The Hidden Gem that Expands Profits in Catering and Your Restaurant
4 Min Read By Sandy Korem
After a couple of years in the restaurant business, it’s not unusual for your customers to start asking the question: do you cater? The answer? Of course, you do! There is no need to pass up these extra profits.
A commissary kitchen is the point, the center, or the hub that keeps the main wheels turning and maximizes efficiencies and profits in a food business.
After answering “yes” a few times and then officially launching your catering division, much to your delight, you’re successful. Before you know it, you have not only an in-demand restaurant, but your catering business has exclusivity at multiple venues and your off-site catering for private/social clients reaches four to five events per weekend.
As these events are in coordination and preparation, you start to notice some challenges the kitchen is having keeping up. For example, employees standing in line to use the 60-quart Hobart to make the extra batches of baked items for the catering events.
Or, while reviewing last week’s food delivery invoice, noting the chef ordered some premade desserts to sell in your restaurant because there was not the time or space to make at least half the desserts on your current restaurant menu. Most likely the cooler space has become a hot commodity, making it more and more difficult to establish a par level for the meats and cheeses used for catering. There is simply no room to store items on shelves with correct labels because everything is being shared between catering and the restaurant.
Challenges like these can lead to turning down orders such as one for 500 boxed lunches because you have no cooler space. You must say “no” and watch your competition get the job.
Your first thought to fix this “problem” with success is to build onto your current kitchen at the restaurant, but the landlord will not allow the expansion. Renting coolers and extra spaces for temporary storage negates your profits, so that option is out. Maybe you should consider moving the restaurant? No, that won’t work. You’ve got nice wait lists on the weekend. Everyone knows your location. It would be a mistake to move.
So, what should you do to remedy these problems? Consider a commissary kitchen.
If a person is a “commissary,” they are the point person for a certain project. A commissary kitchen is the point, the center, or the hub that keeps the main wheels turning and maximizes efficiencies and profits in a food business.
Consider the Pros
Let’s look at some of the pros of a commissary kitchen:
Has adequate space for production of all catered event food
- Prep tables
- Baker’s racks
- Flat top
Provides adequate cooler/freezer space for all catered event food. This one item is so critical. You can prepare ahead of time when you know there is a large event on the calendar. You can make the 500 phyllo tartelettes, 1,500 hors d’oeuvres, 3,000 cookie dough balls, etc., and freeze them in advance. This is simply not an option in your current restaurant’s kitchen space.
Provides the space and staff that can make desserts and hors d’oeuvres ahead of time for your restaurant’s busy season.
Creates opportunity to increase your catering profits by doubling or tripling your catering revenue streams. For example:
- Add a wholesale line of your most popular items and sell them to other restaurants or retail food shops.
- Sell retail items to your restaurant and catering customers.
- Become the caterer for a local hotel.
- Greatly increase your delivery service to your customer database of your most popular catered/restaurant items.
- Cater events with guest counts more than 500 that you had to turn down in the past simply because you had no room to make the food.
- Handcraft baked items, rolls, croutons, etc., for your restaurant to increase your restaurant sales and percentage of profits on items you had previously outsourced.
If you operate two restaurants, combine all of the production for desserts, rolls, sauces, granola, marinades, salad dressing, etc., and move it to the commissary kitchen. This one item will save you money because you will have:
- Less labor (only one baker needed instead of two)
- Fewer equipment needs
- Lower utilities
- Less management
- Cheaper insurance premiums because there are fewer locations with less equipment
- A more accurate par level that you can stay on top of for all your weekly food purchases
- During seasonal down times in catering, cross train your staff so that they can be back-up staff for your restaurant.
Consider the Cons
What are the cons of a commissary kitchen? Businesswise, I really can’t think of one.
If you add a commissary kitchen to your restaurant and catering model, I guarantee you will have lower food costs and better cost of goods sold percentage because everything is all in one location. If you manage it correctly, your profits should be at least three points better. That’s three percent of your gross sales. Now that’s a savings.
How do I know all of these things? Because my company had several locations that made the same items in three locations. I had the driver that sped across the city to pick up a pan of lemon bars, not once but many times. I paid too much for staff, too much for in-company deliveries, too much for extra inventory, too much, too much, too much. And I did it over and over again.
For the past three years, we have had a commissary kitchen that has consolidated many of these costs and the company’s net profits have soared I would never go back to where we were before our commissary kitchen. It’s been a game changer, a company changer, and a personal life changer for me, the CEO.
In the restaurant world, the next economic hiccup could be just around the corner. Having a catering revenue stream greatly expands the business and levels out those ups and downs. Incorporating into that catering revenue stream a commissary kitchen not only serves the catering business and the restaurant, it also provides the hub that keeps you ahead of the competition and more profitable. With a commissary kitchen, you are ready and prepared to take on any new business that comes your way. That’s proactive and smart for profits.