Contract catering: how to control costs?

Running a institutional dining facility—whether it’s a school cafeteria, a corporate cafeteria, or a senior living facility—is a balancing act. It involves not only providing high-quality meals to your guests but also effectively managing costs to maintain profitability, all while navigating a crisis and inflation. The task is challenging… but not impossible! Follow our strategic tips to reduce your institutional dining facility’s costs.

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Understanding catering costs

The first step to optimizing cost management in foodservice is to understand the different sources of expenditure. From the purchase of raw materials to personnel and operating costs, each cost category has an impact on your establishment's overall budget.

List of costs

Creating a detailed list of all your costsgives youan overview of the various sources of expenses. Here is a list of typical costs in institutional food service:

• Food costs: purchase of raw materials (ingredients) and costs linked to product quality and origin (organic, local, etc.).
• Personnel costs: employee salaries, associated social security charges and taxes, staff training.
• Operating costs: energy (electricity, gas), water, miscellaneous supplies (cleaning products, small kitchen equipment, etc.).
• Equipment costs: purchase and maintenance of kitchen equipment (ovens, refrigerators, etc.), replacement and maintenance of worn or obsolete equipment.
• Rental costs: rent, bank loan or depreciation of premises.
• Transport costs: delivery of raw materials, transport of meals (for remote catering services).
• Marketing costs : advertising and promotion, guest loyalty programs.
• Administrative costs: management (accounting, human resources), insurance, office supplies.

👉 Going further: 6 tips to improve profitability in foodservice

Analysis of current costs

Review your financial statements from last year and analyze all your costs. This will help you identify unnecessary expenses and areas where you can save money, and make informed decisions to optimize your operations.

• Which budget items were respected and which were overspent, and why?
• What proportion of food costs can be reduced by negotiating better with suppliers or buying in bulk, for example?
• How can you optimize energy costs without compromising operational quality?
• What strategies can you put in place to reduce personnel costs, particularly with regard to overtime?
• Have you encountered any unforeseen circumstances that have disrupted the organization of your work, and how can you anticipate them in the future?
• To what extent can you anticipate changes in human resources or market fluctuations?

👉 Learn more: 9 tips for better managing your company cafeteria

Would you like to learn more about the industry's ecosystem? Check out our overview of the major contract food service companies in France.

6 effective strategies for managing your restaurant costs

Here are a few practical and easy-to-implement strategies to help you reduce expenses and optimize the profitability of your business:

1. Reduce food costs 

• Cook with local, seasonal produce to cut costs, while offering tasty, healthy meals. 

• Control portion sizes to avoid waste: In 2020, ADEME estimated the cost of food waste at 68 centimes per guest per meal.

• Use digital solutions to manage your inventory in real time. For example, integrating tools like Inpulse can limit your material costs while increasing your profitability. 
• Take control of loss management to combat food waste by better planning your purchases and using leftovers responsibly. 

2. Reduce personnel costs

• Limit staff turnover by creating a positive working environment and offering competitive benefits. 
• Offer your employees training to improve their skills, thus increasing their efficiency and productivity.

3. Reduce operating costs 

• Reduce your energy consumption by renegotiating your bill with your gas and electricity provider and taking advantage of competition. 
• Use management tools like IO Analytics to track your expenses in real time. 
• You should also consider investing in energy-saving equipment which, although initially expensive, can reduce costs over the long term.

👉 Learn more: How can you reduce your restaurant's energy consumption?

4. Reduce equipment and rental costs  

• Switching to reusable containers also helps reduce expenses. With NoWW’s deposit system, businesses buy less disposable packaging, reduce their waste, and recoup their investment within a few months, depending on the size of their fleet.
• Reduce equipment costs by performing regular maintenance to extend the life of your devices.
• You might also consider installing a smart refrigerator at your workplace: it’s more cost-effective to set up than a full-scale cafeteria, and it allows you to diversify your meal offerings while reducing floor space and operational costs.

• Optimizing space utilization can also reduce your rental costs. Make sure every square meter is used to its full potential.

5. Reduce transport costs

• Renegotiate with your suppliers to obtain better prices while maintaining optimum product quality. 
• Optimizing delivery routes can also reduce transport costs and improve efficiency.

6. Reduce marketing costs 

Consider implementing a loyalty program that encourages regular guests while keeping marketing costs low.

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Are you looking to digitize your restaurant? Contact our team of institutional food service experts!