a tough game. Make sure this is a great fit for your menu.

Shrinking portion sizes (tapas, sliders, etc.) and rising menu item prices are solid trends. Not every caterer can pull off the popular small plates dining option. Again, your menu needs to fit this option like a glove.

Accounting For A Production Kitchen

2010-08-13T14:29:00.003-04:00

Hi Joe
I have read your blog for the first time and I think its most helpful. I have a question I run a production kitchen ,in the past we have been a revenue centre ,a new approach they are looking into is to make us a cost centre ,how do I go about this and what are the pros and cons ,I do have a issue with food cost at present we are around the 30% mark,while labour is a challenge a key reason being we have retail section which produce for and we sell products to them at cost.
Please help.
Thank
Peter
Sydney Australia

Thanks for the question Peter.

You have several options. The most popular option is to treat the production kitchen as a vendor in the other profit centers. The advantage to this selection is the ability to compare product to outside vendors (both price and quality). If the production kitchen does not justify the time, effort and fixed investment, the company can simply purchase product from other sources.

The second method involves allocating the costs of the production kitchen based on a predetermined formula. The easiest formula is a straight allocation based on sales or cost of sales. This method requires less time because no effort is made to charge costs based on actual shipments to the appropriate profit center.

Another popular method involves a combination of the other 2 methods. Fixed costs may be allocated based on a square foot (or meter) formula. Variable costs may be charged using the vendor option. If one of the profit centers produces substandard sales for the area, they will bear their fair share of the overhead.

Your choice should reflect the goals of your organization.

The Target To Beat

2010-07-22T15:09:00.003-04:00

The most popular article last month, Costing Catering Menus, has produced a number of great emails and phone calls. Most people asked me to explain what I meant by "Use it as the target to beat."

[In addition, I was asked to convert the quantities to English system by a few readers. This post uses pounds.]

In the example I chose for the post, the caterer had a recipe for 100 portions which used 31 pounds. Imagine you have 1,000 guests and you serve the same chicken dish. In my example, the chef needed 229 pounds for the same dish. The lesson to take from the example is the safety factor remained only 9 pounds. The budget is for .22 pounds per person and a safety factor of 9 pounds for count changes, etc.

If you use a linear formula, scaling the recipe from 100 portions to 1,000 portions would produce a 310 pound order quantity. By asking the chef to get involved in the costing exercise, the caterer would need to buy only 229 pounds.

I believe it is a valid example. The .22 pounds portion is 3.5 ounces. This is a common portion size when there are multiple protein items offered at a catered affair. People using recipe costing software have a HUGE bias toward inflating protein requirements with safety factors. This is my experience in over 90% of the operations I work with in the industry. People have a fear of running out of food.

There are really 2 issues in this example: the size of the safety factor for 100 portions and the true required portion size. Using 3.5 ounces for the true size when you really only need 3 ounces produces a built in excess of 16.7%. The safety factor of 9 pounds when you really budgeted 22 pounds is a built in excess of 40%.

If you start scaling the recipe for 100 portions using a straight line method, massive waste may result. Most caterers are careful with the most expensive protein item served (prime rib, filet mignon, lobster tails, crab meat, etc.) but tend to produce too much when it comes to chicken breasts, deli meats, salads, etc. Every recipe costing program I have used employs the straight line method.

[For those who like math, the models also assume zero as the y-axis intercept.]

Costing Catering Menus

2010-07-17T11:11:00.002-04:00

Hi Joe

Management has decided to revamp the events menus. Costing of menus up till I started in the Food & Beverage Control office was done on paper. Together with Excel buffs we have designed a programme to cost menus according to recipes. Our chefs will send me lists of ingredients of recipes for 100 guests and I will prepare the costing in the Excel programme. My question to you is: If the menus are costed for 100 guests and there is an event for, let say, 700 guests, is it a simple matter of multiplying the cost of a recipe by 7? Of course, the recipes have to be checked for price increases in ingredients and will have to be scrutinized by the chefs from time-to-time for changes they may want to make. Is it that simple or is there a formula that cost may decrease with the increase in number of guests for whom to prepare or cost may increase with events of smaller number of guests? One of our chefs seems to thinks that it is not a simple matter of basic arithmetic.

This is the first time I'm done menus on such a large scale and I can't find the previous F&B Controller's filed the previous costings to compare notes. All-in-all, I've got about 20 menus to cost plus a number of variations, so I'm pretty much on my own.

I'd appreciate your assistance.

Thanks

Brian

Thanks for the question Brian.

In a perfect world, this is a consumption per person exercise. Certainly, the majority of programs treat scaling of recipes as a straight line (linear) exercise. Use it as the target to beat.

The chef has some innovations he can bring to the table when volumes exceed the 100 portion core. This is good. Encourage him to beat the model. You'll need to communicate. Show the production team the pure calculation and then stop and listen. Adapt your purchases to fit the adjustments proposed by the production team.

High volume days are the key to long term success. Many people worry too much about days when only 25 people are served. Cutting too close on these days provides a very small incremental profit improvement and could cost the company in negative word of mouth - bad buzz. Focus on making more money on your high volume days.

I have helped several special events caterers with costing stations at various attendance increments. My background is remote site feeding and our RFP quotes were presented per man per day (man-day) based on operating levels. A typical RFP would ask for a minimum level - say 100. When the count was higher than 100, we would give prices by increment: 101 to 200, 201 to 300, etc.

In a recipe model, you could use the base recipe to create a set of recipes for each station. Take your portions at 100 and ask the chef how this would change if there were 1,000 guests. From these 2 extremes, you can calculate a straight line chart.

For example, the chef may use 14 kg of chicken breast for 100 guests and 104 kg for 1,000. This breaks down to 1/10th of a kg per person and 4 kg fixed. You would budget 54 kg for 500 guests.

As the counts increase, many operators expand the number of choices. You would build these into your recipes for the larger events. When you are done, you would have a deck of recipes: 100, 200, 300,...1,000.

Cocktail Weddings and Signature Cocktails

2010-07-12T23:52:00.003-04:00

Back in May, I wrote a post about Signature Cocktails after enjoying myself at a social hosted by Bourbon Steak in Georgetown. The two cocktails I tried were the Pisco Sour and the Celerickey.

Using an eyeball estimate, I think the Celerickey was very popular.

Earlier this month, I noticed several catering trends articles mentioning the popular Cocktail Wedding. For an astute caterer, a signature cocktail offers an excellent opportunity. If you pour from a premium bottle, say $33/liter, you can create some buzz for a reasonable average pouring cost. Using the $33 figure, each ounce is $1. A $20 bottle of wine yields 5 glasses (using 150 ML for the portion size) for $4 per portion.

Even if you use pricey mixers, the total cost will stay below $2 (about half price compared to our wine example).

The day after the Bourbon Steak event, I checked out their website and they have a cocktail menu. Detailed descriptions on the website remind me of the server at in the lounge. She knew the history of the drink and all the ingredients. Our circle unanimously chose the Celerickey.

A well trained service staff can help you create buzz, achieve a great portion cost and leave your guests with some great memories.

Catering Resources for 2010

2010-07-10T10:29:00.002-04:00

I went searching for current trends in catering events. Just to check the mood, I located a 2002 trends article and noticed the similarities and contrasts with 2010.

Back in 2002, Special Events highlighted trends in an article Catering Trends Food For The Soul by Natasha Garber. Natasha pointed out major moves to international flavors and comfort food. She also pointed out the trend for more snack foods (tapas, cocktail
hors d'oeuvres, etc.) and family style service with large platters.

Her final point was the increased focus on cost control:

With a tight economy and an increasing demand for restaurant-caliber catered food, caterers are under pressure to rein in costs while keeping quality impeccable.

Several 2010 catering trends articles mentioned cocktail Party style wedding receptions - Cocktail Weddings. The best description is found in a Buzzle.com post Catering Trends for Cocktail Weddings by W. Tang.

The cocktail wedding reception seems to adopt the move to international foods and snacks from 2002. This was a period of frugality following 9/11 which preceded the real estate boom caused by the lowering of interest rates. It seems the decline in real estate prices has renewed interest in less formal service with great ethnic flavors and theme cocktails. These events may incorporate special staions to complement the butlered service. Sushi, sliders, tapas, mini burritos and tacos, stir fry vegetables, and samosas were mentioned.

A Top 15 list is presented in an article from AisleDash.com in March.

1. Butlered dishes
2. Family-style service
3. Tasting menus
4. Going global
5. Health-conscious cuisine
6. Customizing with condiments
7. Sophisticated sharing
8. Eco-friendly edibles
9. Interim treats
10. Creative combos
11. Fancier food carts
12. Sophisticated stations
13. Decadent dessert displays
14. Breakfast bites
15. Bon-voyage vittles

They omitted the cocktail wedding trend. This trend was mentioned again in a special trend issue on The Knot on the first slide (7 page slideshow):

Mad Men-Inspired Cocktail Weddings
Re-think a sit-down reception dinner and go for more of a cocktail party, inspired by the cocktail hour era of the 1950s and 60s. Serve old-school cocktails (like gin and tonics and whiskey sours), hire a live big band (or ask your DJ to stick to the classics), and order up a menu of heavy hors d'oeuvres and food stations.

The Cocktail Wedding wasn't the number one pick on Elegala.com Catering Trends post. They described these events toward the end of the article:

Cocktails & Appetizers
Looking to break the traditional five course mold? Base your entire wedding reception on cocktails and appetizers. This catering serving style allows for more variety and affords ample opportunity for creative presentation ideas. Serve a signature drink at a customized drink station. Feature shrimp and grits martinis. You’re only limited by your imagination. The constant flow of stimulating culinary works of art and eye-catching spirits creates an intimate social atmosphere for your guests.

You Should Be Raising Prices

2010-06-14T13:21:00.002-04:00

My recent post "Should You Be Raising Prices?" focuses on the forecast for rising wages looming in the economy. Employees have produced record productivity numbers by accepting meager or no pay increases. Some of these employees work longer hours for less pay. This is beginning to take a toll as the recession (in pure employment terms) continues to impact many workers. Workers who took new jobs for lower pay than their previous job are expected to bolt in large numbers as the economy strengthens.

You need to budget higher future labor costs. The best way to cover these cost is through higher menu prices. Discounts won't help. Few companies pick up significant market share increases through slashing prices. With the industry still contracting in 2010, you need to look at higher profit per guest to cover your fixed costs and profit requirements.

Take a hard look at labor expenses and develop a plan for the next 12 months. If you have a flexible team with a limited number of full-time professionals and a group of event oriented servers, bartenders, kitchen helpers and delivery people at the ready, contact the temporary workers and discuss their hourly rates. As the economy improves, they will be moving to more lucrative positions.

Will an extra $1 per guest cover the expected increase? You need to have excellent staffing charts to answer this question. Try to equate the impact of a dollar on your typical event size. If you typically serve 50 people, this is an additional $50. If you use a bartender and two servers, you could give each person $15 and keep $5 for the house.

An extra dollar may not be enough for your operation. Find the correct number for your operation with information. You'll need a thorough knowledge of costs, current employee morale, competitor intelligence and a detailed sales forecast. This essential data is required to make the best decision.

Once in a Lifetime Events

2010-06-10T10:50:00.002-04:00

Most cities never host a Super Bowl or the World Cup. They will never see a parade for the World Series Champions. For most cities and towns, there is a routine which is defined by the local economic and regional influences. If you travel to a college town, the summers are slower for many businesses. Shore properties are jammed in summer and mountain locations promote their summer and winter attractions.

What happens when something completely out of the blue happens in a town?

Maybe the river overflows the banks (100 year floods) or the city wins the bid to sponsor the Olympics. I can remember trying to book a hotel room on Long Island to visit the private gardens sponsored by the Garden Conservancy back in 1996. TWA 800 investigations caused all the rooms to be occupied by the investigators and the press. I asked the hotel manager who was feeding the workers at the hangar. She did not know and she wasn't sure if it was possible to send food to the secure location.

We bid on a contract to feed Nordic athletes and the press in the 1980 Winter Olympics in Calgary. There were plenty of unknowns. Weather could be a huge issue. How to house our staff for 2 weeks when all the hotels would be jammed was a big question mark. Every bidder knew the menus and the kitchen layouts. I'm sure the cost estimates were similar. Providing for a risk premium, judging the competitor's perspective, understanding the disruption to our main business model, and many other factors had an impact on our mark up decision.

When you are successful landing an account in a risky once in a lifetime bid, get ready to execute the game plan. In addition, prepare an investment plan for the substantial profit you should expect to make. My experience in everyone of these challenging events is one of constant innovation. Since the company has insulated itself from risk with a much higher selling price, the opportunity exists to really hit a huge number.

We housed our employees in construction site trailers and used school buses which were available due to a decision to close schools during the Olympics. The weather was quite mild. In fact, snow had to be shipped to certain venues. Our snow removal budget all went to the bottom line.

These once in a lifetime events may produce once in a lifetime windfalls. Some companies decide to avoid the risk and headaches. I'd recommend aggressively working to secure these contracts.

Should You Be Raising Prices?

2010-05-28T15:50:00.002-04:00

The labor force in America has produced tremendous productivity gains in the past year. These gains have taken their toll in longer hours and no pay increases. Some workers have agreed to pay cuts. Recently, businesses are reporting increases in employee resignations.

Joe Light points out the trend in employee losses due to resignations in his WSJ article More Workers Start To Quit. He quotes a survey response where "60% of workers said they intended to leave their jobs when the market got better".

This may be a good time for caterers to raise menu prices. You could be facing higher labor costs in the months ahead. Evaluate your sales pipeline. You may be able to persuade a few parties to book now before the menu prices increase.

Signature Cocktails a Win-Win

2010-05-18T16:30:00.003-04:00

One of the recent pleasant surprises for my group here in the DC metro has been an increase in signature cocktails at our events. Last month, we enjoyed a drink with cucumber and gin which was very refreshing and delicious. People at the affair were recommending this drink to their friends. By the end of the session, there were lots of empty glasses for the staff to pick up.

