How to price a long term catering job.

7
0
Joined Jan 27, 2021
Hello,

We're a small, family run catering company. I'm looking for some guidance/ideas on how to price a long term catering job for a private institution. We are currently providing them with a continental breakfast, boxed lunch and a full service dinner, seven days a week for about 100 people. They have a few simple options for breakfast (muffins, fruit, cereal, etc...), lunch and dinner are the same for all. We are currently pricing each meal individually per person and the members of the organization pay through their overall dues. It's working well so far however, they are looking to expand their program for next year and are looking to expand the meal plan options as well. This would include potentially adding a hot breakfast with different options as well as the same for lunch and dinner. They are operating out of a facility that has a full commercial kitchen but it is not currently in use, we prepare everything at our facility and serve dinner in theirs. They have brought up using their kitchen and having us run it. I'm not sure it will be financially feasible to get their kitchen up and running as well as maintaining it to serve 100 people (equip maintenance/repair, utilities, etc...) Even if they were to absorb that cost, we would then have to offer different options for each meal as well as staff the facility during the designated mealtimes, while charging a rate that covers our end, and is affordable for them.

Bottom line is, the client is looking for more options and we are looking for a way to please them while charging a price that works for them. Preparing the same dish for everyone is relatively easy to price but having 2-3 or more options everyday, it becomes more complicated to create value for each individual person. Staffing three meals a day as opposed to one adds to the cost as well. I'm just looking for advice or creative ideas on how to approach this job. It's a fantastic job for our company and has kept us afloat during this disaster of a pandemic, so I want to make sure we hold onto it.

Has anyone had an experience like ours? How did you handle it?
 
2,143
625
Joined Oct 31, 2012
I think you'll have to go All In or get out. I don't think they know what they are asking for. They have a facility with full commercial kitchen but don't want the headaches of running it. But what they want would really require opening their kitchen back up and getting it running with staff, etc. as you have noted. Could you operate their facility but use it to do your own catering instead of the facility you have now?
Otherwise perhaps the best thing for them would be to have a corporate foodservice mgt. company like Aramark or Sodexo come in and run their kitchen. Work out the expenses for doing that yourself so both you and the client are sure to be on the same page and understand what the costs involved are but it won't be cheap and they should understand that. If they don't, you've dodged a bullet.
 
2,452
736
Joined Feb 8, 2009
The way I approached my Catering's were to always give the client more than they expected. I would try to get their kitchen up and running. You can utilize your home kitchen for a lot of pre cooking. The extra added items or the ones that don't hold well can be done on site. I had a Corp/Emplyee cafeteria operation. There was a time when a Company was building a Coal Generating plant next-door to my operation. I had them move in a Double wide into the construction site and put tables and seating in for an Employee break room. I had them put in a steam table and some refrigeration. We catered a hot lunch that served about 70 Construction workers daily. I had Vending machines that picked up the slack for Coffee/ Pop/ Candy and chips and cold food items.......I can't stress this part enough. Make the client part of the solution. You understand they want more variety. Tell them you also want that for them but want help with the logistics of not having a large amount of food wasted or leftover. They should agree, and help you with either preordering something like 50 meatloaf dinners and 30 Chicken piccata and 20 vegetarian meals. You can do this by having a planned menu for lunch and dinner....ChefBillyB
 
7
0
Joined Jan 27, 2021
Thank you guys for your responses. As far as our facility, we aren't looking to leave it at this time as we use our facility for things we wouldn't be able to do there. I agree chefwriter, they aren't sure what they are asking for. They are flexible and are open to different options, but just want some variety and have a nice meal plan to sell to their members. I think they see this big kitchen they have access to and are thinking that could be part of the solution, which I understand. I just don't think they understand the $ involved in getting the kitchen up and running and maintaining it. To staff it regularly from our end would increase the costs substantially but if they are willing to pay, then I guess why not. Right now there are only about five of us pulling this job off everyday but the only meal we have to serve is dinner. I could tell them that we will help, but not pay to get the kitchen up and running if they have their hearts set on using it. Where it gets tricky for me is offering variety and still pricing it per person, which is where they are at now. For example, if they want to have 3 different meal options for dinner every night, I'm not sure how I price it per person and still create value for each individual person, as each person will only be getting one option, but paying for three. If it were a wedding and they wanted three options, I would just charge for all three options in the per person price. This is just a different scenario. Not to mention if they wanted us to have per order options available as well, which they also mentioned as a possible want. In my mind, it would put them in a situation where each person is paying big $ and a ton of food is getting wasted.

