Jun 19, 2023

What the future of contract catering looks like

While the AI that generated the picture above has some thinking left to do, we know that contract catering has undergone significant changes in recent years. It has been heavily affected by the pandemic and the fact that fewer people spend time at the office as remote work has become so popular. With less restaurant turnover, how will contract caterers stay profitable? And what actions should be taken in the future of contract catering?

A new era for contract catering

Looking back, contract catering for single or multi-tenants only meant serving hot meals. But at the beginning of the 21st century, something happened. It became increasingly important for companies to stand out and show their values, leading to many companies embracing corporate social responsibility and employer branding. The food concept also became an essential part of the journey.

Let’s take transportation companies as an example. The whole world must together find ways of reducing harmful emissions and transportation companies are forced to take immediate action. If they have begun to promote a journey towards a more sustainable future and advertise green diesel on their websites and social channels, they cannot encourage food in their dining halls that do not match that message, right?

That green message must be conveyed by offering green food options or subsidizing those offers to employees.

The importance of happy and engaged employees

The food concept has thus changed from simply offering a hot lunch to contract caterers playing an active role in their customers employer branding. Today, it’s essential to provide healthy alternatives and also promote food that keeps employees happy, focused, and productive. And, of course, as people are constantly in a hurry, eliminating long queues must also be prioritized since queuing is a big no-no according to Gen Z & Millennials.

A modern food concept should feel fresh and interesting to guests. It should be so appealing that a person visiting a company for a final interview should view the offering of that office restaurant as such an intriguing perk that they are more inclined to take the job.

The residual effects of the pandemic

As the whole world adjusted to the pandemic, remote work exploded. What many first regarded as a passing trend turned out to transform the way we work. As contract catering opened up again in the aftermath of the pandemic, the industry saw a new challenge with fewer visitors since many continued to work from home. Many contract catering companies, therefore, saw 20 percent, maybe even 40 percent, less turnover as a result.

The contract catering industry must adapt to the changed conditions. With more people working from home, fewer will come in for lunch – that’s a fact. It is not enough just to serve a hot lunch anymore – you have to invest much more in your restaurant concept today.

Several employers have stated that they want people to come back to the office. You can assume that those who have large offices, with a restaurant, are more concerned about this than smaller companies.

Great food, offers, and subsidies could be so good that a contract catering operator argues ”with our concept, 20% more of your employees will show up at the office during the week”. Voila – the lunch restaurant became a magnet that draws people into the office again.

The solution is digital

If you look at the food and beverage industry, it has undergone an extensive digitization journey for more than ten years. During the pandemic, most F&B companies could only make money if they used some kind of digital aid, resulting in the launch of self-service checkouts, the usage of QR codes, etc.

This quickly developed technology set up to meet reinforced expectations was mostly suitable for fast food concepts. It resulted in companies being able to increase the average bill. Surveys show that 25% of consumers spend more on off-premise orders than if they dined in.

This can be explained by the fact that people find queues stressful, staff often forget to ask for additional orders, and the alluring images on the screen invite additional sales. If you order yourself, you don’t have to ask about all the dip sauces. You simply click on the one that looks the most delicious.

How digitization of contract catering is different

As the food & beverage industry was digitized so quickly, it resulted in a standardized technology, generally structured roughly the same way. In contract catering, there’s a greater technical need for customization.

When applying the same standard technology to contract catering as in quick service or table dining, you don’t see the same positive effects. Say a lunch restaurant has a fixed price for the lunch buffet of 129 SEK. There’s no room for additional sales other than drinks with the food. Sure, it’s smooth for the guest to order in the self-service kiosk, but there are few possibilities to upsell for the canteen.

The need to create guest loyalty and find new ways of ordering is just as large for contract catering as in the rest of the restaurant industry. But a traditional loyalty scheme does not apply directly to the needs of contract caterers, where other rules, discounts and grouping of guests must be applied when ordering.

Customers today expect to get their lunch at work just as easily as when they order a burger and fries at a fast food chain. You must use proper technology customized for contract catering to meet their expectations.

Introducing: Pej Guest Management

Pej Guest Management is part of Pej’s powerful SaaS solution for contract caterers with one of the most extensive rules engines. It includes a digital ordering solution, a self-checkout kiosk, and an order status board and is designed to make contract catering more profitable and increase customer satisfaction.

Pej Guest Management is developed by Pej in collaboration with Oracle. We are striving to help restaurants just like yours to digitize your business and meet your customers’ high demands. Learn more about how to increase profitability in contract catering, and feel free to contact us if you have any questions.