Sponsored by ezCater
What's more exciting is that the catering market is growing at full throttle—and at a pace 50 percent faster than the overall restaurant industry. That's a huge growth opportunity for restaurants.
Surprisingly, restaurants have been slow to adapt to the rise of catering. Even while 90 percent of restaurant leaders say that catering is important, 28 percent of brands haven't invested a dime, according to a study by ezCater and Technomic. For restaurants that do cater, nearly half say they don't plan to bump up their investments. By not investing, restaurants miss a huge revenue opportunity.
It's not too late to grab a piece of the market, whether you're new to catering or experienced in the business. Before you invest too much time and energy into your catering business, make sure you have a good strategy. After all, catering is different, from the customers to the business model. Here are some tips for ways to invest in your program, from industry experts who've mastered catering.
Invest in Production Capacity
If you want to keep saying yes to new customers, prepare your restaurant for the higher volume of business. Here's how to optimize your restaurant's capacity.
- Create a space for catering. Restaurants often try to shoehorn their catering operation in some hidden corner of the kitchen. But this can create traffic jams and disruptions. "Give your catering operation its own space," advises Jim Rand, Operating Partner in Off-Premises Sales for Act III Holdings. Nonetheless, if you're limited in resources, have your restaurant and catering teams work different shifts to help smooth operations, Jim says.
- Buy equipment for future needs. Before you commit any money to catering equipment, consider whether those items are the best investments for your business in the long run. According to Jackie Swift-Kurkjian, VP of Off-Premise Consumption for Fiesta Restaurant Group, restaurants should base purchases on "where you want your business to be in three to five years. Project your sales volume first, then look at the equipment you need."
Improve Execution
Execution is important for your bottom line. Here are some ways to reach your goals.
- Design your menu for use cases. If you want a profitable catering menu, understand the different use cases for catering, says Scott Davis, President of CoreLife Eatery. "Think about the different functions that people are going to be having. Is it a training? Is it a board meeting? In some cases, your menu needs to be expansive and customizable. In other cases, it needs to be specific, like a box lunch for a board meeting," he says. Invest time in designing a catering menu that works.
- Offer online ordering. Catering customers want food ordering to be as easy as tapping an app. In fact, convenience drives the purchasing decisions of 64 percent of business customers, according to Technomic. To deliver convenience, many restaurants are turning to online ordering. “It used to be that you could have a successful restaurant without having online catering,” says Jennifer Parker, Founder of Impact Brands. “But the off-premises market is too big of an opportunity. And the way that you get there is through technology.”
- Get the right delivery system for your restaurant. Want to score more online orders with delivery? You'll need to decide between third-party vendors and self-delivery. To make the right investment, look at your business objectively and consider whether your restaurant has enough brand recognition to drive traffic to your website and app, says Ed Keller, Director of Off-Premise Business Development of Corner Bakery Cafe. Keep in mind that new customers won't think to order food from less-familiar brands. Whereas with the help of third-party vendors, customers may discover your brand while scrolling through the apps. So unless your restaurant is as big as McDonald's, "third-party support may make more sense," says Ed.
Increase Sales for Your Catering Business
If you want to generate more sales for your catering business, here are some tips to help improve your sales efforts.
- Hire salespeople. One common mistake that many restaurants make is that they put their business on autopilot. Arthur "Sandy" McElfresh, VP of Catering at P.F. Chang’s, says: "[Restaurants] believe that because someone has occasionally ordered catering, they have a catering business. That’s totally reactive, and you need to get proactive." For Sandy, that means turning to sales professionals to grow your catering business rather than trying to do it yourself.
- Use talent smartly. Finding good salespeople can be time-consuming and expensive, so it only makes sense that you would want to use your top talent strategically, says Gracie Prasanson, Director of Off-Premise Sales of Jason’s Deli. Gracie's advice is to reserve your highest-paid salespeople for closing deals with your most valuable customers. Organize your salespeople by specialization to get the highest return.
If you're going to invest in catering, the goal is to get the highest return. Use these investment strategies from our industry experts to tap into the lucrative opportunity. To learn more about growing your catering business, start here.