The host has a major benefit when the signature drink is a success. These drinks have a well controlled pouring cost since the staff has received very specific instructions. Generally, these drinks use spirits which are being promoted by the distributor. Often, the price per bottle of the promotional spirits is discounted to the caterer.

I realize we are focused on a small number of successful uses of a signature cocktail at our events here in the DC Metro area. Still, our group absolutely loved the drink offered, recommended the special to others, and actively discussed the drink including the spirits used in the recipe.

If the distilling company had a survey card to pass out to attendees, they could have received on the spot reviews. I am sure there are other positive ways to use this beverage tactic for both operations and marketing initiatives.

Better Cheese Displays

2010-05-14T13:52:00.004-04:00

Many of the catered affairs I have attended recently present wonderful cheese platters. Generally, I noticed the excellent aged cheeses (both domestic and imported) as well as the top quality crackers, breads and rolls. The one issue I have with this popular option is the poor judgment of the attendees.

I have observed people tasting a creamy double cream brie with their fingers. They did not stop at one taste. One person hacked into a well presented quarter wheel of bleu cheese with abandon. By the time he had secured his plate of cheese, there were piles of crumbled bleu cheese all over the platter.

Should these caterers offer cheeses already portioned on crackers and thin slices of bread. For my money, I would highly recommend this practice. Perhaps the wait staff could present trays with portioned cheese snacks. In addition to lower food cost, a more sanitary service and better presentation, the operator would quickly find out which cheeses are most popular.

It is common for cheese to cost as much as filet mignon or shellfish (depending on the specifications). Cheese artisans produce domestic cheeses in the $15 per pound range. Many people enjoy these excellent cheeses. Would you offer large platters of filet mignon and lobster tails? Maybe you answered yes. How about platters of crab cakes? Most caterers offer these more expensive items by the portion rather than placing a large platter out for self-service.

Your wait staff can offer suggestions for pairing the cheeses with wine. In addition, you could promote cheeses which are rapidly approaching the over-ripe stage while they are still at their peak flavor and texture.

Sick of Sliders?

2010-05-11T14:44:00.004-04:00

In a typical year, I will attend at least one social function each month. Some busy months may offer 3 or 4 worthwhile functions. Off the top of my head, I believe at least three quarters of the locations include Sliders in their hot appetizers. These Sliders may be prepared with beef, lamb or a combination of ground meats. Many are served on brioche or a fresh baked roll.

Initially, I enjoyed this trend but recently I feel the Slider has burned out. In late April, I attended an affair in a terrific hotel conference room. The wait staff served a variety of hot and cold appetizers and a two signature cocktails. I couldn't help but notice the half eaten Sliders on the little plates laying around the room. This was an elegant party with oysters on the half shell and a few very inventive creations.

The Sliders came with mini-baskets of fries with a homemade ketchup. People were sharing their fries and the signature cocktails were a big hit. Has the Sliders trend run it's course? It may just be burnout for our group here in Washington.

Additional Catering Opportunities

2010-04-15T12:43:00.003-04:00

A few years a ago, I worked with an on-premise caterer specialized in wedding receptions. They are located adjacent to a municipal golf course in a major metro area. I asked if they booked many events with the golfers who played on the course. The answer was a firm - no.

On one level, you really can't expect to attract the harried businessmen who take a few hours to play 9 holes or a round of golf. The menu is designed to help create a full day affair with multiple stations and meal courses.

Should this caterer design a mid-week menu to attract this market niche? Maybe. They could use extra business. The wedding events are highly competitive and very price sensitive. Additional revenue sources would help cover the costs of renovations. On the other hand, the sales team likes to take prospects on a full tour of the mansion. The beautiful hardwood floors may take a beating from the golf shoes. Most importantly, the kitchen team is not oriented towards an a la carte menu.

Catering events have a set menu in place (usually weeks in advance of the event), and the service team is scheduled precisely for the contracted number of guests.

Many wedding specialists do not have a lunch menu. Golfers do not want a full banquet unless the golf course has a tournament (typically on the weekend when this operator is busy). I believe the move from a banquet focus to an a la carte menu service would be a strain on this particular operation.

The caterer had lots of experience with receptions and these events often begin with a cocktail hour. I recommended they offer a summer evening mid-week service with a buffet and service bar for the locals (including the golfers). The terrific location near the golf course with the sun setting could generate positive word of mouth and help cover fixed costs.

Competitor Intelligence Site for Caterers

2010-04-14T09:56:00.007-04:00

If your operation is a hotel, you may already be familiar with an excellent resource for meeting planners. The website MeetingsNet.com has a fantastic food and beverage search engine.

Once you choose a metro area, the search will help you locate hotels, restaurants, convention centers, special event venues, golf clubs and galleries. Restaurants with a catering division and special event caterers can research the listings for competitor intelligence.

There are more hotels than restaurants in the Washington, DC venues. Special event venues are next followed by galleries and museums. There are only 9 banquet facilities listed in the Washington, DC search.

In my search of venues in Las Vegas, I noticed the venues really took advantage of this website for properly promoting their locations. In the Additional Materials section, the venues may offer planners menus, property maps, photos and other materials. The list below reflects the Mandalay Bay Resort's resources.

Caterers can use the website to position themselves in the increasingly competitive special events catering industry.

Hotel Catering Statistics

2010-04-11T11:23:00.004-04:00

In the November/December 2006 issue of Hotel F&B Executive, Dr. Fred DeMicco introduced a pilot study designed to quantify the size and complexity of the U.S. hotel food service market. Nearly 50% of the total $71 billion in hotel food and beverage service was generated by catering activities.

Three of the statistics I found interesting include:
1. 48,000 total food service outlets in hotels (exclusive of room service banquets and catering);
2. Over 15,000 hotels offer banquet and catering facilities; and,
3. The average revenue per property from banquet and catering was over $2.6 million.

The article's $71 billion estimate compares very closely with the National Restaurant Association's benchmark of $70 billion in hotel f&b sales.

Contract Feeders vs. Hotels

2010-03-14T13:38:00.003-04:00

I subscribe to several excellent newsletters covering the hotel industry. In 2009, there were many articles involving hotel bankruptcies. The huge fixed costs due to investment in property, buildings and equipment required an unattainable occupancy rate for many properties in the downturn.

Hotel Resources featured an excellent article from the New York Times regarding troubled hotels. An excerpt explains the risks of both hotel owners and the management companies:

The names on the front of the troubled hotels are well-known management companies like Ritz-Carlton and InterContinental. But the owners of the hotels are investment groups, wealthy individuals or companies that specialize in lodging and are generally little-known outside the industry.

Many owners took out loans to finance new construction or renovations when hotel occupancy rates were up and credit was readily available - just the opposite of the situation now, as those short-term loans are coming due.

But it is the management companies that risk damage to their reputations since theirs are the featured names.

Many hotels rely on conventions to survive. They book blocks of rooms, rent banquet facilities and provide meals and break service for these attendees and exhibitors. When conventions suffer drops in attendees, hotels also suffer.

Contract feeders have seen a reduction in revenue and operating income during 2009. I researched the December 2009 10K report for ARAMARK Corporation at the SEC website. ARAMARK reported sales declined from $13.47B to $12.30B (-8.7%) and operating income dropped from $566.1M to $437.5M (-22.7%).

Despite the drop in operating income, cash flow increased by $213M. Although the decline in net income produced a $88.6M shortfall, the reduction in working capital required freed $290.4M. The issue of liquidity was addressed - "we believe we enjoy a strong liquidity position overall" - in the management comments.

We simply do not see front page stories every month regarding the risk of bankruptcy with regard to major contract feeders. Although the major hotel management companies do not take on the real estate/mortgage risk, their flagship brands are hurt with the negative press involving failures.

Should You Pursue Catering Contracts?

2010-03-14T11:38:00.003-04:00

Not every catering operation should pursue long term catering contracts. This activity is different than catering special events. Many contract feeders offer special events catering to their clients. Some special events caterers could significantly increase profits by signing a long term contract.

The growth in contract catering is faster than special events. Since you do not need to invest in major fixed assets, new long term contracts may be signed with minimal fixed asset investment. In fact, your catering facility is not a major asset in this arena. Scaling from 1 or 2 contracts to a portfolio of contracts requires flexibility. The size of your production facility is not a key criteria and may prevent you from taking a clear look at utilization of the client's facility.

Forecasting and cost control depend on managing a cycle menu. Typically, these cycle menus are part of the contract you will sign. In addition to the cycle menu, most operations have several permanent stations. Many operations offer a deli, salad bar, pizza, and a grill. The offerings in these stations are stable.

Since most catering contracts are earned in a competitive bidding process, knowledge of costs is paramount. The largest competitor in contract feeding is the self-operator. A great way to enter the segment is through a negotiated deal with a self-operator. This allows you to avoid the bidding war inherent in major contracts. The winner of a competitive contract operates with razor thin margins.

If you can live with food costs routinely over 40% and a high labor cost percentage, contract feeding offers a fast growth opportunity. Your return on investment can be over 50% (annual). Since the investment is limited to initial inventory, small-wares and minor equipment purchases, the upfront cash requirement is small. You do not invest in land, buildings, utilities, and major equipment. Savvy contract feeders lease almost every asset required (e.g. vehicle) for the same term as the catering contract.

Local Caterers Sign School Feeding Contract

2010-03-13T17:04:00.002-05:00

Recently, I was discussing the current trends with several people who attended my presentation in New York at the Javitts Center. One couple had recently completed their first year of a contract with the village school. They run a special event catering operation and searched for other opportunities when the economy cooled down.

They found the first year of providing school lunches a challenging but rewarding venture. My presentation focused on recession busting strategies. Like many other companies, they had cut their costs as far as possible and still were not generating enough profit. They realized the area just did not generate enough activity since many former clients were cutting back on their expenses, including catered affairs.

I asked them if they intended to continue working on the contract catering division. They enthusiastically said they were currently bidding on a similar contract with a school in a neighboring town.

Once you understand the key differences between special event catering and contract catering, it is possible to significantly increase your annual volume. Some of the major differences include:

1. Contract catering operators deal with razor thin operating margins which require very tight cost control to succeed. Special event caterers have high overhead costs to cover but they also enjoy high margins.

2. Special events catering has a firm "final guest count" which allows caterers to purchase exactly the required amount for each meal. Contract caterers need to understand how cycle menus work. Day to day meal participation will vary. Typically, there is no contract guest count.

3. Contract catering involves an exclusive contract to provide services for a given time period. Once the caterer understands the cyclical nature of the menu, the tight cost targets will be met and rapid growth is possible.

4. Special event caterers are always selling for the next season. The wedding specialists need to get great word of mouth referrals since the bride and groom won't need their service for a long time. Guests at the wedding reception are great targets for the future.

Budget Menu Strategy

2010-02-14T16:29:00.003-05:00

With more events featuring scaled down menus, it is essential to make your budget menu both profitable and of very high quality. Since many of your customers will choose the budget option, you will need to have these packages priced to make a large contribution to your overhead. So how do you up the prices on your budget menu and still get enough business?

I favor lowering prices significantly on your high end and mid-level menus.

Many catering companies show their prospects 3 menu options: great, greater and greatest. Dropping the prices on the top 2 menus will help set expectations properly. Your prospects will see a smaller spread between your menu options. This communicates a top quality budget menu. You can reinforce this perception by letting these prospects know your quality standards are the highest no matter which option they choose.

The lower prices on the upscale menu will have a limited impact since many parties will choose the budget package. You can price the top menu to produce slightly more profit than the budget menu (in dollar terms). This will allow a decent profit regardless of the choice.

Eliminate any menu items which require ingredients with volatile market price profiles. These menu items may be offered as options. Adjust the price on these optional items depending on market conditions.

Restaurant Caterers?

2010-02-09T14:38:00.003-05:00

Some restaurants offer catering services with no catering menu. How do they operate as a caterer? They simply let a party reserve a much larger table than usual (sometimes an intimate room off the main dining room). The guests do not order ahead of time and they are served from the dinner menu. Is this truly a catered affair?

Since a party could have been booked with a catering specialist, these special events are clearly catered affairs. Restaurants with no catering menu do not typically book huge parties during their prime hours. There are exceptions to this rule.

If the restaurant does not ask for the order ahead of the seating, the event is strictly a large party. However, some restaurants ask the guests to order ahead of the party. In my mind, this is a truly catered affair. The restaurant provides a comfortable venue and the room is configured to focus on the party. The kitchen has a predetermined menu allowing the culinary team to execute the event well.

Although the restaurant still is seating regular dining patrons, the act of putting the special menu on the agenda is key. The food order is less uncertain and the proper staff level is easier to forecast. These are two of the advantages caterers have over an a la carte dinner house.

A third option involves establishing a fixed price charged per guest and limiting the menu item options. These operators allow the party guests to choose their appetizer and entree options once they arrive. Allow though the restaurant has a firm sales number, the profit potential won't be as high as the event with a predetermined menu.

Cover Overhead With Event Fees

2010-02-08T14:34:00.002-05:00

One technique used to make menu prices look very attractive involves charging an event fee. The event fee is similar to a room charge for booking an event at a hotel or conference center. If you use the event fee prudently and explain the policy to your customers, this is an excellent way to cover your overhead expenses.

It is helpful to use an example. Our example company expects to serve guests at 1,000 events in the coming year. This company wants to make sure they cover their $200,000 in fixed overhead expenses regardless of the menu choices. They decide to cover these costs through an event fee. This fee is charged to each event regardless of the number of guests or the menu options selected. Every proposal includes a $200 event fee.

Explain to your guests the purpose of the fee. Make sure you mention all the little things which go into making an event special. Try to use essential services when explaining the charge. The guest should see the value in paying this event fee.

