The Risks and Rewards of Catering

Catering can be a great way to bring in extra revenue, but it doesn’t come without its fair share of risk. 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 and future catering orders. 

In order to share valuable operator advice about pizzeria catering with you, I'm pulling information from one of my previously published articles in PMQ Pizza Magazine below....

Pizza is made for sharing, which is why catering, a service defined as providing food for large groups of people, seems like a perfect fit for pizzerias. But to truly excel at catering, pizzeria operators need to go beyond pizza and offer a truly memorable experience for any event, whether it be an important business meeting, wedding, funeral, or other occasion where pizza isn’t always the most appropriate choice. “There needs to be a major paradigm shift between a takeout menu and a catering menu,” says Erle Dardick, CEO of Vancouver, British Columbia-based MonkeyMedia Software and author of Get Catering and Grow Sales! “Pizzeria operators have all the ingredients to do something dynamic with catering, but they need to focus on using the ingredients they have to create a new product specific to platter-based catering.”

What is a Catering Menu?

Think back to the last catered party you attended. Was there pizza there? “Our catering menu is broader than our regular menu,” says Lisa Towne, owner of MaMa Lisa’s Little Italy in Castle Pines, Colorado. “We certainly offer our house favorites such as lasagna and pastas, but we can also provide burger bars, taco bars and breakfast. A broader menu allows you to gain more customers and be accommodating to budgets and dietary needs. We recently catered a group that wanted all gluten free and vegan options. It was challenging, but they were impressed by our creativity.”

Dardick notes that pizzerias are positioned to win big at catering, but the greatest challenge comes in defining the program. “Pizzeria operators need to focus on a subset of products utilizing ingredients already on hand,” says Dardick. “If you are catering a business luncheon, pizza is at the bottom of the list, so tap into other opportunities.”

Catering for Increased Revenue

It’s no secret that catering can bring in a nice side revenue, with many restaurants aiming for around 20% of system sales, according to Dardick. “Catering is so profitable because you already have everything else,” says Dardick. “There are higher incremental sales because there are fewer transactions from fewer people and the cost of production and distribution is much lower.”

Additionally, catering generates revenue during off-season months, slow days of the week, and sometimes, even when the pizzeria is bustling—if you have enough staff on hand. “We can have a normal lunch crowd plus deliver a catering order at the same time,” says Santo Sardo, owner of Sardo's Pizza in Largo, Florida. 

“Catering in Colorado can be a bit seasonal,” says Towne. “Typically, most catering occurs around summer events and holidays, which is a great time to get college help. Catering events can really boost sales in the off-hours and off-seasons.”

Catering has additional marketing benefits as well, according to Kris Moriarty, director of business development for San Diego, California-based Woodstock’s Pizza, with seven locations throughout California. “Catering introduces your product to people who would not otherwise know about you,” says Moriarty. “It provides an additional revenue stream during times that would otherwise be slow.”

Risks

In addition to putting your pizzeria’s reputation on the line, there are other difficulties and risks that go into starting a catering offering, including how to keep products fresh and hot during an event, figuring out portion sizes and pricing, how to handle cancellations, and making sure everyone is happy with the final result. “I worry how to keep food hot and fresh for customers,” says Sardo. “It’s difficult getting it there, keeping it hot, and keeping it looking nice.”

“A deposit as well as a written confirmation or short contract from your customer is essential,” says Towne. “Understand that the event could be weather dependent. Know the plan for bad weather and clarify all these details in advance. Timing is essential. Create a timeline and product list two days ahead. When to prep, what can sit for a day, when everything needs to be in the oven, what time you need to load the car, etc. The last hour is always mayhem, regardless, but it gets better with experience.”

“The difficult thing about starting catering is working out zoning for deliveries and getting the staff used to ordering enough food to cover any pop-up orders,” says Moriarty. “In the beginning, you’re not sure how many orders you will get in a week, so it’s a lot of guess work. Once you establish regular clientele, it's easier to order and schedule more accurately.”

Rewards

For those who take on the risks and succeed, there can be great rewards in the form of increased revenue and positive word-of-mouth advertising for your pizzeria. “During December, we could almost just rely on catering, putting more money in all of the employees pockets at the right time of year,” says Towne. “It can be a fun and cohesive experience for employees and customers. It’s an opportunity to have more of a personal relationship with our customers as we help them plan family events.”

“The greatest rewards are the additional revenue stream, the marketing opportunities and being able to provide more jobs for people,” says Moriarty. “Catering helps control both food and labor costs because you’re able to pre-plan and pre-order. Catering also helps bring in additional revenue without negatively impacting the store operations and is a great way to market and introduce your brand to people who may not know your product.”

“Being a first generation Italian, we enjoy feeding many people at once,” says Sardo. “Most rewarding to me is staying to watch the reaction; to me, it’s like Christmas when you watch your kid’s faces as they open presents.”