Dining services at the 11,700-student University of Notre Dame in South Bend, Ind., has had two major issues to deal with in recent months: a failing economy and a struggling football team. Unfortunately, both events have hit catering sales equally hard.
Notre Dame’s dual catering issues are not unique: Across the country, on-site catering concerns are being adversely affected by the depressed economy. However, at the home of the famous Fighting Irish, dining services is taking a harder look at its resources and battling back with a revised outlook and a new game plan—and they are not alone.
Confronting the economy plus a loss of interest in the university’s once great football team have been part of the “extra challenge” Notre Dame Food Services has been facing during the past two years, says Lisa Wenzel, assistant director, NDFS. Both events have had a negative impact on overall foodservice, Wenzel says. “Our sports programs are not as strong as before, so that has an effect. It’s been the perfect storm.”
To fight back, NDFS’s catering arm, “Catering…by Design,” has created a new menu offering aptly titled Affordable Entertainment, plus an aggressive one-on-one marketing blitz targeting the Notre Dame community through cold calling, networking and trade shows.
Launched in April 2009, the new menu provides lower-cost items paired with a simpler service, effectively cutting regular menu offerings by 20%, Wenzel says. The change was due to the economy and customer feedback. “Their perception was that we were a little too highly priced,” she says.
Part of that stemmed from university-wide budget cuts, which prompted campus departments to look for creative ways to cut costs without losing personnel. Like many institutions and corporations nationwide, they’ve accomplished that by slashing entertainment.
“That really cuts into catering,” Wenzel says. “We’re trying to balance that by doing things differently. People are doing less expensive events. Instead of served meals they may be doing something in their office; we’re setting up and cleaning up after them.”
In the Affordable Entertainment package, the Budget-Friendly Hors D’oeuvre menu is priced at $6 per dozen pieces and may include polenta triangles with pancetta and brie; chili and corn fritters; spicy chicken and cilantro wontons; and brown sugar smokies. The Budget-Friendly Drinks menu is priced at $7.50 per gallon and serves approximately 20 guests.
Across the board
Manask & Associates, a Burbank, Calif.,-based hospitality industry consulting firm specializing in cultural institutions, reports “major cuts” in the catering needs of its various clients across the United States and Canada.
“They’ve all seen, in the last 12 to 15 months, a drop in their business,” says President and CEO Art Manask. “That includes both social and corporate catering. We’ve seen anything from a 20% to a 40% drop in catering.
“What caterers are doing to respond to this is exactly the same thing you’re seeing in the restaurant industry: they’re re-engineering their menus, pricing and portions,” Manask adds.
In addition to catering corporate dining, government sites, hotels, schools, colleges and other institutional dining venues, Manask clients include museums, zoos and aquariums, casinos and performing arts: the University of Central Missouri; the New York State Historical Association; Philadelphia Zoo; RAND Corp.; Paramount Pictures; and the Venetian Resort Hotel-Casino in Las Vegas.
“They’re repackaging to come up with prices that are more to the times,” Manask says.
That seems to be the winning formula for catering today, as institutional and corporate clients eschew holiday sit-down dinner parties for buffets and serving stations with lighter fare.
The box lunch option at Notre Dame has “increased substantially” because of its affordability, Wenzel says. Box lunches can be ordered with at least a two-hour notice. The Light Box Lunch is priced at $5.50 and includes any of a variety of sandwiches with fresh fruit. The regular Box Lunch at $6.50 includes a sandwich with three side choices and a pickle.
Box lunch sandwich choices include butcher block ham, honey turkey, roast beef, egg salad or chicken salad, served on a soft white baguette, beer barley club roll, chipotle club roll, homestyle wheat, sourdough or rye. They also include a choice of four cheeses: cheddar, Swiss, provolone or pepper jack. Sides include fresh fruit salad, red bliss potato salad, broccoli salad, cookies, whole fresh fruit or chips. Beverages are an additional cost and start at $1 for bottled water.
Diversified efforts
Miami University in Oxford, Ohio, is also seeing some impact on its catering operations from the economic downturn, says Don King, assistant director of the Phillip R. Shriver Center for catering and retail sales. The former executive director of catering, King now oversees all catering and retail sales, which includes the food court, coffee shop, convenience store and restaurant. Miami’s catering business has two brands: Carillon Catering and Direct to You!, a delivery service.
“Our summer conferences suffered the biggest losses,” King says. “We’re currently about 9% off from last year.”
