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Introduction to Off-Premise Catering Management

Off-premise catering is serving food at a location away from the caterer's food production facility. One example of a food production facility is a freestanding commissary, which is a kitchen facility used exclusively for the preparation of foods to be served at other locations. Other examples of production facilities include, but are not limited to, hotel, restaurant, and club kitchens. In most cases there is no existing kitchen facility at the location where the food is served. Caterers provide single-event foodservice, but not all caterers are created equal. They generally fall into one of three categories: Party food caterers supply only the food for an event. They drop off cold foods and leave any last-minute preparation, plus service and cleanup, to others. Hot buffet caterers provide hot foods that are delivered from their commissaries in insulated containers. They sometimes provide serving personnel at an additional charge. Full-service caterers not only provide food, but frequently cook it to order on-site.

Basics of Catering Management

Introduction to Off-Premise Catering Management

They also provide service personnel at the event, plus all the necessary food-related equipment-china, glassware, flatware, tables and chairs, tents, and so forth. They can arrange for other services, like dcor and music, as well. In short, a full-service caterer can plan an entire event, not just the food for it. Off-premise catering can mean serving thousands of box lunches to a group of conventioneers; barbecuing chicken and ribs for fans before a big college game, serving an elegant dinner for two aboard a luxury yacht, or providing food, staff, and equipment for an upscale fundraiser with hundreds of guests. On a "degree of difficulty" scale from one to ten-one meaning "easy" and ten meaning "most challenging"-on-premise catering is a two, and off-premise would rank a ten! Off-premise caterers meet the needs of all market segments, from the low-budget customer who looks for the greatest quantity and quality for the least amount of money, to the upscale client with an unlimited budget who wants the highest level of service, the ultimate in food quality, and the finest in appointments-crystal stemware, silver-plated flatware, and luxurious linens. Between these two extremes is the midscale market segment, which requires more quality than the low-budget sector, but less than the upscale. Off-premise catering is an art and a science. The art is creating foods and moods, as the caterer and client together turn a vision into reality. The science is the business of measuring money, manpower, and material. Successful offpremise caterers recognize the importance of both aspectsart and science-and are able to work at both the creative and the financial levels. In off-premise catering, there is only one chance to get it right. Many events, such as wedding receptions, occur only once in a lifetime. Other events are scheduled annually,

quarterly, or on a regular basis, and the caterer who fails to execute all details of such an event to the satisfaction of the client will seldom have another chance. Unfortunately for some, off-premise catering can be like living on the brink of disaster unless they are experienced. Uninitiated amateurs may not recognize a volatile situation until it becomes a problem, later realizing they should have recognized it earlier. Catering off-premise is very similar to a sports team playing all of its games away from home, in unfamiliar surroundings, with none of the comforts of home to ease the way. There is no home field advantage, but there is a minefield disadvantage! As caterers plod their way toward the completion of a catered event, there are thousands of potential "land mines" that can ruin an otherwise successful affair. Some examples follow: Already running late for a catering delivery, the catering van driver discovers that all vehicle traffic around the party site is in gridlock. The traffic has been at a standstill for more than an hour, the police say it will be hours before the congestion can be eliminated, and the clients and their guests are anxiously awaiting dinner. The only freight elevator in a high-rise office building has been commandeered for the evening by moving and cleaning people, thus preventing access to the floor where a caterer is to stage an event scheduled to start in two hours. The wrong hot food truck is dispatched to a wedding reception. The error is not discovered until the truck has reached the reception and the bride and groom are ready for their guests to be served. It will take more than an hour to send the correct truck with the food that was ordered. A cook wheels a container filled with cooked prime ribs down a pier toward a yacht where the meat will be served

Basics of Catering Management

Introduction to Off-Premise Catering Management

to a group of 80 conventioneers in half an hour. Suddenly, the cook is distracted, and the prime rib container tumbles over the edge of the pier into 40 feet of water. The table numbers have vanished, and the guests are ready to be seated for dinner. The fire marshal arrives at a party site 20 minutes before a catered event and refuses to allow guests access to the party site because the space had not been authorized for party use. The catering crew arrives at the party site with a van full of food, cooked to order-exactly one week early. A new customer places an order and asks that the caterer deliver to a home where family members and guests will have gathered prior to a funeral service. The caterer sends the food and, upon arrival, is told that the person with the check-book is at the funeral home and is asked to please stop back in an hour for the money. The delivery person leaves without obtaining a signature. Upon returning, there is no one home and no one from whom to collect payment. While using a garbage disposal in a client's home, the caterer suddenly hears a terrible noise and watches in horror as water and garbage spew from the disposal all over the floor. The irate customer refuses to pay the caterer and threatens to sue for the cost of replacing the garbage disposal that was ruined because of (in the customer's words) the caterer's "negligence." After catering a flawless party at a client's home and loading the catering truck to capacity, the caterer is shocked to learn from the client that all 15 bags of trash must be removed from the client's property because of the neighborhood's zoning ordinances. The caterer's rental company representative calls the caterer the morning after an event and advises the caterer

that the $600 rented chafing dish is missing. It was there the night before, when the caterer left the client's home. Get the picture? We could tell horror stories all day! Seasoned off-premise caterers agree, these are only a few of the thousands of obstacles that stand in the way of completing a catered event. This book addresses the various ways to professionally and successfully deal with difficult situations. With all of these very real potential problems, why are there more than 50,000 off-premise caterers in the United States? Why are more young people studying catering at two-year and four-year colleges and universities? Why are thousands of people starting their own catering companies, risking their savings on their dreams of future success? The reasons are numerous. They may love the adventure of working in new and exciting places. They look forward to the peaks and valleys of the business cycle. They love the intense feeling of satisfaction that comes after successfully catering a spectacular party. They love the myriad challenges of this very difficult profession. Many are their own bosses, with no one to answer to but the client. Many pick and choose the parties they wish to cater. Many make six-figure incomes each year, and others cater occasionally, just for the fun of it. COMPARING OFF-PREMISE AND ON-PREMISE CATERING What are the differences between off-premise catering and on-premise catering? Let's examine these differences, from both the client's and the caterer's viewpoints. FROM THE CLIENT'S VIEWPOINT Most clients fail to consider the cost of the rental equipment such as tables, chairs, linens, china, glassware,

Basics of Catering Management

Introduction to Off-Premise Catering Management

and flatware when they consider engaging an off-premise caterer. They think it will be less expensive to entertain in their homes, or at unique off-premise sites, than in hotels. In fact, it can be more expensive, considering not only the cost of the rental equipment, but also other costs such as transportation of food and supplies to the site, the costs of special labor and dcor, the need for tenting, air-conditioning and/or heating, and other expenses. Clients may save some money by buying their own liquor, but this can be insignificant as compared with the added costs. For many clients, the additional costs are far outweighed by the benefits of entertaining in the privacy of their own homes or the uniqueness of a special off-premise location such as a museum, state-of-the-art aquarium, antique car dealership, or historical site. FROM THE CATERER'S VIEWPOINT Off-premise caterers must plan menus that can be prepared successfully at the client's location. For example, foods to be fried should not be cooked in unventilated spaces, like small kitchens in high-rise office buildings. On-premise caterers are not as limited in this regard, and they are generally supported by built-in equipment that can support a wider variety of menus. On-premise party personnel are more familiar with the party facilities than those who work at a variety of unfamiliar locations. Off-premise catering generally has greater seasonal and day-to-day swings in personnel needs, which can create a greater challenge for the off-premise caterer, who is constantly recruiting and training staff; turnover is usually high because such work is on an "as-needed basis." There is definitely a greater potential for oversights in off-premise catering. Backup supplies, food, and equipment can be miles away or even inaccessible when catering, for

instance, aboard a yacht miles from shore. In spite of the uncertainties, off-premise catering offers the opportunity to work in a greater variety of interesting locations. The work is more likely to be different each day, resulting in less boredom and more excitement. For those looking for unlimited challenges and rewards, off-premise catering may be the answer. ADVANTAGES AND DISADVANTAGES OF OFFPREMISE CATERING In his book How to Manage a Successful Catering Business, Manfred Ketterer mentions the numerous advantages of catering:

Advance deposits Limited start-up investment Limited inventories Controllable costs Additional revenues Business by contract Direct payment Advance forecasting Free word-of-mouth advertising Selectivity
Let's discuss a few of these items in more detail. First, most off-premise caterers require some form of advance deposit prior to an event. This deposit provides the caterer with some security if the event is canceled and also can be used to purchase some or all of the food and supplies for the party. There is no need for large amounts of capital to get started, since most offpremise catering operations begin by

Basics of Catering Management

Introduction to Off-Premise Catering Management

using the existing kitchen facilities of a restaurant, club, hotel, church, or other licensed foodservice business. (It is common knowledge that many start their catering businesses in their home kitchens, but it is imperative to state that this is in direct violation of most local zoning ordinances.) In addition, all of the necessary catering foodservice equipment such as china, glassware, flatware, tables, chairs, and linens can usually be rented, thus avoiding having to invest in expensive equipment inventories. Food and supply inventories, as well as operating costs, are much more easily controlled, because clients must advise the caterer in advance as to the number of guests that are expected. Off-premise caterers need buy only the amounts necessary to serve the event, unlike a restaurant where there is a large variation from day to day regarding the number of patrons and their menu selections. Off-premise catering generates additional revenues for existing operations like hotels, clubs, and restaurants. They can generate even more profit by providing other servicesrental equipment, flowers, dcor, music, entertainment, and other accessory services. Both the client and the caterer have expectations regarding the outcome of the party. These expectations should be clearly spelled out in a written contract. Payment for an event is normally made directly to a manager or owner, eliminating a middleman, whether it's a wedding planner, on-site food and beverage director, or one of the caterer's own staff members. This form of direct payment provides for better cash control and fewer folks to share the profit. Advance forecasting is more accurate for off-premise caterers, because parties are generally booked weeks, months, or years in advance. Moreover, each part of the country has seasonal swings, which make revenue forecasting somewhat

easier. For example, in the South the summer months are generally less busy, but in the North these are the busy months. Off-premise events generate tremendous amounts of free word-of-mouth advertising, which can produce future business without the necessity of advertising. Many offpremise caterers feel that satisfied guests at one party will either directly or indirectly book another party by speaking favorably to friends and co-workers about the event and the caterer. In other words, one party can create future parties. Caterers also have the advantage of being somewhat selective about their clients. There are no laws that require you to accept every request to cater. If the job doesn't Advantages and Disadvantages of Off-Premise Catering meet your standards, politely decline. In sticky situations where you've already begun to work with a client but find that your communication styles just don't mesh-or, as sometimes happens with weddings, the client is not heeding your advice and you can't even decide who's really in charge-you can walk away, as long as you do so within the terms of your written agreement. Off-premise catering does have some disadvantages too: Catering managers, owners, and staff undergo periods of high stress during very busy periods. Deadlines must be met. There are no excuses for missing a catering deadline. Stress is compounded because the workload is not evenly spread throughout the year. For most off-premise caterers, 80 percent of the events are scheduled in 20 percent of the time. For most, weekends are generally busier than weekdays. Certain seasons, including Christmas, are normally busier than others. Of course, caterers must maintain general business hours too! Many have left the catering field, burned out by the constant stress and high energy demands. The seasonality


Basics of Catering Management

Introduction to Off-Premise Catering Management


of the business makes it difficult to find staff at certain times. Revenues are inconsistent, making cash management very difficult, particularly during the slower periods when expenses continue yet revenues do not. For those caterers who operate hotels, restaurants, clubs, and other businesses, the time away from the main business-spent on the off-premise business-can hurt. It is difficult for even the most wellorganized person to be in two places at the same time. Many hoteliers and restaurateurs find the rigors of offpremise catering too great. Some quit after realizing the difficulty of catering away from their operations. They feel that the financial benefits are insufficient compared with the effort required to cater off-premise events. ELEMENTS OF SUCCESSFUL OFF-PREMISE CATERING What does it take to become a successful off-premise caterer? What experience is necessary, and what personality traits are desirable? Work Experience Prior experience in the catering profession or the foodservice industry is important. Experience in food preparation and foodservice (both back-of-the-house and front-of-the-house) helps caterers understand the procedures and problems in both areas and how the two areas interface. Those with a strong kitchen background, for example, would be wise to gain some front-of-house experience, and frontof-house personnel should learn the kitchen routine. Many successful off-premise caterers began by working as accommodators. Accommodators are private chefs who are hired to prepare food for parties. Many assist the client with planning the menu, purchasing the food, and even arranging for kitchen and service staff. The food is prepared

and served in the client's home or facility, eliminating the need for a catering commissary. Accommodators receive a fee for their services. The party staff is paid directly by the client. Passion Successful professionals are passionate about their work, and caterers are no exception. They love what they do! Clients and staff members will quickly detect a lack of passion, and it will cost you business and good workers. If you don't love what you do, move on and try something else. An Entrepreneurial Nature The desire to be an entrepreneur is a trait that is highly desirable for off-premise caterers. An entrepreneur must be willing to spend extraordinary amounts of time and energy to make the off-premise catering business successful, possess an inherent sense of what is right for the business, have the ability to view all aspects of the business at once rather than focusing only on one or two parts, and demonstrate a strong, incessant desire to be his or her own boss and become financially independent. BASIC BUSINESS KNOWLEDGE Accounting and bookkeeping skills are necessary to understand the financial aspects of operating a catering business. The ability to prepare and interpret financial statements is essential. Learn as much about computers as you can. You'll be amazed at how much you can accomplish by using e-mail, having a website, and using specialized programs for everything from budgeting to menu planning. It's also important to understand the legal aspects of catering. Laws that affect caterers include regulation of


Basics of Catering Management

Introduction to Off-Premise Catering Management


licensing, contracts, liability, labor, and alcoholic beverage service. A caterer, like any other businessperson, must have some human resource skills. Knowing how to recruit, train, motivate, and manage personnel is critical. Off-premise caterers should be knowledgeable about how to develop and implement a marketing plan. Ability to Plan, Organize, Execute, and Control These are the four basic functions of management. To plan, a caterer must visualize in advance all of the aspects of a catered event and document the plans so they are readily understood by the client and easily executed by the staff. Organizing is simply breaking down the party plans into groups of functions that can be executed in an efficient manner. Execution is the implementation of the organized plans by the party staff. Controlling is the supervisory aspect of the event. All well-organized and well-executed plans require control and supervision. The adage is, "It is not what you expect, but what you inspect." The premier off-premise catering firms in the United States insist on excellent supervision at each event. Ability to Communicate with Clients and Staff Listening is the key to good communication with clients and prospective clients. Off-premise caterers must listen carefully and attentively to determine what the client needs. A client who calls and asks, "Are you able to cater a party next Friday?" should be dealt with differently from one who calls and asks, "How much will it cost for a wedding reception?" The first caller is ready to buy your services, whereas the second caller is Elements of Successful Off-Premise Catering shopping. Astute caterers must be able to respond to client requests in such a manner that the client will immediately gain

confidence in the caterer. Communicating with staff is a complex issue. In simple terms, it can be reduced to the ability to tell staff what is expected so that they understand, and the ability to receive their feedback regarding problems, both actual and potential. The result of effective communication is an off-premise catering staff that professionally executes a well-planned party that meets or exceeds the client's expectations. Willingness to Take Calculated Risks Off-premise catering is a very risky business. It is not for the fainthearted who are afraid of the unknown. For example, it is more risky catering a corporate fund-raiser at the local zoo under a tent than serving the same group in a hotel ballroom. Off-premise caterers must know when the risk outweighs the gain. In this particular example, catering the event at the zoo without adequate cover in case of rain would probably be too risky. The event could be ruined. The tent makes the risk of rain a calculated one. Sound Body and Mind Off-premise catering requires working long hours without rest or sleep, lifting and moving heavy objects, intense pressure as deadlines near, and even long periods of little or no business, which can cause concern. Successful caterers should be in good physical shape, have a high energy level, and be able to mentally deal with seasonal business cycles that range from nonstop activity to slow periods with little or no business. Off-premise caterers must be self-confident, but at the same time realize that they must always find ways to improve the quality of their food and services. In this profession a fondness for people and feeling comfortable in crowds is important. A "cool head" when under pressure will keep both staff and client calm while potential problems are resolved professionally and efficiently.


Basics of Catering Management

Introduction to Off-Premise Catering Management


Creativity This is the benchmark of all outstanding caterers. Creative caterers are able to turn a client's vision into reality by creating the appropriate look, feel, menu, service, and ambiance. Those who are not very creative can learn to be, or they can employ those who are creative. Dependability Dependability is a major cornerstone of success in offpremise catering. When a caterer fails to deliver what was promised, the negative word of mouth travels fast among clients and potential clients. Even in those situations where circumstances change, making it more difficult to perform as promised, the outstanding caterer will find a way to deliver rather than use the changed circumstances as an excuse not to deliver. Open-Mindedness Open-minded caterers read up on catering trends and try new recipes and menus. They are willing to prepare unfamiliar dishes requested by clients, after thoroughly testing and understanding the recipes. They discover and try new dishes. They are always learning better ways to run their businesses. Ability to Meet the Needs of Clients The needs of the client must always come first. Success in this business comes from identifying these needs and satisfying them. Unsuccessful off-premise caterers are those who get lost in trying to satisfy their own needs for money, equipment, and greater self-esteem. They forget that the primary goal is to serve the needs of the client. When a client's needs are met, the caterer's needs for revenues, profits, and positive feedback will automatically be met.

Ability to Project a Favorable Image Prospective clients hire caterers based on their perceived image of the caterer and what the caterer will provide. In some sense, then, caterers are selling themselves more than their food. Off-premise caterers must be able to project a favorable image to the client, one that is in accord with the client's expectations. For example, a caterer whose image is sophisticated and upscale will be hard-pressed to sell a Little League banquet with a low budget. Successful caterers understand their projected images and target their marketing efforts at those clients who desire that image. Sense of Humor In this pressure-packed, deadline-oriented, and stressful business, it is easy to get carried away with the magnitude of the undertakings and become so tense and uptight that work ceases to be fun. Laughter at the right time can relieve that tension and stress, putting a renewed sense of fun into the work at hand. How do caterers serve shrimps? They bend down! MANAGING AN OFF-PREMISE Catering Operation Even those who possess the qualities that indicate offpremise catering success must know how to put these talents to use effectively. Off-premise caterers should be hands-on managers who are constantly customer focused. They must be able to lead staff and clients alike, while conducting business in a professional manner. They must be able to make timely, ethical decisions, while understanding what makes for a successful event. They must also avoid those situations that cause a business to fail.


Basics of Catering Management

Introduction to Off-Premise Catering Management


Developing a Strategic Plan Yogi Berra, the zany former New York Yankee catcher, is famous for his many witticisms, such as, "Nobody goes there anymore-it's too crowded." But his best quote may be this one: "If you don't know where you're going, you will wind up somewhere else." That's the reason you need a strategic plan-a roadmap to help you determine the direction in which you wish to go, and the specific goals you'll need to accomplish to get there. A strategic plan starts with a statement of core values, which may include things like client satisfaction; ethical business practices; staff satisfaction, training, and motivation; community service; and operating an environmentally conscious business. From these core values, a caterer can develop a Mission Statement-a succinct sentence that sums up the company's mission. Here's an example: "To meet the catering needs of the corporate community, providing high levels of service and food quality that result in repeat business and vital growth." After the Mission Statement comes the Vision Statement-a concise summary of where you want to be in the future. Again, an example: "Within five years, our company will be the top-ranked catering firm in our area, with continuing sales and profit growth, while giving back to our community." It's not enough to brainstorm about these statements. Writing them down is the first step to making a commitment-to make them a reality. Only after they are put in writing can you develop more specific objectives to increase sales and profits, measure customer satisfaction, size up your competitors, and plan the ways in which you will give back to the community. Your Mission and Vision Statements lead naturally to the next step-to establish goals for the operation. You may

have heard time management experts use the term "SMART" when describing goals. The acronym stands for: Specific: The goals to be accomplished must be easily understood, concise, and unambiguous. Measurable: There should be no question about whether one attains, or falls short of, a goal. It may be measured in terms of quality, cost, quantity, or time. Attainable: The goals may be just out of reach, but they're not out of sight! The best goal challenges and motivates you and your team. If it's practically impossible, it may be too frustrating. Relevant: The goals must fit well with your long-term mission and vision, your objectives, and the results you expect. Time-bound: There must be a specific deadline for completion of each goal. An example of a SMART goal might be to increase sales and profits by 20 percent each year for the next five years. Once a caterer has set goals, there must be certain tradeoffs. To increase sales, for instance, may require raising prices, hiring more staff to be able to cater more events, or spending money on advertising. The major goals can be broken into smaller, intermediate steps, with a time line to keep the company on track. And remember, goals are not just for the owner of a company. The staff and other professionals employed by the company-tax preparer, banker, attorney-should also be well aware of the goals. You'll need their help to achieve them, and you want them on your side, committed to your goals. Too often, caterers believe they can do everything themselves. They fail to ask for or accept advice from outside consultants and colleagues. It is far more intelligent to ask for assistance when you need it. Someone familiar with your plans and your passion for them is far more likely to be helpful. Finally, as soon as a goal is set, take some action on it.


Basics of Catering Management

Introduction to Off-Premise Catering Management


The last part of a strategic management process is to reevaluate your mission, vision, and goals periodically. Times change, trends change, and you become aware of new information. Let's say a caterer's sales year showed a 50 percent increase, when he or she had set a 20 percent annual goal. In this case, the next year's goal might be more realistically revised to a 30 percent increase. HANDS-ON ATTENTION TO DETAIL MANAGEMENT The devil is in the details. Have you ever heard that old saying? Another way to put it: We've all been bitten by a mosquito or stung by a bee, but how many of us have been bitten by an elephant? It's always the little things that get us! In catering, the details are virtually endless, a stream of tiny elements that might go wrong and result in a catastrophe. One thing forgotten, misheard, or misplaced can ruin an event. So it's important to check and recheck and to be prepared for last-minute emergencies. It is simply not possible to run this kind of business from behind a desk, reading computer printouts and delegating all tasks. Off-premise catering companies must be managed from the center of the action, whether that is with the guests or preparing foods in the kitchen. It comes from checking and rechecking every detail to ensure that it meets the highest of standards. It comes from inspecting for the best and expecting the best. Some call this management style "management by walking around." In one sense that is true, but there is more to it than walking around. Astute offpremise caterers must: Obtain feedback from clients and guests regarding the food and service. Oversee the catering staff to ensure they are performing as directed and as expected. Help out when a table needs to be cleared or when the bar suddenly becomes very busy. Help in the kitchen during

critical times such as hot food dish-up, and even help scrape, stack, and wash dirty dishes if that's what is necessary. It's a roll-up-your-sleeves kind of profession, and you should never be totally satisfied with the way things are. Always look for new ways to present food and make it more flavorful, and for better and more efficient ways to do things. CUSTOMER-FOCUSED MANAGEMENT An off-premise caterer's full-time mission must be to satisfy the needs of clients. Mike DeLuca, editor of Restaurant Hospitality magazine, puts it this way: Companies that are 100% customer focused make the customer's satisfaction their only goal. They do not have as goals, increasing sales by a certain percentage, raising a profit margin, or reducing debt. They believe... that if you strive to sell only the highest quality product and strive to please every customer, sales, profit and success will follow. This is a difficult concept for many of us to grasp. It means letting go of a financial accounting structure passed down from generation to generation of Harvard MBAs who've instilled in us that the only way to build your bottom line is to raise your top line and squeeze the middle.... That can work... but wouldn't you rather make the quality of your food, the dining experience and your customer's satisfaction your primary concern? The moral is simple: If you satisfy your customers while charging a fair price and controlling costs, profits will follow. MANAGING AN OFF-PREMISE CATERING OPERATION Managerial Decision Making Off-premise catering managers must make decisions that keep their operations running smoothly. They realize that some decisions will be better than others, that there is no perfect solution to every problem, and that the best decision-


Basics of Catering Management

Introduction to Off-Premise Catering Management


making goal is to find the best possible solution with the least number of drawbacks. Connie Sitterly, a management consultant and author, states that to be a good decision maker you should "plan ahead so when problems crop up, you're prepared to act, not react. Control circumstances, instead of allowing them to control you. Take the initiative by anticipating and solving business problems." Although hundreds of books have been written about decision making, the following tips from Ms. Sitterly should be helpful. They're paraphrased from an article she wrote back in 1990 in The Meeting Manager, but they are still upto-the-minute when it comes to making tough decisions successfully. Remember that there's seldom only one acceptable solution to the problem. Choose the best alternative. Make decisions that help achieve the company objectives. You need to consider feelings whenever people are involved. Even if you must make an unpopular decision, you can minimize repercussions... if workers know you have taken their feelings into account. Allow quality time for planning and decision making... pick a time when you are energetic and your mind is fresh. Realize that you'll never please everyone. Few decisions meet with unanimous approval... the appointed authority, not the majority, rules. Make time for making decisions... in business, delaying a decision can cost thousands of dollars. Put decision making in perspective. Every executive feels overwhelmed at times by either the enormity or the number of decisions made during a business day.... For peace of mind accept that you are doing the best job you

can with the time, talent, and resources you have. Don't wait for a popular vote. Rallying your colleagues around your decision before you take action or waiting for their vote of confidence before deciding anything may cost too much in time. There are times when you just have to do something. Leadership There are major differences between those who lead and those who manage. Catering companies need both types of executives, and some who can do both. If a catering company is earning sevenand eight-figure annual revenues, it is most definitely being led by people with leadership skills. Leaders are able to get people to do things they don't necessarily like to do, but they do them and even enjoy them. You might say: Professionalism and Common Business Courtesy Off-premise caterers who are not professional in their business practices will never reach the pinnacle of success in the field. Before we address the technical aspects of catering in the succeeding chapters, it is of utmost importance that we define professionalism. The following guidelines are adapted from an article by Carol McKibben in Special Events magazine: Become known for doing what you say you are going to do. Give price quotes and commitments only when you know everything about the event. Treat clients and staff members with respect. Build relationships with clients. Do not look at them as accounts or projects. Be on time, or a bit early, for appointments. Be prepared for an appointment. Be honest; don't play games.


Basics of Catering Management

Introduction to Off-Premise Catering Management


Stand behind your work. If it is wrong, make it right. In the face of abuse from others, don't respond by becoming abusive. Try to detach yourself from it emotionally and handle it logically. Of course, do not use your position of power to abuse others. Dress professionally. Enjoy your work as an off-premise caterer. When work ceases to be enjoyable, it is time to quit and find a new career. Ethics in Management The Roman philosopher Publilius Syrus said, "A good reputation is more valuable than money." This is as true today as it was in ancient times. And yet, lack of ethics is perhaps the most widely discussed topic in today's business world. We read and hear of illegalities, scandals, and other forms of questionable behavior bringing down some of the nation's largest corporations. Off-premise caterers are in no way exempt from ethical concerns. Even the smallest caterers deal in issues of fairness, legal requirements, and honesty on a daily basis. Examples include truth in menu, misleading advertising, unexpected and unjustified last-minute add-ons to the party price, and even underbidding a competitor when the client has disclosed your competitor's price. The truly ethical caterer will assume responsibility for the host to ensure that the host plans an event in the best interest of the guests. A host who wishes to serve alcohol to underage guests or barbecued ribs to a group of elderly people (tough to eat with dentures) is out of line and needs to be advised that this will not work. In fact, an ethical caterer will refuse to cater an event that is clearly not being planned in the best interest of the host or guests.

There are times when a caterer is given a free hand in planning a menu. Perhaps a grieving client calls for food after the funeral of a loved one, saying, "Please send over food for 50 guests tomorrow night. You know what we like!" The ethical caterer will not take advantage of this situation by either providing too much food or overcharging the client. Another temptation arises when the caterer is pressed to cater more events on a certain day or evening than he or she can reasonably accommodate. The extra money looks good. Unethical caterers will rationalize that they can handle all the events, even if an inexperienced supervisor or staff must oversee these events, or even if the kitchen staff will not be able to prepare the caterer's usual high-quality food because of lack of time and personnel. Caterers who take on more work than they can reasonably accommodate are greedy and are considered by many observers to be unethical. In the foregoing situation the caterer should decline the work and perhaps recommend another caterer. Some caterers refuse to recommend another catering firm because they feel that if the client is not pleased with the other firm, the caterer who turned down the business will be blamed for the recommendation. Other caterers freely recommend one or more companies when unable to cater events. There are times when it is very hard not to bad-mouth a competitor, but this is considered unethical as well as rude. Those who are ethical would rather point out their own strengths than downgrade the competition. It can be very tempting for self-employed caterers to underreport income or overstate expenses. They rationalize that no one will know if they accept cash for a party, then fail to report it as income and pay the associated tax, or that no one will know if they happen to charge personal expenses now and then to the business. Some caterers who are licensed to sell liquor by the drink or by the bottle are tempted to


Basics of Catering Management

Introduction to Off-Premise Catering Management


bill clients for beverages that were not consumed. These practices are not only unethical-they are illegal. Other ethical violations occur when caterers receive under-the-table cash "kickbacks" from suppliers, misrepresent their services to potential clients, or bid on party plans or ideas stolen from other caterers. Caterers also soon learn that some clients are unethical. A few are masterful at finding fault with a wedding or other important event, then demanding a "discount" based on whatever flaw they feel they have uncovered. Some will refuse to pay for linens that were damaged by candles they lit on them! You'll find people who, midparty, will ask you to stay "a couple hours of overtime, just to wrap things up"then not show up to pay you for the extra time the next day, as agreed. Others will haggle over the tiniest details on an invoice or try to engage more than one caterer in a bidding war to lower prices. Caterers who deal with "middleman" organizations, like destination management firms or production companies, may find that a client of one of these companies will come back later to try to deal directly with you, thus cutting out the middleman who recommended you! As a catering professional, you need to expect a certain amount of this behavior and must protect yourself if you suspect an ethical question may arise. Insisting on security deposits, having a valid and authorized credit card number on file for unforeseen charges, refusing to look at other caterers' written bids, and standing firm on your own invoice prices are just a few ways ethical problems can be avoided. And rather than cut out a legitimate middleman-type of vendor, you can either refuse to deal directly with a client who tries such a maneuver or suggest a commission be paid to the middleman.

You will also be put in some sticky situations as-during tough times, and even good times-certain clients will make unrealistic requests. They've often been good, regular clients too! But they'll promise you future business if you'll cater their party "at cost," or defer payment for them, or ask some other special favor "just this once." These requests are unfair, and you're right to be squeamish about them. Offpremise caterers should be extremely wary when approached in this fashion. As a general rule, clients who do not pay their bills in a professional manner, or who are not willing to pay a fair price for catering services, are not worth the headaches they cause. The Jefferson Center of Character Education has set forth a list of ten "universal values": honesty, integrity, promise keeping, fidelity, fairness, caring for others, respect for others, responsible citizenship, pursuit of excellence, and accountability. These values should provide some solid guidance for any businessperson who considers himor herself a true professional. Separating Yourself from the Competition Great caterers do more than imitate-they innovate. There are distinct advantages for those who offer a unique menu, a unique service, or perhaps a unique location. They may build and improve on someone else's concept, but they strive to take the idea to the next level. Rather than mimicking another's success, they imprint their own signature on their menus. The "Unique" bar may include all the traditional accompaniments too-but what a difference a little imagination makes! There might even be a bit of caviar to top the mashers at the Unique bar, and perhaps they'll be served in martini glasses. Why not have fun with it? One of America's top chefs, Charlie Trotter, looks at food trends differently in his book Lessons in Excellence. Says


Basics of Catering Management

Introduction to Off-Premise Catering Management


Trotter, "It's important that you foster a company culture that spurs you and your employees to search for innovative opportunities. Innovations can satisfy needs that are unmet or offer solutions to time-worn problems, or they can be new ways of saving time, space and money." Trotter says he and his staff use input from their travels, readings, television, radio, and even hobbies to hit upon trends. They keep up on the latest changes in public opinion and demographics to search for interesting, potentially highgrowth markets. Currently, they've identified ethnic cuisines such as Pan-Asian and Nuevo Latino as hot areas for menu innovation. The bottom line is that they create their own trends. Similarly, as with any career, catering professionals need to reexamine their business strategies from time to time. Some caterers do what they do best, are well known for it, and never vary their formulas. Their clients love them and get exactly what they expect. Other caterers blindly copy everybody else. They ricochet from one recipe to the other, never bothering to see if it meets their clients' needs. If they read about it in Food Arts magazine, they feel they have to serve it! But most caterers lie somewhere between these two extremes, blending the successful ideas of the past with new twists. Great caterers also separate themselves from competitors by using the resources around them to build their businesses. In South Florida, for example, one caterer specializes in event planning for doctors, through his hospital foodservice management job. Another has an exclusive off-premise contract for a sports facility; a third was the on-premise caterer for a city club, which resulted in off-premise jobs for the club members. Capitalize on the audience you havethey're (almost) already yours!

Personal Management Off-premise caterers must learn how to deal with principles of stress management, time management, and personal organization if they are to manage at peak efficiency. Time is our most precious commodity, and to waste it because of being overstressed or disorganized will inevitably result in less-than-desirable results. Stress Management Stress comes from interaction with others, and from having to meet deadlines. A certain amount of stress and tension is necessary to achieve the best results-those who are too laid back generally do not maximize their potentialbut too much stress causes chronic fatigue, irritability, cynicism, hostility, inflexibility, and difficulty in thinking clearly. Catering managers who are overstressed are unable to perform at maximum capability. Stress can often be controlled through: Daily exercise such as brisk walking, running, or other aerobic pursuits that increase the pulse rate. Some folks purposefully take their minds off work when they exercise; for others, the daily walk or run is a time to get their day mentally organized. Relaxation techniques, including meditation and yoga. Writing down the issues that cause stress. Identify those issues in your life that can be controlled, and simply decide to make the best of those that cannot. List ways to deal with the controllable stress factors. Reading articles and books on stress reduction. It is important to remember that some stress in catering is good. An arrow would not be propelled from a bow if the bow was not stressed. However, too much stress can break the bow, as well as ruin catered events.


Basics of Catering Management

Introduction to Off-Premise Catering Management


Time Management There are only 168 hours in each week, and the greatest rewards come to those who accomplish the most meaningful things during this fixed amount of time. Offpremise caterers realize that if they can accomplish more meaningful production in less time, they will have more time for things other than work. They also realize that working smarter, not harder, through the effective use of time will produce greater results. The key to effective time management is to set goals for a lifetime, for five years, and for each year, month, week, and day. (Use some of the tips for putting SMART goals in writing-not just for "big picture" goals, but as part of your daily business.) Without written goals, off-premise caterers cannot effectively manage their time. Because time management involves choosing how to spend time, it is impossible to make proper choices without knowing your desired goals. The captain of a ship without a destination cannot choose the proper course. He will cruise aimlessly at sea, never reaching his port of call. It is equally important to schedule "downtime" for yourselffor family, friends, hobbies, and interests other than work. You are guarding against burnout when you insist on some personal time. Off-premise caterers can choose from an array of timesaving techniques and technical advances to help them in the quest to efficiently manage time: Make those daily, detailed lists of goals and objectives. Use technical advances to speed up paper handling, such as fax machines and computers with word processing, accounting, and menu-planning software. For heaven's sake, if you don't have a computer, get one! You can purchase one nowadays for a monthly payment of less than $40. You can

take classes to learn how to use it or hire someone to teach you individually. Use cellular phones to stay in touch while away from the office. These are lifesavers at off-premise catering locations when emergency and other calls are necessary, and if you have downtime, a cellular phone can make it easy for you to use this time to return phone calls. Handle incoming papers only once. Here's the rule: Do it, delegate it, discard it, or file it. (Better yet, hire someone else to file it!) Do your most important work at times when you happen to be most alert. Most of us know whether we are "morning people" or "night owls." Take advantage of your peak energy periods to handle your most challenging tasks. Sign up for a seminar or course in time management to learn more tips. One of the biggest time wasters for a caterer is also the source of much business-the prospective client who calls to ask questions-so it's an interruption that cannot be ignored, but can be controlled. Whoever answers the phone at your business should always qualify the incoming call by asking:

The date of the event The location of the event The number of guests The budget for the event
Why? First of all, time can be wasted talking about an event before you ask the date and discover you're not able to do it in the first place because of a scheduling conflict. Perhaps the number of guests is too small or too large for your particular company, the budget is insufficient, or the proposed location is already booked for another event. Always focus on results by asking yourself, "Will this activity help me achieve any of my goals?" Prioritize tasks


Basics of Catering Management

Introduction to Off-Premise Catering Management


in order of their importance and know when to delegate them to others. Most people waste countless hours, days, weeks, and years chitchatting on the phone, shuffling papers, running errands, and doing other things that are easy enough but offer little or no payoff. Learn to delegate these types of tasks whenever possible. Pay other people to do them, and don't tell yourself you can't afford it-you can always make more money, but you have only so much time. The true achievers-in catering and in other fields-minimize their time on lowpriority, low-payoff tasks and turn their attention to those things that will bring the greatest rewards. These tasks are often difficult to accomplish, take a great deal of time, and involve at least some risk. For example, a caterer could spend the entire day showing prospective clients numerous suitable locations for a major event. The caterer would then spend the next three days preparing a written proposal for an event at each of the locations, with no guarantee that the event will even take place. However, if the caterer is hired, there's a five-figure profit to be made. Worth the risk? Certainly! Another high-payoff task might be to write a new catering menu. Both this and the aforementioned task require large chunks of time and involve some risk, but more than likely will produce major rewards in increased revenues and profits. In summary, off-premise caterers who best manage their time in the long run will be the most successful. They become the leading caterers in their communities, in their states, and in the country. Getting Organized When projects, tasks, catering kitchens, and offices are organized, things run much more smoothly and efficiently. The time spent looking for things and jumping from job to

job is wasted time that could be put to much better use. Many off-premise caterers have found various methods that work for them: Establish a filing system using hanging folders and manila folders. Categories can include upcoming events, projects to do, and projects pending. Files should be stored vertically, rather than stacked atop one another, for greater accessibility. Take a tip from event planners who start a separate notebook for each event they are working on. Into this three-ring binder go all notes, contracts, sketches, color samplesanything for that particular job. Consider hiring a professional organizer to come to your office and set up a filing and record-keeping system that works for your business. Keep those items that are used frequently close by. Focus on one project at a time, rather than jumping from one thing to another. This can be easily accomplished by blocking out some time during the day to work on major projects and arranging for no interruptions. Whenever possible, try to schedule time to return phone calls and/or e-mail messages. That way, you can handle them all at once, instead of scattering them (and your thoughts) in five-minute intervals throughout the day. Either at the end of each day or first thing in the morning, prepare a list of things to do for the day. Summary of Personal Management Those off-premise caterers who can effectively deal with stress, who properly manage their time, who learn to delegate and keep things organized will lead their peers into the future. They will set the standards for others to follow. They will accomplish more and will be in a position to receive the greatest rewards as a result.


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Introduction to Off-Premise Catering Management


Looking Ahead-Catering in the Future What does the future hold for caterers in this new century? First of all, we know that catering is neither rocket science nor brain surgery. Change is inevitable in this business, but not at the same rate as, say, in molecular theory or medical technology. In fact, in catering, rediscovering foods of the previous century is trendy! Many caterers still feature the signature dishes-honey coconut shrimp, beef tenderloin, Caesar salad-that they've served for decades. Why? The customers demand, and enjoy, them. This certainly doesn't mean things stay stagnant in our industry. Innovative buffet and food station dcor will continue to evolve. Most catering companies will continue to build their reputations on elegant, "over-the-top" food presentations, and the healthy competition shows no signs of abating. Other caterers prize research, developing cutting-edge menu items to set them apart from the pack. More women are entering the off-premise catering field. Paula LeDuc in the San Francisco Bay area, Katherine Farrell in Ann Arbor, Abigail Kirsch in New York, Mary Micucci in Los Angeles, and Joy Wallace in Miami are but a handful of enterprising women who have grown their companies into catering's elite. Staffing woes will continue to be monumental, as hiring, training, and retraining get tougher. Foodservice has always been a somewhat transient industry. Astute caterers will use preemployment aptitude and personality testing, master online staff scheduling systems, and develop their own training programs. They will also realize, if they haven't already, that they must treat their employees at least as well as they treat their clients. Along the same lines, in a toptier catering operation, the employees treat each other as well as they treat their clients.

