2007 RESTAURANT INDUSTRY OVERVIEW
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Sales: $537 billion
Locations: 935,000 — serving more than 70 billion meal and snack occasions
Employees: 12.8 million — the industry is the largest employer besides government
SALES PROJECTIONS
Type of Establishment
Restaurant industry sales
(Billions of current dollars)
Commercial
Eating Places
Drinking Places
Managed
Services
Lodging-place
Restaurants
Retail, Vending,
Recreation,
Mobile
Other
2007
Estimated
Sales
(Billions)
$491
$363
$16
$36
$27
$49
$46
CORNERSTONE OF OUR NATION'S ECONOMY
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Restaurant-industry sales are forecast to advance 5% in 2007 and equal 4% of the U.S.
gross domestic product.
The overall economic impact of the restaurant industry is expected to exceed $1.3 trillion in
2007, including sales in related industries such as agriculture, transportation and
manufacturing.
Every dollar spent by consumers in restaurants generates an additional $2.34 spent in
other industries allied with the restaurant industry.
Every additional $1 million in restaurant sales generates an additional 37 jobs for the
nation's economy.
Average unit sales in 2004 were $795,000 at fullservice restaurants and $671,000 at
limited-service restaurants.
The average household expenditure for food away from home in 2005 was $2,634, or
$1,054 per person.
More than seven out of 10 eating-and-drinking places are single-unit (independent)
operations.
NUMBER ONE EMPLOYER
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The restaurant industry employs an estimated 12.8 million people, making it the
nation's largest employer outside of government.
Eating-and-drinking places are extremely labor-intensive -- sales per full-timeequivalent employee were $57,032 in 2005 and notably lower than other
industries.
The restaurant industry provides work for more than 9 percent of those employed
in the United States.
The restaurant industry is expected to add 2 million jobs over the next decade, for
total employment of 14.8 million in 2017.
Nearly half of all adults have worked in the restaurant industry at some time during
their lives and 32 percent of adults got their first job experience in a restaurant.
The typical employee in a foodservice occupation is:
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Female (55 percent)
Under 30 years of age (53 percent)
Single (66 percent)
Working part-time and averaging 25 hours a week
Living in a household with two or more wage earners (79 percent)
LADDER TO MANAGEMENT OPPORTUNITY
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Women and minorities represent three of five owners of eating and drinking place
firms, compared to less than half of all U.S. firms.
One-quarter of eating and drinking place firms are owned by women, 15% by
Asians, 8% by Hispanics and 4% by African-Americans.
The number of foodservice managers is projected to increase 11 percent from 2007
to 2017.
Roughly three out of five foodservice managers have annual household incomes of
$50,000 or more.
Three out of five first-line supervisors of food preparation and service workers in
2005 were women, 16 percent were of Hispanic origin, and 14 percent were
African-American.
Two out of five quickservice operators will increase the proportion of their budget
allocated to training in 2007.
Nearly half of all adults have worked in the restaurant industry at some point
during their lives, and 32 percent of adults got their first job experience in a
restaurant.
RESTAURANTS BY THE NUMBERS…
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$1.5 billion — Restaurant-industry sales on a typical day in 2007
57 percent — Percent of consumers who would use delivery to their home or
office if offered by tableservice restaurants.
Four out of five — consumers agree that going out to a restaurant is a better way
to use their leisure time than cooking and cleaning up.
38 percent — Percentage of tablservice-restaurant operators who anticipate that
takeout will represent a larger proportion of their total sales in 2007
43 percent — Percent of tableservice restaurant operators offering organic menu
items who anticipate that they will represent a larger proportion of their total sales
in 2007.
37 percent — Percent of consumers who have used curbside takeout at a
tableservice restaurant.
59 percent — Percent of tableservice restaurant operators that offer televisions for
customer entertainment.
http://www.restaurant.org/pdfs/research/state/northcarolina.pdf
by Jenny Fulbright
PowerHomeBiz Staff Writer
The catering business is one of the most lucrative and profitable home
businesses with a high potential for expansion and growth. It is both
financially rewarding and fun. Each catered event - whether birthday
parties for children, breakfast in bed and intimate candlelight dinners for
two, company dinner parties for 50 and wedding
receptions involving a hundred or more guests -- is a new
experience and challenge with a new group of people.
(article continued below ...)
Whether you cater events on a full-time or part-time basis, the
opportunities are excellent. However, catering is a demanding work,
requiring stamina, ability to work under pressure, and excellent
interpersonal skills. Your success will greatly depend on your reputation.
To build a good reputation in the business, you should be willing to work
hard and the ability to work under pressure. This kind of entrepreneurial
business is definitely growing and becoming more popular with people of
all income levels.
