Restaurant catering sales are booming. This is quite a departure from where we were just a few years ago.
“During the pandemic, catering was way down, because events were way down. Nobody was congregating in person,” says App8 CEO Elias Hage. “But in the last two to three years, the growth of the catering space has actually been accelerating, and a lot of that has been driven by the return-to-office trend.”
Through his work with App8, Hage is helping restaurants seize this trend. App8 is an innovative customer-facing digital ordering solution that can help streamline, simplify, and automate your catering operation.
We caught up with Hage to learn more about the growing restaurant catering sector and to find out how adding restaurant catering sales to your business model can boost your bottom line.
Why Add Restaurant Catering Sales To Your Sales Mix?
The short answer, says Hage, is that there is a financial incentive behind offering catering as a restaurant.
The catering business is poised for even greater growth over the next decade. In fact, says Expert Market Research, the U.S. catering business will nearly double in size over the next ten years, topping $132 billion by 2034.
But what does this mean for your restaurant? What are the actual business benefits of restaurant catering sales?
Catering Tickets Are Worth More
Adding catering to your operation can be a significant boost to your sales numbers for one simple reason — relative to the average table of restaurant diners, “your ticket size is going to be much larger,” says Hage.
“There are a lot of other variables to factor in, but the net profit margin on a catering operation and order is 50% to 100%, so it can be up to double that of your average restaurant operation,” he says.
Having a Kitchen Gives You a Huge Advantage
As a full-service restaurant, you already have a kitchen. If you’re considering adding catering to your sales mix, this puts you in a good starting position.
“One of the key advantages of doing it as a restaurant,” Hage explains “is that you already have an operation in place that's generating revenue” while you get the catering operation operating at a profit.
It also means you have the prep space, supply chain, and personnel in place to experiment with restaurant catering sales.
“From an operational perspective,” says Hage, “you've got a starting point. You could take on a few orders and test it out. And if you see success there, you have to ask yourself, can my kitchen support the volume of catering that I want to aspire towards?”
This is vital, Hage says, “because the last thing you want is for your kitchen to be the bottleneck.”
Use your kitchen to experiment with order volume, to find a balance in your distribution of labor, and to move carefully and thoughtfully into the catering space.
Catering Is a Great Way To Capitalize on “Warm Leads”
Your kitchen isn’t the only asset you have as an established restaurant. You also have an existing customer base.
“The hardest thing is creating net-new relationships in the catering space,” says Hage.
Restaurants, however, “have access to some really warm leads right off the bat, because there are people that will walk in the door that know the restaurant and already love the food there. For a restaurant that wants to start offering catering, that is an incredible source of potentially warm leads and warm business.”
How the Right Technology Can Help You Make the Shift to Catering
Hage took an unlikely path to becoming CEO of App8. Beginning his career as a CPA for accounting giant Ernst & Young, Hage worked with clients engaged in business transformation.
“I spent the most of my time there evaluating ‘how do you get more with less?’ ”
The answer, he explains, was “Changing people, process, and technology in the most effective way possible.”
This lesson would prove extremely relevant when Hage pivoted to food services. App8 is a tool that is designed to help restaurants maximize the effectiveness of their people, processes, and technologies. And one key way that App8 achieves this goal is by making it easy for restaurants to add catering to their sales mix.
App8 is a complete digital ordering suite for food service brands that allows guests use their digital devices to complete the three basic steps of placing a food order: viewing digital menus; ordering dine-in, pickup, or delivery; and paying for their order.
Its highly visual approach, ease of use, and simple implementation make App8 a great option for restaurants that are taking the first step into catering.
Technology like App8 makes it possible to:
- Automate the often demanding administrative tasks that come with catering
- Simplify and streamline production orders so your kitchen always knows what to expect
- Streamline invoicing and payment processing to ease the experience for repeat customers
- Provide all-in-one ordering and kitchen processing functions with zero hardware implementation
- Integrate with an existing POS (point of sale) system
What Else Do I Need To Start Making Restaurant Catering Sales?
Before you make the shift to catering, be sure you have the bandwidth for this new service offering. Catering may be profitable, but it will also place new demands on your kitchen, supply chain, and personnel.
And as Hage points out “I've never heard anyone who does catering or restauranting saying, ‘Oh yeah, I've got tons of time’.”
This is why it’s so important to leverage the right technology. Do you have the right staffing solutions, inventory management tools, and digital marketing plans in place to make the shift?
Reach out to our expert consultants today and find out exactly what you need to get your catering business off the ground.