Caterers of the future will come to realize that bigger is not necessarily better. Having a large volume of business is admirable-but only when the quality of your work rises to the same level. A company can grow to the point where quality slips, gross profit margins lag, more equipment is needed, overhead costs expand, and the bottom line shrinks proportionately. The intelligent caterer will downsize, watch margins and profits grow-and overall stress levels diminishas they become more selective about the clientele they service. Caterers are realizing that "high tech" will never replace personalized service, or "high touch"-but without high tech, they'll limit their potential for high touch. In an industry where, amazingly, some caterers still don't accept credit cards, the savvy businessperson is learning to embrace new technology, launching interactive websites and e-mail marketing campaigns. They're creating improved computergenerated proposals, rental orders, packing lists, staffing schedules, and instant financial statements. And they're realizing that computer-savvy business owners have more time to do what they love-which is run their business! Competition will continue to increase. Sales will grow, but not without some dips, because economic woes, terrorist attacks, and the resulting fears cannot help but impact the catering profession. More caterers were hurt financially by the recession at the beginning of this century than by the September 11 terrorist attacks, but both left their marks on the industry. An increased use of security cameras at highprofile events (and in some cases, to thwart theft) is one result of the heightened awareness. Mega-event catering is acknowledged as an excellent way to grow business-at golf and tennis tournaments, NASCAR races, air shows, boat shows, and more. In addition to being profitable events, they expose the caterer to a wider range of potential clients. Then again, a caterer from Augusta,


Basics of Catering Management

Introduction to Off-Premise Catering Management


Georgia, generates enough revenue from serving sandwiches and beverages at the Masters' Golf Tournament that he need not cater at all the rest of the year! The pressure experienced in servicing huge, multiday events is as big as the events themselves, but the rewards can be significant. At the end of the 1900s, B. Joseph Pine II wrote The Experience Economy, a primer about the "new rules of engagement" for businesses. Pine asserts that a new economic model is taking shape as we move from a service-based economy into an experience-based economy, where successful vendors literally create an "experience" for clients by using props and services to engage them in an "inherently personal way." Pine claims that Walt Disney was the founding father of the "Experience Economy," and in today's restaurant industry there are plenty of examples-Rainforest Caf, Planet Hollywood, Hard Rock Cafes, and other themed eateries that combine food, service, and atmosphere to create a more "complete" dining experience. This kind of trend is adaptable for off-premise caterers too, with elaborate themes, staff members who double as costumed performers, team-building events, and imaginative menu items presented in wild new ways to delight and entertain the crowd as well as feed them! For those who love to have fun, and who are as adventurous as they are practical, it's a great time to be an off-premise caterer. The Seven Habits of Highly Successful Caterers Let's examine some additional techniques, philosophies, and real-life ways to be successful in the challenging field of off-premise catering. Habits are things we do automatically, like brushing our teeth, combing our hair, or straightening a tablecloth that's

uneven. We hardly think about them, we just do them. Stephen R. Covey wrote The Seven Habits of Highly Effective People, which has been a bestseller for years-you should read it if you haven't already. But what are some habits that mark successful caterers? What separates star performers from the rest of the crowd? With a nod to Mr. Covey, here are seven key traits.

Willingness to Take Calculated Risks

One of our favorite sayings is, "A turtle goes nowhere until it sticks its neck out." In order to succeed, we must be continually growing and improving, and the only way to do this is to leave our comfort zones-and stick our necks out! If you're right-handed, you feel quite comfortable writing with your right hand. Try writing with your left hand. You're definitely out of your comfort zone. But after a while, you'll find you can actually write with either hand. Successful caterers make things happen by taking calculated risks, whether it is trying new menu items, new buffet display concepts, or accepting a job in a new and challenging off-premise location. Caterers who refuse to take risks fail to grow and learn are left behind.

Sincere Concern for Others

Nobody cares how much you know until they know how much you care. Empathy and genuine concern for your clients and staff are paramount to long-term success. What are their needs, wishes, and desires? What are their concerns and their "hot buttons"? By putting ourselves in their positions, we can begin to show concern for others and understand them. When we do this, we develop meaningful relationships and, not coincidentally, loyalty. We give them what they want, and we get what we want.


Basics of Catering Management

Introduction to Off-Premise Catering Management


Keeping Up with Current Trends

It's not just a matter of food and presentation and theme trends. Caterers who are not wired to do business online through the Internet and e-mail are missing out on huge opportunities. The online catering referral service, Leading Caterers of America (founded by the book's co-author Bill Hansen), receives 5 to 20 inquiries per day from clients looking for catering services coast to coast, in Alaska, Hawaii, and occasionally overseas. People do shop for catering online, and the companies that lead the way have highquality websites and diligently reply to e-mailed requests in a timely manner. Caterers need to get in the habit of responding to e-mail correspondence as soon as possible, as well as providing e-mailed proposals to those clients who prefer to do business via their computers. Event planners who book caterers for their clients love receiving e-mailed proposals, because they are easy to copy-and-paste into their own proposals. If you're not in the habit of working online, you're behind the times.

and lose it to a competitor whose proposal was simply submitted on time. Successful caterers spend their time in those areas that generate the biggest paybacks in terms of money, quality, and other rewards. They make a habit of planning their days, leaving time for the most important, as well as the most urgent. At the start of each day they prepare an agenda that details both short-term objectives and long-term goals. If you're a student, you should already be using this technique to accomplish as much as you can in school.

Quality before Quantity

Bigger is not necessarily better. Still, many of us get caught up in that way of thinking. If our sales are $1 million, let's go for $2 million. If they're $2 million, what's wrong with $4 million? And if $4 million is good... There's nothing wrong with building sales if quality does not suffer. However, when the quality of our products and services suffers so does the quality of our lifestyle. More business means more hours at work. And doctors will tell you they've never met a man or woman who, on a deathbed, expressed a wish that he or she had spent more time at work. If we can grow our businesses with no adverse effects on the quality of our lives or our products, then we should go for it! But if we find profits slipping and clients complaining, and we need a letter of introduction when we stumble home at 3:00 A then something's very wrong. We need to make of habit of continually asking ourselves whether we might be better off with less business and more time for ourselves and for our families. We need to continually examine the quality of our work to ensure that it's not slipping because we've allowed ourselves to take on too much.

Excellent Priorities and Time Management

You get 20 percent of your sales and profits from 80 percent of your clients, and 80 percent of your sales and profits from 20 percent of your clients. None of us ever go home at night thinking that all the work is done-it never is. It's simply a question of what's most important, as well as what's most urgent. Urgent things are never really an issue. There's no question that if you have a catered event today, it will get done. But what's most urgent is not necessarily what's most important. You must understand the difference. For example, you could spend a day catering three small parties for 25 guests each, but fall behind on preparing a proposal for another job, in three months, for 500 guests-


Basics of Catering Management

Introduction to Off-Premise Catering Management


Being Detail Oriented

A baseball player who bats.250 gets three hits for every 12 times at bat. One who bats .333 gets four hits for every 12 times at bat. The difference-one more hit for every 12 times at bat-means the difference between an average major league ball player and a Hall of Fame inductee. Do you make it a habit to continually look for the little things? A good caterer isn't nitpicky, but is forever finding something that needs to be tweaked, adjusted, redone, or improved-little things that most customers won't notice, but that greatly impact the overall professionalism of an event. Being aware of the details in flavors, looks, aromas, and tidiness separates the average caterers from the superstars. And, by all means, check the spelling, grammar, and punctuation in all your written materials, from brochures to contracts-or hire someone to do it. Again, the goal is to present a professional image. Remember? The devil is in the details.

attending trade shows, and exploring areas that will help them improve their own businesses with new ideas. They challenge and reward their staff members for having the same attitude. Vince Lombardi, the late NFL coach, who during his career coached the first team to ever win the Super Bowl, put it this way: "The quality of a person's life is in direct proportion to their commitment to excellence, regardless of their chosen field of endeavor." HOW DOES AN OFF-PREMISE CATERER Gauge Success? There are a number of signs to look for when evaluating an existing off-premise catering business. Healthy companies rate highly in all of these areas. Those that are unhealthy, or even on the brink of failure, will not rate nearly as well. Management thoroughly plans, organizes, executes, and controls each catered event. Proper controls are in place for costs, accounts receivable and payable, and liquid assets such as cash and inventories. Theft prevention is also a priority. Food and service quality is well-controlled and meets or exceeds clients' approval. Pricing for food and services is fair and competitive with other firms in the marketplace. There is a spirit of healthy competition. The catering firm enjoys good working relationships with both clients and suppliers. Time and attention are given to food safety in storage, preparation, and display. Employees know the local health codes and follow them. There is sufficient working capital to operate the business. The firm can make loan payments as they become due. Excessive credit is not extended to clients. Budgets are prepared and followed. Business records, insurance coverage, and licenses are kept up to date. The information derived from these records is used to provide data to help manage the business.

Setting High Standards

If you refuse to accept anything but the very best, you very often get the best. Successful caterers set their standards high and expect excellence from themselves and their staff members. They're never happy with the status quo, always striving to make each party, wedding, or event better than the last. They debrief after an event, asking staff for input and improvements. They know that if they fail to improve, they're leaving the door open for their competitors to capture a good customer or a larger share of the market. Successful caterers also make a habit of lifelong learning. They're forever reading,


Basics of Catering Management

Introduction to Off-Premise Catering Management


Sales growth is controlled. There are sufficient financial and personnel resources to operate as business steadily grows. Market trends are anticipated. Management and staff have a good working knowledge of the off-premise catering field. There are solid, trusting relationships between management and staff. Staff members are well trained and feel truly appreciated-because they are. Management works closely with a qualified accountant to plan for payment of taxes. And, finally, management is willing to seek qualified professional assistance if problems arise. THE OFF-PREMISE CATERING MODEL Once the planning is complete, it is possible to provide clients with written proposals, which include all the aforementioned plans along with pricing. Normally, proposals are modified somewhat. Once modification is complete and all provisions meet with the approval of both caterer and client, a contract is prepared that contains all the conditions outlined in the proposal. As the party date approaches, certain operational elements are addressed, such as: Hiring and scheduling staff Purchasing and pre-preparation of menu items Ordering equipment as needed from party rental companies Obtaining licenses and permits, as needed, for use of the site, serving alcohol, etc. Preparing a "pull sheet" that details all items supplied by the commissary to produce the party. Coordinating all beverage and accessory services with the client and the vendors. All the preplanning elements culminate on the day or night of "The Show." That's when staff, equipment, food, and other services arrive at the party site, and the event is executed.

After the event, there are certain outcomes, which include: Positive and/or negative word of mouth about the event Revenues, expenses, profits, and cash Accounting records By reading and studying this text, you will gain a thorough understanding of how all these elements combine to produce a successful off-premise event at the hands of a professional caterer. CONCLUSION This book should provide all the necessary information to those who are motivated to start their own companies or to develop an off-premise catering division of an existing foodservice operation. Study hard, and, as an entrepreneurial and motivated student, you should be well on the way to a thorough understanding of the catering field. We must warn you-catering is not an especially easy way to make a living. But it is an extremely rewarding and interesting field that combines interpersonal and organizational skills, societal trends, and financial acumen. If you do it well, your clients won't be the only ones celebrating at your events!


Basics of Catering Management

Food and Beverage Distribution


obstacles-or opportunities. Having the right business solution in place can help you not only succeed in the industry, but excel.


EFFECTIVE SALES ORDERING Getting your customer orders processed quickly and effi ciently is at the core of your business. With a robust business solution in place that tightly integrates your fi nancials, inventory, and customer relationship management, you can be assured that orders are handled promptly and without error. For example, by tightly integrating your data, you can create customer-driven forecasts based on repeat buying patterns to effectively plan warehousing and purchasing processes. Integrated solutions can also support Automatic Data Collection (ADC) processes to ensure that distribution systems are integrated with fi nancial and reporting applications. This in turn ensures that accurate data fl ows throughout the organization, increasing the accuracy of inventory and orders shipped, and boosting your forecasting capabilities. As orders are shipped, integrating accurate catch weights directly to accounting for billing may also help boost profi tability and customer satisfaction through more effi cient operations. And with effi cient sales ordering in place, you can improve your customer service by delivering real-time, customerfocused information directly to your customers at any time-the kind of service that will keep the orders rolling in. Responsiveness Well-integrated business solutions give you the kind of agility and fl exibility your business needs to serve your customers and compete effectively.



Strict compliance standards, low profit margins, intense competition, high customer-service expectations-when you're in the food and beverage distribution industry, these conditions defi ne your business. As a player in the industry, how effectively you meet the challenges determines whether or not your company is successful. There are tough issues on many fronts. First, you need fast and effective sales ordering processes to ensure customer needs are fully understood and addressed quickly. You also need fl exibility-the kind that can help you respond to customer demands and market trends as soon as they're identifi ed. You have to be able to see information across all facets of your operations, and possess effi cient delivery mechanisms that will get product where it needs to be, when it needs to be there. You also have to react quickly to issues such as food safety and recalls before they can damage reputations, and closely monitor compliance with a range of regulations, whether from the FDA, the EU, or the International Food Standard. Put together, these conditions can present


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Food and Beverage Distribution


A fl exible business solution can, for instance, enable you to integrate customer relationship management (CRM) and accounting systems to support individual customer requirements. Or implement a fl exible pricing strategy that uses unlimited price lists, price banding, cost uplift pricing, or quantity break pricing. If your business fi nds itself responding to many customer requests for automated reports, or for frequently requested information, fl exible systems can give you the ability to make reports and data available to customers over secure Internet connections. Well-connected systems also will help you coordinate all aspects of communications when multiple personnel are communicating with the customer. Efficient Deliveries and Food Safety Getting the right product to the customer when they need it is the bottom line for food and beverage distributors. Robust, connected solutions can help make that job easierand can be critical tools when you are managing product shelf life or responding to quality and food safety issues. Your business solution should be able to effectively blend with technologies such as bar code and radio frequency identifi cation (RFID) to provide real-time information that can help you plan product delivery schedules more effi ciently, or allow customers to see deeper into the supply chain. You can also tighten delivery times and schedules by using your business software to create automated processes for specific customer requests. Effi cient delivery also means cost-effective delivery. Your IT systems should help drive down the cost of business with ADC sales systems that are tightly integrated to all other business systems in the organization. This integration can help you nearly eliminate comprehensive inventory counts, lower inventory required to service customers, pull

customer orders in a fraction of the time typically required, and comply with changing customer demand. When it comes to food safety or quality issues, having quick access to the broadest set of data is critical. Help keep the food supply safer by coordinating tracking of product from suppliers, and facilitate traceability from supplier to customer in markets where it's required. You can also improve accountability by implementing metric setting and tracking for individual warehouses, departments, and processes. Microsoft DynamicsTM offers a set of strong applications that deliver a compelling suite of technologies for organizations in the food and beverage distribution industry. The integrated tools in Microsoft Dynamics can help you succeed by speeding products from supplier to the store shelf, removing waste from operations, and meeting the demands of your retailing customers and consumers. Our technology platform will enable your organization to assemble a complete, integrated set of leading-edge business applications. These integrated applications can be deployed quickly and inexpensively without complicated customizations and drawn-out implementation projects. Microsoft Dynamics solutions and Microsoft partners support: o Automated product tracking and tracing from the supplier to the retailer. o Marketing promotion management. o Integrated ADC solutions and catch weight capabilities. o Real-time reports and alerts to management and retailers. o Responsiveness to customer demands. o Customized business reports.


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o Accurate demand forecasting. o Low-cost, Web-based customer support systems. AInnovative Integration Microsoft Dynamics provides a fl exible set of solutions that can be easily adapted to your operational needs. Built on the Microsoft Windows ServerTM platform, Microsoft Dynamics helps you take advantage of technologies such as Microsoft Windows SharePoint Services for knowledge management and collaboration, Windows Terminal Services for extending access to data and processes, and Web services that can enable visibility into your customers' and suppliers' systems. Microsoft SQL ServerTM delivers a solid foundation for collecting, analyzing, and reporting data across your company's systems. And deep integration with Microsoft Offi ce System applications, such as Microsoft Excel, Word, Outlook, Internet Explorer, SharePoint, and Visio, can help you better understand inventory, plan production and lead times, design reports, and use data required to make accurate and cost-effective decisions. Partners with Industry Expertise Microsoft Dynamics solutions are delivered by a network of partners with expertise in food and beverage distribution. They can provide local, personalized service-from planning and implementation, to customization, to ongoing support and education. That means you get world-class business solutions from professionals who understand your business and will be there as your business conditions change. Plan for Growth Organizations need systems that can deliver a strong return on investment (ROI) in meeting current needs, while providing for the opportunity to scale dramatically to account for organic growth, acquisitions, changes in business focus,

and other foreseeable future changes to the business. Microsoft Dynamics, along with Microsoft server technologies and productivity solutions, offers tremendous flexibility and scalability to implement the solution to meet today's requirements and to allow for substantial future growth and change. MANAGING FOOD AND BEVERAGE INNOVATION Driving Growth through Product/Service Development Driving profitable growth through development of consumer and customer relevant products and services is on the agenda in all food and beverage companies. Particularly since the industry is being challenged by price pressures and reduced differentiation (on the verge of commoditisation) between manufacturers. The Managing Food and Beverage Innovation (MFBI) program focus on developing capabilities in both participants and their organizations on how to build and implement an innovation strategy, resulting in innovation efforts that are; strategically aligned; differentiating against competition (delivering relevant, new consumer benefits supporting brand value); planned over time and in resources; effective, efficient and transparent to the organization. The program provides managers from food and beverage companies with the skills and tools required to design and implement an innovation strategy and product/service pipeline to fill the strategy with content. The program relies on action learning, i.e. a balance between theory and practice through lectures, workshops, home company assignments and multi company assignment, assisting in the implementation of learning in ones daily work and in the organization. Participants develop and deliver actual plans for a business unit at the home company including a strategic


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Food and Beverage Distribution


outlook, operational recommendations and an implementation plan. More specifically, MFBI will help participating companies and/or managers to: Understand and apply the concepts of: o Innovation strategy-define what should be the focus of the company's innovation efforts in terms of business, service and product development based on an understanding of the company/business unit strategy and business environment. What capabilities are required and does the organisation have them or need to acquire them o Entrepreneurship-understand what drives innovation in entrepreneurial organisations and companies, in theory and practice, and how can this understanding support the home company efforts o Innovation pipeline-apply tools and practices on how to build an innovation pipeline to deliver against the strategy o Commercializing Innovations-understand how to successfully implement and commercialize an innovation in parallel to an existing product portfolio o Change management-assess how well the home company is prepared to drive innovation (organisation, culture, remuneration systems, capabilities, etc) and what best practices could be applied to approach change management o Learn to design initiatives that are innovative and improve innovativeness by applying theoretical and managerial tools to real life situations. This skill is developed through a balance of readings, class lectures, group exercises and industry-specific case discussions.

o Complete a Home Company Assignment (HCA) targeting business development at a specific business unit. In collaboration with SIMI, the sponsoring company the participants identify a business unit in the organization which will be the target for the HCA. Participant develops a growth plan including an innovation strategy, product/service pipeline and implementation plan. Senior, experienced faculty helps participants develop actionable and justified recommendations, while executives from the sponsoring companies ensure that the work is relevant and supported by top management. The objective is to deliver tangible value to the home company. The HCA is conducted under protection of confidentiality agreements with SIMI and faculty and are not shared with other participants. o Through Multi Company Assignments (MCA) develop an understanding of major issues related to Innovation in the Food industry and build a capability to analyse and react on issues of strategic importance. o Extend professional networks within the industry to benefit both participants and their sponsoring companies. o Earn a diploma that is recognized by the industry, and increases the professional value and loyalty of the individual. The faculty uses executive MBA criteria to determine whether participants have successfully completed the assignments. The MFBI program consists of four modules:

Module I: Developing an Innovative Strategy

Objective: Understand the concept and task of developing an innovation strategy for a business unit and how it directs innovation efforts throughout the organisation.


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A balance of theory tools and marketplace date are used in teaching. Learning's are applied and analysed through the start of HCA and MCA.

initial innovation strategy and building a market/product/ service pipeline to realize the strategy in the marketplace.

Key Sessions
o Written feedback on HCA I from Faculty o How to develop entrepreneurial behaviour and understanding best practises of innovative companies o Learning and applying tools for identifying growth drivers and building a pipeline of innovation o MCA II: The teams will meet experts on the respective industry issue to discuss the topic in more depth as a guide for their live analyses o Executive guest speaker on Retailization-the power of the shopper and the retailer in European food and beverage markets

Key Sessions
o Innovation Strategy: concepts and frameworks for developing an innovation strategy for e.g. a business unit. Generating demand through blue ocean strategy concepts o Understanding and analysing business environment data driving innovation; Market discontinuities driving change. Consumer needs and consumer behaviour. Company capabilities and shortcomings o HCA I: apply the concepts & frameworks for developing an innovation strategy during the 3 weeks following the module. Executive advisors, assigned by the home company, are invited to an optional discussion of home-company assignments on the 2nd evening of the module o MCA I: Introduction of a process for analyses of industry issues that have strategic impact on a business. Quartz Management Consultants will introduce tools and methodology. The teams will test and use these on model issues in preparation of the analyses of a live issue agree with the steering board for the program and chosen by each individual

Module III: Managing and Implementing Change Objective: Innovation is often connected to change. This module teaches how to implement the capacity for innovation and market product innovation inside and outside an organisation. The post-module home company assignment will build on the first two by focusing on the "how of change", i.e. how the different initiatives identified in previous assignments can be introduced in the own company, at customers and into the market. Key Sessions
o Written feedback on HCA II from Faculty o Workshop on Commercialization of Innovations in the F&B industry: o Presentations from Industry Executives on best practice from implementation and commercialization of innovations in the European F&B industry, sustainability and leadership

Module II: Building an Innovation Pipeline Objective: To provide participants with concepts and management approaches for improving innovativeness: leadership role, culture shaping, strategic aspiration, idea creation, idea clustering-conceptualisation, benefit pipeline and initial business plans. The post-module home company assignment will build on the first assignment by revising the


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o Managing Change o Barriers to change-the dilemma of the need for stability and the need to change o How to manage human resources in change o How to build and support an innovative culture o MCA III: With facilitation from Quartz Management Consultants the teams start the process of analysing and building a hypothesis on their respective industry issue. Industry experts will return to challenge the teams conclusions

and discussion of industry issue reports with participants, faculty, home-company executive advisors, MFBI steering board members and MFBI alumni. o Graduation: a ceremony and dinner on the evening of 26 June to which home-company executive advisors and steering board members are invited Learning Methods The key factors in SIMI's learning processes are: o Top international faculty sharing cutting edge research and best practices o Intensive participant involvement o Preparation and discussion of cases that are relevant to the industry o Real home company assignments addressing opportunities defined with the sponsoring company o Multi-company group projects on industry issues relevant to driving and managing innovation o And advice from faculty and industry executives The program requires intensive preparation and commitment on part of the participants. This includes prereading, class lectures and discussions, case studies, individual and group assignments, and application of learning to home company assignments. Modules I, II and III each requires about 10 to 15 hours of preparation, and 25 to 30 hours for a post-module home company team assignment. To anchor the learning and contribute directly to improvements at the sponsoring company, participating companies are expected to appoint one executive advisor to

Module IV: Preparing for Home-Company Impact

Objective: Having developed a strategy for innovation, recommendations for how to build an innovation pipeline and a change program to support the effort, the final module will facilitate successful application of learning at the home company in two ways: (1) Home-Company Teams will prepare an improved version of the previous home company assignments, for discussion with faculty and the homecompany executive advisor (2) Multi-Company Groups will prepare and present their final point of view on the industry issues researched, for discussion in a concluding seminar.

Key Sessions
o HCA IV Examination: one-hour presentation, dialogue and feedback on key recommendations to prepare for a later successful presentation to home company top management. o Industry Issue Workshop: a workshop for MultiCompany Groups to prepare a final presentation on their conclusions and recommendations on their respective industry issue o Industry Issue Seminar: presentation, examination


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help the participating team. The home-company executive advisor's role is to challenge and guide the team in their home company assignments, ensure the relevance of the recommendations and help implement the team's improvement plan during and after the program. Before the start of module IV, participants are required to prepare a final HCA presentation in collaboration with their home-company executive advisor. This presentation refines the key home company recommendations from module I-III assignments, and is reviewed with a faculty member to ensure successful implementation at the home company after the program. An additional 15 to 25 hours may be used on this final report and discussion in the two weeks before module IV starts. During the entire program and concluding in module IV, participants work in 4-6 multi-company groups to deliver reports on industry issues relevant to the food and beverage industry to expand industry-specific learning and networking. These groups are facilitated throughout the program by advisors. Both the home company and the multi-company assignment examinations must be successfully completed to earn a diploma. Grades A, B and C are pass grades and F is fail. Full attendance is required to qualify for a diploma. Due to the international composition of the faculty and the participants, the English language is used exclusively throughout the program. Faculty SIMI recruits top, internationally known faculty from Asian, European and North American business schools supplemented with experienced business executives and advisors to industry. The high academic level combined with specific industry knowledge enriches the learning environment.

Participating Companies SIMI acts as a resource to the food and beverage industries in supporting food and beverage producers, and ingredient, packaging and equipment suppliers with identification of opportunities for long-term sustainable growth. Constructive input from leading players within these industries assures the program continuous improvement. These players also help create a balance between SIMI's academic ambitions and the demands of the industry. Since 1997, 150 high potential, experienced managers from 44 leading food and beverage companies in Europe and the US have attended the program. SIMI governs the program on behalf of a steering board of executives. The Steering Board for MFBI consists of the following companies and executives: Arla Foods amba Anne Lindholm Behnk Carsten Hallund Slot Carlsberg A/S Thomas Tuxen Majvi Wulff-Christensen Lantmnnen Morten Hellesen Ann-Kristin Kongstad Chr. Hansen A/S Jesper Allentoft Danisco A/S Torben Svejgrd


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Findus Tina Bengtsson Novozymes A/S Peder Holk Nielsen Orkla Foods AS Hkon Mageli Procordia Food AB Christer Grnberg Pgen AB Peter Bruun Sknemejerier AB Sophia Palebo Danish Food Federation Ole Linnet Juul Swedish Food Federation Agneta Dreber Federation of Norwegian Food Industries Roald Gulbrandsen In addition, companies such as Coca Cola, Danish Crown, EAC/Plumrose, R. Frch Plast, Mars/Masterfood, GEA/Niro, Nestl, Raisio, TINE, Toms, Unilever, and V & S have participated in the program. Said about the program by sponsoring companies:

practice preparing the teams for action leading to profitable commercial initiatives. We continue to work with SIMI through the Program Steering Board developing and supporting the program."
Mikael Aru, Managing DirectorProcordia Food AB:

"The MFBI program at SIMI has proven a valuable contribution to our understanding of how to drive innovation in our business. In particular the fact that we were able to send a cross-functional group of students from our company has helped to create a very tangible and useful outcome. Our employees have been very pleased with the quality of what was offered by SIMI."
Participant Profile The Managing Food & Beverage Innovation program is designed for experienced, high-potential functional or project managers in the entire macro food chain, who need to develop an understanding of the future strategic options in the industry and the importance of innovation as a lever for profitable growth. Participants represent a diversity of functional areas such as general management, R&D, product management, sales, marketing, supply chain and business development. To obtain maximum benefit from the program, participants are admitted in teams of two to four, preferably from multiple functions in the same strategic business unit. This ensures cross-functional cooperation required to implement home company assignments and is often the start of a stronger cooperation between these functions. Enrolment will be limited to 32 managers, representing 13 company teams. This limitation facilitates a high level of class discussions, advice and feedback. The MFBI program has been conducted successfully Seven times since 1997.

"We have sent several teams to the Managing Food and Beverage Innovation program at SIMI with the objective to build team and business unit capabilities driving innovation. The learning methods used at SIMI have proven efficient in balancing theory and


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The recent average participant has been 40 yrs old with six years of management experience and 12 years of industrial experience. We aim at recruiting an international class representation from mainly Nordic and European nationalities. Said about the program by alumni:

MFBI is a great program. It has provided professional insight at a high level due to the quality of the faculty. In addition it has given the opportunity to meet and network with competent and exiting persons within the industry.
For our company the program has proven to be of high value. The tools and models have helped reveal unprofitable activities within the company and have been of great help in the development of assessment of alternative solutions, which are in the implementation phase in the company. Once accomplished our company will have a new innovation strategy built on a clear and coherent business model with focus on value creating activities. High class lecturers providing insight on latest innovation topics in a well balanced mix of practical experiences and theory. The analysis of individual, company specific innovation topics and challenges and the development of a dedicated business case for launching a new innovation are just some of the many valuable take-aways of the course. The MFBI program is a great program due to the combination of lessons, teamwork, home company assignment and networking. It gives a professional insight in the strategic world of doing business, and inspires to new ways of thinking. All tied up by a very skilled faculty and experienced and highly professional teachers. For our company the program has been of high value. The different tools used in the home company assignment

have inspired our company to think in new ways of doing business, opening the gates to new markets and growth possibilities. On a personal level I have experienced a field of opportunities and strategic insight that has inspired me in my daily work with product development and innovation, focusing on creating value for our customers, our consumers and our company. SIMI's MFBI program 2007 was a very stimulating experience to me and it has considerably increased my understanding how to manage innovation strategy and innovation processes. The three "legs" of the programClassroom theory, multi company assignment, and home company assignment-have all given me inspiration for my daily work in the company. Especially the home company assignment (an actual business case), which was done together with a younger colleague, Jakob Neimann,-also attending the program-has been very fruitful, because we could apply directly the theory, the tools and the learning from case stories given by excellent teachers. Theory does not make it alone-the SIMI frames and spirit together with a very motivated and open minded participant team made it a total success experience to me". MFBI is a great program!! Why? o It has gives us the opportunity to work in projects from a more strategic perspective. o MFBI has broaden our competencies in strategic innovation and gives us deeper understanding in the power of implementation. It's something that we use in our daily business after the SIMI graduation. o SIMI has forced us to challenge internal and external orthodoxies and put more focus on how to be and act different. o During the course professionals from international


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Food and Beverage Distribution


business schools and companies have provided us with useful tools. At Abba we have really appreciated all tools helping us with implementation and to create more structure in the strategic process. Tuition and Admission SIMI recommends that customers send teams of 2-4 participants to the program for maximum learning and HCA efficiency. In certain circumstances SIMI accepts. The fee covers all learning materials and food during the program. Travelling and lodging expenses are not included. Please submit your application before 28 April for early admission, or latest by 15 June 2008. Early application is recommended to ensure availability of space and to allow time to appoint a home company team sponsor before the program starts. Each applicant will be interviewed by telephone to ensure that program prerequisites are met, and that program procedures are clear. Prerequisites include a minimum of five years of industry and three years of management experience, and a bachelor degree or equivalent. However, final evaluation of the applicant will be based on the overall balance of key factors such as management experience, academic background, industry experience, international experience, relevance to current job position, and potential of the individual. QUALITY MANAGEMENT OF PRISON FOOD AND TRAINING

life. The IPS has a staff complement of approximately 3,200 operating in its Head Office, Training Centre and 14 prison institutions. During 2004, 8,230 persons were sent to prison, a decrease of 10% on the previous year. The daily average number of persons in custody in 2004 was 3,199, an increase of almost 1% on 2003. The IPS is committed to managing custodial sentences in a way which encourages and supports prisoners in their endeavouring to live law abiding and purposeful lives as valued members of society. This document is the story of how the Irish Prison Service achieved Excellence in all aspects of Food Safety, Food Management and Hygiene. It is a story of the Irish Prison Service's 14 year journey on the road to independently recognised catering excellence. It is a story of good management, teamwork, improved services and developed opportunities. It is a story of a service provider that changed its status from a provider of unacceptable practices and poor standards to a benchmark of best practices and business efficiency.

The main Content of the Case

In 1992 the Irish Quality Association (today called Excellence Ireland) were invited in to audit Wheatfield Prison's new kitchens and food storage areas. The audit was carried out under 5 separate categories-Structural HygieneOperational Hygiene-Food Storage and Protection-Staff Facilities & Personal Hygiene and Hygiene Management Systems. To our surprise and horror, our flagship prison failed on all counts. The governor convened the Irish Prison's first hygiene committee and we set our first two objectives: 1) To become compliant with current and pending legislation and 2) to achieve Hygiene Award Status. Wheatfield achieved its goal within 12 months and the Irish Prison Service set up a committee to review and upgrade the catering function at each of its prisons.

General Description of the Organisation and/or Project

The Irish Prison Service (IPS) is responsible for the provision of safe, secure custody for those people committed to prison by the Courts. We are a key component in our country's criminal justice system ensuring safer community


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The Reasons behind the Case

Food safety has become a matter of major public interest in Ireland and throughout Europe in recent years. The Hygiene of Foodstuffs regulations, which were enacted in Ireland in 1998 and 2000, gave effect to European law on the matter. In the context of large-scale institutions like prisons, food safety is immensely important. Within prisons, particular risks arise because large numbers of people are in close confinement together. As a consequence of drug misuse many people may be unwell or be more at risk of succumbing to illness. It is essential in the management of prisons to be assured that the highest possible standards are maintained where food safety is concerned. An indication of the scale of our operation can be gleaned from the fact that over 3,000 persons are held in custody on a daily basis in this jurisdiction with a throughput of in excess of 8,000 persons per annum. Food is immensely important in prison. The quality of the food on a prisoner's plate is at the heart of effective prisoner management. An efficiently sourced, hygienically produced and a proper, wholesome, nutritious diet contributes to the morale of our prisoners and supports them in partaking to the full in the rehabilitative regimes we provide in a custodial setting. In prison, food has a major bearing on the quality of prison regime. In particular, it contributes to health and relates to health education. Considerable benefits are achievable where prison catering, education, health care and relevant outside agencies work in a complementary manner to promote a healthy lifestyle and healthy eating.

1. The Department of Justice, Equality and Law Reform; 2. The General Public; 3. The 3,200 inmates incarcerated in our prisons. As part of our needs analysis, we formally wrote to the Department of Justice asking for detailed instructions regarding their specific needs and requirements. As Wheatfield prison was the launching platform for our hygiene programme we carried out a survey of its 320 inmates. We consulted with Failte Ireland, Excellence Ireland, the Food Safety Authority of Ireland and the N.S.A.I. We visited a wide range of hospitals and a number of large catering outlets in the private sector. The end result is a Quality Customer Service that is comprised of a completely transformed, cost effective catering function with added value. As well as providing in excess of 13,000 quality meals per day, we offer inmates training that is validated and accredited by the National Training Authority, recognised throughout Europe and designed to meet the needs of employers. We offer real life skills that are transferable to both the home and work situation and help increase feelings of self worth and self esteem.

The Process Leading to Success

Excellence is a journey, not a destination and although our journey did have a beginning (Wheatfield Prison) it now involves, on a daily basis, for 365 days a year, all 14 institutions under the control of the Irish Prison Service and the Prison Service Staff Training Centre. Our road to success was paved with challenges and opportunities, and strong leadership and teamwork were the main catalysts for change. A major challenge to the success of this initiative was securing the necessary financial resources to support the essential changes required to achieve

The Actors behind the Case

The customers of the Irish Prison Service are identified under one of the following three categories:


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the appropriate standards. The allocation of a sufficient staff complement to the catering function, the professional training of the teams concerned, access to advice from specialist advisors and the structural and equipment changes required in many of our kitchens all required resourcing. The drivers for securing the resources included the developing statutory requirements in this field and the cost savings which could be generated through central purchasing and waste management and through the avoidance of potentially costly claims arising from inmates as a consequence of unsatisfactory food quality and hygiene standards. The most important consideration was, however, the benefits in terms'of prisoners' health and contentment of providing them with good food properly prepared and well presented. Although resources were a primary consideration, some of our biggest problems involved changing attitudes. In 1520 Machiavelli wrote... "Innovators of change make enemies of all who prosper from the old regime and receive only lukewarm reception from those who will prosper from the new". In some respects, very little has changed since then and we overcame the attitudinal hurdles by adopting a multi-disciplinary approach to problem solving. Our management change project was action/research based and it allowed us to engage in the practice of continuous improvement. Our catering strategy continues to be subject to review and our clearly stated goals and objectives help provide clarity of direction and ensure individual responsibility and accountability. Small successes became the building blocks for bigger efforts and goals scored were acknowledged at every level. Our initial multi-disciplinary hygiene programme (the forerunner of all our catering management systems) was an

exercise in Teamwork, Goal setting, Preventative maintenance and Pro-active intervention. It was also a springboard for many more initiatives. A key characteristic of prison catering is the inter-agency partnership that operates between three public service bodies, the Irish Prison Service, Failte Ireland, who bring training expertise of the highest standard and the Food Safety Authority of Ireland who have regulatory as well as hygiene promotion responsibilities. Training has been a main focus of our change management programme over recent years. A comprehensive training prospectus has been developed and introduced for all workers involved in the food chain (Victualling clerks, Industrial Supervisors, Catering Managers, Cleaners, Cooks, Kitchen workers, Internal Auditors etc). The participation of our customers-our prisoners-has also been fundamental to the success of our catering initiative. They now carry out most of the operational tasks in our kitchens under the supervision of our trained staff. They have taken up opportunities to take a certified training programme, validated and accredited by Failte Ireland, designed to prepare them for employment on release. They have also contributed through inmate surveys on menu content and variety. Results Indicating the Success

Success on a Plate-Our Credentials and Improvements

A set of fully documented standards for prison catering has been developed and introduced. These were developed by a multi-agency team of professionals, and in consultation with Failte Ireland and the catering teams at local prisons. They are subject to ongoing review and improvement. Our 28-day menu caters for medical, cultural and religious needs. It is complemented with an optional vegetarian cycle and the dietary needs of ethnic minority groups can also be met.


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Our recipe manual has colour photographs showing how each meal is to be presented on the plate for the guidance of servery workers. The menu cycles and the standard recipes together provide a basis for preparing standard costs at each prison and of controlling catering expenditure.

IS 340
This standard has been prepared by the National Standards Authority of Ireland in consultation with the catering industry, and is the standard required to achieve compliance with SI 165 of 2000, Hygiene Foodstuffs Regulations. The Hygiene Mark, which is awarded by Excellence Ireland, assesses caterers by reference to this standard. It is envisaged that the Hygiene Mark will be introduced in all prisons as a quality assurance procedure over the next few years.

Our food specification procedures set out detailed requirements for all foodstuffs being purchased for the prison kitchens. They also deal with all issues of hygiene arising in relation to the food being supplied. As with the safety standards, this material is under constant review and revised as appropriate to ensure it reflects current best practice.

Monitoring and External Audits

A key aspect of the development programme for prison catering is the establishment of an independent external audit so as to provide comprehensive reports of the quality standards being achieved and to highlight areas in need of greater attention. Food Hygiene regulations and good management practice require that catering operations are subject to ongoing monitoring with records being retained on an ongoing basis for inspection. These records are then archived. The main procedure involved is HACCP (hazard analysis and critical control point), which has been a mandatory requirement under the statutory regulations of 1998 and 2000 regarding food safety. This monitoring and record keeping is carried out at local prison level and is the responsibility of the person in charge of the kitchen along with local management. A process of conducting external audits of each prison catering operation has been established in the prisons. It is conducted annually by Failte Ireland and/or Excellence Ireland. Each audit is comprehensive. It deals with all aspects of catering including the operation of the local monitoring procedures (HACCP).

