With Jim Rand, catering practice leader.
In this episode of Getting Off-Premises, we reveal the new business opportunities created by the huge (and growing) catering market. This is good news for restaurant operators.
Jim Rand here. And we’re back at Andre’s Cafe in Boston South End. And we’re here today to talk about the catering opportunity. Catering today represents a fifty-eight billion dollars segment of the restaurant industry and it’s broken into two pieces. There’s B2B catering and B2C catering. Today I’d like to talk a little bit more about B2B catering.
B2B catering is 22 billion of that 58 billion and it has grown over 20 percent from 2014 through 2017 and is forecasted to grow 5 to 7 percent annually over the next five years. So clearly a great opportunity from a growth standpoint. I guess you’d be asking yourself: so what’s driving that? There are really two main factors. One is employment market conditions today. Everybody’s looking to attract employees to come and work at their business and they’re using catering and feeding their team members as a way to make their place the best place to work.
Additionally, they use it to help increase productivity because people aren’t going out for lunch and they’re in the building longer and so they can actually get more work done.
The other factor is people are using food as facilitation as a way to help their meetings, to help their sales presentations, and to help facilitate training sessions. So that the food is brought in and it helps me to ace my pitch. It helps me to keep people engaged.
So why is this important to you as a restaurant that caters? For a couple of reasons. Number one is: no one owns it. The market is completely fractionalized. Even the largest brands in the United States have less than a 2 percent market share.
Additionally, catering has a 10 x check that you would see for in-restaurant dining or for any of the other off-premises channels including drive-thru or takeout. It has an incrementally better profit associated with it primarily due to the efficiencies that you gain through labor. And last but not least it’s a great way to utilize excess capacity you may have early in the morning in your restaurant or in the middle of the afternoon in order to facilitate catering.
So overall why should you do catering? Because it’s a great opportunity and it’s a great way to boost your top and bottom line. Thanks.
The catering market is broad and complex. Learn about the differences between B2B and B2C.