2007 Catering Study: And the survey says ...

Buffets are up and sit-downs are down for many non-commercial catering operators, according to the FSD 2007 Catering Study. Learn what trends are driving catering, and what challenges non-commercial caterers faced in the last year.

The environment is certainly one of the hottest topics in non-commercial foodservice these days. But the desire to operate foodservice in a more environmentally friendly manner isn’t necessarily a driving force in catering, at least according to FoodService Director’s 2007 Catering Study.

Although anecdotal evidence suggests that most foodservice departments engage in recycling efforts with regard to catering, most operators have yet to make the switch to biodegradable or compostable serviceware, the study revealed. Only 33% of operators surveyed say they offer customers the option of using such serviceware. The largest percentage of operators making this option available are found in colleges and universities (38%) and the smallest percentage in B&I (24%).

However, most of those that do offer environmentally friendly tableware make a solid effort to encourage customers to make the choice. According to the survey, 71% of operators who offer such serviceware do not pass the cost onto the customers, even though it  is more expensive to purchase.

Interestingly, the sector most likely to be most environmentally friendly is also most likely to charge more. Thirty-eight percent of university caterers say they pass the cost on to clients.

Of course, not offering biodegradable serviceware does not necessarily mean that a caterer isn’t environmentally conscious. For example, at Harvard University, Crimson Catering tries to reduce its environmental footprint by minimizing the use of disposables.

“We encourage the use of china wherever possible,” says Madeline Meehan, director of Crimson Catering. “In addition, all of our delivery vehicles  run on bio-diesel fuel. We have light sensors in all of our catering areas so we don’t waste electricity, and food salvage is sent to a local pig farmer.”

But other operators cite reasons why environmental efforts are lagging. At Eastman Chemical Inc., Kingston, Tenn., the company makes a major effort to recycle such items as plastic bottles, cooking grease, cardboard boxes and aerosol cans. But Jean Petke, senior employee services coordinator, notes that her contractors aren’t as active.

Reasons noted by Petke’s contractors include lack of space and a lack of interest from customers. Greg Saunders, catering director for Troutdale Catering, which handles events at the Eastman Lodge, notes, “This is our most challenging area. A large part of our business is using disposable products, but we have had success in washing and reusing some of the more durable ones. Space is a huge concern for us as far as recycling.”

Million-dollar baby: But whether caterers recycle or not, their operations are big business for their institutions or companies—especially on college campuses, where respondents averaged nearly $1.1 million in catering revenue last year. The average for all respondents was $468,000, with B&I operators reporting $561,000, hospitals averaging $239,000 and school districts only $88,000.

And it’s growing. Sixty percent of respondents said their revenue increased in 2007, led by colleges (77%) and B&I (71%). Fifty-seven percent of hospitals reported an increase in revenue, as did 44% of school districts.

Most operators (80%) attributed the growth to a higher number of catered events. Among the other causes cited were increased customer satisfaction (66%), increase in customer base (40%), menu changes (32%), and marketing and promotions (28%).

Going off-site: This growth comes in the face of continuing competition, since only 40% of respondents said they have exclusive rights to catering. Universities are most likely (66%) to have a catering monopoly, while B&I operators (10%) are least likely.

Universities are also most likely (63%) to  cater to both on- and off-premise customers, while B&I operators (27%) least likely.

Off-premise catering can be more lucrative for operators, because they can—and often do—charge more for off-premise events. Sixty-two percent of respondents said they charge more for off-premise, with universities (67%) and hospitals (64%) most likely to. Only one-third of B&I respondents said they have a two-tiered pricing structure.

That being said, catering is not necessarily a profit center, according to the survey. Only 44% of respondents said they operate catering at a profit, while 15% said it is a break-even proposition and 41% said catering operates at a loss or is subsidized. Colleges (67%) and B&I (57%) most frequently run catering as a profit center, while hospitals (58%) and school districts (42%) either subsidize catering or operate it at a loss.

Better early than late: On average, 30% of catering revenue comes from breakfast and 42% comes from lunch, with only 22% of business being for dinners. Another 6% comes from special events.

Predictably, B&I operators do 90% of their catering during the day, while universities are much more likely to cater dinners. Those respondents said 31% of their average catering revenue comes from this daypart.

For those earlier dayparts, drop-off service is more often requested than any type of sit-down meal. Survey respondents said that 66% of their breakfast business is drop-off, as is 57% of luncheon business. By contrast, only 31% of dinner business is drop-off.  

Anecdotally, operators are seeing a move away from sit-down and waitservice functions, with more requests coming for buffet-style meals and drop-off services such as boxed lunches.

“Our largest growth has been in delivery service on campus,” says Brenda Ryan-Newton, director of catering at the University of Massachusetts at Amherst. “With marketing and our catering Web page giving more easy access to our customer base, we have seen a substantial increase in this business.”

Citing the budget mindfulness of many university clients, she adds, “We tend to cater more buffets than sit-down dinners. It appears that our university sponsored sit-down meals are used mainly for large fundraising purposes.”

Other operators concur.

“We have seen more of an increase in simple delivery catering, box meals, etc.,” says Jim McAdam, owner of James Michael’s Catering on the campus of Eastman Chemical. “Our biggest decline is in sit-down meals.”

Echoing McAdam’s comments was Opal Spears, manager for HoneyBaked Ham, another Eastman caterer. “We’ve seen an increase in delivery, boxed lunches and buffets,” she says. “When people meet, they eat.”

Pick it up: Todd Foutty, director of foodservice for MetroHealth System in Cleveland, also notes a rise in the desire for buffets, as well as for pick-up, rather than delivery, service. “Pick-up is gaining because hospital departments are being forced to reduce their catering costs,” Foutty says. “Taking out the delivery/labor component reduces the cost to the department and the facility as a whole.”
He adds that catering volume at MetroHealth is rising in general because of cost concerns. “Internal catering is far less costly than when departments order from an outside vendor,” he explains.

Tony Almeida, director of nutrition services at Robert Wood Johnson University Hospital, New Brunswick, N.J., agrees, adding that his prices encourage departments to upscale events.

“Our clients want to impress their guests with a high-end food presentation,” Almeida says. “We can do a high-end event for $30 a person, and still cost only half of what an outside caterer would charge.” Almeida also notes an increase in the demand for buffet service, but not necessarily for cost reasons.

“Our catering service has seen an increase in buffet dining because of the selections that can be offered, and the diversity of the guests,” he explains.