Menu Innovations | September 2010 | By Sam Oches

Beyond Your Four Walls

Carryout has always been an inherent part of the quick-service business. Some operators, however, are finding that catering is a better investment when trying to get their food out into the world.

The wedding dinner was prepped for the oncoming slew of guests: Stainless steel chafing dishes lined the buffet tables, silverware sat wrapped in cloth napkins and silver rings, and servers stood at the ready in black slacks and white dress shirts.

It was a fine feast to celebrate the sharing of vows, but there was a twist: The dinner was catered and staffed by Dickey’s Barbecue Pit.

“It was a rehearsal dinner that they wanted us for, but the groom really wanted us for the wedding,” says Maureen Woloszczuk, vice president of operations for GMW Carolina Inc., a two-store Dickey’s franchise company that Woloszczuk owns with her husband, Greg. “He loved it that much. I actually dressed it up for them; I made their silverware with nice little wedding rings around it. Anything to make the event more special for them.”

Though weddings are more the exception than the rule for GMW Carolina’s catering program, the operation—handled through its stores in Durham and Cary, North Carolina—is finding success in taking its food beyond the four walls of Dickey’s, wherever the social gathering may be.

“Catering is typically about 10–15 percent of the business,” says Greg Woloszczuk, president of GMW Carolina. “It’s a very important part of the business.”

Of course, taking quick-serve food beyond the four walls of an operation has traditionally been done through carryout. Food to go is an inherent branch of the quick-service business, while catering has typically been left to private companies or casual-dining establishments.

But not anymore. Dickey’s is just one of the many quick serves that are investing more into their catering programs and looking beyond carryout as a means to getting their food to consumers. Other brands, meanwhile, are sticking to the tried-and-true formula of carryout as the method of choice for going outside the store.

“Something Totally Different Outside of the Restaurant”

The investment into catering is not unwarranted. Studies show that in the wake of the recession, consumers are spending more time at home and that restaurants would be wise to meet them there.

The 2010 National Restaurant Association Forecast shows that social catering sales are expected to grow by 4.5 percent in 2010, more than any other commercial restaurant service. Sales are expected to rise to $7.09 billion in 2010 from $6.78 billion in 2009.

Moreover, according to an October report from market research firm Technomic that studied social catering opportunities, 40 percent of respondents reported that they anticipated entertaining at home more often in 2010. Another 53 percent of respondents said they plan on entertaining at home about the same amount in 2010 as they did in 2009.

“There’s no stigma anymore about buying a platter from somewhere else and letting people know that you just picked up a platter.”

“Even though consumers are retrenching on dining out, they’re still entertaining or having social activities on a fairly regular basis,” says Melissa Wilson, a principal with Technomic. “So there are opportunities for operators to follow them home with platters and bulk meals.”

Wilson says the recession played a big role in the increasing demand for catering options from quick-service operations. With diners cutting back or trading down from their prerecession purchasing habits, a catered meal from a quick serve is no longer faux pas.

“Part of what we uncovered with the study is that there’s no stigma anymore about buying a platter from somewhere else and letting people know that you just picked up a platter,” Wilson says. “You don’t have to pretend that you made everything yourself anymore.”

The quick-service industry, Wilson says, offers consumers the ability to bring a new element to social occasions than they might have had in the past. “Restaurants are offering a lot wider of variety of options than the traditional supermarket platters,” she says.

Indeed, with the sandwich, Mexican, chicken, bakery/café, and even burger segments of the quick-serve industry boasting concepts with catering operations, customers have a range of choices to bring to their gatherings.

Qdoba entered the catering business in 2002. While the company’s traditional stores offer customers the ability to customize a burrito, taco, or nachos, and dine in or take it to go, the catering operation needed to have its own distinction, says Chris Bingel, director of catering for the chain.

“We have a completely different catering menu, which over time we’ve fine-tuned to meet the needs of our catering guests,” Bingel says. “It does display all of the products that we have in the restaurant but in a simpler manner for our guests to order for those catering occasions.”

The Qdoba catering menu includes a Hot Taco Bar, a Hot Nacho bar, and a Hot Naked Burrito Bar. Each bar is customized by the consumer, who picks the protein, shell, and toppings to be featured. Qdoba supplies chafing stands to keep the products hot, and boxed lunches are also available.

“Catering allows us … a new revenue stream, something that is totally different outside of the restaurant,” says Doug Thielen, manager of nontraditional marketing and public relations for Qdoba. “What it also does, as a significant plus, is it allows us to put our product in front of a lot of different people who may not have had a chance to come into a Qdoba restaurant in the past.”

Neither Bingel nor Thielen say how significant Qdoba catering sales are, but acknowledge it’s an amount the company is “happy with,” Thielen says.

Carryout, meanwhile, remains a major part of Qdoba’s business. Thielen says that while catering remains more of a niche option offered by Qdoba—one that is tailored specifically to the consumer on a sale-by-sale basis—it does not necessarily offer a better to-go option than carryout, especially in certain markets.

“[In] certain markets where we have high urban density—so New York, Chicago—the percent of carryout is much greater than you will see in suburban locations,” Thielen says. “We definitely noticed that the location of the restaurant really determines how much we see as far as to-go business versus in-restaurant dining.”

