Despite the ways in which many caterers in the industry have pivoted their business models to weather the storm of COVID-19, it’s undeniable that they have still been greatly impacted by the loss of income and product over the last few months. So, as we begin to rebuild and continue the process of planning events, a question on our minds is this: how will this affect our menu pricing as we know it? And furthermore, to what degree should we keep in mind that our clients are likely on tighter budgets?
Pricing and recouping losses
As catering professionals, we may be accustomed to small losses here and there, but nothing compared to the losses we’ve experienced since the start of COVID-19. Without events and steady profit, many were ultimately forced to diversify their income with delivery and to-go services as a short-term solution. However, these offerings were only band-aids on the larger issue of rapidly decreasing funds.
That said, we’re now coming to terms with menu pricing moving forward – including whether or not our prices should reflect the need to recoup some of our losses. Fausto Pifferrer, owner of Blue Elephant Events & Catering, notes: “This will vary depending on individual catering companies – there isn’t a ‘one size fits all’ approach to this. Some companies are charging a rebooking fee for each wedding client that moves from 2020 to a future date. Others are marking up their menus by a designated percentage to account for the increased cost of goods. Different markets will bear different approaches to this.”
On the other hand, Adam Gooch of Common Plea Catering suggests that you should be working with the current budget and price that you quoted. “I know that you may not make the percentage you normally would, but these events will not be normal events – they will be your future that you can build on. We will all have to adjust what we are doing, so you won’t be the only caterer facing the tough challenges. [However], rising prices right out of the gate won’t establish a good future.”
How shortages come into play
For those that aren’t aware, it should be said that the industry has been hit equally hard with a number of food and product shortages since around mid-March. According to Russ Cipolla, principal of Team Four Foodservice, this caused commodities to spike significantly and affect pricing.
However, because nearly all of our industry-wide events were shut down, we didn’t feel the impact of the subsequent price increases. As we’re now picking up the pace with events once more, this is where businesses will start being hit with higher food costs. “There’s probably not much relief for the rest of the year in commodity pricing, [and] we see commodity prices continuing to go up due to COVID-19 issues,” says Cipolla.
“[Beef, pork, and poultry] have been hit the hardest. Prices on certain products almost doubled. Fresh product is very tough to get. Frozen product is available and should be considered – if you use fresh, boneless chicken breasts, you probably won’t have any problem getting frozen, boneless breasts, although the price will probably be similar. That said, there’s an abundant amount of seafood, and dairy is lower now than it’s been in a while,” adds Cipolla.
The implications of health and safety precautions
Beyond the increased pricing of goods as it pertains to setting new menu prices, it’s crucial to also consider the new requirements for health and safety in our events. Social distancing guidelines will, of course, need to be adhered to, but this also includes purchasing safety gear for staff.
Pifferrer advises taking a look at how you can add this into your quote for rescheduled or new client events. “Many caterers will add a ‘COVID-19’ line to cover masks, sanitizer, gloves, and more. This is similar to a market price line on meat or seafood. These additional costs will have to be absorbed by the clients, not the catering companies.”
When looking ahead to adjusting your menu pricing to reflect these very real changes, keep in mind that you will be setting the standard for the future of your events. While you want to avoid overcharging customers, you’ll also want to ensure that you’re being realistic about prices that will keep your catering business sustainable for the long-term.