How Planners Can Offset Rising F&B Costs in 2016

In 2016, food costs will continue to rise — but many planners’ budgets won’t. How do chefs and caterers suggest bridging the gap?


Many people wouldn’t think twice before tucking into an egg-white omelet with ham and asparagus, especially one served by a chef. Yet the omelets that Jeffrey Magatagan’s staff plated earlier this year for a group at San Antonio’s Henry B. Gonzalez Convention Center were a workaround during an egg shortage caused by an outbreak of avian flu.

“We went through a lot of egg-white omelets when fresh eggs were hard to find,” said Magatagan, senior vice president of The RK Group, which provides food-and-beverage at the Gonzalez center and several other Texas venues. “People loved them.”

Eggs are 35 percent more expensive than they were two years ago. The prices of dairy, beef, and turkey are up, too. “I just had to secure 5,600 pounds of turkey,” Magatagan said during an interview last month. “I paid $1.89 a pound. Five years ago, it was 89 cents a pound.”

Those prices sometimes get passed on to diners, as well as to meeting planners — whose budgets don’t always keep pace with costs. “Menu pricing will continue to be a challenge on a limited budget,” said Michael Barber, executive chef at the Hyatt Regency St. Louis at the Arch. “Based on industry estimates, the cost of food is predicted to go up 2.5 percent in 2016.”

While planners might sign contracts anywhere from a few months to a few years before an event, Magatagan said he can only peer a few months into the future — six, at most — to predict prices. Gary Prell, senior vice president for culinary development for Centerplate, thinks three to four months might be more accurate. “I don’t think anyone could have looked into a crystal ball and predicted the avian flu,” Prell said. “Once the news hit and the prices spiked, the ‘oh my God’ feeling started rippling through the industry.”


As Barber mentioned, food-cost increases are predicted to be modest compared with previous years. As in many industries, the 80/20 rule applies: 20 percent of menu items will yield 80 percent of sales, and 20 percent of ingredients will account for 80 percent of costs. Those ingredients are often proteins such as beef, chicken, dairy, or eggs, whose prices tend to fluctuate.

Magatagan suggests that creative, informed menu planning can offset some of these costs. “If [planners’] budgets don’t go up, we need to be more proactive in how we approach their menu design,” he said. “[Rising food costs] doesn’t mean everybody’s budget goes up. Be flexible on what kind of creative ideas we can come up with.”

An obvious solution is portion control, especially as food-waste reduction grows in importance for both venues and planners. “You can’t physically eat everything,” Magatagan said. And even if there’s less food being served, “How we lay it out is important. You can spread it around to look like more food is out.”

Likewise, family-style serving, which has been trending at meetings, can make meals feel less stodgy and more fun — and also maximize smaller amounts of expensive protein. “We do a lot of entrée salads for big lunches, where we might have chicken or pad thai with shrimp,” Magatagan said. “You can have an entrée salad, and then do a family-style dessert on the table which also serves as a centerpiece.”

Prell suggest planners view their caterer as a partner who can help them focus on what matters most during a meal. “Our meeting planners are smart, they’re savvy, they’re professional. They have very, very sophisticated palates and they know their business,” Prell said. “We’ve gone beyond ‘this is a three-course meal, this is my budget, make it work.’ Instead, we’re talking about adjusting portion size, we’re talking alternative ingredients, we’re talking about underutilized cuts of meat that can be prepared in different ways.”


As it happens, menu planning now takes place closer to an event, which makes it easier for strategic collaboration. “The window of time that we book medium and large events in our convention and meetings business is probably a little shorter,” Prell said. “We work with meeting planners to customize menus much closer to the point of service [than before]. If we’re talking today about something we’re going to serve in three or four months, we can talk about seasonality, we can talk about locality, we can talk about what’s going to be available come the time of an event.”

Planners can also take advantage of the fact that the average palate has become more flexible. Barber utilizes “seasonal banquets” at the Hyatt, and he isn’t alone. “The days of having big, elaborate carving stations and pasta bars have gone away,” Magatagan said, “not only because of the cost of protein, but also the tastes people have. We’re also increasing vegetable portions.”

Even so, tradition — and traditional tastes — persist. Prell’s team recently served a banquet of Beef Wellington to 17,400 people at a convention center. Sometimes there is that one ingredient — artisan lettuce, prime rib — that a planner can’t do without. “Chefs and planners need to talk with one another,” Prell said, “so that we can drill down into the part of the discussion where we learn about the important elements of a meal and what the important messaging points are, and that requires taking that relationship from the transactional world and into the relational world.”


Corin Hirsch

Corin Hirsch is a writer who specializes in food and drink.