Looking to boost revenue and expand its brand, STK established a thriving catering arm perfect for upscale parties, from small gatherings to celebrity bashes.
Combine a swanky steakhouse with a chic bar lounge and what results is STK, a group of 10 global eateries located in trendy neighborhoods in gateway cities such as New York, London, and Chicago. But The One Group, which owns STK, is always in pursuit of new revenue streams. When regular clients such as DirecTV and NBC inquired about its catering events off premises, STK listened.
It launched STK OUT, an off-site catering service. Since its inception in 2013, the company reports the numbers have been spiking. Without a marketing campaign and relying solely on word of mouth, STK OUT has shown signs of establishing a strong base, and is also boosting business in the restaurants.
STK OUT builds brand awareness for the company by expanding to new markets, explains Celeste Fierro, senior vice president at The One Group. For instance, it has catered special events in San Francisco and San Diego, where it doesn’t own eateries. “But people travel all over,” she says, and clients who attend these events become aware of STK’s restaurants and are more likely to dine there.
Overall, STK has shown signs of growth. In 2015, The One Group’s revenue spiked to $52.6 million, up from $40.5 million in 2014. Much of the spurt emanated from opening STK eateries in Chicago and Beverly Hills, and reopening its Miami Beach outlet. Establishing STK OUT presented a way to stimulate growth after comparable sales from STK-owned eateries dipped 0.7 percent in 2015.
STK’s model breaks the mold of the old-fashioned steakhouse, Fierro says. “We’re not your daddy’s steakhouse,” she notes. “We’re not the all-men’s club, with dark décor and the waiter who tries to sell a big steak. We want [guests] to enjoy [themselves] and have fun.” In fact, the chain also specializes in small and medium-size steaks, which appeal to all audiences.
Its catering arm STK OUT is dedicated to breaking even deeper ground. Fierro says that STK OUT delivers “a unique experience and offers that elevated culinary and customer experience that many catering companies aren’t [providing].” Customizing each event provides an edge. “If they want an outdoor barbecue, we’ll give them a unique barbecue, not just burger and steaks,” Fierro says. For example, the menu can highlight shish kebabs or porterhouse steaks, not just the premium steaks featured on the STK restaurant menu.
Cocktails can be customized as well. “We’ve held martini bars, where any type of martini can be served,” she says.
Not only is STK individualizing the food and beverage menu, it also concocts a distinctive atmosphere at each event. “We bring in our own [disc jockeys], bring in décor, and turn the event into an STK experience outside of the usual venue,” Fierro says.
These events range from intimate dinner parties of 15 people to a Super Bowl event hosting hundreds. For example, STK OUT catered a Hall of Fame dinner party for 25 people at pop star Mariah Carey’s Malibu home and a birthday party in New York City for the 11-year-old daughter of an investment banking executive that included specially designed cupcakes for each guest.
Fierro acknowledges that overseeing a catering service presents different challenges than running a restaurant on a day-to-day basis. Maintaining service quality for events held sporadically is one major point. “Consistency is more difficult. You don’t have the same people cooking each day, and they’re not in their regular station,” she says.
To establish consistency, Fierro says STK OUT emphasizes its training programs. “As we’ve expanded, we’ve developed strong relationships with staffing companies in national and regional markets,” she says. For smaller events, it relies on in-house staff and servers.
Moreover, chefs at the STK eateries depend on trusty stoves with equipment at their fingertips—not true when catering parties at an external space or private home. When catering, “You have to bring your own grills, hot plates, fryers, everything,” Fierro notes.
Catering off premises requires extensive planning and organization to make sure everything is packed and in order. To comply with health regulations, “you can’t pre-cook anything,” she explains, meaning that everything has to be cooked to order.
STK OUT operates with selected personnel, such as an executive chef, operations, and events managers to handle events. For larger events, it summons staff from cities closest to the event. And Fierro operates as the globetrotting problem solver, transporting to other locales when a major party or event occurs.
Clientele for STK OUT events mirror the upscale audience common to its restaurants. Fierro says the target audience is affluent people in their “mid-30s to 50s,” though it often appeals to a diversified clientele who are celebrating birthdays and anniversaries. The typical dinner check at the steakhouses can rise to $90 to $100 per person.
While a typical STK restaurant can serve 600 covers a night, STK OUT can add 200 people, for example, at an event and boost capacity, she says.
STK remains in an expansion mode. Fierro says it plans on opening six new eateries in 2016 in San Diego, Denver, Toronto, Miami, and Orlando, and overseas in the Mediterranean island of Ibiza. All will offer catering services on a local level. The goal for STK OUT in 2016, Fierro says, is “to go after more events in each city we’re in as well as cities we’re not in. We want to put more resources into [catering] and go after bigger events.”