little over a year ago, business aviation caterers were feeling the pressure as the wholesale price of consumables rose and the price of gas began to soar. Today, that pressure has become a clear squeeze as the global economy struggles.
According to Paula Kraft, founder and co-owner of Tastefully Yours in Atlanta, caterers currently fall into two groups: “Some will tell you things are slow. The others will lie.”
Joe Celentano, co-owner of Rudy’s Inflight Catering, is among those acknowledging that business has dropped off. He said that business is “about 14 percent less than last year at this time, and I expect that number represents a downward trend.”
Fly Away Gourmet Aircraft Catering of Eagle, Colo., serves the Vail and Aspen ski resort areas. Owner and executive chef Joe Keegan described the current business trend as, “down, down, down.” But he noted that his is a seasonal market. “The snow will come, and our customers will come.”
However, there remains room for caution. Last winter, the business aviation industry was still riding a strong mountain wave when the slopes opened. This year might be a different story. Keegan is optimistic, but not exactly confident, pointing out that catering is not a safety issue and in an economic downturn, “it’s one of the first things to get cut.”
In Florida, Sal Tocco, owner and chef at Air Concierge, is also anticipating a seasonal increase in business that begins in mid-November and typically runs through April or May. “The cost of everything is up,” he said. “I’ve done my purchasing for the coming season and I’ve seen a 10-percent increase in wholesale costs from just six months ago.”
Prices Not Quite So Palatable
Khalid Halim of JetFinity in San Mateo, Calif., is “somewhat insulated” from the current recession by serving the thriving high-tech, pharmaceutical and venture-capital companies in the San Francisco/Oakland area. According to Halim, these companies have “continued to fly quite a bit.”
Halim recalled, “In 2000/2001 we went through the dot.com bust. We saw companies disappear and vacancies skyrocketed. But this was our rehearsal for the next crisis, and a lot of companies already had contingency plans in place to survive this one.”
Nevertheless, he noted, some of JetFinity’s customers have been avoiding the high-ticket items, sometimes even choosing sandwiches over entrees.
Barry Saven, president and founder of Los Angeles-based Air Gourmet, said he “initially blamed the decline in business on fuel prices.” However, “Now I hear from flight attendants who say they’re flying less and some full-time attendants are losing their jobs and I realize it’s more than fuel costs. The economy is catching up with everybody.”
He said Air Gourmet is filling the same number of orders, but the ticket value is less as customers become more frugal in their selections. “It’s not that people have lost their taste for caviar and lobster, but they don’t find the price as palatable.”
Cyndee Irvine is a corporate flight attendant with 12 years of experience and is currently the West Coast sales rep for aircraft crew staffing provider Jet Professionals. “There’s cost-cutting on the part of flight departments [and] some that might have called a caterer are now having the crew shop at local markets and restaurants for meals aboard the aircraft,” she told AIN.
Irvine is intimately familiar with the effect of the recession on business aviation, having watched “a number of Part 91 flight departments in California close their doors in the past year.”
Rising costs in the marketplace continue to have an impact on catering. “Costs across the board are going up, and it’s getting passed along,” said Irvine.
Air Concierge’s Tocco said a year ago he was paying $55 a case for the box-lunch containers, “and now they’re $105 a case.”
According to Jetfinity’s Halim, in the past 18 months the cost of flour and corn has tripled, which has in turn driven up the cost of every food item with corn or flour among the ingredients. And because corn is a feed grain, it has resulted as well in higher prices for beef and poultry.
“We used to spend $200 to $300 a day for basic produce,” said Kraft, “but in August and September it jumped to $400 a day.”
In mid-2006, when the price of oil began to escalate dramatically, caterers watched as the price at the pump jumped. In September 2007, Kraft reported that the cost of fuel for deliveries was $4,800, more than twice what she had paid at the same time the year before. This year, as the national average for gas at the pump topped $4 a gallon, Kraft, along with other caterers, instituted a fuel surcharge for deliveries.
Automobile gas is not the only commodity tied to the price of oil. Plastics are a petrochemical product and Kraft said she has seen the price of plastic containers and eating utensils jump more than 20 percent in the past year. “And on top of that, our vendor had begun adding his own fuel surcharge for delivery.”
