Business and Operations
Catering & Expansion
Getting into catering
By Andrew Hind
Catering for corporate and private events can provide valuable extra income if you do it right
By Andrew Hind
The pizza industry is evolving. The needs, tastes and preferences of consumers are signficantly different than they were 10 years ago. The rise of third-party food delivery services means there is greater competition than ever, and economic factors are forcing pizzeria owners to consider changing the way they operate.
As such, pizzerias must up their game to provide customers with the dining experience they yearn and, at the end of the day, make a profit.
In order to do this, pizzerias are looking to new and innovative ideas. Among the more profitable options available is to enter the catering market.
“The number of visits to restaurants has been flat for a number of years in a row now, thanks largely to rising costs of labour and food prices in Ontario. Indeed, the finer dining industry has never really rebounded from the recession. This makes looking for other revenue streams – such as catering – particularly important,” explains Jeff Dover, principal of fsSTRATEGY Inc., a food and hospitality consulting firm. “Because pizzerias were ahead of the curve in terms of delivery, it’s becoming pretty commonplace for them to branch into the catering industry. It’s a natural extension of the business, actually.”
Roberto Vergalito was one of the first pizzeria owners in St. Catharines, Ont., to dive into the catering industry. Always an innovative voice in the industry – he helped introduce the concept of healthy eating in St. Catharines’ schools, formed the Canadian pizza team for international competition after being crowned the Canadian Pizza Games champion, and set the world record for the largest calzone – Vergalito quickly recognized the opportunities catering afforded.
“There was a time when pizza would thrive anywhere,” he says, “but the market has become saturated with pizzerias now so you really have to work to stand out. Add the rising cost of food and wages, and you can see why it’s getting harder and harder to make a dime. I began pushing the catering side of the business. It’s a bit of a different market because people want really good quality food, but will pay well for it. It’s a great way to bring in extra revenue.”
Dover is equally bullish about the revenue incentive for entering the catering market.
“Catering is a fixed-cost driver,” he says. “The things that make food services challenging – how much food, when, and at what cost? – don’t really apply. As a result, it’s a more profitable business than the restaurant operation.”
Vergalito agrees. “Catering is a lot easier and more profitable. You know exactly how many people you are cooking for and how much food to prep, so unlike in a restaurant, there is no food loss through wastage. Also, nine out of 10 times, I don’t need to pay staff to assist me because I can plan my schedule and pace myself accordingly.”
Catering has the added benefit of generating revenue during off-season months or on days of the week when traffic in the restaurant is slow.
There are additional marketing benefits as well, according to Joe Lombardo, owner of That’s Italian Ristorante in Vaughan, Ont., a restaurant with a 40-year pedigree (including 33 years in downtown Toronto before a recent move north). “Catering supports your brand by providing exposure and introducing your product to people who would not otherwise know about you,” the personable chef explains. “A lot of our catering clients are so impressed with our food and service that they later book parties with us at the restaurant. It’s the best advertising you can get.”
Perhaps surprisingly, pizza is at the bottom of the list when businesses are looking to cater a luncheon or a family is planning an important party. If you want to succeed in the catering business you have to expand beyond pizza. Additionally, you need to play to the strengths of your chef and, unless you want an outlay of capital expenses, make full use of your existing kitchen.
“It’s imperative that you have a separate catering menu,” Lombardo says. “In my father’s day, a catering menu was unsophisticated and not really customer friendly – the client simply ordered 10 of this item or that off of the regular menu. But that wouldn’t cut it today. We cater a lot of corporate lunches, for example, and people don’t eat as much at lunch. Additionally, personal assistants don’t have time to price out items and compile complicated orders; they want the ease of pre-set meals. It’s more convenient – the customer just says they want a meal for 10, no need for pricing – and the end product looks better, more professional.”
There are risks and costs involved in the catering industry, though.
“It’s important that a pizzeria make an honest appraisal of whether they have the capacity to do catering without it affecting one’s core business,” Dover says. “Ideally, you don’t want to have to allocate additional resources to the catering endeavour.”
At the same time, you need to be very clear: when a catering order goes right, everyone is happy, but when it goes wrong, a lot of people will know, potentially threatening your pizzeria’s reputation.
“Timing is everything to a successfully catered event, especially when it involves the corporate world,” Lombardo says emphatically. “The corporate world is very structured, so timing is important. If executives say they need to eat by 12, we need to be there by 11:45 because their days are so tightly scheduled. This also applies to private events as well, though: people want their food to be there exactly when they expect it. If you miss the deadline, people are mad and your reputation is affected.”
Finally, there’s the matter of how to keep products fresh during an event. “The biggest obstacle I faced when entering the catering field was the start-up cost, thanks to the special containers needed. They are not inexpensive,” Vergalito says. “It’s a one-time expense, though, and the return on investment has been great.”
At first glance, entering the catering industry might seem a monumental undertaking. It’s a very different business model, after all. But it’s far less daunting than it might appear, as a growing number of pizzerias who have already taken the leap can attest to.