Interesting piece in Washington State’s Everett Herald about how Haggen, which launched a catering business two years ago, has found that this relatively new venture is generating double-digit sales growth for the company.
According to the story, the business, called Market Street Catering, is structured “as a company within a company. It functions independently but it uses the resources of the grocery store. When the catering chef needs prime rib he walks to the meat department and chats with the manager. The bakery bakes the bread for the catering company. And when a customer wants flowers, the event coordinator uses the store's floral department. The catering company will use Haggen employees to staff events. ”
The Herald quotes local experts as saying that “when a supermarket adds what amounts to an entirely new business venture it adds an element of risk. The business faces new issues such as food spoilage, transportation and hiring and training a wait staff. It often takes a keen financial eye to make this sort of venture work, and what most supermarkets do have on their side are accountants who know how to control costs effectively,” though “a supermarket such as Haggen may have an advantage over an independent caterer who cooks up a business from scratch.”
According to the story, the business, called Market Street Catering, is structured “as a company within a company. It functions independently but it uses the resources of the grocery store. When the catering chef needs prime rib he walks to the meat department and chats with the manager. The bakery bakes the bread for the catering company. And when a customer wants flowers, the event coordinator uses the store's floral department. The catering company will use Haggen employees to staff events. ”
The Herald quotes local experts as saying that “when a supermarket adds what amounts to an entirely new business venture it adds an element of risk. The business faces new issues such as food spoilage, transportation and hiring and training a wait staff. It often takes a keen financial eye to make this sort of venture work, and what most supermarkets do have on their side are accountants who know how to control costs effectively,” though “a supermarket such as Haggen may have an advantage over an independent caterer who cooks up a business from scratch.”
- KC's View:
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It would be my perception that one of the reasons Haggen can make this work is that it is a highly food-driven company, with a traditionally strong emphasis on fresh foods. It brings credibility to the whole notion of fresh food, which allows it to build the catering business using that as a foundation.
It doesn’t mater how you structure the business if you don't have that credibility.