Like other caterers, Rudy’s began levying a fuel surcharge for deliveries earlier this year when prices at the pump spiked. “But when the price fell below $3 a gallon in October, we dropped it.” Other caterers have followed suit as gas prices have dropped well below $3 a gallon, either reducing the delivery surcharge or eliminating it.
At Air Gourmet, Saven dealt with the increase in fuel costs by making multiple deliveries on a single run. “But it’s the nature of our business to prepare meals only a short time before delivery. We want all the deliveries dropped off within an hour of the scheduled pickup time, and that makes it complicated. If you deliver too early, it increases the chances of an order change, and then you have to make another run anyhow.”
Tastefully Yours has coped by reducing staff and cutting hours and scheduling multiple deliveries. The kitchen has also changed to less expensive, lightweight packaging that delivers the same portions without increasing the cost.
Many caterers are reducing staff, and rather than letting people go, they are more often simply not replacing those who leave.
Devine Catering out of Madison, N.J., has been replacing boxes with bags and also gone to thinner plastic containers for individual portions.
JetFinity has gone so far as to request weekly commodity reports in an effort to forecast pricing increases.
“We’re seeing wholesale price increases of 30 percent for some things,” said Kristen Wasyliszyn, owner of Atiki’s Flight Catering in St. Paul, Minn. “Plastic just killed us in the past year. It reached a point at which plastic was more expensive than glass.”
With wholesale prices climbing, caterers say they have no choice but to pass along costs to their customers. As a result, customers are receiving invoices with prices much higher than they were expecting. For example, a caterer might charge $16 for a large bag of potato chips that would cost $2.95 in Shop Rite. “Now I buy them at the local grocery,” said a disgruntled flight attendant. “My loyalty is to the people who hired me to work that cabin, not to the caterers.”
Cost is prompting many aircraft operators to bypass caterers and send members of the crew out to shop at local markets. Los Angeles-based flight attendant Irvine, for example, stops at the upscale Gelson’s Market en route to the airport and picks up Wolfgang Puck Chinoise Chicken Salads at $6 per person rather than order Chinese salad from a caterer at $26 per person.
Scott Lalka, president of Catering Specialists, arranges catering for larger executive aircraft, often those carrying professional sports teams and, this year in particular, political campaign teams. He works with some 100 caterers worldwide but also makes extensive use of restaurants, such as Cheesecake Factory, Jason’s Deli, Panera Bread and Ruth’s Chris Steakhouse. It’s less expensive than catered fare, he said, and most often simply a matter of what his customers prefer.
As for customers, “Orders are not as large and they’re demanding price breaks,” said Kraft. “Everybody’s trying to save.”
According to caterers, there are still those who want what they want and have the money to indulge. But other customers have cut costs by eliminating meals on shorter flights. Still others are no longer ordering hot entrees on two- and three-hour flights, replacing them with an assortment of sandwiches. Recognizing that passengers accustomed to individual meal choices are not going to take kindly to a one-size-fits-all sandwich platter, some operators are asking for a variety of separately packaged breads, meats, cheeses, dressings and condiments and passengers are building their own.
“In some cases, we’ve created custom menus for clients with prices that allow them to remain within their catering budget, so long as they stay within the borders of that menu,” said Kraft.
Beli Deli Gourmet Catering of Oakland, Calif., has become a popular business aviation catering source, with a wide variety of ethnic dishes, including Chinese, Georgian, Greek, Kosher and Russian, as well as the typical menu items. “Wholesale costs have risen but our prices have not,” said owner and founder Eugenia Sinitsky. “We know everyone has a budget and so our prices are flexible.”
At Atiki’s, Wasyliszyn is adjusting the portion sizes to keep costs down. “Everybody wants to look at a dish and see that the chef has put a lot of work into it. But we’re also aware that some customers, in particular Europeans, find large portions offensive, while others are offended if they don’t leave the table ‘full.’”
