Insider Tips for Finding Hidden Food and Beverage Savings

By Brian Lemay No comments


– Hi there, I’m Bari Baumgardner, founder of Sage Event Management, and today, I want to talk to you about one of the big mistakes
that event hosts make every single day. Now, I have recently
shared two other videos on common myths and
misconceptions about live events, and today we’re gonna talk about one that I think costs even
hosts money every single day. Let me tell you a quick
story to give you an example. So, recently we took
on a brand new client, and we were analyzing her
food and beverage cost and her hotel bill, and how
she was spending her money at her live events. And one of the things
I immediately noticed was she was paying rental
on her smaller events, and when we talked about it, she said well I’ve always thought if I could just pay rental, it really saves me money on
not having to spend anything on F&B, so I gladly pay the rentals so that I have zero liability
on food and beverage. I said, okay, that makes sense. Are you spending any money
at all on food and beverage? And she said, oh yeah,
well I do host a reception, and I like to give them
breaks during the day to keep their energy
up, but I don’t have to because I’m paying rental. So, that’s the myth and misconception, because here’s the deal. If you pay even a little
bit in food and beverage, you can almost always
offset that room rental. And think about it, would
you rather pay room rental, which no attendee can see,
no attendee has any idea that you’ve spent money with
the hotel and room rental, or would you rather spend your
money on food and beverage, which allows you to wine
and dine the attendee, to give them something
they’d really enjoy? As she was rightly thinking,
it does keep the energy up, it does, I think, involve some reciprocity with the attendee, which I
always think is a good thing, and if you can do that in a way that allows you to make
your attendees happier and save you money,
why wouldn’t you do it? I think it’s because
most of our event hosts do not fully understand
how food and beverage with the hotel work. So let’s take a quick look
at how you can save money. So first of all, if you
are not spending any money on food and beverage at your event, whether it’s a mastermind,
a group program, a three day event, if
you are adamantly opposed to spending any money
on food and beverage, then yes, you probably are
gonna spend some room rental, and yes, it may be better
for you to do that. But if you’re considering
spending any amount of money on food and beverage, then you
are going to come out ahead by going ahead and committing
to that in advance. You’ll eliminate the rental, you’ll get better service from the hotel, and you’ll get better concessions. Because here’s a little secret that no hotelier will tell
you, but it’s the truth. Hotels like to keep their staff working, so when you pay rental, they
do make more money on it, it’s 100% profit margin, which every hotel is delighted to get, but it’s kind of a bummer for them if you don’t do any food and beverage, because all of these team
members that they pay, don’t come to work, don’t get paid, don’t accrue hourly hours
if they’re not on the floor helping to serve food and beverage. Hotels like to keep their people happy, and part of how they do
that is food and beverage. And there is actually a
pretty good profit margin on food and beverage, so
it’s a nice little offset, which is why they’re
willing to swap it out in place of rental in almost every case. But if you’re going to go this direction, I want you think about how to do it. You may be thinking that a
food and beverage minimum means that you have to serve
breakfast, lunch, and dinner, three squares a day, but I’m
not trying to convince you to serve them every meal. I think you can be really selective. Think about your audience,
think about your event, the pacing of your
event, and what you think would give you the most
return on your investment for that food and beverage investment. Know that all of these things count toward food and beverage: A coffee break, even if
it’s just coffee and tea. A coffee break, snacks for attendees, whether it’s cookies,
whether it’s fresh fruit, whether it’s bagels in the morning, all of those things count towards your food and beverage minimum, a hosted bar and, think
about this, a cash bar. A cash bar means that the
attendees are buying the drinks, but every drink they buy counts towards your food and beverage minimum, so the attendees are actually paying for your food and beverage minimum. So whether it’s a hosted bar
where the drinks are free or a cash bar, both of them count towards your food and beverage minimum. And the last one, and this
one people often forget, staff meals. I’m a big believer that a
well-fed, well-hydrated staff is a happy staff, they’ll
