Some caterers have discovered that limiting their appeal to just one niche of the market makes for good business. John Burfitt reports.
It is a general rule of any business that to succeed, you need to know your market and keep your eyes fixed firmly on the target at all times.
It’s a rule most caterers follow from the basic business fundamentals of Catering101: to remain competitive in a market that demands a full range of all-encompassing catering experiences. Accordingly, many choose to keep their eyes on multiple targets by offering everything to everyone. They’ll do morning sandwiches, a lunchtime wedding and a vehicle launch all on the one day.
Then there are other caterers who have instead fixed their sights on one chosen target and aim to hit it right in the bullseye with a single niche service. These caterers might still do morning tea along with the big-budget network TV launches, but they do so in a particular way that sets them apart from others in the market. And it appears from the balance sheet results, these specialist caterers keep the clients coming back.
Such is the case with Passion8 catering in Sydney and Ed Dixon Food Design in Melbourne. While they appeal to very different ends of the catering market, they have both created their own niche market by offering a highly specialised service.
Passion8 offers traditional kosher catering to Sydney’s Jewish community, which is estimated to number around 45,000. But such has been the response to the standard of their kosher service recently, the demand has extended beyond traditional Jewish markets and into Greek Orthodox christenings and even a lesbian engagement party.
Melbourne’s Ed Dixon Food Design might not be kosher, but they are definitely doing things their own way, offering a service that is based strongly on design principles for the entire event—from the style of the food to its presentation and the decorative styling of the party premises. Not too surprisingly, Ed Dixon has become a hot favourite for many of Melbourne’s top architecture firms and design businesses.
While operating in different fields—not to mention different capital cities—the two catering companies have more than their fair share of similarities. And they also report learning several similar lessons along the way.
Positive word-of-mouth is important in any business, but when the business appeals to a very specialised market, it becomes an essential key to its success. The owners of Passion8 and Ed Dixon agree in the golden business rule that referrals are a vital marketing tool in keeping the doors of the business open.
“The Jewish community of Sydney is relatively small, so at our events we often see the same faces,” says Passion8 director Steve Edelmuth. “We have to be innovative with the food we create and the experience we present, so these repeat guests don’t have the same experience all the time.
“For example, we do 22 functions a year for the Jewish Communal Appeal, and 30 per cent of the guests at these functions would be returning hospitality. If we didn’t vary our menu or the service we offer, people would get bored very quickly—and then they would begin looking elsewhere.”
Appealing regularly to same group of specialists in the architecture field, along with other design-focused clients, means the bar is already set high for what Ed Thomson of Ed Dixon Design believes she needs to offer her clients.
“These people are design savvy, and they expect us to provide an event and food that has a continuity to it,” she says. “But we need to keep doing that time and time again, and I think that is the success of the business.
“We have done minimal advertising—95 per cent of our work is from word-of-mouth, and that comes from doing a good job. But to ensure those referrals continue, we need to make sure we do everything to guarantee our reputation stays at that high level.”
Passion8 was born three years ago when Graham Flax’s Cherry Bim catering business combined with another kosher specialist, Front Page, operated by Steve Kahn. Pasison8 has recently streamlined its operations from eight premises throughout Sydney to a sprawling, single plant
located in Lane Cove.
Edelmuth says the move to centralise all of Passion8’s activities under the one roof was important, given the tightly controlled stages of preparing kosher food. It has also improved the logistics of the operation and led to significant budget savings.
In a time of increasing food and fuel prices, Edelmuth says paying attention to small details is also essential—particularly as there are other costs to consider as a specialist provider.
“Things have changed a lot for us in recent times, and now that we have everything under the one roof, the new economies of scale will help a lot,” he says. “But running a kosher business also involves extra costs that some of the more traditional caterers might not have to factor in.
“We have to pay for our kosher license, which is about $4.20 for every bum on a seat at every function we do. And then we also have to pay for a kosher supervisor as well.
“The raw produce is also more expensive in the case of kosher food. The other day, we bought lamb cutlets for $3.60 per cutlet, compared to $1.75 in the regular market.”
A business specialising in kosher catering also has high processing demands. About 99 per cent of Passion8’s
functions areheld on a Sunday, making weekend frantically busy, but kosher food also demands attention to detail in other areas, like separate preparation areas for meat and dairy, as well as a range of special crockery, cutlery and food presentation items for functions.
