In the Fall issue of Catersource, Carl Sacks, Executive Director for Leading Caterers of America, offered mid-year predictions regarding how he felt the remaining few months of 2021 would unfold. “There has been a massive buildup of asset-based household wealth in the U.S.,” he noted. “This is in part because of the remarkable (and sometimes perplexing) runup in the stock market [up to mid-Q3], and because of spending deferred during the pandemic. Most U.S. workers, particularly in white collar jobs, have remained employed during the pandemic. They have been banking a lot of their pay due to deferred spending on vacations, restaurant meals, sports and entertainment, and other typical activities.”
Has the spending begun? Have catered events of all kinds returned?
As the end of 2021 arrived, we spoke (and listened) to several executives from across the U.S. offering their take regarding various aspects of catering business. Here’s a recap:
Full service corporate events & meetings
Sacks noted earlier in the year that small to medium local and regional meetings would begin to pop on the calendar for Q3 2021 and later, including SMERF (social, military, educational, religious, and fraternal) events, as well as corporate events.
Passed appetizers, served during a 2020 wedding on the east coast, were most definitely a luxury for any event with an in-person aspect during the pandemic. Photo courtesy Jaclyn Watson events and Jag Studios
It’s a mixed bag, depending upon region. In some areas, employees are returning to corporate offices, in other areas not at all. Employers are skittish in some regions about spending, others look to spending money on their employees as an investment in company culture and staff appreciation.
In the Chicago area as of mid-November, mask mandates are still in place, and very few companies have welcomed their employees back to the office. “It’s a ghost town during the week,” said Catering by Michaels’ Director of Operations, Jeff Ware. “We have not seen any pickup yet in the day-to-day corporate events, meetings, or specialty drop off division. It’s still very slow. Where we have seen the pickup is in the educational market: most of our schools and universities are fully back on campus and we’ve seen the return from that sector.”
In the Denver area, Ingrid Nagy, Founder and CEO of Catering by Design noted that the activity for proposals is high, but due to the spike in COVID cases in the area, “not a lot of people are pulling the trigger.” Nagy believes the company won’t see a lot of corporate business until spring of 2022.
In Dallas, Craig James, Regional Vice President of Food Glorious Food says corporate business is picking up, but “a lot of what we are seeing is a two-week lead time, which makes things a little messy.” He believes they will see people back to the office by January.
Buffets are finally on the way back into events in 2022 and beyond. Photo courtesy Jaclyn Watson events and Jag studios
In Las Vegas, an entirely different story is unfolding. “We see 65,000 people at football games, concerts, whatever!” says Pam Howatt, President of Divine Events. “Fingers crossed, our positivity rate is only 6.7% and has been maintaining that for the last month or so, which is pretty amazing what with all of the activity that’s going on. Our business has been an amazing mix of small business meetings and a lot of private events. We were 82% to 83% corporate before COVID, so we are hopeful, [all is] looking positive right now.”
In San Francisco, catering businesses relying on corporate spends are still suffering, with mask mandates still in place. At Taste Catering, company president Mags Teskey noted that, due to frequent communication with corporate clients, the company hopes to see a lot of spring business in lieu of holiday and autumn 2021 business.
In the New York and Connecticut areas, Jeffrey Selden, Managing Partner of Marcia Selden Catering & Events noted that one of their largest corporate clients had just reopened its offices, bringing back 2,000 employees. “They are planning full steam ahead as if everything is normal,” he said. However, certification of vaccination and testing for everyone who walks on their property, even for a delivery, makes things difficult when working with outside vendors.
In Portland, Oregon, a “triple whammy” of challenges to corporate events arose over 2020 and into 2021. COVID, the riots, and a grim homeless situation in the core downtown area has kept workers from returning to their desks and businesses boarded up. The mask mandate is in play until February 2022, which will hopefully curb the hold COVID has in that area.
A boxed meal from 2020 for a drive-in fundraiser. Photo courtesy footers catering.
