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Catering seems like a pretty basic thing. You cook some food and bring it to the party/event and serve it up. So why does it cost so much for a catered event, especially one that’s not at a restaurant or dedicated catering hall?
Where does all this money go? Into the pockets of the caterers? Let’s try to unpack this just a bit and examine what a caterer actually does for all that money. As we’ll see, much of it has nothing to do with cooking food.
Raw food costs
Caterers are able to purchase most foodstuffs at a considerable discount over what an ordinary consumer will pay. This is especially true for anything bought in bulk, such as canned (or fresh) vegetables, meat, seafood. For example, a caterer might pay $40 for a 10kg (22 lb.) box of top quality Holland Sweet Red peppers, while you are charged $4.00-$5.00/lb at your local grocery store. However these products are subject to far greater degrees of fluctuation than what consumers face. Prices for produce, especially climate-sensitive fruit and veggies, can easily double or even triple in just a few months. It’s impossible to predict, with any degree of accuracy, what the price of a commodity will be a year from now. Therefor some protection is always built into caterer’s pricing, which goes beyond what you’ll find at your local restaurant, where pricing reflects current conditions. After all a caterer is promising to deliver a particular menu, and, if it includes Holland Peppers and the weather in Holland is unusually cold and rainy that $40 box might easily jump to $70.
There’s yet another factor for caterers to consider. Unlike a restaurant, where the customer orders a dish and the kitchen makes it, the caterer is in the unique position of playing God or at least psychic regarding food choices. If they’re catering a sit-down meal with two main dish choices, say steak or fish, how many steaks and how many portions of fish should they make? Yes, you can records from previous catering gigs and come up with an estimate but if you’re wrong, if you run out of steak, you will not be forgiven, and your reputation may suffer catastrophically. No caterer wants to run out of food. This adds yet another food cost.
With a buffet meal, while labor costs are certainly lower than for serving plated entrees, the amount of food required for the buffet is proportionally higher. Not only can’t the caterer afford to run out of ANY of the far more numerous items on the buffet table; it’s very important that a buffet always have a well-stocked appearance; the caterer can never afford for it to begin to look threadbare. For this reason they will generally make at least 20% more food than is necessary for a buffet. Guess who has to pay for this. On the other hand buffet items tend to be less labor intensive to produce and serve, and frequently use cheaper ingredients. That’s because these items need to be able to sit in a chafing dish for a prolonged period of time. That simply rules out many higher ticket items, especially any fish or meat dish where continued heat will negatively impact the quality of the dish. So, forget seared wasabi tuna, or medium rare anything (unless you have a carving station). Think pasta, stew-type dishes, or chicken marsala or similar, where heat doesn’t rapidly degrade the quality of the entree.
As the owner of a mid-range restaurant I would generally cost out my dishes such that my food costs were no more than 1/3 of the retail price. Labor costs ate up another 1/3, and operational costs such as rent about 1/6. For both of the above reasons a caterer would want food costs to be no more than 1/4 of the entree price, and depending on the level of sophistication of the dish (how labor-intensive it is), and number of buffet items perhaps only 1/5.
So when you look at the raw food cost and see $60 for food you could cook yourself for about $12-$15 per person don’t think that the caterer is simply gouging you; they’re simply basing the cost on a fixed formula and trying to make maybe $10-$12 per person profit on this part of the event.
Labor and Operational Costs
Photo Courtesy of Divine Studios
For a caterer, both operational and labor costs are significantly higher than those of a restaurant, for a variety of reasons. Here are a few:
1. Operational costs are higher, mainly because caterers work at two locations for each event. Food is prepped and frequently is partially cooked in their home kitchen and then reheated, plated, and served at a remote location. Transportation to and from the venue is one extra cost. The need to purchase or rent heavy equipment (such as convection ovens) at most venues is an additional cost.
