No Surprise, Food Costs Are Rising: Tips to Manage F&B Costs

Presenting a lackluster chicken breast or lukewarm chunk of salmon to attendees during an event is now a liability that event planners are looking to avoid. Food and beverage service has become integral to not just the event experience, but marketing success in the age of Instagram and Twitter.

As event professionals focus more attention on food and beverage, though, costs and quality expectations have risen in tandem, creating a challenge for the budget-minded event planner.

CWT Meetings & Events finds that food and beverage costs make up 20 percent of overall event budgets – up from around 15 percent five years ago, according to senior vice president and global head Cindy Fisher.

Where events don’t have a large lodging component, food and beverage can represent an even bigger slice of the total budget. “An inner-city InterContinental Hotel might have a food and beverage share as high as 70 to 75 percent, whereas the share at a resort hotel may be lower due to higher spend on room bookings,” said Leanne Harwood, managing director of Australasia and Japan at InterContinental Hotels Group.

 

As social media shines a spotlight on dining experiences, delegate expectations are placing pressure on food and beverage budgets. Meeting organizers don’t just have to deal with allergies and intolerances; they also have to wow attendees while keeping costs under control.

— Allan Leibowitz

 

It’s not just economic factors driving up costs. Delegates are becoming more demanding, with meeting professionals witnessing an increase in attendee requests for special dietary options, including gluten-free, low-cholesterol, low-carb, vegetarian, and vegan, all of which cost more to prepare.

Organizers can no longer rely on the old ‘plan for 15 percent vegetarians’ rule, said MCI Group account director Antonio Guadagnoli. “We now need to accurately capture this information beforehand. This is adding workload on one side and creates higher expectations on the other side.”

Another challenge identified by Guadagnoli is that the volume and variety of ‘special’ diets impose creativity, equipment, and supply source demands on caterers, especially for large events. “Many organizers have made the survival choice to limit the number of special diets taken care of to the most frequent ones (vegetarian, celiac, and kosher).”

PLEASING THE PALATES

Thanks to social media, food is becoming increasingly important in social activities, and this is raising the bar for event catering.

“At an event, ‘chicken or beef’ just doesn’t cut the mustard any longer, so organizers are looking to venues for ways to differentiate their events with some wow factor, and that’s where food has increasingly become a focus,” Harwood told Skift.

Clients are commonly looking for new cuisine experiences, including Nordic foods, Chifa cuisine (a fusion of Cantonese and Peruvian food), and reimagined Mexican cuisine, according to Kimpton Hotels & Restaurants’ latest Culinary & Cocktails Trend Forecast.

Hoteliers are also seeing a strong move to healthy menus. Nigel Moore, head of food and beverage for Accor Asia Pacific, said his chain is seeing a move “away from the normal menu offerings to a healthier lifestyle experience.”

“In the past, we would have seen maybe 5 percent of the delegates/guests asking for healthier menu options; recently, we had an event where close to 50 percent of the guests requested a healthier menu choice,” he said.

Accor Asia Pacific is planning a pilot project to introduce a meeting and incentive menu that is 70 percent health-focused and 30 percent indulgent.

LIMITING ALCOHOL CONSUMPTION

Rising costs, combined with increased awareness of organizers’ duty of care obligations, have forced many events planners to reconsider alcohol policies.

At one extreme, there has been a return to the prohibition era. According to Guadagnoli, alcohol has been banned from most of the medical congresses and from many other non-medical congresses “for compliance and image reasons.”

Hotelier Harwood said that it would be a bold event manager who tried to restrict or limit the service of alcohol at a function, especially in Australia and New Zealand. “However, we have seen some budgets for alcohol spend reduced or capped in industries that are particularly focused on duty of care, for example, pharmaceuticals.”

Gone are the days of excessive partying, said Fisher. “Most organizations we work with take a sensible approach to alcohol consumption and expect the delegates to take the same approach and show a level of responsibility, given the often packed agendas.”

Also gone are the ‘open bar’ policies, with more events using vouchers to limit the number of beverages per delegate or restricting the choices to wine and beer.

Where alcohol is served, organizers are also being pressured to provide delegates with taxi or Uber vouchers to ensure attendee safety beyond the event if they are not staying in-house, according to Harwood.

TIPS FOR MANAGING F&B

Because it constitutes such a large slice of event budgets, food and beverage spending has become a clear target when overall expenses need to be reduced, according to Guadagnoli. One way to cut costs is to exclude food and beverage from registration packages and ask participants to pay on consumption, which has been common practice in the trade show model for some time.

Large events are now replacing in-house catering with user-pays food trucks, reducing costs while also enhancing the dining experience for attendees.

For Fisher, menu consolidation is one of the best strategies to keep costs under control. “Narrowing the menu to utilize a kitchen in a certain way may reduce food and beverage rates if a venue saves money through bulk purchasing and preparation and passes on some of those savings to buyers,” she explained.

Harwood has seen the rise of grab-and-go catering, especially for smaller meetings and events. This minimizes time out of the office for delegates and can also cut costs.

Sustainability is another powerful trend which meeting managers need to take into account. “The reduction of food and packaging waste is becoming more of an expectation for guests – and they are not afraid to call us on it, so our hotel teams have had to be more prepared to tell the story of how we deal with waste,” said Harwood.

CWT Meetings is also seeing the green push, according to Fisher. “Events planners and venues are coming together to address wastage, sourcing, and food management issues. The farm-to-table story is becoming increasingly popular at corporate events.”

As with most other aspects of successful meeting management, it’s all about balance – keeping delegates engaged and happy, containing costs, and meeting duty of care obligations while also keeping suppliers and venues on the same side.

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