Fast-casual eateries tap catering for revenue growth
For fast casuals, catering can leverage costs and build additional businessCatering is an effective way to add incremental revenue to a restaurant, particularly if it can be non-disruptive to the main operations of of the business and can be managed to leverage labor that may be underutilized at certain times of the day. Catering can also, in some cases, leverage the real estate of a restaurant, although many restaurants and restaurant chains opt to prepare catering orders at a separate facility to build certain scales of efficiencies. Independent eateries and chain restaurants are increasingly promoting catering, and this is amplified during the busy holiday season around Thanksgiving and New Year’s Day. Washington, D.C.-based Taylor Gourmet—a chain of gourmet sandwich shops operating in D.C., Maryland and Virginia, and expanding soon to Chicago’s Loop—promotes catering offerings for lunch and dinner. Prices range from about $5 to $10 per serving, with additional sides priced at about $2 to $5 per serving. Notable on the Taylor Gourmet menu is a variety of traditional and healthier offerings, including “fancy fruit,” yogurt parfaits and fresh salads, many topped with grains and seeds, which may draw more fans as today’s consumer preferences, tastes and diets can be divergent and can lean toward functional and healthy eating.
The marketing of catering optionsAfter having recently expanded to Westfield Montgomery Mall, the growing fast-casual Gusto Farm to Street restaurant chain is also marketing its catering options to customers. Gusto, which is known for its creative, locally-sourced menu and trendy flavors, offers a variety of salads, assembled lunch trays and boxed lunches in the $12 to $15 per serving range, with pizza options running about half as much. Pizzas include the Quattro Mia, with four types of cheeses, including Gouda, and Devil’s Wing, made with grilled chicken and “spicy diavolo sauce” and topped with fresh avocados. Through its newsletter, the chain has been increasing its marketing of catering options to its regular cadre of customers. Retention is a big part of marketing. Repeat business can lead to sizable revenue streams over the course of the year and also engender word-ofmouth promotion to other business customers. Most quick-serve catering options, including those at Taylor Gourmet and Gusto, tend to be drop off and are defined by their successful execution, including on-time delivery, order accuracy and good customer service. Another fast-casual eatery in D.C., Moxie’s, serves all dayparts with breakfast and sandwich & taco options, and is well known for its decadent, hot-pressed ice cream sandwiches. Its motto is about taking risks on the menus and offering bold flavors. Moxie’s catering menu includes bagel bites and morning sandwiches, like sausage, turkey sausage, bacon, veggie, or ham & egg, for breakfast. Wrap trays can turn up the heat with Buffalo Chicken and Spicy Chicken wraps among the lunch offerings. One of the ways Moxie’s has been able to build its catering business is through the ezCater web platform. The website is a lead generation and referral tool for restaurants in several markets. With a text, web link or fax notification, ezCater can alert customers to what is being offered and the company has access to numerous business clients. The owner of Moxie’s, Marcus Barnett, says his catering orders were only a couple per day, initially, but have now increased significantly. As a five-year ezCater customer, orders can now easily reach about 10-12 per day. What Barnett likes about the service is that it gives him access to a staple of regular customers looking for quick, tasty options on a regular basis —pharmaceutical reps among that demographic. Additionally, there are times when regular customers may need a special or last-minute order and they contact ezCater, which then contacts its top-performing restaurants to fulfill these orders, referring him additional business. He also cites the concierge-like service that ezCater offers, acting as an intermediary between the customer and the restaurant. This all has benefits and challenges. The benefits for his restaurant are outsourcing the communications part of the orders and a big chunk of the marketing efforts. “They try to be the middleman and the customer service side,” says Barnett. “The restaurant focuses on the food prep and the delivery.” A challenge for Barnett, admittedly, is not having access to the ezCater customer database. This may pose last-minute communication challenges; also, it may reduce the ability to market to those customers directly. However, Barnett appreciates the platform as a partnership, and recognizes the internal efforts and costs of marketing, and how catering operations can be run more smoothly with restaurants focusing on on-time delivery and performance. Platforms like ezCater are just one of the ways that restaurants can market to business clients. In-store communication is also effective. When business customers have an on-premise meal or get take-out from a restaurant, they should visually be made aware (or reminded) of its catering options through point-of-sale promotion materials. Tabletent cards, menus and point-of-purchase banners and posters are great ways to promote catering. Taking a cue from Gusto Farm to Street: newsletters and social media channels, including Facebook should be used, as well.
Catering lessons learnedFor Moxie’s Barnett, catering has been a careful, gradual foray into incremental business, and not a plunge. The ezCater relationship has certainly been a benefit, but being smart about strategy has also been a boon to the his catering business. Moxie’s owner achieves success, in part, by only taking catering orders that he knows his team can execute. That doesn’t mean passing up on big orders, but knowing if the team can deliver on the order and it has sufficient time to prepare and deliver. “[I know I can’t take an order,] if I get an order at 11, but it’s for 12,” he says. “A lot of restaurants shoot themselves in the foot and then they can’t deliver.” Moxies’ has taken on sizable orders totaling $4,000 or more, when they know they can deliver to the customer on time. One such order—executed well and leaving the customer totally satisfied—recently provided the restaurant with repeat business of more than $500. “They really liked our product and our service. That’s why the same customer did repeat business.” Barnett also establishes catering order minimums and limits the delivery radius. This is another aspect of his smart catering strategy. Small orders, of course, can be disruptive and can lead to unprofitable business once fuel expenses, paper, plastic and driver labor costs are factored in. He admits that new businesses, initially, may have to have a very wide delivery radius. As a restaurant owner sees its catering business getting established, and that there is sufficient marketing, word of mouth and steady weekly revenue, then that delivery radius can be reduced to ensure consistent on-time catering delivery, reduced operating expenses and ease of operations.