2. Labor costs (for food production, alone) are much higher as well. Firstly, if food is to be served in its ideal state it’s not acceptable to simply cook it at the kitchen and merely reheat at the venue. Imagine a perfectly cooked piece of fish. Fish is very delicate. There’s a pretty small window of proper doneness; when you cook the fish to its desired consistency and then reheat it you can’t help but overcook it. Partially cooking and reheating is a better way to go; however, even there, you may end up with a perfectly cooked center and overcooked ends, since you need to get the entire filet hot again to be able to finish cooking the center. The best, and most expensive way to achieve a desired result is to merely sere the piece of fish or steak, to seal in flavor and get some carmelization, and then bake or grill at the venue. This process requires more labor time and longer setup time at the venue and proper equipment.
3. Venue Service costs are far higher that for restaurants. Restaurants generally pay waiters minimum wage. Most of a waiter’s wages are garnered through tips, which average 12-15% typically. Event waiters cost a minimum of $20/hr and they expect a 20% service charge on top of that. So, realistically we’re talking about at least $25/hr charged to the caterer, instead of maybe $3.00/hr including all worker benefits. Bartenders charge similar fees. Additionally, if there are hand-passed appetizers additional labor is needed for this rather inefficient (IMO) way of distributing food to guests.
4. Rental costs are the single biggest element in pushing catering costs through the roof. When you look at all of the items which have become standard for any formal event, and consider that caterers don’t stock any of them, generally, you realize what a huge expense this is.
Courtesy of Midtown Loft and Terrace
Generally caterers handle rentals themselves, though not because they either enjoy it or profit greatly from it. Contrary to what you may think caterers generally do NOT gouge when it comes to rentals. They bill for the actual price plus their management and labor time in booking, setup, cleanup, and repacking for pickup. Here are a few sample costs. Individually they may seem extraordinarily low; yet, altogether, as you will see, they add up:
Tables-$7-$10 each; for 150 people figure 15 tables (rounds) and about $120-$140. Beat up tables are fine, since they are covered.
Chairs-$2.50-$6.50 depending on the type requested. Figure $500 for your 150 person wedding.
Utensils/glassware-$.75 each. Figure on 6 utensils and 3 glasses per person, including cocktail and wine glasses Add another $1100.
Tablecloths, napkins, platters, serving utensils, salt and pepper shakers, cream and sugar bowls, water pitchers, etc.-$350-$500 depending on whether you want silver or stainless tea sets and platters, etc.
So you see that the minimum is about $15/pp. These are the actual out of pocket costs for the caterer. They will generally charge around $20/pp to cover their associated management and labor costs for arranging all this.
5. Flowers and Decor: This is a whole different “ball game”, which I’ll deal with this in a separate Blog post. It requires it!
So what does a catered event cost?
Let’s compare the cost of producing the following meal at an upscale restaurant to the projected cost of serving the same meal at a catered event:
For 150 people; 6 hand passed apps + 4 course sit-down meal with open bar
Price for upscale New York Restaurant*
Cocktail hour hors d’oeuvres-$15
Entree- $30 (with accompanying dishes and bread)
Open bar is $30
Food and Liquor- $93
20% service= $18.60
Grand Total $121.33/pp.
*Note, however that the actual cost charged by the restaurant will be higher on a busy night, since the wedding lasts for two full seatings, which greatly reduces the amount of “covers” they can serve. Expect the price to be at least 1/6th higher for a peak evening, so maybe $140-$150, if they’re willing to book the entire restaurant at all. If it’s on a Sunday afternoon, when the restaurant is normally closed or does little business the above rate should hold up pretty well. But expect to pay for all extras, such as dance floors. Daniel, for example charges a hefty $1000 just for a 10′ x 15′ dance floor. They do not permit larger ones either.
To figure the catering cost for the same meal we have to factor in the following additional costs: approximately 20% higher food cost (to account for price fluctuations and the need to make significant extra food) + 60% higher labor cost (to account for food prep, plating, & serving at venue) + 20% higher operational costs… and, of course that $20 rental cost per person for a rather basic setup. Here’s our revised breakdown.
Price for catered event (for same meal):
Cocktail hour hors d’oeuvres-$20
Entree- $40 (with accompanying dishes and bread)
Open bar is $35 (includes $100 for bar and accessory rental)
Food and Liquor- $118.50
20% service= $23.70
Grand Total $176.39
How to control catering costs?
Tune in for my my next installment as I try to figure that out. (don’t worry there are some creative ways to bring your costs way down and still have a great event).