The Watts Gallery, which manages its catering in-house

Catering: contract out or go in-house?

Rebecca Atkinson, 16.01.2012
Running a museum cafe in-house means bigger margins - but also carries a higher degree of risk
IN OR OUT?

“Whether a museum contracts its catering or runs the operation in-house is an ongoing debate that is unlikely to be resolved anytime soon,” says Mark Hobbs, managing director of catering consultants Kendrick Hobbs.

While the general trend has been for museums to contract out, there are always examples of museums doing it for themselves too. The Geffrye Museum in London does its catering in-house, as does the recently redeveloped Watts Gallery near Guildford.

And the tide might be turning. According to Paul Smith, principal consultant at Montfort Consultants, which works with a number of cultural organisations on their catering operations, an increasing number of museums are now looking at the opportunities that moving their catering in-house might present.

In-house catering gives a museum greater control over everything from menus, opening hours and pricing. And the most discernible benefit is that it means bigger margins.

But on the other side of the coin, getting a caterer in is far easier and dramatically reduces the risk to the organisation. In many cases, caterers are willing to invest in a museum’s cafe or restaurant – money that the museum might otherwise not be able to spare.

“Catering is very hands-on,” says Fiona Boyd-Thorpe, director of catering consultants Boyd-Thorpe Associates. “Any museum considering doing it in-house has to ask what they would do if their chef didn’t turn up, for example. If you contract it out then it is someone else’s problem.”

The National Tramway Museum, based at Crich in the Peak District, runs its own catering but a few years ago found itself making a loss of £7,000 despite sales of £280,000. Turpin Smale Foodservice Consultancy was appointed to help it identify the issues.

Sales, standards, margins and costs were all examined closely. Weekly and monthly montiroing of costs of food and staff have helped improve margins, increasing sales in 2010/11 to over £300,000 and producing an £80,000 profit.

CHALLENGES

Running a cafe or restaurant is very different to running a museum, and the biggest challenge is getting an experienced team of staff in place. Consultants say mature museums with an established visitor base are more likely to successfully provide catering in-house.

As well as the start-up costs, museums need to have the right infrastructure to deal with staffing and training, and adhere to health and safety regulations. Expertise on issues such as pricing and cost control is also essential.

“Museums need a certain amount of turnover before they will be able to support the infrastructure required to offer catering in-house,” says Duncan Ackery, the director of catering consultancy Ackery Consultants and the former head of Tate’s catering division. “For a small organisation, going in-house is high risk.”

They may also struggle to attract a caterer (see separate article). According to Hobbs, most caterers are not interested in museums unless their turnover is at least £500,000 a year. 

One development that could influence whether more museums start to offer in-house catering is the rise of outsourced food production. This can mean buying in cakes, but can also extend to finished dishes – all the museum cafe needs to do is heat these up before serving.

Ackery says this approach de-skills, and therefore de-risks, in-house catering for museums. “It might be an opportunity down the line but a museum will still need to be a significant size to make it worthwhile.”

While a number of museums are successfully running catering operations, with or without the help of catering consultants, the majority prefer to form mutually beneficial relationships with caterers.

“Catering isn’t really what museums do – it’s a specialism and any organisation wanting to do it in-house has to have passion to make it successful and commercially viable,” says Smith.

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