Catering Services
Description
Companies in this industry provide single-event food services at customer-owned and company-owned facilities. Catering companies typically operate as local businesses; major US-based companies include Abigail Kirsch (New York), Behind the Scenes Catering (San Diego), Blue Plate Chicago (Chicago), and Legendary Events (Atlanta).
Worldwide, as consumers in emerging markets increasingly enter the middle class, they are more likely to organize catered special events such as wedding receptions, holiday parties, and graduation dinners. The middle class is thriving in the Asia-Pacific region, mainly in the Southeast Asian Nations, according to Mastercard.
The US catering industry includes about 12,000 establishments with combined annual revenue of about $11 billion. Many food service contractors, hotels, and restaurants cater events, but those businesses are covered in separate industry profiles and are not included in the catering industry. Companies that prepare and serve food for immediate consumption from trucks, carts, or other vehicles also are not included in this industry.
COMPETITIVE LANDSCAPE
Corporate profits and consumer income are the main drivers of demand for catering services. The profitability of individual companies depends on cost controls and effective marketing. Large companies have advantages in offering expanded services such as facilities management, room rental, and entertainment. Small companies can compete effectively by serving small groups and offering personalized service. The industry is highly fragmented: the top 50 US companies account for less than 15% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include meals, snacks, other food items, and beverages, which account for about 85% of the industry revenue. Other services include the serving of alcoholic beverages prepared for catered events.
A typical catering event starts with a consultation with a potential client to assess the type of event, guest count, venue, and special food requests. The client may want the caterer to also coordinate facility rental, flowers, entertainment, and photography. The caterer produces a detailed proposal that includes the menu, beverages, a list of rental needs, special requirements, and a detailed price quote. After the client accepts a proposal, frequent communications are maintained with the client until the event takes place.
Major operations on the day of the event include cooking, setting up, serving food and drinks, and cleaning up. On-premises catered meals are typically served buffet-style or as seated functions. Off-premises catering includes boxed lunches, buffets, "finger food," barbecues, clambakes, and seated meals. Large off-premises functions may require a portable kitchen.
Servers typically help set up the event, serve food, and break down tables once the event is complete. Ratios of servers to guests vary according to the type of event. More servers are required for a sit-down meal than for a buffet or a standing reception, for example. Since waitstaff work is irregular and pay is low, finding dependable waitstaff can be a challenge. The seasonal demand for catering makes it even more difficult, as servers are often unavailable at a caterer’s busiest times of year: summertime and just before Christmas.
As with servers, work for cooks and chefs is generally part-time, irregular, seasonal, and often stressful. Work includes preparing, transporting, and cooking food before the event; serving food at carving tables and chef stations; and cleaning the kitchen. Food can be pre-prepared and pre-proportioned, but many catering chefs still make meals from scratch. Caterers plan for about 5% "overage" to avoid leaving people hungry or dissatisfied.
Kitchen facilities may be large or small, depending on the types of events a caterer services. Food is bought from wholesalers if the quantities are large. While a caterer will prepare standard food items, specialty items like wedding cakes may be subcontracted out.
Worldwide, as consumers in emerging markets increasingly enter the middle class, they are more likely to organize catered special events such as wedding receptions, holiday parties, and graduation dinners. The middle class is thriving in the Asia-Pacific region, mainly in the Southeast Asian Nations, according to Mastercard.
The US catering industry includes about 12,000 establishments with combined annual revenue of about $11 billion. Many food service contractors, hotels, and restaurants cater events, but those businesses are covered in separate industry profiles and are not included in the catering industry. Companies that prepare and serve food for immediate consumption from trucks, carts, or other vehicles also are not included in this industry.
COMPETITIVE LANDSCAPE
Corporate profits and consumer income are the main drivers of demand for catering services. The profitability of individual companies depends on cost controls and effective marketing. Large companies have advantages in offering expanded services such as facilities management, room rental, and entertainment. Small companies can compete effectively by serving small groups and offering personalized service. The industry is highly fragmented: the top 50 US companies account for less than 15% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include meals, snacks, other food items, and beverages, which account for about 85% of the industry revenue. Other services include the serving of alcoholic beverages prepared for catered events.
A typical catering event starts with a consultation with a potential client to assess the type of event, guest count, venue, and special food requests. The client may want the caterer to also coordinate facility rental, flowers, entertainment, and photography. The caterer produces a detailed proposal that includes the menu, beverages, a list of rental needs, special requirements, and a detailed price quote. After the client accepts a proposal, frequent communications are maintained with the client until the event takes place.
Major operations on the day of the event include cooking, setting up, serving food and drinks, and cleaning up. On-premises catered meals are typically served buffet-style or as seated functions. Off-premises catering includes boxed lunches, buffets, "finger food," barbecues, clambakes, and seated meals. Large off-premises functions may require a portable kitchen.
Servers typically help set up the event, serve food, and break down tables once the event is complete. Ratios of servers to guests vary according to the type of event. More servers are required for a sit-down meal than for a buffet or a standing reception, for example. Since waitstaff work is irregular and pay is low, finding dependable waitstaff can be a challenge. The seasonal demand for catering makes it even more difficult, as servers are often unavailable at a caterer’s busiest times of year: summertime and just before Christmas.
As with servers, work for cooks and chefs is generally part-time, irregular, seasonal, and often stressful. Work includes preparing, transporting, and cooking food before the event; serving food at carving tables and chef stations; and cleaning the kitchen. Food can be pre-prepared and pre-proportioned, but many catering chefs still make meals from scratch. Caterers plan for about 5% "overage" to avoid leaving people hungry or dissatisfied.
Kitchen facilities may be large or small, depending on the types of events a caterer services. Food is bought from wholesalers if the quantities are large. While a caterer will prepare standard food items, specialty items like wedding cakes may be subcontracted out.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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