By Mike O’Hanlon, Head of Catering Partner Business

We’ve kept a close eye on the state of business catering during COVID-19 and see several significant trends emerging.

Business catering remains a powerful part of many restaurants’ strategies. Higher margins and profitability, and free brand marketing are crucial revenue drivers for restaurants. Across our network of 80,000+ restaurants and caterers, these themes have been consistent during COVID-19:

1. The future is BEYOND THE 4 WALLS – off-premises is here to stay.
2. Restaurants will need to be multichannel (in-store, catering, delivery, takeout, drive-thru, etc.) and be capable of handling the unique needs of each channel.
3. Customer experience will make or break a brand. True hospitality and creativity will set the best brands apart from the rest.
4. Location may continue to matter (highly dependent on the type of restaurant), but every restaurant needs to be online.
5. Buyers will (if they haven’t already) shift their ordering online. 

Catering will help offices reopen

As offices begin to reopen across the country, companies face a new challenge: ensuring that employees have safe, convenient access to food every day. Pre-COVID, companies provided food to employees and guests in support of specific meetings or events. Companies also ordered in employee lunches, breakfasts, or other meals and snacks, as a perk. In the COVID era, safe access to meals at work is a matter of health, risk reduction, and efficient operation. We see this unfolding in three successive phases:

Phase 1

This is the phase we are currently in. Offices staffed with smaller teams will naturally result in lower headcount and average order sizes. Orderers are looking for individually packaged meals to limit communal handling of food. Adding menu items to support this use case is crucial to keep the largest group orders coming in. Online ordering, contactless delivery, and proper safety precautions (masks, gloves, sanitation) are paramount. 

Phase 2

As more staff begin to return to the office, a corresponding increase in average order size will take place. Demand for individually packaged items will continue. Online ordering and contactless delivery will still be a priority, as safety protocols around things like elevator capacity make leaving the office at lunchtime for takeout problematic. 

Phase 3

Phase 3 represents a more permanent “new normal” where precautions and restrictions will ease, and the largest group orders will return, along with more traditional catering items for larger groups. At this stage, average order sizes should approach pre-COVID levels. Online ordering and delivery will remain a permanent preferred fixture.

What catering looks like today

Demand for individually packaged catering has increased 5x since the start of the pandemic. The majority of ezCater orders now include individually packaged menu items. Most large orders contain individually packaged items, while small groups of colleagues who work together closely still opt for more traditional catering options. 

Pre-COVID, the average value of a catering order was $300. Now, this value has dropped to $255. While the overall AOV for catering has dropped, these orders are still much higher than typical individual delivery orders. 

Headcount on orders that include individually packaged food has shifted from an average of 22 people pre-COVID to 21 people, while headcount for orders with no individually packaged items averaged 24 people pre-COVID and is currently at 19 people. Orders with only traditional catering menu items are still happening for smaller, more controlled groups. These orders will continue to increase, so it is important to maintain menu items that support this use case.

Boxed lunches are a customer favorite

21% of our orders have contained boxed lunches since the beginning of April. Sandwiches remain the most popular item, but burrito boxes and chicken options (tenders and sandwiches) are also performing well.

To keep lunch both safe and easy, customers are looking for an entire meal in a single package, including drinks, sides, snacks, and desserts. Boxed lunches represent an excellent opportunity for menu innovation and margin improvements. As with all individually packaged items, clear labeling is crucial.

Ever-shrinking lead times

The current environment of uncertainty is driving more “last minute” searches, with 50% of the searches on our marketplace now happening within 24 hours of when the order is needed. 24% of these searches are happening with less than 5 hours of lead time – up from 12% pre-COVID.

Given the operational challenges restaurants face during COVID-19 (labor, supply chain, drivers, etc.), this may be an opportune time to simplify menus and focus on best selling items to capture this last-minute demand.

Steps you can take today

Here are a few changes you can make immediately to meet the needs of today’s B2B catering buyer:

1. Add individually packaged meals to your menu. Create more boxed lunches and add items from your regular takeout menu.
2. Optimize your catering packages/trays/bars for smaller groups e.g., 6-8 people.
3. Lower lead times for top-selling items and simplify your menu for operational efficiency.
4. Lower order minimums and lower delivery fees to capture smaller catering orders.
5. Update your menu to accommodate dietary restrictions – especially your online menus, to make the search process easier for customers.
6. Clearly label all individually packaged items to reduce handling.
7. Train drivers to wear gloves and face masks and to look out for contactless delivery requests/instructions.