Yet, overall, foodservice operations saw positive year-end results for the fiscal year ending June 30. King says that’s due in part to his operation’s focus on diversification. Gains in programs like catering for fraternity and sorority houses and the surrounding community are helping insulate the business from the economic downturn.
“It would probably be a little worse if not for Direct to You! and our fraternity and sorority business,” King says. Direct to You! deliveries require a $75 minimum, although smaller orders can be picked up. Anyone using a university account to pay also receives a 10% discount. “Direct to You! sales have been up,” King says. “We’ve had more deliveries and drop-off catering. We’re seeing more box lunches.”
Popular deliveries include the “no frills” pasta buffet. Priced at $9.50 per plate—against the typical $12.95 options—the more affordable buffet includes penne with meat or garden marinara sauce, tossed salad with ranch or Catalina dressing, garlic bread sticks and cookies or brownies. Similarly priced at $9.95, the baked potato bar features a baked potato with choices of fillings: broccoli florets, diced tomatoes, Texas chili, cheese sauce, butter, sour cream, salsa and bacon bits. It too includes a salad and choice of dessert.
The box lunch menu is also becoming more popular. It includes a Seasonal Fruit Box at $10.50 featuring fresh-cut fruits, low-fat cottage cheese or fresh-made chicken or tuna salad, plus club crackers and a large apple bran muffin. All box lunches include a choice of beverage. The Create A Box offering, at a more frugal $8.95, starts with a choice of sandwich: smoked turkey and Swiss; ham and provolone; roast beef and cheddar; or hummus and muenster with roasted red pepper, served on asiago, multi-grain or white bread. Sides are seasonal fresh fruit, potato chips or pretzels and two Otis Spunkmeyer cookies.
This takes the cake
The foodservice department at Reid Hospital & Healthcare Services in Richmond, Ind., is also seeing positive results against a negative fiscal climate, partly because of catering. The overall foodservice business is up some 50% for the year, says Michelle McClurg, director of food and nutrition services.
The Reid foodservice catering team includes two full-time staff members, a chef and administrative support; it also makes use of the procurement and production supervisor in the department to support the catering business when needed, McClurg says. But the real boon to catering has been staff member Lisa Turner Blumer, who also is a professional cake decorator and is cross-trained in catering and the niche cake business. That’s been a distinguishing element for Reid of late, as several local businesses have stopped doing custom cake decorating altogether.
“[Blumer] has done phenomenal work,” McClurg says. “We’re just getting more and more orders all the time, and that’s spinning off into general catering orders, too.”
Reid’s foodservice operation includes three entities: an eatery, Café at Twelve Hundred, Café at Twelve Hundred Catering and Café at Twelve Hundred Cake Decorating. The services are aligned to feed off each other’s business. The hospital is also well positioned for catering in regards to resources, McClurg says. For example, Blumer uses the bakery when the baker is done with all the patient services and daily café menu items for the day.
“We are able to continue to build revenue from the already running ovens after the baker is gone by making cakes,” McClurg says.
The new Grand Hall at Reid can hold up to 350 people in its main area, but the catering crew can serve even more meals by doing several different events at once.
“We can expand to multiple levels in the Reid facility and change venues,” McClurg says. “We can do stations or sit-down dinners. We do what’s necessary in order to create the event—not what we necessarily say we have done before. We do a lot of station-type concepts. We just did a major one with a fabulous dessert station.”
At a recent event Blumer created a cake in the shape of the word “ART” with a contemporary styling. At about two-feet tall and two-feet wide, the cake became a tall focal point that could be seen from across the room. The purpose was to have the guests walk away thinking, “That entire thing was cake; I wonder who did that?” McClurg says.
Blumer wore a pink chef’s coat to the event, whereas everyone else was in black and white, so that she stood out from the crowd.
“That whole thing was to make people remember that we’re doing specialty cakes now,” McClurg says. “Our goal from that station was to promote the cakes when we have 300 potential customers to do that with.”
Drawing them in
Notre Dame’s catering team has been creating brand recognition events as well, from one-on-one meetings to seminars.
“We’re a not-for-profit doing non-traditional marketing,” Wenzel says. “We’re doing more trade shows and having a lot of interaction with local chamber of commerce businesses, such as drop-ins with plates of cookies.”
While dropping off goodies to a potential customer, she’ll ask, “Hey, have you thought about your Christmas entertaining?” Wenzel says. “You get a much better response when you give them cookies before the brochure.”