“We’re encouraging flight attendants to pack ingredients separately,” said Peter DeVito, co-owner of 121 Catering in Oxford, Conn. “For example, raw vegetables left over after assembling a crudité tray can be steamed and served as a side dish later, or diced, sautéed and added to an omelet.”
At the Corporate School of Etiquette in Newport Beach, Calif., a chef-led, two-day class in advanced menu planning is one of the most popular courses. “How to order from a caterer is important to the flight attendant in terms of saving both time and money,” said president and founder Donna Cassacia. “We also teach flight attendants how to save money by ordering in bulk and preparing trays on the airplane.”
Using all of what is ordered seems to be happening throughout the industry. Flight attendants are making smoothies of the fruit remaining after creation of a fruit tray. They are serving smoked salmon for lox and bagels at breakfast and later with goat cheese on toast points as hors d’oeuvres.
Charter operators for some time now have been creating culinary profiles of their preferred frequent fliers. It allows them to order specific meals, rather than just order a lot of food. And some operators and owners have asked preferred caterers to create a special menu with their frequent-flier passengers in mind, taking into account everything from individual taste to religious and health considerations.
Eating healthy, in fact, is a serious issue for many private aircraft passengers. Peanut allergy is common in many children, and an allergy they typically do not outgrow. The reaction to exposure can range from minor irritation to life-threatening anaphylaxis.
Even more common is an inability to metabolize lactose, a sugar found in milk and other dairy products. Not to mention a gluten-free diet for those with celiac disease or who have a wheat, rye or barley allergy.
In Southern California in particular, said one caterer, passengers are especially health conscious. Organic foods remain in high demand, as do fish, and grilled or steamed is preferred to sautéed and deep-fried. And some who want fish want only farm-raised to avoid the possibility that it may contain mercury. “They want the Omega-3 but they don’t want the mercury,” he explained.
Although times are tough and caterers are watching their wallets too, some have recently expanded or are planning an expansion.
Atiki’s Wasyliszyn has been negotiating to acquire property for a new kitchen and plans to build an apartment on the second floor as a residence. The acquisition would triple the size of Atiki’s kitchen. The problem, she said, is that the lender for the original mortgage was Lehman Brothers, which folded earlier this year amid much controversy. “It’s in foreclosure, and I put in an offer,” said Wasyliszyn, “but nobody seems to know who currently holds the paper on the place.”
Sensations partner LaRosa said he has been eyeing expansion down the East Coast and is considering “an alliance of some kind” with an established Florida caterer. “We are at the stage where you can choose to stay as you are or move to the next level, and staying where you are is essentially moving backwards.”
Silver Lining at Pompano recently opened a new 4,800-sq-ft kitchen in October in West Palm Beach, not far from Palm Beach International Airport. Also in the works is a restaurant called Jet Runway Café, appropriately located adjacent to the runway at Fort Lauderdale Executive Airport. The restaurant is expected to open in the middle of this month.
Caterer 121 In Flight is just two years old but opened its new 5,000-sq-ft facility at Waterbury-Oxford Airport in January; the à la carte 121 Restaurant is located upstairs.
Casacchia of the Corporate School of Etiquette plans to add a class on cultural differences that will include cuisine, as well as history and religion. “We’re starting with India and Russia because they’ve been specifically requested by a client. About three-quarters of the course will involve cuisine and will be taught by one of our chefs.”
“Right now, there’s some real uncertainty in the market,” said Rudy’s Celentano.
According to the U.S. Department of Labor, wholesale prices in the past year are up nearly 7 percent from last year. And the consumer price index showed the average cost of a market basket of goods and services in September 2008 was up 4.94 percent from the same month last year.
Looking forward, it seems costs to caterers, and ultimately to their customers, will only continue to rise.
“My concern is not so much where I am today,” said Saven, “as it is where I’m going to be tomorrow. Well structured and established caterers will survive this, but some will almost certainly close.”
It’s a sentiment Celentano echoed. “The bottom line is a profit/loss statement, and some players won’t survive.” He added, however, “It is cyclical, and we knew it was coming. The alternative in the meantime is to run up a white flag and surrender, and I don’t think any of us wants to do that.”