Demand for Catering
The demand for catering has increased tremendously through the years.
According to the National Restaurant Association's 2000 Restaurant
Industry Forecast, social caterers are one of the fastest-growing segments
of the restaurant industry, with sales expected to reach $3.6 billion in 2000
- a 5.7 percent increase over its 1999 level. As impressive as the figure
may be, there is great likelihood that it still underestimates the industry, as
many home-based caterers are not even listed in the phone book.
Driven by the rising number of higher-income households and a strong
economy, catering sales is expected to continue to soar as more
companies, corporations, charities, civic groups, event organizers and
individuals call on caterers to host on- and off-premises events.
Businesses of all sizes are using catered lunches, cocktail parties and
dinner meetings to build their images and increase company sales. It is a
matter of keeping up with the competition in promoting a company and/or
product.
Present lifestyles have also given way to increased demand for catered
food service. Instead of laboring for hours, even days, in the kitchen
preparing for parties or events, many homemakers now call on a caterer
to provide sumptuous and unforgettable feasts for their guests. An
increasing number of working mothers are paying to have catered birthday
and graduation parties, as well as wedding receptions handled by
caterers. The reasons are simple: if she is working outside the home,
today's mother just does not have the time or the energy to do all the
planning and staging of a memorable party.
Even the concept of eating out is slowly being changed by the business of
catering: instead of going out to a restaurant to partake of a good meal,
families can call on a caterer for that same great food.
Start-Up Costs
Catering offers an opportunity for starting a food service business with a
lower initial investment than opening a traditional restaurant.
In the catering business, you can start as small or as big as your wallet will
allow. The start-up costs for a catering business will depend on what you
put in your kitchen and can range from $1,000 (if you work from your own
kitchen) to $80,000 (if you outfit a professional kitchen). Most caterers do
the cooking on-site, either using their own facilities or equipment provided
by the clients. However, you would still need to do some prep-work in your
own kitchen facilities (e.g. pre-cutting vegetables, etc.)
To keep your initial costs down, you can opt to start your catering
business by renting items. You may rent the use of kitchen facilities, china,
utensils, tables, tablecloths and linens, serving equipment and other
staples. You can start buying your own equipment only when you have
steady revenues. By renting equipment, facilities and supplies, you can
use your first few months to build your reputation, develop some capital for
investment and expansion and evaluate how much time and money you
want to invest. You can also take the start-up period as the time to
determine the impact that this business will have on your family.
(article continued below ...)
Income Potential
The income potential of catering depends on the size of the events you
cater. Like any other business, however, catering requires excellent
management and organizational skills for the business to succeed. Your
ability to keep your operating costs down while maintaining a high quality
service is also essential.
A quick survey of successful caterers across the nation shows that began
with zero capital by working out of their homes. The basic starting up
investment would appear to be around $500, with some big spenders
capitalizing their idea with as much as $15,000 in order to get off to a fast
start.
Many claim that profits in the catering business are the best in the food
and beverage industry. An in-demand caterer in a large metropolitan area
can easily gross upwards of $200,000 per year, while a small part-time
caterer in a small town can count on at least $50,000 per year.
To cut down costs, you can employ several strategies to help keep your
bottom line richer. You can use your house as your office, hiring
employees and renting a kitchen in a nearby restaurant only on days you
have catering events. With its seasonal nature, catering usually does not
require a large number of year-round employees.
What You Need
Successfully running a small catering business takes much more than a
passion for cooking and a knack for preparing tasty dishes. You have to
be a superb planner and manager as well. You need to be extremely
organized, yet flexible enough to be able to deal with last minute changes.
You also need a strong affinity for people and a kind of intuition as to what
people enjoy in different environmental settings.
As the culinary sophistication and desire to be entertained of many people
have grown, some caterers today have to be adept not only in satisfying
the taste buds but also excel in food preparation. With the goal of wowing
the socks off the clients, many caterers give ample focus on plate
presentations, venue selection, and table decoration, among others. Some
even hire artists to improve the presentation of the food, while some go to
such lengths as indoor pyrotechnics, confetti guns and laser-light shows.
Given the intense competition, caterers nowadays are prepared to do
anything to keep the customer happy (and coming back for more).
You do not need special education or training to become a successful
caterer. Although taking some courses at culinary institutes or vocational
schools can help. Some start out by working for one or more catering
businesses to get an inside look at how the business goes.
As with any business, your success will be directly related to the
soundness of planning and the working of that plan. Understand exactly
what your client wants, and give him what he wants in the way of service
that reflects upon the client in a complimentary manner.
