Off-premises foodservice can be a cash cow for operators, but it’s not all easy money—menu development and food prep are key factors.

Six months after opening her restaurant, Chef Amy Brandwein launched an off-site catering business. It was a good move. Now, catering constitutes 5 percent of Centrolina’s revenue, but that’s not why she started it.

“It’s a good part of our business but it’s not huge,” says Brandwein, who opened Centrolina in Washington, D.C., in June 2015. “It’s important for how we service our customers—if they want to have our experience but have it somewhere else, it’s important for us to provide it.”

Catering is appealing to full-service restaurants for the reason Brandwein states, and of course from a financial standpoint. The margins alone can make it worthwhile. Typically, says Howard Cannon, president of Restaurant Expert Witness, a consulting firm in Birmingham, Alabama, margins are 35 to 45 percent for the food, comparing favorably with a restaurant’s typical margins of 10 to 18 percent (and the drinks pan out even better: 60 to 80 percent). But off-premises catering is a challenging business, and one that should be debuted only after much consideration, research, and financial reckoning. 

“If you’re not great at hospitality, quality, service, cleanliness, and accuracy in your restaurant I would not go off-site,” Cannon says. 

However, catering is what Cannon calls “a cash cow,” and allows restaurant operators to rack up much profit for several reasons: There’s no overhead, since the restaurant is using an existing kitchen; they can buy in bulk because they have exact guest numbers; they can prepare food in bulk; and they can increase prices because of the expectation of a special event.

TipsGet paid upfront. Cash flow is critical, says Cannon, so try to get paid in advance. At the very least, get 50 percent, so you’ll break even.Bear in mind foods can serve a double purpose. An example is baked potatoes, which, wrapped in aluminum foil, hold (and transmit) heat for about three hours and keep other foods hot.To limit over-consumption at an event with stations, have servers dish up the foods. Also, be careful on a buffet line—place something expensive like shrimp toward the end, so by the time guests see it, their plate is already laden with foods that have a higher profit margin.Allow twice as much time to set up an event as you anticipate it will take, because there are always surprises.

Starting Points

Sandy Korem lives and loves catering. She’s the owner of two gourmet food shops in Dallas, Texas, and has run an off-site catering business called The Festive Kitchen for 25 years. She also runs a catering consultancy business, The Catering Coach.

Korem leaves a lot of menu decisions to guests. She says offering sample menus at different prices works best, then they can customize from there.

“If you offer customers complete à la carte choices it’s overwhelming and you lose them,” she says. So she starts off with a one pager of four or five sample menus of appetizers and entrées. 

What stalls the process, Korem says, is when people won’t reveal their budget, or don’t know it. So she nudges them by suggesting a menu for $50 per head, for example. This usually prompts the customer to go up or down.

She’ll also work backward to get to the food costs they can afford by estimating average costs for staffing, equipment, glassware and tableware, location rental, beverages, gratuity, and administration fee—this helps hosts realize what they can spend on the food.

Once she’s locked in the menu, she’ll talk desserts and beverages, which are priced separately, since that’s how it’s done in a restaurant.

When creating your menus and menu prices, it’s vital, says Korem, to cost your recipes. “If you don’t know what it costs, the entire thing is a crapshoot.” She recommends aiming for a profit margin of 67 percent. “You want to sell food for three times its cost,” she says, “and for beverages you want to at least double that.” 

D’Amico Catering has been providing off-premises events in Minnesota and Florida for 25 years (although it started as D’Amico & Partners restaurant group) and now has seven full-service restaurants in those two states.

The company, which caters 3,500 to 4,000 events per year, starts with a proposed menu, which clients can completely customize. 

This isn’t how it’s always been. Rachel Bruzek, senior creative event and culinary trend specialist, says when she started with the company 18 years ago, most guests simply picked from the standard menus. “Now it’s all customized and everyone knows everything about food.”

The best way through the menu process, Bruzek has found, is to chat by phone or in person first, which is faster than email and more personal. “It doesn’t matter what our product is, at the end of the day, it’s how the relationship is built, and having that contact is huge. It’s about whether your personalities match. Do you see the person’s vision? 

