Today, catering represents about a third of Fox Bros.’ revenue, and the company handles events ranging from 40-person office parties to feeding 2,500 construction workers at the new Mercedes-Benz Stadium in Atlanta.
“We’re in a much stronger position today than we’ve ever been and a real calculated focus on off-premises catering is key to that,” Fox says.
Benefits and Challenges
Off-premises catering, which can be as simple as dropping off goods and setting up a modest buffet to creating a formal, full-service dining experience complete with service staff, is undoubtedly a compelling business opportunity for restaurants. Chicago-based foodservice research firm Datassential reported last fall that consumer spending on catering is approaching $8 billion and is capturing growth that is on par, if not beyond, that of other restaurant categories.
“From a revenue and profit perspective, [off-premises catering] is off the charts,” says Phoenix-based restaurant industry consultant David Scott Peters, founder of TheRestaurantExpert.com. “You’re getting better margins because you’re not paying for all that it takes to make the restaurant [operate], like rent, utilities, and the like. And, in many cases, you are only paying for the product and kitchen staff to produce the food. Just about everything else necessary to cover the event can be passed along to the client.”
For restaurants working in the off-premises catering arena, the revenue pull is beyond appealing, particularly as restaurants can fill seats that don’t exist in the dining room.
“In our restaurants, we cater to four- and six-tops. In catering, we’re looking at 400- or 600-tops and an opportunity to do what we do in the restaurant at a much greater level,” says Brent Fuller, brand leader at Flying Biscuit Café, a chain of 14 restaurants scattered across the Southeast.
That spurs impressive revenue at reduced costs, Fuller notes, but also offers the company a high-value marketing opportunity, as Flying Biscuit can translate its restaurant experience into a different environment and bring its brand to customers rather than waiting for customers to walk through its restaurants’ doors.
“You can never assume people know who you are and what you do,” says Fuller, whose team often leaves Flying Biscuit Café menus and bounce-back coupons at its catered events to promote visits to the chain’s restaurants.
Indeed, the ability to connect with new guests, many of whom might be unfamiliar with the concept, cannot be discounted when considering off-premises catering, says Thaddaeus Smith, executive chef of Sterno Products, a portable warming and catering equipment company headquartered in Corona, California.
“The exciting part about off-premises catering is that you’re exposing your brand and product to so many more people,” Smith says. “It’s grassroots, viral, word-of-mouth marketing that can pay off big because you can’t experience restaurants virtually. You have to dig in.”