In Los Angeles, experiential marketing events are happening full tilt. Marketers didn’t spend well in 2021, and if they don’t spend it now, they might not get that budget back in subsequent years, says Nace Neubauer, CEO of Contemporary Catering. “They are finding ways to spend it right now, so the stuff that is happening is happening at premium rates. Like $125,000 for a 40-person sales dinner. In a backyard.”
Corporate delivery catering
“I remember that part of the business,” said Paul Neumann, President, Neumann’s Kitchen (New York City) with a rueful smile “…it was back in 2019.” The consensus is that corporate delivery has essentially disappeared in New York City. “It’s not really coming back in any recognizable form or necessarily a form we are going to jump back into, so it’s one of the factors that makes us consider what Neumann’s Kitchen 2020-21-22 is now versus what it was up until the pandemic.”
Neumann noted that office building occupancies are approximately 10% to 20% in New York City—maybe. When people return, he believes 100% occupancy will "normally" look like 60% occupancy, despite that many of the large commercial office buildings are—either in conjunction with their major tenants or on their own—building out major amenity spaces: gyms, conference centers, restaurants, cafes, to make their employees feel good about returning.
Ghost kitchens will also significantly affect a caterer’s ability to jump back into the market. One significant barrier to caterers: building management wants to reduce the number of people entering the building. “But if you are a ghost kitchen doing 20 brands, then you’re satisfying 20 different taste levels, 20 different options in one delivery. [Corporate catering] has not just been changed by this, it has been blown apart. I don’t know what it will look like in six months or a year—or ever,” said Neumann.
Delivery times are increasing significantly in New York City as people take to their personal vehicles instead of using mass transit.
Another delivery barrier in the New York City market is the switch from mass transit and crowded subway cars to an increase in personal cars on the streets and highways into and out of the city. Delivery times are increasing significantly, says Robin Selden, Partner and Executive Chef, Marcia Selden Catering & Events. “Paying labor to make these deliveries doesn’t even make sense anymore because I can’t charge enough to make them worthwhile; so, we’re just trying to get out of it entirely.”
On the opposite end of the country, however, a light glimmers for the VT Group in Portland. As hotels become unable to handle food service due to staffing issues, food supply, or smaller customer base, the VT Group has been hired to go in with box lunches, catered meals, and mostly delivery and drop off for hotel ballrooms and meeting rooms. “There are opportunities that come from odd places,” Art Fortuna, President, says, noting also that a local golf course needed help with staffing for their tournaments. “They had the food but didn’t have the service staff, so we provided that. They were thrilled to get somebody who knows what they’re doing instead of the high school kids they usually use. There are opportunities.”
Tracy Vessillo, President, Puff ‘n Stuff Catering in Florida agrees. “Puff didn’t really play in the corporate delivery world before, but what we are starting to see happen is that it’s a little safer for corporations to have a meeting and have a corporate delivery opposed to a big function. A lot of traditional foodservice companies that had a traditional café …the population isn’t there anymore and they can’t afford to go in and produce food. We’ve had a couple of foodservice companies come to us and say, ‘will you produce the food for us?’ They’ll brand it and have their employees heat it up and serve it. We have actually picked up a decent amount of business doing that.”
Back in Chicago, Ware remarks that, “the delivery business is critical to our business, so we have to make it work.
“We won’t see anything else in 2021; but we are definitely hearing from our corporate clients that they are remodeling offices, building more meeting rooms and less cubicles, and facilitating the future of what they see the workplace looking like: a place where people are going to come to be together; and that creates opportunity for us. We’ve seen a lot of corporate clients that are reaching out to us and other caterers in the market for a formal RFP process, saying they want to change the way catering works in their buildings; we don’t want to have 20 different people coming in delivering, they want to streamline to two or three providers for catering. We have a lot in our delivery pipeline as soon as the lights go on.”
Check back next week for Part 2 of our State of the Industry 2022