Safety Standards
Our Safety Standards provide standard safe operating procedures for the various hazards present in kitchens and a safety induction training manual for use in the prison kitchens is available in each location. Safety standards for catering are reviewed on an ongoing basis to ensure they reflect current best practice. Food Specifications Incoming foodstuffs have a critical impact on the quality of catering and its cost. Dealings with the suppliers of foodstuffs are managed by reference to detailed foodstuff specifications and incoming product is subject to scrutiny. Foodstuffs are purchased in accordance with standard Public Service practices for procurement and only from approved suppliers who operate in accordance with relevant food hygiene regulations (potential suppliers are advised, as part of the tendering process, that their premises will be audited by prison personnel).

Today, the Irish Prison Service proudly boasts the successful achievement of a wide range of prestigious and independently accredited National and International standards and awards. Our credentials are clear and our


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improvements are indisputable. Our kitchens are showrooms of excellence and shining examples of best practice. Each year we beat hundreds of competitors in the public and private sectors in the race for recognised excellence. We are the first organisation on the Island of Ireland to have achieved the combined standards of I.S.O 9001:2000 & I.S. 343:2000 for catering In 2004 we were outright winners of the Excellence Ireland Supreme Award.-beating stiff competition from a wide range of top class private and public businesses throughout the country including hotels, restaurants, bakeries, supermarket chains, food processing plants, wholesalers, and dairy producers. We are acknowledged exemplars of best practice and catering managers in the private and public sector now use our kitchens as benchmarks of sustainable quality, cost effectiveness and efficiency. Innovation and Sustainable Quality Examples of our innovative approach include the design and introduction of safety signs, induction booklets and interactive e-learning programmes that are suitable for trainees with literacy and numeracy problems, the broadening of the work/training programmes for inmates and the introduction of recycling and waste prevention programmes. The sustainability of the programme is as assured as its quality. The catering improvement programme is in operation for in excess of 14 years and it gets stronger each year. Independent assessment combined with training, continuous professional development, professional pride and a strong desire to maintain our international status is our guarantee of sustainable quality.

the highest European standards and was a recent winner of of Excellence Ireland's Supreme Award for Hygiene. Success breeds success and lessons learned on our journey often became foundation stones for other projects. The catering success story had a knock on effect that reached into every corner of the institution and into every institution in the State. It resulted in the development of a national programme to improve the catering function at all prisons. It also had the indirect effect of raising standards in other areas within the prison (e.g. prison officers compared the new improved kitchen standards with their own canteen and working areas, became dissatisfied with their own situation and strove for change). This resulted in improved services generally and a string of associated awards. (N.I.S.O award for general safety, energy efficiency awards etc)

Delivering SMART Outputs and Results

The improvement in prison catering in recent years is testament to the professionalism of our multi-disciplinary catering management team. Our outputs and results are Specific, Measurable, Achievable, Realistic and Timely. We can and do achieve excellence in standards when the occasion demands and we comply fully with current and pending legislation. We provide a quality catering service. We are acknowledged leaders in the catering sector. We provide transferable life and work skills for inmates. We are engaged in continuous professional development. We offer enhanced employment opportunities. We support our training programmes with meaningful certification. We offer value for money. We guarantee quality and we are accredited exemplars of best practice. Currently, some of Ireland's oldest prisons are holders of the prestigious Hygiene Award and prisons now compete with each other and with a myriad of organisations in the private sector in the race for recognized

Improved Services and Applied Learning

In 1991, Ireland's flagship prison was in breach of statutory regulations. Today, that same prison operates to


Basics of Catering Management

Food and Beverage Distribution


excellence. Our outdated, wasteful and cost ineffective 7 day menu cycle has been replaced with a healthy, innovative, cost effective 28 day standard menu cycle that incorporates a 14 day vegetarian cycle and caters for a wide range of individual needs (religious, cultural and medical). The main Obstacles of the Case Shaking people out of their comfort zones and changing attitudes were the hardest obstacles to overcome. Our antiquated, cost ineffective system was driven by rules of operation that were designed in 1947. There was comfort and safety in familiarity for suppliers, chefs and prison management. All concerned had to become aware of their fundamental role within the change management process to ensure the success of the initiative. They had to be moulded into a cohesive multi-disciplinary team with a single agreed vision. Main Sources of Inspiration behind the Case The initial source of inspiration was a desire to professionalise our catering programme. We were in obvious breach of statutory regulations, open to litigation and a potential outbreak of food poisoning due to bad food safety practices. However, once we achieved compliance with statutory regulations, our professional pride and a desire to reach our full potential became our main motivators. The most Important Lesson Learned "We want to, so lets do"is easier and better than "We have to, so go do". Compliance with legislation and the adoption of best practices is not the hard option, it is the practical option. Today while other organisations scramble to keep ahead of exposure and bad publicity, while television programmes and newspapers tell stories of business closure, cross contamination, bad practices, super bugs, food poisoning

and litigation, the Irish Prison Service is free to concentrate on new and innovative ways to improve its business performance. A FICCI survey of Food and Beverages Industry has shown positive growth trends during April-March 2004-05. The Survey also confirms higher growth during 200506 in almost all the products belonging to Food and Beverage segment over the corresponding previous period. The improvement has been reflected both in volume terms and in terms of value for most of the products. The overall industry has achieved a growth rate of about 8 % in terms of value during 2004-05. The survey confirms that the Rs 3584 bn Indian Food and Beverages industry have shown buoyancy due to some positive factors : Government's high priority for development of food processing industry to encourage commercialization and value addition to agricultural produce.

Liberal reform measures and various tax benefits Policy Initiatives taken by the Government in the Food Processing Sector which include : Food processing industry declared a priority area. Entire sector is de-licensed.
Automatic approvals for foreign investment up to 100 percent, except some products like alcoholic beverages and also technology transfer.

Zero duty import of capital goods and raw material for100 percent export oriented units. Agro based l00 percent export oriented units allowed sale up to 50 per cent in domestic tariff area.


Basics of Catering Management

Food and Beverage Distribution


Export earnings are exempted from corporate tax All processed fruits and vegetables products exempted from Central Excise Duty. Government grant given for setting up of common facilities in Agro Food Park. Full duty exemption on all imports for units in Export Processing Zones. Use of foreign brand name is freely permitted
The Federation of Indian Chambers of Commerce and Industry (FICCI) has recently conducted the survey of industries in the Food and Beverages sector through extensive interactions with representatives of industry, allied industry organizations, associations, government and public sector undertakings. With the changing life styles of the consumers and rising disposable income of the growing middle-income group, Branded Food, Health food and Convenient Food are rapidly rising segments of this industry which are gaining vast popularity. The market for branded foods is growing at a healthy 10%-15%. The next sunrise industry for India is going to be food. In terms of total output addition, food has surpassed IT and pharma India's middle class segment will continue to hold the key to success of the processed food market in India. The profile of the middle class is changing steadily as hired domestic help is becoming costlier. This is conducive to an expansion in demand for ready to eat Indian-style foods. Indian food and beverage companies are making a beeline for regional overseas markets like Bangladesh, Pakistan, Nepal, Middle East and CIS countries because of similar

lifestyles and consumption habits. Godrej Consumer, Marico, Dabur are among the companies Some companies have achieved growth in the key processed food segment by reaching lower price points to make the products more affordable to a bigger consumer class The Unorganized, small players account for more than 70 per cent of the industry output in volume terms and 50 per cent in value terms. Lower overheads due to limited local area, family management, focused product lines and less expenditure on marketing help the unorganized sector to grow. The Food and beverages sector is witnessing recently large-scale transformation, huge advertisement spending, ,awareness campaign about the products and brands, distribution of free samples with the focus on improving the distribution network to make strong presence in the Indian market. Key factors to success are distribution (in rural markets) and advertising (in urban markets Innovation and launching of new brands are being adopted by the companies to grab the market. Big companies have started sourcing their products from local manufacturers as cost saving measures and to enter the mass consumer segment.. The market is seeing players like Heinz, Mars, Marico, Conagra, Pepsi, ITC, Dabur, Britannia, Cadbury, HLL, Pillsbery, Nestle and Amul, Smithkline Beecham, The Surya Food and Agro Private Ltd etc and a host of local manufacturers offering competition with their established brands on national level. Every player is busy in the race by expanding their product range. The companies have added new variants into their existing brands including stylish packaging


Basics of Catering Management

Food and Beverage Distribution


Many food and beverage companies have targeted the schools spread throughout the country for brand promotion and sale of their products The focus on urban markets have also contributed significantly to the growth of the biscuit industry. Semi-processed foods/Cooked/Ready to eat foods sector is growing by 20 per cent due to rising demand. Milk and milk products is rated as one of the most promising sectors in the Food Processing Industry though traditional dairy products are India's largest selling and profitable segment and accounts for more than 50 per cent of milk and dairy products Cashing on brand value and encouraged by the growing market, select dairy companies are planning major expansion plans in various cities with new brands of products including those suited to local taste and preferences and realizing higher price with higher sales volume Some national brands like Haldiram, Bikanervala, K C Das, Chitales, Ganguram, Brijwasi, Agarwal Sweets etc are getting wide acceptance because of consistent quality and product safety Local manufacturers with numerous local brands cater to populous segment and contribute considerably in the bread segment. Biscuits' packaging has undergone a swift transformation. Major players are now trying to differentiate their brands to reflect their superior quality through superior packaging. Both public and private players operate in the market. Large MNCs, such as Hindustan Lever, Nestle and Pepsi Foods, compete with public sector giants such as NDDB, NAFED and MAFED in the fruit juice market Some market leaders have introduced age-specific market segmentation with a new sub-brand, Real Junior targeted

at Children below 6 years, claimed to be a first of its kind initiative in the country. Street corner vendors are still very popular. Fruit juices in the unorganized segment are considered cheaper and fresher by the consumers, even though they are often relatively unhygienic. Standard grocers are the leading distribution channel, with one third of the Indian confectionery market, by value. Traditional grocers are the only other channel to take a double-digit share. Malted beverages with nutritional attributes control around 70% of the total market and energy drinks (brown beverages) account for the rest. The emergence of new players at the lower end of the packet tea market with marketing support from the retailers has affected the industry and particularly, the value added segment badly. There has been a trend towards consolidation of the existing tea plantations. Smaller players are being bought over by larger estates or global consumer goods majors. Strong beer, which has 5 percent of alcohol content, outsells mild beer in India and accounts for more than 68 % of the total sales.. Beer is losing ground to hard liquor in India. Amidst beers, the current trend is that lager beer is giving way to strong beer. Brewers in India are gearing up for the consolidation wave sweeping the global beer industry. The price stability throughout the year has contributed to the increase in domestic liquor sales.


Basics of Catering Management

Food and Beverage Distribution


The Northern region has contributed significantly as Rajasthan has regularized sales in the state with the formation of a distribution corporation similar to Karnataka. Flavoured low alcohol beverage with new variants like the 330 ml beer pack have driven sales growth across the country. Several Indian brands have made inroads into the foreign markets including British market Branded products are preferred in the Edible oil segment as the urban consumers are increasingly becoming health conscious and looking out for low-cholesterol cooking medium. Growth Highlights The FICCI survey confirms higher growth rates for some sectors belonging to Food and Beverages segment as compared to the previous year based on the estimates made by the industry and interaction with the concerned representatives in the industry. The industry is estimated to have achieved higher growth of 8 per cent in 2004-05 with an estimated figure of Rs. 3584 billion. The overall industry has achieved a growth rate of 8 % in value terms during 2004-05. The sectors that have recorded an excellent growth of 20% and above are-Semi-Pocessed/Cooked Ready to Eat(20%),and Ice-Cream (25%), Wine (20%). The Sectors that have recorded a high growth rate between 10%-20% are-Branded Flour (Atta) ( 12%), Bakery items including Bread,Cakes, Pastry (10%-Organised Sector(11%), Biscuits (12%), Biscuits Organised/Packaged sector(14%), Processed Fruits and Vegetable Juices, Pulp sauces, Ketch ups (18%), Milk Products (10%),Traditional/Unorganised milk products (10%), Organised Branded milk products (15%),Khoa/chhana based sweets (10%), Butter(10%), Curds and curd products (12%),), Health beverages/Malted food

(11%), Spirits/Country Liquor (10%), Alcoholic beveragesIMFL (10%), Beer (10%). Some sectors which have recorded Moderate and single digit growth are-Food & Beverage (8%), Bread (7.5%), Bread/ Organised (8%), Culinary products/Snack food(8%),Fruits and vegetables(5%), Milk and Dairy products (4.5%), Milk (4.5), Milk liquid/packaged(5%), Milk Products(8%), Milk powder including infant milk(7%), Ghee(5.5%),Cheese/ Panner(8%), Chocolates (8%), Sugar Confectionary/ Gums(4%), Health Beverages/Malted Food(8%), Tea (7%). Liberal policy measures of the government and sector specific concessions have helped growth. A package of fiscal incentives provided by various State governments like Himachal Pradesh, Uttranchal, have encouraged companies to set up manufacturing facilities in these regions. The excise exemption for 10 years and income tax exemption for 5 years for units located in backward regions under section 80IA have encouraged many companies to set up new units and helped growth BASIC ISSUES AND CONSTRAINTS The foremost setback in expanding the food-processing sector, in terms of both investment and exports, is lack of adequate infrastructure. There is an absence of a strong and dependable cold chain system which is very vital and essential for food processing industry based mostly on perishable products. Farm produce of about 30 per is being wasted every year only because there is no adequate storage, transportation, cold chain facilities and other infrastructure supports. Harmonization of multiple food laws is an urgent necessity. It has been observed that there are 13 laws enforced by 9 Ministries. There is a need for integrating into


Basics of Catering Management

Food and Beverage Distribution


one common food law. Prevention of Food Adulteration laws is not only stringent one but time consuming also. It is considered as an archaic and needs review. Food standards should not be overlapping, contradictory and highly prescriptive but should be made simple to be complied with and industry friendly. The proposed Food Safety and standard Bill, 2005 with penal provisions requires a review as the same gives huge powers to the Inspecting Officers to seize the food articles without authorization and may create unwanted confusion to the detriment of the industry. There is a need for a review of the Agricultural Produce and Marketing Act to ensure freedom to farmers to sell agricultural produce to sellers of his choice at remunerative prices rather than selling them through regulated market committees or authorized agents. The Essential Commodities Act (ECA) puts a lot of hindrances including easy inter-state movement of food grains and essential food items. Commodity traders should not be regulated and free movement of agricultural produce should be permitted between states. This is very essential for food processing where the processing units are located in different states. There is multiplicity of taxes, local taxes and levies charged on different commodities belonging to food and beverages industries. Different states have different sales tax rates. Different Mandi taxes charged by local market committees in different states, inter-state charges and levies like Chungi tax and procedural complexities add pressure on margins and put hurdles to sound growth and development of the food processing sector. Higher cost of raw materials and packing materials put pressure on margins Some commodities in one segment are used as inputs in another segment of the food processing

industry, e.g, skimmed milk powder (SMP) used as raw material for chocolate, ice cream etc sugar, edible oil used as raw materials for a number of items, molasses for alcohol etc. There has been a rise in the prices of all such commodities which have impacted the overall cost of production in the food processing industry sectors. There is a need for review of all such cases involving the users and the producers. The higher railway freight has pushed up cost of raw materials and inputs such as sugar, edible oil and all these add to cost of production. Besides different commodities are subject to different rules and system of regulations and licensing, e.g, dual taxation system for tea, dual licensing for sugar, different labeling rules for some food and beverages items like alcoholic beverages. These are mentioned in the detailed segmentation section. FICCI has highlighted some areas of concern impacting the overall Food and Beverage Industry and some sector specific issues through its Pre-Budget Memorandum for the year 2005-06 to the Government for consideration as under : The exemption on Milk and Milk products, fruits and vegetable products, edible oils etc that already exists at the zero rate, should continue. The Excise Duty on all Value Added food products like Nutritional and health foods, confectionary, innovative Indian ethnic products, high value Ready to Cook/serve products to be brought down to a maximum of 8% from 16 %. Excise on all Machineries used for the processed food industry should be lowered to a maximum of 8%. Ice-creams and Non-alcoholic beverages dispensed by vending machines are exempt from excise duty, while other beverages like chocolate drinks, health drinks which are


Basics of Catering Management

Food and Beverage Distribution


dispensed by vending machines attract 16%. The excise duty on packaging materials and packaging machineries used for the processed food industry should come down to 8%. Packaging material for match sticks is exempted from excise duty. The Sales Tax or VAT rates for all machinery used should be lowered to the concessional rate of 4%.. CST @ 4% is a big obstacle in creating one single Indian Market and it is suggested that the CST be phased out urgently. OPPORTUNITIES AND PROJECTION The survey confirms that the Food and Beverages sector is poised for further growth because of the emerging opportunities and strong fundamentals developing in the economy. The Food and Beverage Industry is projected to have overall growth between 8%-8.5 % in 2005-06. The sectors which are projected to achieve excellent growth of 20% and above in 2005-06 are-Semi Processed/ Cooked Ready to eat (22%), Ice-Cream(20%), Edible/ Vegetable oil (20%),Wine(22%). The sectors that are projected to achieve high growth between 10%-20% are: Branded Flour Atta (13%), Bakery Items including bread, cakes, pastry (11%),organized sector (12%),Bread/organized (10%),Biscuits (13%), Biscuits Organized/Packaged sector (14%), Culinary products/snack food) (10%),Fruit juices,pulp,and concentrates (18%), Sauces/ ketups (17%), Milk Products(11%),Traditional/unorganized (12%), Organized/branded (15%),Khoa/chhana based sweets (11%),Butter(12%),Curd & curd products(12%), Chocolates(10%),Beer (10%), Spirits/liquors (11%), Edible Oil (20%), Some sectors projected to record moderate and

single digit growth are: processed Food products (8.5%), Food products (8%), Flour/atta (7.5%), Bread(9%), Milk and Dairy products(6%), Milk (6%), Milk Powder including infant milk (6%),Ghee (6.5%), Cheese/paneer (8%), Sugar confectionary/gums (5%), Health beverages/Malted food (9%),Tea (8.5%), IMFL (10%), Sugar (8-10%) The recent policy packages announced by the government for farmers for raising rural income is bound to stimulate growth further. The Union Budgets 2004-05 and 2005-06 have given some incentives for boosting the food processing industry sector including tax exemption on agroprocessing units and full exemption of excise duty on dairy machines. The government has recently outlined some measures for growth and development of the primary sector.The measures include strengthening the means to increase the yield in agriculture and dairy sectors, improving farm credit and doubling agricultural credit over the next three years, raising horticultural output to 300 million tons by 2011 and removing all controls that hamper increase of farm income. The National Policy aims to increase the level of food processing from 2 per cent to 10 per cent by 2010 and 25 per cent by 2025. The proposal to enhance the level of institutional credit to be provided by banks and financial institutions from Rs. 80000 crore during 2003-04 to about Rs 105000 crore and to bring l00 new farmers in a district in the yearly loan scheme would accelerate rural income and rural demand. Development of rural infrastructure, rural extension services, agro-based and food processing industries have been given high priority in the budget for generating employment, reducing poverty and raising the income level of the farmers and rural masses by the Government.


Basics of Catering Management

Food and Beverage Distribution


The process of setting up of Food Parks in various key locations of the country with the involvement of the various state governments and other allied institutions is on.. The Minister of Food Processing Industries has announced the setting up of 500 such parks within the 10th Five-year plan across each parliamentary constituency. This will give a boost to growth and development of food processing industries. The FICCI survey highlights the need for pro-active government action for helping the industry to achieve lower cost, improved quality and better performance in the competitive environment. For tapping the opportunities and potentials, some initiatives and steps are required to be taken for technology improvement, automation and computerization in the manufacturing processes, quality control, improvement of packaging to improve shelf life of products, investment in R & D to develop new products and for establishing an efficient cold chain system. There is the need for ensuring adequate land for large scale farming/contract farming by introducing necessary amendment in the existing laws and in the Land ceiling Acts Harmonization of multiple food laws by integrating into one common food law is an urgent necessity. The expert committee set up by Ministry of Agriculture has estimated that an investment of the order of about Rs. 11200 crores in the next 10 years would be required for establishing infrastructure in agriculture marketing. There is need for developing market yards/auctioning centres to handle perishable commodities including flowers. Commodity exchanges in India are now being encouraged while covering a large number of commodities.Commercial banks in India with a wide network of branches in the rural areas may act as intermediaries between the exchanges (aggregators)and farmers to make available the benefits of price risk insurance to large sections of the farmers.

FOOD AND BEVERAGES INDUSTRY SURVEY The size of the Food and Beverages Industry is estimated to be Rs 3584 billion. India is among the world's major producer of food and produces over 600 million tonnes of food products every year and has huge potentials with the food and agricultural sector which contributes to around 22% of India's GDP. While food accounts for only 9.7% of the total private consumption expenditure for an average American person,15% for the Japanese and 15% for the British, for the Indian it is the single largest component of their total consumption expenditure, accounting for as much as 53%. India's food consumption market is expanding rapidly to attract global food and drink giants. Rising per capita incomes, changing life styles, and a growing younger population with preference for convenience food have driven growth. Experts suggest that the next sunrise industry for India is going to be food. In terms of total output addition, food has already surpassed IT and pharma. While the total output addition in information technology and pharmaceuticals is of the order of Rs.30,000 crore and Rs. 15,000 crore, respectively, between 1993 and 2000, food manufacturing recorded an output addition of Rs.90,000 crore, which is the double of the two industries put together. India is the second largest producer of rice and wheat and the largest producer of pulses. The total production of food grains is estimated to reach 213 million tones in 200304 after a setback in 2002-03 recording 174.2 million tonnes of production. Table 1 gives product wise current performance in production and growth rates. The Food Processing Industry sector in India has been accorded high priority by the Government of India, with a number of fiscal relief and incentives, to encourage


Basics of Catering Management

Food and Beverage Distribution


commercialization and value addition to agricultural produce. Indian food processing industry is poised for further growth in view of the liberal policy measures and government's commitment for reforms and development of food and agroprocessing industries. This opens up huge opportunities for large investments in food and food processing industries in different fields including up gradation of technologies and improvement of skills with installation of modern machinery and equipment, especially in areas of canning, dairy plants, specialty processing. The opportunities of investment lie in various stages like packaging, preservation of food with suitable refrigeration and thermo processing, quality control and also in creating a good marketing and distribution infrastructure and an efficient network of cold chain management system. Health food, health food supplements, Convenient Food and Branded Food are rapidly rising segments of this industry which is gaining vast popularity with the changing life styles of the consumers. Development of rural infrastructure, rural extension services, agro-based and food processing industries have been given enough priority for generating employment and reducing poverty and raising the income level of the farmers and rural masses by the Government. The present Government also plans to continue the process further with a package of incentives for rapid progress and development of rural India. Of the total estimated food market of approximately Rs.3584 billion, value-added food products comprise about Rs.920 billion. The unorganized, small players account for more than 75% of the industry output in volume terms and 50% in

value terms There are very few large Indian Food Brands with global presence. Although India is among the world's largest producers of many food items, only about 20% of India's fruit and vegetable output is processed in the country, compared to 30% in Thailand, 80% in Brazil and 60-70% in countries like the UK and US. There is strong preference for raw and semi-processed foods in most parts of the country. The tremendous potential for growth of the industry is also reflected in the number of foreign investment proposals received for the various subsectors of the industry. Since the liberalization in 1991 till January 2004 proposals for projects of over Rs.87715 crores have been proposed in various segments of the food and agro-processing industry including Rs 33574 crore for food processing, Rs 33818 for sugar and Rs 20323 crore for vegetable oil and vanaspati. Besides, the Government has also approved proposals for joint ventures, foreign collaboration, industrial licenses and 100%export oriented units envisaging an investment of about Rs.20,000 crores. Out of this, foreign investment is of Rs 9620 crore which is 3.3 of total Foreign Direct Investment. Liberalization of Food Sector started since 1991, removal of price controls, de reservation of small scale industry, reduction in import tariffs, fiscal incentives for encouraging investment in the sector under the liberalized policy environment of the Government have spurred growth in this sector. The Government has provided many liberal incentives to encourage the Food Processing industry. Policy Initiatives in the Food Processing Sector Food processing industry declared a priority area. Almost entire sector is de-licensed.


Basics of Catering Management

Food and Beverage Distribution


Automatic approvals for foreign investment up to 100 percent, except some products like alcoholic beverages and also technology transfer. Zero duty import of capital goods and raw material for100 percent export oriented units. Tax exemption on agro-processing units and full exemption of excise duty on dairy machines Agro based l00 percent export oriented units allowed sale up to 50 per cent in domestic tariff area. Export earnings are exempted from corporate tax All processed fruits and vegetables products exempted from Central Excise Duty. Government grant given for setting up of common facilities in Agro Food Park. Full duty exemption on all imports for units in Export Processing Zones. Use of foreign brand name is now freely permitted Income Tax exemption for 5 years for new units only in fruits and vegetable processing industry etc. Sector specific concessions have been extended to different products of the Food Processing Industry which among others include : Exemption for all the milk products but not condensed milk Reduction for biscuits,cakes and pastries to 8% Sugar based confectionary exempted Reduction for meat and poultry products to 8% India's middle class segment will continue to hold the key to success of the processed food market in India. Of the

countries total population of one billion, the middle class segment account for about 350-370 million. Though a majority of families in this segment have non-working housewives or cannot afford hired domestic help they prefer to prepare food of their taste in their own kitchens. But the profile of the middle class is changing steadily as hired domestic help is becoming costlier. This is conducive to an expansion in demand for ready to eat Indian-style foods. As about 10% of output is processed and consumed in packaged form, there is huge potential for expansion of the food processing industry. In view of the tremendous growth potential of this segment many MNCs as well as domestic players have made an aggressive entry in the sector, betting large amounts of money. Companies like Nestle after achieving growth in the key processed food segment are now reaching lower price points to make the products more affordable to a bigger consumer class. With changes in eating habits and the increased affordability of the growing middle-income group of Indian population, the market for branded foods is growing at a healthy 10%-15%. In the basic food segment there is dominance of the regional unorganized sector. This is to some extent due to government policies of the past, wherein, many segments were reserved for the small-scale industry. However, the segments, which are dominated by the unorganized sector, have the potential to grow faster in the years to come. For example, products like 'atta' are already poised for hectic competition between players like HLL, Pillsbury, Conagra and ITC, because of changing lifestyles and preference for brands.


Basics of Catering Management

Food and Beverage Distribution


Pizza hut outlets, the MNC food chains are operating in the big cities and expanding their network in cities and small towns with variety of cooked, ready to eat food and drinks. The process of setting up of Food Parks in various key locations of the country with the involvement of the various state governments and other allied institutions has been initiated. The minister of Food Processing Industries has announced the setting up of 500 such parks within the 10th Five year plan across each parliamentary constituency. The market is seeing players like Heinz, Mars, Marico, Conagra, Pepsi, ITC, Dabur, Britannia, Cadbury, HLL, Pillsbery, Nestle and Amul, Smithkline Beecham, The Surya Food and Agro Private Ltd, MTR Ltd etc and a host of other regional and local manufacturers offering competition with their established brands on national level. Every player is busy in the race by expanding their product range. HLL has entered the ready to eat segment through Indus Valley rice meals in seven flavours. Satnam Overseas has also entered this growing market with its Kohinoor brands of rice meals and curries. ITC 's more than 50 packaged branded food products under Kitchens of India and Aashirvaad brands with different varieties of ready to eat/ cooked food is gaining popularity in the market. The sector is witnessing large-scale transformation, huge advertisement spending, focus on improving the distribution network to make strong presence in the Indian market. BASIC ISSUES AND CONSTRAINTS The foremost setback in expanding the food-processing sector, in terms of both investment and exports, is lack of adequate infrastructure. There is an absence of a strong

and dependable cold chain system. Without a strong and dependable cold chain vital sector like food processing industry which is based mostly on perishable products cannot survive and grow. Cold chain facilities are miserably inadequate to meet the increasing production of various perishable products like milk, fruits, vegetables, poultry, fisheries etc. Farm produce of about 30 per is being wasted every year only because there is no adequate storage, transportation, cold chain facilities and other infrastructure supports. Provision should be made for sufficient accommodation in various modes of transport, particularly in trains for transport of perishable fruits and vegetables in cool condition on priority basis Harmonization of multiple food laws is an urgent necessity. It has been observed that there are 13 laws enforced by 9 Ministries. There is a need for integrating into one common food law. Prevention of Food Adulteration laws is not only stringent one but time consuming also. It is considered as an archaic and needs review. Food standards should not be overlapping, contradictory and highly prescriptive but should be made simple to be complied with and industry friendly. The proposed Food Safety and standard Bill, 2005 with penal provisions requires a review as the same gives huge powers to the Inspecting Officers to seize the food articles without authorization and may create unwanted confusion to the detriment of the industry. There is a need for a review of the Agricultural Produce and Marketing Act to ensure freedom to farmers to sell agricultural produce to sellers of his choice at remunerative prices rather than selling them through regulated market committees or authorized agents. There is the need for ensuring adequate land for large-scale farming/contract


Basics of Catering Management

Food and Beverage Distribution


farming by introducing necessary amendment in the existing laws and in the Land ceiling Acts. The Essential Commodities Act (ECA) puts a lot of hindrances including easy inter-state movement of food grains and essential food items. Commodity traders should not be regulated and free movement of agricultural produce should be permitted between states. This is very essential for food processing where the processing units are located in different states. There is multiplicity of taxes, local taxes and levies charged on different commodities belonging to food and beverages industries. Different states have different sales tax rates. Different Mandi taxes charged by local market committees in different states, inter-state charges and levies like Chungi tax and procedural complexities add pressure on margins and put hurdles to sound growth and development of the food processing sector. Higher cost of raw materials and packing materials put pressure on margins Some commodities in one segment are used as inputs in another segment of the food processing industry, e.g, skimmed milk powder (SMP) used as raw material for chocolate, ice cream etc sugar, edible oil used as raw materials for a number of items, molasses for alcohol etc. There has been a rise in the prices of all such commodities which have impacted the overall cost of production in the food processing industry sectors. There is a need for review of all such cases involving the users and the producers. The higher railway freight has pushed up cost of raw materials and inputs such as sugar, edible oil and all these add to cost of production. Besides different commodities are subject to different rules and system of regulations and licensing, e.g, dual taxation system for tea, dual licensing for sugar, different labeling rules for some food and beverages items like alcoholic beverages. These are mentioned in the detailed segmentation section.

FICCIS TAX PROPOSALS The exemption on Milk and Milk products, fruits and vegetable products, edible oils etc that already exists at the zero rate, should continue. The Excise Duty on all Value Added food products like Nutritional and health foods, confectionary, innovative Indian ethnic products, high value Ready to Cook/serve products to be brought down to a maximum of 8% from 16 %. Excise on all Machineries used for the processed food industry should be lowered to a maximum of 8%. Ice-creams and Non-alcoholic beverages dispensed by vending machines are exempt from excise duty, while other beverages like chocolate drinks, health drinks which are dispensed by vending machines attract 16%. The packaging cost component in the food products is very high amounting to almost 40%-60% of the cost depending on the size of the product.The excise duty on packaging materials and packaging machineries used for the processed food industry should come down to 8%. Packaging material for match sticks is exempted from excise duty. The Sales Tax or VAT rates for all machinery used should be lowered to the concessional rate of 4%.. CST @ 4% is a big obstacle in creating one single Indian Market and its suggested that the CST be phased out urgently. OPPORTUNITIES AND PROJECTION The Food and Beverages sector is poised for further growth because of the emerging opportunities and strong fundamentals developing in the economy. With the growing awareness about health products in the minds of consumers, increasing urbanization, rising standards of living and popularity of convenience foods, the


Basics of Catering Management

Food and Beverage Distribution


industry is expected to witness further growth. Table 2 gives product wise growth projection. The recent policy packages announced by the new government for farmers for raising rural income is bound to stimulate growth further. The present Government with a human face in reforms process strongly favors the idea of raising the level of living of rural masses through innovative reforms and packages for farmers. The Union Budget 2004-05 and 2005-06 have given some incentives for boosting the food processing industry sector including tax exemption on agro-processing units and full exemption of excise duty on dairy machines. Development of rural infrastructure, rural extension services, agro-based and food processing industries have been given high priority in the budget for generating employment, reducing poverty and raising the income level of the farmers and rural masses by the Government. A package of fiscal incentives provided by various State governments like Himachal Pradesh, Uttranchal, have encouraged companies to set up manufacturing facilities in these regions. The excise exemption for 10 years and income tax exemption for 5 years for units located in backward regions under section 80IA have encouraged many companies to set up new units. The government has recently outlined some measures for growth and development of the primary sector which include among others strengthening the means to increase the yield in agriculture and dairy sectors, raising horticultural output to 300 million tons by 2011. The proposal to enhance the level of institutional credit to be provided by banks and financial institutions from Rs. 80000 crore during 2003-04 to about Rs 105000 crore and

to bring l00 new farmers in a district in the yearly loan scheme would accelerate rural income and rural demand and speedy monetization in rural area. This would provide untapped commercial opportunities for banks to lend and earn reasonable profits. The process of setting up of Food Parks in various key locations of the country with the involvement of the various state governments and other allied institutions is on.. The Minister of Food Processing Industries has recently announced the setting up of 500 such parks within the 10th Five-year plan across each parliamentary constituency. This will give a boost to growth and development of food processing industries. The proposed measures also include some vital changes in the Agricultural Produce Marketing (APMC) Act by incorporating contract farming, land leasing and privatization of food grain storages over time. There is the need for ensuring adequate land for large scale farming/contract farming by introducing necessary amendment in the existing laws and in the Land ceiling Acts The proposals also include removal of restrictions facing farming community including cross border movement of food grains, doing away with local level rules and restrictions that prevent easy movement and marketing of food grains and improving marketing structure. The National Policy aims to increase the level of food processing from 2 per cent to 10 per cent by 2010 and 25 per cent by 2025. There is a need for pro-active government action for helping the industry to achieve lower cost, improved quality and better performance in the competitive environment. For tapping the opportunities and potentials, some initiatives and steps are required to be taken for technology


Basics of Catering Management

Food and Beverage Distribution


improvement, automation and computerization in the manufacturing processes, quality control, improvement of packaging to improve shelf life of products, investment in R & D to develop new products and for establishing an efficient cold chain system. The expert committee set up by Ministry of Agriculture has estimated that an investment of the order of about Rs. 11200 crores in the next 10 years would be required for establishing infrastructure in agriculture marketing. There is need for developing market yards/auctioning centres that can handle perishable commodities including flowers. Commodity exchanges in India are now being encouraged while covering a large number of commodities.Commercial banks in India with a wide network of branches in the rural areas may act as intermediaries between the exchanges (aggregators)and farmers to make available the benefits of price risk insurance to large sections of the farmers. DETAILED SEGMENTWISE ANALYSIS Milling Industry Branded Flour (ATTA) The milling industry comprises rice milling, wheat-flour milling and pulse milling. It includes a wide range of products, from basic ground wheat (atta) to flakes of wheat, rice or corn. Over the years, there has been a steady process of technology upgradation and modernization in the traditional milling industry. The grain-processing sector is largely unorganized, although there are a few large players in the market. Since the packaged flour market was explored first at a national level by the Mumbai-based DCW group in 1994, with "Captain Cook" atta, some large players, like Hindustan Lever (with its Annapurna brand) and Godrej Pillsbury (Pillsbury), Agro Tech (Healthy World), Nature Fresh and

ITC (Aashirvaad) entered the market. Traditional brands like 'Shakti Bhog' have also consolidated their position. Increased competitive activity is spurring market growth. The segment, which had been growing with excellent rate of 40-50% till 2000 is now growing by 12% in 2004-05. The market has huge potential as in urban areas (with market size of about 42 mn tons), branded atta accounts for 2-3% of consumption and is getting increasing acceptance. BAKERY INDUSTRY The annual production of bakery products which includes bread, biscuits, pastries, cakes, buns, rusk etc is estimated to be 50 lakh tones in 2004-05 with estimated value of Rs 69 billion. The two major bakery industries, viz., bread and biscuit account for about 82% of the total bakery products. The organized sector has a market share of 45 per cent and the balance 55 per cent is with the unorganized sector in the baked products.. BREAD INDUSTRY The bread industry with estimated production of 27 lakh tons in 2004-05 and having 7.5 % growth is represented by both the organized and unorganized sectors with 55 per cent and 45 per cent contribution to production. The large organized sector players who are prominent in the high-and medium-price segments include Britannia, Modern Industries Ltd. Brands like Modem and Britannia are major players in the bread market and together they account for 90% of the organized bread market. Local manufacturers with numerous local brands cater to populous segment and contribute considerably in the bread segment. Low margins, high level of fragmentation are the main


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features in the bakery industry. Volumes, brand loyalty and strong distribution networks are the main drivers of growth. Organized bread industry is recently facing problems due to low margins of profit due to escalating prices of major raw materials, particularly wheat flour, vegetable oil, sugar, milk. According to All India Bread Manufacturers Association, bread should be included as a food item in the Mid-Day Meals Scheme and thus making a very nutritious and hygienic food available to the children and the poorer sections of the community. BISCUIT INDUSTRY The large organized sector players who are prominent in the high-and medium-price segments include Britannia, Parle and Bakeman. The major brands of biscuits are Britannia, Parle, Bakeman, Priya Gold, Elite, Cremica, Dukes, Anupam, Horlicks. Within the sector, Britannia has become aggressive with its Tiger brand with variants to compete with Parle's Parle-G in the glucose biscuits category. Britannia and Parle dominate in branded biscuit segment. The Surya Food and Agro Private Ltd with its Priya Gold Brand has come out of the local fold. ITC Foods Ltd has expanded network and is promoting its Sunfeast biscuits across 1000 schools in the country. Foreign players like United Biscuits and McVities have also entered the fray. However, these players have concentrated themselves in the super-premium and premium segments. The companies have added new variants into the existing brands as done by Britannia in Good Day brand. Parle G in Hide & Seek with addition of flavors like butter, badam, pista and cashew, HLL in Kisan Grudy biscuit brand.

The focus on urban markets have also contributed significantly to the growth of the biscuit industry. Focused advertising and new launches helped the biscuit industry to grow. The World Food Programme procuring about 25,000 tonnes of biscuit through a tendering process from Priya Gold, Cremica and Anmol for school children in Pakistan, Iraq and Afganistan has opened opportunities for the Indian companies. The top 5 manufacturers-Britannia, Parle, Priya Gold,Cremica and Anmol have competed with each other over prices and quantities. Britannia, which is a market leader in the top end, has been trying to make a dent into the mass market segment with the Tiger Brand with more emphasis to tap the rural market. Parle is doing the opposite, trying to break into Britannia's strong hold with its popular Parle-G brand. The per capita consumption of biscuits in our country is about 1.52 kg as compared to more than 12 kg in developed countries. Besides the two major players, Parle and Britannia, the State-level markets show the presence of strong regional players such as Bakeman, Priya Gold, Shalimar, Windsor and Champion-brands present in almost all markets. Biscuits' packaging has undergone a swift transformation. From Britannia's functional protective blister wraps, which prevent breakage, to Parle's stylish offering packaging has been completely transformed. The excise duty cut on biscuits from 16% to 8% has given a boost to biscuit industry. But there are some basic issues confronting the industry. Various States have increased Sales Tax on Biscuits ranging from 16 per cent in Andhra Pradesh and 8 per cent in Uttar Pradesh, Karnataka, Delhi and Haryana.


