It is a misconception to center catering strategies solely around traditional POS systems. Instead, operators should transition into being agile food producers.
What does the future hold for the catering industry? It’s a significant inquiry, especially with projections suggesting the industry could generate up to $124 billion in revenue in the US by 2032.
For the purposes of this discussion, let’s delve into catering within multi-location restaurants operating at scale, although much of the insights can also apply to single-unit setups. When we rely heavily on conventional POS solutions, we may encounter challenges in the catering realm. This is because catering is not simply a point-of-sale transaction. On the contrary, catering orders are usually made in advance, packaging and distribution processes differ significantly, and catering demands a unique skill set and comprehension to execute effectively. It’s a distinct field, and to succeed in your catering initiatives, acknowledging this reality early on is crucial. The reason for raising this point is to emphasize that future catering solutions should tackle the real challenges faced by catering businesses. Therefore, before envisioning the future of the catering sector, it’s essential to first grasp the essence of catering to understand the hurdles that need to be addressed as we develop our catering programs.
Let’s consider this scenario: A customer walks in and orders three sandwiches for their office. Is that takeout? Now, they order a dozen sandwiches. No issues so far, but do they want them individually wrapped? Still falls under takeout. However, your catering specialists can encourage the customer to choose a sandwich platter comprising a dozen sandwiches but presented in a completely innovative manner. Does this qualify as catering? Possibly. The precise boundary between your various sales channels is a cultural decision that your company will need to make, and the line is yours to draw. Nonetheless, the objective remains to venture into a form of light food production.
This distinction is pivotal and carries significant implications. As a caterer, you essentially function as a manufacturer rather than just a restaurant. While this concept may seem daunting, it should actually be seen as an opportunity. It’s time for a shift in mindset within the industry. Whereas most restaurants experience peak hours and lulls, catering operates on a distinct schedule and taps into a different customer base. By viewing yourself as a manufacturer, you can leverage your catering arm as an additional revenue stream that complements your core business, resulting in incremental sales.
Breakdown of Catering Segments
To comprehend the direction in which catering is evolving, it’s crucial to acknowledge the three key segments of the catering market:
- The consumer-oriented segment, encompassing personal and event-based gatherings such as weddings and birthdays
- Business-to-business catering, involving partnerships with other commercial entities
- Contract catering, which involves long-term commitments and serves as a significant revenue source for catering establishments. The rapid growth of contract catering has led to some referring to it as the “food at work movement.” Reflect for a moment on the multitude of individuals heading to offices daily. Where do they typically have lunch? From an in-house cafeteria? How many of these closed down during the pandemic?
This notion of being a light-food manufacturer is foundational. It is imperative to fully utilize our kitchens round the clock to produce goods that can be efficiently distributed through the appropriate channels, achieved by incorporating these three critical elements.
Essential Components for Catering
- Diverse services and skilled catering professionals to guide customers towards suitable products and service points, thereby streamlining backend operations
- Kitchen operations mirroring factory setups to deliver the necessary quality and quantity across channels
- Adoption of an Enterprise Resource Planning (ERP) approach to software systems to seamlessly integrate all operational aspects
We will delve deeper into ERPs shortly, but these are the technological strategies evolving within the light food production space. As emphasized, it’s time to shift our viewpoint and acknowledge ourselves as manufacturers.
Food service operators face numerous challenges ahead. In an era marked by shrinking profit margins and continual strain on existing labor models, it’s imperative to adapt by embracing a strategic framework focused on multi-faceted production.
The time is ripe to spark discussions about the trajectory of the catering industry. To establish successful channels, we must contemplate how we design our programs to ensure they are future-proof. Because, truth be told, the future of catering isn’t as distant as we might think.
We appreciate your attention, and let’s delve further into the realm of catering.
Keen for more insights?
Dardick and FastCasual.com are hosting The Restaurant Catering Workshop, scheduled for October 15-16, 2024, immediately following the Fast Casual Executive Summit, taking place at the Sheraton Denver Downtown Hotel in Denver.
Restaurant operators can register here for exclusive attendance at The Restaurant Catering Workshop or here to participate in both the workshop and the Fast Casual Executive Summit. Operators stand to receive a discount when enrolling for both events.