ChefBillyB, I totally agree with you on your first point and we do the same thing. We try to give more than is expected and create as much value for the client as we can, which has helped us grow a great customer base that returns to us whenever they need catering. I've tried to bring this client in on this but they are pretty hands off when it comes to the menu. They have left it completely up to us, which is perfectly fine, but I doubt I could get them to preorder menu items on a weekly basis. Maybe I'm wrong but that would make this a lot easier and give them the variety they are looking for.

Do you think Sodexo or Aramark would even talk to them with it only being for 100 people? My roadblock in pricing it like one of the big companies would is that, I can't find a clear understanding of how their contracts work to model from.

Either way, we very much want to keep this job and make this client happy.
 
2,452
736
Joined Feb 8, 2009
If it were a wedding and they wanted three options, I would just charge for all three options in the per person price.

I'm not sure how you could charge for 3 entrees for any occasion. When I do a banquet or Catering I may offer a Carver Roast Beef, Sweet & Sour Ham and Fried chicken with Rolls butter and a few salads. Let say it's $18.95 per person. I figure them taking X amount of each entree. I'm not charging them or allocating a full portion like it was a sit-down dinner.

When I travel 1st Class on the airlines, they give you a menu. There could be two or three entrees on that menu. Lets say they start at the back and work their way up. When they get to my seat they could have all the most wanted entrees sold out. They will then tell me " Sorry Jack" You're getting the X meal.......You see, they don't have 16 of each meal available......

In your case, I would offer two entrees and made even a Entree Salad that could be made up while you're there on site. Something like a Chicken Caesar, Asian Chopped Salad or a Santa Fe Salad, whatever. I would then have equal portions of the other two entrees available until one of those are gone. You then will have the one dinner Entree left and a Entree Salad available. Your objective is to keep waste as low as possible.

As far as costing goes, you will only charge them what they order...........ChefBillyB
 
7
0
Joined Jan 27, 2021
I'm not sure how you could charge for 3 entrees for any occasion. When I do a banquet or Catering I may offer a Carver Roast Beef, Sweet & Sour Ham and Fried chicken with Rolls butter and a few salads. Let say it's $18.95 per person. I figure them taking X amount of each entree. I'm not charging them or allocating a full portion like it was a sit-down dinner.

When I travel 1st Class on the airlines, they give you a menu. There could be two or three entrees on that menu. Lets say they start at the back and work their way up. When they get to my seat they could have all the most wanted entrees sold out. They will then tell me " Sorry Jack" You're getting the X meal.......You see, they don't have 16 of each meal available......

In your case, I would offer two entrees and made even a Entree Salad that could be made up while you're there on site. Something like a Chicken Caesar, Asian Chopped Salad or a Santa Fe Salad, whatever. I would then have equal portions of the other two entrees available until one of those are gone. You then will have the one dinner Entree left and a Entree Salad available. Your objective is to keep waste as low as possible.

As far as costing goes, you will only charge them what they order...........ChefBillyBI
I hear you on the first part. I do the same thing, but I try to make sure there's enough for everyone as you don't always know what's going to go fastest. Buffets tend to produce waste it's just a matter of keeping the waste as low as possible like you mentioned. The airline analogy is a good one and that's kind of the idea I am working on now. The only problem is I would worry that the people who come a little later won't get to pick once one runs out and that might cause friction with the client. Right now due to COVID restrictions, they come in small groups at designated times so the later groups might not get a choice, through no fault of their own. Hopefully by the next session those rules will be relaxed and it could be more of a first come first served type situation, as long as I make that clear to them upfront.

I like the salad idea as well. I could rotate different entree salads on a weekly basis or something like that. We could make those onsite even if we aren't using their kitchen facilities. At the very least I think we could have access to refrigeration there.

If they are hell-bent on seeing a quote to fully run their kitchen, where would you start?