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The Federation of Biscuits Manufacturers of India (FBMI) wants the Central government to reconsider its decision to include biscuits in the category of Revenue Neutral Rate (RNR), and levy 12.5% VAT. Biscuits should be recognized as a mass consumption item. SEMI-PROCESSED/COOKED/READY TO EAT The market for semi-processed/cooked and ready to eat foods is estimated to be of around Rs 82.9 billion in 200405 and is rising rapidly with a growth rate of 20 per cent. With the changing life styles of the Indian middle class and the busy schedules of both the husband and wife in the family the demand for semi-processed cooked/ready to eat food will rise steadily as hired domestic help is also becoming costlier. HLL has entered the ready to eat segment through Indus Valley rice meals in seven flavours. MTR Foods has also launched a whole range of rice meals and other curries. Satnam Overseas has also entered this growing market with its Kohinoor brands of rice meals and curries. ITC 's more than 50 packaged branded food products under Kitchens of India and Aaashirvaad brands with different varieties of ready to eat/cooked food is gaining popularity in the market. Pizza Corner,has also expanded its outlets rapidly this year. Global Franchise Architects (GFA) currently has 37 Pizza Corner outlets across India. CULINARY PRODUCTS & SNACK FOOD The total production of culinary products and snack food is estimated to be around Rs 1750 crore in 2004-05 and is growing at a moderate rate of 8 per cent. The culinary products including mainly wheat based products comprising of noodles, vermicelli, macaroni and

spaghetti is gaining popularity. HLL (Kissan and Knorr range) and Nestle (Maggi) dominate this segment, as both have large product portfolios. Heinz and Top Ramen are also knocking at the door. Indian snack food market has reached a value of Rs 1530 crore. It is one of the largest snack markets in the world. Potato chips are by far the largest product category within snacks, with 85% of the total market share. Snack nuts and savory snacks also add to the market. At present, popcorn has yet to break into the Indian market. Frito Lay's India, Pepsico's Snack Food Division having snack foods plants in Channa (Punjab) and Pune (Maharashtra), and going for another in (Sakrail) West Bengal with investment of Rs 75 Crores as the state of West Bengal has immense opportunities for agro-based industries. The company has carried out backward integration to source potatoes and other crops with farmers across the states The world's largest producer of French fries and potato specialties McChain Foods with McChain Smiles and NP Foods have entered in India's potato snack industry in 2005. FRUIT JUICES/PULP & CONCENTRATES/SAUCES/ KETCH UPS India is the second largest producer of both fruits and vegetables in the world. Different Agro-climatic conditions ensure availability of a wide range of fruits and vegetables in large quantities throughout the year. India produces about 148.6 million tones of fresh fruits and vegetables of which fruits contribute to about 48.5 million tons and vegetables account for the rest 100 million tons. The potential of the sector has, however, not been fully tapped. India produces about 11 mn tonnes of processed


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fruits and vegetables, fruit juices, pulp and concentrates. The production/market for Indian fruit juice/pulp concentrate, sauces/ketch ups is estimated to be more than Rs 2800 crore in 2004-05 with growth rate of 18 per cent. The market has immense potentialities provided some infrastructural facilities for efficient transportation and marketing of fruits and vegetables are created. Provision should be made for creation of an efficient cold chain system subsequently. About 89% of the processing units are in the small and medium sectors. Street comer vendors are still popular. Fruit juices in the unorganized segment are considered cheaper and fresher by the consumers, even though they are often unhygienic. Pepsi with its brand Tropicana and Dabur Foods through Real brand compete in the market. Coca Cola India its only juice brand-Maaza is further is talking to multi-packaging to attract customers. Mother dairy is also in the line to access the market effectively through Safal brand. Dabur Foods not only leads with innovation in its product offerings but also has now taken the lead in redefining traditional marketing dynamics in the segment. The Awareness about health and more sophisticated cocktail culture has driven growth in packaged fruit juice segment. CONFECTIONARY INDUSTRY The Indian confectionary market can be segmented into sugar boiled confectionary, chocolates, mints and chewing gums. Organized market for sugar confectionary/gums is estimated to be 183216 tons in volume and around 19.2 bn in value. The entire market can be divided into 7 major categories, namely Hard Boiled Candies (HBC), Toffees, Eclairs, Chewing gums, Bubble gum, mints and Lozenges. The confectionary market is highly fragmented with several players with strong

regional presence. Leading players are Cadbury India, Nestle, Nutrine, Parry's Confectionary, Parle, Ravalgon, Candico etc. The chocolate market in India is estimated to be around 30800 tonnes. It is dominated by 2 major players, Cadbury India Ltd and Nestle India Ltd, which together account for about 90% of the total chocolate market. Cadbury India is the market leader with 65-70% share in chocolates, but Nestle is also growing faster. ITC and HLL are also operating in the confectionery segment. Parle is trying to revive popular Poppins melody. It plans to give the brand a new packaging and a makeover for Mango Bite. It is also concentrating on newer brands such as Smoothies (lacto), Chox (chocobar) and Cafechino (coffee toffee). Players like Cadbury and Nestl have also introduced chocolates in smaller packs, costing less than the regular packs to have larger penetration in the market New product launches including-a brown and white chocolate combination 'Dairy Milk Two-in-One', 'Bytes' choclate wafer snacks by Cadbury India are driving growth. Standard grocers are the leading distribution channel, with one third of the Indian confectionery market, by value. Traditional grocers are the only other channel to take a double-digit share. The remainder of the market shows a high degree of fragmentation. Low margins, high volumes, price sensitivity and high advertising expenses characterize the Chocolate industry. The perishable nature of the product and the fact that India lacks a cold chain distribution network are among the major problems that inhibit market expansion. The chocolate companies are facing problems due to scarcity of milk and rising prices. The private dairies have raised the prices including the prices of Skimmed Milk Powder (SMP), the essential ingredient for manufacturing milk chocolates and ice cream mixes in addition to biscuits and confectionery


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products. The proposed Food Safety and standard Bill, 2005 with penal provisions requires a review as the same gives huge powers to the Inspecting Officers to seize food articles without authorization and may create unwanted confusion to the detriment of the industry. According to the Indian Confectionary Manufacturers' Association, hard boiled candies should be brought out of the list reserved for SSI and also there should be reduction of excise duty on gums. MILK AND DAIRY PRODUCTS/HEALTH BEVERAGES Milk and milk products is rated as one of the most promising sectors in the Food Processing Industry. India is the largest milk producing country with production of more than 92 million tonnes. With increased production of liquid milk, there has been a simultaneous growth in the production of processed milk products, including milk powder, infant milk food, condensed milk, butter, cheese, ice-cream, ghee, curd and khoa and khoa based sweets. The traditional dairy products are India's largest selling and profitable segment and accounts for more than 50 per cent of milk and dairy products. The production of traditional dairy products is estimated to reach Rs 1089 billion in 2004-05 against the total estimated production of milk and dairy products of the amount of Rs 1747 bilion. The organized sector sector accounts for Rs 264 billion. It has been observed that efficient production and marketing can bring about more than 200 per cent value addition in the Indian dairy segment. With liberalisation, the import of technology and machinery has effected modernization and technological breakthrough in production of traditional milk products and

this has encouraged the growth of the organized sector in the Dairy segment. The dairy industry is dominated by the co-operative sector. About 60% of the installed processing capacity is in the co-operative sector. The National Dairy Development Board (NDDB) is a major player in the market with its major brand, Amul. Leading brands like Amul, Nestle, Mother Dairy and Britannia are in the race to tap the growing market. SmithKline Beecham Consumer Healthcare, Nestl India and Heinz India are amongst the large MNCs that dominate the high-value milk products market. Other players include Indiana Dairy Specialties, Jagatjit Industries Ltd and various other state co-operatives. Some dairy plants have production of mithais on a commercial scale. Some national brands like Haldiram, Bikanervala, K C Das, Chitales, Ganguram, Brijwasi, Agarwal Sweets etc are getting wide acceptance because of consistent quality and product safety. Encouraged by the growing market and cashing on brand value select dairy companies are planning major expansion plans in various cities with new brands suited to local taste and preferences and realizing higher prices with higher sales volumes. The milk and dairy products segment is set for up gradation of cold-storage chains for expansion. Mother Dairy, a wholly owned subsidiary of National Dairy Development Board plans to make strong presence in the market of milk and milk products under the Mother Dairy brand through retail outlets across the country in addition to its own 300 outlets with provision of cold storage and cold chains. North India is one of the most important markets for ghee since it accounts for 45 per cent of the country's ghee


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market. There are different taxes and duties by both the Central and State Governments. Some procedural issues including amendment of Milk & Milk Products Order (MMPO) of the Government of India need to be reviewed for bringing viability in the production of milk and milk products. For tapping the opportunities and potentials, some initiatives and steps are required to be taken for technology improvement, automation and computerization in the manufacturing processes, quality control, improvement of packaging to improve shelf life of products, investment in R & D to develop new products and for establishing an efficient cold chain system. With the growing awareness about health products in the minds of consumers, increasing urbanization, rising standards of living and popularity of convenience foods, the industry is expected to witness strong long-term demand growth potential. BEVERAGES/NON-ALCOHOLIC MALTED FOOD & HEALTH BEVERAGE The Rs. 14.4 bn malted foods market is composed of two segments-brown and white. While the brown drinks are held to be as energy boosters, the white drinks are regarded as milk substitutes. Malted beverages with nutritional attributes control around 70% of the total market and energy drinks (brown beverages) account for the rest. The malted food drink industry is dominated by few players. These include brands such as ' Horlicks, 'Complan' and 'Viva', which are mainly known as white beverages. 'Boost', 'Bournvita', 'Milo' and 'Maltova' on the other hand are classified as brown drink. Smithkline Beecham's 'Horlicks' and 'Boost' dominate the segment with around 65 % of the

market share. Cadbury's Bournvita, Nestle's 'Milo', Hienz's 'Complan' and Amul's 'Nutramul' are the other famous brands of the respective players. The consumption pattern of malted beverages differs according to usage patterns across geographic zones. In the southern and eastern regions white beverages are preferred as substitute for milk. The people in the east prefer for sweetness of taste, the southern region prefers more cocoa based beverages. TEA INDUSTRY The Rs 86 bn Indian tea industry's leaders have launched a number of instant tea drinks for the new-generation consumers. Tea has managed to remain on top despite repeated onslaughts by other beverage segments largely because of its price advantages. India has a vast domestic market. The Industry is estimated to have achieved a production of 878 million kg in 2005 from 820.5 million Kg in 2004 with a growth of about 7 per cent. About 88 per cent of tea grown in India belongs to CTC variety. India generally produces black tea. Black tea can be classified into two groups-Orthodox tea and Crush, Tear and Curl (CTC), a cheaper variety depending on the system of processing the green leaves. Tea plantations in India are concentrated in the NorthEast (Upper Assam, West Bengal) and the South (Kerala, Tamil Nadu). The North-Eastern region with 82% of area accounts for 76% of total tea production. In the North East, the yield is lower but quality of tea is superior. Consumers in different parts of the country have heterogeneous taste. Dust tea is very popular in the south


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and in central India. In the western states, good quality loose tea is preferred in Gujarat, whereas in Maharashtra, consumers provide a large market to packet as well as unbranded tea. The eastern states of West Bengal and Orissa and northern states consume CTC. Tea trading in the domestic market is done in two waysauction and private selling. Bulk trading is done by auction. There are six major auction centers in India The main players in the tea industry are Hindustan Lever, Tata Tea, Williamson Magors, George Williamson, Harrisons Malayalam, Mcleod Russel, Bishnauth Tea, Dhunseri Tea, Warren tea, AFT Industries. These ten companies together account for approximately 75 per cent of the turnover In the packet/branded tea segment Hindustan lever is the leader. The other important players in this segment are Tata tea, Duncans, Goodricks and Jay Shree.The major segment of the market is dominated by the unorganized players. Besides, many local brands have entered the packaged tea segment. There are about 1000 brands of tea in the country and out of which more than 90 % brands are represented by the regional players. Regional brands have increased their market share from about 37 per cent to around 50 per cent. The industry is faced with multi-pronged problems. On the one hand it is plagued by low productivity and lower price realizations and on the other hand the changes in demand due to changing consumer profiles and the threat of imports put pressure on the margins. Some of the basic issues and constraints are: The higher age of tea plants in India compared to tea plants in other tea producing countries has affected the quality and yield.

All tea factories are not capable of manufacturing both CTC and Orthodox tea. Huge investment is required for installation of machinery and equipment to enable the factories to have the facility of dual manufacturing. Another issue confronting the industry is that of differential import duty on bulk and branded tea. The differential duty has led to surge in imports of foreign tea as well as lower quality tea in bulk form. Income tax liability for tea companies is calculated differently. It is deemed that 60% of the pre-tax profits is agricultural income, which is taxable by the states. The remaining 40% is taxable as corporate income by the Centre. This Dual taxation system is hurting the industry badly. Tea Marketing Control Order requires all the manufacturers to sell 75% of tea (excluding exports and packet sales) through auction houses. This industry is very labor intensive. Labor cost is generally fixed and therefore lower production would result in higher unit cost of production. In India, large capital investment, long gestation, stringent labor laws and restrictive land ownership laws prevent Indian entrepreneurs from expanding tea production and business. The Government has also taken some policy measures and incentives for the growth and development of the tea industry. The Government has extended benefit under Section 33 AB of Income Tax Act, whereby profit up to 40 per cent can be ploughed back for these purposes. 100 per cent foreign direct investment (FDI) has been


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allowed in the tea plantation sector with 26 per cent divestment over 5 years Replanting and modernization are very essential for maintaining the quality and productivity of tea bushes. There has been a trend towards consolidation of the existing tea plantations. Smaller players are being bought over by larger estates or global consumer goods majors, as in the case of Unilever Plc. buying over Rossell Industries. The purchase by Tata Tea of UK-based Tetley's tea is a move towards consolidation among the global tea majors. The industry plans to access the market with innovative beverages such as "herbal tea" and "iced tea" for the modern consumer combined with an advertisement orientation. The PepsiLipton alliance to launch iced tea and cold coffee is an initiative in this direction.. Apart from improving realizations the tea companies are also making strategies to attract new consumers (especially the younger generation) ALCOHOLIC BEVERAGES Alcoholic beverages is growing industry in India. The alcoholic beverages industry in India is generally divided into two main categories-Industrial Alcohol and Potable Alcohol. Potable Alcohol segment comprises some categories as Beer, Country Liquor, Indian Made Foreign Liquor (IMFL) and wine. IFML primarily comprises wine, vodka, gin, whisky, rum and brandy. The Indian beer market has reached about 94 million cases or 7.3 lakh kilolitre (one case is 12 bottles each of 650 ml) in the financial year, 2004-05 and is expected to reach 100 million cases in 2005-06. The price stability throughout the year has contributed to the increase in domestic liquor sales. The Northern region has contributed significantly as Rajasthan has regularized

sales in the state with the formation of a distribution corporation similar to Karnataka. Flavoured low alcohol beverage with new variants like the 330 ml beer pack have driven sales growth across the country. United Breweries Ltd, Shaw Wallace, MC Dowell & Co Ltd (part of the UB Group) Radico Khaitan, Mohan Meakins, Sula Vineyards, Mount Shivalik, Seagram India Ltd are among the familiar names in the alcoholic beverage industry in the country. UB accounts for nearly 40 per cent of total domestic beer sales and controls close to 50 per cent of the brewing capacity. United Breweries (UB) Ltd, and Millennium Alcobev Ltd (MABL), a three-way joint venture with UK's Scottish & Newcastle (S&N) and UB group, now manage almost half of the beer sales in the world's second most populous market. Strong beer, which has 5 percent of alcohol content, outsells mild beer in India and accounts for more than 68 % of the total sales. Indian Made Foreign Liquor Market is estimated to be 105 million cases in 2004-05. Country Liquor Market is estimated to be 175 million cases. Mount Shivalik Group, has pioneered the concept of the Super Strong segment in India. UB group has its eye open on entering the branded country liquor business. Radico Khaitan has established its presence significantly.The UB Group Spirits Division also controls about 35% market share. It has developed about 66 brands with different flavours (Whisky, Rum, Brandy, Gin, Vodka, Wines). Another significant player in the domestic spirits market is Seagram India which has launched a premium Vodka brand.


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The Indian wine market, estimated at 5 lakh cases annually, has witnessed robust 30% growth over the past few years. This includes about 3 lakh cases of quality wine produced by emerging domestic wine companies like Indage, Sula and Grover's.The domestic production is having a growth of about 20 per cent Champagne Indage Ltd., Asia's biggest wine producer and the largest indigenous wine maker in India, is in the process of taking its niche red and white wine to mass market by breaking price barrier besides entering into beer market and acquiring a vineyard in Maharashtra. Brewers in India are gearing up for the consolidation wave sweeping the global beer industry. Several Indian brands have made inroads into the foreign markets including British market. The domestic alcoholic beverages industry is plagued with some basic issues and constraints. The basic issues relate to distribution, mobility, labeling laws and duty structure. Distribution schemes vary between states. Free market system practiced in Mumbai while Government operated system is followed in Delhi. The auction system is operational in Haryana and Madhya Pradesh. Lack of uniformity in sales tax rates and other charges by different state governments is an important deterrent. Each state has a different tax structure and levies and other regulations regarding licensing fees and sales of new brands. Different states have different labeling laws that leads to wastage, delay and higher cost of production. Besides heavy financial implications on them, they cannot transport their products from a market that has excess capacity to one where there is a short supply. Treating beer to the same level of taxing as on hard liquor is unjustified since the alcohol content in beer is very low. Beer should be delinked from IMFL.

The liquor output should be brought under the purview of the value added tax (V AT) in all States. However, the V AT should comply with the principle of revenue neutrality rather than a revenue enhancing measures. According to All India Distillers' Association, there is the need for a review of the ban imposed in the year 1975 on the expansion of capacity for production of alcoholic beverages As the quantitative restrictions on the import of alcoholic beverages has been removed on 1st April 2001, there is no justification for the ban on expansion of domestic capacity by the domestic industry. Increase in the price of molasses, essential raw materials for production of alcoholic beverages due to shortage and inadequate availability, has affected production adversely. The Indian Liquor market is expected to grow at about 10 per cent in volume terms. The premium segment is expected to grow by 20 % and the cheap segment is expected to grow by 7-8 percent.. Edible Oil The growth of the Rs. 250 bn edible oil industry in India has been somewhat stagnant at around 5% per annum. The market for edible/vegetable oils is estimated to be 10.4 million tones in 2004-05 including domestic production of about 6 million tons. Nine major oilseeds contribute three-fourths of the total oil availability in the country, including those for industrial use. The country resorts to sizable amount of import to bridge the gap between domestic availability and to stabilise prices of edible oil, an essential commodity. Oilseeds have support price mechanisms to help the farmers. NDDB has emerged as a major player in the sector with its "Dhara" brand of edible oil. Even small growers and cooperatives having crushing units or solvent extraction units


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have started branding their products. As the urban consumers are increasingly becoming health conscious and looking out for low-cholesterol cooking medium, branded products have come to play a major role. Players like ITC, Marico, Hindustan Lever, etc., in the private sector, and NDDB, in the co-operative sector, have made strongholds the urban market in various oil segments. In Edible oils, National Dairy Development Board (Anand), ITC Agro-Tech (Secunderabad), Marico Industries (Mumbai), Ahmed Mills, (Mumbai) are the major players. In vanaspati, Hindustan Lever (Mumbai), Wipro (Bangalore),Rasoi (Calcutta), Avi Industries (Mumbai are the major players. The major oil brands are Sundrop, Dhara, Saffola, Sweekar and Postman. The major vanaspati brands are Dalda, Rath. The main issues in the edible oil segment is the rising cost of raw materials. Raw material cost account for 70 per cent of sale price. Free imports, low import duties and slump in global prices lead to `dumping'. Indian Sugar Industry India's sugar industry is amongst the largest agroprocessing industries of the country with an annual turnover of Rs 200 billion. But the industry is recently facing a setback in production. Because of devastating drought, delayed payments to farmers, inadequate availability of cane and some other reasons production came down to 13.5 million tones in 200304 and 12.7 million tons in 2004-05. The production of sugarcane is cyclical in nature. Hence the sugar production is also cyclical as it depends on the sugarcane production in the country.

As Indian sugar industry uses sugar cane as the only input, the sugar industries have sprung up in large sugar cane growing states like Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Punjab, Gujarat, Andhra Pradesh, West Bengal. Uttar Pradesh and Maharashtra are the leading sugar producing states of the country. Of the total 564 sugar mills across the country, more than 144 are remaining closed during the season bringing down sugar production. Indian sugar industry is highly fragmented with organized and unorganized players. The farmers co-operatives own and operate the bulk of sugar industry's total capacity. Of the total 450 mills operating in the country, about 252 are in the cooperative sector. The leading players in Indian sugar industry are Balrampur Chini Mills Ltd, Bajaj Hindustan Ltd, Andhra Sugars Ltd, Thiru Arooran Sugars Ltd and, Dhampur Sugar Ltd. The players are consolidating their position to increase their market share either by acquiring smaller mills or by going for green field capacity additions. Besides the Indian urban market is slowly moving towards branded sugar. The Indian sugar industry is faced with some problems. Sugar is a controlled commodity in India under the Essential commodities Act, 1955. The Government controls sugar capacity additions through industrial licensing, determines the price of the major input sugarcane, decides the quantity that can be sold in the open market, fixes the prices of the levy quota sugar and determines maximum stock levels for wholesalers etc. Dual Pricing System is adopted in the Indian sugar industry, which includes sugar price in Public distribution system and the free sale sugar price. As represented by Indian Sugar Mills Association (ISMA), the industry suffers


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from lack of a uniform pricing system. Inadequate sugar cane availability, uneconomical size, old age, bad condition of plant and machinery are some of the reasons responsible for closure of many mills in the country, There is a shortfall in cash credit limit for sugar industry by banks to the extent of 40% of requirement, according to Indian Sugar Mills Association (ISMA). The Central and state governments have announced measures for the development of the industry. Central Government has also provided inland transport subsidy for sugar export. Maharashtra state government has provided subsidy of Rs 1000/-for every ton exported from the state. Government has outlined some measures involving banks and state governments to hike cash credit limit for the sugar factories. The measures also include special attention to sugar by expediting special relief package for the sugar industry and reshaping the terms of credit by including either a one year moratorium on loan repayment or soft loan package for state governments meant to clear arrears to cane farmers.

As part of the implementation of the World Health Organization (WHO) Global Strategy on Diet, Physical Activity and Health (DPAS), and in preparation for the WHO European Region Ministerial Conference on Counteracting Obesity, WHO organized a Forum and Technical Meeting on the at the Lysebu Conference Hotel in Oslo, Norway, from 2 to 5 May 2006. The Norwegian Directorate for Health and Social Affairs kindly supported both the Forum and the Technical Meeting. The objectives of the Forum were to review the current state of knowledge regarding the influence of marketing, including advertising, of foods and nonalcoholic beverages on children's dietary choices; to discuss the implications of this influence on children's nutritional status; and to review national experiences and actions taken by various stakeholders to address the issue. Participants included academics, technical staff from ministries of health and representatives from different stakeholder groups. They discussed the evidence of the impact of marketing on children's diets; the changes that have taken place in statutory regulation and self-regulation between 2004 and 2006; different methods of categorizing


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foods according to their nutritional composition; and the experiences of countries with either statutory or selfregulatory processes in place. Details of the presentations and the conclusions of the Forum are outlined in part 3 of this report. Having considered the information presented during the Forum, the Technical Meeting participants discussed possible measures that could be taken by WHO and national governments to limit the adverse impact of marketing on children's health. The participants at the Technical Meeting agreed that marketing should be defined in accordance with the definitions of the American Marketing Association and that all forms of commercial promotion should be considered as part of the scope of any action. "Promotion to children" was agreed to include both promotion that is deliberately targeted to children and scheduled to reach them and promotion that is targeted at other groups but to which children are widely exposed. "Children" was agreed to mean all persons aged under 18 years, following the United Nations Convention on the Rights of the Child, but it was recognized that children under the age of about 13 years are more vulnerable and may therefore require more stringent protections. The participants also agreed that exposure to the commercial promotion of energy-dense, micronutrient-poor foods and beverages1 can adversely affect children's nutritional status. Meeting participants recommended that WHO should: (i) support national action to protect children from marketing by substantially reducing the volume and impact of commercial promotion of energy-dense, micronutrient-poor foods and beverages to children;

(ii) address issues such as cross-border television advertising and global promotional activities; and, (iii) consider the development of an international code on the marketing of food and beverages to children. The recommendations from the Technical Meeting are detailed in part 4 of this report. The Technical Meeting was one element of an ongoing process of evidencegathering, review and discussion with a wide range of stakeholders. This meeting and others will serve to inform WHO's future work on this issue. INTRODUCTION Chronic, noncommunicable diseases (NCDs)-including cardiovascular disease, diabetes, cancers and other obesityrelated conditions-constituted 60% of global deaths and almost half of the global burden of disease in 2005. In response to this disease burden, the Fifty-fifth World Health Assembly in May 2002 called on WHO to develop a global strategy on diet, physical activity and health in resolution WHA55.23. The development of this strategy involved consultations with Member States in all WHO Regions, other United Nations organizations, other intergovernmental bodies, and representatives of civil society and the private sector. Advice was also provided by a reference group of independent international experts. Marketing of foods to children was often mentioned during these consultations as an important topic requiring action. In addition, the Report of a Joint WHO/FAO Expert Consultation Diet, nutrition and the prevention of chronic diseases, launched in April 2003, notes that there are limits to what individual countries can do alone to promote optimal diets and healthy living. It states that: Strategies need to draw substantially on existing


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international standards that provide a reference in international trade. Member States may wish to see additional international standards that address, for example, the marketing of unhealthy food (particularly those high in energy, saturated fat, salt and free sugars, and poor in essential nutrients) to children across national boundaries. The WHO Global Strategy on Diet, Physical Activity and Health (DPAS), together with the resolution by which it was endorsed, was formally adopted by the Fifty-seventh World Health Assembly in May 2004. The strategy recognizes the heavy and growing burden of NCDs and addresses two of the main risk factors for NCDs-diet and physical activity. The goal of the strategy is to promote and protect health by guiding the development of an enabling environment for sustainable actions at individual, community, national and global levels which, when taken together, will lead to reduced disease and death rates related to unhealthy diet and physical inactivity. DPAS specifically points to the responsibility of Member States to formulate and promote national policies, strategies and action plans to improve diet and encourage physical activity and recommends that governments should provide accurate and balanced information to consumers. In this context, the strategy highlights the fact that food advertising affects food choices and influences dietary habits. It specifies that food and beverage advertisements should not exploit children's inexperience or credulity. Messages that encourage unhealthy dietary practices or physical inactivity should be discouraged, and positive, healthy messages encouraged. DPAS states that governments should work with consumer groups and the private sector (including advertising) to develop appropriate multisectoral approaches to deal with the marketing of food to children, and to deal with such issues as sponsorship, promotion and

advertising. The strategy also notes that the private sector can be a significant player in promoting healthy diets and physical activity. At the time that DPAS was adopted, WHO published a report on the global regulatory environment related to the marketing of food and non-alcoholic beverages to children. The report concluded that, while many countries have a range of regulations applicable to the marketing of food to children in place, there were gaps and variations in the existing global regulatory environment, and enforcement of regulations varies considerably between countries. An updated version of the report was presented as a background paper at the WHO Forum and Technical Meeting on the marketing of food and non-alcoholic beverages to children. In June 2005, a WHO Expert Meeting on Childhood Obesity was held in Kobe, Japan, which reviewed major contributing factors to childhood overweight and obesity; the assessment issues for identifying overweight and obesity among school-age children and adolescents; and the existing intervention programmes, their impacts on preventing childhood obesity, and lessons learnt. Outcomes of the Expert Meeting included various issues related to assessment and monitoring of the growth of school-age children and adolescents and effective strategies to prevent childhood obesity, in particular in school settings, as well as possible measures to ensure that the marketing and promotion of food and non-alcoholic beverages to children are consistent with the achievement of a "healthy" diet. Lastly, it is noted that work aimed to limit the adverse impact of marketing on children's health is in accordance with the rights of children for protection as acknowledged by the United Nations Convention on the Rights of the Child, the right to adequate food, as set out in the International Covenant on Economic, Social and Cultural


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Rights, and consistent with the United Nations guidelines for consumer protection. Following these developments and as part of the implementation of DPAS, WHO headquarters, in collaboration with the WHO Regional Office for Europe, organized a Forum and Technical Meeting in Oslo, Norway, from 2 to 5 May 2006 on the marketing of food and nonalcoholic beverages to children. For the first two days representatives from health and consumer nongovernmental organizations, private food and advertising industry trade associations, academics, technical staff from ministries of health, and representatives of organizations of the United Nations system, the International Food Policy Research Institute and the European Commission met at the Forum to review and discuss the current state of knowledge regarding the influence of marketing and various national experiences of how the issue can be addressed. On the two following days, academics, technical staff from ministries of health, and representatives of organizations of the United Nations system, the International Food Policy Research Institute and the European Commission met for a Technical Meeting to suggest possible measures to be taken. The Norwegian Directorate for Health and Social Affairs generously supported the convening of the meetings. This is the combined report of the WHO Forum and Technical Meeting on the. The report outlines the purpose of the meetings, summarizes the discussions that took place in the Forum, and details the conclusions and recommendations from the Technical Meeting that followed. The structure of this report follows the structure of the meetings. The report from the Forum and the recommendations of the Technical Meeting to WHO will serve to inform WHO's future global work in the area of marketing food and non-

alcoholic beverages to children and, with other background documents and the European Charter on Counteracting Obesity, will feed into the WHO European Region Ministerial Conference on Counteracting Obesity in November 2006. DEFINITION OF REGULATION For the purpose of the Forum, the Technical Meeting and this report, the definition of regulation was taken from Hawkes as follows: Regulation is "broadly defined as any law, statute, guideline or code of practice issued by any level of government or self-regulatory organization (SRO). Regulations can be divided into three categories: o statutory regulations o non-statutory government guidelines o self-regulations Statutory regulations are either texts enshrined in laws or statutes, or rules designed to fill in the details of the broad concepts mandated by legislation. The development, promulgation and enforcement of statutory regulations are the responsibility of government or a mandated body. Self-regulations are put into place by a self-regulatory system whereby industry actively participates in, and is responsible for, its own regulation. Led, funded and administered by the industries concerned, self-regulation normally consists of two basic elements. The first, a code of practice-a set of ethically-based guidelines-governing the content of marketing campaigns, and the second, a process for the establishment, review and application of the code of practice. This process can be structured in many different ways, but typically involves an SRO set up by the advertising and media industries, and in many cases also involving the companies that use advertising to promote their products or


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services. Self-regulation may be mandated by government framework legislation, but can also exist completely independently of government regulation." In some cases voluntary codes are developed by individual companies-these are not the same as selfregulation but should still be considered for their potential impact on marketing. OPENING SESSION The meeting was opened by Professor Knut-Inge Klepp, Chair of the Norwegian National Council for Nutrition, who introduced the speakers. The Norwegian State Secretary for Health, Ms Rigmor Aasrud, welcomed everyone to Norway. She highlighted the active involvement of Norway in the development of the WHO Global Strategy on Diet, Physical Activity and Health and expressed support for the multisectoral approach. In Norway, an action plan on physical activity was launched in December 2004, and an action plan on promoting a "healthy" diet, which will discuss possible restrictions on marketing to children, will be finalized in late 2006. An intersectoral strategy to tackle inequalities in health is also being developed. In the context of improving labelling, the Norwegian health authorities are now also considering whether or not symbols, similar to the Swedish keyhole symbol, should be introduced as a government initiative. Norway would support the development of such a system at a European level. Ms Aasrud urged the WHO Secretariat to continue its efforts to promote and coordinate implementation of DPAS. She said she looked forward to seeing the results of the meeting and highlighted the 2006 World Health Assembly as an opportunity to give further attention to the issue of marketing to children. The Director General of the Norwegian Directorate for Health and Social Affairs, Bjrn-Inge Larsen, said he

welcomed the opportunity to examine-together with the leading experts in the field-the different aspects of marketing food and beverages to children. He highlighted the WHO Child Growth Standards launched in late April 2006 in Geneva, Switzerland, as a key tool for the prevention and early recognition of childhood obesity. Mr Larsen pointed out that Norway has a long history of nutrition policy going back to the formulation of an integrated Food and Nutrition Policy proposed by the Government and endorsed by Parliament in 1976. He said that the current major challenges are increasing fruit and vegetable intake, addressing the sharp increase in sugar consumption among children and adolescents and tackling overweight and obesity. To prevent the development of an obesity epidemic, Norway regards preventive measures as very important, including possible restrictions on the marketing of energydense, nutrient-poor foods to children. Mr Larsen said the Norwegian authorities should be a driving force in creating common international regulations in this area and welcomed the WHO initiative. Norway has a long tradition of using tax and marketing restrictions in the field of tobacco and alcohol and Mr Larsen felt that now the time had come to consider such measures in other areas of public health. Dr Denise Coitinho, Director of the WHO Department of Nutrition for Development and Health, then welcomed participants to the meeting on behalf of WHO headquarters. She pointed out the importance of taking further steps in the implementation of DPAS based on the growing problem of child obesity worldwide. She described the meeting as an important response to the challenges set out in DPAS, and said that the International Code of Marketing of Breast-milk Substitutes could provide guidance to the discussions in this meeting.


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Dr Francesco Branca, Regional Adviser for Nutrition and Food Security, welcomed everyone on behalf of the WHO Regional Office for Europe. He highlighted relevant initiatives at the European Regional level and, in particular, the WHO Ministerial Conference on Counteracting Obesity, which will take place in Istanbul in November 2006. This Conference is expected to adopt a European Charter on Counteracting Obesity and to provide feedback on a draft second European Food and Health Action Plan. Dr Branca said that the WHO Forum and Technical Meeting were important parts of the preparatory process for the Ministerial Conference and subsequent European Charter and Action Plan. The objectives of the Forum and the Technical Meeting were described by Dr Colin Tukuitonga, Coordinator of the WHO Surveillance and Population Based Prevention Unit in the Department of Chronic Diseases and Health Promotion at WHO headquarters. Objectives of the Forum To review the current state of knowledge regarding the influences of marketing, including advertising, of foods and non-alcoholic beverages on children's dietary choices. To discuss the implications of this influence. To discuss national experiences and actions taken by various stakeholders to address the issue. Objectives of the Technical Meeting To summarize and complete the discussions and evidence presented at the Forum on the current state of knowledge regarding the influences of marketing on dietary choices.

To provide guidance for various actors and stakeholders on how to manage and limit the negative influences of marketing and advertising of foods and non-alcoholic beverages on children's dietary choices, while encouraging the promotion of healthier food and beverage options. To indicate elements to be included in future guidelines. WHO FORUM The Forum was attended by representatives of a wide variety of stakeholders, including representatives of health and consumer nongovernmental organizations, private food and advertising industry trade associations, academics, technical staff from ministries of health, and representatives of organizations of the United Nations system, the International Food Policy Research Institute and the European Commission. The following summaries of the speakers' presentations are based on the presentations given at the Forum supplemented by abstracts provided by the speakers. Marketing Foods to Children This first session examined different perspectives on marketing of food and non-alcoholic beverages to children. The session comprised an overview of the nature of food marketing and the need for change, a review of the evidence of the effect of food advertising on children, and an assessment of the changes in statutory regulation and self-regulation of food marketing to children since the last review in 2004.

Food Marketing and Children: Setting a Course for Change

The marketing of food to children accomplishes what industry intends.


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Cultivated as consumers at very early ages, children are trained to desire foods and beverages whose typical consumption may compromise health. Science on the topic is abundant and converges on unambiguous conclusions, namely that such marketing to children increases: consumption preference for energy-dense, low-nutrient foods and beverages purchase requests purchases positive beliefs about food and beverage products. Swift and aggressive action should be taken to address food marketing (and the other proven contributors to poor diets) if there is to be any hope of curtailing poor nutrition and obesity in children. This requires anticipating industry manoeuvres that could undermine public health mandates for promotion of foods such as fruits and vegetables; noting that traditional advertising on television, radio, and billboards is merely a fraction of total marketing (hence all forms of marketing must be included); and taking a creative approach to limiting damaging practices. Industry activities, such as the promotion of physical activity and marketing self-regulation do not adequately address the problem and can be a diversion, possibly doing more harm than good by forestalling legislation and litigation. Considerable talent resides in the food industry and in the marketing and lobbying industries which support it. Harnessing this human capital for good is possible but will only occur in response to government action or public outrage. Public opinion polls show substantial support for regulation to curtail food marketing aimed at children. The convergence

of science and public opinion makes the present an ideal time to act decisively. A creative approach to the problem is needed. One way may be to set the industry a target-for example a 25% reduction in children's consumption of certain types of food-and leave the industry free to decide how it will achieve the target. The Extent, Nature and Effects of Food Promotion to Children: A Review of the Evidence A recent systematic review of the extent and nature of food promotion to children, and its effects on their food knowledge, preferences and behaviour, focused on the following questions: What is the extent and nature of food promotion to children? What are the effects of food promotion on children's food knowledge, preferences and behaviour? The findings in relation to the extent and nature of food promotion were that: Food dominates advertising to children. Five product categories dominate this advertising (soft drinks, presugared cereals, confectionary, snacks and fast food restaurants). The advertised diet contrasts dramatically with the recommended diet. Children engage with and enjoy this "unhealthy" advertising. The findings in relation to the effects were that: Food promotion influences children's nutritional knowledge, food preferences, purchasing and purchase-related behaviour, consumption, and diet and health status.


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The extent of the influence is difficult to determine (though advertising is independent of other factors). Food promotion affects both total category sales and brand switching. While the more complex studies have all been undertaken in developed countries, the review shows that children respond to advertising in much the same way regardless of their country's place on the development ladder. In fact, there is reason to believe that children in developing countries may be even more vulnerable to food promotion because: They are less familiar with advertising. They are a key entry point for developed country firms because they are more flexible and responsive than their parents. They associate developed country brands with desirable attributes of life. Consideration should therefore be given to how infrastructure can be developed so that countries have adequate complaints procedures and mechanisms for enforcing and monitoring either legislation or self-regulatory activities. The review is likely to understate the problem. The evidence base focuses on television advertising, with relatively little attention given to other forms of advertising, and several indirect effects of marketing are not considered. The review concludes that food marketing affects children's food behaviour in a negative way and therefore global action is needed on the marketing of food to children. Changes in the Global Regulatory Environment In May 2004, WHO's DPAS called on governments, private industry, and consumer groups to take action against marketing messages that promote unhealthy dietary practices.

