March 2006

Budgeting and Financial Management

Part 5: Champagne On a Beer Budget

by Vicky Betzig, CMP

While food and beverage makes up a meeting’s largest expense, it is the one thing attendees notice most. Therefore, taking away F&B items that have typically been part of the meeting, or scaling back the quantity or quality to reduce costs, should be a last resort. Here’s how to do it without negatively impacting the meeting’s overall quality — and attendee perception.
 

The No. 1 way to control and reduce food and beverage expenses is through improved guarantee management. This has utterly no impact on the perception of attendees or on the quality of the food and beverage served at the meeting. It merely requires skill and effort on the part of the meeting manager to ensure that guarantees are as accurate as possible.

The amount of food - and therefore money - that gets wasted during a meeting can be exorbitant. While donating leftover food to charitable organizations helps us feel better, ordering appropriately and making the effort to guarantee accurately is a skill that can significantly reduce costs.

Providing tickets for meal functions does not assist in guarantee accuracy - unless you require that vouchers for meal functions, included in registration materials, be traded in (at a designated area) for actual meal tickets. Attendees will not spend the time standing in line to exchange vouchers for tickets they have no intention of using. Therefore, as long as the ticket exchange takes place far enough in advance of guarantee deadlines, this is a method that will substantially reduce the number of meals paid for but not consumed.

Likewise, planners must be vigilant about researching and taking into account factors that will impact the number of people attending meal functions, such as:

  • the number of hotel departures for each day of the meeting - those departing that day will most likely not be attending that night's dinner function
  • the weather forecast - a beautiful day will encourage attendees to skip a banquet lunch function to enjoy the outdoors, while a rainy or cold day will cause most to attend the meal function
  • whether there are interesting or destination-specific outlets nearby that may draw attendees away from planned meal functions - especially if no program or a program of little interest to many attendees is held in conjunction with the planned meal.

Timing will also play a large role in determining the number of attendees who will take part in a function. For example, if sessions end at 5:00 p.m. and a reception is scheduled for 7:00 p.m., many attendees will not come back, especially if the meeting is in a destination where there are many activities and/or families are along for the trip. If you plan the reception for 5:00 p.m., however, you could expect that most attendees would come.

Programming also impacts guarantee management. Featuring a unique speaker, entertainment, or awards presentations during a meal function will encourage more attendees to participate.

Bulk vs. Per Person

Another key method to cut F&B expenses without affecting quality or perception is to order in bulk portions instead of packaged "per person" items. This is especially true with continental breakfasts and refreshment breaks. While it is easier for planners to order based on the number of people attending, per person packages are always more expensive. There is a good reason for this: Facilities must provide enough food for the number of people guaranteed, so that items do not run out. However, doing the math can provide appropriate amounts of F&B for the attendees in bulk and save money.

In some destinations, one gallon of coffee (regular or decaf) can cost $90-$100 dollars and more (and the same price may be charged for hot water)! Management of these beverages alone can result in significant savings. Order only what is needed, based on the number of people, the time of day, and the demographics of the group, and put controls in place for replenishing these beverages. A gallon of coffee (or decaf or hot water for tea) will provide 18-20 cups (or 14-16 mugs) of coffee. Depending upon the length of a continental breakfast (and there is no rule that says a continental breakfast has to be an hour long; 30 minutes is fine), you can figure two cups per person of coffee/decaf/tea combined. It is also key to know your audience: Younger groups tend to consume more soft drinks than coffee, which means coffee orders can be reduced.

Many facilities either automatically replenish coffee as it is consumed, or replenish at specific times (as outlined in your meeting specifications). Either way, they will typically refill coffee/decaf/hot water to original levels. If there are only 10 minutes left in the continental breakfast before the meeting begins, this will be a waste. Specify exact procedures with the facility for refilling beverages to control costs, such as checking with you prior to replenishing; not replenishing anything in the last five to 10 minutes of a continental breakfast or refreshment break; or replenishing a certain amount of coffee/decaf/hot water at a time.

Quantities of food items can also be carefully controlled. Most people, especially in a group setting, will not consume a large amount during continental breakfasts or breaks. Therefore, order bagels and large bakery items to be cut in half and order by the dozen enough for about two-thirds of the group. Supplement this with whole (instead of cut) fruit, which is much less expensive. Juices can be ordered bottled instead of in pitchers; while more expensive, these can be ordered "on consumption" (see below) to control costs. For mid-morning breaks, ask for leftover food items from the continental breakfast to be re-trayed and served, instead of ordering additional food items. For afternoon breaks, order either items that can be charged on consumption (see below) or items by the dozen, versus "designer" or themed per-person breaks.

On Consumption

Order items that can be charged on usage or consumption, such as soft drinks, bottled juices, bottled waters, yogurt, whole fruits, granola bars, power bars, and snacks (chips, pretzels, popcorn). However, keep in mind that what items may or may not be charged on consumption (and whether or not any items may be charged on usage) is up to the facility. There are very real reasons why a facility may not be able to charge items on usage, such as whether or not items can be reused prior to expiration and the increased labor required to count leftover items after a break or continental breakfast in order to charge only for what was consumed. Even if you are able to work with the facility to order some items on consumption, you will realize savings.

° Vicky Betzig, CMP, is a 20-plus year veteran of the meetings industry, currently providing freelance meeting management services on a project basis for associations and companies. Formerly the vice president of JR Daggett & Associates, she has been involved with all aspects of managing meetings, conferences, conventions, trade shows, and events. She is the co-recipient of PCMA's 2004 Author of the Year Achievement Award and can be contacted at vabetzig@mindspring.com.