The Catering Coach
3 Reasons to Establish a Commissary Kitchen in Your Catering Business
On any given day in my catering business, we have catered food items being made for at least five catering revenue streams, i.e., wholesale food manufacturing, retail food shops, corporate catering, hotel catering and private social events. We actually have a total of 11 multiple catering revenue streams and all of the food is produced in our commissary kitchen. A commissary kitchen is a kitchen that serves as a hub, a central location, that can provide food for multiple catering revenue streams. Simple corporate hot lunches, sandwich platters, boxed lunches, specialty high-end hors d’oeuvres, delicate tea sandwiches, brownies, French pastries, wholesale retail items, etc., are all made at one central location, a commissary.
Why should you consider a commissary kitchen?
No. 1: If you have several locations where your food is being produced, it’s much easier to control food costs, inventory, staff and deliveries if all the food is made in one location versus several locations. For example, flour on the shelf represents dollars not in your bank account. If you have flour on the shelf in one location vs several locations, that’s more money in your bank account. OK, flour is not expensive, but think of the savings you could realize if you only kept cheese or olive oil in one location. That’s more money in the bank.
No. 2: Another advantage to a commissary kitchen is labor cost. If you have production kitchens in several locations, you have to staff them all. Why not have one kitchen and all your staff in one location? I can guarantee you that your labor cost and payroll will shrink if your staff is not spread out. Again, money in the bank!
No. 3: A huge advantage of a commissary kitchen is employee retention of the right kind of employee. If you are a catering pro, you love diversification, creativity and doing something different. A restaurant chef or line cook or prep cook has to produce the same menu day in and day out and it can get boring. A catering chef or line cook or prep cook for a company with a commissary kitchen doesn’t get bored. Each day is never the same. Thankfully for US employees today, the unemployment rate is very low. As an employer, that makes it more difficult to find the right fit when hiring because the labor pool is smaller. If you have a commissary kitchen and you are interviewing an employee, offering them more diversification is an asset for your company in the hiring process. It makes you an employer of choice.
What’s the con of a commissary kitchen? It takes more organization, exact daily food purchase allotments and exact daily labor allotments, which translates to accountability for all employees. That’s work but also means more net profit!
Now, for the B word: BUDGET. I have four budgets for my company. I have one for each of my two food shops, one for catering and one for my commissary kitchen. I’m considering next year having a fifth budget for our wholesale manufacturing. The budget for the commissary kitchen is easy. It has to produce any and all food for the food shops and catering and its goal is to break even, generating zero profit. The food shops and catering divisions are purchasing all of their sales food from the commissary kitchen. The profit for the company is made in catering and at the food shops. Yes, the food shops and catering actually write invoices to purchase food from the commissary kitchen. It’s not hard; It’s about being precise and knowing where every penny is spent. This budget process and invoicing the commissary kitchen have greatly helped me to increase my company’s yearly net profits.
I speak at many national food shows every year. The thing I hear over and over from catering company CEOs is, “My net profit is not good. I‘m working so hard and not making the money I should.” If these are words you hear yourself saying, one of the first steps to getting your profits on track is to have and use a budget. The year has really just begun, and I’ve got a challenge for you. Make a budget now. Look at every penny you spend now, not in November 2019 when it is too late for the profit you deserve in 2019.