Package Deals
Catering drives revenues with simplified menus, pricing and innovation
By Margaret Sheridan, Senior Editor -- Restaurants & Institutions, 4/15/2004
Catering can be an operator's life line, adding revenue by using existing space, staff and inventory. Opportunities exist in corporate and social sectors, with events such as breakfast meetings, anniversaries, receptions and fund-raisers.
Successful caterers say one key is being aggressive in seeking relationships with decision-makers. "We rarely go off site for catering," says John Knorr, director of operations for Phillips Seafood Restaurants, Washington, D.C. "But we actively contact tour organizers, hotel concierges, church and education groups, seniors and tourist associations."
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Its 1,200-seat Phillips Flagship restaurant easily can be sectioned into semiprivate areas for gatherings of almost any size. "We'll market to groups of two or 1,000. We'll even waive room rental fees depending on their budget or need."
Catering represented 17% of the restaurant's $9 million in annual food and beverage sales in 2003.
Playing Politics
Wooing event planners behind political fund-raisers is a top priority
for Suzanne Halperin-McIntosh. "Because 2004 is an election year,
there will be more receptions and meetings tied to candidates
coming through town," says the Chicago-area director of catering
for San Francisco-based Kimpton Hotels & Restaurants.
Approximately 85% of catering sales for Kimpton's three Chicago properties (Hotel Allegro, Hotel Burnham and Hotel Monaco, each with a Kimpton-owned restaurant) is corporate. With downsizing and budget cuts in that sector, however, Halperin-McIntosh says the caliber of decision-makers has changed. "Event planners are the first jobs to go in a budget cut," she says.
The people she now deals with have less party-planning experience so she simplifies their work by creating "express" packages. One for business meetings includes breakfast, buffet lunch and afternoon snack. The $54 per-person price includes $2 for room rental. Taxes and gratuity are extra.
"Quoting one price saves time and is less confusing," she says. Clients select from several theme menus, with food costs averaging 23%.
Entertainment budgets are loosening a bit, Halperin-McIntosh says, noting the 50% increase in December 2003 holiday sales to 60 parties versus 2002's 40. She expects brisk sales this summer and fall with political-related events, and anticipates 2004 revenue of $2.5 million, up from $2 million last year.
Electronic Secretary
Catering represents 35% of $4 million in annual sales for 300-seat
Lovells of Lake Forest in Lake Forest, Ill. Its location near
office plazas, law firms, pharmaceutical companies and financial
institutions helps the suburban Chicago restaurant do 70% of its
yearly catering sales for corporate clients.
"Rather than go to a hotel, they come here for warmer atmosphere," says Joann Winnegar, director of private catering. The second-floor Odyssey Room, with 110 seats, can be partitioned into smaller spaces. The Wine Cellar accommodates 12.
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Winnegar says her computer skills have helped win corporate business. "Most event planners work via e-mail. In fact, 90% of my work is done electronically. I even send terms of agreement documents as e-mail attachments," she says. Winnegar manages the restaurant's database of 5,000 names and an e-mail address book of 600.
She considers Internet marketing invaluable in dealing with corporate clients. A Web site helps operators attract business and stay competitive in pricing, services, menus and room rental rates. Dealing with social-catering clients is based less on technology than on personal relationships though. Lovells markets to small parties of 15 or less. "You never know when a guest will turn into a catering client," Winnegar says.
Though co-owner Jay Lovell places ads in local papers and magazines, he recently hired a public relations firm hoping to offset the typical seasonal July slump. "The firm can reach hotel concierges and the 1,500 professional meeting planners in Chicago. Sometimes advertising isn't enough," he explains.
A slow economy and corporate downsizing mean greater demand for casual rather than formal catering. Regular clients of Ambria and Everest, two upscale restaurants owned by Chicago-based multiconcept operator Lettuce Entertain You Enterprises, find it at Scoozi!, a lower-priced sister operation. A recent renovation turned a semiprivate space into a private 88-seat room with glass partitions that is ideal for cooking-class parties. Clients such as corporations and law firms select from five menu packages. The price per head averages $60, excluding beverage, tax and gratuity. The new space helped Scoozi! boost annual catering revenues to $100,000 in 2003 from $60,000 in 2002.
"Midweek business, usually early in the week, keeps us busy," says General manager Aine O'Brien. Banks and law firms use the room for team building or courting prospective employees. Organizing events doesn't overwork the Scoozi! staff. The space has a designated pool of five to 14 servers, and the company's catering division handles scheduling, contracts and menus. "It's not that much work and it keeps the staff busy," says O'Brien.
Crystal Balls
Clients of Victoria Steck eat up her ideas. The executive director of culinary services for Sanese Services Inc., a Columbus, Ohio-based contractor, devised a solution for time-pressed employees who wanted to do holiday baking but had no time to mix dough. She offered to sell frozen cookie dough to employees through Sanese's 57 business-and-industry accounts.
Frozen dough balls in 12 varieties were sold on Wednesdays throughout December. "It was a convenience for workers, especially factory workers on late shifts," says Steck. It took one employee 20 minutes to set up a skirted table and arrange open cases of dough, freezer bags and containers, plastic gloves and recipes. Sold by the dozen for $3, food cost was $1.68.
Since introducing the program in 1990, dough sales at one insurance company in Newark, Ohio, have gone from $500 to $5,000. Marketing at breakfast with posters and plates of decorated cookies and recipes triggers impulse buying, and additional sales of $200, she says.
Popularity of Cookie Day promotions resulted in offering more frozen products during the year, such as pies, hamburger patties and side dishes.
"Whatever isn't nailed down, we sell," Steck says.
Room for Growth
Private-party catering helps successful restaurants keep revenues high. Offering private rooms with distinctive personalities drives sales for many of these operations.
Boston's Abe & Louie's steakhouse, for example, took in nearly $2 million in banquet sales (about 15% of total revenues) in 2003 by ensuring that private rooms are properly equipped to serve business or social client needs. Upstairs from its main dining room is the Louie Louie Room, which can hold as many 125 guests. So that large groups don't wander through the dining room, the Louie Louie Room has its own entrance as well as private bar and kitchen. The Board Room, located on a lower level, is designed primarily for business meetings of 15 to 30 people.
Seating only eight, The 410 Room is the smallest of four private rooms at El Gaucho in Seattle, but one of its most popular as the bins lining its walls store some of the restaurant's choicest wines. Nearly a quarter of El Gaucho's 2003 revenues came from private-party hosting.
At the other end is The Stockyards Room at Millrose Restaurant and Brewing Co. in South Barrington, Ill., which features a floor-to-cathedral-ceiling fireplace, rustic décor with exposed beams and space for up to 100. Banquets provided 23.5% of the restaurant's $6.7 million in 2003 sales.
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