Monthly corporate catering contracts seemed like easy money until I watched three caterers go broke on them. Your margin determines if you make money on these deals, but most caterers charge too little for the fixed costs and service involved. Here's how to calculate a profitable margin that actually works.
What makes corporate catering different?
Corporate catering operates on a completely different cost structure than events. You're delivering consistently—often daily—which drives down per-person costs. But you've also got fixed expenses like transportation, dedicated staff, and ongoing administration that must be factored in.
The cost structure of a monthly contract
Monthly contracts involve several cost categories that can't be ignored:
- Food costs: Ingredients for all meals
- Packaging costs: Containers, cutlery, napkins
- Labor costs: Preparation, delivery, service
- Transportation costs: Fuel, wear and tear, time
- Administration: Invoicing, planning, communication
- Unforeseen costs: Extra portions, changes
💡 Example:
Monthly contract for 50 people, 22 working days, lunch at €8.50 excl. VAT:
- Food costs: €2.80 per person (33% food cost)
- Packaging: €0.40 per person
- Labor: €1.20 per person
- Transportation: €0.30 per person
- Administration: €0.20 per person
- Unforeseen: €0.30 per person
Total cost price: €5.20 per person
Calculate your minimum selling price
Once you know your true costs, you can determine your minimum selling price. For sustainable catering margins, aim for 35-45% total costs of your selling price.
💡 Calculation:
Cost price: €5.20 per person
Desired cost percentage: 40%
Minimum selling price: €5.20 / 0.40 = €13.00 excl. VAT
Margin per person: €13.00 - €5.20 = €7.80
Factors that affect your margin
Monthly contracts have unique variables that can make or break profitability. And one of the most common blind spots in kitchen management is underestimating these ongoing costs:
- Volume: More people = lower costs per person
- Contract duration: Longer contracts = lower administration costs
- Distance: Further travel = higher transportation costs
- Service level: On-site service costs extra
- Menu complexity: Simpler menu = lower preparation costs
⚠️ Note:
Always factor in 10-15% extra portions in your cost price. Corporate catering means more people often show up than indicated, and you can't arrive short.
Monthly check of your margin
Contracts run for months, but costs fluctuate. Check monthly:
- Have ingredient prices increased?
- Does portion count match your estimate?
- Are transportation costs higher due to traffic or detours?
- How much time are you actually spending on this contract?
💡 Practical example:
Contract at €13.00 per person, 50 people, 22 days:
Monthly revenue: €14,300 excl. VAT
Actual costs: €6,200
Margin: €8,100 (57% profit margin)
Recognizing unprofitable contracts
Sometimes you need to adjust a contract or walk away entirely. Warning signs that your margin is deteriorating:
- Your cost percentage rises above 50%
- You're spending more time than calculated
- Ingredient prices have risen structurally
- The client constantly requests extras without additional payment
Food cost tracking systems help you monitor actual costs and margins per contract, so you can adjust before it's too late.
How do you calculate the margin on a monthly contract? (step by step)
Calculate all cost items per person
Add up: food costs, packaging, labor, transportation, administration, and 10-15% unforeseen costs. This gives you the actual cost price per person per meal.
Determine your desired cost percentage
For healthy catering, this is between 35-45% of your selling price. At 40% cost percentage, you keep 60% for margin and profit.
Calculate your minimum selling price
Divide your cost price by your desired cost percentage. At €5.20 costs and 40% cost percentage: €5.20 / 0.40 = €13.00 excl. VAT per person.
Check your actual figures monthly
Compare your actual costs with your estimate. Have ingredients become more expensive or are you spending more time? Then you need to adjust your price.
✨ Pro tip
Track your actual delivery times against estimates every 8 weeks for the first 6 months of new contracts. Most caterers underestimate setup and breakdown by 20 minutes per stop, which quietly kills your labor margins.
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
What margin is normal for corporate catering?
A healthy margin runs between 55-65% of your selling price. This means your costs stay at 35-45% of revenue. With ongoing contracts, you can sometimes work with slightly lower margins than one-off events.
Should I include VAT in my margin calculation?
No, always calculate excluding VAT. Catering carries 9% VAT, which you pass directly to the client. Calculate your margin based on the pre-tax price.
How often can I adjust my contract price?
This depends entirely on your contract terms. Many caterers include indexation clauses for ingredient price increases. With significant cost spikes, you can always attempt renegotiation.
What if the client has fewer people than expected?
Build a minimum order into your contract. For example: 'minimum 40 people—if fewer attend, pricing applies to 40 people.' This protects your margin from fluctuation.
How do I calculate transportation costs per person?
Add up your total monthly transportation expenses (fuel, time, vehicle wear) and divide by total portions served. A daily 30-minute round trip typically costs €0.25-0.50 per person.
Should I offer price breaks for longer contract commitments?
Yes, but calculate carefully. A 12-month contract saves administration costs and guarantees revenue, so a 5-10% discount can work. Anything more erodes your margin too much.
How do I handle menu changes mid-contract?
Include a change fee structure in your contract. Minor substitutions might be free, but significant menu overhauls should trigger a cost recalculation and potential price adjustment.
📚 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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