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 11,600 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 about half of industry revenue, corporate events are about a third, 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 13 workers, and generates about $1 million annually.

    • The catering industry consists of about 11,600 companies that employ about 154,900 workers and generate about $12 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 13, 2023 - Wedding Spending Continues to Rise
                                    • Total spending for weddings increased to $29,195 in 2022, up 7.3% from $27,063 in 2021, according to The Wedding Report (WR). Spending on wedding venue bar service and food service – each up 19.8% year over year – saw among the largest increases in spending. Last year’s 7.3% increase came on the heels of an increase of 25% in 2021 vs the prior year when the pandemic raged. Most of the rise in spending in 2022 was due to higher service demand and inflationary pressure, according to WR. The average number of wedding guests increased to 127 in 2022 up from 124 in 2021. In addition, couples increased their travel distance to 56 miles from home up from 50 miles in 2021.
                                    • The vast majority (92%) of catering companies made more money last year than in 2021, according to the 2022 International Caterers Association (ICA) survey. The post-pandemic wedding boom buoyed the industry, with wedding catering driving the most sales growth for 35% of caterers last year, the survey found. Overall, weddings were by far the largest source of revenue for catering companies. Corporate full-service staffed events also made a comeback, with 48% of caterers reporting that corporate events were the largest area of growth. Amid inflation and greater competition for workers, 98% of catering companies reported increasin pay last year. Still, 80% said staffing is their biggest business challenge. Just 10% of caterers reported being well-staffed moving into 2023. Staffing shortages are most acute in operations, which includes servers, planners and front of house management. Half of all respondents said they are understaffed in operations.
                                    • Catering businesses can save thousands of dollars and increase their profit margins by joining a group purchasing organization (GPO), reports. While the advantages and cost savings from bulk purchasing through a collective purchasing organization are “undeniable,” says Catersource, many small and independent businesses remain skeptical and afraid of entering into a bad deal. Catering businesses looking to prioritize profits by joining a GPO should take the following steps to find a reputable GPO that helps achieve their goals: Avoid rigid contracts by reviewing its policies and checking for rigid restrictions; inquire about suppliers to ensure they procure food safely and responsibly; and look for a GPO that offers attentive, informative and professional customer service. GPOs are only worth joining if they prioritize your business needs and support your growth, according to Catersource.
                                    • Caterers are contending with short lead times for corporate events, according to Catersource’s State of the Industry Report 2022 released in January. Full-service corporate catering, whose recovery has lagged wedding and fundraising events, largely remained elusive for much of 2022, per the report. Layoffs and rising competition from restaurants and ghost kitchens were hurdles that hurt the office lunch business for caterers in 2022. One of the biggest challenges caters will face in 2023 is shorter turnaround times, likely due to a constant flux in corporate staffing. “What the market is showing us is that it’s such an on-demand market,” said Kris Reinhard (Bold Catering and Design) at an industry gathering in November, adding “They’re calling us a week before for a 300-person event.” While challenging, rush orders can be an opportunity for caterers who see increased opportunity (and revenue) for expedited contracts.
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