Catering Trends in U.S. Foodservice


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Catering Trends in U.S. Foodservice

  1. 1.    Get more info on this report!Catering Trends in U.S. FoodserviceJanuary 1, 2011 Emerging from a dismal 2009, the catering industry is on the rebound. Packaged Factsestimates that 2010 catering revenue among caterers, restaurants, foodservicecontractors, and hotels reached $14.2 billion, a 9.0% increase from 2009, according toPackaged Facts’ Catering Trends in U.S. Foodservice.Going forward, we believe that sales will rise 9.1% in 2011 and 6.5% in 2012, drivenprimarily by aggressive expansion into the catering space by limited-serviceestablishments, the return of business event-driven spending, higher wedding spending,and a moderately healthier consumer.With its high-growth days likely behind it, the restaurant industry continues to adapt tothe in-home entertaining trend while taking in-home meal share from food retailers. Thisconvergence signifies an increasingly competitive battleground for the catering dollarnot only among restaurants and food retailers, but also for caterers and hotels.Sustained growth will require growing catering opportunity, primarily in the form ofsignificant consumer life events.This Packaged Facts report provides the insight and analysis market participants needto plan their catering and foodservice strategies. Key coverage includes the following: • A market size and forecast for the catering industry, including caterers; full- service restaurants; limited-service restaurants; snack and non-alcoholic beverage establishments; foodservice contractors; and hotels. • Key factors to catering growth: travel, hotels and accommodations, and holiday party spending • Trended consumer catering expenditures by demographic. • Catering trends within the institutional foodservice category, with a focus on hospitals and colleges and universities. • Restaurant catering operation tracking • Catering macro-trend analysis, including the economy; sustainability and environmental concerns; technology; food & celebrity chef familiarity; and health trends.
  2. 2. • Insight on the “catered meals” consumer, including stand-alone analysis as well as restaurant, institutional foodservice and food retail context. • Catering operations analysis of a mixture of restaurant, food retail, foodservice contractor, and caterer companies, such as Panera Bread, Whole Foods Market, Compass Group, and Blue Plate Catering. • Catering “opportunity analysis” of significant life events (such as births, weddings, and funerals) as well as significant social events (such as the Super Bowl).Market Insights: A Selection From The ReportShare of Stomach: Catering Market Size and ForecastIn this section, Packaged Facts provides a market size and forecast for the cateringindustry. Its scope includes caterers; full-service restaurants; limited-servicerestaurants; snack and nonalcoholic beverage establishments; foodservice contractors;and hotels.Insight capsule• Packaged Facts estimates that 2010 catering revenue reached $14.2 billion, a 9.0%increase from 2009. Going forward, we believe that sales will rise 9.1% in 2011 and6.5% in 2012, driven primarily by aggressive expansion into the catering space bylimited-service establishments, the return of business event-driven spending, higherwedding spending, and a moderately healthier consumer.• With its high-growth days likely behind it, the restaurant industry must find ways totake in-home share from food retailers while adapting to the trend toward in-homeentertaining. This convergence signifies an increasingly competitive battleground for thecatering dollar.Trends afootMany of the trends coming to the fore of institutional programs are cost based, a result of tightening budgets and a more pronounced need to demonstrate catering program value. They include the following: • Transitioning toward buffets and away from sit-down dinners • Transitioning toward pick-up and way from delivery • Proving that catering an event serves a purpose to the institution • No-frills menus • Reductions in selections and/or servings
