June 2007
Marketwatch: Food & beverage

F&B budgets fall flat in 2007; sponsorships defray one-quarter of the costs

By Danica Tormohlen

Show organizers plan to spend 16 percent of their budgets on food and beverage in 2007, the same as last year, according to the 95 show organizers who responded to an online survey conducted by EXPO Maga-zine and Exhibit Surveys Inc. in April 2007. On average, 26 percent of F&B expenses are paid by sponsorships.

Selling F&B sponsorships is getting tougher, according to 40 percent of respondents. Fifty-one percent report that it’s about the same, while 9 percent say selling F&B sponsorships is easier.
No surprise, convention centers are the most popular venue, with 80 percent of show organizers hosting F&B functions there. Fifty-nine percent of show organizers hold functions at hotels, while only 27 percent hold them at other venues (museums, restaurants, local attractions, special event venues, etc.).

Cocktail receptions are the most popular type of F&B function. Eighty-seven percent of show organizers hold cocktail receptions, followed by lunch (71 percent), breakfast (65 percent) and breaks (55 percent). Less than half of show organizers (45 percent) hold dinner functions.

More on expoweb.com

F&B benchmarks by show type, by show size and by show revenue

Where functions are held

Association
Convention centers – 84%
Hotels – 69%
Other – 31%

For-Profit
Convention centers – 78%
Hotels – 48%
Other – 23%

Corporate
Convention centers – 67%
Hotels – 50%
Other – 33%

Consumer
Convention centers – 68%
Hotels – 36%
Other – 23%

Trade
Convention centers – 80%
Hotels – n/a
Other – 20%

Revenue more than $2 million
Convention centers – 88%
Hotels – 58%
Other – 38%

Revenue less than $2 million
Convention centers – 70%
Hotels – 61%
Other – 16%

Types of F&B functions held
Association
Breakfast – 71%
Lunch – 76%
Dinner – 57%
Breaks – 57%
Cocktail – 90%
Other – 20%

For-Profit
Breakfast – 60%
Lunch – 65%
Dinner – 33%
Breaks – 60%
Cocktail – 88%
Other – 15%

Corporate
Breakfast – 50%
Lunch – 67%
Dinner – 33%
Breaks – n/a
Cocktail – 67%
Other – n/a

Consumer
Breakfast – 55%
Lunch – 59%
Dinner – 32%
Breaks – 36%
Cocktail – 77%
Other – 27%

Trade
Breakfast – 68%
Lunch – 73%
Dinner – 47%
Breaks – 56%
Cocktail – 88%
Other – 15%

Revenue High
Breakfast – 66%
Lunch – 74%
Dinner – 54%
Breaks – 68%
Cocktail – 90%
Other – 20%

Revenue Low
Breakfast – 64%
Lunch – 66%
Dinner – 36%
Breaks – 39%
Cocktail – 84%
Other – 11%

Number of F&B functions held
Association
Breakfast – 3.6
Lunch – 3.6
Dinner – 2.9
Breaks – 5.3
Cocktail – 2.5
Other – 2.3

For-Profit
Breakfast – 3.1
Lunch – 3.2
Dinner – 1.1
Breaks – 4.5
Cocktail – 1.4
Other – 2.8

Corporate
Breakfast – 2.0
Lunch – 2.0
Dinner – 2.0
Breaks – n/a
Cocktail – 2.0
Other – n/a

Consumer
Breakfast – 3.1
Lunch – 3.8
Dinner – 1.8
Breaks – 4.5
Cocktail – 1.4
Other – 2.2

Trade
Breakfast – 3.3
Lunch – 3.4
Dinner – 2.4
Breaks – 5.0
Cocktail – 2.1
Other – 2.4

Revenue High
Breakfast – 3.8
Lunch – 3.4
Dinner – 3.0
Breaks – 4.7
Cocktail – 2.3
Other – 3.4

Revenue Low
Breakfast – 3.0
Lunch – 3.3
Dinner – 1.6
Breaks – 5.2
Cocktail – 1.8
Other – 1.0

Percentage of budget spent on F&B in 2006
Association – 19.1%
For-Profit – 10.5%
Corporate – 18.8%
Consumer – 9.6%
Trade – 16.3%
Revenue High – 11.8%
Revenue Low – 19.4%

Percentage of budget percentage expect to spend on F&B in 2007
Association – 19.5%
For-Profit – 11.3%
Corporate – 16.3%
Consumer – 9.6%
Trade – 16.8%
Revenue High – 12.4%
Revenue Low – 19.7%

Percentage of F&B expenses paid by sponsorships
Association – 25%
For-Profit – 27.8%
Corporate – 16%
Consumer – 33%
Trade – 24.4%
Revenue High – 26.5%
Revenue Low – 25.6%

Trends in selling F&B sponsorships
Association
Easier – 2%
Harder – 49%
About the same – 49%

For-Profit
Easier – 16%
Harder – 31%
About the same – 53%

Corporate
Easier – 25%
Harder – 25%
About the same – 50%

Consumer
Easier – 15%
Harder – 45%
About the same – 40%

Trade
Easier – 10%
Harder – 40%
About the same – 50%

Revenue High
Easier – 3%
Harder – 33%
About the same – 64%

Revenue Low
Easier – 15%
Harder – 48%
About the same – 38%

How often entertainment and/or education is held in conjunction with F&B
Breakfast – 38%
Lunch – 33%
Dinner – 73%
Breaks – 5%
Cocktail receptions – 64%
Other – 54%