If the average guest count is 50, this $200 fee would cover $200,000. You could shave the cost per guest by $4 on your menu packages and still cover your overhead.

In contract feeding projects, we offered lower rates per person/day if the company paid a one-time mobilization fee. We detailed the work and investment involved in properly setting up the location and stocking the kitchen with equipment and small-wares. Our goal was to create a win-win pricing format which covered our risks and offered the lowest possible daily rates.

Profitable Budget Menu

2010-02-07T00:09:00.002-05:00

With all the focus on frugal weddings and downsized special events, it is prime time to make money selling value. Companies who form partnerships with customers who need to fit a tight budget will earn their loyalty. When you review your budget menu, you need to provide for a reasonable profit. Since you will be selling a higher number of meals from this menu, it is essential to build in enough profit to cover your overhead.

What should be included in your overhead calculations?

I recommend including all key employees. These are people who are not event oriented. They work regardless of the volume each month. All monthly rent, utilities, mortgages, vehicle payments and other fixed expenses need to be included. You should also include money for marketing and advertising expenses. Omit food and beverage costs. Don't include any employees who work only when needed for a specific event.

How many people could you serve this year if you promoted your budget menu?

This count is the key to your budget menu. Add your overhead number to your target for profit and divide by your annual guest count. This number needs to be included in each and every quote. You need to markup your variable expenses by this number to cover overhead and profit.

Knowledge of your variable costs is critical. If you can keep your food, beverage, direct labor and direct operating expenses in line, you'll make money. Your total cost per guest for the budget menu is the total of your variable costs plus the markup figure.

If you expected to serve 25,000 guests this year and your fixed expenses are $200,000 you need to charge $8 per guest. Let's add another $4 to provide for $100,000 of profit. This $12 is our markup.

We then work hard to create a menu which can be produced for $8 per guest. The direct labor and operating expenses may cost another $6. In this example, you would charge $26 per guest. All beverages and extras would require extra charges.

Let the guests decide how much they want to spend on beverages. Create a second menu for extras. These extras can be quoted at cost plus a small profit since you have provided for $4 per guest in the base menu.

Report from the Trenches on Frugal Weddings

2010-01-20T16:41:00.002-05:00

Just before Thanksgiving last year, I went out for dinner with a friend in New York. We discussed business conditions in his company's special events division. He told me sales were 50% of the previous year which was 50% of 2007. So in 2 years, their volume has dropped 75%. They are impacted by the reduced spending on the part of the financial industry in downtown Manhattan due to the public outrage with extravagant parties. I started to research the low budget offerings in the special event segment this year. Today, I received an excellent contribution from Marilyn Chapman of Delectables Fine Catering.

We are on the Front Line of the Battlefield of Frugal Weddings as Off Premise Caterers. The current trends are unlike anything we have ever experienced as Bridal Couples now compete to have the most unique but low budget events. I read the Blogs and they are not being written by Wedding Professionals because many of the ideas are not practical and most couples do not have the expertise to recognize that. By the time they come to us for Catering they are almost always already committed to these plans.

The biggest change has been the exodus from the Banquet Halls. This creates all kinds of challenges to the Caterer but most important it has cost us our most reliable vendor referrals as the Banquet Halls know and appreciate our professional services. Both our number of events and guest counts are down and the Halls are suffering as a consequence.

The Banquet Halls are designed for Special Events and the alternative venues that Bridal couples are selecting are often lacking in basic amenities essential to the hospitality experience. I refer to basic guest needs such as shelter, climate control, water, electricity, bathroom facilities, ramps and parking. Almost every wedding now requires table and chair rentals which require set up and tear down, often outdoors in inclement weather. The planning and equipment required for the alternative venues are an additional in house expense and the menus are invariably bare bones but hard to execute under difficult circumstances. Site inspections are almost a necessity which is another in house expense. We charge for that when possible.

The Blogs are telling clients that everything is negotiable when it is not and suggest how to cut corners. Bridal couples are enlisting friends and hiring unlicensed Vendors off of Craig's List. Our staff has to deal with an increased amount of unprofessional behavior and emotional fallout as "Friends of Friends" fail to show up with a Wedding Cake or Flowers. Alternative venues do not have rules requiring licensed caterers so even if we are catering the meal it is now fairly common for the Bridal couple to provide the Hors D' Oeuvres and Wedding Cake. Off Premise Catering is difficult in the best of circumstances but food handling in alternative venues (think parks, beaches, cow pastures) requires special skill so we worry about food handling and generally have to pitch in. The Feedback from our service staff is that the client provided foods, IPod music, friends as Photographers and MC's and home made wedding cakes are just a disaster, especially outdoors.

We have responded with budget menus and are maintaining our Market Share in a recessionary economy but we have reduced our service staff as events become smaller. I see this turning around over time as more people experience the Frugal Weddings first hand and recognize the added expenses of rentals and the cost of providing amenities such as tents, portable toilets and valet parking.

--
Marilyn Chapman
Wedding Event Coordinator

Delectables Fine Catering, Inc.
"The Bay Area's Most Prestigious Caterer"
969 Virginia Avenue, Inc.
Palm Harbor, FL 34683

E-mail: info@delectablescatering.com

http://www.delectablescatering.com

Phone: 727-781-1200
Fax: 727-789-3401

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Frugal Wedding Menu?

2010-01-16T22:16:00.005-05:00

I initially started to write a post with a focus on innovative extras which could be added to a modest menu to make it more special. I searched Google for frugal wedding ideas. I recommend all caterers take a look at some of the ideas on the sites. Most of the contributors would never call a caterer.

The contributors suggest combining purchased items with home made favorites served buffet style. Where do they suggest the food be purchased? They recommend super markets, family-owned restaurants and family members who enjoy cooking as the sources.

Most of the contributors used parks or other very low cost venues for the reception. They universally avoided expensive cakes.

The first site I checked,The Simple Dollar, mentioned the family-owned restaurant option:

...look around your community for a family-owned restaurant and ask the owners directly to cater your wedding. Family-owned restaurants are always the first place to check – they will almost always go the extra mile to make your wedding special and will also charge a reasonable rate.

There was a segment from ABC's Good Morning America on frugal weddings. The family decided to prepare all the food themselves using a friend or family member:

Find a friend or family chef. Rather than outsourcing to a caterer that could cost thousands, try to find a friend or family member who cooks. Natalie's mother and sister fed the 200 guests for $1,000.

Two other sites Thrifty Fun and Frugal Underground recommended the party platters, cold cuts, rolls and salads from the local supermarket.

So, do you ignore this market segment?

Catering pros are equipped to make sure the wedding reception is a success.

Obviously, you can't compete on price with someone who has decided to go alone. The prospective guests you meet have already decided to hire a pro. I think every caterer should prepare a well designed budget menu. You can contrast the regular menu with the budget menu. Some profitable extras could be added back to reach a middle price point.

Budget minded guests will be open to scheduling the party on a less busy day of the week. Encourage the guest to bring their own cake.

Contract Catering Opportunities

2010-01-10T14:59:00.002-05:00

Economic downturns often cause corporations to cut office staff at headquarters and major regional offices. Some of these larger offices have company dining rooms with many lunch options including entrees, sandwiches, pizzas, soups, salad bars, snacks, desserts and beverages. If the company dining room is staffed by employees, there may be an opportunity for a local caterer to take over the feeding on a contract basis.

The greater market segment is referred to as B&I (Business and Industry). There are many B&I professionals looking for work at this time. This style of food service is very different from a special event package. You will find daily attendance varies depending on the cycle menu, weather and other factors. Overall, sales volumes can be predicted with a high degree of accuracy.

Generally, you will be expected to demonstrate value. Employees have the option of leaving the building and going to a local deli or restaurant. Knowledge of the average prices charged at these local spots is required. Often, you will be asked to do a quarterly or annual comparison report.

In my experience, office workers tend to consume less food in the company dining room than they do outside. The salad bar normally gets a big turnout. Cup of soup and half sandwich combos are popular. Frozen yogurt works well and you can charge extra for healthy toppings.

These contracts may be offered on an annual basis or for much longer time frames. It is common to sign a 3 year deal. Once you have the contract award, you will find additional opportunities in catered events. Companies have many day long meetings in multiple conference rooms. Many times, they will ask the caterer to prepare food and beverage items for breaks and sometimes lunch.

Profits for additional services tend to be higher. A flexible team helps for these extra events.

Catering Demand Shift

2010-01-05T21:54:00.003-05:00

The economy has produced a number of similar patterns. Consumers have shifted from upscale to casual, from casual to fast casual, and from fast casual to quick service. Catering operations have seen similar shifts in demand.

Companies still book parties but the amount spent per guest has declined. It's important to offer value priced menu items which cover expenses and produce profits. The use of the same old multiplier may be a mistake for many operators.

Perhaps you multiplied your recipe costs by 4 in 2007. A $40 party would have a gross profit of $30. If your labor, extras, sales, and fixed cost amortization chewed up $22, you would realize a profit of $8 (20% of sales). Today, you may need to drop your bid to $30 per person to close the deal. Offering the same menu and service level for the much lower price would be dangerous.

An alternate menu should be used for guests in the $30 price range. This menu should be designed with less costly recipes which require less labor to produce and serve. If the multiplier was 5, your recipe costs would equal $6. This is a 40% drop from the upscale menu. Searching for the right menu mix will be a challenge. Generally, lower food costs mean higher production costs as the kitchen uses fewer convenience items.

You need to find menu items which can feed a party for $6 per guest and keep labor in check just to turn a $2 profit. Cut back on the cost of extras and keep sales costs in line with volume. You could make $4 per guest. This is a 50% reduction in profit.

The type of demand shifts which are present at almost every social level may persist for years. Watch your investments in plant, property, equipment and leasehold improvements. Preventive maintenance can help keep vehicle costs lower.

If your cost control was loose during the boom, the $10 cost of sales may have allowed for plenty of inefficiency. I can remember working with managers on recipe costs and many built in "safety factors" which tend to smooth results. For example, the menu may call for shrimp cocktail. If the portion size is 4 shrimp, many would use 4 portions per pound using 16/20 size shrimp. Assuming the supplier sold shrimp with an average yield of 18 pieces per pound, the true number of portions is 4.5 per pound.

These companies would be content using these erroneous measures since variances would normally be quite low. In the shrimp example, a thief could have stole 1 box of shrimp for every 10 without causing an alarm to sound. It may seem tough to serve a top quality meal for $6 but part of the answer is found in tight cost control.

If the patrons do not want to pay for prime, aged beef you should not offer the guests this level of quality. Prices have settled lower than the boom years due to less volatile commodity markets. Match the ingredient quality to the market prices you need to charge to compete.

Loyal guests who have used your company for years and do not intend to shop the event may also want to spend less. Sit down with them and explain clearly their options. You may find a middle ground price level (like $35 using the previous example) which meets their budget and still allows for the quality they have come to expect. One less piece of shrimp or a slightly smaller portion of beef or chicken can drop the recipe costs in line with the new reality.

Upbeat RAMW Holiday Party

2009-12-03T11:33:00.002-05:00

We all enjoyed the annual Holiday Party for the Restaurant Association of Metropolitan Washington held on Tuesday. This year, the party was hosted by Tony and Joe's and the food was fantastic!. The cocktail shrimp were fresh and huge with great flavor. They also offered oysters on the half shell with freshly grated horseradish. There was a terrific cheese display and a steamship roast of beef.

Everyone loved the shrimp and oysters and we were comparing different sauces for shellfish cocktails in my group. I stuck with beer and the selection was perfect for my tastes.

Although everyone expects this year to be slower than Q4 2007, most people feel the bottom is in and we will all do as well or better than Q4 2008.

It was great to see a big turnout and hopefully this is a good sign for special event caterers.

Major Adjustments Needed This Fall

2009-11-17T01:06:00.004-05:00

Last week I had dinner with a friend of mine who works for a catering company in New York. His company's sales are 25% below last year. Unfortunately, last year's sales were 25% below the previous year. So with their sales off 7/16, how do they manage to stay in business?

The catering business has a project orientation. Each event is a separate job with a unique budget. As long as a caterer makes a profit on each event, the business has a good chance of breaking even. Managing fixed costs is the key to survival.

Several caterers I work with have downsized their offices and production facilities. These are off-premise caterers. They don't need a large footprint. They need enough space and equipment to handle sales, purchasing, production and accounting functions.

The lower the overhead, the better chances of making a decent profit. If you know your costs and keep your fixed costs to a minimum, you will have an edge on many of your competitors. On-premise caterers have additional fixed costs since they provide a facility for their clients. These larger fixed costs need to be covered with additional profitable business.

If an on-premise caterer can cover their variable expenses, almost any event is worthy of consideration mid-week. Wedding caterers may need to expand into other segments during the week and consider Sunday Brunch.

Restaurant Catered Affairs

2009-11-09T15:55:00.003-05:00

Many restaurants have scrambled to increase their catering business. For many of these companies, a party simply requires an estimated guest count and a reserved table or room. The guests order off the menu and drinks are all charged by the drink. Rarely, the host may restrict their guests to specific entree choices. Usually, a printed menu is prepared with the limited choices specified with prices.

Some restaurants charge a set price per person for food but let the orders go through to the kitchen on the POS system. Often, these companies have separate PLU numbers to handle these orders. In this manner, the revenue is generated per person and the menu items selected are tracked to the specific party. These PLUs may be grouped to show party activity at-a-glance.

Restaurant operators using their facility for parties do not shut down their normal operation unless the group wants the entire space for the event. Occasionally, you will see an apology sign in the window letting guests know the restaurant is closed for the evening due to a party.

Generally, the manager adapts the service staff to the number of guests. The final count for the party is added to the base forecast. Since the guests often order off the base menu, the meal period is treated as normal with a higher covers forecast.

Extras like photographers, flowers, special invitations, etc. may be handled by the host or the restaurant. If the restaurant provides these services, they are usually added to the bill.