As most catered events are done on campus, she has to seek out her clients and lure them in. “We have to get people to come here. It’s kind of a dual challenge,” Wenzel added.
A yearly marketing event, the Fall Fete, showcases the catering menu alongside products from a local decorator and rental company to show university personnel what types of events—from casual to elegant—their in-house foodservice team can produce. Another marketing lure is the December Special, which offers catering clients a dozen free Christmas cookies with any food delivery made between Dec. 21-23. The offer is only for orders placed at least three days ahead of service.
Miami University’s King pulls business in by keeping track of Carillon Catering’s comprehensive four-year marketing plan to follow where targeted revenue growth is headed. That includes the wedding and fraternity/sorority markets. Toward the latter, King is offering the Direct to You! brand to pitch home meal replacements; he’d like to capture a piece of their weekly meetings as well.
He’s also pushing his lunch catering arm “a little bit more” so that it makes sense from the students’ standpoint for a “quick in and out” meal approach. And rather than paring down the pricing on the Carillon Catering restaurant menu, King has put more emphasis on the food items.
“I didn’t want to discount it; I didn’t want to dilute what we’ve done in the past,” he says, adding that moves such as taking $10 off an entrée price just leaves the customers feeling as if they’d been paying too much all along. “We’ve looked at some items. We’ve gone with some smaller portions, and we’re selling a lot of chicken.”
Carillon Catering also scaled back its fillet option for the black-and-blue beef tenderloin. Where customers might have ordered a 6-ounce to 8-ounce tenderloin, they’re now going for the 4-ounce portion, which has a 25% to 35% lower cost than the larger fillet.
“It’s presented in such a manner that people are enjoying it. We seem to be selling a lot of those,” King says. The chef builds the 4-ounce fillet upon vanilla bean mashed potatoes, with a blueberry demi-glaze over blue cheese. It’s part of King’s adherence to the rule that people eat with all five senses. “Along with the flavor there’s really great aromas, and it’s presented in a manner that is visually appealing.”
The department has been pushing home meal replacements for Thanksgiving and the summer holiday as well, he says. A complete high-quality meal for 10 goes for about $75.
“This year our sales are about 300% over what they were last year” for Thanksgiving, which typically has been “a very slow week.” Helping to boost sales are in-house made pies, rolls and dinner packages. Plus, he’s made it easier for people to order such items with online ordering. “That helped,” he says.
Reid Hospital is finding positive marketing results from meeting last-minute catering calls. “We’re finding it spins into something else,” McClurg says. “It’s amazing what people are interested in doing in the communities. We’re doing a lot of box lunches.”
The hospital’s foodservice has found that its community outreach for such specialty events and benefits as non-profit group banquets, anniversaries, sororities, athletic box lunches, chamber of commerce events and, now, weddings, has boosted its brand recognition as well.
“That’s been filtering into Reid. People are saying, ‘The hospital does catering?’” McClurg says. The Reid Hospital Foundation also has been instrumental in acquiring clients. “Every time they do a presentation to a community group they have us cater the events. Every time there’s a physicians’ dinner for new or existing physicians, we are catering.”
At Notre Dame, from a cost control perspective, the department has increased its focus on waste, purchasing and monitoring staffing levels, Wenzel says. “We don’t want wasted product,” she says. Her team currently uses about 70% local food products.
Miami U’s Carillon Catering uses local purveyors “when it makes sense to go local; if we can do it at a comparable price to support the local economy,” King says. That usually depends on the time of year. “We have a lot of farmers in the area and we are trying to buy produce from them.”
Quality always comes first—get what you want, then get it from where you can, he adds. Miami also has been controlling costs through creative staffing.
“We’ve been cautious about filling positions. We’ve left a few [positions] open and reallocated labor,” King says. “We’re leaner than we’ve ever been.”
He admits it’s definitely a different catering atmosphere than before the economic fallout. “But compared to some of my colleagues I’m seeing out there that are being hit hard by it, I’m thankful that we’ve been able to really build diversity on and off campus,” he says.
Weddings remain a viable source of income for many catering ventures. Consultant Manask has found that prospective brides and grooms are not postponing their weddings in this economy; they’re simply downsizing like everyone else.
“The wedding isn’t getting cancelled; they just have less money to spend,” he says. It’s the same with corporate events. Caterers are not offering the $100-a-plate wedding for a discounted $80; nor are they lowering the $50-per-plate corporate event to $40. They are getting more creative.