The food for Centrolina’s catering business is similar to the seasonal Italian fare Brandwein serves in the restaurant. But she doesn’t serve exactly the same food. “It’s more standardized because you have to appeal to a wide range of tastes. We do authentic, edgy Italian, so for catering it’s not as edgy; it’s safer.”

Brandwein works with food margins for catering that are around 10 percentage points higher than at the restaurant, with even greater margins for beverages. 

About a quarter of the catered food prepared by Russo’s Restaurants—a Houston, Texas–based chain with seven full-service restaurants as well as 38 fast casuals—are for full-service events. The remainder of the catering business is dropped-off food, sometimes with chafing dishes.

Full-service catering entails mostly pasta and pizza. “We do the things we are known for,” says founder and president Anthony Russo. Luckily, both hold up well. Sometimes the company takes equipment to an event so chefs can cook on-site and keep food at temperature.

For pizza, chefs make it at the restaurant and put it in a hot unit, which keeps it warm for 90 minutes or so until an event. Russo prefers this to a delivery bag, which would render the pizza soggy.

Russo’s catering profit margins are good—50 percent on food and 70 percent on beverages. “We’re preparing in bulk and I’m using my current labor—their hourly wage is still the same—and my rent doesn’t go up, so those are great advantages,” Russo says. “And it’s one way of reaching new consumers—they eat great food then discover it came from Russo’s.”

Cactus, a five-location full-service chain of Southwestern/Mexican/Spanish food in Seattle, has been offering off-premises catering for 10 years. Like Russo’s, Cactus offers different types of catering. It has “party pickup,” where everything is packaged in a box with details on how to assemble a burrito, taco, etc. This part of the business is growing the fastest, says culinary director Brent Novotny, “Because the program is convenient and allows our customers to have a restaurant experience at home. It is scalable, and the easy ordering and packaging make it simple.”

The second area is business delivery, which is mostly a lunch business, with a $500 minimum; and finally, there’s the full-service catering, for events serving 100 guests on average.

Mostly, Novotny says, the chain’s Mexican food holds up fine. One thing that doesn’t, however, is nachos, so he’ll steer people away from them. “If they insist on having them—which is rare—we work on an alternative packaging and presentation to make them the best we can.”

Unlike other caterers, Cactus does a lot of cooking on-site at events “because the food is a closer representation of what you’d get at our restaurant.” But sometimes the company will transport hot food, if there’s no kitchen at the event site. Either way, chefs usually visit the site first “so we know what we’re getting into. We don’t like surprises,” Novotny says.

A Commissary Strategy
Michael Schwartz Events is the off-site catering arm of The Genuine Hospitality Group, a restaurant group with six full-service restaurants in Miami, Florida.
The group started catering events four years ago, but recently purchased a commissary. All catered food will now be prepped, and sometimes cooked, here; it’ll be used for the restaurants too.
At 2,170 square feet, the commissary provides ample space for storage of the food, equipment, and tableware needed for catering. It’s also led to more creativity in what Michael Schwartz Events can deliver.
“It’s allowed us to come up with menus not related to our restaurants,” says director of special events Lindsay Guido. For example, the group has added pasta stations at events, featuring a pasta extruder, to cut pasta to order.
The commissary has also allowed the catering division to brand Michael Schwartz Events with its own look and aesthetic, “with its own portfolio of menus and capabilities,” Guido says. “We have created a look for the brand, complete with logos and a new website.”
It also makes the events more cohesive and easier to track, with less room for error, since all work is done in the one location. Previously, all prep for an event was divided between different restaurant kitchens and it all came together at the end.

Start-Up Advice

Getting a catering business launched is half of the challenge. Korem recommends operators start with small events and very few events. “If you screw up it’ll take so much longer to regain what you’ve lost since the people from that event will talk to everybody,” she says.

When launching off-premises catering, restaurant operators need to be very careful with their pricing, Cannon says. “Everyone thinks if they under-price, customers will come. But really, although a lot of people talk price, they want value and reliability. So if you happen to be a bit more expensive, they’re fine so long as they get value. It’s a special event so it carries more weight.”

