Restaurants Cater To New Opportunities

Restaurants Cater To New Opportunities

With overall traffic essentially flat, restaurant operators have been forced to seek out different ways to grow sales and market their brands.

As a result, operators are entering the box lunch catering business.

Box lunch catering – especially for business lunch crowds – is an underserved niche that is poised for growth and is a high margin sales opportunity.

Take Atlanta-based Great Wraps for example, who decided to enter the box lunch catering business last year. Out of the company’s 70 locations, 15 offer box lunches and those locations are seeing 10-15% sales increases.

Both consumers and corporations are investing more in catering with the average business spending $1,000 per month on catering and the average order size around $181.

It’s Not All Bread and Butter

While increasing or adding catering offerings is not a new business strategy, many operators are unaware of the complexities and careful planning that’s required when building catering sales in conjunction with existing restaurant operations.

Business aspects like workflow, logistics and packaging differ greatly from traditional restaurant operations, and box lunches attract a different audience than those who dine in a restaurant.

Operators need to develop a catering menu that serves as an extension of their brand and offers the options that these particular customers want while also working around the constraints of transportation, preparation, holding and serving.

And as a separate branch of a restaurant, catering needs to be marketed in the same ways as the brand’s traditional dining services – with a separate website page, social media, e-mail marketing and database of both individual consumers and businesses.

A Catering Strategy for Growth

Ultimately, restaurants need to determine whether catering is a good investment for their unique brand. Departmental models, which are similar to daypart models, can be used to determine whether or not catering would be an effective brand extension.

Catering can be modeled as a separate department and the drive-time customer value decay can be defined by utilizing either company profiles or consumer profiles, as well as delivery routes, territory boundaries, core business/consumer types, the number of businesses/consumers in a given trade area and other variables.

At that point, the number of best potential catering customers in a given trade area can be identified and assigned a value – allowing operators to understand which markets should offer a catering service, forecast each of those locations’ optimal catering performance and identify actionable marketing targets.

Additionally, as operators develop a true and deep understanding of their catering customer profile, it becomes easy to optimize menu selections based on the data from particular catering trade areas and to know when and how to communicate promotions.

The Bottom Line

By leveraging the knowledge gained from customer profiling and departmental modeling, restaurant operators can make better informed real estate, operations, inventory, staffing and marketing decisions, resulting in improved efficiency and higher earnings.

Operators will also understand the relationship between catering and other sales channels as well as how catering impacts overall total sales.

Let’s talk about how your brand can capitalize on the emerging catering opportunity.