“We Wanted to Own Our Part of Catering”

Similar to Qdoba, Atlanta Bread Company’s carryout business accounts for a significant chunk of sales—as much as 30–40 percent of each store’s business.

But Basil Couvaras, vice president and chief operations officer for Atlanta Bread, says carryout isn’t something the company uses to push for increased sales. Catering, meanwhile, is a function that the company believes sets it apart.

“Takeout just happens to be part of our business, and we gladly do it, but I don’t know that we’ve ever promoted takeout,” Couvaras says. “Everyone pretty much knows takeout is available, not everyone does catering. To bring awareness to that, you’ve got to get the message out there.”

Atlanta Bread’s way of getting the message out there about its catering program is not simply through traditional advertising methods. Instead, Atlanta Bread decided to give its catering program its own brand identity: In November 2009, the bakery/café concept unveiled Pronti, a specialized catering program that fit in with the company’s attempts to upgrade the entire brand.

“We’ve always been in catering, I think this was just a way of branding the catering so it had a different feel to it … as sort of a fast, different part of our business, and giving it a comfortable name,” says Jerry Couvaras, CEO of Atlanta Bread. “Catering says a lot of things, but we didn’t want it to be generic. We wanted to own our part of what we do in catering.”

The Pronti menu offers everything that Atlanta Bread stores do—including sandwiches, salads, and bakery items—but bundles many items into specialized order options. This includes items like the Passport to Flavor sandwich option, which includes Roast Beef, Roasted Turkey, Honey Maple Ham, and Chicken Salad sandwiches with an assortment of cheeses and breads; the Sweet Soleil breakfast option, with a selection of pastries, muffins, croissants, and danishes; and the Crisps N’ Cheese snack option, with a selection of Parmesan Bread Crisps, sliced cheeses, and a Sourdough Bread Bowl filled with a dipping sauce.

By giving Pronti its own brand name and image, Jerry Couvaras says Atlanta Bread was able to win more support from franchisees and even boost sales. He says catering accounts for about 14–15 percent of sales at most stores, while some stores see catering account for as much as 40 percent of sales.

“The Integrity of the Product is the Challenge”

While several quick-serve brands box up their menu and roll out the delivery vehicles in the name of securing a strong catering program, others are holding firm to the carryout model.

Papa Murphy’s, the fifth-largest pizza chain in the U.S., built its entire system around the idea of a take-and-bake menu option. There are not even seats in a Papa Murphy’s establishment—customers walk in, order their pizza, watch it be assembled, and walk home with it ready to stick in the oven.

As a result, it’s found no need for a catering program—or even delivery.

“[Catering] breaks down three of the most fundamental things we’ve become known for, the first being value,” says Evan Evans, vice president of field marketing and corporate communications for Papa Murphy’s. “We’ve done some analysis on delivery in our system, and right off the bat it’s going to add $3–$4 for the consumer … by the time you hire drivers, reimburse mileage, deal with the insurance issues, and all of those other things.”

On top of securing value, Evans says carry-out helps maintain the quality of Papa Murphy’s pies and supports the element of control for the chain’s customers.

“The biggest gripes about delivery overall for the baked guys is complete lack of control over the timing of that process,” he says. “We continue to deliver, so to speak, by virtue of carryout the whole convenience factor, because consumers, once they understand the Papa Murphy’s process and that fact that they can control it from beginning to end … equate that control to convenience.”

Evans says the entire pizza segment would struggle in the catering industry, as portability of the cooking and heating process is a major roadblock.

“The big issue is, ‘How do I come up with a portable pizza oven that can cook enough to satisfy a big, catering-type event, and get it around and have it make sense economically?’” he says. “That would be the issue for not just Papa Murphy’s, but for the pizza category.”

Indeed, Atlanta Bread’s Basil Couvaras echoes the fact that many challenges in the catering industry prevent it from becoming a widespread phenomenon. Costs for transportation, extra labor, and specialized packaging are just a few of the extra burdens. But he agrees that any concept with hot food faces an especially difficult challenge.

“The integrity of the product is the challenge with any hot product,” Basil says. “That’s probably why you see a lot of the quick serves not offering catering, because a lot of their food doesn’t translate or execute well 20 or 30 minutes later, driven across town.”

Technomic’s Wilson says one segment of the quick-service industry in particular faces more of an uphill climb than others in the catering realm: the burger segment.

“I think the burger segment is a little bit trickier because the product isn’t likely to be as portable,” she says. “I would say it depends on the operator and how he has the program structured.”

Back Yard Burgers is one burger operation that seems to think differently. The Nashville, Tennessee–based chain caters events every week, says the company’s chief financial officer, Steve Neuroth, by essentially taking its operations to a customer’s back yard: Trucks haul a grill to the customer’s location.

“We view it as an extension of the brand, an extension of the footprint of the brand, so we’re just trying to be out there in the community and be visible as much as we can.”

Indeed, food trucks provide a means for quick serves to take their catering options on the road and cook their products fresh at the consumer’s doorstep. And with the trend growing all over the U.S., one can only suspect that mobile operations are in the catering industry’s future.

But for now, the players in the catering business are just trying to stay up to date with what their customers are demanding.

“We’re constantly taking a look to say, ‘How can we provide a better product, a better service, that delivers on our brand standard?’” Qdoba’s Thielen says. “So with catering we’re taking a look at different options.”