Verbatim responses from respondents on their biggest challenge/frustration with F&B
Ability to work out custom menus at a reasonable price.
At facilities that we use, there is one exclusive F & B provider; therefore, no ability to negotiate nor any control over quality of food and service.
Automatic gratuity.
BEOs! Food not always presented on time, lack of on site coordination by catering personnel.
Corporate sponsors
Cost.
Cost containment
Cost is getting more expensive each year.
Cost of F&B provided by convention center or hotel
Cost! I can't justify paying $5 for a candy bar or a cup of regular coffee! We use to bitch about paying $10 for a mixed drink. That's starting to look pretty good! Many bars today are charging that much. However you can still buy a cup of coffee and a candy bar for under a buck!
Cost, service charges, minimum delivery fees, minimum on buffets.
Costs and quantities.
Decent pricing and custom menus; also, the automatic gratuity creep that has now topped 20%; I've seen up to 22%; I might not mind as much if I knew that the wait staff got this, and that it wasn't split with the house/management.
Estimating attendance and consumption
Exclusive contractors
Exclusive contracts
Finding sponsors to cover the cost of feeding 7,000 attendees.
Getting the food order correct and in its location on time; we seem to always have to check up on caterer and there's usually always something missing or not right.
Guarantees necessary are further and further out from the event date. Cost of tax and tip.
High cost vs. amount/type of food.
How the F&B costs are always some of the highest expenses and how it is always surprising to your Board of Directors.
Keeping costs down.
Late or no-shows
My biggest challenge is making trying to provide a variety of food choices while staying within my budget.
Not allowing our exhibitors to be able to use any other caterers than the one supplied by the convention centers. European exhibitors have a very hard time with this.
Poor food and service quality for the exorbitant cost. Accountability for on-time delivery.
Poor quality, high expense
Prices are becoming extremely high.
Prices for F&B are off the charts. It's absolutely ridiculous.
Prices! It's very annoying to know that you pay $3.25 for a bottle of water when you can buy a six-pack of the identical item at a drug store down the street for less. And there is no budging on pricing. I've asked for assistance and special items that might be cheaper, and am always told "no."
Pricing
Pricing at convention centers is outrageous.
Quality and price (too expensive, and lack of variety & healthful food item choices).
Quality, cost and variety.
Restrictions placed on the type of sponsors and the variety of F/B offered.
Rising costs
Rising costs at convention centers
Rising costs
Rising prices
Service charges and minimums.
Since I am required to maintain a similar F&B budget every year, I am continually challenged by the rising costs associated with the F&B events.
Sponsorship
The concession stands throughout most facilities are horrendous. Our show surveys, completed by our attendees, show that one of the top complaints about our shows is the ridiculously high price charged for food and drinks, as well as the lack of choices for healthy food selections. The public perception is that show management is charging these prices, on top of our ticket prices and the parking fees charge by the facility, so the F&B ends up reflecting negatively on our show.
The cost and timely service
The cost of coffee, at $5 (or more) per cup. The cost of appetizers (at $5 each - it adds up quickly). Facilities unwilling to work with us on finding cost-effective solutions (for both them and us), i.e., no alternatives.
The food item and beverage item is extremely expensive then real frustration sets in with the additional high percentages of gratuities, service fees and taxes on food+grats+service fees! It isn't fun to have to be the "soda & bottled water police," but someone has to protect the "golden soda" sometimes inclusively priced as high as $6.25 per soda.
The industry needs to look at the value of F&B services in hotels and convention centers. Costs have increased dramatically over the last several years. Far outpacing CPI increases or any other cost center that we track. IT is becoming very hard to justify supporting at the same level the F&B events we have historically held at our events.
The minimums required by many hotels and all of the service charges.
The outrageous costs charged by convention centers.
The price of coffee
To get the special license for holding liquor sponsorships with F&B events in India
Too expensive
Usually the quality of the food - which is why we really aren't doing breaks or anything anymore - when we did it - it didn't really work.
Value for price especially when you add ++.
Value for the cost. The costs are outrageous, the quality is going down and in many centers the service is spotty to bad.
Variety, cost
Variety, quality, service
Venues offering new and different F&B options at a reasonable cost
Waiver of minimums, the cost of a gallon of coffee as well as charges in general and the taxes involved. Taxes and service charge can be as much as 1/3 of the total bill.

Profile of survey responses
Respondents - 95

Organization Type
Trade association/society/not-for-profit - 52%
Independent/For-profit convention/trade show/meeting owner/producer/planner - 42%
Corporate event management - 6%

Event Type Produced
Trade only - 77%
Consumer show - 4%
Trade and consumer show - 19%

Total Gross Revenue
$500,000 or less - 14%
$500,001 - $1,000,000 - 14%
$1,000,001 - $2,000,000 - 19%
$2,000,001 - $3,000,000 - 12%
$3,000,001 - $5,000,000 - 14%
More than $5,000,000 - 28%