Hidden in the rubble of the Bay Area’s collapsing catering scene is the industry’s future, and it’s one shaped by months of shelter-in-place orders, closed tech offices and millions in lost revenue.
Before the coronavirus pandemic, Nybll was one of California’s fastest-growing catering companies. Amazon, BuzzFeed, Apple and Lyft, along with large-market sports franchises such as the Giants and Warriors, all paid for Nybll’s catering services. When the pandemic forced the closure of Bay Area offices, Nybll quickly shifted its focus to home deliveries and serving grocers.
Dozens of caterers have made similar changes. Companies that once fed hundreds at lavish galas and luncheons are now pinning their financial livelihoods on filling the home refrigerators of displaced office workers.
“Companies that have as their core values wellness and health and have been providing meals for their workers before all of this, we see them continuing to find ways to do that,” said Nybll founder Kristen Thibeault. “Companies that don’t have that ethos probably won’t be doing that because they’ll see not feeding their remote workers as a way to save money.”
Nybll introduced a weekly grocery delivery service as a reaction to shelter-in-place orders in March. The same can also be said for Nybll’s efforts to cater virtual office meetings, delivering each participant the same food but in different locations. The company’s revenue is down by about 90%, Thibeault said, but by changing her business early in the pandemic, Nybll is already adjusted to the catering market’s precarious future.
Hugh Groman, who owns Greenleaf Platters in Berkeley, shared similar sentiments. Greenleaf opened in May as a grocery store, a gourmet prepared-foods market and a liquor store. Groman said he’s encouraged by the venture’s growth and that he believes he can triple his revenue in the near future.
“I was worried before by the thought of when the next downturn comes, how some businesses will disappear,” he said. “It’s going to take some time for the industry to recover. Time goes by quickly, though.”
Understanding the footprint of the Bay Area catering industry, and why its transformation is significant, requires looking at national data from before the pandemic. The U.S. catering industry was a $60 billion market last year, according to online catering marketplace ezCater, and its fastest-growing segment was offices. The average check a caterer received for its services was about $283, according to the report. Nationally, catering revenue accounted for about 11% of overall food service industry revenue.
These numbers reflect why many of San Francisco’s more than 4,400 restaurants also have catering operations. Alongside companies such as Nybll that had been solely dedicated to large corporate events, and restaurants also dabbling in the market, there are at least 250 catering businesses registered in the city with the word “cater” in the name, according to public records. The true total number of catering operations in the Bay Area is much higher.
The landscape is plentiful because catered food has become synonymous with the perks associated with working for companies such as Google and Facebook, among others. Yahoo reportedly spent around $150 million on food for employees in 2016.
Before the pandemic, Nybll sold 4,000 to 7,000 daily meals to companies primarily in San Francisco and Los Angeles, generating about $1.6 million in weekly sales. Groman said that before the pandemic, Greenleaf Platters was bringing in close to $75,000 per week in revenue.
Culinary Eye in San Francisco, which has catered events for Apple and Salesforce, was one of the first notable Bay Area caterers to shift its business model to feeding remote workers. The change came after Culinary Eye lost about $680,000 during the first six weeks of the pandemic. Revenue will not return to normal in the near future, founder John Silva said, but he’s encouraged by the growing interest in his company’s three-day meal packages among remote workers.
“We’re basically their personal chef for three or four nights a week. All they have to do is put the items in the oven, reheat them and make some fresh salad, and that’s it,” he said. “Not every company still has the incentive for workers in compensation with free lunch offers, but in a market where those same workers want to be able to have dinner made at home a couple nights, we’re ready for that.”
Many Bay Area catering companies see their permanent changes as smart decisions, even as the state is making progress toward reopening. Based on Gov. Gavin Newsom’s four-phase process, the state is mostly in early Stage 2, which means some manufacturing facilities can open, as well as offices, though tele-work is still encouraged. Restaurants in some counties are allowing dine-in service, but in San Francisco and Oakland, takeout and delivery are still the only service models allowed.
Even when corporate offices begin to fill, there remain companies like Twitter that will allow people to work from home indefinitely. Facebook is also encouraging its employees to continue working from home. The demand for in-office meals will remain low for the next year or two, according to several catering company owners. And when the demand does grow, the dining format in an office will require an adjustment for workers.
“We will have PPE safe team members working behind sneeze guard shields. The office employee has to walk along a socially distanced safe path to the food. They’ll then choose the meal they want, and we hand it to them with everything sealed and contained,” Thibeault said. “Then they go back to their desk or to an area where the office has identified as a safe place to eat. But in this initial phase, people won’t be eating together, so there will be Plexiglas between workers in that area, most likely.”
Eventually, the state will return to some semblance of normalcy, Thibeault said, and when it does, caterers like her that shifted quickly for the new market will be prepared. The Bay Area catering industry’s future is starting to reveal itself, she added.
“Corporate caterers are going to have to be really smart about how they get food into people’s hands,” she said. “We have seen the rise of meal kits, but as more Millennial employees have come into the workplace, the more we see they like to just have a prepared meal instead of a meal kit. I believe the whole model is going to become a significant growth opportunity for corporate caterers.”
Justin Phillips is a San Francisco Chronicle staff writer. Email: jphillips@sfchronicle.com Twitter: @JustMrPhillips
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June 01, 2020 at 06:37PM
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