Caterers often have profit and loss statements with very low food costs. A 25% food cost is at the high end because they divide all revenue into their food cost. Beverage costs are treated similarly. Restaurants will show the traditional food and beverage cost numbers. Extras will be treated as other income.

While it is not always the case, caterers tend to use job costing principles and restaurants stick with periodic reports. Restaurants could increase catering profit by creating suggested packages. If guests were offered packages with higher gross margins, the positive impact of special events could increase.

Do It Yourself Special Events

2009-11-06T11:26:00.002-05:00

I have been invited to 4 parties this year hosted at a home. All four events used the services of a caterer. In every case, the customers picked up prepared menu items and setup the entire meal on their own. The caterers were careful to keep hot food separated from cold food.

Taking a critical view, I believe these companies had some additional opportunities which were not offered to their clients. A few parties lacked a proper table for presentation and all parties could have used extra chairs. I noticed people scrambling to see who was in charge of buying ice.

Beyond the simple additions, I thought champagne glasses could be rented or perhaps a high quality disposable flute sold to these parties.

I was involved with two of the pickups. We all praised the local Italian restaurant for dropping the aluminum serving pans into well insulated deep dish pizza boxes.

Most of the hosts would have gladly paid extra money to help them save time on the day of the event. Delivery service and setup could have been offered and additional revenue would have been the result.

A few salads would have been better if the dressings were provided in containers rather than applied to the greens and veggies. In every single case, the caterer lost an opportunity to provide a dessert course. I asked the hosts if the caterer provided desserts and most were never asked if they wanted desserts.

In general, these do it yourself special events could produce more dollars if the sales team takes a consultative approach. Rather than taking down the order verbatim, the person could be taken through each course and given the options. Most of the parties ended with lots of food leftover. This is a chance to sell some take home containers.

All the hosts seemed relieved to be freed from preparing food on the day of the party. One caterer gave the host a detailed set of instructions on oven temperature and number of minutes. They suggested how to time each course and the suggestions were terrific.

Playing It Safe?

2009-10-18T12:48:00.002-04:00

What happens in a large organization if everyone adds an extra 10% safety factor to their individual forecast? Let's use an example of an operation with a sales staff, a purchasing manager and a chef.

The sales manager needs to communicate the final guest count for each event several days before the meal service. The sales manager has a commitment for 90 plus guests and they give the kitchen a final count of 100. After receiving the count, the chef decides he does not want to run out of food and sets up production for 110 guests. Based on the production requirements, the chef asks the purchasing manager to order the perishable food. Our purchasing manager wants to be safe and orders 10% extra.

If 120 people show up for the event, the operation will exceed the budgeted profit. Unfortunately, actual counts frequently fall short of the early count. An operator could have 50% too much food if only 80 show up. Weather, a change in plans, emergencies, traffic jams, airport delays and other factors can cause a low actual count.

Even if you want a safety factor, make sure your safety factor is a combined 10%. Communicate with the entire team. Eventually, you may want to test a 5% safety factor. Depending on your market, the specific group of guests and season of the year, you may try a zero safety factor. Good forecasters know the cost of erring on the high side and on the low side.

If you receive a full payment based on the final count, should you always buy more food and produce more food to make sure you have enough for the event? The answer to this question is found in your garbage cans. Regardless of the guarantee, the cost of the wasted food impacts your profit.

Catering Books

2009-10-16T23:52:00.003-04:00

If you want to research catering oriented books in a hurry, pay a visit to Google Books and run a search on catering. You will find over 12,000 hits. Of course, you may want to be more specific. A search on "catering menu pricing" yields only one hit. Nancy Loman Scanlon's Catering Management is the only book listed.

The results offer specific page numbers and you may click through to see a complete summary for the book. Many books have sample pages, current prices on Amazon, Borders and Barnes & Noble and other useful data. If there are any available reviews, you can check what other readers said about the book.

If you're not purchasing the book and want to go to your library, there is a "Find in a library" selection. You can even click through to locate the library closest to you on a map.

If you click on the "All sellers" link, you will find a list on all online sellers for the book. I noticed Textbooks.com was very highly rated. They had a great price for Catering Management. The $42 was pretty close to the lowest - eBay.

Catering Gigs on craigslist.org

2009-10-06T16:04:00.005-04:00

I ran a Google search using 'craigslist catering' for the search string. The query returned over 500,000 hits. Many caterers are using craigslist for posting jobs, marketing, menu information, contact information, sale of business, ancillary services, self-catering and networking activities.

Noticing quite a few ads had $20 in the text, I added $20 to the search query. The search returned 239,000 hits. I then tried a list of different dollar amounts from $5 to 100. The search string with $100 actually returned more hits than the string with no mention of a dollar amount. The following table illustrates the various dollar amounts used with 'craigslist catering'.

Moving away from the Google search engine and into the current local craigslist postings, I found 89 in the services/event/catering and another 99 in jobs/food/bev/hosp/catering.

Lunch Buffets

2009-09-20T11:33:00.002-04:00

Many conference groups order breakfast buffets. Special event caterers frequently offer elaborate buffet presentations. With the economy on the mend and clients watching their wallets, a lunch buffet may meet the needs of several demographic groups.

I just returned from Las Vegas and I had some time to try out a lunch buffet at Sunset Station's Feast. Henderson, NV is a popular retirement area and the buffet crowd was treated to 1950's music. My neighbors at the next table were nice enough to answer my questions.

I asked how often they go out to eat each week. The entire table said they go out every day once. Regarding the lunch buffet, they volunteered it is their favorite. The lunch buffet has many healthier options. They prefer to go to the brunch on Sunday for omelets, bacon and sausage but they tend to limit eggs to once a week.

The buffet at Feast is $9.99 for lunch and Boarding Pass(Station's free member card)holders get a $2 discount. You get tremendous value for $7.99. There are stations for salad bar, Asian, Italian, Mexican, American and dessert bar. Beverage is included.

My neighbors prefer the lunch buffet to the dinner version. They said the dinner buffet has more roast beef, shrimp and salmon. I never tried the dinner buffet but I went by to check the demographics. The dining room was packed with families. There were lots of high chairs. The music was more contemporary.

If you are trying to book events at lunch time, a simple lunch buffet could attract the attention of a frugal audience looking for a healthy and light meal with great variety.

Tailgate Season

2009-09-13T17:47:00.004-04:00

The final Saturday in August is the peak of Saratoga Springs racing season. Thousands of customers descend on the track to see the Mid-Summer Derby - the Travers Stakes. After the races are over, the traffic is very heavy and many people stay in the parking lots and party. This is the reverse of the traditional football tailgate party which is before the game.

My friend manages a huge parking lot close to the clubhouse entrance and in the middle of the lot there is a large tent. As the crowd moves from the track to the lot, a local caterer pulls in with a van. They setup a set of 4 long tables with salads, cold cuts and rolls at the beginning table; entrees, pizza and vegetable dishes in the middle tables; and, desserts at the final table. Admission is free to loyal customers. Most people have coolers in their trunks and everyone shares.

I spoke with the caterer and he said they had 6 parties on Saturday and they had 4 on Friday night. August is his busiest month of the year with lots of parties each weekend. He also owns a year-round restaurant.

As we move into football season, tailgate parties will take place in many college towns and outside stadiums where the pros compete. Many groups prepare their own menu and share in the preparation. I'm sure there are also plenty of caterers who offer tailgate packages.

Caterers Take Advantage of Cheaper Leases

2009-09-03T18:16:00.003-04:00

I have two catering clients who decided to move their primarily off-premise operations from pricey locations to less expensive alternatives. One company was expanding their operation so this was not a defensive move. Should you look at a less expensive location for your off-premise operation?

A really good exercise is to sit down and create an action plan for replacing your production facility in the event of destruction due to a major weather event.

You will immediately think through insurance issues and other required coverage issues. Go beyond a rebuild strategy and really think about your true needs. Many operations expand into a given space. You may find a smaller space is easier and cheaper to maintain and clean.

If you just signed a lease last year, you can approach the landlord and ask for a lower rent. Many landlords are dropping rent numbers for 6 months or more to keep good tenants.

Bar Inventory Turnover Question

2009-08-11T10:18:00.002-04:00

Hi Joe,

I've been reading your blog for about a year now and it has really helped me a lot with my food purchasing. Unfortunately I've improved so much I was handed the liquor purchasing as we started the 2 busiest months of the year and what a mess the inventory was. We must have had over $2000 in wine inventory not represented on our wine list. In addition I found wines racked in 2 or 3 different areas in addition to being in dunnage, leading to over ordering as well as not ordering things we needed. Upstairs at the bar I found a similar situation. The bartender was complaining we had too many white wines and not enough cold storage, yet, I found 4 bottles or more of 5 types of wine in the coolers that were not on the wine list as well as wines occupying multiple slots. Now that I've managed to get the wine cellar and the bar organized and I'm working on training the bar tenders to work off of an inventory sheet I feel I'm finally getting things to a point I can start getting the inventory down to a resonable size. I've been getting 1.5-2 turns on my food in the slowest months and around 6-8 turns in the bussiest months (we are very seasonal, sales last Friday and Saturday combined beat the month of Febuary). Our liquor has been between .3 turns in the slowest months and 2 turns in the busiest months. I feel that should be closer to .6 and 3 turns. Some points to consider though are :

* We have approx. 130 wines on our list including half bottles and sparkling, I'd like to reduce that to around 100 for the off season.
* We have no rail liquors. Smirnoff is as low as we go with Tanqueray, Baquardi, Jack Daniels and Patron rounding out our pours.
* We don't have any tap beer. On a 350 cover night we might sell only 30 beers making impossible to justify the expense for a Tap system.

Also could you recommend any books or websites to help me understand this side of my purchasing.

Thank you for your time
Eric
Purchasing Manager

It's very common to have an out of control wine program. Many companies seek the status of a Wine Spectator award without doing a proper strategy to achieve this goal. You need to separate the popular wines your customers buy every day from the slow movers and legacy wines (purchased just to fit the award profile).

You'll find a really fantastic turnover in the popular bottles and a very poor turnover in the other bottles. Most wine cellars in restaurants and catering operations are simply not designed to age young wines in a controlled environment. There is a very real risk with wine turning to vinegar. Wine merchants sell wine meant for consumption now.

Avoid the draft beer game if you have mostly wine drinkers.

On the well pour issue, many bars use mid-range liquor for well drinks (Bacardi, Smirnoff, etc.). This is fine as long as your drink costs reflect the higher quality.

If you stay focused on wine, you'll go faster and get a major benefit through future purchasing control. Restrict wine purchases to popular wines. Identify your slow movers and offer these wines by the glass and in other promotions. Create a separate category for the slow movers and track this activity closely.

You should be willing to sell these wines at lower margins. They are a different class of inventory. Treat them as a perishable item. They surely will be garbage if they stay on the shelf another year. By selling these wines by the glass, you can taste the wine to insure it hasn't gone rancid.

Dinner For Two Question

2009-08-03T14:53:00.003-04:00

Good Morning, Mr. Dunbar,

I am very new to the catering business. I would like to know what to charge for a picnic for two where the hostess is purchasing the food items (except cake, icing & fruit) for dessert, and I am preparing and packing the food purchasing the items for the cake, icing and garnishments of fruit.

Is this simple or is it more involved?

Please advise.

T. D.

I would approach this request as follows:
1. Estimate your total labor cost with all burden included.
2. Estimate the costs of all food, beverage, supplies and disposables.
3. Estimate all other costs.
4. Determine the profit you wish to make for your efforts.

Add everything up and send the proposal.

Beef Roasts and Paper Routes

2009-08-02T11:39:00.002-04:00

If you have a policy of preparing an extra 10% to insure you have plenty of food, what do you do with the leftovers? Often, caterer's busiest days of the week are followed by their slowest days. Will you ever get value from the additional food you prepared?

I walk through lots of kitchens on my way to the office. The image of a leftover rib roast or tenderloin roast (more often the rib roast) is etched in my brain. These remnants are found in many kitchens. To add a bit more information, I am typically not found on a busy day. Usually, I'm in on a slow Monday (often the operation is closed).

Mathematically, the dilemma of the leftover roast is very similar to the classic paper route model. In the paper route model, the owner of the route buys papers at a discount to the retail price. Any leftover papers decline in value rapidly. Perhaps they may be sold for a slight loss on day 2. Beyond day 2, they may be sold in bulk to a recycling company.

The meat from the leftover roasts are often used in a "Poor Man's Special", a Prime Rib Sandwich or other next day favorites. After a few days, the remaining meat makes it to soups and stocks. If your beef soup is too meaty, you prepared too much roast.

Purchasing and preparing the correct quantity is a key to improved profitability.

Lines are Blurred Between Dining Out and Dining In

2009-07-15T13:46:00.000-04:00

The Recession has hit Main Street and one of the most interesting phenomena is the blurring of the lines between Dining Out and Dining In. It was not that long ago that local restaurants advertised "Home Cooking". Now it is quite common to read grocery ads lauding products that "Rival the Dining Out Experience". What a paradigm shift.

Where does this leave the local restaurant? I hope humbled because it is going to take a concerted effort to fight both the economic climate and the competition of the grocery stores which are offering more and more gourmet product. The good news is that the Dining Out experience is the more coveted experience, almost an American birth right at this point. In all the discussions of food costs and portion control in a down economy it is easy to forget what the Dining Out experience really has to offer - Hospitality.

The word has been so institutionalized that few people remember that the real goal of the Dining Out experience is . . . pleasure. Is anyone in your restaurant really tending to this aspect of the business? Are your guests warmly welcomed and provided a clean environment full of cheerful people? Is the service staff well groomed, attentive without being intrusive? Is the food fresh, attractive and presented with pride? I believe the down economy is an opportunity for serious soul searching and change.