If we were to have a small cafeteria style menu where we cook to order and everyone only pays for what they get, I'm having trouble seeing how it would be a winning proposition for us. After staffing, inventory, waste etc... I just think it's a relatively small group of people for that model to work for us. Maybe I'm wrong.
 
2,452
736
Joined Feb 8, 2009
If they are hell-bent on seeing a quote to fully run their kitchen, where would you start?

If we were to have a small cafeteria style menu where we cook to order and everyone only pays for what they get, I'm having trouble seeing how it would be a winning proposition for us. After staffing, inventory, waste etc... I just think it's a relatively small group of people for that model to work for us. Maybe I'm wrong.
Your right! You can't operate a full service Cafeteria for that many people. The Cafes I ran had several hundred employees in the building. I feel, and I think the way you are think is, try and accommodate by catering as you are now. You just need to figure out the logistics and meet their needs. If you have a black board with the specials you can erase the special thats gone. You can either replace it with something or just offer the other special and the salad. I'm sure you could get some refrigeration. That would also be easier for you to keep a few things on had for the salads. I really think offering two entrees and a salad will take care of their needs and accomplish whats needed for your client. By doing this it also helps you keep your labor cost in check......
 
7
0
Joined Jan 27, 2021
Your right! You can't operate a full service Cafeteria for that many people. The Cafes I ran had several hundred employees in the building. I feel, and I think the way you are think is, try and accommodate by catering as you are now. You just need to figure out the logistics and meet their needs. If you have a black board with the specials you can erase the special thats gone. You can either replace it with something or just offer the other special and the salad. I'm sure you could get some refrigeration. That would also be easier for you to keep a few things on had for the salads. I really think offering two entrees and a salad will take care of their needs and accomplish whats needed for your client. By doing this it also helps you keep your labor cost in check......
Thank you again for your thoughts. They have come off of the full service cafeteria idea for now, as they realized it wasn't going to be cost effective for their program right now. I have been going back and forth with the client for about a week now trying to come up with a solution that works for them. I quoted them new pricing for the next session (which is several months out). I expanded the dinner menu to include a choice of two entrees more than half the week and included a couple of days of hot, full service lunches to supplement the cold, boxed lunches we are doing now. I tried to account for a 4% increase in food cost for next year (the industry standard I was taught) and came out with about a 22% increase compared to what we are charging now. However, the client's budget is only allowing for a 7% increase. I attempted to get them to meet me in the middle, around 14%, but their budget seems to be a hard ceiling. I also pitched the idea of having one entree for dinner with an alternate option every night (the salad idea or something that can be made on the spot) and they didn't go for it. They are set on offering more options for dinner.

My dilemma is providing what they want, while making sure my end is covered. Just so I can get some assurance that I'm not way off here I'd greatly appreciate your insight. With all of your experience in the business, what is a ball park number you would quote a client for a job like this? Either per person, per day or per person, per week. All inclusive (8% Tax, paper products, etc...)

Continental Breakfast- 7 days a week
Boxed Lunch- 5 Days a week
Full Service Dinner- Choice of Two Entrees 5 Days a week
Full Service Dinner- One Entree- 2 Days a week
100 people
 
2,452
736
Joined Feb 8, 2009
Thank you again for your thoughts. They have come off of the full service cafeteria idea for now, as they realized it wasn't going to be cost effective for their program right now. I have been going back and forth with the client for about a week now trying to come up with a solution that works for them. I quoted them new pricing for the next session (which is several months out). I expanded the dinner menu to include a choice of two entrees more than half the week and included a couple of days of hot, full service lunches to supplement the cold, boxed lunches we are doing now. I tried to account for a 4% increase in food cost for next year (the industry standard I was taught) and came out with about a 22% increase compared to what we are charging now. However, the client's budget is only allowing for a 7% increase. I attempted to get them to meet me in the middle, around 14%, but their budget seems to be a hard ceiling. I also pitched the idea of having one entree for dinner with an alternate option every night (the salad idea or something that can be made on the spot) and they didn't go for it. They are set on offering more options for dinner.

