A growth spurt for catering
As the economy goes, so goes catering. And with the nation’s economic horizon brightening, consumers and restaurant operators are, once again, spending more on off-premise dining.
But as the segment grows—driven largely by gains in full service’s and fast casual’s catering arms—a nagging problem continues to pester: With concepts so clearly defined by their in-store branding, how can operations maintain brand integrity when customers aren’t in the restaurant. Turns out, operators are tackling the issue with new creativity.
In the aftermath of the recession, business catering plummeted, but social catering remained steady, says Melissa Wilson, who tracks catering for Chicago-based research firm Technomic. “We saw a decline in the overall catering market size,” she explains. “Business catering dialed back dramatically. Social catering—party platters, bulk meals—did better. Customers traded in-store meals for socializing with friends at home.”
Now, with the recession subsiding, catering is back across the board. According to Catersource—a media, conference and trade show company—2013 catering sales beat a projected 5 percent increase by 1 to 2 percent. Projections for 2014, showing overall sales of $47.5 billion, represent another 5 percent increase. Restaurants account for about $20 billion of that.
“We are forecasting positive growth moving forward,” Wilson concurs. She says restaurants are stealing market share from other catering options because they are focusing more on the business of it than in years past. “There were a lot of segments and operators that were, to an extent, inadvertently in catering, garnering business just based on consumer request,” she says. “They didn’t have a dedicated focus. That has shifted quite a bit. As more operators have eyed competitors and others with success in the business, they see this is a tremendous opportunity to grow revenue.” She adds, “This is healthy for the industry, because a lot of restaurants are taking share from grocery stores and independent caterers.”
Carl Sacks, director of consulting services at Catersource, agrees. “The restaurant companies that are doing well are the ones that have developed a catering infrastructure, catering managers, catering sales people. The ones that try to add it on to someone’s other responsibilities are unlikely to be as successful.” Concepts like Stephen Starr Restaurants and Fig & Olive in full service and Boloco and The Counter in fast casual are investing in dedicated catering infrustructures and finding rewards.
One of the industry’s advantages over other catering sources is the strength of its brands. Customers come to a restaurant and get to know it. As Sacks points out, independent caterers often surpass restaurants in market knowledge and dedicated sales teams, and they often have deeper relationships with local event planners. But operators have the advantage of a ready-built brand showcase: their restaurants. “One area where restaurants have the advantage is being able to bring event planners to their restaurants,” he says. “Independent caterers have to construct an entertainment venue to show what they can do.”
Philadelphia-based Stephen Starr Restaurants began catering in Philadelphia in 2007 with a five-person staff. It has since expanded into New York City and Miami and employs eight times as many people. “We have seen significant and sustained growth,” says Morgan Bedore, vice president of sales, creative development and marketing at the multiconcept, full-service operator.
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