One of the biggest areas of neglect has been training of service staff. If you accept that the biggest advantage to Dining Out is pleasure than the importance of your serving staff is paramount. Does your service staff go out of their way to tend to the wants and needs of the customers as if they are guests? Do they understand the menu and wine list if applicable? Do they spend their down time polishing the silverware and straightening the place settings to make the venue shine? How long has it been since you revamped uniforms and dress code?

First impressions are so so important. In this economic climate you can no longer presume that Guests entering your establishment have decided to Dine In. Browsing has become commonplace and customers are skittish about prices. An inviting entrance including clean windows and doors is crucial. Think old fashioned hospitality and make sure all guests are attended to upon arrival whether they have reservations or not. This means having comfortable seating and beverage service for your guests while they are waiting. Think about the ceremony of seating your guests - does it meet the criteria of a gracious welcome? Are your guests happy once served? Are the restrooms not just neat and clean but a pleasurable experience? If not then you have some adjustments to make or you will be losing customers to the new and improved Dining In experience.

--
Marilyn Chapman
Wedding Event Coordinator

Delectables Fine Catering, Inc.
"The Bay Area's Most Prestigious Caterer"
969 Virginia Avenue, Inc.
Palm Harbor, FL 34683

E-mail: info@delectablescatering.com

http://www.delectablescatering.com

Phone: 727-781-1200
Fax: 727-789-3401

Basic Recipe Costing - Part 3

2009-07-13T09:37:00.005-04:00

I started my consulting company in 1990 to help food service operators with financial troubles. Finding it difficult to get paid, I started looking for work with companies in better shape. I ran into a local consultant, Bob Kaiser, who said I should work with computers since I had a background in accounting and technology.

My first assignment was with one of Bob's clients. This company had two catering facilities and used Eatec software. The chef had zero success building recipes despite purchasing the The Professional Chef and the Food for Fifty (12th Edition) modules.

These add on modules were a huge time killer. I found myself gutting sophisticated recipes for chicken, beef and vegetable stocks and replacing the classic recipes with a package of soup base and a gallon of water. After hours of wasted time, I completely destroyed the chef's preliminary efforts and built the recipes from scratch.

I used the Professional Chef book's approach and started with Mise en Place and Stocks. Then I progressed to Soups and Sauces before starting work on entrees. After a week, I had all the major protein work done. The vegetables, starches, breakfast items, baked goods and desserts went much quicker.

During the project, my wife and I began to refer to this gig as "The $4,000 Mistake" since it consumed over 200 hours and 3 round trips (300 miles each trip) to finish.

The Food For Fifty book has a fantastic first chapter which is a must read for anyone trying this exercise for the first time. They focus on quantity food service and use the perspective of a caterer or institutional food service operator. Recipes all yield 50 portions. I took many of the chef's clippings from Bon Appetit and Gourmet and converted them to the 50 portion yield.

Before you start a project on a recipe costing program, you need to be very well organized. Create an outline. Take the most complex recipe and imagine you are building the database. You will find you need to stop work and create other sub-recipes first since you can't purchase many of the stocks, sauces, mixes and blends called for in the recipe. Each of these components requires a recipe.

These individual components called for by the complex recipes are the building blocks of a successful recipe model.

NYT Article Focuses on Butchers

2009-07-09T13:16:00.002-04:00

This week, the New York Times featured butchers in an article Young Idols With Cleavers Rule The Stage just when everyone thought butchering was a dying art. They interview young butchers from around the country working primarily in boutique butcher shops.

Basic Recipe Costing for Caterers - Step 2

2009-07-09T01:10:00.004-04:00

After you have your item list broken down into purchase units (e.g. case) and inventory units (e.g. #10 can), you can begin to visualize the production process. For each ingredient, make a list of units commonly called in recipes. This will vary depending on how many different recipes use each item.

Three common portion methods for recipe ingredients are weight, volume and count. Meat items are often portioned by weight and count. When portioning by the piece, you may have more than one portion size. A strip steak could be sold in two or three portion sizes. For each portion size, imagine the entire strip will be used. You need to answer a simple question. How many steaks would you expect if you only cut the one size from the strip? Repeat the exercise for each portion size.

Use the average weight for popular random weight items. Generally, each case will always have the same number of large cuts (ribs, strips, loins, etc.). The total case weight will vary. Huge weight variances from the average will impact the number of portions per piece. It helps to keep accurate records of the butchering and fabrication process.

Yields may change from week to week. If you expected a 80% yield for a particular cut and you actually hit a 70% figure, your costs would run higher by over 11%. The variance is due to the poor yield alone. Add a price variance and some spoilage and the gross margin will begin to disappear. Portion control steaks provide operators with a consistent yield - one portion. When deciding to purchase portion control meat, you need to consider the hidden costs. Look at the whole picture including labor, equipment, risk of injury, and poor yield in your comparison.

Items portioned by volume or weight are straight forward. It is helpful to know the common conversion units for each method. Volume is expressed in gallons, quarts, pints, cups, liters, fluid ounces, milliliters, shots, tablespoons, teaspoons and fractions of each. Weight may be expressed in pounds, ounces, kilograms, grams, etc. A #10 can has about 6 pints (96 fluid ounces) and often about 6 pounds. Check all weight to volume relationships.

When developing standards, you may find your specifications are different than some of the excellent books. If you trim your produce quickly, the yield will probably be lower than the expectation. One way to reduce the variance is to portion produce items by the piece. A 24 head case of iceberg lettuce will yield 144 wedges if sliced in six pieces per head. Cutting the heads into larger wedges of four per head would yield only 96 portions.

Think of this step as the recipe model equivalent of the prep process. Having accurate recipe costs depends on accurate unit and yield data. The recipe costing programs will re-cost your recipes over and over as prices change. Spend the time initially to get this critical information correct for your operation. Don't worry about benchmarks for portion size. Use your unique portion sizes in determining the conversions between inventory count units and the units called for in recipes.

Basic Recipe Costing for Caterers

2009-07-04T23:55:00.004-04:00

[This summer, I'd like to engage readers in a unique approach to recipe costing which does require laying some groundwork. Two posts from the Food Cost Control Blog will be posted here to cover the essentials. Once readers have a chance to discuss and comment, this blog will shift to banquet style recipes.]
You may have lots of cookbooks, proprietary recipes, books with food yield statistics, market data, shopping lists, inventory count sheets, supplier quotes, product mix reports, quarterly tracking reports and other documents. A professional recipe model should be designed to integrate all of this useful information. The person working on this project needs to wear many hats: purchasing agent, steward, prep cook, line cook, and chef.

Rather than using a cookbook approach, start with your shopping lists. Use your shopping lists to create a spreadsheet with all your ingredients. Make columns for the name, category, primary supplier, purchase unit, storage area and storage unit.

Since the unit you purchase is used on orders, this is our starting point. It's helpful to know your alternate sources for each ingredient. You may want to categorize each item by the storage method. For example, frozen, refrigerated, dry bulk, canned goods, frozen goods, baked goods, etc. Feel free to add these columns. Its impossible to get too much information for your ingredient list.

[We'll eventually need to know the usage units for each ingredient and portion information. This will be discussed in Part2 (later this month).]

Once the list begins to come together, envision the flow for each item from loading dock to the table. Most items are purchased by the case and are stored as purchased. Some items are immediately transformed into other items through fabrication. Visualize the process of moving from the purchased unit of measure to the storage unit of measure first.

You may simply remove six #10 cans from a case and place the cans in a rack. The purchase unit is case and the storage unit is a #10 can. Focus on the storage unit and the divisor (6 in our example). Breaking down every item you purchase into logical storage units is one of the most important steps in creating a professional recipe costing model.

Each #10 can is valued at 1/6 of the case cost. Don't worry about the actual cost of each can. Focus on the number of storage units in each purchase unit.

Our work will eventually involve many calculations using units of measure, various blends, yield formulas, conversions, reciprocals and standard portion data. The simple exercise of developing a purchase unit to storage unit model is the ideal starting point. Once you complete this exercise, future conversion work will be more intuitive.

38 Year Old Catering Business For Sale

2009-06-30T14:16:00.003-04:00

The Montgomery Advertiser reported on the closing of a catering business. Their article highlights the history of Personal Touch as they prepare to close on July 1st(tomorrow). The article ends with a phone number for potential buyers.

Catering Sales Triple

2009-06-30T14:12:00.002-04:00

I found a press release in Chain Leader about a Northern California restaurant chain. The release focuses on a tripling of catering sales at the chain.

Speculative Events

2009-06-14T18:26:00.003-04:00

In recent days, I've received three invitations to special events. These invitations were delivered in my email box. In one instance, the event was called off one day before the scheduled time. The same promoter has a new invitation this week.

I suppose their strategy involves filling a space which would otherwise go empty. Generally, I would agree with this strategy. Rather than trying to fill the time slot with a random group, they may want to offer a special offer to a charitable foundation. They could let the foundation use the space for a fund raiser. The foundation would receive a special rate and the caterer would receive free publicity.

Now the empty space will be filled with new prospects and the press.

The caterer who called off the event actually suffered from the attempt to fill a void. They used the same email service to cancel the event. Hundreds of people who had no intention of attending the event know the outcome. I mentioned the series of emails to several of my friends since we enjoy the ethnic cuisine offered by this caterer.

Putting people into seats with no bait just does not work for most caterers. Most months have special occasions including New Years Eve, Valentine's Day, Mother's Day, Columbus Day, etc. Special event caterers often take advantage of these dates. Avoid speculative events and develop a second special event each month for a charity or foundation. These highly visible events will help you succeed as the economy improves.

What Should Our Food Cost Be?

2009-06-08T00:55:00.002-04:00

In a suburb of New Haven, CT, I was asked to help an event caterer organize accounting for receivables and payables. During our discussions, he decided to expand the scope of the project to include inventories and cost of goods sold.

Since I needed to gain a knowledge of his operation, I asked what his food cost percentage was the previous month. He said without hesitation: "Our food cost is phenomenal! We run a consistent 22%." I asked if he divided his revenue into components. He said he did not. Just to complete the basics, I asked for the recent beverage cost. I was told: "We shoot for a 10% beverage cost but it can vary depending on cash bars and open bars in any given month."

It was apparent they needed help analyzing alcoholic beverage service.

At this point, I felt it necessary to ask point blank how costs were computed. Event catering is very different from a la carte restaurant service. It is completely false to shoot for a restaurant style benchmark.

After two hours of sifting through financials, it was clear the operation was out of control on both food and beverage. The chef was reporting food cost as a percentage of the entire catering package. The pricing for a package typically covered food, beverage, entertainment, flowers, photographer (optional), limo service (optional) and prime location rental (optional).

Adding together the 22% and 10% to get a F&B total of 32% was my first attempt to get the staff focused on how 22% might possibly be a high number. I explained a restaurant would never divide food cost by the combined food and beverage sales. They then realized the 22% might not be as great as they had imagined. The reply was: "So we're good; not great."

They asked: "What should our food cost be?" I said about $5 per person for most events.

I mentioned my catering background. My remote site feeding background focused on cost per manday. One person in camp per day would be entitled to housekeeping services, food and beverages. We kept all financial data in categories and divided each category's cost by the number of mandays in the period.

We decided to rework the cost of goods sold data. The rework provided a method for tracking costs by event category. Once they had a clearer picture, the food cost swings were more apparent. Eventually, they had a system of control which allowed separate reporting for open bar events and cash bar events.

A second benefit emerged from the project. Precise pricing for clients was possible. Depending on menu mix and selection of entertainment and service options, a quote was provided with a minimum count and a price per attendee.

Their final menu included three layouts on a fixed price basis. Gold, Platinum and Diamond service food choices were offered at three price levels. Regardless of menu choice, clients could choose from the full list of auxiliary services with a per person charge for each.

Once the operation realized their food cost results were not phenomenal, they began to track costs and profits increased.

[Originally posted on the Food Cost Control Blog on March 22, 2006.]

Requisitions and Transfers From Central Inventory

2009-06-03T19:21:00.001-04:00

Many hotels use a control system for requisitioning food, beverages, and supplies from a central inventory. The steward may be responsible for both purchasing and stock control. Some operations split these responsibilities, depending on volume, and use more than one person. There is a tendency to overkill this valuable control tool.

The manufacturing approach to inventory control offers a great comparison to the hospitality industry. It is common for manufacturers to classify stock items as A, B, or C items. The A items are high-volume, big-impact items that make up 70 to 80% of purchasing volume. Most B items are lower volume items that tend to have a high cost per unit. The C group is typically the low-volume, low-impact, lower-cost-per-unit items.

I find that too much time is spent controlling the C items in our hospitality industry. Many operations spend the same energy documenting these minor items as they do with a case of lobster tails. Since time is money, the time spent documenting transfers of toothpicks, ground nutmeg, and other similar items is rarely justified by the benefit. If possible, a small open storage area could be setup to handle many of these low-impact inventory components.

On inventory day, the frozen lobster tails may be off by 2 cases. If the control team is lost in a jungle of too many transfer sheets with too many entries, the time needed to solve the shortage may not be spent. Hotels often stock more than 2,000 unique food, beverage and supply items. I urge you to try the manufacturer’s approach and focus on the A items.

Banquet caterers can use this same method to cost events. Use the pull sheets for A items (possibly B items) and use an estimate for C items.

Article on Hotel F&B Executive Blog

2009-05-28T16:14:00.003-04:00

While reading a blog post by Geoffrey Sagrans over on the Hotel Food and Beverage Executive Blog , I thought about the many buffets presented by caterers. Geoffrey discusses his experience observing guests on a cruise ship. Specifically, he writes about cruise ship buffets and the huge volumes of food his fellow travelers put on their plates.

He asks whether people on a buffet line are more concerned with the quantity or quality of food. I know from experience my friends and family like to go out for brunch. They go light at dinner the day before and intend to make the brunch a two meal event.