A review based on a systematic research strategy was recently carried out to investigate changes that have occurred in the regulatory environment around food marketing to children since then. Although some changes have occurred, from a global perspective there has been more talk about regulation than action to implement regulations. It appears that this heightened level of discussion and action has been directly and indirectly stimulated by DPAS and as a result there are now increasing numbers of ideas and proposals on how food marketing to children can be regulated. Countries can draw on these experiences as a means of informing the development of regulation appropriate to their national contexts. Six key trends are discernible: The development of self-regulatory codes by the advertising and food industry. Industry has been proactively developing self-regulatory processes. Since 2004, 10 countries have developed or revised selfregulatory codes on food-almost a 100% increase. However, the activity has been largely limited to Australasia, Europe and North America. The industry has also been lobbying aggressively against any legislative proposals to restrict food marketing to children. Slower development of statutory regulation by some governments, despite strong advocacy by public health and consumer groups. Some governments have taken action to address food marketing to children; they have supported developments in self-regulation and discussed options for statutory regulation, although there has been little real change in statutory regulation. Consumer groups remain firmly in favour of statutory restrictions. In different parts of the world consumer groups have stepped up campaigns calling for statutory regulation on all forms of marketing and have


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produced numerous reports indicating that the marketing of energy-dense, nutrient-poor foods is continuing and intensifying. A concentration of activity in high-income countries. There is relatively little action to restrict marketing in middle-and low-income countries, despite the fact that it is in these countries where advertising and promotional activities are growing faster and potentially have a greater impact. A continued focus on television advertising. Most of the discussions about regulation have focused on television advertising and in schools. However, since 2004, increased awareness and attention has been paid to other promotional techniques. The continued growth of traditional and/or nontraditional advertising techniques. This is true for all countries, but particularly for middle-and low-income countries, and is partly stimulated by the liberalization of advertising services markets. More attention is now paid to monitoring and enforcement. This includes both existing and new regulations. However, monitoring is still inadequate in terms of measuring the impact of regulations on the quantity and quality of food promotion and on children's food choices and diets. In order to move forward, the goals of regulation need to be clarified in relation to whether we are aiming for: responsible marketing to children (quality); reduced amount of food marketing experienced by children (quantity);or improved food choices made by children and their parents (outcome).

It is also important that the level and type of evidence needed to support t development of regulations is clarified and targets are set to evaluate the impa of regulations as and when they are implemented. Categorizing Foods according to their Nutritional Composition For a long time food has been categorized in various ways to show what should be eaten more of and what should be eaten less of. However, different stakeholders often use different criteria when categorizing foods to identify which are the healthier options on offer. Nutrient profiling refers to a range of different mechanisms for classifying foods according to their nutritional value-varying from a simple definition of "low fat" being less than 3 g to the much more complicated nutrient profiling model recommended to inform the restrictions on advertising to children in the United Kingdom. Nutrient profiling can be defined as "the science of categorizing foods according to their nutritional composition". It can be used to communicate effectively with consumers the nutritional implications of their purchasing decisions. There are a number of reasons why it might be important to distinguish between "unhealthy" and "healthy" food, including: improving the comprehensibility of nutrition labelling regulating nutrition and health claims compositional standards for foods reforming taxation/subsidy systems regulating the marketing of foods (to children). This session considered different nutrient profiling methods under development and their potential usages.


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Nutrient Kingdom





The marketing of foods to children is generally held to be beneficial if the foods marketed contribute towards a "healthy" diet and conversely is held to be harmful if the foods marketed do not. Therefore, there needs to be clarity about which foods contribute towards a "healthy" diet and which do not. Clarity is also crucial when seeking to regulate the marketing of food to children, e.g. when drawing up rules or guidelines on which foods should be allowed in vending machines in schools, or which foods should be allowed to be advertised to children on television. Manufacturers already use different forms of nutrient profiling systems to justify their marketing strategies. A uniform system would help consumers make their choice. A systematic, staged approach to developing nutrient profiling involves generating a variety of different "nutrient profile models" and testing the different models to assess which is most suitable using different validation methods. A nutrient profiling model has been developed by the United Kingdom Food Standards Agency as a tool for categorizing foods on the basis of their nutrient content. The agency's nutrient profiling model uses a simple scoring system to rate the overall balance of nutrients in a food. It identifies foods high in fat, salt or sugar while recognizing the important contribution of fruit, vegetables, cereal, meat and dairybased products to a balanced diet. The model was delivered to the Office of Communications (Ofcom), the independent regulator and competition authority for the United Kingdom communications industry, on 6 December 2005, to help tighten controls on the advertising to children of foods high in saturated fat, salt or sugar. The

approach was tested on food sold in the United Kingdom and therefore may not be relevant for other countries. The global applicability of nutrient profiling systems may require further work to allow for a broad range of food products, and they may need to be adapted in the context of local foodbased dietary guidelines. Comparisons of Different Systems of Nutrient Profiling-merits and Limitations Growing concern about food-related diseases-such as childhood obesity-has led to increased interest in nutrient profiling. Nutrient profiling systems aim to categorize foods according to their nutritional composition while also taking into account current objectives of nutrition policies. When developing a nutrient profiling system, a series of practical questions arise, including: Which nutrients should be examined? Should we consider specific food categories or take a more general approach? Other technical questions should also be considered, such as: What is the reference basis e.g. should foods be compared on a 100-g, 100-kcal, or portion basis? Which mathematical model should be followedthreshold, scoring or continuous? How should the final result be presented? An overview of existing nutrient profiling schemes illustrates how technical matters may influence the final result. Indeed, when comparing how different systems rank the same foods, consistency is often relatively weak-this may be shown using a list of 125 food items ranked by four different systems. In addition, practical objectives have often driven the methodological decisions and-while this might


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seem a pragmatic approach-this usually produces systems which are only fit for a unique purpose and that are not easily adaptable. For instance, while some nutrient profiling schemes take into account both "negative" and "positive" nutrients, others are only concerned with the negative properties of food. There are also systems that include whole food groups-such as fruits and vegetables-in addition to several nutrients such as fat, sugar, sodium, fibre, vitamins, minerals and protein. A validation step to compare systems is clearly needed. Validation methods which have been proposed but are not yet operational include comparison with expert opinion and more science-based procedures. If the primary goal of the nutrient profiling systems is to improve the nutritional quality of the diet, then we need to consider how they can be used, not only in relation to the marketing of foods to children and to determining foods eligible for health claims, but also for food and nutritional labelling, consumer education, and industry research and development. The variety of systems in place today-and their relative incompatibility-may be very confusing for all stakeholders, including consumers. Work is currently under way to develop innovative and science-based systems focused on improving the quality of the diet. However, even the perfect nutrient profiling system will remain a technical tool used to inform decisions that have to be taken and implemented in a political context. The keyhole label is a simple, positive label used to help consumers make "healthy" food choices. The label was introduced during the 1980s as part of a regional intervention project in northern Sweden to reduce the prevalence of coronary heart disease. Today the symbol is used nationally on a voluntary basis, and is free of charge to the user. The

criteria for labelling are set by the National Food Administration. The symbol combines two elements-the food circle and the food pyramid. When the symbol appears on a package it guarantees that the product has a low amount of all of the following ingredients: total fat saturated fatty acids trans fatty acids added sugars salt as sodium and/or that the product has a high amount of fibre The keyhole label is a relative, not an absolute, scheme, indicating nutritionally better options within a category. The criteria are based on the products that are on the market today and the scheme should be regarded as ongoing and dynamic where the criteria will change over time. One of its main purposes is to serve as an incentive to the food industry to reformulate products to make them more "healthy". The keyhole labelling scheme is a positive labelling scheme promoting healthier products. It does not identify energy-dense, nutrient-poor foods and therefore cannot be used to identify those foods for which there should be marketing restrictions. Practical Application of Nutrient Profiles: the Swedish Keyhole System Examples of countries with statutory regulatory or selfregulatory measures to control marketing of foods and non-alcoholic beverages to children. This session examined a number of national approaches to the statutory regulation of marketing of foods to children,


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examples of self-regulatory approaches, and a discussion of the pros and cons of statutory regulation versus selfregulation. Advertising Foods to Children in Norway The Office of the Consumer Ombudsman is an independent authority that monitors marketing activities and negotiates contracts between consumers and business. In addition, the Ombudsman can impose sanctions. A brief survey done by the office showed that a large number of television commercials shown during youth programmes promote "unhealthy" foods-such as chips, sweets and chocolate-while hardly any "healthy" food is advertised. Several laws regulate the marketing of food and beverages to children in Norway today. The Marketing Control Act is the general regulation for all marketing activities supervised by the Consumer Ombudsman. This Act states that marketing activities should not be in conflict with good marketing practice or otherwise unfair on consumers and that marketing should not be misleading or incorrect. The Office of the Consumer Ombudsman has handled several cases of misleading or incorrect marketing practice, most of which have been initiated by consumers. There is no overall self-regulatory framework to address food marketing aimed at children in Norway. Several companies claim to have internal guidelines, but do not promote them. No initiatives have been taken by trade associations to establish a self-regulatory framework. Several additional measures must be taken in the future combining selfregulatory measures, corporate social responsibility and legislation. Education and information is essential and schools must play an important role in this. Suggested measures to address marketing aimed at children include:

legislation prohibiting advertising of food and beverages in schools the introduction of labelling systems warning systems (such as on tobacco products) campaigns for "healthy eating" in schools negotiating guidelines with business additional legislation after five years if advertising has not been reduced. In Brazil, there is currently no specific legal regulation on food marketing to children. However, several initiatives are being developed: The State of So Paulo Congress passed a law in February 2005 creating a public policy to prevent obesity. When fully implemented by an Executive Act, this will provide the legal basis on which to restrict marketing to children. The federal health agency is aiming to pass a regulation banning all forms of commercial promotion of products rich in fat, sugar or salt and compelling companies to include a statement about "healthy" eating with every piece of commercial promotion. In 2003, two lawsuits were filed against soft drinks companies based on the Consumer's Defence Code. One case was overruled but in the other it was ruled that the company should stop marketing to children and that it should warn consumers on every soft drink container and in all advertising that excessive sugar consumption may damage health. Other key points made in the presentation included the following: No one will ever be able to establish what constitutes "sufficient evidence" of the influence of marketing on


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children's diet. Thus, delaying action until we have "sufficient evidence" is a trap. We should not convert to a perennial debate what can already be considered a known fact. Measures successfully taken to prevent tobacco and alcohol use should be used as models to control marketing influences. These include counteradvertising, public campaigns, lawsuits, reduction of marketing power and taxation. Controls on marketing should form part of an extensive public policy to combat obesity. The two main obstacles to the adoption of legal measures to control marketing influences are the strong lobby against them and the lack of public support for them due to the limited information available about the magnitude and causes of the public health problem. Nongovernmental organizations and advocates should file lawsuits against companies for abusive campaigns. More emphasis needs to be given to the psychological consequences of obesity, including distress, low selfesteem, social discrimination and stigmatization among children. WHO, because of its impartiality and credibility, has a very important role in providing technical support and guidance for policy-makers around the world, and also in disseminating information and monitoring progress in relation to the regulation of food marketing. Advertising to Children In 1978, the Government of Quebec enacted the Consumer Protection Act, which came into force in 1980. Under this Act, all forms of commercial advertising directed

at children less than 13 years of age are totally prohibited. The regulatory ban on advertising to children is very broad and applies to any goods, including but not limited to food, and to all forms of advertising. Section 248 of the Consumer Protection Act stipulates that "Subject to what is provided in the regulations, no person may make use of commercial advertising directed at persons under 13 years of age". To determine what constitutes an advertisement directed at children, Section 249 of the Act states that "account must be taken of the context of its presentation, and in particular of: (a) the nature and intended purpose of the goods advertised; (b) the manner of presenting such advertisement; and (c) the time and place it is shown". A scale chart is used to assess whether an advertisement is directed to children. Marketing Control Measures in Brazil Elements to define an advertisement directed at children Legislation is enforced by the Consumer Protection Law Enforcement Agency in Quebec. The agency reports directly to the Minister of Justice and has all the necessary investigation and prosecution powers to enforce the law. Although the agency does not have a Clearance Committee; advertising agencies and legal firms consult with it on a regular basis. The compliance with this prohibition is mainly monitored through a complaint filing system and media reports on the issue. The provisions were challenged by the industry as soon as they were enacted. After a long judicial debate, the Supreme Court of Canada ruled in 1989 that although the prohibition constituted a restriction to the freedom of


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expression guaranteed by the Charter of Rights, this limitation is reasonable and justifiable in a free and democratic society mainly because the purpose of the measure is the "protection of a group which is particularly vulnerable to the techniques of seduction and manipulation abundant in advertising". Self-regulatory Code on Advertising of Food Products Aimed at Minors in Spain In February 2005, the Spanish Food Safety Agency launched a Strategy for Nutrition, Physical Activity and Prevention of Obesity (NAOS Strategy), with the goal of promoting a "healthy" diet and physical activity. One of the objectives of the strategy was to develop a framework for collaboration with the food industry to promote the production and distribution of products that contribute to a healthier, more balanced diet. As part of this collaboration, an agreement was signed with the Spanish Federation of Food and Drink Industries to develop a code to regulate advertising and marketing of food and beverages aimed at children. This "Code of Self-Regulation of the Advertising of Food Products Directed at Minors (translation from Spanish)" (PAOS Code) is a big step forward in the regulation of commercial promotion of food. Aiming to reduce the commercial pressure on children to consume disproportionately, the code states that advertising will not exploit the special confidence of children, including through parents, teachers or celebrities. It requires special caution in advertisements directed to children under the age of 12. The PAOS Code explicitly states that celebrities cannot be used by commercial companies to promote food and drink, unless used to "promote healthy eating habits" (or physical exercise) among children. It also

states that since children cannot distinguish clearly between television programmes and advertising, advertisements directed at minors must be clearly distinguished from programmes. As a general rule, food advertising cannot promote "unhealthy" food practices or sedentary lifestyles. No product should appear as a substitute for any of the three main daily meals. As of December 2005, there were a reported 35 signatories to the code, including the Spanish Federation of Food and Drink Industries. Enforcement of the PAOS Code is the responsibility of the Spanish Association for the SelfRegulation of Commercial Communication (Autocontrol) funded by the commercial sector. This self-regulation is in addition to the existing government control mechanisms. Any infractions of the code are assessed by an Autocontrol jury composed of "prestigious persons in the fields of advertising and commercial communication". Companies that infringe the code are fined, with a maximum sanction of 180 000 euros, according to the level of premeditation and unfair competition to other food companies. Funds raised from these fines are used to cover administrative costs and to undertake educational campaigns to promote "healthy" lifestyles. Autocontrol also offers copy advice for advertisers in advance of broadcasting. A separate Monitoring Commission-made up of consumer and industry representatives and chaired by a government official-has also been created to review the operation of the PAOS Code and to propose improvements. Country Perspective: South Africa Concern about childhood obesity and the marketing of food is not currently seen as a real issue in South Africa although increasing local media coverage indicates that the issue is slowly gaining momentum.


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South Africa has a very young population with nearly 50% of the population under the age of 20. The South African advertising industry compares with the best in the world and it employs the full spectrum of techniques in promoting to children. Six out of the 10 main advertisers promote food. Since 1969 the country has opted for a voluntary system of self-regulation based on that in the United Kingdom. The South African Advertising Standards Authority is responsible for the regulation of advertising within this self-regulatory framework. The authority operates with a Code of Advertising Practice, in which provisions for the protection of children are made. The Code stipulates pre-clearance of advertisements. Non-compliance results in sanctions. No consumer complaints relating to food advertising targeting children have been received by the Advertising Standards Authority in the recent years. Academic research on advertising aimed at children is sparse in South Africa, while commercial research is plentiful. Civil society appears to pay little attention to the issue of marketing to children, and it is not a priority on the government's agenda. More support for research and a comprehensive media literacy campaign to introduce and engender healthy scepticism are important parts of the solution to the issue of advertising aimed at children in South Africa. The New Zealand Ministry of Health developed "Healthy Eating Healthy Action" (HEHA) in 2003 and its implementation plan in 2004. The HEHA strategy is an integrated policy framework relating to nutrition, physical activity and obesity which aims to bring about changes in the environment in which New Zealanders live, work and play. It brings together HE (healthy eating) and HA (physical activity).

The HEHA strategy outlines the multiple actions required by multiple players and sets out government expectations for a wide range of other public and private sectors, e.g. local government, transport, education and industry. The Advertising Standards Authority regulates advertising in New Zealand. The complaints board reviews complaints about advertisements that contravene the code of practice in any media and requests withdrawal of advertisements found to be in breach. There has been 100% compliance with rulings to date. The codes regarding children and food have recently been reviewed, largely as a result of initiatives arising from the HEHA strategy. This review has led to significantly strengthened codes linked with the strategy, with Food and Nutrition Guidelines and with the United Nations Convention on the Rights of the Child. The Food Industry Accord, representing marketers, manufacturers and retailers, arose from the HEHA Industry Group, driven by the twin goals of social responsibility and a desire to avoid regulation. The Food Industry Accord is not a partnership with the Ministry of Health, but is an industrydriven body responding to strong imperatives from the Minister of Health to "do more". The accord has been a driver of a number of industry initiatives, including a review of the Advertising Standards Authority's advertising codes. Discussion continues around ways to further strengthen the self-regulatory mechanisms. Experiences from New Zealand At a wider level, a key strategy of HEHA is to mobilize community and intersectoral action around goals to build community ownership, and establish and support an impetus for change. Thus a wide range of projects-at District Health Board, community, school, primary care and local government


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levels-are under way and will be supported by a national social marketing campaign. APPROACHES BY THE PRIVATE SECTOR AND INITIATIVES BY HEALTH AND CONSUMER ORGANIZATIONS Responsible Food and Beverage Marketing Owing to the rising incidence of obesity worldwide, food marketing has come under the spotlight. Despite a lack of agreement on the role of marketing, advertisers have taken action to address societal concerns. Advertisers are investing to strengthen standards and governance structures for responsible marketing. The vision is of standards that operate effectively within a regulatory framework, through participative, accountable and transparent governance structures, and that are enforced effectively. Advertisers have invested heavily in media literacy education for children. For example, the Media Smart programme now operates in over 30% of primary schools in the United Kingdom. The World Federation of Advertisers has made substantial commitments to the EU Platform on Diet, Physical Activity and Health and participates in similar multi-stakeholder platforms in several countries. The federation is also in dialogue with the European Commission and nongovernmental organizations through the EU Advertising Roundtable. The World Federation of Advertisers recognizes that advertising has a modest effect on children's food preferences, but that this effect is small compared to a variety of other factors. Furthermore, the federation does not believe that

the literature provides evidence of a link between advertising and obesity. Obesity is rising worldwide despite a marked decline in food advertising in most mature markets and there seems to be no correlation between obesity levels and marketing regulation. There is a need to address societal concerns, but the policy instruments must be based on a realistic understanding of the food chain and the role of marketing. Marketing is central to the process of increasing the demand for "healthy options"; without marketing there will be no competition, innovation or increased choice. Regulation cannot be effective if it stifles competition or innovation. Marketing standards are a valuable complement to regulation, and are most effective when set at national level, based on specific cultural and socioeconomic sensitivities and needs. Marketing to Children: Threat or Opportunity? A Choice for the Future The title of the Institute of Medicine's report Food marketing to children and youth: threat or opportunity? encapsulates a basic choice to be made by those interested in improving child nutrition and health today-are we going to approach marketing to children primarily as an evil which is to be controlled, or will we harness the power of communication, combining social marketing with commercial marketing, to improve the diets of children? The European food industries have already taken important steps in creating principles of marketing and advertising as the basis for national norms to be used by governments, companies, and industry associations. Some examples of European food industries which have created such principles are the Confederation of the Food and Drink Industries of the EU, the Union of European Beverages Associations, the European Vending Association, as well as the International Chamber of Commerce. However,


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these principles (limits) on marketing are unlikely to achieve the objectives laid out by the Institute of Medicine unless they are a part of an overall communications and marketing effort to promote "healthy" diets. The Institute of Medicine report sets out what needs to be improved in children's diets in the United States-and there is clear relevance for children in Europe and many other countries. While the United States may presently have the most extreme levels of childhood obesity, dietary goals are much the same for European and other countries. Unfortunately, changing behaviour in order to achieve dietary goals has proven to be very difficult. Realistic goals for dietary change need to be established and a collaborative approach, combining the power of commercial and social communication, needs to be devised, in order to achieve those goals. Marketing norms are obviously a part of this, but should be dealt with in the context of a positive plan which has a chance of achieving dietary goals. EASA's member organizations are self-regulatory organizations, advertisers, agencies and media associations. EASA is the single authoritative voice of advertising selfregulation whose mission is to promote responsible advertising through best practice in self-regulation across the EU for the benefit of consumers and business. It also provides information and research, promotes convergence among national self-regulatory systems, and manages cross-border complaints. Self-regulation is based on an agreement of what constitutes responsible behavior. Industry codes are devised at national level by advertisers, agencies and the various forms of media, and national self-regulatory organizations are set up to apply these codes. The advertising industry supports self-regulation financially, morally and practically.

For food advertising, EASA applies its Best Practice Recommendation on Monitoring, based on the International Chamber of Commerce Framework on Responsible Food and Beverage Communications. EASA is currently running a comprehensive 2006 Monitoring Exercise, in which self-regulatory organizations in 14 countries are monitoring all television food advertisements for a three-month period. Based on the results of this exercise, national scoreboards will be developed, detailing compliance rates with the International Chamber of Commerce Framework and national self-regulatory codes. The scoreboards will also show what parts of the codes are most often breached, and by what sector of the industry. An independent auditor will verify the results, which will be presented at the meeting of the European Commission's Platform on Diet and Physical Activity in October 2006. Monitoring Compliance with Food and Nonalcoholic Beverage Marketing Codes There are several reasons for supporting self-regulation: its ability to respond quickly to breaches of codes, its flexibility in a rapidly changing industry and the ease of use for consumers who wish to make a complaint. By applying national self-regulatory codes of advertising practice based on the International Chamber of Commerce codes, and carrying out comprehensive monitoring, industry demonstrates its ability to regulate itself responsibly. Food marketing aimed at children has increased dramatically in the USA over the last two decades. Manufacturers and restaurant chains use aggressive and sophisticated techniques to attract children's attention, manipulate their food choices, and prompt parents to purchase products that are high in fat, sodium and/or sugar. Food marketing works, according to the Institute of Medicine in the USA. The barrage of food marketing by


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industry has created a serious information imbalance where messages to children to eat healthfully are greatly outnumbered by messages from the industry to consume products of low nutritional value. This information imbalance is so great that it cannot be remedied simply by increasing the quantity of nutrition education messages to children. Rather, the problem needs to be remedied by limiting the promotion of foods of low nutritional value. While parents bear much of the responsibility for feeding their children well, government has a role to restrict activities that undermine parental authority, protect children from marketing practices that harm their health, and help make the "healthy" choice the easy choice. This implies an important role for government in the area of food marketing to children. To achieve this objective government authorities should: Set nutrition standards for the kinds of food that can and cannot be promoted to children of different ages; implement restrictions on the marketing and promotion of any foods that fall below these nutrition standards. Unfortunately, the United States government is not seriously pursuing such steps. Instead, it is waiting for major commitments by the food and advertising industries. Such standards, however, have not been achieved through industry-wide self-regulation. In fact, not a single self-regulatory authority in the world has set nutritional standards for the types of foods that can, and cannot, be marketed to children (although some individual food companies such as Kraft have set internal corporate guidelines that they use to restrict the promotion of certain products). Instead, self-regulatory measures merely attempt to prevent the use of misleading or unethical marketing

techniques. This effort does not get to the crux of the information imbalance problem. The United States Department of Health and Human Services and the United States Federal Trade Commission have recommended that the selfregulatory body in the USA, the Children's Advertising Review Unit of the Council of Better Business Bureaus, should consider developing nutritional standards for foods that can be promoted to children. It is too early to tell whether it will take that step. In the absence of legislative measures, consumer organizations in the USA have begun to use the judicial system to push companies to make changes. This effort will continue to be a major focus of these organizations. In addition, consumer organizations will continue to educate the public, to seek federal, state, and local legislation, and to monitor the effectiveness of the self-regulatory process. Food Marketing Works-regulatory Action is Needed Ultimately, the United States Government needs to implement legislation that will limit the marketing of foods of low nutritional value and improve children's diets and health. The Center for Science in the Public Interest urges WHO to draft an international code of food marketing to children to help facilitate progress at the national level. Consumer Concerns and Activities The marketing of foods high in fat, sugar and salt to children undermines efforts to promote good dietary habits and has long been an issue of concern to consumer organizations globally. In 1996 Consumers International published an international survey on television food advertising, and in 2004 the organization published a study on food advertising to children in Asia and the Pacific. The 2005 European Consumers' Organisation's nutrition campaign focused on the need for more responsible marketing


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of foods to children. The scale of the problem of obesity and diet-related disease has become only too apparent in the last few years. Tackling food marketing to children will not alone solve this global epidemic, but it is an important element of the multifaceted approach needed if the "healthy" choice is to become the easy choice. There is clear evidence from academic reviews that food advertising and promotion influences children's food preferences and choices. Research by consumer organizations has highlighted the plethora of methods that can be used to target children-everything from the use of cartoon characters and celebrities on food packaging through to the use of free toys, computer games, web sites and text messaging. While parents have ultimate responsibility for their children's food choices, the way that foods are marketed makes it more difficult for parents to influence their children's choices. Food marketing is increasingly sophisticated and integrated, making it difficult to keep abreast of the messages that children are exposed to. All forms of advertising and promotion of "unhealthy" foods must be tackled. Some companies have recently made announcements that they are adopting a more responsible approach to food marketing to children. However, these approaches have been limited and largely focus on only the youngest children. The problem is global and so is the solution. Strong action in this area by WHO, such as the development of an international code, is needed to ensure that irresponsible marketing practices are no longer tolerated, and that the promotion of foods high in fat, sugar and salt to children stops. The International Baby Food Action Network works to remove obstacles to breastfeeding through the adoption of

independent, transparent and legallyenforceable controls on the marketing of baby food. Public outrage about the harm caused by promotion of breast-milk substitutes paved the way for the development of the International Code of Marketing of Breast-milk Substitutes (the Code) under the leadership of WHO, which bans all promotion of breast-milk substitutes. The Code was adopted by the World Health Assembly in 1981 as a recommendation rather than as a regulation. It is a "minimum requirement" for all Member States to implement "in its entirety" and requires the baby food industry to abide by it "independently of government action". Progress on the Code is reviewed every two years and new resolutions are passed which ensure that it keeps pace with scientific knowledge and developments in marketing. The International Code of Marketing of Breast-milk Substitutes The baby food industry described the Code as "unworkable" at its inception and over the years has issued many weaker versions, condoning harmful practices. The International Baby Food Action Network uses the Code and subsequent relevant World Health Assembly resolutions as a global benchmark for its monitoring, helping governments to identify loopholes and to bring in effective controls. It is the organization's experience that laws-especially those which have a wide scope and include truly independent monitoring and enforcement systems-are a much safer option than a reliance on self-regulation, which is dependent on industry's goodwill. Seventy-five countries now have laws implementing the Code and these are leading to increased breastfeeding rates and reduced sales of substitutes. Countries without such protection are inundated with aggressive promotion which undermines efforts to protect health.


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A key concern is the sponsorship by the food industry of educational materials which blur the boundaries between advertising, marketing and education. The World Health Assembly resolutions on infant feeding contain important safeguards relating to conflicts of interest which clearly define roles for different stakeholders and ensure that the appropriate professionals provide information to parents. Through such sponsorship, companies gain the trust of parents, children and teachers and influence policymakers and reposition themselves in society as providers of "healthy" food. SUMMARY AND CONCLUSIONS OF THE FORUM A summary and some initial conclusions from the meeting were presented. This was followed by a discussion. The following points were made: At present, most commercial promotion targeted at children is for foods high in salt, fat and sugar and there is clear evidence to show that this has a detrimental effect on children's diets. This is shown by the systematic review commissioned by WHO for this meeting and by the Institute of Medicine Report, which also shows that the strongest impact of advertising on children's diet and nutritional status is on those aged 2-11, but does not exclude influences on older children. The purpose of measures to address food promotion is to improve children's diets and thus they should be part of a broader approach to improving diet and health, including measures to tackle the problem of the supply of energy-dense foods and to change consumer behaviour. The impact of any measures on inequalities in health also needs to be considered.

Both statutory and voluntary/self-regulation are currently being considered as responses to the problem of marketing. However, selfregulation alone is not sufficient. In assessing the usefulness of the two options, it is important to think in terms of the public health goal, which is to reduce the volume of marketing to children and to minimize its impact on children's diets. Self-regulation is likely to be more effective if it operates within a legal framework with incentives for change. However, existing self-regulatory approaches aim to ensure that several aspects of marketing promotions (e.g. television advertising) are responsible (i.e. legal, decent, truthful, honest). They do not attempt to address the volume of advertising (or other marketing practices) and they are not being monitored in relation to their effect on children's diets. Clear targets need to be developed at national level and effective mechanisms need to be established for monitoring both statutory and self-regulatory approaches using clear criteria which incorporate frequency and amount of marketing. Any measures should consider all forms of marketing and should anticipate new developments from the industry. Cultural and national situations will influence the decisions about what type of restrictions are appropriate, although there is also a moral issue concerning child protection and children's rights which is relevant to an international approach. Public awareness about the problem also needs to be raised in some countries. A global response is required to address the transnational nature of promotion strategies (e.g. cross-border television advertising). The growth of


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marketing activities in emerging economies and developing countries is of special concern and any attempts to address the problem need to take account of the ability of these countries to implement and enforce the measures. Any fines for breaking codes of practice should take into account the annual turnovers of the businesses involved and should be an adequate disincentive. Maintaining the reputation of a brand might be a sufficient incentive to most companies to avoid breaking the rules. In case of a controversy about the effects of an advertisement, the burden of proof should lie with the advertiser rather than with the person or organization complaining about the advertisement. Independent government agencies should take responsibility for setting clear targets and monitoring progress. Further evidence is needed to determine whether enforcement systems that rely on preclearance are more effective and cost-efficient than systems based on monitoring. The potential for nutrient profiling to support public health professionals, government and industry should be examined further. In addition, consumers need to be provided with reliable and easy-to-understand information about food. The role of the industry in providing information to consumers needs to be considered carefully. There is a vital role for WHO in the protection of child health through the development of guidelines and international standards for marketing to children, and in advocating effective action by governments.

INTRODUCTION The working groups concluded that there is a robust evidence base to support the fact that exposure to the commercial promotion of energy-dense, micronutrientpoor foods and beverages adversely affects children's diets. A large body of literature supports this view, as summarized in the background paper by Hastings et al, as well as the 2006 report of the Institute of Medicine in the United States. The goal of any regulatory action should be to protect children from marketing which adversely affects their diets by substantially reducing the volume and impact of commercial promotion of energy-dense, micronutrientpoor food and beverages to children. Moderate increases in the promotion of better foods are judged to be insufficient. Three forms of rationale for taking action were discussed: (i) evidence of harm; (ii) a precautionary approach; and (iii) protection of the rights of the child-all of which support the need for action.


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Four broad policy options to address the problem of commercial promotion of foods and non-alcoholic beverages to children at national level were discussed and further developed in the meeting recommendations-while acknowledging that implementation would depend on local circumstances. In addition, the need for international action was underlined. The meeting participants agreed to recommend that WHO should develop guidelines to promote and support national action to substantially reduce the volume and impact of commercial promotion of energy-dense, micronutrientpoor food and beverages to children. The participants also agreed that WHO should take the lead in the development of an international code on the commercial promotion of food and beverages to children to address issues such as cross-border television advertising and global promotional activities. RECOMMENDATIONS FROM THE TECHNICAL MEETING The experts gathered in Oslo, on 4-5 May 2006 to attend the Technical Meeting on the, having considered the evidence and experience from countries and different stakeholders, made the following statements and recommendations. Aim The aim is to protect children's health by improving their diets through substantially reducing the volume and impact of commercial promotion of energy-dense, micronutrientpoor food and beverages, a concept that can be further refined by using nutrient profiling. WHO should support national actions to substantially reduce the volume and impact of commercial promotion of energy-dense, micronutrient-poor food and beverages to children; and consider the development of an international code on the marketing of food and beverages to children to

address issues such as cross-border television advertising, and global promotional activities, and to protect children in countries where national action has not been fully implemented. Rationale Diets high in energy, saturated fat, free sugars, salt and low in certain nutrients are putting children at risk of overweight and obesity and other diet-related diseases which are increasing public health problems worldwide. The marketing and advertising of energy-dense, micronutrient-poor foods and beverages to children has been identified as one of the many factors contributing to this in a series of expert consultations. These include the 2002 joint WHO/FAO Expert Consultation on Diet, Nutrition and the Prevention of Chronic Diseases and the 2005 WHO Expert Meeting on Childhood Obesity. The Fifty-seventh World Health Assembly also identified the issue of marketing to children in the 2004 Global Strategy on Diet, Physical Activity and Health. Addressing concerns about the marketing of food and non-alcoholic beverages to children is consistent with the obligations of countries in implementing the United Nations Convention on the Rights of the Child, the International Covenant on Economic, Social, and Cultural Rights and the United Nations guidelines for consumer protection. A strong scientific rationale is available through the robust science and research that links commercial promotion of foods and beverages to poor diets in children. The evidence clearly shows that:


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- there is extensive food and beverage promotion to children; - children are aware of, appreciative of, and engage with this promotion; - this food promotion is overwhelmingly for energydense, micronutrient-poor foods and undermines recommendations for a healthy diet; - this food promotion has a deleterious effect on children's food knowledge, attitudes, purchase behaviour, and consumption. Scope Evidence shows that all children are affected by marketing and therefore the current document would apply to all persons aged under 18, following the United Nations Convention on the Rights of the Child. The age group of under 18 years may be further segmented in order to formulate specific measures. This will take into account: - different countries' legal definitions of what constitutes a child; - age-related developmental differences in children's comprehension of the nature and purpose of marketing; - educational settings; - marketers' segmenting of child and adolescent populations. Marketing is defined as "an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders." The traditional

components are product, place, price, and promotion. Marketing as referred to in this report includes the promotion and/or the sale of food and beverages in child-specific settings (e.g. schools, kindergartens, daycare centres, play areas, children's hospitals, etc). Many of the existing regulations in countries recognize that children under the age of about 13 years are more vulnerable to exploitation by commercial promotions and thus have more stringent regulations for this age group than for adolescents. This is concordant with the literature on the developmental transition to being less vulnerable and gullible in relation to targeted marketing. Commercial promotion should be defined as all forms of communication activity designed to raise consumer awareness in order to encourage recognition and sales of a product. Examples include competitions, point-of-sale displays, packaging, contests, sweepstakes, free gifts, product placement, sponsorships, celebrity endorsements, use of cartoon characters, and communications using new media such as cell phones and the Internet, as well as mass media advertising, and using activities designed to enhance brand recognition through image or lifestyle without specifically identifying food or drinks. Health and nutrition claims on products targeted to children should also be considered as they may also be a form of unwarranted commercial promotion. In addition, parents should not be targeted in ways that could damage children's diets. It is recognized that it will be easier to regulate and enforce restrictions on the use of some of these promotional strategies than others. This report does not refer to the promotion of messages and products as part of non-commercial social


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marketing initiatives. This non-commercial promotion of healthy food choices is to be encouraged. The action recommended in this document should be considered as a continuum to actions aimed at protecting breastfeeding in infants and young children according to the International Code of Marketing of Breast-milk Substitutes. In particular, policies at the national and international level should be consistent as far as commercial promotion of complementary foods is concerned. Guiding Principles Bold, innovative action at both national and global levels is essential. Poor diets and diseases related to them constitute a public health emergency. National action is required and different models have been successfully implemented. Strong support by government agencies is essential. Global action is necessary. Considering the globalization of the food system, a standardized international approach is required. Multinational companies market products around the world and many forms of marketing cross country boundaries. It is important that global rules be generated and that commercial promotions that target children across country boundaries be addressed. Constructive action can be implemented through both statutory action and industry self-regulation. For the purpose of substantially reducing the volume and impact of commercial promotion of food and beverages to children, self-regulation is not sufficient; it is however a valuable supplementary strategy to ensure promotions are legal, truthful, decent and honest and

to deal with other aspects of marketing (e.g. product, price, place) not addressed in this document. Increased population awareness and participation of national governments and international agencies in advocating actions to reduce the adverse impact of commercial promotion is essential. It is especially important to encourage children and youth groups to familiarize themselves and act upon the issues implied. The action recommended in this document should not be seen as a stand-alone intervention. Its effectiveness will be related to other positive or proactive interventions aimed at promoting healthy diet and lifestyle in children and young people. National actions Cultural, legal and regulatory climates differ from country to country and there are likely to be various ways of reducing the promotion of energydense, micronutrient-poor food and beverages to children7. Four policy options are suggested here. The first two take a targeted approach specific to the commercial promotion of energy-dense, micronutrient-poor food to children and the remaining two adopt a more comprehensive approach to achieving the same goal. Rationale and implications of the various policy options are suggested in Box 2 below. A. Prohibiting promotional marketing of energydense, micronutrient-poor food products at specified times, in specified settings, using specified techniques or targeting specified age groups. This option would reduce the times and settings where energydense, micronutrient-poor food promotion to children is most intense, the


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techniques that are particularly persuasive or difficult to understand, and for the age groups that are the most vulnerable, for example by providing a means of ensuring that schools and children's television programmes remain commercial free zones. It could also prohibit particular techniques used to promote energydense, micronutrient-poor foods and beverages to children, such as toys and collectables. B. Prohibiting the commercial promotion of energydense, micronutrient-poor foods and beverages to children. This option would remove energy-dense, micronutrient-poor food and beverage promotion, not just from exclusively child-centred environments and media-such as schools and children's television programmes-but also from environments that they share with adults such as shopping malls and prime-time television. C. Prohibiting the commercial promotion of all food or drinks to children. This option widens the net and removes all forms of commercial promotion of food and drink to children. Exceptions could be made for approved public health campaigns promoting healthy diets. D. Prohibiting all commercial promotion of any products to children. This option includes all products and protects children from commercial exploitation in general. All of these options may be combined with a regime of product-related health warnings and nutritional messages.

Suitable enforcement mechanisms, that include adequate penalties, should be established, such as pre-clearance of advertising campaigns and independent monitoring of complaints. Monitoring the application of the policy options and evaluating their affects on the volume and impact of commercial promotion and on children's diet should be performed. Four Policy Options to Address Marketing to Children: rationale and Implications

Option A-specified restrictions on the age groups targeted and the times, settings and techniques used by advertisers in the commercial promotion of energy-dense, micronutrientpoor foods and drinks.
This option is likely to have less of an impact on children's exposure to the promotion of energy-dense, micronutrientpoor food products than the other alternatives. However, it should be considered as a first step (where other options are not feasible) as a means of reducing the most intense exposure times and the techniques that are particularly persuasive, and of protecting the age groups that are the most vulnerable.

Option B-no promotion of any energy-dense, micronutrient-poor foods or beverages to children

This option only seeks to restrict the promotion of the specific foods and beverages that are considered detrimental to children's diets. The implementation of this option requires clear identification of products that cannot be promoted, using methods such as nutrient profiling. This approach could act as an incentive for the food industry to develop healthier products.


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Option C-no commercial promotion of any foods or beverages to children

This option is based on the view that children are best informed about healthy eating by parents, schools and health professionals rather than food industry protagonists. It avoids classifying foods as "good" and "bad" and recognizes that the vast majority of commercial promotions to children are for energy-dense, micronutrient-poor food products. However, this option would restrict the commercial promotion of more healthy foods to children.

