After enduring a brief lull during the worst of the recession, catering businesses have been back on the upswing. In fact, according to a recent report from Packaged Facts, catering revenue exceeded $14 billion in 2010, representing a 9% increase over 2009. Sales are expected to rise another 9% this year and 7% in 2012, driven largely by the return of business-event spending, higher wedding spending and the slow but ongoing recovery in consumer spending, according to “Catering Trends in U.S. Foodservice.”
There may be an opportunity here for supermarket delis, bakeries and prepared food departments, one analyst explained.
“During the recession, a lot of restaurant operators were impacted by consumers paring back on dining occasions,” said Melissa Wilson, a principal for Technomic, a Chicago-based restaurant consulting group. “Supermarkets that expanded or enhanced their prepared food departments benefited from that [trend] tremendously.”
Technomic research also revealed that consumers began entertaining at home more often during the recession, a trend that the consultancy expects to continue.
And, while homemakers of yesteryear may have been mortified by their guests discovering that the bloomin' onion and fajita rollups served at their Super Bowl party were not homemade, today's party-goers have no problem with catered food.
“It appears to be perfectly acceptable these days to purchase platters from some place and not try to pretend that you made it yourself,” Wilson noted.
“Consumers in the focus groups told us that it gave them an opportunity to enjoy food from their favorite restaurants in a less formal occasion like a potlatch or a party at their home or a friend's home.”
But supermarkets may be missing the boat. Although many retailers saw the recession as an opportunity to beat local restaurant takeout at its own game by overhauling or fine-tuning their prepared food programs, their catering offerings rarely kept pace, Wilson said.
“A lot of supermarkets still seem to have their core catering offerings, the deli platters, the shrimp platters, the cheese platters and so forth, but they have not taken the innovations that they've made in prepared foods and expanded that into the catering realm,” she said. “So I think there may be a missed opportunity.”
By contrast, a full-service, casual-dining restaurant with a catering option typically offers a comprehensive selection of items from its entire menu. For example, in addition to traditional party favorites like artichoke dip, sandwich platters and vegetable trays, Heartland Apple, an Applebee's franchisor with locations in Illinois, Wisconsin and Iowa, also offers a selection of several different party-sized salads, as well as pasta bowls, a variety of buffalo wings and a menu of different sliders.
When supermarkets aren't incorporating recent innovations from their prepared food departments into their catering menus, local restaurants still really have an edge, Wilson said.
Supermarkets have one key advantage. They can probably beat restaurant catering operations on price, and customers are still looking to save money, whether they are planning a party at home, a fund-raiser at their church or a lunch at the office.
During the recession, in particular, business-to-business catering budgets were pared back, according to Technomic. Office managers and other decision-makers generally looked for lower-priced options. Technomic focus groups even revealed that when those decision makers had an internal office meeting coming up, they often considered picking up platters from their supermarket deli department, rather than ordering from a restaurant, Wilson said.
Unfortunately, here supermarkets also face one key disadvantage. Most do not offer delivery or full-service catering. Between the sporadic, seasonal nature of catering order volume and the cost of commercial auto and other liability insurance, most supermarket deli and prepared food departments don't see the payoff in offering delivery.
“One of the biggest challenges operators face is developing a delivery offering, because it is important,” Wilson said. “Many have made the decision that it's not something they can offer. And that's fair enough, as long as they understand that they won't be in the consideration set for certain occasions.”
However, Technomic research also revealed that restaurants that don't offer delivery are still getting a sizeable chunk of the B2B catering business. Sub shops, in particular, get a lot of short-notice business from local offices. Proximity and familiarity are both big factors in these situations, but many supermarkets are located near an office building. They may just need to pursue these opportunities more aggressively, by marketing to local businesses and possibly by modernizing their sandwich platters and offering selections from their prepared food departments, Wilson suggested.
Deli and prepared food departments that want to stay top-of-mind when their customers are planning a party or a meeting might also consider offering tips and advice to ensure their event is a success.
Lakeland, Fla.-based Publix Super Markets began testing event planning in 2001. Thirteen of the company's store locations now offer staffed, All Occasion Event Planning year-round, and every Publix store offers Special Event Planning during certain times of the year, such as the November and December holidays, major sporting events and graduation season, according to Maria Brous, director of media and public relations for Publix.
“Customers can gain assistance in planning a theme if needed, planning and ordering at the event planning station with an event planning specialist and have all the items gathered for ease and convenience of their checkout,” Brous told SN. “Our Event Planning program continues to grow. Each of our store locations with an Apron's Cooking School also offers event planning and then we have a few more locations with event planning, such as Publix GreenWise Markets.”
The company's website also features a comprehensive Food and Entertaining section, where shoppers can browse events by category, ranging from kids' birthday parties and adult milestone parties to holidays and business lunches. Each selection features tips, along with an easy-to-use menu planner suggesting appropriate appetizers, entrees, side dishes and desserts available at Publix stores, all based on the number of guests expected to attend.
For example, the “Party Like a Pirate” event for kids suggests that parents “get guests into the spirit by sending handmade map invitations,” and that the party include a treasure hunt or a game of capture the flag. A deviled egg tray is suggested as an appetizer, along with a sandwich wheel for the entree, and a fresh fruit or cheese plate for a side dish. A list of “reminder items” including plates, napkins, utensils, balloons and decorations is also included.
And, assisting their customers through the party planning process has helped their catering offerings grow.
“We have had very positive feedback from our customers, as they enjoy the one-stop service,” Brous said.