Additional Resources:
Associations:
National Association of Catering Executives, 2500 Wilshire Blvd., Suite
603, Los Angeles, CA 90057 (213) 487-6223
National Institute for Off-Premise Catering, 1341 N. Sedgwick, Chicago, IL
60610 (800) OFF-PREM
National Restaurant Association (http://www.restaurant.org), 311 1st St.,
N.W., Washington, DC 20001 1-800-424-5156
Books:
How to Manage a Successful Catering Business, 2nd Edition by Manfred
Ketterer
Start Your Own Catering Business (Start Your Own) by Kathleen Deming
(Editor)
How to Run a Catering Business from Home by Christopher EgertonThomas
Demand for off-site catering has grown significantly among Twin Cities restaurant chains,
particularly from corporate users.
Companies including Eden Prairie-based Famous Dave's Inc., Bloomington-based Leeann
Chin Inc. and Minneapolis-based D'Amico & Partners Inc. have seen bottom-line
contributions from catering boom. The growth is due primarily to increased demand among
business clients for limited-service deliveries.
Leeann Chin and Famous Dave's have provided catering services since their inceptions in
1980 and 1994, respectively.
Last year, Famous Dave's handled several thousand catering events in the Twin Cities, with
sales for each ranging from $200 to more than $15,000, said Howard Polski, who leads
business development for Famous Dave's Twin Cities catering services. Its catering revenue
grew 20 percent last year to $2.1 million.
The chain has 12 Twin Cities locations, with most able to handle catering. The Plymouth
restaurant features an expanded catering outfit, including Famous Dave's vans boasting
onboard hot and cold compartments and barbecue smoking equipment.
Leeann Chin catered 5,000 events in 2003, with revenues for each ranging between $200
and $10,000, said Jeff Siegle, the company's director of corporate sales and marketing. Last
year's catering revenues were $1.9 million, compared to $1.75 million in 2002.
The quick-service Chinese restaurant has 44 Twin Cities locations and launched a centralized
catering venture in 1993. That operation, located at the Bloomington headquarters,
coordinates all metro-area catering events, Siegle said.
D'Amico launched D'Amico Catering Inc. in 1992, five years after its first restaurant opened.
Steve Davidson, president of D'Amico Catering, said catering grew by 20 percent in 2003. He
said the catering business has grown as the company has expanded to 17 Twin Cities
locations.
The scope of catering services
"Corporate delivery" -- in which the restaurant transports freshly prepared food to office
buildings or other venues -- makes up 80 percent of the catering service at both Famous
Dave's and Leeann Chin. At D'Amico, corporate delivery contributes about 65 percent of the
catering business.
For Famous Dave's, corporate delivery includes dropping off and setting up hot barbecue
ribs, chicken, sandwiches and side dishes, along with paper and plastic dining ware. "All the
client has to do is lift the lids," Polski said.
Catering demand rises
Restaurants attribute revenue growth to corporate delivery
Minneapolis / St. Paul Business Journal - January 23, 2004
by Edie Grossfield
Contributing writer
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Leeann Chin and D'Amico also set up before they leave, and all three chains will provide
higher levels of service, as requested.
This trend toward delivery rather than full-fledged catering is likely due to time and money
constraints, Siegle said. "The hour lunch that used to be spent outside the office has been
pulled in-house, for the sake of productivity. With corporate spending down, they've reduced
the number of large-scale events, and what they've done is to make it up with more
economic, efficient ways of saying 'thank you' to employees."
Polski, of Famous Dave's, agreed that catered events can provide a nice employee award.
"Most companies are working on tighter budgets during the last two to three years. Many of
their employees are working harder these days, and they still want to reward them."
Restaurants nationwide also are finding a higher demand for off-premise service due to nosmoking laws, said Michael Roman, president of Catersource, a Chicago-based catering
consulting firm. "If smoking is banned in restaurants, then people go back to their houses to
have small, intimate dinner parties because they can smoke. You may not smoke, but there
are still a lot of smokers out there."
Independents also see opportunity
Independent Twin Cities restaurateurs also are looking into catering as they see demand
growing, said Wayne Kostroski, co-owner of Minneapolis-based Cuisine Concepts, which
operates Tejas, Goodfellow's, Bar Abilene and the Franklin Street Bakery.
"People continue to say they have less time, more going on, more family events; and, in the
short term, I think takeout has gotten strong, as well as some catering," Kostroski said,
adding that Cuisine Concepts is considering a serious entrance into catering for the future of
its restaurants.
"We have decided to consider it because we believe the demand for our food and services has
grown significantly over the past couple of years, and we believe that we have the talent at
this time to begin the process of developing a catering division of our company," Kostroski
said. The company hasn't yet decided when to start the venture or whether it would be
centralized or not, he added.