“Working in a specialist area means we can’t afford to leave anything behind at the warehouse, because we can’t just run to the local store and pick up a new bottle of whatever we left behind—it’s not that easy with kosher,” Edelmuth laughs.
“Logistically, there is a huge amount of work in putting every function together.”
But even with the extra costs of operating in a niche, he says Passion8 is able to remain competitive in the market by watching expenses at every stage of the process—from the buying of produce to hiring of staff.“We keep an eye on our costs and we watch the bottom line carefully, so when we are compared to a lot of other kosher caterers, I think we compete favourably,” Edelmuth says.
Ed Dixon Food Design started offering their design-focused catering service seven years ago. Owner Ed Thomson had previously worked in interior design with an architecture company before deciding to instead focus her design skills on her true passion of food.
Thomson said she wanted to create a catering business with a “design consciousness”, and focused on the look of the entire event she was at, as much as the taste of the food she was serving.
“I wanted people to know that the way food was made and the way it looked was equally as important to us,” she says. “And for us, catering was not just about the food—it was the way the entire event came together.”
The company has enjoyed a profitable run ever since, and Ed has recently moved her business into new, larger premises in the inner suburb of Abbotsford.
While Ed Dixon Food Design offers a specialised service, Thomson says she also knows the company must be able to compete with every other caterer in the market—particularly in these tighter economic times. Thomson says that even when a caterer isn’t operating in a niche market, the client’s final decision often comes down to the final quote.
Like Edelmuth, she says the usual stresses of running a company are compounded in a niche situation.
“Staying in business is always hard, but when you are in a niche area, it’s even harder,” she says. “People look at one quote compared to another and wonder about the price difference, but they are usually not comparing apples with apples.
“Most of our work comes from word of mouth, and when people see the high standard of event we do, they usually don’t question things any more because they are satisfied they are getting what they pay for.
Thomson says she is particularly aware of her costs in the current climate.
“You need to keep in mind what can happen during tight [financial] times, but while we have been waiting for a downturn in the market, we have not seen it. For us, it just seems to be getting stronger.”
With such an increasing demand for the niche service provided by Ed Dixon, there has been the temptation to continue growing in size to meet the needs of every new client. But Thomson made a strategic decision a few years ago to focus on the type of client she is best suited to, and instead turn over extra business to other caterers.
“We have the potential to be a medium business, but our mentality remains that of a small operation, with personal service and that attention to detail,” she explains.
“We do all varieties of function—sometimes as many as two or three a day—but we are at a point we can say no to things that are not suited to us. At the end of the day, I want to enjoy my work and be proud of it.”
It might sound easier to be a specialist caterer within a specific market rather than in a more general operation, but focussing on a niche market is not for the faint–hearted, says Michael Fischer of Close Encounters Consulting.
He says the secret to niche success is to learn everything there is to know about the particular market before
establishing a business.
“People working in a niche really need to know what they are doing. They need to know what their market is, how big it is and what the potential ups and downs are,” Fischer says.
“You can’t just charge into a niche without any experience in the field. You can’t just suddenly decide that you are going to do halal catering unless you know what all the rules are for entertaining a Muslim audience. You have to know exactly what you are doing with your market.
“Again, if you are going to be a halal caterer, you need to be prepared for Ramadan and know how that will impact on your business. Likewise, kosher caterers need to know how the Passover will affect them, as well as how to cope with the religious limitations imposed on their clientele for two months afterwards.”
Echoing the golden rules identified by the managing teams from Passion8 and Ed Dixon, Fischer notes that good word of mouth can quickly make and break a niche catering operation.
“Good word of mouth is everything in a niche market, because word will spread quickly,” he says.
“But if you muck up, that word can spread just as fast and it will go like wildfire. In such a dedicated market, you have to keep your standards high all the time in order to hold on to them.”
Both Passion8 and Ed Dixon agree it is the celebratory nature of catering work that is one of the best benefits of the time-consuming gig.
“We are always working at happy occasions, and, while it takes some work to get it there, being with happy people at an event is always great,” Thomson says. “But you do have to love the work side of it, because if you don’t, there is no point in doing it.”
Passion8’s Graham Flax agrees: “I first got into this industry because I wanted to do what I knew best, which was ultimately the art of serving people. It is hard work, but the nice thing about being a kosher caterer is we’re always celebrating—even though we work on the weekends when other people are playing… To me, this is a way of life.”