I'm not sure we load up to the extent Geoffrey mentions in an example:

"...two pounds of salad, a loaf of bread with a pound of butter, a pound of potatoes, two pounds of meat and some greens..."

However, it is a foregone conclusion the calorie count will be high. Brunch layouts with smoked salmon hit our radar scope so there is a quality component. Most of our group like the customized omelette option. It seems everyone grabs extra bacon and sausage. Most get a fresh plate for the salad course and almost everyone gets dessert.

Do your customers prefer quantity over quality? When offering expensive meat and seafood items, do you have servers portioning the food?

Special Event Season

2009-05-14T10:41:00.003-04:00

With graduations, weddings, Mother's Day, Father's Day, Cinco de Mayo, Memorial Day, Fourth of July, Proms, and other everyday celebrations, I hope everyone is busy right now. Try not to continually compare 2009 to record years of the past. Pick a year during a previous recession to get your compass reading for the road ahead.

Many companies are using inflated sales years to make strategic decisions. Try not to use your best year ever as the base for a five year plan. If you are paying the bills and putting a little away right now, you may want to use the downturn to take aim on your competition.

Adding extras is a simple way to demonstrate value to your guests in the busy season. Rather than skimping on service and quality to squeeze extra profits, invest in the future. This season's guests can all become super loyal.

Let's imagine a day at the local pool this summer. One parent is lamenting about the shabby service at his daughter's wedding reception. Across the table, his friend is telling him about the great job your company did catering his daughter's graduation party. The conversation will be lead by the guy who was hosed. He'll tell everyone about his disappointment. Our happy camper will add a little spice to the conversation recalling the little extras you gave his guests in service and surprise menu items.

If other tables in the pool area over hear the conversation, you could be mentioned over and over all summer long. Your short sighted competitor will never know what hit their company.

Value-Added Catering Options

2009-05-05T14:14:00.004-04:00

Most caterers offer their guests profitable options. I performed a two year study of a caterer in Montreal. In this period, I attended 2 weddings, 2 New Year's Eve parties, and 2 Valentine's Day parties. The caterer and his chef were native Italians from Naples.

The menu at every event included Tortellini in Brodo, Spinach Ravioli and Eggplant Rollatini appetizers, a small pasta course, an entree selection, salad and coffee. Dessert varied based on the event. We were served wedding cake at the weddings with coffee. Both New Year's Eve parties included a pastry and fruit buffet with aged cheeses. After midnight, there was an additional Lobster Station with half lobster (each guest was given a ticket for the half lobster) and shrimp (self-service). Valentine's Day dessert course was a chocolate cake served by the wait staff.

Every party included a live band. There was always an open bar before the meal. Wine and beer were served with the meal. All parties included champagne.

The cost per couple at the New Year's Eve party was double the charge for Valentine's Day. My friend let me know the charge per adult for the weddings. Pricing was similar to the New Year's Eve bash.

From a cost/benefit perspective, the New Year's Eve and wedding parties lasted 90 minutes longer. The band played equal time at all events. A DJ offered dancing music at the longer events after the band left.

Comparing food served at the two events, I chose the excellent Fillet Mignon at each party and I received the exact same portion size. The value-added involved the dessert buffet station and the lobster station. The Valentine's party had no lobster and just a slice of chocolate cake.

The caterer clearly earned a bigger profit on the two more ambitious events. Despite the higher charge, most guests thought the New Year's Eve gala was a tremendous value. They pointed out the local competition didn't offer the lobster station. Even though regulars paid twice as much for the ticket (vs. Valentine's Day), they felt the price represented good value.

Buffet Scorecard

2009-04-24T14:55:00.003-04:00

Every event brings a unique group of guests to your operation. Many groups prefer buffet service. In an earlier post, I highlighted Buffet Production Decisions with a focus on preparation. The next stage of buffet cost control involves monitoring the event. For this purpose, I prefer a simple scorecard.

You may add a few variations on this theme but the basic approach is to list all the menu item components in the left hand column. These menu items should be listed by category in either alphabetic order or in the layout sequence order (the order of the actual buffet presentation). If you use stations, the list should mention the station with every component. Once you have the items on the scorecard, record the service unit in the next column (e.g. pan, half pan, tureen, bowl, platter, etc.). In the next column, you will record the production estimate. Write down the number of units for the production forecast.

The kitchen will then prepare the menu items using standard recipes. Once the menu items are prepared, go ahead and check the amount produced against the forecast. Make a notes column and record any production issues. Try to quantify each issue.

Once the event begins, monitor the movement of food from the kitchen to the ballroom or salon. Record the initial setup (typically 1 unit for each item) in the next column. Finally, monitor the movement of pans, platters, etc. during the event. Anytime an item is replenished, record the additional units.

At the end of the event, inventory the leftover food on the service line. Then go out to the kitchen and record the leftover food in the kitchen.

Many caterers produce using a big safety cushion. I have noticed overproduction of many menu items. If you review these buffet scorecards after each event, you will start to see trends in the disparity between production and guest consumption.

You may want to note huge variances and discuss these findings with the forecast team. Tracking overproduction will provide you with excellent data for future forecasts.

Culinary Twitter Tour - Part 3

2009-04-13T14:07:00.002-04:00

I'm wrapping up the tour with a study of a local caterer in Austin, TX. Renee's Catering recently started using Twitter to update locals on their wedding capability. The Twitter updates include recipes, link's to other resources, local news, and online sites of interest. Most of the caterers I found on Twitter have a relatively small list of followers.

Renee's Catering follows Catering Results , a site used to promote their $37 book. From my brief check, it appears the Renee's team has followed the social media advice from the site:

As a caterer, you want to join this conversation on two playing fields: Locally and Nationally. Locally, you want to use social media to spread the word about you and your catering company. Nationally, you want to know what other caterers are doing. On both accounts, you can use social media to find out exactly what your clients are looking for in a catering service. You can do this by easily inserting yourself into the online conversation. An important thing to remember is online, everybody is fair game—you can learn and communicate all at the same time—social media creates and open door policy of learning. As a caterer there are great things you can do in the realm of social media. Facebook, Twitter, Blogs, Online Communities, and even YouTube are social media tools that you can use to market your business.

The followers of Renee's tweets are mostly local folks from Austin. They follow a short list of national resource sites including TweetMyWedding, WeddingChannel, Weddwebsite and Catering Results.

In general, most of the caterers who can be found following the resource sites have a limited number of followers. This is in keeping with the strategy of spreading the news locally. A caterer in Ithaca, NY had some followers from out of state. However, I dug further and found they were outdoor enthusiasts drawn to the spectacular water falls and gorges in the Finger Lakes area.

There is a limit for your message on Twitter. Their About Twitter page states: "Answers must be under 140 characters in length and can be sent via mobile texting, instant message, or the web." The short length is not a huge limitation. Many developers have created apps to help Twitter fans push longer messages via short URLs. Photos may be uploaded to TwitPic, blog feeds may be converted into tweets on Twitterfeed.

Everyone wants to make sure they do not invest significant time on any of the online tools with little return. Will Twitter still be hot next year? Clearly, the early adopters have been joined by the first main stream wave. For the catering pros, the site is still fresh.

Culinary Twitter Tour - Part 2

2009-04-11T22:54:00.003-04:00

My mailbox has been absolutely deluged with emails from Twitter followers. I finally turned off the notifications. One of the links I clicked took me to a great website for Greek food. Kalofagas celebrates Greek food and culture. Peter Minakis is a Canadian. I love the Greek restaurants in Montreal and Peter has plenty of Montreal information. He lives in Toronto.

Could a caterer use Twitter to update loyal clients and others on new menus and special offers? You are allowed to follow 2,000 Twitter accounts before the system makes it difficult to follow others. With about 4 hours of effort on Twitter, I now follow 2,000 people and 800 follow my updates. I was able to automatically feed updates from my two blogs and a social network.

Twitterfeed is a free service. You are allowed to setup RSS feeds from your blog or website. Twitterfeed pushes these updates to Twitter. Your followers will receive the tweets with tinyurl links.

Twitter is incredibly open at this time. Just about anything goes and people genuinely want to have more followers. A message which would be considered SPAM on email may be safely spread through a simple tweet.

Culinary Twitter Tour - Part 1

2009-04-01T22:09:00.005-04:00

This week I tried to research use of Twitter, Facebook and Skype. I have been attending webinars put on by the folks at Classroom 2.0. In the Classroom 2.0 archives, there is a webinar on using Skype for conference calls. I went looking for signs of culinary life on Skype.

Although I only found actual hotel reservation numbers, I'm sure many international culinary pros are using Skype. Facebook has plenty of food service pros onboard. Very few list their Skype numbers. I'm still looking for a directory.

There are thousands of people in the industry who have discovered Twitter. I went on three nights and started following about 1,000 people. Already 300 have returned the favor and are now following me. There are people on Twitter with over 4,000 people they follow and who follow them right back. Many of the tweets now have a business angle. You can link your blog posts to your updates (like a Twitter RSS feed). Other services help you send a stream of updates automatically to Twitter.

The International School Of Hospitality (TISOH) just sent me a notice they are following me. I immediately clicked through and found a link to an excellent post regarding use of social networks for caterers: 8 Rules For Using Social Media In Events. Lara McCulloch-Carter is the author. Her post is on her "ready to spark" blog. The blog has plenty of great information and tips for event caterers.

Adapt to Customer Needs

2009-03-14T14:22:00.002-04:00

I like to surf the web looking for information on branding and sales strategies. One word which tends to come up on catering sites is adapt. Do successful caterers adapt to their clientele or do they let their clientele adapt to their model?

In their Here Comes The Guide service page, Wolfgang Puck Catering highlights their ability to adapt to dietary needs of their clients:

The excellence begins with their philosophy, which is to insist on the most wholesome ingredients. The quality of their food is unparalleled, and they offer organic catering options, which are key in today’s green market. “We can adapt to a variety of dietary needs and traditions including kosher, vegan, and gluten-free,” explains Catering Sales Manager Meredith Oritt. “Preparation is always à la minute, meaning everything is cooked to order on site to ensure the very freshest up to the minute presentation.”

They use their concern for dietary issues to showcase their use of wholesome ingredients and their focus on freshness.

The homepage at Cuomo Catering stresses their ability to adapt to unique needs in developing custom menus:

As a full service caterer, Cuomo Catering provides complete event management, from menu and theme development to event coordination and detailed execution. We appreciate the unique needs of each of our clients and adapt our knowledge and experience into translating each of these requirements into one readable menu format to satisfy every request. Our professional Culinary and Executive Event Management team will create custom menus and event services for virtually any budget and event service options offering you and your guests a very enjoyable and memorable experience.

The phrase "virtually any budget" reflects their sensitivity to the current economy. This paragraph highlights their flexibility using the words unique, adapt, satisfy, custom and options to reflect their client focus.

In a Special Events article, caterer David Casteel rejects a complacent attitude:

But just because you've enjoyed years of success doesn't mean you can afford to be complacent. Indeed, Casteel and company founder Craig Mitchell credit their success to their ability to adapt effectively to an ever-changing business climate.

Casteel credits success to the ability to adapt to economic conditions.

Finally, the folks at Spice of Life Catering adapt their recipes for vegetarian and allergy options.

The catering menus listed are only a small sample of what we are capable of. Phone us or fill out our inquiry form and we will work with you to customize a menu that suits your need. From Party Trays to a Buffet for 500 we can do it all. Whether it is a vegetarian option that is required or an allergy to be avoided we can accommodate and adapt our recipes to satisfy every customer. We would be more than happy to discuss your plans and offer suggestions, then, relax and let us handle the work.

The central theme of adaptation is used to show concern and a proactive approach to the budgets and dietary concerns of the guest.

Time To Go Long On Beef?

2009-03-13T11:48:00.003-04:00

We're about 7 weeks away from the start of wedding season. The summer grilling season will begin in 9 weeks. Should you lock in today's beef prices? If your meat supplier allows you to lock in a price for the next quarter, you may want to take a good look at the offer.

Both prime and choice steak cuts are far below prices from one year ago. The 1X1 prime strips are down over 44%! This drop is from $10.06 per pound to $5.60. Drops in energy and grain prices, lower demand for beef during Lent, and the ongoing recession have brought beef to these levels.

Veal racks are way lower as well. This item is one third lower than last year. Tenderloin and short loin offer tremendous savings as well.

The market could go lower if unemployment continues to increase at the current pace. If you have freezer space you could slowly fill your freezers with steaks over the next month.

Choosing a Caterer

2009-03-10T21:00:00.005-04:00

In the contract feeding industry, we had to take a contract menu and cost it properly. The goal was to win the competitive bid and still have an achievable budget target. Caterers do this every order. Most prospects take a look at several caterers before making a decision. The winning bid requires a great knowledge of the prospect, the market and the cost of the menu items.

The number of competitors is the most important piece of information in the bid process. You will have a better chance of success if the prospect lets you know if they are shopping and the names of the competitors. We had this information since all bidders attend a meeting to clarify the specs. The composition of the competition will give you an insight into the prospect's top priorities.

Some prospects are interested in the lowest price. Period. They have no other criteria other than price. You may assume you meet the minimum quality requirements and take your best shot on price.

Most prospects look at many factors other than price. In the current environment, cost is always a key factor but you'll want to figure out the other factors in the decision process. You know your positives and negatives. Do everything possible to accentuate the positive and turn your negatives into neutrals.

If you specialize in a popular ethnic cuisine, turn your proposal into a travel agent style presentation. Show the prospect how your company's unique skills will help the guests feel like they have traveled to a distant culture. Highlight both your culinary prowess and your creativity.

Our top chefs were trained in European hotels. We always featured their fantastic holiday displays, bakery expertise and their ability to meet any request. Even though the contract menu was standard fare, we showed off our talent by describing our approach to the monthly "monotony breakers" (special menus designed to lift morale at our construction sites). We focused on these special theme nights and put the spotlight on our top flight culinary pros.