United Nations Agencies, Member States and other stakeholders. The international code will provide the basis for action at this level. The unique issues to be addressed by the international code include: - actions to address the transnational nature of promotional strategies (e.g. cross border television advertising, Internet); - provisions for limiting the promotional activities of companies irrespective of country; - support to the design, enforcement and monitoring of country action; - monitoring and reporting on the activities of transnational manufacturers and distributors that are not amenable to monitoring at the local level and provision of information to international agencies. The international code should build upon and support activities taken by countries at the national level to strengthen the overall effectiveness and impact of various strategies to prevent the promotion of energydense, micronutrient-poor foods and beverages to children. Activities undertaken at the national level should be incorporated into the scope of the international code to ensure that all activities are complementary and mutually supportive. The international code should specify precisely expectations of participating countries and how these national activities will be monitored. The international code should also aim to build capacity of countries where infrastructure to address this issue is not already in place, both at the national and local government levels, and also of civil society and nongovernmental organizations. In addition,

Option D-no commercial promotion of any products to children

This is the broadest approach of all and is based on children's right to a commercial-free environment. It prohibits promotional marketing of any products specifically to children, following models such as those being tried in Quebec (see section 3.3.3) and parts of Scandinavia. This would be concordant with the United Nations Convention on the Rights of the Child and with consumer protection legislation operating in many countries. It provides a degree of equity between different industrial sectors, but consideration needs to be given to issues such as "positive" marketing which encourages healthy behaviour. It was recognized that this approach may not be a realistic option for many countries. It also requires acceptance by more players, including the media and communication industries. International action In order to address the international nature of commercial promotion of energy-dense, micronutrientpoor food and beverages, WHO should take the lead in the development of an international code on the commercial promotion of food and beverages to children in association with international partners,


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there are several gaps in the knowledge and evidence base on the effects of food promotions on children, particularly in developing countries. More research is needed in the area of the extent, nature and effects of food promotions on children in developing countries. The international code should be developed through a consultative process facilitated by a public sector body and signed by participating countries. Elements of a future international code include: - overall goal and purpose of the code; - scope and principles; - responsibilities of Member States; - responsibilities of the commercial sector; - responsibilities of civil society (support can be provided to the civil society to carry out independent monitoring); - ensuring effectiveness; - monitoring and evaluation of impact; - provision for revisions. Countries signing the international code will commit to a core set of actions. NEXT STEPS The discussions in the Forum and the recommendations from the Technical Meeting will be considered for future WHO work to ensure that appropriate actions are taken to protect children from inappropriate promotion of energy dense, micronutrient-poor food and beverages. The recommendations require discussion and assessment by WHO with regard to their technical merit, financial implications and appropriate roles for the Organization. Member States

need to be consulted in terms of the feasibility of these recommendations and their commitment to undertake some of the actions. After the assessment and consultation with Member States, WHO plans to facilitate a process for the implementation of the recommendations and relevant units and programmes within the Organization are encouraged to incorporate the recommendations into workplans and secure the necessary funding. The critical steps in the implementation of these recommendations are: Appropriate forums should be identified to discuss the issue with Member States and ensure their commitment in undertaking national actions and in supporting the development of international guidelines. The Ministerial Conference on Counteracting Obesity to be held in the WHO European Region will have on its agenda a discussion of these issues. Further Development of National Actions WHO will assess the feasibility for implementation of the proposed national actions and develop them further. Tools to assist countries may need to be developed, e.g. "model" legislation, and technical assistance provided to Member States on request. Technical assistance may be required to draft appropriate legal frameworks for consideration by Member States. These actions can be implemented as part of national policies, plans and programmes for the prevention and control of chronic diseases. Member States are encouraged to take a stepwise approach to implementation appropriate to their local circumstances. National actions need to be supported by suitable international actions. Voluntary regulation can be an effective supplement to national legislation and several self-regulatory models are


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in use in various countries around the world. These models have been developed mainly by industry and the extent of state involvement varies from country to country. If required, "principles" of good practice in self-regulation can be further developed and disseminated to Member States. International Action In view of the cross-border promotion of energy-dense, micronutrient-poor food and beverages, national actions alone are inadequate. International action is essential to ensure an effective overall approach to limit that impact of promotion of energy-dense, micronutrient-poor food and beverages to children. The development of an international code will require the approval of the WHO governing bodies.



DEFINITION Food and Beverage (F&B) outlets are commercial establishments offering eating and drinking facilities to customers. Meals can be prepared on the premises or bought in to be consumed on site or to take away. Examples of F&B outlets include Restaurants, Coffee Shops, Quick Service Restaurants; Bars, Pubs, and Taverns. MINIMUM REQUIREMENTS BEVERAGE GRADING FOR FOOD AND

Safety and Security

A high degree of general safety and security should be maintained. All reasonable precaution must be taken to secure the personal safety of patrons and staff and prevent damage to or theft of their possessions. Information on procedures in the event of an emergency should be clearly displayed in the F&B outlet (exit signs, etc). There should be adequate levels of lighting for guest safety and comfort in all public areas, including stairwells and car parks.


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Food and Beverage Outlets


Cleanliness and Hygiene

A high standard of cleanliness should be maintained in all parts of the establishment. Particular attention should be paid to toilets, kitchen and food storage and preparation areas. Each F&B outlet must have a valid and current Certificate of Acceptability to handle food-issued by the Environmental Health Services Division of the local Department of Health. This certificate must be valid for the current owner (the certificate is issued in the name of the person in charge of the establishment, when this changes a new certificate is required). The Certificate of Acceptability should be displayed in a conspicuous place in the food premises-for public viewing. Alternatively where the display is impractical a copy should be made available on request. Management should commit to a programme of optimum hygiene covering all aspects of food handling. Vigilant and competent supervision is essential (verbal and/or written policy confirmation required). With regard to hygiene, it is mandatory for each F&B outlet to comply with the TGCSA Hygiene Checklist included in the F&B Grading Criteria document. In addition, all employees should be clean and appropriately groomed and dressed.

Business registration which entitles the establishment to legally operate; Public liability insurance; Evidence of a smoking management policy; Health, hygiene and food safety regulations (an appropriate and valid hygiene certificate); Liquor license (if applicable); Compliance with national and local authority regulations including (but not limited to); o Fire safety certificate; o Compliance with building regulations-in particular with regard to accessibility.

There should be no discrimination to accepting patrons based on their race, citizenship or nationality, gender, ethnicity, physical or mental condition, etc. However, notwithstanding the above, management has the right to refuse access in the interest of other users of the establishment. Establishments should be open on the days stipulated by management and advertised as such. Appropriate service and facilities should be available on all days that the establishment is open (unless advertised otherwise).

Statutory Obligations
Premises are expected to comply with all relevant statutory and national, provincial and local government regulations. Assessors may request that relevant documentation or proof of compliance be presented at the time of the assessment. This includes, inter alia: Provincial registration (if applicable);

The highest standard of courtesy should be shown to patrons at all times. Guest complaints should be dealt with courteously and promptly (including those received via the Tourism Grading Council's Consumer Feedback mechanism).


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Marketing, Reservations and Pricing

There should be friendly and efficient service appropriate to the style of the establishment. All enquiries, requests, reservations, correspondence and complaints should be handled promptly and courteously. It should be made clear to patrons what is included in the prices quoted including service charges and other surcharges. Prices for all meals and beverages served at the establishment should be clearly displayed and/or presented and available on request. Prices should include VAT. Menus and wine lists, where appropriate, should be clean and well presented and provide accurate descriptions (where applicable) of the meals and beverages on offer. Menus and wine lists may be presented verbally. Full details of the establishment's cancellation policy should be made clear to patrons at the time of booking. Details of any in-house policies e.g. no smoking or no children should be communicated at the time of booking. Each customer should be provided, on request, with details of payment due and a receipt of payment. The bill should be clearly presented and well laid out. Facilities and services provided by the establishment should be described fairly and truthfully to all visitors and prospective visitors, whether by advertisement, brochure, website, verbal communication or other means. BUILDINGS

There should be appropriate signage (suitable to the requirements of the market) to direct patrons to the main entrance of the establishment. Paths under the control of the operator should be well lit and directional signage should be provided.

Interior Maintenance
The interior of the building/s including all fittings, fixtures and furnishings must be maintained in a sound and clean condition and must be fit for the purpose intended. All electrical equipment should be safely maintained and in good working order. F&B OUTLET AREAS

Reception Area
A clearly designated reception or "wait to be seated" area should be provided. A moveable podium is also considered appropriate.

Dining Area
A dining area should be provided which is available during operating hours with appropriate seating.

Public Toilets
Public toilets should be provided for the use of patrons (located within close proximity-these need not be the property of the establishment). Ideally the toilets should not be connected directly to the kitchen (refer to Hygiene Regulations). The number of sanitary conveniences provided per member of staff and maximum number of patrons must be in accordance with South Africa's Hygiene Regulations. All toilets should be well maintained, clean and frequently checked.

Grounds and gardens under the control of the operator should be neat and appropriate. The exterior of the property must be well maintained and in a sound and clean condition.


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At minimum a basin with running water, toilet, toilet paper, liquid soap and a hand drying mechanism (clean towel per user, paper towels, hot air dryer, etc) should be provided. Toilet cubicles should be lockable. Fabric towels for hand drying purposes may only be provided if they are washed and replaced after a single use (Hygiene Regulations).

management/waiting staff must have adequate knowledge of the different varieties on the menu. Table Appointment: Table appointment: High quality cutlery, crockery, glassware and linen. Appropriate table cloths and placemats to be used. Food Menu: Food menu should offer a variety of items: entrees, seafood, poultry, meat dishes, salads, desserts, and dishes for vegetarians. Noise Levels: Entertainment/background music (where available) should be set at the appropriate noise level. Table Spacing: There should be adequate space between tables to ensure privacy for conversation. GRADING CRITERIA FOR FOOD AND BEVERAGE (F&B) OUTLETS Each establishment wishing to be graded needs to comply with the minimum criteria including the specified minimum criteria per star grading. Thereafter the establishment will be graded according to the criteria listed in this document. The grading criteria have been developed based on guest expectations. The criteria cover: Building exterior Internal fabric Toilets Menu and wine list Food and beverage Services and service Housekeeping and cleanliness A kitchen Hygiene (check list)

Food and Beverage

All food and beverage should be hygienically stored, prepared and presented.

Staff should demonstrate adequate levels of product knowledge and provide efficient service. Management and staff should be well trained, attentive, polite and helpful. They should be dressed in clean, wellfitting clothes and be personally well-groomed. ADDITIONAL REQUIREMENTS FOR GOLD AND PLATINUM STAR OUTLETS

All Platinum Star outlets should have private guest toilets located within the same property as the restaurant and under the control of restaurant management. Alternatively if only public toilets are available then the Platinum Star outlet owner/manager should ensure that these public toilets are continuously monitored and kept clean.

Table Reservation: All Gold and Platinum Star outlets should offer a table reservation service. Wine List : A wine list with a good selection of wines must be available and


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Not all areas will be applicable to all establishments. Where an area is not applicable it will not be graded and will therefore not count in the overall grading score. This means that F&B outlets will not be penalised for not having a service or facility beyond the minimum requirements. The grading assessor will award a score between 1 and 10 for each area assessed. The score will be based on: The assessor's experience which will comprise a balance between quality and condition (personal preference and fashion should not have an influence) Consumer feedback and comments. The score for each standard is defined as follows: Excellent Very good Good Standard Acceptable Poor Unacceptable 10 9 8 6 or 7 5 3 or 4 1 or 2


Platinum Star Award

Overall score of Items to score No more than 2 items to score 95%-100% 9 or 10 8

Gold Star Award

Overall score of Items to score No more than 2 items to score All service elements to score 84%-94% 8 or more 7 8, 9, or 10

Silver Star Award

Overall score of Items to score No more than 2 items to score All service elements to score 71%-83% 7 or more 6 8, 9 or 10

Bronze Star Award

Overall score of No unacceptable items Items to score No more than 2 items to score All service elements to score 4 or more 5 6, 7, 8, 9 or 10 50%-70% Less than 3

In the TGCSA Star Grading Scheme the highest marks awarded, 9 or 10, reflect excellent quality together with excellent condition. These standards have been set at the highest levels possible to achieve. Examples of all possible standards are provided in the criteria. It is important to consider that these are examples and guidelines only. The criteria are not exhaustive, rather a guideline to steer assessors and property owners or managers in the right direction in respect of scoring. In addition, an establishment need not comply with all criteria under a specific score in order to receive that score.

Exterior Appearance of Buildings

10-9 New buildings, absence of weathering, fresh wellmaintained paintwork, an overall clean and "new"


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look. Older buildings-no unsightly staining and well-maintained paintwork. Visible outbuildings or annexes to be of a similar standard. Addition of attractive architectural features, etc. 8 High quality maintenance of paint, stone or brickwork although a certain natural weathering may be present. All areas of paintwork to be in sound condition. Some additional external features to enhance appearance. 7-6 Paintwork, windows, drains, etc in good state of repair, though not necessarily recent. No obvious structural defects or damage. "Plain" architectural features are acceptable. 5-4-3 Some areas of paint may be ageing and rather weathered. Small defects, damage, cracks, etc. No evidence of recent repairs, paintwork, etc. 2-1 Generally neglected buildings. Obvious structural defects or damage. Flaking paint, illegible signs, rotting wood.

8 High standards of maintenance in formal gardens. Pleasant and tidy appearance throughout the year. No clutter or disorder around service areas. Good driveway. Some architectural features appropriate to the market. 7-6 No overgrown, tangled areas. Immediate surrounds kept tidy and well maintained. Some attempt to produce a pleasing effect with interesting design. Uncluttered access to establishment and pathways. No potholes in driveway. Clear access. 5-4-3 Gardens and enclosed area around the establishment are kept under control. Little attempt at interesting design. Drive may have an uneven surface. Domestic disorder kept to a minimum. 2-1 Neglected and overgrown appearance. Badly surfaced driveway with large pot-holes or puddles. Rubbish and clutter visible. Disorderly appearance.

Grounds and Gardens

All grounds and facilities including children's play areas, etc under the control of management should be evaluated in this section. 10-9 Evidence of systematic programme of maintenance (excellent standard)-well-tended formal gardens or attractive "natural" environment. Tidy pathways. Attractive appearance throughout the year. Well maintained driveway and entrance. No disorder or rubbish and no evidence of litter. Provision of garden furniture or architectural features appropriate to the nature of the guests attracted to the establishment.

10-9 Sufficient, marked parking bays in a secure environment, within the grounds and within easy walking distance of the entrance. Alternatively plentiful and secure parking for vehicles close (adjacent) to establishment. General public parking facility with security provided. 8 Some organised, secure parking within the grounds of the establishment. Overflow parking outside grounds, in close proximity to establishment with security provided. Alternatively general public parking facility, fairly close (but not adjacent).


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7-6 Some parking in secure environment but not necessarily organised (not on property). Fairly close proximity to the establishment. 5-4-3 Unorganised parking outside grounds with no security, but in close proximity (e.g. on the pavement or street outside establishment). 2-1 Owner vehicles taking up most of available parking space. No parking available at the establishment and parking is located a long distance away. No control and no security provided.

establishment, entrance and pathways. No signage. Internal Fabric: All reception rooms, bars, dining rooms and eating areas accessible to patrons will be evaluated under this section. Where different standards are present, an average score will be applied, unless there is significant difference between the highest and the lowest score, in which case the lowest score will apply.

10-9 High quality wall covering (paint, tiles, wallpaper, etc). Attention to detail. Thoughtful co-ordination of patterns, colours and textures. If the dcor is "plain" then the addition of high quality pictures, objects d'art, etc. Although some "minimalist" styles require less. All work should look professional and be well executed. 8 High quality wall covering, but need not be in excellent condition. Slight signs of wear and tear (i.e. scratches, water splashes, finger marks, etc). Room dcor may range from excellent to good. 7-6 Competent, average quality wall coverings. Some pictures in good frames. Attempt to co-ordinate patterns and colours. No jarring mismatch of colours and styles. Dcor may be some years old but not obviously damaged, scratched, torn or stained. 5-4-3 Ageing looking dcor, of average quality to begin with. Amateur application of paint or wall paper. Little attention to detail. Plain style with no adornment. Some wear and tear, stains, marks, etc.

External Lighting and Signage (on property)

10-9 Very good external security lighting. Effective and attractive lighting guiding patrons along pathways on property. Use of lighting to enhance appearance and highlight features. Good clear signage, guiding patrons to the main entrance, annexes, parking, etc. 8 Good security lighting in parking facilities and in grounds. Sufficient lighting to guide patrons to establishment and along pathways. Some attempt at attractive lighting to highlight features. Clear signage to guide patrons. 7-6 Some external lighting in important areas. Pathways sufficiently lit to guide patrons. Signage to guide patrons but perhaps not clear enough or insufficient. 5-4-3 Ageing and limited signage. Limited external lighting. Some security lighting. Difficult to navigate along pathways at night. Lights shining at eye level. 2-1 Poor or no lighting. Difficult to find to


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2-1 Low-grade materials poorly executed. Uncoordinated styles and colours. Noticeable wear and tear, stains, splashes, scratches, tears, marks, etc. Few pictures, graphics, wall hangings or works of art (if any). Unsightly pipe work, exposed wiring. Signs of damp.

Furniture and Furnishings

10-9 Excellent intrinsic quality and condition. Furniture of sound construction, attractive professional finish and detailing. Little or no sign of ageing, wear and tear or ill-use. Full, well lined curtains with appropriate accessories, in working order. Or attractive and appropriate window coverings. High degree of comfort, well-spaced chairs of appropriate height for tables. Coordinated themed design. Spacious tables. NB: Some excellent antique furniture may show signs of "distress" which does not detract from its excellence depending on the degree of deterioration. 8 High intrinsic quality of materials may show some signs of use. Alternatively new, good (instead of excellent) quality furniture and furnishings. Some contract furniture even when brand new will only be "very good". Curtains to be full and effective in retaining heat/keeping out light. Good quality and attractive window coverings. All of high quality but not necessarily the same design though co-ordinated. Good sized tables. 7-6 Furniture which may have been "excellent" or "very good", but through ageing, showing signs of wear and tear. Alternatively, a medium quality range of materials and construction in sound and

useable condition. There should be no damage, stains or fraying on furniture. No jarringly uncoordinated styles-all furniture to be of a similar standard. Window coverings showing slight wear and tear. Average quality. Tables large enough for uncluttered use. May be a mix of styles and ages, but all in good condition. Design may take precedence over comfort. 5-4-3 Furniture of average quality and in well-used condition. Little co-ordination of styles, some slight damage may be apparent, but all items capable of use. Surfaces not well-maintained. Thin, short, skimpy curtains. Some stains, marks on soft furnishings. Maybe a mix of styles, ages, designs, shapes and heights. Chairs not very comfortable. Tables close together. Wobbles in tables and or chairs. 2-1 Furniture of a low quality material, poor construction, damaged, marked or scratched. Uncoordinated styles. Thin, unlined curtains, stained, worn upholstery. Inadequate table sizecluttered and inconvenient. Table cracked. Tables or chairs very wobbly. Cramped, uncomfortable layout.

Flooring and Ceiling

10-9 High quality fitted carpets (high percentage wool content), good thick pile and underlay. Alternatively excellent quality domestic carpeting, fit for purpose. High quality wooden or tiled flooring with high quality occasional rugs or mats. Ceilings to be of an excellent quality, no sagging or evidence of water leakage or seeping, marks or stains.


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All of the above should be professionally fitted, painted and in pristine condition. 8 High quality carpets beginning to show some signs of ageing (flattening or wearing). No stains, burns or marks, etc. Alternatively carpet with higher percentage of man-made fibre but in new condition. Wooden or tiled flooring in need of buffing but with high quality rugs. Ceiling of good quality, no sagging, evidence of water leakage or seeping. Professionally fitted and painted. 7-6 High quality carpet with flattening in areas of most traffic but all in sound condition-some small discolouration in places. Alternatively a cheaper new carpet. Wooden or tiled floors a little scratched in places. Ceiling of average quality, competent job of application. Paintwork competently applied, although not necessarily of a professional standard. 5-4-3 Carpets showing considerable use-flattened spots, bleaching by windows, some thinning. Unprofessionally fitted with ripples, rough illfitting edges, thin or no underlay. (There should be no holes, tears, burns of other defects that render the carpet unsound). Vinyl or low quality flooring. Chipped wooden or tiled floors. Poor quality ceiling, amateurishly fitted, but no evidence of sagging. Ceilings slightly stained paintwork of a poor standard. 2-1 Carpets with distinct signs of wearing, visible canvas or backing fabric, patches, stains, discolouration, obvious seams. DIY fitting with gaping joints, gaps between carpet and wall. Several unmatched styles or newer carpets laid

on top of damaged or worn-through older ones. Wooden floors that have aged-now in need of a new coat of varnish, with worn and stained rugs. Missing tiles and obvious chips. Poor quality sagging ceilings and evidence of water seepage. Stained paintwork, old and amateurishly done. NB: In all levels there may be a high quality natural alternative to carpeting, tiles or wooden floors. In these cases the intrinsic quality and condition would be assessed, taking the style of the property into consideration.

Temperature Control
10-9 Thermostatically controlled heating and or cooling system capable of maintaining a comfortable room temperature of between 18oC and 25oC in each separate dining or eating room (climate dependent). Appropriate to size and location of room. Appliance in excellent condition and quiet. In larger establishments an excellent score would apply for ducted or air-conditioning hidden from general view. In smaller establishments new domestic, excellent quality heating or cooling appliances are acceptable (free standing, wall or ceiling mounted-fan, heater or air-conditioner). In moderate climate, an adequate natural ventilation system i.e. large opening doors and windows may suffice. 8 Some ageing of excellent appliances. Good quality and quiet wall mounted (visible) air-conditioners could receive an 8 rating. In smaller establishments, new, good quality domestic heating or cooling appliances are acceptable (free standing, wall or ceiling mounted-fan, heater or air-conditioner). Good free airflow achieved


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throughout dining or eating areas in moderate climate. 7-6 Effective heating and or cooling provided in rooms when appropriate. Not necessarily the most up to date system. Large, slightly noisy, wall mounted air-conditioners apply here. In a smaller establishment good quality, not necessarily new heating or cooling, freestanding appliance is acceptable. Adequate free airflow in a moderate climate. 5-4-3 Free standing apparatus able of maintaining a reasonably comfortable temperature in room. Ageing appliances. In a smaller establishment low quality heating or cooling, freestanding appliance in good condition is acceptable. Limited free airflow in moderate climate. Room slightly stuffy and or cold in winter. 2-1 Old low quality appliances. Hot or cold only available close to appliance i.e. unable to maintain a comfortable temperature throughout the room. No heating or cooling system in extreme temperature environment. Very limited free airflow. No free airflow in moderate climate. Stuffy room. Very cold in winter.

Picture lights. Recessed spot lamps. Lighting appropriate for the ambience. 8 Provision of more sources of light than is strictly necessary i.e. more than just central lights. Able to create an appealing dining experience. High quality fittings, lamps bases, etc. with more adequate spread of lighting for practical use, though no sophisticated use of lighting "effects". Lighting appropriate for the ambience. 7-6 More than adequate room light. Good blend of natural and electric light during day. Medium quality fittings in sound condition. No burnt shades, ageing lamps, etc. No extra lights for effect. 5-4-3 Minimum lighting in room. Restricted natural light. Fittings ageing, beginning to look scruffy. Enough light for practical use, but nothing more. No lighting provided for effect. Fittings dated, ageing, discolouration. Stark, unattractive, harsh lighting. 2-1 Low quality fittings in poor condition. Exposed, fraying wires, wobbly fittings, loose plugs. Dim, gloomy effect with dark areas. Glaring, irritating, harsh fluorescent lights with no diffuser. Light in inappropriate places. Poor natural light. Shades burnt, scruffy, stained, etc.

10-9 Overall high standard of lighting providing sufficient light for all appropriate purposes. Also designed for good effect, showing off features, rooms, corridors, etc. Lighting appropriate to create the required mood. All lights and shades of high quality manufacture and in excellent order. No wobbly connections, burnt shades, flimsy bases that fall over, etc. No harsh fluorescent tubes.

Table Appointments
10-9 An emphasis on style and high quality (stainless steel, silver, etc). All cutlery and crockery of a high quality, matching and co-ordinated. No wear, damage, cracks, chips, etc. Additional features such as flowers, candles and candlesticks, coasters, etc. Good quality linen or cloth napery. Large,


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fabric napkins. Tables all preset as per standard etiquette. All unclothed tables or surfaces to be in pristine condition. Equally high quality accessories i.e. ice buckets, sauce boats, etc. Provision of appropriate styles of cutlery and crockery for different dishes. 8 Items of similar style and quality as above but perhaps more limited in range, fewer glasses and smaller napkins. Alternatively, high quality crockery rather than high quality china. Fine glass rather than crystal, good quality stainless steel rather than silver, etc. Limited wear but no damage (chips, imperfections, etc). 7-6 Middle to high range cutlery and crockery. Good condition and main service matching. Accessories of different style but good quality. Thick (multiply) paper or fabric napkins. Alternatively sufficient quantities of large 1-ply serviettes accompanied by a refresher towel or finger towel. 5-4-3 Cutlery and crockery of varying of styles and quality (not intentional). Wear and tear (fading of pattern or glaze) but no chips or cracks. Thin (1-ply) but large paper napkins or well-used thin linen napkins. No accessories. Sauces in bottles or packets. Slight smudging on glasses, cutlery, crockery. 2-1 Mismatched patterns. Cracks, chips, well-used appearance. Low quality functional crockery. Small, thin (one-ply) napkins. Sticky sauce bottles on table. Cutlery, crockery, glassware obviously dirty.

Spacious room and good layout of tables. No intrusive noise or smells. Themes or designs may add to the ambience. Music/entertainment to be appropriate to the style of the outlet. 8 High standard of dcor and lighting. Perhaps busy, with some background noise. Tables rather close together. Smaller room. Atmospheric lighting. Pleasant aromas. 7-6 Tables quite close but with sufficient space to allow private conversation, staff and customers can pass without inconvenience. A certain amount of noise and activity from other areas. 5-4-3 Crowded tables. Awkward access. Difficult to have private conversation. Intrusive noise and stuffy. Strong smells. 2-1 Very crowded, cramped, uncomfortable. Loud noise. Very stuffy. Impossible to have privacy. Intrusive. Unpleasant smells. Toilets: If toilets are only available off the premises (for example, in shopping centres), management of the restaurant should have control to ensure safety and security.

Decoration and Flooring

10-9 Highest quality floor and wall coverings. Tiles well fitted. Grouting in excellent condition. No marks, stains, condensation damage. No peeling wallpaper or flaking paint. Flooring well-fitted and free from stain or water damage. Overall attractive and high quality dcor. 8 Maybe high quality finish but not recent-some signs of wear but all in good condition. Alternatively, maybe recently decorated but not

Atmosphere and Ambience

10-9 Harmonious combination of dcor and lighting.


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with the highest quality materials, though a competent and professional job. High quality floor covering or tiles. 7-6 Not necessarily recently decorated though in good condition. Some signs of wear. Standard quality bathroom flooring. No stains or marks. 5-4-3 Lower quality materials, ageing and evidence of poor standard of DIY. Very plain with no attempt at adornment. Grouting discoloured. Tired, dated style. Some stains and marks. 2-1 Very tired and old style. Damp or condensation marks. Cheap very low quality finish, unprofessionally applied. Sealant or grouting mouldy, carpet rotting, smelly. Paintwork chipped, flaking. Area around toilet discoloured, damp. Smells.

2-1 Stained or mouldy grouting or sealant. Cracked washbasin or toilet. Ill fitted cheap plastic toilet and cover. Discoloured plastic cistern. Plastic taps. Loose or broken towel rail. Evidence of cigarette burns, damage, etc.

Linen, Hand Drying Facilities and Accessories

10-9 Thick, heavy, fluffy hand towels with plenty of pile (replaced after each use). Effective, efficient and quiet hot-air hand dryers. Thick, good quality paper towelling with easy to use dispenser. Excellent quality liquid hand-washing soap. Pleasant aroma. Extensive quantities of two-ply toilet paper. Addition of accessories such as air fresheners, flowers, hand cream to create a pleasing environment. 8 Hand towels-linen not as high quality as found above (replaced after each use). Slightly smaller or thinner paper towels with easy to use dispenser. Hot-air hand dryer not excellent (loud or less efficient). Very good quality liquid, hand-washing soap (not a bar of soap). Pleasant aroma. Sufficient two-ply toilet paper. 7-6 Good quality paper towelling system but possibly thin, small paper (disintegrates easily when wet). Large and loud hot-air hand dryer. Adequate quality liquid, hand-washing soap. Neutral aroma. Adequate quantities of one-ply toilet paper. 5-4-3 Loose paper towels that are thin and disintegrate easily. No dispenser. Slight unpleasant aroma. Liquid soap in poor dispenser. Adequate quantities of one-ply toilet paper. 2-1 Towels that are very thin, small, scratchy, old, fraying, some holes, stained, faded. Low

Fixtures and Fittings

10-9 High quality, solid, well-made fittings in excellent order and matching style. High quality finish. Easy to use with responsive controls. Plenty of hot water at all times. 8 Generally high quality fittings throughout, but not necessarily new. All porcelain in good condition-no cracks, crazing or dull finish, no stains. Matching and co-ordinated styles. 7-6 Standard domestic range of bathroom fittings. Maybe showing some wear but in good clean condition. 5-4-3 Ageing fittings-dull finish to porcelain, chrome wearing off. Fittings not matching. Out of date style or colour, well used. Rough DIY grouting or sealant.


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absorbency. Not replaced after each use. No hand drying facilities. No soap. Poor, unacceptable aroma. No toilet paper.

10-9 Lighting effective for all purposes particularly at washbasins and mirrors. Excellent lighting in all cubicles (even when door is closed). Excellent quality fittings. Recessed lights. 8 High standard of light fittings centre, main light plus adequate light at washbasins and mirrors. Possibly supplementary lights. 7-6 Centre light well positioned providing adequate light, even in closed cubicles. 5-4-3 Dim centre light. Stark fluorescent tube on ageing fittings. 2-1 Gloomy, badly placed, ageing, damaged light fittings. Menu and Wine List

8 High standard of presentation. May show a little wear, although not dirty. Where wines are not available-they should be clearly marked. No written corrections. Good, clear and accurate verbal descriptions. 7-6 Clear layout but not top quality production. Clean, not worn or grubby. Large majority of wines available and those that are not, clearly marked as such. Concise, "rattled off" but clear verbal descriptions. 5-4-3 Basic but legible. Scrappy appearance, over-used, stained. Many wines out of stock and not marked. Vintages wrong. Verbal descriptions not totally clear. 2-1 Dirty, dog-eared. Difficult to read. Wine list out of date, bears little relation to what is available. Unintelligible verbal descriptions.

Menu Content
10-9 Well-balanced menu. Excellent range of dish options catering for different tastes and requirements (i.e. vegetarian dishes should be available). Variety of cooking styles available. Excellent use of seasonal ingredients. Complimentary range of starters, entrees and desserts available. All dishes to be appropriately described. Charges for dishes to be clearly detailed and legible. Minimum charges, services charges, payment terms, etc to be clearly detailed and legible. 8 Good range and variety of dishes, covering at least starters, mains and desserts (but not considered to be excellent). Vegetarians considered. Perhaps menu not quite as discerning as above.

Menu and Wine List Appearance

10-9 Excellent presentation appropriate to the market (maybe verbal, temporary i.e. blackboard or permanent). Attention to detail in all aspects of print, layout and descriptions. Clear, informative layout. Wines should be listed per cultivar. Attractive design in excellent condition. No grease, thumbprints, wine stains, written corrections, etc. Wine set out in clear sections and all available. All menus and wine lists clearly legible, given the lighting in the restaurant. No incorrect spelling. Words appropriately used to describe dishes and wines. All verbal descriptions clearly, accurately and eloquently presented.


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Good description of dishes. All charges clearly described and legible. 7-6 Variety in dishes and cooking styles available-but not extensive options. Some dishes with appropriate descriptions. Charges are clearly depicted. 5-4-3 Limited range of dishes available and limited options in terms of cooking style. Charges listed but not that clear. 2-1 No variety. Only one cooking style available. Menu illegible and unclear.

within limited cultivar range. Good, standard range of beverages. 5-4-3 Limited range of standard wines and beverages available. 2-1 No variety and choice in beverages. Only unbranded products available. Food and Beverage

Meal Presentation
10-9 Well laid out on appropriately sized plate with attractive and complementary garnish or display. Pleasing combination of colours, textures, and shapes. Extremely imaginative and exclusive in concept and outstanding execution. Extreme attention to care with attention on visual appeal. Ingredients meticulously integrated with plate design. Highest skill applied to meal presentation. 8 Obvious care and attention to detail with visual effect but perhaps not with the highest degree of skill. Tendency to standardise garnish or display. Attention to food placement and design. Creative and artistic use of garnishes. Selection provides variety in texture, colour, substance, theme and temperature. 7-6 Attractive. Neat arrangement on plate. Complimentary garnishes to enhance overall appeal. 5-4-3 Unadorned and straightforward. No attempt to enhance appearance. Limited variety of colours and textures. No careful arrangement. 2-1 Badly presented. Inappropriate garnish. Dull combination. Lukewarm. Some drying out of food, wrinkled skin on sauce. Incorrect temperature.

Wine and Beverage List Content

10-9 Sommelier or qualified, trained wine advisor to assist diners with their wine choice. Knowledge of in-stock and out-of-stock wines by year. Excellent variety of wines and beverages available. Wines from a variety of different cultivars available. Excellent description of wines available, (verbal or written) including year. A variety of good quality wines available by the glass. Excellent variety of beverages, liqueurs, liquor, etc. Variety of different brands per type of beverage. 8 Good range of wines from a variety of cultivars. Good variety of appropriate beverages but perhaps only one brand per option. Possibly only local beverages (with limited international brands) available. Good description of wines (verbal or written). 7-6 Wines from a number of different cultivars available but limited choices within each. Alternatively good number of different brands


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Beverage Presentation
10-9 Appropriate glasses for all beverages. Beverages presented, poured and displayed according to internationally accepted etiquette and the guest's specific request. Wide variety in beverage presentation. Wide variety of different glass types available. Guest's asked how they would like their beverage presented. Cognisance should be taken of changing styles in the F&B industry. 8 Some variety in different presentation styles for beverages, but overall presentation techniquestandard. Presentation good, in appropriate glasses. Wines stored and poured appropriately. 7-6 Beverage presentation standard, unexciting. Overall good use of different glasses. 5-4-3 Limited range of different glass types. Some attempt at basic etiquette. 2-1 Beverages presented in inappropriate glasses, tins, etc. No knowledge of basic beverage presentation etiquette.

manner, canned, frozen, pre-baked, preproportioned, individually wrapped, etc). 7-6 Mixture of fresh ingredients and high quality pre-prepared ingredients for meal components. Limited evidence of convenience items. 5-4-3 Basic ingredients, including use of convenience items. Low quality food. 2-1 Poor quality ingredients, poorly prepared. Dried out.

Texture and Flavour

10-9 Interesting textures with layers and depth of flavour. Perfect flavour of different ingredients discernable. Perfect balance of a complex range of different flavours and textures. Texture and flavour according to menu specifications and guest's specific requests. Correct and appropriate textures. Pleasant aroma. 8 Correct texture of main ingredients. Well-balanced flavours. Appropriate flavours are discernable. Pleasing aroma. 7-6 Good and appropriate flavour. Correct texture of main ingredients. 5-4-3 Basic blend of flavours. Imbalance of flavours. 2-1 Inedible. Unacceptable flavour and or texture. Bland, no flavour. Incorrectly cooked. Badly flavoured too much salt, burnt, etc. Unpleasant aroma.

Quality of Ingredients
10-9 Skilful use of finest, fresh ingredients. Wide variety of different ingredients used. Preferably all dishes made fresh, on-site (pre-prepared ingredients and dishes are acceptable but quality is important and it should be indiscernible from freshly prepared). Could be simple style but with great attention to detail and quality. Everything prepared to the right degree. 8 High quality, fresh ingredients. No evidence of the use of artificial enhancers and discernable convenience items (i.e. pre-prepared in some

Culinary Skill and Temperature

10-9 Flawless and meticulous execution of all cooking methods. On a par with international culinary trends. Variety of cooking techniques applied to


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dishes. All menu items are prepared from scratch and in-house (pre-prepared ingredients or dishes should not be discernable from fresh, in-house preparation). With the exception of classic dishes, food is prepared in a manner that is highly imaginative and adventurous. Classic dishes correctly and expertly executed. Food served at the appropriate temperature. All dishes cooked correctly. 8 Advanced degree of culinary skill evident throughout. Variety of cooking techniques efficiently executed. Food correctly cooked. Food served at the appropriate temperature. 7-6 Adequate culinary skill. Correct cooking techniques applied. Food served at the appropriate temperature. 5-4-3 Average to limited degree of culinary skill evident. Incorporates limited variety of cooking techniques. Incorrect temperature, slightly too hot or too cold. 2-1 No culinary skill evident. Food at incorrect temperature, too hot or cold. Cooking techniques incorrectly applied.

7-6 Limited range of good quality sundries. Alternatively good range of standard quality sundries. Clean cruets. 5-4-3 Inappropriate sundries, but quality acceptable. Limited range of sundries as would typically be expected. Some standard sundries absent. Difficult to dispense cruets 2-1 No sundries. Dirty, sticky condiment, salt and pepper dispensers, etc. Empty cruets. Stale bread. Uncovered sweets and toothpicks. Services and Service

10-9 Efficient and helpful telephone reservation. All details taken down and checked and all necessary information about the establishment given (i.e. booking policy, licensed, minimum charges, corkage, smoking, children, dress code, etc). May call to confirm or provide written or SMS confirmation. Overall personalised approach to reservation. Prompt service. 8 Reservation dealt with promptly and all necessary information taken and provided. High degree of telephone etiquette evident. Guest information confirmed for accuracy. Thanks patron for calling. 7-6 Reservation dealt with fairly well and all necessary information taken and provided. 5-4-3 Name taken. Minimal information given. Casual approach to bookings. 2-1 Name not taken. Surly, off-hand phone manner. Failure to properly record booking. Failure to answer telephone or return messages. Information not available.

10-9 Appropriate range of sundries e.g. breads, condiments, sugars, butters, herbs, spices, etc as per the character of the establishment. Clean, easy to dispense cruets, at least half full. Excellent quality. Covered after-dinner sweets and toothpicks of excellent quality. 8 Good quality and appropriate range of sundries. Clean, easy to dispense cruets. Good quality (covered) after dinner mints, sweets and toothpicks.


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Welcome, Attitude and Seating

10-9 Courteous greeting from maitre d' or someone of similar authority. Patrons addressed by name. Warm friendly smile. Helpful attitude. Help with provision of information about the establishment. Orientation provided. Attempt to establish a good rapport and show willingness to please. Patrons offered use of pre-dining area. Patrons shown to table and seated. Table preset per reservation. Management of queue efficiently and effectively handled (time provided is adhered to, list kept upto-date, friendly and pleasant attitude). Charges from lounge or bar are transferred to dining room. Menus and wine lists presented promptly. 8 Courteous greeting by host or hostess. Personal assistance provided as appropriate. Cheerful demeanour and attitude. Patrons shown to table and given necessary information. Encouraged to ask if anything else required. Menus provided promptly. Extra place settings removed. 7-6 Greeting from host or hostess. Offers a seat in waiting area if seating is delayed. Pleasant appearance. Willingness to help when asked. Casual guidance to table or self-seating. Menu and wine list presented at appropriate time. 5-4-3 Unenthusiastic welcome, just doing the job. Limited assistance from staff. Menu not presented promptly. Queue not managed efficiently-time taken is significantly longer than indicated. 2-1 Off-hand behaviour. Clear indifference to patrons, irritation at being asked for anything. No greeting. Menus not presented or presented at the door. Queue poorly managed, not kept up-to-date, name left off the list, time not adhered to, etc.

Management Efficiency
10-9 Prompt, thorough acknowledgement of guest comments or complaints. Management confirmation of guest experience. Patron needs anticipated. All guest comments, complaints handled at management level. Complaints handled promptly and courteously. Management identification of problems that may arise. An excellent dining experience would be an evidence of management efficiency (often behind the scene). 8 Good responses to any requests, but patron needs aren't anticipated. 7-6 All requests dealt with pleasantly. 5-4-3 Rather unwilling response to any requests. 2-1 Off-hand manner. Marked reluctance to give any help. No manager present.