  3. 3. • Less costly meats and lower pricing structuresUniversity of Washington Medical Center nears $1 million in catering salesUWMC serves an average of 1,000 patient meals and 5,000 cafeteria meals per day.The UWMC foodservice department has annual retail sales of $5 million, which includescatering sales of $950,000. UWMC also offers catering. A four person catering staffmanages up to 20 events per day, most of which are small staff meetings. • Percentage of catering that makes up overall business (2008) - 10 percent • Annual catering sales (2007) - $950,000Summa Health System goes no-frillsNearly 85% of Akron, Ohio-based Summa Health Systems catered events are handledin-house,the organization does outside catering at a 50% markup.Table of Contents Foodservice Catering, On-Premises v. Off-Premises On- and off-premises sales relied on by caterers Graph 2-9: Caterers, On-Premises v. Off-Premises Full-service restaurants make room for customer pick-up Graph 2-10: Full-Service Restaurant Catering, On-Premises v. Off-Premises For limited-service restaurants, "pick up” plays to strengths Graph 2-11: Limited-Service Eating Place Catering, On-Premises v. Off- Premises Caterer analysis Table 2-1: Caterer Sales, by Category Fragmented and regional marketplace Mom and pop still have a place in the catering business But competition looms Serving consumers and businesses alike Table 2-2: Caterer Industry Profile
  4. 4. Solid historical growth rate Table 2-3: Caterer Profile: 2002-2007 Consumer catering expenditures Catering sales trends by consumer demographic Overview Table 2-4: Consumer Catering Expenditures, 2005-09 HH income plays significant role Table 2-5: Consumer Catering Expenditures, HH Income, 2005-09 Cultural differences at play Table 2-6: Consumer Catering Expenditures, Race/Ethnicity, 2005-09 Just the two of us Table 2-7: Consumer Catering Expenditures, People in Household, 2005-09Chapter 3: Travel, Hotels & Holiday Party Catering Trends Overview Travel industry shows signs of life 2009 travel volume paints a grim picture Fewer visits = less catering revenue Table 3-1: U.S. Travel Spending, by Industry Sector, 2008 v. 2009 Breaking it down, domestic leisure, domestic business and international Domestic travel expenditures International drops even further Leisure travel down, but business travel really falls off Corporate events travel falls into tailspin Convention center traffic drops precipitously, but signs of life emerge Table 3-2: Convention Center Traffic Trends 2010 brings relief Business travel rebound underway
  5. 5. But business travel index remains off 2007 peakGrowth levers: transient business travel and international travelTable 3-3: U.S. Travel Forecast, 2007-2013Hotels and accommodations dig out of recessionAlmost $4 billion in catering revenue on the lineWhew. Fewer empty rooms!Occupancy and room rates on the upswingTable 3-4: Monthly Hotel Room Occupancy Rates and Revenue, December 2009to November 2010Checking in with the hotel playersStarwood Hotels Worldwide, Inc.Host Hotels & Resorts, IncMarriott International, Inc.Red Lion Hotels CorporationLas Vegas Sands CorporationDiamondRock Hospitality CompanyCorporate holiday spending not a bad wordA look back to 20092010 holiday catering season better than 2009? Yes!Gauging the spectrum: some bad, but mostly pretty goodThe badPretty good: National Association of Catering Executives remains upbeatPretty good: 6 in 10 organizations plan an end-of-year/holiday employee partyTable 3-5: 2010 Challenger Holiday Party SurveyWhere is it going to be? On-site v. off-site?Graph 3-1: Corporate Holiday Party Location, 2009 v 2010Checking in locallyChicago catering makes a comeback
  6. 6. Cleveland: more with less Detroit tallies big gainsChapter 4: Institutional Foodservice Catering Trends Overview Institutional foodservice is big business Catering plays a role in most institutional foodservice programs Not immune to recession Trends afoot Day part analysis Table 4-1: 2010 Institutional Foodservice Catering Revenue, by Daypart On-premise dominates Table 4-2: 2010 Catering Revenue, On-premises v. Off-premises Hospital catering Hospital users Bottom line: dealing with illness correlates with foodservice use Relationship with food changes; foodservice plays important role Table 4-3: Hospital Users, Foodservice Use by Type, 2010 Catering Checking in with the hospitals UCLA Medical Center: Catering at 10 years of age University of Washington Medical Center nears $1 million in catering sales Summa Health System goes no-frills Texas Health Presbyterian Hospital Dallas succeeds with reduced costs Reid Hospital & Healthcare Services reaches out College catering Checking in with the colleges University of Oklahoma: A different approach
  7. 7. Notre Dame Food Services: Marketing affordability Price repackaging with boxed lunches Miami University sends Direct to You!Chapter 5: Restaurant Catering Trends An avalanche of limitedservice restaurant movement Atlanta Bread Backyard Burgers Boston Market Bruegger’s Dickey’s Barbecue Pit Panera Bread Co Einstein Noah Restaurant Group Jamba Juice Jersey Mike Subs Noodles & Co Panchero’s Mexican Grill Qdoba Souplantation/Sweet Tomatoes Subway Wingstop Not for everyone Papa Murphy’s Casual and upscale California Pizza Kitchen Famous Daves of America Ruth’s Chris Steakhouse ThinkFoodGroup