Even though the economy is still weak, people shopping for a first class catered affair want to feel special. Show your prospects your special abilities while letting them know you are watching the price. If you convince them your company is uniquely qualified to meet their needs, the price won't be the deciding factor.

Excellent Catering Blog

2009-03-07T20:34:00.002-05:00

Take a look at the Ajua Maya Blog which blends reviews, local tourist information, and a record of successful events in a blog format. They mix Mayan arts, culinary education, views of paradise with a subtle sales pitch.

Build Profit Into Your Budget Packages

2009-02-15T15:19:00.002-05:00

As the economy continues to cool, caterers have one advantage over other food service segments. The main advantage for caterers is the ability to tightly forecast demand. Most events are booked months in advance. This information helps to plan for food and beverage purchases, production, staffing and financial requirements.

We have seen the trend toward more modest menu choices and beverage selections. As you offer your guests a better price, make sure you maintain the proper level of coverage for fixed expenses and profit. My recommendation for menu pricing involves a base package with a modest menu marked up to produce the same profit as a more ambitious menu. If you know your guest count for the year and divide this number into your total fixed expenses and profit target, you will find the correct mark up figure to add to your costs.

You should be indifferent regarding the menu choices made for each event. Since you will produce the same profit for every package, your primary concern is guest counts.

This method implies a higher profit % for the base menu and a lower profit % for the upscale menu. You are implicitly betting on more people choosing the budget package. Regardless of the main package decision, you will always want to offer profitable options.

Cost Control For Open Bars

2009-02-07T16:07:00.002-05:00

Many caterers offer an open bar option. This is the beverage equivalent of a buffet. The caterer offers beer, wine and liquor for a specific period of time in many events. Less often the bar is open for the entire party.

How do you properly charge for an open bar arrangement given the variety of options available? It helps to know your target group. Do they enjoy red wine, domestic draft beer, imported bottle beers, mixed drinks, etc.? You can more accurately quote a price if you know the preferences for a specific group.

Since many operators stock a complete bar, they have a good supply of all popular liquor bottles and domestic beers. Depending on the nature of the event and the menu items, your sales team may want to suggest specific wine choices.

In our monthly association meetings, the bar is open early and then we sit down for a meal. Everyone knows wine will be served with the meal. Most people drink two drinks at the cocktail hour and take the second drink to their seats. They switch to wine during the meal and have one or two glasses. The average consumption is one bottle of beer, one half vodka mixed drink and two glasses of wine per person. Our events go for about 3 hours.

The caterer for these events could project costs accurately once a final attendance count is known. The bar never comes with every possible liquor. Most caterers make up service bar setups (often in plastic milk crates). It helps to measure the liquor levels before and after each event to get an accurate usage figure. A count of beer and wine bottles consumed completes the picture. You need to cost out each event and note the number of guests and the specific bar package agreed to for the party. By keeping accurate records, you will begin to confidently price open bars.

Shifting consumption from the bar service to the meal service and offering coffee at the appropriate time will help you manage the overall alcohol consumption.

Recession Catering Packages

2009-01-19T20:20:00.006-05:00

I love your discussion on Dollars vs. Percentages but I am wondering how this will work in the Recessionary Economy when we are looking at few events with smaller guest counts? The budgets for Special Events have taken a nose dive. I am trying to resolve how to keep a dollar amount profit per guest with lower cost menus. At the same time I do not think we can presume to have the name number of events or guestcounts in 2009. I believe we could project a 20% drop in overall business and we are a strong company with many presold events on the books.

I keep returning to downsizing portion size. The food industry has already taken this path in food packaging and I believe the consumers have accepted the concept. I also think that we will have to radically revamp our menus to include attractive items with lower food costs to meet profit goals. Bye Bye to Beef and Seafood entrees which could be used cleverly as garnishes in the future. We may also have to design additional menus with the intent of decreasing the labor required to service the event allowing a higher percentage of the total cost going to food and beverages. I am even looking at edible options to replace plates. I think that I can use your model during the Recession but only if we act to change our menus without raising prices. Thanks for the Food for Thought. Marilyn Chapman

I love your input Marilyn because I think the industry hasn't caught on to the difference between special events to impress and special events for life's big moments. Know thy guest! You will prosper. Chicken Breast is the new standard. Charge extra for Chateaubriand, Stone Crabs, Conch Fritters, Shrimp Remoulade, etc.

Overall, you use the 20% lower guest count (last year times 80%) to spread your overhead and profit. Review your finances and decide who and what make up your fixed expenses. Try to make everything variable. Anything you can't tie to a guest count is fixed costs. Add your profit to all your fixed expenses. Divide the total by your guest count (i.e. last years guest count times 80%). Make sure you know all your variable costs to the penny and charge guests for the variable costs plus the number to cover your fixed costs plus your profit target.

Make sure you know the additional cost for each and every upgrade. Offer package upgrades when you feel the guest really wants to go with your company and they are willing to pay a little extra.

Dollars vs. Percentages

2009-01-14T14:33:00.003-05:00

If you have decided to offer your special event parties a budget package, how do you continue to meet fiscal targets with a lower average sales per guest?

If you expect to serve the same number of guests as last year, you simply need to divide the annual profit by the number of total guests. Build this profit per guest into your price structure. This may create a new view for fans of percentage analysis. While you may target a specific profit margin %, this percentage may not put enough dollars in the bank.

Use the dollars per guest to handle any expenses you typically analyze by the % method. Flowers, bands, photographers, limousine services, special decorations, etc. may all be calculated per guest rather than as a % of sales.

If you pass along the fixed costs in a room rental fee, try to keep the same rental fee. You need to cover your fixed costs regardless of the menu class.

Service labor needs to be adjusted. If you have a targeted number of guests per server, you will need to adjust the standard for events using the budget menu. A formula can help determine the new number of guests per server. Divide last year's average sale price per guest by the budget selling price. Multiply the result by the old guests per server standard.

Your goal is to provide for all expenses (including the lower cost menu) and maintain your profit total (in dollars). You will find some expenses offer a challenge using this method. You will need to know your costs very well to implement the strategy. As you gain an improved knowledge of your cost structure, your overall profitability will improve. I find people shocked by the cost of many banquet and buffet items as they cost these items for the first time. Percentage analysis hides many problems. The dollar per guest analysis will help you uncover lost profit.

Banquet Production Decisions

2009-01-11T14:47:00.005-05:00

We have received many reader questions about food cost % in a banquet operation. The focus seems to be on benchmarks and peer comparisons. My work takes me to operations with fantastic event management tools. Most of these operations take a banquet event order (BEO) and distribute the order to the various departments. The kitchen gets a copy of the BEO with specific menu details.

If you take the time to develop a recipe costing and scaling model, it is much easier to answer food cost questions. Management can focus on specific production issues and the most important is a production forecast. There are many factors to take into consideration. What is the contracted guest count? Do we expect fewer guests or more guests than the contracted count? Given the best intelligence, do we expect the particular group to consume more or less than our standard usage? What items will be prepared for the Chef's Choice items? What is our safety factor?

I prefer to focus on the first and last questions. The contracted guest count and the production safety factor will have the greatest impact on the total food cost for the event. While many choose to forecast production for 100% of the contracted guest count with a 10% safety factor, there is no law which requires this approach. For the purpose of analysis, let's take this approach as the industry standard. For the answer to the "What should our food cost % be for our operation?" question, we can use the 100/10 approach.

Once we have the model calculate our purchasing requirements for this standard, we can tweak the numbers to gain an advantage. I realize no one wants to run out of food during a special event. Do not take a radical production cut from your current model. If you use the 10% safety factor now, try moving to 9% for a couple of months. When you are comfortable with 9%, take it down to 8%. Eventually, many of you will find a safety factor between 5% and 7% is optimal for your company. The move from a safety factor of 10% to 5% could put an extra 1% to 1.5% profit in the bank.

Adjusting your forecast for both the safety factor and the contracted vs. actual guest count simultaneously is complex. Stick with the safety factor adjustments at first. If you are very certain a specific party will likely be far above or below the contracted count, go ahead and use your educated guess for purposes of production forecasts. Use a safety factor 1% higher than your current number for these events. For example, if you expect the count to be 90% of contracted and you use a 8% safety factor, the production adjustment factor will be 97.2%. Take your contract count and multiply by 97.2% to get your guest forecast.

Don't build excess into your recipes. The standard recipes should not be used to adjust for guest count fluctuations. Use your standard recipes to allow accurate scaling for a specific number of guests. The guest count adjustments should be a separate calculation agreed to by the entire management team. If you build safety factors into guest counts, recipe requirements, raw ingredient yields, etc., it is very possible to over produce by as much as 25%. In many catering operations, there is no way to make use of this over production.

Finally, let the Chef choose the Chef's Choice items. Rely on your professionals in the kitchen to find seasonal ingredients and menu items to prepare with these ingredients. You may want to adjust the entire model to adapt to a very popular seasonal menu item. Corn on the cob or autumn pies may attract greater consumption than the standard, year round menu items. This is a gut check adjustment. Take your best shot and study the actual results to improve your visceral accuracy.

Many of you already employ many of these ideas. Hopefully, this focus will help you develop a framework for the future. Many great ideas get shot down in meetings due to normal discussion noise. If you use a straight forward forecasting model, your accuracy will improve.

Reader Question - Catering Cost Targets

2009-01-07T23:40:00.003-05:00

Joe,
I have enjoyed your blog as an owner of a large catering company.
The past 6 months I have had a new chef. He is doing a good job with food quality and reducing the numbers in the kitchen. I want to make sure I am inline.

I would like to run my kitchen at no more then 40% total cost for food and labor. (Sales includes beverages)

He uses a lot more labor than the previous chef. I (as an owner) am primarily concerned with the total kitchen cost.

If he runs 20% food and beverage and 20% labor fine. Or less labor and more food either way.

This includes his salary which is higher then I have ever paid. He writes his own schedule and orders his own food. However, the area of kitchen organization and cleaning is left to last(or nothing if there is no more hours). I have a problem with this.

Please share your thoughts.

We did $2M in food/beverage last year and another $1M in rentals and labor. What should my kitchen guidelines be?

My preference is to use costs per guest for each menu option, beverage option, special dessert option, extras like flowers, band, photographer, etc. You need a kitchen labor and a service labor (including the bartender) figure per guest. Make sure to include a profit figure per guest. Track the costs by event and make sure you are hitting the budget on all the component costs.

You can use staffing charts to determine the labor costs per guest. Regarding food cost control, you need to know your costs for every menu including all stations, upgrade options, and dessert choices.

By hitting your cost targets, you will automatically hit your profit targets.

Let's address your concerns:
1. The current chef uses significantly more labor than his predecessor.
2. You are paying a higher salary for the chef.
3. Despite the greater labor and salary expense, the time required for proper kitchen organization and cleaning is insufficient.

If the current chef can hit a lower food cost than his predecessor through the efforts of the better paid staff, you are happy. Make sure the chef knows the overall cost targets. Work directly to develop labor and food cost figures on a per guest basis. Its important to insist on proper cleaning in the labor figure.

I realize you want some sort of benchmark for catering and I believe you should attack this goal first. Divide your annual profit target by the expected number of guests. Build the result into every party on a per guest basis. If you charge for your costs plus a decent profit, you will meet your goals.

I have seen two chefs work the same menus for the same caterer with tremendous variance in food cost. Chef A used 40% more food than Chef B. Using your % method, I'm describing a real life situation where one person hit 30% and his successor hit less than 22%. People ask how this is possible. Catering is all about tight ordering and tight portion control. If the chef buys food using a 20% safety factor and has a major fear of running out of anything during an event, they won't hit the cost targets. The cost of many key items like filet mignon and shellfish can vary by wide margins based on specifications. Quality is a huge issue.

By establishing clear cost targets per guest (vs. a % method) you will achieve a better % result.

Customizing Buffets for Budgeted Catered Events Based on Unit Costs

2008-12-15T14:04:00.004-05:00

Thanks to Marilyn Chapman for her valuable insight from the front line:

In the current economic climate the Sale of the Catered Event is often determined by price point. It is crucial to know your unit costs for all Buffet items in order to customize the meal to meet the client's budget. This implies that the Salesperson knows the costs and has the expertise to design a menu. This requires the ability to recognize which items can be down sized in quantity without significantly impacting both the presentation and reputation of the company which depends on the success of the event, not just the Sale.

Extensive experience both back and front of the house will give the Salesperson the experience to do this. I have learned to describe all our regular menus as "Lavish meals" which is accurate as they include Hors D' Oeuvres, a full Buffet, Dessert and Coffee. We insist that all Buffets include a Salad, at least 2 Entrees, a Starch, Vegetables, and Breads. Most menus include Coffee and Dessert but I will eliminate them if the client wants to provide their own at a savings.

I can also adjust quantities for Stationary Hors D' Oeuvres such as Cheese Presentations, Fruit Presentations, and Crudite to a portion of the guest count depending upon the time allotted for the Cocktail Hour and the number of items. If a third entree is added them we can decrease the portion of each entree without increasing the price by very much.

I also frequently sell an extra starch which is usually a Pasta dish as a substitute for a 3rd Entree at a significant savings for the client. It "feels" like a 3rd entree as Pasta is very popular. I present this option as a "Vegetarian Entree" and it is very well received. The bottom line is the Client's needs are met both financially and emotionally as they can feel good about the menu on their budget. We expect Sales to remain steady but events to down size with lighter menus and fewer guests. Our ability to customize based on unit costs will keep us competitive.

Marilyn Chapman
www.delectablescatering.com

Essential Buffet Cost Control

2008-12-15T00:20:00.002-05:00

Most buffets involve several "stations" with either a specific course, ethnic theme or both. It is very helpful to know the cost of one serving unit (pan, platter, tray, etc.) for each buffet component. Once you know the cost of each component's serving unit, you can calculate the cost of the entire buffet layout.

