A caterer charging €25 per person for both 20-guest and 100-guest events is throwing away profit. Your fixed costs get spread thinner with larger groups, creating natural economies of scale. Most caterers miss this opportunity entirely.
What are economies of scale in catering?
Small catering orders carry relatively high fixed costs per person. Transport, setup, and on-site staff don't change much if you're serving 15 or 150 people. Larger groups spread these costs across more guests, dropping your per-person expense.
💡 Example:
Business lunch for 20 vs 100 people:
- Transport: €50 (fixed amount)
- Setup staff: €150 (2 hours × €75/hour)
- Food cost per person: €12
20 people: (€50 + €150 + €240) / 20 = €22 per person
100 people: (€50 + €150 + €1,200) / 100 = €14 per person
Calculate your fixed costs per order
Fixed costs stay constant regardless of guest count. You'll need to track these separately:
- Transport: fuel, vehicle wear and tear
- Setup: staff for transport and setup
- Materials: warming plates, trays, cutlery (if you bring these)
- Breakdown: cleanup and return transport
Add these together and you've got your fixed costs per order, no matter the group size.
Calculate your variable costs per person
These expenses scale directly with guest numbers:
- Ingredients: food cost per person
- Packaging: plates, cups, napkins per person
- Extra staff: beyond certain group sizes you'll need more cooks/servers
⚠️ Note:
Staff costs aren't always linearly variable. Up to 50 people you might manage with 1 cook, after that you need 2. These are 'step costs'.
The economies of scale formula
Cost per person = (Fixed costs + (Variable costs × Number of people)) / Number of people
Simplified: Cost per person = (Fixed costs / Number of people) + Variable costs per person
💡 Example calculation:
Corporate lunch with different group sizes:
- Fixed costs: €200
- Variable costs: €15 per person
25 people: €200/25 + €15 = €8 + €15 = €23 per person
50 people: €200/50 + €15 = €4 + €15 = €19 per person
100 people: €200/100 + €15 = €2 + €15 = €17 per person
Accounting for step costs
Some expenses don't rise gradually—they jump in 'steps'. For example:
- 1-50 people: 1 cook (€150)
- 51-100 people: 2 cooks (€300)
- 101-150 people: 3 cooks (€450)
Your cost per person drops within each step, but jumps up at the next threshold. Most kitchen managers discover too late that these step costs can completely wipe out your scale advantages if you don't plan for them.
Building your selling prices
With your per-person costs calculated, you can use different pricing strategies:
- Fixed margin: cost price × 2.5 = selling price
- Scale discount: give larger groups part of your economies of scale
- Minimum price: set a minimum number of people or minimum amount
💡 Example pricing:
Your cost drops from €23 to €17 per person (€6 advantage).
- Option 1: Keep €57.50 per person (€23 × 2.5) = more profit
- Option 2: Pass on €3 discount, keep €3 extra = €54.50 per person
- Option 3: Pass on all advantage = €42.50 per person
Most caterers choose option 2: win-win situation.
Catering calculation tools
A food cost calculator can run different scenarios without Excel headaches. You set your fixed costs, add your recipes, and the system automatically calculates your cost per person for different group sizes.
This way you immediately see at which numbers you make the most profit and where you can offer scale discounts without destroying your margins.
How do you calculate economies of scale? (step by step)
Split your costs into fixed and variable
Make a list of all costs. Fixed costs don't change with group size (transport, setup). Variable costs scale with the number of people (ingredients, packaging).
Calculate cost price for different group sizes
Use the formula: (Fixed costs / Number of people) + Variable costs per person. Do this for 25, 50, 100 and 200 people to see the pattern.
Determine your pricing strategy per group size
Decide how much of your economies of scale you pass on as a discount and how much you keep as extra profit. Create price tiers that make sense for customers (for example, per 25 people).
✨ Pro tip
Run calculations for three different group sizes (25, 75, 125 people) every 2 weeks to spot your true cost breaks. You'll discover that prep efficiency alone saves 40% more time per person on orders over 100 guests.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
From what group size do you get real economies of scale?
This depends on your fixed costs, but usually from 40-50 people you start seeing noticeable economies of scale. With groups under 20 people the fixed costs are often still too heavy per person.
Do I always have to give a scale discount for large groups?
No, that's your choice. You can also keep your economies of scale as extra profit. However, scale discounts help you land large orders and stay competitive with other caterers.
How do I calculate step costs for staff?
Determine how many people you can serve before needing extra staff. Add those labor costs to your fixed costs for that group size. Your cost per person then jumps up at each 'step' threshold.
What if the customer changes the number of people at the last minute?
Make agreements about changes in your quote. Up to 48 hours before you can usually still adjust numbers. After that you charge the originally agreed guest count.
How do I prevent earning too little on small groups?
Set a minimum price or minimum number of people. Many caterers use a minimum of €500 or 20 people to cover their fixed costs and make the job worthwhile.
Should I calculate economies of scale differently for buffet vs plated service?
Yes, plated service has higher labor costs per person but more predictable portions. Buffet service has lower labor but higher food waste risk that increases with group size.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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