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Rebuilding Catering
- 1. Rebuilding Catering “ Staying in the Game ” Anthony Morro Principal Food Industry Solutions, LLC
- 8. Non-Exclusive Market Share External Caterer 1 23% External Caterer 2 11% External Caterer 2 8% External Caterer 1 15% On-Site Caterer 66% On-Site Caterer 77% 2008 Revenues $1M 2009 Revenues $700K
- 9. Exclusivity? Market Share 2008 Revenues $1M 2009 Revenues $700K
- 15. LEAN 5S
- 16. Catering Research Drive efficient operations Saves time for focus on customer service Continued challenge Drive change orders to web based, faster than phone Over 90%, prefer web based Web based 30% faster 30% Phone 46%, Web Based 40% What technology to manage orders? How long to process orders? What % of orders are changed? How are changes made? Caterer (Operator) Admins are key! Web Self Service enables anyone to place an order, anytime, anywhere High Acceptance Think Green Admins 2:1, event coord., dept. managers Over 70% chose web based over other order types Hardly any chose fax Who places orders? How are orders placed? Customer Comments Finding Question Category
Hinweis der Redaktion
- Thoughts of good friend, Realtor in LA area; Concerned about him given down turn….his comments… “In these times we get smarter about our clients, and our markets. The weak will get out of the business, but they were not really committed anyway. In essence, these tough times will make us better operators, better sellers, and cause us to really prioritize our activities. The business is cyclical, but in down turns it is there if you were doing your work all along. Then you are able to stay in the game and reap the rewards on the upswing.”
- Tony reads slide quickly…
- As I thought about this talk and the challenges that we are faced with in catering, I came up with sort of six over arching themes….I will speak to each one of these briefly. My hope is that you will relate some of the points to your own business and get you thinking about some things you can take back to your operations. But before I jump into strategic value I think it is helpful to understand how we got here…. (Next Slide)
- So how did we get here?….what is revenue or sales to you is potentially and often viewed as unnecessary indirect spend to your client management. HOWEVER, I believe, the more you align with your client’s strategic values the less you will be seen as “indirect” spend. So what do I mean by strategic values (Next Slide)…those things that are going to help you not only stay in the game but also reap the rewards later on.
- There is this notion of strategic value, vs. just price point. Know your clients and your customers and how is it that they measure success in their business? What are their value hot buttons for their core business?…If R&D maybe it is productivity,- if your catering service helps keep scientist collaborating and on – site- think of how we have just helped that R&D’s group productivity…and how much productivity would be lost if the service was not available? Can you get a testimonial from the head of research? If its sales and marketing maybe it is the special look that communicates or aligns with that client’s brand, perhaps your catering in some way just helped secure a new customers…what is that worth in terms of revenue to the client? This is not an exhaustive list but rather one that hopefully gets you thinking about what the potential strategic value could be for your clients. Also realize that your clients needs will evolve or change over time based on their business climate – be ready to re-align as needed…
- Since the volume is no longer there to hide the sins…we must manage our P&l’s with increased rigor . Review your sales mix more often, simplify and focus the offerings by introducing seasonal menus that are local and sustainable- offer targeted specials for a short time to pass along seasonal savings – help your clients meet that budget piece. Knowing Food Cost on a percentage basis is no longer good enough- you need to know your margins for each menu offering . Labor must be managed more closely- caterers must know how many hours a position could work based on where sales are TODAY. (As time permits relate story of the VIP building and catering napkins…what does VIP really mean?) It may mean when external customers are present - but the internal VIP’s are perfectly happy with the “no frills” disposables.) Key Point -When you really have a handle on your P&L you are in a better position to be flexible and keep a long term view of the business… (Next Slide)
- Understand you may not make as much per event but money is still there to be made. Keep the customer in the habit of using you with goodwill and frequent engagement! What you don’t make on this one you will likely make on the next one. And Trading down does not mean lower quality…if you have gone from Filet Mignon to Mini- Burgers…make sure they are the best mini burgers out there. This applies if you are exclusive or non exclusive (open campus)… because in either contract arrangement you can never rest easy in this environment…(Next Slide)
- If your non-exclusive (open campus), meaning other caterers can provides services to the site, are you aware of what your market share is? If not try to partner with your client to find out. Clients if this is something you are not tracking – you probably should consider it. You may not have the title but you should understand all the spend in your “category”. This is important because catering sales may be moving from one menu segment to another (ex: from lunch buffet to simple box lunch (Ext Caterer # 1) or from hot breakfast to continental – External caterer #2). The challenge is that the external caterers who specialize in those menu segments do not lose but gain market share during the down cycle, with sales (SPEND) going from $1M to $700K as this example shows. The risk is that catering dollars go out of the “internal system” and it is likely that the external caterers have deepened their relationships with your internal clients/partners and stand ready to increase their business when the market cycles back. In other words, you may not even be aware of this unless you track market share as a key performance indicator.
