You’re Charging How Much?!: The Case for Smarter F&B Budgeting

You’re Charging How Much?!: The Case for Smarter F&B Budgeting

Food and beverage (F&B) can make or break a meeting or event. And certainly, the complete absence of F&B can set in motion kvetching like you haven’t heard since the last time you managed a meeting without it. Just try to have a meeting break with no coffee!

I’ve been in this industry a long time. Years before my own company, Eisenstodt Associates, celebrated its 38th anniversary on June 1 of 2019.

Planning meals has never been my favorite thing to do. In fact, I would place it among my least favorite things tied to the involved process of planning meetings and events.

Guessing what others would want to eat on a given day is a nightmare especially when we are planning months out and have no idea what will be fresh, what will be available, and what factors impact what a chef can best prepare.

Or what an audience will want to consume.

Key Considerations When Planning F&B

In planning events where food and beverage elements play a starring role or for when any sort of F&B is offered, we must consider, at least, the following key items:

  • Group demographics
  • Availability of food and beverage
  • Chefs’ abilities and specialties
  • Religious practices
  • Allergies and food and beverage sensitivities*
  • Accompanying meeting and event activities
  • Service provided
  • Meal and item costs
  • Service charges and taxes**

*Tracy Stuckrath is a prolific writer and speaker about allergies and sensitivities. You can learn more about her and read additional insights about F&B on her website.

**These are likely to change if we are booking six months or more from the planned event.

Not only must we consider the above items related to F&B, we must convey all this information in our RFPs for meetings and events.

And we must clearly state that in order for us to respond appropriately and then create a contract, we need full and complete information.

Déjà Vu All Over Again: Coffee’s Cost Per Gallon

In all my years in this profession, there is rarely a month—or even a week!—that goes by when the cost of a gallon of coffee is not discussed.

As in, “Why does a gallon of coffee cost x?” Lately and frequently again on social media, the cost per gallon discussion has reared its head.

(We used to look at the cost of “dry snacks”—potato chips, peanuts, pretzels—when those were considered the budgetary best for cocktail receptions without “real” food!).

The discussions have been accompanied with questions about the amounts billed for taxes, service, and ancillary fees, on top of per plate or per person costs for various F&B offerings.

Other popular topics of discussion related to F&B include:

  • the number of, and charge for, servers for buffets, continental breakfasts or breaks
  • bartender and, if cash bar, cashier charges and minimum numbers to serve and the minimum hours we must contract
  • the administrative fees now added to food and beverage (F&B) events

Nothing in the discussion seems to change.

Calculating the Cost of a Gallon of Coffee

I looked back at 2012 menus*** from a contract negotiated for a client’s 2016 meeting.

At that time, a major Las Vegas hotel at which the meeting was booked charged $70.00 per gallon of Kona coffee plus 21% service charge plus 8.1% tax on both the coffee and on the service charge.

If one calculates that, and assumes 20 cups per gallon, it’s about $4.57 per cup.

In emails with James Filtz, interviewed here, I asked about the cost of coffee.

He said “In 2014 coffee at The Venetian in Las Vegas was $86 per gallon. Today it is $100 per gallon. That’s about a 16% increase.”

I checked with the same unnamed Vegas hotel above for their current prices. The price of coffee at the major Las Vegas hotel previously contracted, came out to $95.00 per gallon, with a service charge of 23%, tax of 8.5%, and the service charge taxed slightly over 4%.

How does that compare to what a cup of made-at-home coffee using a Keurig costs, considering the purchasing and labor that goes into how a hotel provides coffee?

Is it cheaper for each guest to run back to their rooms, use the in-room coffee maker (if there is one and the condiments are to their liking), and the time it takes for them to return for valuable networking?

I found this about Keurig, where the cost per cup is measured on a 5-6 ounce cup.

***A Pro Tip Regarding Food & Beverage Menus

Most hotel menus are now electronic.

When you negotiate more than a year out with an escalation clause on food and beverage, the menus from which you are negotiating will no longer be live on the website.

I recommend printing them out—on post-consumer paper—and attaching to the final signed version of the contract and saved as a PDF in your files and saved with the printed contract and menus and other policy documents on paper.

Otherwise, you have nothing from which to gauge prices.

Hidden—and Not So Hidden—F&B Costs

Hotel owners and management companies want to make money. Now more than ever. We want hotels to be kept up—that is, furnishings to be clean and updated.

I hope all or most of us want people who work in hotels, especially those who provide service, to make “livable” wages—though I’m not sure even $15.00/hour in most markets is “livable.”

Or is it “not on my group” mentality among meeting and event planners that is the issue—you know, charge other groups what you need but negotiate my costs to what I want to pay?

My meeting and event clients have almost exclusively been not-for-profit groups for whom budgets are tight. Yet, as chef and humanitarian José Andrés says:

“I realized very early the power of food to evoke memory, to bring people together, to transport you to other places, and I wanted to be a part of that.”

If we skimp on food or beverage, it reflects badly on the hotel, caterer or our group.

The Power of F&B at Your Meeting or Event

Food makes memories. Food brings people together. Harrison Owen, back in 1985, knew the power of breaks on the overall experience of learning at meetings. We know the power of available food and beverage to make or break a meeting or event experience.

See what three planners interviewed had to say about what’s important to them and their questions about costs. When will we budget differently and realistically and think about what the two NACE officers have to say when we plan and negotiate meetings?

Oh, and don’t miss the “bonus section” of the August 2019 Friday With Joan newsletter: I had the pleasure of dining with Tom Sietsema, food critic for The Washington Post, at a José Andrés restaurant. Read more about how noodging can pay, the ethics of dining with a food critic and Sietsema’s “go-to” food when he’s not on-duty—one of my favorites too!

Editor’s Note: The views expressed by contributing bloggers are their own and do not necessarily reflect the opinions of Meetings Today or its parent company.

Related Content From the August 2019 Edition of Friday With Joan

[Click here to view additional content in the 08.02.19 Friday With Joan newsletter].

Posted by Joan L. Eisenstodt

Joan Eisenstodt Headshot

Follow Joan on Twitter: @joaneisenstodt

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