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.