Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 12,115 caterers in the US provide food and beverage services for a variety of events, including weddings, parties, luncheons, and trade shows. Additional services include equipment (tables, chairs, dinnerware) rental, floral/centerpiece design, and event planning/design. Weddings account for slightly more than half of industry revenue, corporate events are about a quarter, and social events are 20%.

Competition from Alternative Sources

Caterers compete with a variety of alternative sources, including restaurants and food retailers, such as warehouse clubs and grocery stores.

Seasonal, Uneven Demand

Demand for catering services can be seasonal and uneven, driven by holiday events and special occasions.

Industry size & Structure

The average caterer operates out of a single location, employs 12 workers, and generates about $785,000 annually.

    • The catering industry consists of about 12,100 companies that employ about 150,000 workers and generate about $9.5 billion annually.
    • The industry is highly fragmented; the top 50 firms account for 15% of industry sales.
    • Some large restaurant chains offer catering services.
                                    Industry Forecast
                                    Caterers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 4, 2024 - Payroll Costs Rose in 2023
                                    • Employment by caterers jumped nearly 11% in December compared to a year ago, according to the US Bureau of Labor Statistics. Headcounts grew as caterers continued their brisk hiring pace to staff up for the busy holiday season. In 2023, employment by caterers, which plunged during the pandemic, returned to and now exceeds pre-pandemic levels. Competition for workers drove average industry wages to a new high of $23.82 per hour in December, up 3% year over year, BLS wage data shows.
                                    • The average cost of a wedding in the US rose 3% in 2023 to $30,119, according to the latest data from The Wedding Report (TWR). Catering represents the second-biggest cost for most couples, with the average wedding notching a food and drink bill of about $10,000, according to a survey of engaged and recently-wed couples by the wedding registry platform Zola. The typical food and drink cost is $85 per guest (not including cake), per the Zola survey. TWR finds that catering accounted for more than a quarter of the total wedding cost with bar service amounting to $2,785 (up 4% year over year) and wedding venue food service ringing in at $5,391 (up 3.6% over 2022). Wedding costs are expected to rise again in 2024 thanks to stubbornly high inflation, per Zola, with caterers facing rising food and labor costs.
                                    • Caterers are expressing cautious optimism as they look ahead to 2024, Catersource (CS) reports. After a year of relative stability in 2023, the industry is anticipating modest growth and an easier time filling open positions than in recent years. After struggling to hire staff, companies are now focusing more on retaining team members. Demand for catering has returned to pre-pandemic levels after the COVID-induced bust and bulging backlog due to postponed events and pent-up demand for in-person celebrations in 2022 and 2023, according to CS. In addition to raising wages to attract and retain employees, more caterers than ever are offering health insurance, matches on retirement plans, and paid time off. In some cases, these benefits are being extended to part-time team members. Also, companies increasingly are getting requests for remote work from sales and administrative staff and for flexible work schedules from frontline workers.
                                    • Caterers looking to reduce overhead amid rising food, labor, and other input costs need to be judicious to avoid compromising food and service quality, warns a recent article in Catersource. While some ingredients lend themselves to lower-cost substitutions – including vinegar, spices, and grains – others are worth the investment. Three foods that caterers should never skimp on, according to the article, include meat and seafood; fruits and vegetables; and alternative ingredients when working with dietary restrictions. In the case of dietary alternatives, cutting corners risks more than just quality and can result in serious health consequences. As food safety is of paramount concern, caterers should avoid taking the low-cost route when it comes to the proteins – meat and seafood – and produce they serve. If clients value organic, locally sourced, or non-GMO fruits and vegetables, investing in high-quality produce is imperative.
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