Some menu items will be far more popular than others. If you track the flow of replenishment trays and pans during the meal service, you will be able to calculate the entire buffet cost. The total of the opening layout plus all the replenishment activity is your buffet food cost. Many people calculate the total cost by keeping track of all food pulled from storage to produce a buffet. In theory, the two methods should produce the exact same number.

Why take the time to cost each buffet component? Why not rely on accurate pull sheets to cost the buffet? The answer to both questions is superior information. Tracking the cost of each component, we can design more profitable buffet layouts. In addition, it is possible to estimate the cost of repeat events with pinpoint accuracy. Each group of guests has their own menu preferences. By keeping a history of buffet layouts and replenishment trays, pans, platters, etc. for each event, you will have a huge advantage when pricing future buffets.

The same recipes used to cost each component may also be used to prepare order guides. There are excellent tools available for turning a menu plan into a purchase requirements report. You can save a tremendous amount of time and improve forecasting accuracy using the more sophisticated approach.

Excess Food When The Buffet Ends

2008-12-10T13:12:00.002-05:00

You have talked about busy day vs. slow day and I’m sure the buffet food cost % will vary based on volume. Also, it is important to evaluate the impact of excess food left when the buffet ends. Steps can be taken to minimize this through menu development but either way the impact is greater on slow days as it relates to the overall revenues.

Paul

The subject of how a buffet looks at the end of a shift or event is an excellent discussion topic. I know there are many 4 and 5 star resorts where the buffet looks good to go even if its 5 minutes to closing the line down. These operators build the entire layout into their cost structure. Many other operators go with half pans and other end of shift wind down techniques to minimize the overall food cost.

I agree entirely regarding a greater impact on slow days. There are fewer ways to use the food produced for a buffet when the sales volume is low.

Savvy operators close stations down as the meal or event proceeds through the routine stages (starters, salad/soup, entrees and sides, and desserts). This is tougher when the timing of the event is flexible. Regardless, a slow day buffet event will typically produce much lower gross profit than the same event in a busy season or weekend.

Buffet Production Decisions

2008-12-07T13:49:00.011-05:00

The majority of event caterers sell prospects a package using a strong base menu and many optional choices. Once the decision is made to use a buffet approach, the main layout is decided and one or more stations may be added to complete the picture. A modular approach helps to cost the event and determine the presentation.

In general, the more options the guest decides to add to the base buffet layout the less is needed per menu item. Since the total amount of food consumed will be similar for a given time period, you need to produce less of each menu item as the number of menu items increases. Many caterers develop tables to help them calculate the requirements depending on the overall buffet layout.

It is important to understand how much of each menu item you need to produce. Once the guests arrive and the event starts, minor adjustments may be made in the quantities produced. However, for most menu items the production decision is made without perfect knowledge of guest preferences. Because many caterers dread running out of popular menu items (and the preferences won't be known with certainty until the event) there is a tendency to produce more than the amount required.

Given the current economy, it is important to understand your customers needs and expectations. Work with the event contact to develop a game plan to meet their budget and to make forecasting less uncertain. You can specify limited production on certain menu items to meet their budget target. This understanding can help prevent needless waste from over production. The guest gets a fair price and the caterer gets a clearer idea of purchasing and preparation requirements.

Question on Buffet Food Cost

2008-11-30T14:28:00.004-05:00

Dear Sir,
Do you still remember last month I sent you an email regarding my food cost that was above 49%?

I followed your advice and now for this month I managed to turn over my cost to 38%.

So far, everything turned up well.
I still have question regarding this issue. It is quite difficult to find the cost for buffet. Is there any basic formula to you in finding the cost for a person?
If there is what is the formula.

Best regards.

There are 3 ways to forecast your buffet cost: 1. Standard Recipe Approach - most accurate, easy to scale and the most time required to develop. 2. Purchasing Requirements Approach - very accurate, difficult to scale, no development time required. 3. Hybrid Approach - requires standard usage factors for all protein items, dairy and produce combined with estimates for dry and canned items. This is the first step away from the Purchasing Requirements approach. It puts you on the road to a Standard Recipe model.

To implement the simple Purchasing Requirements approach, simply make a list of all ingredients needed with the correct amount (kilos) and cost (per kilo). Complete the calclations and divide by the number of guests to get your cost. Divide this cost by the sales price per guest. The result is your percentage.

You can begin to move to a more sophisticated model by saving these analyses. Develop standards for all meat, poultry, seafood, cheese, other dairy products, fresh fruits and fresh vegetables. Popular menu items should have standard recipes. Make your recipes flexible (sized easily by the number of guests).

Buffet cost analysis is easier to do than a la carte dining because the menu is known. As you start to save previous forecasts and cost analyses, you will begin to see patterns. Develop ratios for bread, rice, condiments, and complimentary beverages consumed per guest.

Banquet Production Basics

2008-11-26T09:44:00.002-05:00

Hi sir,
Sorry sir, i am disturbing you every time , but i would like to know costing of below mentioned menu for 10,000 pax:
1 Vegetable Soup
1 Non-Veg Soup

Starters

Vegetable(Any)
Paneer
Chicken
Mutton

One combo of Chinese(Vegetable, Fried Rice, Noodle, Chicken Manchurian and Gravy)

I would like know what amount of raw material we'll consume. Please help me.

Thanks and regards,

Rajnikant

Instructions:
1. Ask the chef for standard recipes for each menu item. Convert the ingredient amounts to serve 100 portions.

2. Determine the overall approach to this event. You may decide to offer one selection of the entrees (banquet style) or buffet style. The vegetables and side dishes may be full portions or a fraction (since you offer a variety). Again, the presentation is key. Both buffet style and banquet style require forecasts.

3. Based on your decision in step 2, determine the number of full portions of each menu item to produce. Multiply the ingredients in each recipe by the number of portions required.

4. Add up the ingredient usage for raw ingredients used in multiple recipes. Make a order guide from this list. Check your inventory to see what you need to purchase.

I personally use Food-Trak software for these issues. This software has a menu planning and production module. Once you setup your ingredients and recipes, the system allows you to enter events with the menu items. These events are saved in the system. The reports show how much you need to buy, prep and every recipe is properly sized for the event (or day if there are multiple events).

Catering to the Holiday Season

2008-11-17T19:36:00.003-05:00

I received an email from Marilyn Chapman, Delectables Catering, with some great holiday suggestions:

Our catering community is experiencing a slower start to the Holiday Season. One suggestion is to get creative with Party Trays offering a wider variety of appetizers for pick up only. I would recommend a Tasting Sampler with lower than usual minimums of individual items to enhance variety and create excitement. I would suggest a least one, preferably two different platters of hot Hors D' Oeuvres and a platter of cold hors d' oeuvres plus a seafood sampler including shrimp and crab.

The platters should be designed for 20-30 people as parties are getting smaller. The variety of platters will encourage experimentation as I anticipate that many clients will select at least one of each. Hot Hors D' Oeuvres will need to be precooked with warming instructions. Desserts should be revamped to include seasonal specialties including full pies and decorative holiday cookies.

An attractive E- Flyer can go out to corporate, social and even Bridal clients as many are undecided on Hors D' Oeuvres and/ or overwhelmed with the Holidays. The items on the Party trays would be carefully designed to minimize kitchen prep but showcase the capability of the company. This effort could result in good will, increased sales and seed the company for year end expenses.
Marilyn Chapman

Party Season For Caterers

2008-11-15T19:04:00.005-05:00

Oil prices continue to drop and prices at the pump have begun to reflect the drop. Americans will all benefit from lower prices for gas. Food service operators will benefit in areas related to the lower oil prices. Corn prices are also dropping since the demand for ethanol is in decline. Lower corn prices help to lower prices for protein items. Shipping costs will decline and we should see these fuel surcharges drop. Finally, energy costs will decline and help with lower utility bills.

Whether this holiday season will be as vibrant as last year may not be the point. The holiday season will represent a sales bump for many caterers. We're in a party zone for the next three months with Thanksgiving, Christmas, New Years, Chanukah, Inauguration (I live in the Washington, DC metro area), Super Bowl, Valentine's Day and President's Weekend.

Caterers need to schedule carefully and offer low cost menu options. Offer some higher priced items for guests who want to splurge. Try to get future business from satisfied seasonal guests. Rather than constantly comparing this year to 2007, make the most of the current economy. High priced wines and champagnes may be out of fashion. Your guests may want more beer and non-alcoholic beverages.

In addition to private parties, you'll want to have open parties for New Year's, Super Bowl and Valentine's Day. Develop some competitive packages to get your share of these special events. You should find deals for entertainment and other party extras.

Event Scheduling

2008-11-10T23:27:00.003-05:00

I observe many catering operations and their sales strategies. There are many schools of thought on booking events. We'll assume our event bookings are less than 100% of capacity. Should we try to book at least one event per day? Or should we try to book lots of events on specific days of the week? The answer depends on your overall operation.

Some caterers operate a full service a la carte restaurant in addition to the event catering business. Since the kitchen is always manned, you should welcome events any day of the week your restaurant is open. On the other hand, off-premise caterers can save on labor and other operating expenses by booking multiple events on the same day and closing on other days.

Rather than bringing in the production team each and every day, concentrating the activity can save labor in batch recipe production and utilities. Let's say we will book 350 events over 50 weeks and close down 2 weeks this year. If we booked 1 event per day, the staff would need to be brought in every day. If we booked all events on one day each week, the kitchen would be all out one to two days each week. This is an exageration to illustrate a point. You will need to open your catering business more than one day a week.

I am not advocating closing when you have a chance to make money. The point is recognizing the cost of opening for business. A skeleton staff is required to open for a single event. If the same event could be catered on a day when there are other parties, you'll save money.

Taking a look at their calendars, some caterers try to fill in blank days at the last minute with any event. They will try hard to get something booked. What happens if they get a small party for 15 people? Should you open the entire operation to serve 15 people? If your capacity is 500 guests, these events can cost you on slow days.

When last minute requests are made, try to book smaller parties on busy days and large parties on blank days. You'll save on labor and utilities by closing on blank days. Restaurants typically open from 6 to 7 days a week despite the number of covers. They have plenty of days each year when the sales (less cost of sales) do not cover the labor. Caterers are not forced to be open every day of the week. Strategic event scheduling can help put a few extra dollars in the bank.

Flexible Catering Menus

2008-11-03T10:13:00.003-05:00

The early warning signals point to downsized Christmas party spending this year. When negotiating with your corporate clientele, you should expect fewer guests and less spending per guest. There's not much you can do regarding the guest count. You can positively impact results with a flexible pricing model.

Take your previous year's holiday menus and deconstruct each menu category. Look for lower cost menu items in each category. Put together several budget options using these selections.

You can offer your guests flexibility by allowing them to swap a pricier option in any menu category. Let the customer hit their budget by using lots of pricing options. Offer to help them select the best package for their budget.

When you develop a flexible catering menu, the first issue is cost coverage. Make sure your base budget menu covers the food, labor and other direct operating expenses for any number of guests. Add mark up to cover your fixed costs and profit. Stay with the budget theme but allow your clients to choose profitable extras. Get the negotiation going with a low starting price. Work with the corporate contact to add extras while staying within their target limit.

Menus based on a budget solution should always be priced to be highly profitable. You want a lower food cost percentage. Slash the caviar, collossal shrimp, lobster tails, etc. and add cheese trays, crudites, canapes, mediterranean dips, etc. Offer less costly cuts of meat and in season fish for the entrees. You want to find an attractive menu from a price perspective.

When pricing the upscale options, you can use an add on method. For example, substitute prime rib for steamship roast for $5. Don't price the upscale options separately. Always offer substitutes. By using the add on cost for substitutes, your pricier choices will look more budget oriented. People won't see the steamship roast disappearing when they look at the $5 prime rib number.

Event Management

2008-10-14T19:57:00.002-04:00

On the day of the event, most of your revenue and expenses are booked. The staff has been scheduled, the food has been prepared, and the room is dedicated to the event. There are very few things the management can do to change the profit and loss for a particular event on the day of the event. Most of the decisions were made far in advance.

Catering is an industry for the planners of the world. Profitable event management relies on exceptional planning of all the key functions. Management needs to accurately forecast rooms, staff and menu items to maximize profit.

Final counts, the expected arrival time, spacing menu courses and other end game activities take place routinely most of the time. There are plenty of last minute decisions but very few with a major impact on profits.

The best event caterers understand the potential for future business and profitable referrals. Rather than trying to squeeze every last dollar of profit through last minute staff realignment and portion size cuts, these pros focus on client relations. They work the floor and make a solid impression.

You're as good as your last event in this industry. Make the most of your opportunity to generate positive word of mouth and additional business from the same clients. Make sure every menu item is well timed and make sure the quality is top notch. You will generate profitable future events through attention to details on event day.

Profitable Catering Extras

2008-10-05T17:43:00.004-04:00

If you offer your guests a complete package for their event, how do you price extras? How do these extras impact the overall event profit? Your base package needs to offer value in your market niche. Pricing this base package depends on local competition and your menu focus. Once the guests decide on a package, your extras must generate above average profits.

Car manufacturers and sales staff at the dealer locations understand this model very well. The base car model is priced to get you in the door. Extras are used to put money in the bank.

With respect to the mechanics, I start with the base package and completely cost out food production for 100 guests. Let's add a shrimp cocktail as an extra. First, cost the shrimp cocktail portion per guest. You may want to produce twice the profit as your base. If your current food cost percentage is 20% and your bottom line profit is 7%, multiply the portion cost by 5 and add an additional 7% to the result.

As you sell more extras, these options will allow you to offer smaller portions of the base package menu items. Your guests will expect to see a full portion of our shrimp cocktail example. As you sell more options, the profits will increase and the overall weight of the entire meal will shift. Offer the standard portion size for your main entree. Serve less food on the other courses. For example, you can serve a smaller salad portion.

Selling extras to your guests will greatly enhance the overall event result.