October 5, 2021 | Mandy Wolf Detwiler | Website
As more Americans return to the workplace following the COVID-19 pandemic shutdown, many companies are returning to catering for lunch options. The catering market in the U.S. is predicted to reach approximately $12 billion this year, according to Statista data. That represents a healthy increase from $11.35 billion in 2020.
Pizza restaurants from Donatos to Domino’s have successfully added catering components to operations based, in part, on the availability of delivery. But as more restaurants grapple with staffing issues, delivery can be difficult to achieve.
Yet, catering is a lucrative addition for a restaurant when done right.
“Catering orders are extremely valuable to restaurants due to their high margins and high order values,” Mike O’Hanlon, ezCater’s head of catering partner business, told Pizza Marketplace in an email. ezCater is a national marketplace for business catering.
“Plus, with restaurants everywhere facing massive labor constraints, catering can help (revenue). It takes less work to fulfill a $300 catering order than it does to fulfill 30 individual $10 orders. Additionally, catering orders are often prepared outside of the typical breakfast and lunch rushes, keeping employees active on revenue-producing activities throughout the day,” said O’Hanlon.
Donatos Pizza does more than $5 million per year in catering, but when you add in the orders that the stores handle directly, catering sales were right around $14.8 million per year prior to the pandemic starting, Lianne McGlade, Donatos director of sales and services told Pizza Marketplace by email.
“These orders consist of roughly 80% corporate orders including school lunch accounts and 20% residential parties and events,” she said. “Pizza is designed to feed groups and catering has always been a focus for us. With so many different fresh, premium toppings and crust types, there is something for everyone and it’s easy to feed large groups at an affordable rate.”
The company has specialized staff in place to deal with catering orders specifically.
“Having a dedicated catering team in place to help customers place the order for exactly what they need is a big plus,” McGlade said. “We are ready and able to talk through all types of catering options with our customers and not just for pizzas but also other menu items with subs, wings, desserts and party salads. We’ve even developed large catering boxes to help deliver large quantities of pizzas efficiently while also keeping them hot. We advertise that we are a catering option and we send out catering-specific emails to local businesses. During the pandemic, we also got creative with virtual pizza parties since large groups were not gathering together to eat. In addition, we can meet customer needs for individually packaged items with our seven-inch pizzas, subs, wings, salads, cookies and brownies.”
Using your POS system
Technology has made the ordering process easier than ever by allowing customers to pay ahead of time, Dirk Izzo, president and GM of NCR Hospitality, a point-of-sale provider, told Pizza Marketplace by email.
“To ensure catering orders are not just ordered and forgotten (then wasted by the restaurant and inventory is lost), deposits can be taken from the guest upon ordering then managed until fulfillment,” Izzo said. “Deposits help protect the restaurant from last minute cancellations or orders that are not picked up.”
Since POS systems can store previous orders, “catering features on the POS can schedule the same order for fulfillment in a way that is scheduled for convenience,” Izzo said. “Payment can even be stored and applied automatically.”
Izzo said it’s a myth that a POS system solely benefits the check-out experiences.
“For caterers, POS systems provide real-time information needed to prepare meals in the correct order, ensure requested condiments and toppings are included, and coordinate with delivery drivers,” he said. “POS systems create opportunities for digital rewards programs to drive customer loyalty, streamlined back-office processes, such as data and analytic insights, inventory and labor management and cybersecurity protection and contactless ordering and payments, providing an added layer of safety and convenience for customers.”
Tips for effective catering
The experts shared several tips when adding a catering component to the operations strategy:
- Limit your menu for catering. Remember the food has to travel well and set up efficiently. Pizza and bread sticks travel well if you’ve got the hot bags and boxes to get them there.
- Remember small items like silverware, napkins and sauces. What are wings without the blue cheese? You’re likely to get repeat catering orders when you pay attention to detail.
- One size does not fit all. Designate and train specialized staff members to deal with catering orders. “Our catering specialists ask questions about the event in order to send the right amount of food,” McGlade said. “We try to build a relationship with the customer to create trust and loyalty. We ask about dietary needs and whether the group needs individual items or large pizzas and party salads. We want to take all the worry out of the event for the customer so they can enjoy it and know that all the guests will be happy with the food.”
- Be ready to discount for large orders. If you’re not aggressive with your pricing, potential customers will look to competitors for catering orders.
- Work your delivery fee into your catering prices. Adding a large surcharge on top of a tip can be a turn-off for some customers.
- Be everywhere online, and make sure online ordering is sleek and intuitive. “During COVID, many more people have started ordering food online,” O’Hanlon said. “If you don’t offer online ordering, you must. And feature it prominently on your website so customers can easily find it.”
- Lower order minimum and expand delivery area. “Throughout COVID, ezCater has seen significant changes in needs from B2B customers,” O’Hanlon said. “Many have unpredictable schedules and reduced budgets. An order minimum of $100 or less will attract more customers who need smaller orders, and they may return with larger orders later. Expanding your delivery area to 10 to 20 miles as appropriate will also increase the number of customers you can serve.”
- Finally, be ready to advertise your catering component. Once you’ve got your systems in place, add catering to your menu and marketing materials.