“What a lot of caterers are doing is being proactive in coming up with $80 wedding packages and $40 corporate events that they can still make a profit doing,” Manask says. “They’re being more proactive in developing packaging and pricing that is lower than it was a year or two ago, but it is still profitable for them.”
Weddings at Notre Dame have not dipped in volume with the economy. So brides there are doing one of two things: paring down the guest list or cutting back on food.
“People will stop doing corporate entertaining, but they will not stop getting married,” Wenzel says. “Half of brides still want a big extravagant wedding. The second half are looking to do something more affordable and more creative. That’s another big target for us to go after.”
Wedding planners may forego the high food costs of steak and shrimp for lower-priced items like a sandwich spread or cake and cookies. “We have an in-house bakery and we are able to capitalize on that by doing fresh-baked products that are unique.”
The wedding business at Miami has insulated the catering business, King says. Carillon Catering hosts some 30 weddings a year either onsite at the Shriver Center or off campus.
“People are trading downwards” as far as entrée selections, he says. “A year or two ago we were selling tenderloins or shrimp. Now we’re doing a lot of chicken piccata.”
King is trying to grow the area. “That’s definitely in our marketing plan, to increase our weddings by 50% to 70% in the next couple of years,” he says. January marks the beginning of the wedding show season, and Carillon Catering is being positioned “to be at every one of them,” he added.
Another traditionally pricey purchase at weddings—alcohol—is shrinking. “Where they might have gone to some really nice wines, microbrews and craft beers, people are ordering right off our menu, [such as] stock items they can get at a better price,” King says.
Probably the biggest change in King’s repertoire has been attitude. Recent forays into elegant yet simpler offerings included a seafood eggs Benedict station, including salmon, mashed potato martini bars and risotto bars.
“In the past, we might have been a little quick to offer our higher-end stuff,” he says. “We certainly sell a lot more of our other things right now.”
FSD’s 2009 Catering Study
The results of our 2009 Catering Study are in. Here’s a snapshot of the industry, based on the responses of 297 operators:
Eighty-five percent of operators offer catering; virtually all of the respondents in B&I, colleges and hospitals do. In schools, 73% offer catering, while only 68% of operators in long-term care do. The average annual catering volume was $511,246.
Of the operators who do offer catering, 51% cater both on- and off-premise events, with 77% of their business on average coming from on-premise catering. Fifty-five percent of operators say they charge off-premise customers more than they do for on-premise business, with most charging between 11% and 20% more.
The types of services offered run the gamut from breakfast meetings to cocktail receptions. In total, 91% of respondents offer continental breakfast; 89% offer lunches with deli meats, buffets and salads; 89% offer break service that include cookies and pastries; 86% offer hot and cold buffets; 83% make box meals available; 83% do plated meals; and 56% do cocktail receptions. Colleges are most likely to do sit-down meals (98%) and receptions (75%), while schools are least likely (57% and 29%, respectively).
For more than half of the respondents (63%), catering represents 10% or less of their total foodservice revenue. But catering is big business in colleges: 21% of respondents say catering represents more than 30% of their overall revenue, versus only 13% of respondents as a whole.
The downturn in the economy affected a fairly high percentage of operators in 2009; 34% say their catering revenue decreased last year, compared with only 18% the previous year. The recession hit B&I hardest, as 50% say catering business had declined. By contrast, only 21% of long-term care operators reported a decrease last year. By far the reason cited most by operators reporting a decrease (81%) was budget cuts in their companies or institutions. Other noted reasons included fewer events to cater (45%) and a decrease in customer base (22%).
Full-service catering, as opposed to drop-off, makes up the majority of business in all segments except B&I and hospitals. Overall 58% of catering is full-service; it is 77% of the business in long-term care, 62% in colleges and 57% in schools. However, drop-off service makes up 63% of the business in B&I and 53% in hospitals.
Exclusivity is a right enjoyed by 43% of operators. Long-term care (55%) and colleges (54%) are most likely to have the sole right to catering on their campuses, while schools (18%) are least likely.
Overall, 44% of operators offer their customers the options of choosing environmentally friendly disposable serviceware for their catered events. Twelve percent say they use only permanentware. Colleges (64%) are most likely to offer biodegradable/
recyclable serviceware, while long-term care (29%) is least likely. However, overall only 23% of clients are requesting such serviceware, and only 38% of operators will charge customers more if they use it.