  8. 8. Chapter 6: Catering to Life Events The cycle of life offers a wealth of catering opportunities Birth! 4 million catering opportunities annually A declining birth rate dampens catering opportunity Graph 6-1: Births and Birth Rates, 2000-2009 Getting to know a first child’s parents Navigating the income issue Table 6-1: First Child Born in Past 12 Months, Key Demographics, 2010 Birth expectation differential shifts over time Table 6-2: Birth of First & Second Child, Last 12 Months & Expected in 12 Months, 2006-2010 Graduations More than 6 million catering opportunities annually Postsecondary opportunity Table 6-3: Graduation and Degree Opportunity, 2007-08 to 2011-12 Catering to a wide swath of graduates Widening age parameters Graduates have income to pay for catering, or at least their parents do Table 6-4: Graduations in Past 12 Months, Key Demographics, 2010 Marriage! A one-two punch Wedding rate significantly declines Graph 6-2: Marriages and Marriage Rate, 2000-2009 Fewer expected marriages Table 6-5: Marriages, Last 12 Months & Expected in 12 Months, 2006-2010 Getting to know newlyweds
  9. 9. Table 6-6: Marriages in Past 12 Months, Key Demographics, 2010 Wedding cost trends Weddings downsized 2010 wedding volume ticks upward A rebound in the works Table 6-7: Cost per Wedding, 2005-2010 Expenditures per event on the upswing Table 6-8: Wedding Reception Food Service & Bar Service Spending, 2005-2008 Death 2.4 million events requiring a caterer’s helpful hand Graph 6-3: Deaths and Death Rates, 2000-2009 Age is a primary consideration Table 6-9: 2008 U.S. Deaths, Age of Death The yin and yang of funeral cost Everything in between! Want watch the Super Bowl? Table 6-10: Super Bowl Ratings and Viewership, 2001-2010 Home viewing the winner in a landslide Home food spend stagnates Table 6-11: 2010 Super Bowl Watching versus Food & Beverage Event Purchasing HH income plays a role Table 6-12: 2010 Super Bowl Ratings by HH incomeChapter 7: Catering Trend Watch Economy Current impact Outlook Future impact
  10. 10. Sustainability and environmental concern Current impact Outlook Future impact Technology helps spur efficiency and build clients Current impact Outlook Future impact Food & celebrity chef familiarity builds client expectations Current impact Outlook Future impact Health trends Current impact OutlookChapter 8: The Catered Meal Consumer Overview Note on reading tables and charts Introducing the catered meal customer Packaged Facts’ Consumer Restaurant Tracker places catered meal use at 16% A seasonal caveat A distinct profile emerges Table 8-1: Catering User Demographic Profile, 2010 Catering: a small part of a huge foodservice pie Table 8-2: Foodservice Establishment Meal Share, 2010 In context: catered meal users and foodservice attitudes and behaviors More comfortable with technology
  11. 11. Strong relationship to institutional foodservice Table 8-3: Catered Meal Users, Foodservice Attitudes and Behaviors, 2010 In context: catered meal users and institutional foodservice Institutional foodservice generates highest cross-use Table 8-4: Catering User Foodservice Engagement, by Category, 2010Chapter 9: Catering Company Analyses Retail Foodservice Catering Operations Einstein Noah Restaurant Group Strategic direction Catering operations Catering strategy Einstein Noah by the numbers Table 9-1: Einstein Noah, Selected Metrics, 2008-2010 Panera Bread Co Strategic direction Catering operations Catering strategy Panera Bread by the numbers Table 9-2: Panera Bread, Selected Metrics, 2008-2010 Subway (Doctor’s Associates Inc) Strategic direction Catering operations Catering strategy Grocery Retail Publix Strategic direction Catering operations
  12. 12. Catering strategyPublix by the numbersTable 9-3: Publix, Selected Metrics, 2008-2010SafewayStrategic directionCatering operationsCatering strategySafeway by the numbersTable 9-4: Safeway, Selected Metrics, 2008-2010Whole Foods MarketStrategic directionCatering operationsCatering strategyWhole Foods by the numbersTable 9-5: Whole Foods, Selected Metrics, 2008-2010Foodservice ContractorsAramarkStrategic directionCatering operationsCatering strategyAramark by the numbersTable 9-6: Aramark, Selected Metrics, 2007-2010Compass GroupStrategic directionCatering operationsCatering strategyCompass Group by the numbers
  13. 13. Table 9-7: Compass Group, Selected Quarterly Metrics, 2009-2010 Catering Establishments Blue Plate Catering Catering operations Catering strategy Centerplate Catering operations Catering strategy Delaware North Companies Catering operations Catering strategyAvailable immediately for Online Download at  US: 800.298.5699UK + +1.240.747.3093Fax: 240.747.3004