- It is really no different for the Exclusive arrangement. You can’t rest easy. Your customer will find ways around the policy to save $. Also, the competition may look a little different but is competition none the less for the shrinking catering pie, if you will…how many of your customers go to Costco or walk to the local coffee shop? Look at what they are bringing back. Now part of the reason we want to track market share is so we can better understand our own business as well as the other guy too! (Next slide)
- Incorporate SWOT into your strategic planning for the catering business strengths (maintain, build and leverage) , opportunities (priorities and optimize) , weaknesses (remedy or exit) , threats (counter) - AND SO TO COUNTER THESE THREATS YOU MUST HAVE A DEEPER UNDERSTANDING OF YOUR CUSTOMER”S BUSINESS
- - Deeper knowledge of customer’s business- In slow times it becomes more important to let your customers know how much you value their business…BUT get to know as many as your customers and potential customers as you can. Realize they may sit in different places in an organization. Understand who they are and what is it they do?...Offer to partner and plan for the long term vs. just the transactional contact. What are the significant milestones and small wins in their business that will drive the need for some type of social event, meeting, or celebration…? And once you formed those relationships successfully, you can more deeply align those strategic values we discussed earlier and explore new business opportunities… (Next Slide)
- That’s right, explore the non-conventional…Because if you have the positive and trusting relationships you can now probe these areas with your clients… Can you bring any community based events in house? Or what about client sponsored fundraisers… by knowing the folks in community affairs and public relations a caterer could be in a position to attract some of these events that were perhaps done off site… A few Non-conventional success stories… One caterer did such a great job with there catering fares, that they now charge to attend! Wine Tastings, Cooking Classes, Morale events, Sweethearts Dinner for valentines, Facility Tours, Retiree programs. University? Tap into students (Parents) – Movie Night Snack Packs, Celebration Brownies that say congrats or get well, simple things…no frills If you are in a office park with smaller companies that do not have food service, you may be able to tap into this market and provide catering services – check with your client contract first though… And mainly for universities, this UNIQUE VENUE Web site… allows you to market your conference center so that event planners can request quotes and bids…this could work for certain organizations… And the last concept I want to discuss is the need for caterers to continue to Invest – even in difficult times…that doesn’t necessarily mean spending huge $$ but is does mean being really smart and focused on the dollars we do have to invest… next slide…
- When I say Invest, I mean invest time (and some money) in training your people that you already have on board…but be smart about the training that you do so that it has the impact you need it to have – align the training with the strategic value goals…for example if your client is an insurance or pharmaceutical company who has a focus on health and wellness it may make sense to make sure your culinary team is current on all the healthy cooking techniques for catering…market that as win/win for your client’s business… Cross train and share knowledge…in other words make sure you efficiently make use of all the man hours you do have available and understand this… so much of the training knowledge you need is often available within your organization… what are you doing to leverage and share this information across your teams
- We have to be smart about the money we do have to invest in our operations. Where there is a clear ROI for labor saving equipment we should look at those but we also have to be smarter and more careful with the equipment and supplies we already do have. How many here have ever been in a catering store room that well…lets say wasn't the most organized place in the building? C’mon be honest…. Well OK, here is a system for all of you that can admit it… Lean 5S (Next Slide)
- It endorses continual organization and efficiency in a workplace with an emphasis on waste elimination and visual communication. Sort, Simplify, Sweep, Standardize, Sustain, - Lean 5S can be applied to any business. Emphasis on making things visual so that they are easily repeated by all. I have seen this done in manufacturing ops…but isn’t your catering kitchen really a manufacturing/production operation? It really is! Now one of the things I learned recently about being a consultant is beside giving talks like these you also have to do some market research – I want to share just a slice of some of the research in motion right now on web based technology that maybe 10-15 years ago or so was a nice to have and now today I believe it to be a necessity for any catering business to function efficiently…
- 16 customers/ 13 responded – diverse operations in terms of size and geography Participants (caterers) were asked questions about their customers and how technology is used in their facilities… here is a brief overview that I think supports the efforts around rebuilding catering and staying in the game… So not only should we have process tools in place, like LEAN 5S, we also must leverage technology ( Next slide)
- So part of being a better operator is about making sure you have the right technology for your operation…and that you are leveraging it to its full potential.. Aside from these benefits.. Be careful to choose the right web based tool that will keep your customer’s data safe and secure and provide a platform for suggestive selling as well as centralized management of pricing and policies.
- So to recap our six themes briefly ... Market Strategic value – think about ways to align your services with the client’s core business – be a partner – become less of a “Indirect spend” – What would be lost if the service went away? Rigorous P&L Management – Know the numbers in more detail – enables greater flexibility to Take that Long term view – You may not make much on this event but make sure you get the next one Competition and market share- Know your SWOTs, understand that market share is an important metric to track so you know the dynamics of the catering spend- Deeper knowledge of customers business ..who are they and what do they do? How do they measure success? Continued “Investments” of time and Tools…. Process Tools like 5S Web based technology is key to ensure your operation is efficient I believe these 6 areas we discussed will help you Stay in in the game and reap the rewards! Thanks and now let me introduce my panel partner…