Diversification is on the cards in the world of corporate hospitality

As the corporate hospitality sector continues to suffer, Lizzie Murphy meets an events catering company which is adopting a new tactic.

THE sun is shining, the champagne is flowing and the strawberries are out. It's the 2010 racing season and the catering staff are in full swing.

CGC Events, which caters for 10 racecourses in the North of England, runs more than 100 restaurants, bars and mobile eateries at York Racecourse.

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But although its racing days remain glamorous affairs, the lack of corporate hospitality at major events is a problem for CGC and its competitors.

"We have certainly been affected by the downturn in corporate hospitality," said managing director Keith Stewart. "But we realised early on that we could not rely on repeat business.

"If a company has laid off a lot of people, they don't want to be seen to give hospitality to clients. It seems wrong. We realised we would have to be more proactive in the market place."

The company, which employs 130 full-time staff and more than 1,000 casual staff during busy events, said its fierce local and regional loyalties have enabled it to weather the economic storms of the past few years with remarkable resilience.

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Although turnover is down from the historic peak of 19.5m in 2008, the company is returning a higher percentage of profits – performing better than some of its competitors – and has not made any redundancies.

While bankers and property developers might not be trackside, the British "staycation" racegoers have taken their place, according to Mr Stewart.

"The public side of racing is holding up extremely well and particularly on the festival meetings," he said. "People are staying in the UK rather than going abroad, and going racing is a good way of having a day out without spending too much. From 5 a head, you can have a day at the races.

"Our large meetings are at least five per cent up in attendance and some are much more."

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Nevertheless, the lack of companies spending large amounts of money on a day at the races is noticeable and an issue that CGC has had to address.

For the first time, it has invested in sales teams in York and its headquarters, in Garforth, near Leeds, to try to win new business.

"We determined that corporate hospitality, which is half of our business, could be as much as 30 per cent down year on year," said Mr Stewart. "It hasn't been as bad as that but we have had to look at costs."

Even in the face of a harsh economic environment, CGC has broken a number of its own records in 2010. It achieved the best July it has ever had in York with its Music Showcase weekend, which featured competitive racing and live music from Madness, a winning combination that attracted 42,500 people.

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It also catered for 4,000 Girl Guides celebrating the centenary of the Girl Guides Association at Harewood House, near Leeds, and the Farnborough air show.

A key strategy for CGC's future is to create its own events. As well as the Music Showcase weekend, it also organised a Take That Tribute night at Beverley Racecourse and is planning to host a number of similar events.

"They are relatively economical to put on and, if successful, we could book original acts," said Mr Stewart.

CGC also takes on outside catering events at the Great Yorkshire Show and the Yorkshire International Business Convention, in Harrogate. It has also catered for the BBC Sports Personality of the Year event.

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But Mr Stewart knows it needs to diversify and win more winter contracts if it is to thrive.

"We are moving towards a degree of diversification," he said. "We have just picked up our first stadium contract at Edgeley Park, in Stockport. We are a very summer-based business and we would like more winter work. We are looking to take on more work at football and rugby matches."

CGC is also proud of its commitment to seasonal, local produce. Mr Stewart said: "We have always tended to buy from small producers but now people are catching us up. We now make sure everyone knows where things have come from."

The company recently undertook a strategic marketing review, which led to the recruitment of a dedicated marketing coordinator to promote the business, and revamped its website. It is also looking at blogging and social media.

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Mr Stewart said: "We are not here to conquer the world but we know there is much more business we can obtain by being a bit smarter."

CGC Events

CGC Events was founded 100 years ago and now employs 130 full-time staff at its headquarters, in Garforth, and York Racecourse.

Besides York, the company caters for nine other racecourses in the North of England, at Beverley, Catterick, Thirsk, Wetherby, Pontefract, Ripon, Newcastle, Sedgefield and Redcar.

York Racecourse is the largest of CGC's contracts, which it has held since 1982, and operates as York Racecourse Hospitality.

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Behind the scenes of the flagship Ebor Festival, which regularly attracts more than 100,000 racegoers, there

are 60 chefs working in 10 different kitchens.

During the four-day festival, 17,000 bottles of champagne are served, 6,000 punnets of strawberries prepped, 150 full sirloins of local beef roasted, 350 lobsters boiled, 1,200 crabs dressed and 2,000lb of prawns peeled.