It’s a good idea to start with what you know, says Stephen Zagor, dean of culinary business at the Institute of Culinary Education in New York City. “If you have a niche, have that be your bread and butter to start with. Once you have catering in your stride, you can move into new frontiers,” he says.

When Brandwein opened Centrolina, she wanted to spend some time getting the restaurant established before she moved into catering. She ended up launching it for the holidays, when regular clients asked what she could do, and built it slowly from there. 

Transporting Food

D’Amico Catering gets all food and equipment to events using its fleet of trucks and a smaller van. To transport tableware it uses “poker chips”—heavy holders for stacking plates and cups. Food is always transported in hot or cold Cambro containers or cabinets.

It’s important to remember to start refrigerated trucks early, Bruzek says, so the unit is very cold before food goes in.

Korem is a fan of online supplier Catering Crate, which has white boxes with polystyrene at the top and bottom that will keep hot food at temperature for three hours. For cold food, she suggests ice chests on wheels. 

The transportation vessel of choice for Brandwein is fish boxes—lightweight plastic sealable boxes that hold food really well. She fills these with ice for cold foods. She also likes small soup pans, which have plastic tops that are clipped into place. The lids serve a double purpose, she says: They protect food and provide a hard surface to stack onto. 

Forbidden Foods

Serving catered food that’s been prepared in bulk, often hours before it is consumed, is a game of food safety techniques, timing, and using the correct equipment. “Some foods just do not lend themselves to being served in a catered setting,” Korem says.

To maintain the integrity of food and have everything cooked or cooled and ready to go at the right time, D’Amico Catering constructs a timeline on paper. The lead chefs have this, and it’s sometimes posted for servers to see, too. “We don’t go by the minute for our timeline, just because you have to remain fluid because things happen at events,” Bruzek says.

Korem also writes a timeline, “to let everyone know what will happen at what time. So all the staff can see it and it’s right where they’re doing the prep work.”

As for what to serve, while much of it comes down to trial and error, Korem advises against fried foods, which simply end up soggy and needing to be refried, she says. 

Some foods she’ll cook up to a certain stage and then finish at the event, such as a phyllo tartlet or select meats, which she’ll cook 75 percent of the way then finish off for 10 minutes. Desserts—like crème brûlée and cakes—typically need some kind of finishing.

Korem is a big proponent of pre-testing—making dishes and then holding them to see how they are after several hours. Stuffed mushrooms, she says, are shriveled after being held. But she’s found they work if she par-cooks them and finishes them off in a Sterno Warming Cabinet. “Do your homework,” she says. “What works in a restaurant doesn’t necessarily work in catering.”

D’Amico’s Bruzek tries to steer clients away from roasted vegetables, which will be limp by the time they’re served, so she encourages them to be dished up at room temperature as much as possible. “Room temperature is the answer to a lot of things,” she says. 

She also advises against layer cakes. Buttercream is so slippery and fondant can easily crack—so someone usually builds cakes on-site.

For Brandwein, fresh pasta is a big no-no for catered buffets, since it ends up in a blob-like format. Instead, she encourages clients to think of risotto or something similar.

Desserts are another problem since they’re delicate and can get bumped around. Chocolate glazes and ice cream can melt, and delicate desserts and decorations mostly don’t look great upon arrival. Dishes that transport well, Brandwein says, include panna cotta, bunet (an Italian flan cake), cannoli, and polenta cake.

There’s always something that goes wrong at catered events, and Howard Cannon advises clients to expect the 20 percent rule: “Twenty percent of everything you think is going to be spot-on will be spot-off.”

Something always goes wrong behind the scenes at a catered event, Korem says. “Personally I like the challenge of it, that each event is different. It’s not the same-old, same-old. Every day is different.”

To prevent small errors from being noticed, or from becoming bigger errors, Cannon recommends operators under-commit and over-deliver. “If you under-deliver, clients and guests never forget it.” 

Events, Feature, Kitchen Equipment, Menu Innovations, Non-Commercial