Meal Service
10-9 Cheerful, friendly, polite, well-trained staff. Wellinformed about food and wine. Extensive menu knowledge, including how dishes are prepared. Thorough knowledge of specials. Appropriate description of menu and specials provided. All descriptions presented in a clear tone and at an appropriate pace. High standard of personal cleanliness. Prompt and efficient service. Correct cutlery and glasses supplied for each meal. Good judgement on timing of courses and drinks. Any further needs responded to. Guest needs anticipated. Polished, professional manner. Plates are only cleared when all meals are finished (or if guest requests plate to be cleared). All food should be presented simultaneously to correct


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guest specifications. Internationally accepted high standard of serving etiquette and protocol to be observed. 8 Well-motivated, willing, helpful, attentive staff that shows evidence of aspiring to an excellent standard, but may fall a little short. Could benefit from more training. 7-6 Willingness to be helpful and attentive. More enthusiastic than polished, but trying to do their best. Would benefit from further training. Staff always present and respond helpfully when asked. 5-4-3 Low skills but basically pleasant. Informality bordering on inefficiency. Not really interested, but respond in reasonably helpful way to requests. Conversely well skilled and trained but lacking social skills, arrogant, insensitive. Staff difficult to locate at times. Do what they are asked without enthusiasm. No rapport. Little interest. Stacking of plates at the table. Stretching across the table to access plates, etc. 2-1 Off-hand, indifferent, unskilled staff. Slow service. Disinterest. Inefficient staff missing for long periods of time. No willingness to be helpful. Ignoring customers they are serving. Little product knowledge. Stacking of plates on the table.

the table, request if guest would like their drink poured. Attention to detail, patrons' glasses kept half full at all times. No need for patrons to request for top-ups or help themselves. Efficient, courteous service. 8 Some slight lapses in beverage etiquette. Attempt at excellent standard. 7-6 Overall good service, but lapses in serving etiquette. Patron needs not anticipated. Service slightly slow. 5-4-3 Patron needs not anticipated. Patrons fill own wine glasses. Wine offered for tasting but no knowledge of wine or other standard serving etiquette evident. 2-1 Server with no wine training or knowledge. Bottle held between knees when opened. No taste poured for the patron. Beverages not presented to table.

Payment and Departure

10-9 Waiter/waitress anticipates when patron wants the bill. Clear, legible, correct and well-itemised bill presented in a folder (consistent with theme). Bill typically accompanied by some form of complement such as mint or speciality candy. Server quickly, efficiently and discreetly handles settlement. Waiter/Waitress and Maitre'd willingly acknowledge patron's departure. Use of patron's name in all acknowledgements. All payments handled at the table. 8 Server anticipates when patron wants the bill or reacts quickly to patron request. Clear, legible, correct and itemised bill presented in a folder (consistent with theme). Bill typically accompanied

Wine and Beverage Service

10-9 Sommelier or trained advisor present. Drinks correctly served and presented. All bottles opened correctly at table and service etiquette followed. Top ups offered. Beverages served from left and cleared from right. If necessary partially full bottles to be stored in ice-bucket. Remove all empty bottles and ice-buckets. Canned drinks opened at


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by some form of complement such as mint. Server quickly and efficiently handles settlement. Server and greeter willingly acknowledge patron's departure. 7-6 Bill presented on a plate, in a folder or on a tray upon request from patron. Server and greeter willingly acknowledge patron's departure. 5-4-3 Bill presented after meal or upon request. Pay at cashier. Server handles payment with limited enthusiasm. Server briefly thanks patrons or says farewell. 2-1 Bill not presented after meal or upon request. Repeated request for bill. Incorrect charges or items on bill. No farewell on departure. Unacceptably slow processing of bill and payment. Bill presented in a dirty, unacceptable folder. Housekeeping

dusting. All surfaces, high and low, dust free, no cobwebs. Table surfaces well-polished, no smears. Ashtrays clean. Everything tidy and well arranged. 7-6 High level of cleanliness. Pre-dinner area may have "lived-in" feel. 5-4-3 Clean but with some dust on high and low surfaces. Personal clutter. Dying plants, flowers. Smears on surfaces. 2-1 Generally neglected housekeeping-carpet badly vacuumed, floors dirty. All surfaces dusty. Cobwebs, dead insects. Evidence of pests. Dead/ wilting plants or flowers. Ashtrays full and dirty. Dirty glasses, cups on tables.

Dining and Eating Rooms

10-9 Excellent standard of cleanliness in all areas no evidence of previous meal. Efficient cleaning and vacuuming. Tables always set to highest standard. Waiter station neat and orderly. Restaurant fully set when not in use complete with flowers, crockery and cutlery. During meal times vacated tables are cleared, cleaned, provided with fresh linen (neat and tidy). Crumbing of tables executed flawlessly. 8 Generally high standard of cleanliness no dust, etc. May be some clutter. 7-6 Always tidy and clean in time for beginning of meal service. Generally good standards of dusting, tidiness. Some tables remain unset during meal service but have been cleared and cleaned. 5-4-3 Not always at it's tidiest. Bottles, glasses, menus on surfaces. Generally clean but may be some

Public Areas
Includes all general public areas visible to patrons such as open kitchens and work areas, pre-dinner areas, patios, gardens, pavements, etc but excluding the eating/dining areas. 10-9 All well cleaned and vacuumed. All surfaces, high and low, dust free, no cobwebs. Table surfaces well-polished, no smears. Ashtrays clean. No fingerprints or smudges on windows or glass doors. No fingerprints on door plates, light switches, etc. Flowers fresh and well arranged. Newspapers, books, etc up to date and tidy. Overall excellent standard of cleanliness evident and neat appearance. 8 Generally very good level of vacuuming and


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dust on high or low surfaces. Pot plants and flowers neglected. Crumbing of tables poor, crumbs dropped onto the floor. 2-1 Dusty, crumbs on carpet, surfaces smeared, ring marked, dead or dying flowers. Untidy piles of menus etc scattered around. Marks, stains on tablecloths, dirty ashtrays. Dirty cutlery and crockery on tables.

A general smart, well-groomed appearance. Sleeves and trousers the right length. Clothing fresh and well ironed. Hair clean and under control. Hands and fingernails clean. Standard of dress uniform throughout serving staff. Polished shoes. Uniform appearance, quality and type consistently applied across all staff 8 Approaching excellent, but lacking the final touch. Perhaps some items a little ill fitting. All clothing clean. Standard of dress uniform throughout serving staff. Excellent standard of personal cleanliness and grooming. 7-6 A noticeable attempt to be smart. No stains, tears, etc but dressed for comfort rather than smartness. All clothing clean. Very high standard of personal cleanliness and grooming. 5-4-3 Clothes starting to look worn, rumpled, lived in, but basically clean. Hair a bit uncontrolled. 2-1 Clothing dirty, stained, frayed, holed. Dirty shoes. Hands and fingernails grubby. Hair unwashed and out of control. Unshaven. Personal hygiene lacking.

Public Toilets
10-9 Fastidious attention to hygiene. All surfaces gleaming. Clean, fresh smell. High level of efficiency. Toilets, including access area to toilets are kept clean throughout use of restaurant. Lots of toilet paper available. 8 Generally very high standard, but perhaps one or two slight lapses. 7-6 No evidence of dust, hairs or grime. Surfaces all clean. Floor clean, vacuumed and free from dust. 5-4-3 Generally clean but lacking attention to detail. Dust on low and high surfaces and in inaccessible places. 2-1 Low standard of housekeeping dust on all surfaces. Long term encrusted grime in inaccessible places, dirt and hairs on floor, in corners. Flooring around toilet stained, smelly. No toilet paper. Toilet paper on floor, blocked toilets, leaking toilets, etc.

Additional Requirements for Gold and Platinum Star Outlets General

All Platinum Star outlets should have private guest toilets located within the same property as the restaurant and under the control of restaurant management. Alternatively if only public toilets are available then the Platinum Star outlet owner/ manager should ensure that these public toilets are continuously monitored and kept clean.

Appearance of Staff
The nature of the establishment will be taken into account as formality may vary significantly. 10-9 Clean, neat, appropriate clothes that fit properly.


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Services Table Reservation: All Gold and Platinum Star outlets should offer a table reservation service. Wine List : A wine list with a good selection of wines must be available and management/waiting staff must have adequate knowledge of the different varieties on the menu. Table Appointment: High quality cutlery, crockery, glassware and linen. Appropriate table cloths and placemats to be used. Food Menu: Food menu should offer a variety of items: entrees, seafood, poultry, meat dishes, salads, desserts, and dishes for vegetarians. Noise Levels: Entertainment/background music (where available) should be set at the appropriate noise level. Table Spacing: There should be adequate space between tables to ensure privacy for conversation.

Developing standards (levels of expected performance) is part of the process of controlling food and beverage costs. Standards specific to the property's current plans will better indicate problems (variances from planned costs) than will standards adopted from industry averages or standards developed from the property's past operating statistics. The usefulness of control information can be increased by establishing standards for each revenue center within the food and beverage operation. For example, instead of computing a standard food cost covering all outlets, a property might establish separate standard cost levels for its coffee shop, dining room, room service, and banquet operations. An advantage of this alternative is that each outlet can be evaluated separately based on its own set of anticipated costs. However, food and beverage managers realize that as a standard becomes more specific, more time is required to develop and monitor it. The longer the time needed to collect information on which to base the standard, or later to measure actual results, the less practical managers may judge the task; and as a result, the less likely they may be to undertake the control activity. In addition, the more complex the


Basics of Catering Management

Determining Food and Beverage Standards


development of standard costs becomes, the more likely the task will be met with resistance by those who must collect the information. Therefore, an ideal control system must strike a balance between the time and effort spent developing the control system and the usefulness of the results the system provides. Simplified, timeand cost-effective systems for determining food and beverage standards are offered in this chapter. The principles for establishing standards are the same regardless of whether the property is commercial or institutional, large or small, fast food or gourmet, hotel or restaurant. Managers in any kind of operation who want to develop in-house food and beverage standards can use the procedures discussed in this chapter. Systems for developing food and beverage standards must begin with the menu. The menu should be designed to implement the property's marketing plan as it relates to the food and beverage operation. Because it establishes which food and beverage items will be served, the menu is the most basic and important control tool. Once a menu is created, five standard cost tools can be developed: Standard purchase specifications. Standard recipes Standard yields Standard portion sizes Standard portion costs STANDARD PURCHASE SPECIFICATIONS A purchase specification is a concise description of the quality, size, weight, count, and other factors needed to describe a desired item. The specified factors should be described in sufficient detail to properly guide the company's

suppliers and receiving personnel in the delivery and receipt of the desired products. Management should establish standard purchase specifications based on menu requirements and the operation's merchandising and pricing policies. Once developed, standard purchase specifications should be given to those responsible for purchasing, the property's suppliers, and receiving personnel. In this way, all of the parties involved in ordering, supplying, and receiving will have the necessary written guides to permit the operation to consistently obtain the quality and kind of food and beverage items desired. In addition to providing a knowledge of what is required by the operation, standard purchase specifications offer several other advantages: Fewer products may be required. Analyzing the menu may suggest ways to duplicate product use (use an ingredient for several menu items) so that fewer ingredients have to be purchased. Reduced purchase costs are possible if proper quality items are purchased. Developing purchase specifications based on the needs of the menu means that the property will not have to pay a higher price for a product of greater quality than necessary. If purchase specifications are properly established, more than one supplier will likely be able to quote prices and compete for the operation's business. The development of specifications involves time and effort. Time is needed to create the specifications and then to monitor the need for changes as the operation's business evolves. Furthermore, their use will create increased duties for the receiving staff. Finally, since specifications establish the minimum quality expected, over time they may become the maximum quality that will be purchased. However,


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considering the many advantages to the use of purchase specifications relative to the few disadvantages, it should be clear they are a critical standard cost control tool. It is only through carefully developed and rigidly enforced specifications that the operation can help assure that the" right" quality product is consistently available for production and service. Remember, however; use of standard purchase specifications will not, alone, guarantee that products of the correct quality will be received unless effective receiving control procedures are in use. STANDARD RECIPES A standard recipe is a formula for producing a food or beverage item. It provides a summary of ingredients, the required quantity of each, specific preparation procedures, portion size and portioning equipment, garnish, and any other information necessary to prepare the item. The advantages of standard recipes are equally relevant in both food and beverage preparation. The primary advantage of following a standard recipe is that, regardless of prepares the item, when it is prepared, or to whom it is served, the product will always look, cost, and taste the same. The consistency in operations provided by the standard recipe is at the heart of all control, and many marketing, systems. Note that this recipe yields 60 portions, each with a standard portion size of 6 ounces. The" Amount" column on the left margin can be used to adjust the yield to a larger or smaller quantity. To aid in portioning, the recipe's "Procedure" column specifies that a #60 scoop (which equals 60 level scoops, or servings, per quart) should be used. Note also that the recipe clearly indicates baking time, temperature, and the exact procedures for preparing the menu item. There are several other reasons to use standard recipes in

addition to the advantages of consistency in appearance, cost, and taste: When managers know that the standard recipe will yield a specific number of standard-size portions, it is less likely that too many or too few items will be prepared. Since standard recipes indicate needed equipment and required production times, managers can more effectively schedule food production employees and necessary equipment. Less supervision is required since standard recipes tell the employees the quantity and preparation method for each item. Guesswork is eliminated; employees need only follow recipe procedures. Of course, managers should routinely evaluate the quality of items produced and ensure that standard recipes are followed correctly. If the chef is ill or the bartender doesn't show up, a product can be produced if a standard recipe is available. Granted, inexperienced employees will be slow and may make mistakes. However, if the recipe is in the head of an absent employee instead of on a standard recipe card or available for printout, management will be in an even more awkward position. Many persons think about the importance of standard recipes for food production; as suggested above, however, they're also critical to control the consistency (quality and cost) of beverages. Today in the U.S. it is critical that standard recipes specifying ingredient and portion sizes of alcoholic beverages be available in consistent use. Liquor liability concerns often arise when standard recipes are not available and or when standard portion controls are not in use. It is


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Determining Food and Beverage Standards


always necessary to be able to verify the actual quantity of alcohol (not just number of drinks!) that has been consumed by a guest. Using a standard recipe does not requite that the recipe be physically in the work area during production times. After a cook prepares a menu item several times, or a bartender mixes a drink several times, he or she will-remember ingredients, quantities, and procedures. It would obviously be impractical if, before preparing a drink, a busy bartender had to refer to a standard recipe. A standard recipe must always be followed and must always be available, but it does not always need to be read. DEVELOPING STANDARD RECIPES Developing standard recipes does not require throwing out existing recipes and starting over. Rather, it often requires standardizing existing recipes according to a series of steps. Select a time period for standard recipe development. For example, you may choose to standardize three recipes at each weekly cooks' meeting, or spend one hour each week with the head bartender to develop standard beverage recipes. At these meetings, ask the cook or head bartender to talk through the preparation of the item. What are the ingredients and how much of each ingredient is needed? What are the exact procedures? What are cooking/baking temperatures and times? What portioncontrol tools are, or can be, used? On what plate or in what glassware is the item served? What garnish is used? Doublecheck the recipe by closely observing the cook or bartender as the item is actually prepared. Record the recipes in a standard format that will be helpful to those preparing the items. For example: Decide on the desirable yield. If 25 portions of a food item are normally prepared for slow periods and 60

portions are needed for busy times, recipes should be designed to yield these servings. List all ingredients in the order they are used. Decide whether to use weights or measures or both. Weighing is always more precise than measuring, and it is just as practical to weigh liquids, flour, etc., as it is to measure them. Avoid confusion by using consistent abbreviations throughout all the standard recipes you are developing. Whenever possible, express all quantities in amounts that are practical for those preparing the item. For example, convert all measures into the largest possible units. Change 4/8 cup to 1/2 cup, four cups to one quart, or three teaspoons to one tablespoon. At this point you need to be sure that the proper equipment is available. It does little good to specify a three-ounce quantity when an accurate measuring scale is not available. Also, when applicable, recipes should be developed that call for standard-size pans and other equipment. Record procedures in detailed, concise, and exact terms. Avoid ambiguous statements. For example, what does" one cup whipping cream" mean? Does it mean one cup of cream that has been whipped or does it mean one cup of cream that must be whipped? When mixing is called for, tell how to mix (by hand or by machine) and provide the exact time and speed if a machine is used. State the size and type of equipment and small wares such as pans or bowls needed and always list exact temperatures, cooking times, and other necessary controls. Carefully consider potential sanitation problems which can arise in each step of recipe production; note these


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Determining Food and Beverage Standards


and incorporate food handling precautions directly into the recipe. For example, if the operation uses a hollandaise sauce (this sauce is potentially hazardous and is highly susceptible to contamination by microorganisms), a last step in the recipe for hollandaise sauce might state: "Hollandaise sauce is a potentially dangerous food which can become contaminated by microorganisms; always prepare in small batches and do not hold on the serving line for more than one hour." Provide directions for portioning. Indicate the type and size of the serving dish. Also, indicate portioning equipment, such as ladle or scoop, and specify the expected number and size of portions. Be sure all required portioning equipment is available for use. If garnishes or sauces are needed, these should be listed. After the standard recipes have been recorded, share them with other production staff. Solicit their ideas about accuracy and possible refinements. Finally, test the recipes to be certain that they yield products of the desired quantity and quality. After successful testing, the recipe may be considered standardized. Despite the advantages of using standard recipes, there may be some difficulties encountered in implementing them. Cooks or bartenders, for example, may feel that they can no longer be creative in the kitchen or behind the bar. They may resent the need to put things down on paper. Other difficulties may be related to concerns about time. It takes time to standardize existing recipes, and it takes time to train production employees to precisely follow them. These concerns, however, are minor when compared to the points already noted in favor of using standard recipes. In addition, managers can minimize difficulties with

implementing standard recipes by explaining to employees why standard recipes are necessary and by involving them in developing and implementing the recipes. STANDARD YIELDS The term yield means the net weight or volume of a food item after it has been processed and made ready for sale to the guest. The difference between the raw or "as purchased" (AP) weight and the prepared or "edible portion" (EP) weight is termed a production loss. In general, there are three steps in the production process. The first step is preparation, which includes such activities as meat trimming and vegetable cleaning. The second step is cooking. Holding, the third step includes the portioning of those products that have not been preportioned. A "loss" can occur in any of these steps. A standard yield results when an item is produced according to established standard production procedures outlined in the standard recipe. They serve as a base against which to compare actual yields. For example, if the standard purchase specifications are adhered to and a meat item is properly trimmed, cooked, and portioned, the actual yield should closely approximate the standard yield. DETERMINING STANDARD YIELD Standard yields are determined by conducting a yield test. Ideally, everything that does not have a 100 percent yield should be tested. (Examples of items with 100 percent yield [100 percent edible portion] are some portion-controlled products such as meats and those convenience foods that only need to be plated.) However, from a practical standpoint, yield tests are typically performed only on high-cost items or on lower-cost products used in large quantities.


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The yield from a product depends upon several factors, including the grade, original weight, and preparation and cooking methods. Therefore, it is helpful for a food and beverage purchaser to compare the yields for similar products from different suppliers. It may be possible to substitute a raw product with a lower cost per unit that provides a yield similar to that of a higher cost product, without compromising the operation's quality standards. Since the AP weight is already known, the meat must next be weighed when it is removed from the oven after cooking. By subtracting the cooked weight from the original weight, you can determine the loss in cooking-in this example, an average of 3 pounds, 14 ounces per beef rib. Next the fat cap and bones must be removed, and the remaining meat weighed. This is the edible portion or servable weight-in this example, an average of 11 pounds, 3 ounces per beef rib. Subtracting the edible portion (servable) weight from the cooked weight indicates that the loss in carving and bones averaged 5 pounds, 3 ounces. COST PER SERVABLE POUND Once the edible portion (servable) weight is determined, a cost per servable pound can be determined. To find the cost per servable pound, first establish the yield percentage. The yield percentage (sometimes called yield factor) is the ratio of servable weight to original weight and is calculated by dividing the servable weight by the original weight (normally both weights are expressed in ounces; there are 16 ounces in one pound), and multiplying by 100 to change the decimal to a percentage. The cost per servable pound is the information needed to calculate standard portion costs, discussed later in this chapter. One can make a similar calculation to determine the total AP quantity needed once the yield percentage is

known. Assume that 50 8-ounce edible portions of beef ribs in the above example are required for a banquet and that there is a 55.25 percent yield. What quantity of beef ribs will be needed to yield the 25 pounds (50 portions at 8 ounces per portion) that are requested? The cook will have to prepare approximately 45.25 pounds (724 ounces divided by 16 ounces per pound) to yield the 25 pounds that are needed. THE COST FACTOR The cost factor is a constant value that may be used to convert new AP prices into a revised cost per servable pound, assuming that the standard purchase specifications; standard recipe, and standard yield remain the same. The cost factor is obtained by dividing the cost per servable pound, calculated as part of the yield test, by the original AP cost per pound. STANDARD PORTION SIZES Each food and beverage standard recipe indicates a standard portion size. This is the fourth standard cost tool for ensuring consistency in operations. Because a given menu item or drink will be the same size each time it is portioned, no guest will get a larger or smaller portion or a stronger or weaker drink. The benefit is twofold: portion costs for the same food and beverage items will be consistent, and the guest will always receive the same value for the dollars he or she spends. Value is the relationship between price and quality. Basing the selling price of the food or beverage item, at least in part, upon its cost will help to establish a fair selling price, or value, from the guest's perspective. Assume that an operation does not provide a standard portion size. On one occasion, a guest may receive a very large portion-a great value. Returning at a later time, the same guest may receive


Basics of Catering Management

Determining Food and Beverage Standards


a smaller portion at the same selling price-a lesser value and a disappointment for the guest. Consistency, then, in terms of value perceived by guests, is a primary advantage of standard portion sizes. Portion control tools must be available and used every time a recipe or beverage is prepared. Portion control tools include such items as weighing and measuring equipment, ladles and scoops to portion food, jiggers and shot glasses for beverages, or automated beverage-dispensing equipment. Employees must know about portion sizes in order to follow them. Required portion sizes from each standard recipe should be posted in production areas for cooks and bartenders to refer to. In addition to these lists, some operations use pictures of each item. When these are posted in serving line stations, employees can see how the item should look or how it is placed on the plate. STANDARD PORTION COSTS After standard recipes and standard portion sizes have been developed, a standard portion cost-the fifth standard cost toolcan be calculated. A standard portion cost is, simply, the cost of preparing and serving one portion of food or one drink item according to the standard recipe. The process of establishing this cost is called pre-costing. A standard portion cost is determined by dividing the recipe's total ingredient costs by the number of portions the standard recipe yields. For example, if the cost to prepare a recipe is $75.00 and it yields 50 portions, then the standard portion cost for one item is $1.50 ($75.00 + 50 portions). The prices for ingredients listed in standard recipes can be obtained from current invoices. Today, many operations use computerized precosting systems to keep the per-portion cost of standard recipes current. For example, if the price

of ground beef increases, the new cost is entered into the menu management system and all recipe costs in which ground beef is an ingredient are automatically adjusted to reflect the price increase. For example, no costs are included for salt and pepper. To arrive at the total cost of each ingredient, the amount of the ingredient is multiplied by the cost per unit. For example, the total cost of fish fillets is calculated as follows: Amount x Cost/Unit = Total Cost 22 lb, 8 oz x $4.85 = $109.13 (rounded) The total ingredient cost for preparing 60 portions of fish fillet amandine according to the recipe is $119.50. The portion cost for this menu item is calculated at the bottom of the worksheet: Total Cost ------------------------------ -= Standard Portion Cost ----------------------------Number of Portions $119.50 --------------------------- = $1.99 60 Therefore, the standard portion cost-the cost to prepare one portion according to the recipe-is $1.99. Changes in the yield of a standard recipe that occur because of a change in the portion size will affect the standard portion cost. Anytime the portion size is altered, a new standard portion cost must be calculated. CALCULATING STANDARD DINNER COSTS Many food service operations combine individual menu items to create dinners or other meals that are casted, priced/


Basics of Catering Management

Determining Food and Beverage Standards


and sold as one selection (although some operations such as cafeterias offer items a la carte-each item individually priced). The cost of each item listed on the standard dinner cost worksheet is obtained from pre-casted standard recipes for each menu item. The costs of items offered as part of the dinner are totaled to arrive at the dinner cost of $4.14. Because the vegetable varies from day to day (the term" du jour" for vegetable means" of the day," and because guests have choices in the potato, dressing, and juice categories, it would take an impractical amount of time to determine the standard dinner cost for all the different dinner combinations that are possible. For the categories in which the guests have a choice, managers can choose the cost of the most popular item in the category to determine the dinner cost. For example, if baked potatoes are chosen most often by guests, then the portion cost of baked potatoes might be used when calculating the standard dinner cost. It is also possible to select the item with the highest portion cost in a category and use this when determining the standard dinner cost. In addition, managers can track the actual number of each item chosen for several days, and then calculate an average cost that can be used when determining the standard dinner cost. Regardless of the method used, planners should be aware of the item cost which is used in calculating the standard dinner cost. Then, when additional items are considered, they can better assure that the per portion cost of the new item will be in line with that used in earlier cost calculations. The worksheet provides four more columns for calculating the standard dinner cost when the standard portion costs of items change (due to a change in an ingredient's price on the item's standard recipe). When this occurs, the new standard portion cost is added to the unchanged costs of the

other dinner items to arrive at a revised standard dinner cost. Increasingly, computerized menu management systems are used to update the costs of menu items. These systems are also used to calculate possible food costs when managers consider changing menu prices. CALCULATING BEVERAGE STANDARD PORTION COST:

Establishing a standard drink cost for beverages is relatively simple because usually there are few ingredients. A standard recipe form, such as the one shown in Exhibit 8 for a Manhattan, can provide space for listing ingredient costs and calculating the standard drink cost. Most alcoholic beverages are sold by the liter rather than by the ounce. Therefore, because recipes and bar equipment typically use ounces as a unit of measure, it is usually necessary to convert liters to ounces before making recipe extensions or costing calculations. Since there are four columns in this section, three ingredient price changes can be noted before a new standard form must be used in this manual system. As with the food costing procedures noted above, computerized systems make this process quick and easy. How are ingredient costs calculated? To determine the cost of the rye whiskey used in the Manhattan, for example, the price of the bottle of rye whiskey first must be divided by the, number of ounces in the bottle to obtain the cost per ounce: $ 9.65 (price per liter bottle) Cost per Ounce = 0$.286 33.8 (ounces per liter bottle) (rounded) When calculating a bottle's cost per ounce, some beverage managers deduct an ounce or so before dividing to allow for


Basics of Catering Management

Determining Food and Beverage Standards


evaporation or spillage. This will increase the cost per ounce. Since 1.5 ounces of rye whiskey are used in a Manhattan, the ingredient cost for rye whiskey is $.43: $.286 X 1.5 ounces = $.429, or $.43 (rounded). The costs of the rye whiskey and the other ingredients used to make the Manhattan are added together and the total drink cost ($.530) is recorded at the bottom of column 5. This figure is then transferred to Line B at the top of the recipe. Line C at the top-of the recipe indicates the drink cost percentage. The drink cost percentage expresses how much of the drink sales price (recorded on line A) the drink cost represents. The drink cost percentage is calculated by dividing the cost of the drink by the drink's selling price and multiplying by 100. The drink cost percentage for the Manhattan in the sample recipe is calculated as follows: $.530 (drink cost) Drink Cost Percentage = $4.00(sellingprice) = .133 (rounded) X100= 13.3% Special Standard Cost Tools for Beverage Control The five standard cost tools-standard purchase specifications, standard recipes, standard yields, standard portion sizes, and standard portion costs-are necessary to establish performance standards for both food and beverages. However, two additional standard cost tools are important to the beverage operation: standard glassware and standard ice size. Standard Glassware: Glassware obviously affects portion size, quality, and perceived value. In too small a glass, highballs made with mixers such as soda, tonic, or water will be too strong since less mixer can be added to the standard portion of liquor.

Conversely, in too large a glass, the drink will taste weak since the greater amount of mixer dilutes the standard portion of liquor. Therefore, the standard drink recipe should specify a standard glass size, which should be determined when the beverage recipe is standardized. A standard glassware review sheet, should be posted in the work area. The same style and size of glass should be used every time the drink is prepared. This means, of course, that sufficient quantities of all necessary glassware must be available at all times. Glassware is also important in marketing to help carry out an atmosphere theme and to influence the appearance and presentation of the drink. However, while glassware affects presentation (marketing) concerns, it is wise to limit the number of different glasses in inventory. For example, the same glass might be used for ice water, soft drinks, milk, and highballs. If this can be done, problems with the costs of glassware, storage space behind the bar, and training time for bartenders and servers may be reduced. Standard Ice Size: It is easy to ignore the effect of ice size on drink quality. Although any size ice is suitable for most food service purposes, drink standardization must consider ice cube size. Bigger cubes leave more empty space in the glass because they do not clump together as smaller cubes do. This space must be filled with something. In a liquor-only drink, such as a martini, the amount of beverage appears smaller, unless a larger portion is served. In a mixed drink, the drink will be diluted by adding more mix. On the other hand, small cubes or shaved ice fill up a glass more completely before a beverage is added, but both melt more quickly. Therefore, a delay in serving or consuming the drink may create a diluted taste. Management must therefore consider its operating procedures to determine the proper size of ice cubes for the operation.


Basics of Catering Management

Determining Food and Beverage Standards


Computer Applications: Recipe Management Software Recipe management software maintains three of the most important files used by an integrated food service computer system: an ingredient file, a standard recipe file, and a menu item file. Most other management software programs must be able to access data contained within these files to produce special reports for management. Ingredient File An ingredient file contains important data about each purchased ingredient. Ingredient file data generally include ingredient code numbers and descriptions, as well as each ingredient's: Purchase unit and cost per purchase unit Issue unit and cost per issue unit Recipe unit and cost per recipe unit. A sample ingredient cost list produced from some of the data contained in an ingredient file. This report is useful for detailing unit expenditures at current costs and monitoring relationships among various product units (such as purchase, issue, and recipe units of the same ingredient). Some ingredient files may specify more than one recipe unit. For example, the recipe unit for bread used for French toast is by the slice; the recipe unit for bread used for stuffing may be by the ounce. The initial creation of an ingredient file and the subsequent file updates (daily, weekly, monthly, etc.) are often challenging tasks for many food service managers. However, the benefits of an ingredient file often outweigh the cost of creating and maintaining the file. When the ingredient file can be accessed by other management software programs (especially by inventory software), ingredient data can easily be transferred (rather than re-inputted) to

appropriate management software programs. Since other management software programs rely on data maintained by the ingredient file, it is important that data contained in the file are accurate. If errors are made when initially entering data, all subsequent processing will be unreliable and system reports will be relatively worthless. Standard Recipe File Computers can assist in generating standard recipes by simplifying many of the calculations needed. Numerous software programs that calculate recipe quantities based upon estimated unit sales and then print the standard recipe are available. Standard recipe conversion information generated by recipe management software. The software converts recipe ingredient amounts to weights and then to ingredient costs. It can also determine nutritional information for an entire meal (or other period) and define applicable preparation areas (for example, whether ingredients are to be issued or delivered to specific workstations). Some recipe management software programs provide space within standard recipe records for preparation instructions (also referred to as assembly instructions) that are typically found on standard recipe cards. This can be a useful feature when the number of portions yielded by a particular standard recipe has to be expanded or contracted to accommodate forecasted needs. For example, if a standard recipe is designed to yield 100 portions but 530 portions are needed, it may be possible (depending on the particular menu item) to instruct the system to proportionately adjust the ingredient quantities. A recipe for 530 portions can be printed that includes preparation information, thus providing a complete plan for the new recipe's production.


Basics of Catering Management

Determining Food and Beverage Standards


Few restaurants purchase all menu item ingredients in ready-touse or preportioned form. Some ingredients are made on the premises. This means that the ingredients within a standard recipe file may be either inventory items or references to other recipe files. Recipes that are included as ingredients within a standard recipe record are called subrecipes. Including sub-recipes as ingredients for a particular standard recipe is called chaining recipes. Chaining recipes enables the food service computer system to maintain a single record for a particular menu item that includes a number of sub-recipes. When ingredient costs change, recipe management software programs must be capable of automatically updating not only the costs of standard recipes, but also the costs of sub-recipes that are used as ingredients in other standard recipes. Menu Item File A menu item file contains data for all meal periods and menu items sold. Important data maintained by this file may include the menu's identification number, descriptor, recipe code number, selling price, ingredient quantities for inventory reporting, and sales totals (by unit). This file also stores historical information about the actual number of items sold. Generally, after a meal period, the actual number of menu items served is manually entered into the menu item file, or automatically transferred from an electronic cash register (ECR) or point-of-sale (PaS) system through an interface to the restaurant management system. This data can be accessed by management or by sophisticated forecasting programs to project future unit sales, determine the number of ingredient quantities to purchase, and schedule needed personnel. In addition, computer-based sales analysis applications access data in

the menu item file to produce various sales analysis reports for management. When menu items, prices, or tax tables need to be changed, the menu item file is accessed and appropriate changes are entered according to procedures indicated in the user's manual provided by the system's vendor. STANDARD FOOD COSTS The best sources of information to use as the basis for establishing standards are the property's operating budgets developed for a current fiscal period and in-house measurements that consider potential costs matched with anticipated revenue. The remainder of this chapter discusses this second method of establishing standard costs. Standard costs can be implemented after the standard cost control tools for the food and beverage operation discussed earlier in this chapter have been developed. When standard food costs are known, management is able to compare the cost of food with the revenue it generates. There are several ways to measure food cost. One way expresses costs in terms of total dollars spent on food per day, week, or year. The more common method of measuring food cost in commercial food and beverage operations is the food cost percentage. This expresses cost as a percentage of food revenue and is calculated by dividing food costs by food revenue and multiplying by 100. In institutional, non-pricing operations, the food cost percentage often measures food cost differently by expressing it as a percentage of total operating expenses rather than as a percentage of revenue. In all cases, the standard food cost percentage represents the planned food cost percentage against which actual food costs are measured. The procedure to calculate food cost percentage begins by first establishing all standard cost tools: standard purchase


Basics of Catering Management

Determining Food and Beverage Standards


specifications, recipes, yields, portion sizes, and portion costs. With these tools, the standard food cost for each item is developed following the process discussed earlier. Next, a time period for a trial study must be selected. Over this trial period, accurate sales information for each menu item is collected to calculate an overall standard food cost. The longer the time period for the analysis, the more accurate the information. A practical and reasonably accurate method for calculating standard food costs involves the use of the worksheet illustrated in. Each menu item is listed on the left side of the form. If an item is offered for sale individually, such as soup or eggplant appetizer, it is listed separately on the worksheet. If it is sold as a dinner or in combination with other items, such as seafood or steak, it is combined with the dinner. Since actual food cost is calculated across all meal periods (properties do not determine actual food cost separately for breakfast, lunch, and dinner) the worksheet should list all menu items. SALES HISTORY INFORMATION The information necessary to determine standard food cost may come from actual sales records citing the number of each menu item sold during one or more prior periods. If a sales history has been kept, the total number of each item sold can easily be transferred to the worksheet. If there is no record of past item sales (for example, if an entirely new menu is introduced), items sold must be tallied daily during the study period. An accurate tally of the number of each a la carte and complete meal item sold during the trial period must be made. The information may come from an analysis of the guest checks created each day during the study period or from a management report generated by most electronic cash registers or point-of-sale

systems. The worksheet has space for only 16 days. Because accuracy increases as the number of days increases, two or more forms can be used to tally item sales for at least one month. By recording this information on a worksheet, total sales (number of units) and total food costs for the trial period can be easily tracked. With this information, an overall food cost percentage can be figured. Because each food item is likely to have a different food cost percentage, calculating the overall food cost involves determining a weighted average food cost. Items with a high food cost raise the average food cost percentage; items with a low food cost reduce it. It is this weighted average food cost that will be used as the standard against which to measure actual food costs. 1. The item sales price is the actual selling price of each menu item as printed on the menu. 2. Total food revenue represents the total revenue expected from sales of the individual menu items. In the first example, 223 servings of soup were sold at 90 cents each, resulting in a total revenue of $200.70. Actual revenue may be less than expected revenue. Differences could be due to theft, to errors in processing sales information, or to inaccurate counts of the number of items sold. 3. Item food cost is the standard portion cost. If the item is sold individually, this figure can be taken from the pre-casted standard recipe. If the item is a grouping of menu items, such as a New York strip steak dinner, then the figure can be transferred from the standard dinner cost worksheet. 4. Total food cost is the total cost of all food used to produce the number of items sold. For example, the 223 servings of soup each had a standard food cost of 32 cents. The total food cost, then, is:


Basics of Catering Management

Determining Food and Beverage Standards


5. The food cost percentage is calculated by dividing the food cost by the sales price and multiplying by 100. The standard food cost percentage for the soup is: While the standard food cost percentage for each individual item is of some interest, one more step is needed to arrive at the overall standard food cost percentage. 6. To calculate the standard food cost percentage against which to compare actual food costs, the sum of the total food cost column is divided by the sum of the total food revenue column and multiplied by 100. In the example in Exhibit 14 the standard food cost percentage is calculated as: $11,892.84 100 = 35.64%; $33,370 The effort needed to calculate an overall standard food cost percentage can be simplified by using one of the many electronic spreadsheet programs available for a personal computer. The number of each menu item sold can be entered on a daily basis. The computer can calculate total revenue and total costs along with the item's standard food cost percentage and the overall standard food cost percentage. CALCULATING STANDARD COSTS PER MEAL One final comment about developing standard food costs must be made. Properties offering more than one menu, such as lunch and dinner, must decide whether to develop standard food costs by meal or across all meals. If by-meal food costs are desired, calculations for each meal must be done on a separate worksheet. There are two advantages to a separate listing. First, when food cost standards are separated by meals, it is easier to compare any differences between standard and actual costs. Second, since corrective action can focus specifically upon the meal period contributing, higher than expected food

costs, the reasons for losses can more quickly be identified and brought under control. There is, however, one serious disadvantage to overcome when standards are established for each separate meal period. To effect control, actual food costs must also be assessed separately for each meal. Even with the use of point-of-sale equipment, the process of determining how much of each food item is used for breakfast, lunch, or dinner is very timeconsuming. For example, a manager might know the cost of food that should have been used during a meal period (number of items sold times each item's standard food cost). But if some food was wasted or improperly portioned during preparation, the actual cost of food used would be greater than that determined from the tally of sales. Many food and beverage managers, therefore, find it more helpful to spend time identifying problems common to all meal periods, such as ineffective purchasing, receiving, storing, and issuing, or problems in production and service, rather than searching for problems applicable to a specific meal period. DEFINING EXPECTED FOOD COSTS The standard food cost percentage is one of the most important tools of the control process. It becomes the manager's goal since it defines expected food costs. If actual food costs are close to this goal, the management team is probably doing a good job. If, on the other hand, actual food costs are greater than standard food costs, there may be problems within the operation. The manager should first check to see if the sales mix has changed since the information was collected to determine the standard food cost. For example, it may be that more items with higher food cost percentages are being sold. This is a common reason that total food costs and food cost


Basics of Catering Management

Determining Food and Beverage Standards


percentages are higher than expected. If this is not the cause, the manager must analyze the food service operation to determine where corrective action is needed. IDEAL COSTS BASED UPON ACTUAL SALES MIX To this point, we have discussed the development of standard food costs that are based upon historical sales mix. We have noted that when actual costs do not approach standard costs, one reason may be that the sales mix for the period under study is different from the sales mix at the time the standard food cost was calculated. The concept of ideal cost addresses this problem. An ideal cost is based on the actual number of each menu item sold. After each meal period or at the end of a day, the actual number of each item sold can be multiplied by its per-portion standard food cost to arrive at the expected cost for serving that number of the item. When this process is completed for all menu items and the expected costs are added together, an ideal cost for the meal period or day can be determined. This data is, in turn, summed for each successive meal period or day to generate an ideal food cost for the entire time period (such as month) for which actual costs will be assessed. Because an ideal cost is based on the actual number sold, it provides a more accurate basis of comparison against actual food cost. This gives management an opportunity to effect control closer to the time of production and service. For an ideal cost system to be effective, standard recipe costs must be kept current. This means that management must maintain up-to-date information about ingredient purchase costs and continually recalculate (pre-cost) standard recipes. The need for a large amount of computation suggests that ideal cost may be best implemented using a computerbased system.

