||Party of 100? No Problem. Fast-Casual Chains Gobbling Up Catering Biz
Time-Strapped Consumers Are Increasingly Turning to Panera, Others When They Entertain
Throwing a wedding shower? Call Panda Express to cater it.
Fast-casual chains are leading growth in the catering category, which has increased significantly since the recession. Even as pinched consumers slashed their restaurant spending, they invested more in catering -- and not just through local restaurants and delicatessens. Almost a third of consumers now cater through fast-casual chains.
Chipotle earlier this year announced it was bringing catering to Denver, its hometown, and will roll out catering nationally.
"It fascinated us," said Melissa Wilson, principal at Technomic. "Even when consumers were watching pennies, they're still very time-pressed," and invested more in catering when they entertained at home. She added that while consumers increased their catering spending during the recession, corporations cut theirs.
Technomic estimates that in 2012, catering was a $43.4 billion business in the U.S. -- including both business-to-business and consumer catering -- with about 39%, or $16.7 billion of it, sourced from fast-food and fast-casual chains. Consumer catering last year was estimated at $27.5 billion, or 63% of total catering, with $9.9 billion of that coming from fast-food and fast-casual chains.
Increasingly chains like Popeyes and Panera are creating websites dedicated to catering, making it easier for consumers to order. Chipotle is also seeing the opportunity. Earlier this year, the chain announced it was bringing catering to Denver, its hometown, and will roll out catering nationally.
Panera has long benefited from its catering business, and has grown this segment significantly, said Ms. Wilson. Subway has also seen an increase in catering. Firehouse Subs is another chain of that ilk that offers catering.
Over the next three years, fast-casual chains -- Chipotle, Panera and the like -- are projected to experience the strongest industrywide gains, with a 12% compound annual growth rate forecasted. The fast-food sandwich category, which includes Subway, is expected to be the second in line, with a projected 8% compound annual growth forecast.
The growth in catering is coming despite a relative dearth of marketing.
Baja Fresh and Boston Market promote their catering menus during the holidays, while others tend to market them during the football season. "They're concentrating their spend," said Ms. Wilson. "In the fall, leading up to the holidays" is when the promotion for catering is the most prominent.
One type of chain that doesn't stand to gain much are traditional fast-food chains, such as McDonald's, Burger King or Wendy's, in part because the nature of what they serve. "The food doesn't transfer well," said Ms. Wilson.
(Source: Advertising Age, 04/24/13)
How You Can Make Money:
The catering surge for fast-casual franchise business is a boon for your station's events. Work with your market Franchise Associations on sponsorship opportunities that let them sell on-site and make connections to promote their catering options to the consumers that listen to your station(s). It expands the cool food options at your event (and everyone loves lots of food options; just ask any State Fair) and brings in a whole new slew of sponsorship revenues.