Catering to Change
While the recession has continued to take its toll on the restaurant industry, a recent study conducted by foodservice consultants Technomic revealed a potentially vibrant market that has gone largely untapped in the quick-service sector: catering.
Despite the dour economic state of the past 12 months—and perhaps, in some ways, because of it—foodservice catering looks to be, according to the study, a promising growth opportunity for quick-service outlets both large and small in the coming years.
The study, released in July, found that more than 40 percent of consumers are buying platters or prepared food for holidays and celebrations, and at least one third of them are socializing at home with friends and family more than in previous years. Technomic’s report also went on to point out that “catering is one of the fastest growing segments of the foodservice industry” and that declining guest traffic is causing operators to look more closely at the double-digit sales growth reported by chains that have invested in developing this side of their business.
The study suggests there is a shift in consumer behavior, as the home—not the restaurant—is quickly becoming the central meeting place for social gatherings. And it appears quick-service owners and operators are already beginning to adjust to the trend.
Andy Howard, vice president of marketing and research and development for Richardson, Texas–based Wingstop, says the 45-store chain is about to launch a full-service catering operation this winter.
“We’ve known for a while that there’s a market for this based on the feedback we get regularly from guests and our franchise community,” Howard says. “We’ve always done large take-out orders for people to bring home, but we’re taking that to the next level so we can set up and serve our wings at large events. It feels like a natural addition for us.”
While the possible profitability is promising, operators are quick to point out that adding a catering option to a restaurant’s traditional menu is not as simple as it may seem. From an operational standpoint there are several challenges to consider before going in with Sterno blazing.
Tom Piper is director of marketing for Bruegger’s Bakery Café, a Burlington, Vermont–based chain that is in the process of instituting a catering program for all of its 290 locations this winter. Piper says the two most important considerations when thinking about adding a catering option are the ordering and delivery of a product.
“On the front end you have a more complicated order that is going to require a more personal touch and more hand-holding than your basic in-store pickup,” Piper says. “And on the back end you have delivery and set-up to consider. Those are skill sets and processes that don’t necessarily exist in the day-to-day operation of the store. It is considerably more complex than one might first assume.”
In an effort to invest more fully in its catering division, Jersey Mike’s Subs revamped its entire catering program last year, which included the rebranding of its packaging as well as the development of an extensive employee-training program designed to streamline the service. Dave Altmann, senior vice president of operations for the chain, says the changes came from an understanding that customers are looking for a fundamentally different experience from a catering service than from picking up a large order at the store and taking it home to the Super Bowl party.
“A lot of times quick-service concepts will just take their traditional menu and turn that into catering, but you need to think a little differently and package your product in just the right way for this service,” Altmann says. “You have to consider how you want the product to arrive. You have to think about napkins, forks, knives, and chips. What will be the dessert options? What about drinks? There is a lot to take into account.”
From a personnel standpoint, operators must also consider how to most efficiently execute the process. In the case of Jersey Mike’s, Altmann says the chain decided early on to train an individual at each location to serve as catering director for that particular store. “It allows us to build a deeper relationship with catering customers,” he says.
In the case of Panchero’s Mexican Grill, which launched its first catering program in April, this means shifting the responsibilities of workers in an effort to minimize the added stress of taking large, bulk orders.
“The biggest challenge for us was that we wanted to keep things the same. We didn’t want managers running around all day trying to deliver catering orders,” says Jay Hochenedel, director of operations for Panchero’s. “This meant being a little more organized and shifting responsibilities. That way we didn’t have to bring on more labor to support the concept.”
Larry Weismann, vice president of marketing for Cousins Subs, which offers a full, on-site catering menu, says timing is catering’s most important element.
“The big thing is really in the area of delivery,” Weismann says. “When a customer tells you, ‘I need it delivered at 12:30,’ that’s not a joke. They want it there at 12:30. In the end you have to make sure you can execute.”
If these various needs can be met, quick-service operators that have experience with catering all say the same thing: The marketing benefits are significant. A catering order means a larger group of people will be snacking on the product, and the likelihood of reaching a new customer in that setting is pretty good.
“We’ve always seen this as an opportunity to get Wingstop wings into people’s mouths who have never tried us before,” Howard says. “So if nothing else its certainly a great sampling opportunity.”
Takeout trends support investing in takeout packaging
* Carryout comprises 23.3 percent of all fast-food occasions, according to a 21-quarter average; drive-thru garners 40.7 percent; eat-in, 30.1 percent; and delivery, 5.8 percent.