work far harder for you if they’re well-fed and taken care of. This doesn’t mean putting out a massive display of food for them, but even simple snacks in the staff office that they can grab and
go, or coffee and tea, or a scaled down lunch buffet to make it easy for them to grab lunch. All of that counts towards
your food and beverage minimum. So here are the steps that I recommend to stay focused on how to
spend your food and beverage, and how to negotiate a minimum. First you wanna look at the hotels menu and get a good sense of their pricing, per gallon, per piece,
per person, per item, per plate, etc. You wanna get a sense
of all of their pricing, per hors d’oeuvres, all that good stuff. Then, you wanna lock in the menu prices at the contract signing, so
that they can’t change on you between the time you sign the contract, and the time you have your event. At that point, you can even
do some basic negotiation. Hotels will often give
you a flat fee discount, like 10% off of all pricing,
or locking in this years menu, plus 10% discount, or even
locking in a discounted rate for select items you
know you want to serve. But that needs to be
done at contract signing. Once you’ve looked at the menu, you’ve locked in your pricing,
and you’ve thought through the number of people
you realistically expect to have at your event,
this is not your wish list, this is true goals, what you really think are going to attend for each
of those meal functions, multiply it out, do the math, and come up with a collective number. Let’s say that you’re
going to do coffee breaks every afternoon and you’re going to host a welcome reception. You multiply all that out, look at the combined
amount of food and beverage you would spend, and
then I like to recommend, especially if you’re new at this, subtract 20% just to give
yourself a comfortable buffer between what you realistically
think you’re going to spend, and what you’re going to have to spend in that food and beverage minimum. Typically hotels are gonna
charge you the difference if you don’t hit your minimum, unless you negotiate
profit margin in there, which is essentially
saying if I fall short, I’ll pay you your profit
margin, which tends to be 35 cents to 50 cents on the dollar. That’s a high-level move, don’t feel like you have to do that one, but if you have a hotel willing
to give you profit margin, it can limit that liability even further. Even if you can’t get profit margin, you’re still going to be in a better place committing to this flat F&B minimum, and what I mean by a flat F&B minimum is you’ve ganged up all of
your expected meal costs into one flat fee, that’s
what you have to spend at the hotel. Don’t let the hotel force you
into saying you will serve a reception at this price point
for this number of people. That’s a no-go. You want to combine it all
together into a flat minimum. Here’s the benefit of a flat
food and beverage minimum. You can choose to spend
the money however you want. So let’s say you change your mind and decide not to do a reception. Instead you want to do a
lunch on the first day. That’s perfectly fine. When you have a flat F&B minimum, you choose how to spend the money. It doesn’t matter whether
you wanna do coffee and tea, add snacks, cut snacks, totally up to you until the last 72 hours before the event. So it gives you a lot of flexibility to navigate how you’re going to spend the food and beverage based on
the number of people you have that limits your risk and your liability, and allows you to provide
a really awesome experience for your attendees. I hope you found this information helpful and if you’d like to check
out more of my videos, including the last two in this series that covered common
myths and misconceptions when event hosts are planning their events that cost them lots of
money, for example rooms and room attrition and
ordering food per person, go to my video blog at
blog.poweredbysage.com. And as a quick recap, I
just wanna remind you, if you’re thinking about
planning your next event, you haven’t yet committed
to the hotel contract, if you’re not going to be paying rental, you wanna really negotiate
a flat F&B minimum. It really can pay off for you, not only in spending less at the hotel, but providing a really
extraordinary experience for your attendees. Much like the other risk in live events, you do want to do the homework before committing to the flat F&B minimum, so do the math, be conservative,
but commit in advance, and know that part of this commitment is part of being a real host,
running a real live event. It does come with risk, but with careful and proper advance planning,
you can mitigate those risks and save yourself a ton of money. Trust me, you can do this. Go, team, go. We’ll see you next time.

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