My dilemma is providing what they want, while making sure my end is covered. Just so I can get some assurance that I'm not way off here I'd greatly appreciate your insight. With all of your experience in the business, what is a ball park number you would quote a client for a job like this? Either per person, per day or per person, per week. All inclusive (8% Tax, paper products, etc...)

Continental Breakfast- 7 days a week
Boxed Lunch- 5 Days a week
Full Service Dinner- Choice of Two Entrees 5 Days a week
Full Service Dinner- One Entree- 2 Days a week
100 people
It's hard for me to quote a catering without knowing the quality of the meals and expectations of the client. You'll need to take all of these factors into account when offering a catering. In your case knowing your client is important. When you figure these few things out you'll know what to charge......Figure your costing on setting a range per day because quality of items on your daily menu will change. Lets say the Continental Breakfast is $4-$6... Then Boxed lunch is $7-$9.....and dinner is $12-14........This will give you some leeway to offer a wider range of meals and not get beat for the higher food cost.
Try to make the meals fun. If you do Chicken Piccata for dinner one day don't be afraid to do a Taco or Nacho bar the next. It's not easy catering to the same people everyday without them saying "WE WANT PIZZA, WE WANT SUBS, WE WANT KFC......Good Luck.....
 
Last edited:
7
0
Joined Jan 27, 2021
It's hard for me to quote a catering without knowing the quality of the meals and expectations of the client. You'll need to take all of these factors into account when offering a catering. In your case knowing your client is important. When you figure these few things out you'll know what to charge......Figure your costing on setting a range per day because quality of items on your daily menu will change. Lets say the Continental Breakfast is $4-$6... Then Boxed lunch is $7-$9.....and dinner is $12-14........This will give you some leeway to offer a wider range of meals and not get beat for the higher food cost.
Try to make the meals fun. If you do Chicken Piccata for dinner one day don't be afraid to do a Taco or Nacho bar the next. It's not easy catering to the same people everyday without them saying "WE WANT PIZZA, WE WANT SUBS, WE WANT KFC......Good Luck.....
OK, you're thinking is pretty close to mine in terms of pricing. I was a little more aggressive with breakfast and lunch and made up for it with the dinner pricing, so it's about the same. I think they will go for keeping breakfast and lunch the same with adding a choice of two entrees for dinner 5 days a week. The thing I'm struggling with is they only want the 7% increase in price per week and I concerned the extra entree for dinner each night is going to raise my labor and food costs to a point that makes it really tight. Also, keeping it fresh day to day is a little tougher when you are offering two choices every day as it becomes a little tricky to not get repetitive. As far as the meals go, you're right on target, that is the type of stuff we are serving now. We aren't talking about prime rib and lobster tails or anything. Would you be comfortable offering two entrees for that pricing?
 
2,452
736
Joined Feb 8, 2009
OK, you're thinking is pretty close to mine in terms of pricing. I was a little more aggressive with breakfast and lunch and made up for it with the dinner pricing, so it's about the same. I think they will go for keeping breakfast and lunch the same with adding a choice of two entrees for dinner 5 days a week. The thing I'm struggling with is they only want the 7% increase in price per week and I concerned the extra entree for dinner each night is going to raise my labor and food costs to a point that makes it really tight. Also, keeping it fresh day to day is a little tougher when you are offering two choices every day as it becomes a little tricky to not get repetitive. As far as the meals go, you're right on target, that is the type of stuff we are serving now. We aren't talking about prime rib and lobster tails or anything. Would you be comfortable offering two entrees for that pricing?
The prep and and preparation of two meals for a spoon up catering s/b easy. In all cases the veggie could be used for both. Sometimes the starch could be used for both. You'll do fine with labor and food cost. Just think of how low of a food cost most Mexican entrees are, look at pasta dishes. Know what their expectations are and give them more than they expect and you'll be a hero.......
 
1,214
746
Joined Mar 1, 2017
Consider these options.

1. The client brings their kitchen back on line. The cost of doing so is a write off as a business expense.

2. You contract with the facility to provide kitchen staff who operates the kitchen and produces the menu according to the facility's preferences. However, they remain your employees but, under the day-to-day control of the facility.

3. The facility pays you a "lease" to use your employees that covers the cost of payroll plus a tidy sum for your trouble. In exchange, the facility agrees to provide all necessary insurance coverage for the employees such as comp, liability etc.