Catering isn't a good idea for all restaurants, however, said Lane Schmiesing, vice president
of marketing for Famous Dave's. "I think it's got to fit the concept, the menu and the
organizational structure of the company. Some menus just don't lend themselves well to
catering." Famous Dave's is a natural fit, he added, since barbecue is a catering mainstay.
Revenue booster
While restaurants have maximum nightly turnover rates and unpredictable food sales,
catering offers the chance to access many more people and to have precise control over how
much food is sold.
Because of these advantages, annual profits from catering can be as much as 11 percent
higher than from restaurant services, said Roman of Catersource.
Adding off-site catering can be challenging, however. Initial setup includes obtaining a state
catering license and equipment for safely transporting and maintaining food quality.
In addition, there is the unpredictability that comes with each event, D'Amico's Davidson
said. "Off-premise catering is like setting up and tearing down a restaurant every day. There
are so many variables introduced by being remote that it can lead to many difficult
situations. So, you need people who can think on their feet."
For example, when D'Amico catered the opening of the Mall of America, which required
meals for 10,000 people, its semitruck full of food arrived at a delivery dock without the
correct power supply. Luckily, the staff was able to find a company to bring over a generator
and hook up the truck. "It would have been a disaster," Davidson said.
It's no wonder, then, that many restaurateurs choose to avoid catering altogether.
At Minneapolis-based Buca Inc., Randy Lopez, vice president of marketing, said the
restaurant has chosen to stick to its lucrative takeout business, though it may consider
adding catering in the future. If and when it does, it probably will look to the catering
expertise of Vinny T's, a Boston-based restaurant chain Buca purchased in 2002.
Edie Grossfield lives in the Rochester area.
The Demand for Catering
The call for catering has increased enormously through the years. According to the
National Restaurant Association's Restaurant Industry Forecast, social caterers are one of
the fastest-growing segments of the restaurant industry.
Driven by the rising number of higher income households and a strong economy, catering
sales are expected to continue to soar as more companies, corporations, charities, civic
groups, event organizers and individuals call on caterers to host on and off-premises
events.
Businesses of all sizes are using catered lunches, cocktail parties and dinner meetings to
build their images and increase company sales. It is a matter of keeping up with the
competition in promoting a company and/or it's product.
Present-day lifestyles have also given way to an increased demand for more and more
catered food services.
Instead of laboring for hours, even days, in the kitchen preparing for parties or events,
many homemakers now call on a caterer to provide sumptuous and unforgettable feasts
for their guests.
Also, an increasing number of working mothers are paying to have catered birthday and
graduation parties, as well as wedding receptions handled by caterers. The reasons are
simple: if she is working outside the home, today's mother just does not have the time or
the energy to do all the planning and staging of a memorable party.
Even the concept of eating out is slowly being changed by the business of catering:
instead of going out to a restaurant to partake of a good meal, families can call on a
caterer for that same great food.
One attraction is that catering offers an opportunity for starting a food service business
with a lower initial investment than opening a traditional restaurant.
In the catering business, you can start as small or as big as your wallet will allow. The
start-up costs for a catering business will depend on what you put in your kitchen and can
range from $1,000, if you work from your own kitchen, to $80,000 where you equip a
professional kitchen.
Most caterers do the cooking on-site, either using their own facilities or equipment
provided by the clients. However, you would still need to do some prep-work in your
own kitchen facilities, for instance pre-cutting vegetables, etc.
To keep your initial costs down, you can choose to start your catering business by renting
items. You may rent the use of kitchen facilities, china, utensils, tables, tablecloths and
linens, serving equipment and other staples.
Naturally, you can start buying your own equipment, but only when you have steady and
reliable revenues.
By renting equipment, facilities and supplies, you can use your first few months to build
your reputation, develop some capital for investment and expansion and evaluate how
much time and money you want to invest.
Then too, you can also look at the start-up period as a time for revealing the impact that
this business on your family.
Your Income Potential
The income prospective of catering depends on the size of the events you cater. Like any
other business, however, catering requires excellent management and organizational
skills for the business to succeed. Your ability to keep your operating costs down while
maintaining a high quality service is also essential.
A quick survey of successful caterers across the nation shows they began with zero
capital by working out of their homes. The basic starting up investment would appear to
be around $500, with some big spenders capitalizing their idea with as much as $15,000
or more in order to get off to a fast start.
Many individuals claim that profits in the catering business are the best in the food and
beverage industry. An in-demand caterer in a large metropolitan area can easily gross
upwards of $200,000 plus per year, while a small part-time caterer in a small town can
count on at least $50,000 per year.
To keep costs down, you can employ several lines of attack to help keep your bottom line
richer. You can use your house as your office, hiring employees and renting a kitchen in a
nearby restaurant only on days you have catering events. With its seasonal nature,
catering usually does not require a large number of year-round employees.