To that end, system manufacturers often include software to generate an ideal cost as part of their ECR or POS systems. With computerized systems, the process of determining ideal costs is relatively simple. STANDARD BEVERAGE COSTS Standard beverage costs are calculated for exactly the same reason as standard food costs. The manager wants to establish a goal-a base of comparison-against which to measure actual results of the beverage operation. The standard beverage cost becomes the goal. The steps in calculating standard beverage costs are: Establish all standard cost tools: standard purchase specifications, recipes, yields, portion sizes, portion costs, glassware, and ice. Select a time period for the analysis. As with standard food costs, more time and effort spent on determining standard beverage costs will generally produce more accurate cost calculations. However, no system can provide data with 100 percent accuracy. The best time schedule will allow observation of all phases of the beverage operation, including both slow and busy times, or shifts with high, low, and/or regular prices. At a minimum, the review should cover two or three weeks in succession. Operations with several beverage outlets need a longer observation period for sales to reflect an average volume and a variety of drinks served. Inform all affected staff members-bartenders, food and beverage servers, and others-about the study. They will want to know: a. The reason for the study-to determine cost expectations for accounting, record keeping, management, and control purposes.


Basics of Catering Management

Determining Food and Beverage Standards


b. Why the study is important-management wants to assess how well the beverage program is operating. c. What's in it for them-the results of the study will help staff members know what's expected of them, and cost savings may be shared with the staff. d. Implications of the study-results of the analysis have no bearing on employment status; no one's honesty or competency is being reviewed or questioned. e. Procedures for the study-there will be minimal, if any, disruption in on going operations. Set rules for the study period, emphasizing that during the trial study employees must very carefully follow all standard procedures. The purpose is to ensure that accurate and reliable information is collected. a. Standard beverage recipes are to be used whenever drinks are prepared. b. Portion control tools (shot glasses, jiggers) and standard glassware are to be used in preparing every drink. c. Management personnel might work behind the bar whenever possible during the study to better assure that required procedures are followed consistently. When not working the bar, managers should carefully supervise operations to ensure compliance with all standard operating procedures. d. At the beginning of each shift, the manager should remind personnel that the property is involved in the beverage study and that careful compliance with all procedures is important.

e. Revenue from all drinks served must be collected. Management must approve all complimentary drinks. Personnel must save all drinks returned because of mistakes. Special precautions to minimize the possibility of guest" walkouts" and errors in guest checks should be used. Before the study begins, take careful inventory of the quantity of liquor behind the bar. Maintain a record of the cost of all liquor issued to the bar during the trial study. Record any beverages transferred from the bar and any food transferred to the bar. Calculate the standard beverage cost. Close supervision and efficient operations during the study period should yield a reasonably accurate standard beverage cost. That is, with continued use of the standard cost tools, a lower beverage cost percentage most likely could not be achieved without measures such as raising prices, reducing portion sizes, or revising basic operating procedures. As with the standard food cost percentage, the standard beverage cost percentage is a goal that managers of the beverage operation should work toward. There are, of course, many factors that affect actual practice. For example, errors may occur, control of the beverage operation may gradually become looser, or changes in policy may require revised procedures. These and similar factors reinforce the value of recalling the standard beverage cost percentage when examining actual operating results. The beverage manager should understand that when actual beverage costs exceed standard beverage costs, a problem may exist.


Basics of Catering Management

Determining Food and Beverage Standards


Key Terms Adjustment Factor: The number by which the amount of each ingredient indicated in a standard recipe is multiplied in order to increase or decrease the recipe's yield, determined by dividing the desired yield by the original yield. Chaining Recipes: Including sub-recipes as ingredients for a particular standard recipe. This enables the food service computer system to maintain a single record for a particular menu item that includes a number of sub-recipes. Cost Factor: A constant value that may be used to convert new" as purchased" (AP) prices into a revised cost per servable pound, assuming that the standard purchase specifications, standard recipe, and standard yield remain the same. The cost factor is determined by dividing the cost per servable pound by the original" as purchased" (AP) cost per pound. Cost per Servable Pound: Information needed to calculate standard portion costs, determined by dividing the" as purchased" (AP) price by the yield percentage as a decimal. Food cost percentage-In relation to commercial food and beverage operations, food cost percentage expresses cost as a percentage of revenue and is calculated by dividing food costs by food revenue and multiplying by 100; in relation to institutional food and beverage operations, the food cost percentage expresses cost as a percentage of expenses and is calculated by dividing food costs by total operating expenses and multiplying by 100. Ideal Cost: A method of calculating standard food costs based on the actual number (sales mix) of each menu item sold during a day or meal period; the actual count of each item sold is multiplied by its per-portion standard food cost to arrive at the expected cost for serving all portions of the item.

Ingredient File: An electronic record that contains important data on each purchased ingredient, such as ingredient code number, description, purchase unit, purchase unit cost, issue unit, issue unit cost, and recipe unit cost. Portion Control Tools: Items such as weighing and measuring equipment, ladles and scoops to portion food, jiggers and shot glasses for beverages, or automated beverage-dispensing equipment. These tools must be available and used every time a recipe or beverage is prepared. Pre-costing: The process of determining the costs of ingredients used in a standard recipe to arrive at a standard portion cost for one item yielded by the recipe. Production Loss: The difference between the raw or "as purchased" (AP) weight and the prepared or "edible portion" (EP) weight. Purchase Specification: A concise description of the quality, size, weight, count, and other quality factors desired for a particular item. Standard Dinner Cost Worksheet: A format for determining standard food costs for all items that are combined in a menu selection. Standard Food Cost Percentage: The planned food cost percentage against which actual food costs are measured. Standard portion cost-The cost of preparing and serving one portion of food or one drink item according to the standard recipe. Standard Portion Size: The quantity (for example, weight, number of ounces or cost) of a menu item to be derived from a standard recipe. Standard Recipe: A formula for producing a food or beverage item. The formula provides a summary of ingredients, the required quantity of each, specific


Basics of Catering Management

Training and Employment


preparation procedures, portion size and portioning equipment, garnish information, and any other information necessary to prepare the item. Standard Recipe File: An electronic record that contains recipes for menu items. Important data included are recipe code number, recipe name, ingredients, preparation instructions, number of portions, portion size, cost of ingredients, menu selling price, and food cost percentage. Standard Yield: Results when an item is produced according to established standard production procedures outlined in the standard recipe; for example, if the standard purchase specifications are followed and a meat item is properly trimmed, cooked, and portioned, the actual yield should closely approximate the standard yield. Sub-recipe: A recipe that yields an "ingredient" such as sauce which is used for another recipe. Yield-The net weight or volume of a food item after it has been processed and made ready for sale to the guest. Yield Factor: See yield percentage. Yield percentageThe ratio of servable weight to original weight, calculated by dividing the servable weight by the original weight and multiplying by 100 to change the decimal to a percentage.



Since the 1970s, France and the United States have carried out a veritable transfer of competences in the hotel and catering trade. France has exported its gastronomical expertise and received in return, not without a certain resistance, hotel and catering chains from which it has learned new management methods and a new approach to service in numbers. Today, the chains are improving their positions in both countries. The main growth expected in France is that of the fast-food outlets, but at the very time that these are slowing down in the United States in favour of restaurants offering table service at moderate prices. France, which is still largely dominated by a tradition of self-run enterprises in the hotel and catering trade, will probably undergo an increase in the share of salaried jobs, especially in supervisory, management and marketing functions. The American advance in this area thus permits us to take a prospective look at employment, while recognising France's advance in the constitution of the different occupations and hotel management training. EMPLOYMENT PROSPECTS IN THE HOTEL AND CATERING TRADE Hotel and catering jobs offer considerable employment possibilities for a young labour force which, with little


Basics of Catering Management

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experience, often places its career hopes on specialised training. In fact, such jobs, which are so attractive to the young generation, are frequently found in structures less prestigious than the palaces or five-star restaurants of the candidates' dreams. In addition, they do not offer longer term career opportunities, in the form of a real employment or profession, to more than a tiny proportion of these young people. From this point of view, the United States, where a distinction is made between odd jobs, regular employment and professions within the hotel and catering trade, permits a prospective look at the activity in France. RESTAURANTS AS THE SECTOR'S MAIN EMPLOYER In France, the number of hotel and catering jobs is generally underestimated owing to the large number of canteens, which are run by private and especially public operators. Indeed, France is the European leader in the field, with 40 percent of the turnover for food consumed outside the home, but this sector, known as 'institutional food service', is not very visible in statistical breakdowns since it is generally classified not with the hotel and catering sector but with hospital, school, prison, military and other activities. If institutional food service is reintegrated into the hotel and catering industry, the profession represents nearly one million jobs. More than one-third are found in restaurants, including three-quarters in 'traditional-style restaurants' and one-quarter in 'fast food'. One-third of these jobs are carried out in canteens and only one-fifth in hotels or other accommodations. In the United States, the same statistical operation leads to an estimate of nearly ten million hotel and catering jobs. Three-fourths are found in restaurants, where table service is less widespread than in France, with the result that such

jobs are evenly divided between what are defined as 'fullservice restaurants' and 'limited-service eating places'. Canteens, moreover, account for only a small proportion of the jobs and 13 percent of the turnover for meals eaten outside the home. Indeed, only one-tenth of companies with more than one hundred full-time employees offer eating facilities to their personnel, and the other canteens often provide only a basic service to a needy population, notably elderly persons and school children identified as undernourished. The hotel trade, meanwhile, which is much less developped than catering, offers even fewer employment opportunities than in France: proportionally, the United States has 2.6 times fewer hotels (and 1.5 times more restaurants) than France. On the other hand, going to restaurants is more widespread among Americans, who eat an average of one out of every five meals outside their homes, which is nearly twice as often as the French. In France, 25 percent of hotel and catering personnel are self-employed, compared to fewer than 5 percent in the United States. Catering remains largely perceived as an opportunity open to all age groups, without significant capital and without diploma requirements. Anyone can open a restaurant, as in the United States, where only some states require a basic training course in hygiene. The growth of hotel and restaurant chains in France is gradually extending salaried work, however, and may thus come to limit the opportunities for creating an independent activity. AN INDUSTRY SEGMENTED BETWEEN PROFESSIONS, REGULAR EMPLOYMENT AND ODD JOBS The French hotel and catering industry is characterised by a high turnover and a workforce that is largely young and unskilled. In this respect, it tends to take its inspiration


Basics of Catering Management

Training and Employment


from the American model, where a third of the population has worked in a restaurant at one time or another. It is mainly composed of operating personnel who are often in contact with customers and thus essentially recruited on the basis of behaviour assessment. In the hotel industry, the majority of jobs involve cleaning, sometimes delegated to specialised companies, and personal services such as hostess-desk clerk, porter, doorman or bell captain. It is possible to arrive at supervisory or managerial posts through internal promotion, but highlevel jobs are increasingly reserved for those with specialised diplomas in business, accounting, management, company strategy and so on. The career prospects for operating personnel are thus often limited, especially in receptiondesk functions, where the hotel trade is above all a sector for initial labour-market entry before professional reorientation. Catering is also a two-tiered sector. The cooks, however, notwithstanding their subordinate role, often have real possibilities for advancement. It is true that cooking is still largely the work of skilled personnel, with diplomas or experience, unlike table service and the bottom-level hotel jobs, which involve a personnel that is often very young (under 25), unspecialised and employed on a part-time basis. The Americans, meanwhile, long counted the hotel industry, as an essentially non-specialised activity, within the cleaning and personal services sector, while 'food services' were attached to retail trade. Since 1997, hotel and catering activities are included in the same service sector, under the heading 'accommodation and food services'. This change is more indicative of a concern for harmonising international statistics sources than a real linking of the two trades. Nonetheless, the management of the workforce in hotel and catering activities is fairly close to that practised in France: apart from supervisory personnel, generally holding diplomas

and employed full time, only competences in culinary production are really recognised. American employers even tend to maintain a three-tiered management of operating personnel. Two distinct populations occupy the subordinate posts: on the one hand, a considerable student population in need of work to help pay for costly studies, generally in contact with customers and employed on a part-time, hourly basis, and, on the other hand, a population essentially consisting of minority groups who hold the less prestigious full-time jobs such as cleaning or caretaking in the hotels or dishwashing, basic cooking or baking in food services. Only major hotels and gourmet restaurants seek personnel with a good level of general training for jobs as waiters or other service posts, while insisting that this personnel is 'educated but not skilled' in relation to the job held. They also require their cooks, whose expertise is recognised, to have a specialised diploma. The occupation of cook is nonetheless becoming more commonplace in the United States. The restaurant chains in particular, whose menus are often developped around a single theme, can rely on standardised work which permits the rapid learning of limited techniques. Thus, the proportion of jobs for short-order or fast-food cooks is sharply increasing and now equals that of traditional cooks. This category-based management of the workforce reflects the coexistence of different kinds of jobs: o about one-fifth treated as skilled professions and centred on culinary production; o one-fourth full-time jobs, including the subordinate positions that basically involve minorities; o a majority of odd jobs for students, more numerous in restaurants than hotels.


Basics of Catering Management

Training and Employment


If the spread of odd jobs still seems unlikely in France because of the relatively small number of students who work, the downgrading of certain jobs relating to the profession of cook and their opening to unskilled labour is underway, notably among large employers in urban areas. TWO SYSTEMS OF TRAINING FOR A SINGLE EMPLOYMENT STRUCTURE? French hotel training, mainly taking its inspiration from the luxury hotels, grew out of a large number of specialities basically intended to satisfy a prestigious, independent hotel and catering trade. Over the past thirty years, it has been restructured around basic specialisations: cooking, table service and hotel management. Recently, moreover, its level has been improved to meet the management needs of hotel chains and catering companies providing a service that is often standardised but more diversified in terms of the range of chains, and thus reaching a larger clientele. Hotel education remains dominated by an artistic ideal, however-and this is the case as of the initial levels of vocational training, which begin around the age of fifteen (certificat d'aptitudes professionnelles [vocational aptitude certificate, CAP] and brevet d'tudes professionnelles [vocational studies certificate, BEP])-which may explain the frequent dissatisfactions of cooks when they actually enter the labour market. At present, France and the United States have the same proportion of high school graduates: 62 percent of a given age group. But the American educational system is more orientated to the recognition of higher-education diplomas. In the hotel and catering trade in the United States, there is no real professional recognition for low-level operational specialities such as cleaning, service or assembly cookery (which consists of carrying out simple food preparations on

the basis of semi-prepared products from the foodprocessing industry). Specialisations come into play after the first two or four years of higher education and are thus more limited: they deal only with culinary arts and hotel management. They are generally recognised in terms of job status-with more full-time posts and more attractive wages-and better career prospects. Certain hotel schools subsequently propose narrower specialisations in management, distinguishing, for example, independent hotel management from that of chains or restaurant management from that of canteens, while these options do not yet exist in France. These two educational systems correspond, however, to a comparable employment structure in both countries. With the exception of gourmet cooking, the traditional activity in the sector remains fairly indifferent to high-level diplomas and privileges on-the-job training. On the other hand, the hotel and restaurant chains have a great demand for highereducation graduates. Such chains are, moreover, more widespread in the United States, where they represent 27 percent of the restaurants and 20 percent of the hotels and employ half of the industry's employees. In France, fewer than 4 percent of the restaurants and only 7 percent of the hotels belong to chains. The essential part of the restaurants' activity is thus still carried out in an artisanal context, within SMEs. Only the canteens generally belong to very large structures, with several thousand salaried employees each. In both countries, chains and large employers generally have a stronger union presence and often provide better employment conditions, with possibilities of advancement to supervisory and management posts. In France, however, independent of these advantages, working for chains which offer such run-of-the-mill services is viewed as so socially degrading and technically deskilling that they often have difficulties in recruiting professional cooks.


Basics of Catering Management

Training and Employment


Attached to the image of gourmet cooking, French professionals are less sensitive to objective working conditions than to the socially prestigious nature of the services provided. In a trade that counts above all on its artisanal features and the personal involvement of individuals, the orientation towards canteens or hotel and restaurant chains tends to be seen as a 'comfortable' choice-but also one that cannot be reversed. On the other side of the Atlantic, it is simply seen as a passing chance in the context of constant professional mobility. In the United States, the economic recovery of the late 1990s saw the average unemployment rate fall to around 4 percent, as compared to 9.6 percent in France (August 2000). Sometimes confronted with a shortage of labour, American employers have lowered their demands for qualifications. They turn, for example, to retired or unemployed individuals seeking work to compensate for inadequate income and also employ large numbers of young people (one-fourth of the employees in the American hotel and catering industry are under twenty years old). This phenomenon remains quite limited in France, where only 10 percent of the 15-19 age group works, as compared to 50 percent in the United States. It is thus not certain that France's hotel and catering trade will follow the same evolution as that of the United States, which provides odd jobs to students, low-skilled employment to a needy labour force and a few professions with real prospects for career advancement. Nonetheless, in France as well the profession seems to be having difficulties recruiting young, low-skilled personnel, to whom it often offers inferior employment conditions and few possibilities for career advancement. In the face of a labour force which is less 'flexible' than in the United States,

it would seem to be lacking in attractiveness and, above all, to have difficulties in keeping its employees. It does not always give clear indications to young people about the content of hotel and catering jobs and their middleterm prospects and has yet to adopt less irregular working hours or offer better recognition of experience in the trade and employees' involvement in their work. From the educational system onwards, this sector is too often described as a prestigious artisanal and artistic activity rather than as an efficient commercial activity serving a broad public. BRIEFING In Chile, higher technical education is open to high school graduates and is offered by three different institutions: university, vocational institute or technical training centre. Each of these bodies is authorised to grant its own diplomas, without coordination among them. All students pay for their courses and tuition costs are roughly the same regardless of the institution, but loans are available only to students enrolled in State universities. Each institution is responsible for its admissions choices. There is a general feeling that the system functions with great obscurity, if not inequality, in relation to students, their families and the companies which use their services: o access to a higher-education diploma is held to offer protection against unemployment and favour social mobility, but higher technical education suffers from an inferior social image; o students choose orientations without knowing the likely effects of their choices, which are based on supposed reputations and opportunities, while the cost of the studies often constitutes a considerable sacrifice for their families.


Basics of Catering Management

Training and Employment


Chile: Longitudinal Survey of Exits from Higher Technical Education o employers are seeking qualities of initiative, autonomy and adaptation, which higher education does not always provide, while the technical competences expected may be at a lower level; o the directors of the higher technical education institutions would like the diplomas they grant to be better recognised both officially and socially. The Ministry of Higher Education is planning an overall reform of the system but, in line with the recommendation of the World Bank, is waiting for advice from an employment observatory on the paths to be promoted. In this context, Creq, the French Ministry of Employment and Solidarity and the University of Marnela-Valle participated in a seminar on "Higher Education and Labour-Market Entry of Young Graduates" held in Santiago on 15-17 September 2000. This meeting brought together experts from Chili, other Latin American countries and France. Representatives of the Chilean Ministry of Education presented the results of a survey of two thousand graduates exiting the highereducation system between 1995 and 1999. This survey, carried out by telephone, is representative at the level of Chili's main regions and covers graduates of the three cycles of higher technical education as well as graduates of full higher education programmes. It thus offers the first statistical findings on the opportunities for young graduates in the Chilean labour market. It notably brings out sharp disparities between university and non-university streams, as well as those between technician training and full training programmes, in terms of both access to employment and remuneration:

while university graduates come out quite well, the schoolto-work transition of those exiting vocational institutes and technical training centres is much more problematic. Among university graduates, moreover, those coming from the former public universities generally encounter less unemployment than graduates of the other private universities. These results will be consolidated by those of a postal survey carried out among five thousand graduates from the class of 1995. New Publications and Special Events

2 Jean-Paul Cadet, Laurence Diederich-Diops, Dominique Fourni, Chirstophe Guitton

The arrival of sixty thousand assistant educators in the schools since autumn 1997 through the "New Services, Youth Jobs" programme raises three groups of questions for the Ministry of Education: o To what extent do the activities assigned to the assistant educators prefigure new functions likely to become permanent? o Does the integration of assistant educators give them a particular identity in relation to teaching and administrative personnel and can this serve to modify the practices of the latter? o What is the impact of the assistant educators' experience within the school system on their chances of labour-market entry, given that they are not supposed to remain in this function beyond the five years of their Youth Jobs contract? Some initial responses and resulting recommendations are provided by the first phase of a study, which combines the results of a panel survey of three thousand assistant educators and analyses of activities based on the ETED (typical job studied in its dynamic) method.


Basics of Catering Management

Training and Employment


2001/02 Manpower Survey of the Catering Industry Job Descriptions for Principal Jobs in the Catering IndustryCatering Establishments other than Chinese(Some of the job titles may not be identical to those used in your establishment. But if the jobs have similar or related functions, please treat them as the same and supply the required information in the questionnaire.)
C.N. Job Title Job Description

personnel records and fringe benefits; manages cash flow, loan and money changer; supervises the credit department, general accounting, cashier, income audit, costings sections; arranges LCs for the company's purchases and liaises with suppliers. 108 Purchasing Manager Plans, organizes and controls purchase and stock of food commodities for sale or internal consumption according to supply and demand trends.

MANAGERIAL AND PROFESSIONAL LEVEL 101 General Manager/ Managing Director Assumes the total responsibility of managing of hospitality establishment, usually with other managers/executives as direct subordinates; implements the company's policies and their objectives with a view to achieving them. 113

Marketing Manager Plans, organizes, directs and controls the marketing functions; reviews market and sales analysis to determine local and overseas market requirements; coordinates public relations activities relating to sales promotion. Executive Chef/ Sous Chef Establishes standards of food quality and preparation; develops new menus; coordinates with other departments on food selection and storage; supervises performance and discipline of kitchen staff; carries out inspection and maintenance of the kitchen set-up; prepares cost lists and requisitions on market items. Plans, organises, directs and controls operation of food and beverage facilities; analyses operation costs and closely liaises with purchasing manager; determines payroll and operating costs so as to establish food and beverage prices; makes improvements in service procedures and guest relations; organizes special food and beverage promotions and festivals; makes contacts with clients regarding functions; co-ordinates with executive chef in menu planning and staffing, studies market trends by visiting other establishments.


Executive Assistant Takes charge of the overall daily Manager/Club operations and management of the Manager hospitality service establishment. Personnel Manager Formulates and supervises the implementation of personnel policies, procedures and regulations; maintains amicable staff relations, may design and carry out training programme for employees of an establishment. Training Manager Plans and implements effective training programmes for all levels of staff; coordinates and controls internal and external training; advises management on training and management development trends; acts as course leader in specific training programmes; provides counselling for employees; determines the effectiveness of training activities.





Food and Beverage Manager/Senior Assistant Food and Beverage Manager

CATERING ESTABLISHMENTS OTHER THAN CHINESE 107 Chief Accountant/ Controls budgets and expenditure, Controller/Financial company financial policies and procedures, Controller contracts and licenses, senior executive

125 Pastry Chef

Basics of Catering Management

Supervises the pastry cooks in the preparation of all doughs, pastries, cakes, sweets petit fours, sugar decorations and butter carvings; able to operate all machinery in pastry and bakery room, maintains quality standard set by executive chef. Manages and co-ordinates the activities of the restaurant and trains staff to ensure prompt and courteous services; recommends menu and dishes to clients.

Training and Employment


guest/patrons; responses to accounts disputes and queries; prepares accounts receivable report. 206 Store Supervisor Supervises and co-ordinates the work of the fast food outlets staff; assumes the management responsibility of a fast food establishment; oversees the training of new staff; handles guest complaints. Audits and processes the payments of the companys disbursements; prepares expense analysis and other reports on suppliers invoices and monthly statements; keeps all records relating to payroll; prepares and remits payroll reports; and compiles all tax returns. Trains all food and beverage cashiers; issues guest checks daily to all F & B cashiers and follows-up on missing checks; picks up cashiers daily reports at the close of each shift; arranges cashiers for other banquet functions. Ensures bar is equipped with supplies and correct liquor brands are served; maintains prescribed profit margin; supervises maintenance of bar and service equipments; prepares work schedules and checks on staff performance. Takes orders from guests and delivers orders to kitchen; may carve meats and prepare flambe dishes at table; advises on the selection of wines and serves them. Supervises preparation of all cold foods; responsible for table and food decorations; checks function sheets and menus daily for distribution of work loads to helpers; ensures that all required food item for each outlets are ready in time; keeps professional records of recipes and working methods.


Restaurant Manager


Audit Supervisor/ Paymaster


Specialty Chef/Cook Plans, designs and supervises the (e.g. Japanese, Thai, preparation of exotic cuisines and Indian, Vietnamese, different national food specialities. Korean, Singaporean, Malaysian) Others (M)


Head Cashier


SUPERVISORY AND TECHNICIAN LEVEL 201 Personnel Officer Recruits, interviews and hires employees for the hotels; counsels, transfers and dismiss employees based on appraisal of supervisors. Counsels and advises department heads regarding personnel problems. Trains new or existing employees; performs periodic reviews on trainees progress and recommends actions based on appraisals; maintains supplies of training materials; participates in discussions regarding the adoption of new or improved training methods and/or materials.


Beverage/ Bar Manager


Training Officer


Captain/ Service Supervisor




Accounts Supervisor Audits and processes the payments (e.g. payable/ of all the establishments disbursements; receivable) prepares expense analysis and other reports on suppliers invoices and monthly statements; keeps a record system of all amounts due to the establishment from

248 Public Relations/ Sales Supervisor

Basics of Catering Management

Promotes the sale of food and beverage items for groups/parties/individuals; checks sales figures, stock and customer preferences; supervises sales persons. Inspects the establishments premises; checks on the electrical/mechanical plant and equipment; contacts outside contractors regarding repair and maintenance works or renovations.

Training and Employment



Maintenance Supervisor/ Technical Supervisor

performs different types of cookery and meal preparation; checks stocks in his location in kitchen area; may specialize in sauce, soup, roast, butchery, fish, cold cut and vegetable. 307 Engineering Craftsman Others Maintains and repairs all necessary mechanical and electrical engineering works of a catering establishment.


256 Chief Security Officer Informs department heads concerned of any necessary procedures on internal security matters; liaison with police department, arranges staff safety training and fire drill tests; security screening of new employees; investigates all incidents and thefts within the premises. 257 Food and Beverage Supervises cost control and inventory Controller/ taking; reviews purchase requests for food Cost Controller and beverage; provides management with information regarding operational costs; prepares forecasts and analysis on all cost reports; makes random inspections on all supplies to the hotel. Public Relations Officer Liaises with media; handles publicity and photographic assignments; prepares press releases in both English and Chinese; liaises with sales executives and cover other duties assigned by the management.

CLERICAL LEVEL 401 Accounting Clerk Performs a variety of routine calculating, posting, recording, filing and typing duties in an accounts department.


Food and Beverage Cashier Records all food and beverage sales at the time of meal and that charges and timely remitted to the front office for posting to the ledger by the front office cashier; prepares cashiers daily report. Food and Beverage Checks and maintains cold and dry store, Storekeeper wine cellar, silverware and glasses inventories and store records. General Cashier Corrects all daily receipts, provides changes for all cashier; makes daily bank deposits and prepares a daily accounting of cash; acts as a petty cash disbursing agent.






Others (S) 411 Prepares cakes, pastry and desserts for during the day time and bread and loaf during night time; supervises work of apprentice pastry cooks. Checks daily and weekly menus; operates utensils and crockery used in kitchen;

General Office Clerk Performs clerical duties of a general nature such as copying, compiling, filing and recording information. General Storekeeper/ Checks all merchandise entering the Store and premises and their proper documentation; Receiving Clerk maintains par stocks in storeroom; informs management of the storage situation for expensive items. Personnel Clerk Assists in implementing personnel policies and functions; processes

CRAFTSMAN LEVEL 301 Baker/Pastry Cook





Basics of Catering Management

application forms from prospective employees and arranges interviews; keeps staff records.

Training and Employment

511 Junior Waiter/ Junior Waitress/ Barboy/Bar Porter Cleaner/ Dishwasher/ Kitchen Helper/ Steward/ Pantry Helper


Collects food from kitchen, cleans up table and changes linen, knows all items on menu. Washes crockeries by hand and by machine, sweeps the floor and wipes clean stainless steel counters in kitchen; disposes garbage; cleans stove and top of exhaust fans.


Purchasing Clerk/ Quality Control Clerk

Follows up purchase orders and requisition requests; helps expedite delivery, verifies of invoices and freight charges; maintains a library of catalogues, price and reference data; performs a variety of routine calculations, posting and recording; assists in cost control and inventory taking; makes random inspections on all supplies for the outlet.



Bartender/Barman/ Follows specified drink and cocktail Soda Fountain receipts by free pouring jigger quantities; Captain checks on supplies of wines and spirits; prepares daily supply requisition for bar managers approval. Receptionist/ Hostess/ Waiter/Waitress Serves guests in assigned station under supervision of a captain, prepares table setting and removes dishes; knows all menu items; keeps good guest relations and extend personalized service. Pushes for beverage sales; takes care of the wine and liquor stocks in the restaurant; has good knowledge of wine and advises guests on selection; serves wine at the required temperatures.


Others (C)


OPERATIVE LEVEL 504 Security Officer Regular patrol in premises; conducts full enquiry on incidents occurred; ensures all items found in the premises are properly recorded and kept safety; checks all exists and back staircases. Carries out guard duty; patrols the premises entrances and passageway in the rear service area; provides protection to VIP guests on managements instruction.


Wine Steward/ Sommelier


Other (O)


Telephone Operator Processes local and overseas calls, provides wake-up call service; keeps close communication between executives; provides directory service for guests; follows proper procedures for handling emergencies. Uniform and Linen Controls supply and distribution of all Attendant/ house linen; checks on inform supply; Cloakroom stores and controls replacement of Attendant household supplies; keeps up-to-date stock records; checks and repairs staff uniform/house linen, provides service to guests when required; repairs curtains and drapes.

SECRETARIAL AND OTHER MINOR STAFF LEVEL 601 Secretary Takes dictation and transcribes letters, reports and memos. Answers telephone, screens calls and takes messages. Prepares replies to routine enquiries, maintains daily calendar and appointment schedules and receives personal callers. Performs stenographic and related secretarial duties. Handles odd jobs and run errands of the general office.


602 603 604

Steno/Typist Office Assistant/ Messenger/Runner Others


Basics of Catering Management



Judi, Radice: Restaurant & Food Graphics, Glen Cove, PBC International, 1994. Medlik, S.: Managing Tourism , Oxford, ButterworthHeinemann Ltd., 1991.

Alfred, H.: Hospitality Design for the Graying Generation: Meeting the Needs of a Growing Market, New York, Wiley, 1996. Auguste, E.: Escoffier Cook Book: A Guide to the Fine Art Cookery, New York, Crown, 1969. Berry, A., Jarvis, R.: Business Accounting for Hospitality and Tourism, London, Chapman and Hall, 1995. Bryson, McDowell: Concierge: Key to Hospitality: A Training Manual, New York, Wiley, 1992. Charles, G.: International Dictionary of Food & Cooking, Chicago, Fitzroy Dearborn, 1998. Clark, Mona: Interpersonal Skills for Hospitality Managers, London, Chapman Hill, 1995. Dennis, J.: How Consumers Pick a Hotel: Strategic Segmentation and Target Marketing , New York, Haworth Press, 1997. Donald, M.: Customer Service in the Hospitality and Tourism Industry, Englewood Cliffs, Prentice Hall, 1994. Eberts, Marjorie: Careers in Travel, Tourism, and Hospitality, Lincolnwood, VGM Career Horizons, 1997. Elio, C.: The Hospitality Law Desk Reference, Southern Beverage Journal, 1994. Miami,

Michael, John: Principles of Hospitality Law, Cassell, 1999.


Norman, G.: Hotel, Restaurant, and Travel Law: A Preventive Approach, Albany, Delmar Publishers, 1993. Petty, Keown, Scott, and Martin: Basic Financial Management, Prentice Hall, 1993. Robert, H.: Managing Hospitality Human Resources, East Lansing, Educational Institute of the American Hotel & Motel Association, 1997. Rocco, M.: An Introduction to Hospitality Today, Orlando, Educational Institute, 1998. Rosemary, E.: Managing Employee Relations in the Hotel and Catering Industry, London, Cassell, 1995. Swarbrooke, J.: Marketing Tourism, Hospitality and Leisure in Europe, London, International Thomson Business Press, 1996. Thomas, F. : Introduction to the Hospitality Industry, New York, Wiley, 1995. Thomas, F.: Introduction to Management in the Hospitality Industry, New York, Wiley, 1995. Timothy, R.: Cases in Hospitality Management: A Critical Incident Approach, New York, Wiley, 1995. Ware, Richard: How to Open Your Own Restaurant: A Guide for Entrepreneurs, New York, Penguin Books, 1991. Zupan, J.M.: The Distribution of Air Quality in the New York Region, Baltimore, Johns Hopkins University Press, 1973.

Gisslen, Wayne: Professional Cooking, New York, Wiley, 1999. Hubert, B.: A Host of Opportunities: An Introduction to Hospitality Management, Chicago, Irwin, 1996.


Basics of Catering Management

128, 129, 131, 134, 150, 151, 154, 156, 164, 167, 168, 210, 211, 214, 234, 252. Distribution, 42, 43, 45, 46, 73, 75, 76, 84, 88, 96, 101, 109, 110, 113, 140, 255, 258. 84, 85, 86, 87, 90, 91, 92, 94, 96, 97, 99, 100, 102, 103, 104, 106, 107, 108, 110, 111, 112, 114, 120, 121, 126, 127, 128, 132, 134, 135, 140, 141, 142, 145, 146, 147, 151, 152, 153, 160, 164, 168, 209, 242, 243, 247, 248, 252.

263 89, 95, 101, 105, 109, 113, 125, 129, 139, 143, 148, 154, 196, 244,

Advantages, 7, 9, 25, 105, 211, 212, 213, 216, 232, 247. Advertising, 7, 9, 17, 22, 73, 97, 101, 115, 117, 118, 119, 120, 121, 124, 125, 126, 127, 128, 129, 130, 131, 132, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 152, 153, 156, 157, 159, 163, 165. Atmosphere, 34, 188, 225. 25, 26, 28, 29, 31, 32, 33, 36, 37, 39, 40, 42, 43, 44, 45, 46, 47, 48, 49, 50, 54, 56, 57, 58, 59, 60, 61, 71, 107, 109, 136, 152, 163, 171, 195, 231, 259.

Employment, 65, 69, 82, 84, 92, 236, 241, 242, 243, 246, 247, 248, 250.

Food Marketing, 125, 126, 128, 129, 130, 136, 137, 138, 144, 145, 147, 148, 149, 150. Food Processing Sector, 71, 78, 85, 90. Food Products, 79, 81, 83, 84, 88, 91, 98, 133, 140, 161, 163, 164. Food Safety, 39, 44, 42, 44, 45, 61, 62, 63, 65, 67, 70, 78, 89, 102, 140, 171. Food Specifications, 66.

Leadership, 21, 50, 51, 63, 151.

Catering Business, 7, 11, 39. Catering Management, 1, 65, 69. Catering Operation, 15, 19, 32, 67. Catering Trade, 241, 242, 246, 248. Company, 4, 16, 17, 20, 21, 26, 29, 33, 42, 47, 48, 49, 50, 51, 52, 53, 54, 57, 58, 59, 60, 99, 137, 244, 252.

Maintenance, 65, 173, 178, 179, 253, 255, 256. Management, 1, 9, 12, 16, 17, 18, 19, 20, 22, 24, 26, 27, 28, 29, 31, 36, 39, 40, 43, 44, 45, 46, 48, 49, 50, 52, 57, 58, 60, 61, 62, 64, 65, 67, 69, 70, 73, 84, 176, 177, 180, 181, 184, 194, 205, 206, 213, 218, 220, 223, 230, 232, 235, 236, 237, 238, 239, 241, 244, 245, 246, 247, 250, 251, 253, 254, 255, 256, 257, 258, 259.

Bakery Industry, 95, 96. Beverage Distribution, 42, 45, 46. Beverage Innovation, 47, 56, 57. Beverage Outlets, 169, 235. Beverage Presentation, 196. Biscuit Industry, 74, 96, 97. Bread Industry, 95, 96. Business, 2, 5, 7, 9, 10, 11, 13, 14, 15, 16, 18, 20, 21, 22, 23,

Development, 47, 48, 49, 57, 58, 59, 67, 68, 69, 71, 78, 81, 82, 84, 90, 92, 93, 103, 107, 112, 114, 117, 118, 121, 122, 123,

Industry, 42, 48, 53, 60, 74, 79, 10, 43, 49, 54, 66, 75, 80, 32, 45, 50, 55, 71, 76, 81, 33, 46, 51, 57, 72, 77, 82, 34, 47, 52, 58, 73, 78, 83,


Basics of Catering Management

137, 139, 192, 193, 195, 196, 225. Products, 37, 45, 47, 71, 72, 73, 74, 76, 77, 79, 80, 81, 82, 83, 84, 86, 87, 88, 89, 91, 92, 94, 95, 98, 99, 102, 103, 104, 110, 112, 121, 126, 132, 133, 135, 137, 140, 147, 148, 159, 160, 161, 162, 163, 164, 195, 211, 212, 216, 217, 218, 247. Project, 14, 15, 31, 57, 60, 64, 134, 228. Projection, 80, 91, 92.

Basics of Catering Management


Marketing, 12, 15, 33, 45, 57, 73, 75, 78, 82, 84, 89, 93, 94, 100, 102, 107, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 128, 129, 130, 131, 132, 134, 135, 136, 137, 138, 139, 140, 141, 142, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 163, 164, 172, 210, 212, 225, 241, 253. Meal Presentation, 195.

1. Introduction to Off-Premise Catering Management 2. Food and Beverage Distribution 3. Marketing of Food and Non-alcoholic Beverages 1 42 115

4. Who Technical Meeting for Catering Developments 155 5. Food and Beverage Outlets 6. Determining Food and Beverage Standards 7. Training and Employment 169 209 241 260 262

Nature, 11, 95, 101, 113, 125, 127, 139, 153, 158, 164, 165, 166, 178, 206, 248, 257.

Reservations, 172, 199. Restaurants, 8, 10, 68, 127, 169, 228, 241, 242, 243, 245, 247.

Bibliography Index

Opportunity, 6, 46, 58, 59, 122, 123, 145, 234, 243. Organizations, 24, 45, 46, 47, 72, 117, 120, 125, 138, 144, 146, 147, 149, 150, 166.

Security, 7, 24, 33, 124, 169, 179, 180, 189, 256, 258. Stress Management, 27.

Tea Industry, 105, 106, Technology, 32, 33, 45, 82, 83, 86, 94, 104. Time Management, 16, 28, 29, 36. 107. 71, 103, 27,

Personal Management, 27, 31. Presentation, 36, 52, 54,