4. Your payroll is outsourced to a payroll company which removes the overhead and time to manage payroll from both of your shoulders.

5. Meanwhile, you are free to continue developing your catering business.

The cost to the facility to purchase food and pay the salaries of 3 - 5 competent kitchen staff will be cheaper on a yearly basis than paying a caterer to provide the same meals.

Of course the devil is in the details but, in my experience, facilities like this are all about the bottom line. And the bottom line here is this will reduce the cost of their meal production on a yearly basis. Meanwhile, you both benefit from the arrangement.

Good luck. :)
 
7
0
Joined Jan 27, 2021
The prep and and preparation of two meals for a spoon up catering s/b easy. In all cases the veggie could be used for both. Sometimes the starch could be used for both. You'll do fine with labor and food cost. Just think of how low of a food cost most Mexican entrees are, look at pasta dishes. Know what their expectations are and give them more than they expect and you'll be a hero.......
I think you're right and I may be overthinking it a little, I just want to make sure we get it right as this is a very important job for us. We are doing fine with food and labor costs currently but the client wants us to do more for basically the same money. I figure doing two entrees really won't raise costs much it will just be a little more work from a menu generation and ordering standpoint, which I can adjust to. I've run the numbers enough times now that I'm confident we can pull it off and make money. As long as I am creative and pay close attention it should work out well. Thank you for your insight and your advice. It's greatly appreciated!
 
7
0
Joined Jan 27, 2021
Consider these options.

1. The client brings their kitchen back on line. The cost of doing so is a write off as a business expense.

2. You contract with the facility to provide kitchen staff who operates the kitchen and produces the menu according to the facility's preferences. However, they remain your employees but, under the day-to-day control of the facility.

3. The facility pays you a "lease" to use your employees that covers the cost of payroll plus a tidy sum for your trouble. In exchange, the facility agrees to provide all necessary insurance coverage for the employees such as comp, liability etc.

4. Your payroll is outsourced to a payroll company which removes the overhead and time to manage payroll from both of your shoulders.

5. Meanwhile, you are free to continue developing your catering business.

The cost to the facility to purchase food and pay the salaries of 3 - 5 competent kitchen staff will be cheaper on a yearly basis than paying a caterer to provide the same meals.

Of course the devil is in the details but, in my experience, facilities like this are all about the bottom line. And the bottom line here is this will reduce the cost of their meal production on a yearly basis. Meanwhile, you both benefit from the arrangement.

Good luck. :)
This is a really interesting idea, is that how it's normally done on the institutional level? I don't think our client is quite there yet but they have expressed their desire to expand their program so this may be something to pitch in the future.
 
1,214
746
Joined Mar 1, 2017
This is a really interesting idea, is that how it's normally done on the institutional level? I don't think our client is quite there yet but they have expressed their desire to expand their program so this may be something to pitch in the future.
Not necessarily. All you're doing is leasing out employees to run their kitchen and fraying the cost of your payroll and freeing up some resources to focus on expanding your core business. :)
 
2,452
736
Joined Feb 8, 2009
Not necessarily. All you're doing is leasing out employees to run their kitchen and fraying the cost of your payroll and freeing up some resources to focus on expanding your core business. :)
My Business was contracting employee cafes and in house Corp Catering. The contract I had in all my accounts was that I had to get Liability insurance and a Health permit for the kitchen and vending services. The company provided all the equipment and utilities needed to provide a daily 24 hr food service. These were companies with between 1000 and 2000 employees. The hours of operation depended on the needs of the company and schedules of their employees.
In your case you could provide a service with a limited number of employees if everyone didn't break at the sometime. In my case they did break at different times but, there were still large numbers of employees hitting us during each break. You could offer the 3 meals a day coming out of their kitchen but, it will be more labor intense and less profitable. The reason being is the amount of employees don't require that kind of a full service Cafe. It's just not profitable. You need to get in fast and serve all of them at the sometime.
I had one account that was subsidized and paid me to come in and provide them this kind of service. I was paid for being there and also kept all sales that we made during each service. This provided a full Cafe service and lower cost meals to their employees.....I hope this helps......ChefBillyB
 
Top Bottom