The "Food & Beverage Trap" in clubs?

This post looks at a phenomenon that is highlighted by Club Benchmarking, one of the best-known club consultancies. They base a number of their observations on data gleaned from a unique source: they provide a software platform for club finances, as well as providing assessment services for clubs, all of which are used by some 1,200 clubs across north America; the result is that they have aggregate anonymised data on trends across the club sector. Their findings are therefore always of interest, for their (sometimes counterintuitive but data-led) analyses of clubs.

And over the last few years, they have highlighted what they call “the food and beverage trap” in clubs. A new white paper draws attention to this; but it is nothing new - the consultancy has been setting out an argument in this area for at least five years.

It is entirely normal for club boards, committees and senior management teams to review their own performance, and to express concern at the lack of profitability of the food and beverage operations. And this is a common experience the world over, not just in US country clubs - I can well recall the Secretary of a well-known London club describing the difficult conversation they had had with staff over the coffee room [dining room] operation: “I’m seeing a lot of red, guys.”

Yet Club Benchmarking’s counterintuitive conclusion is that the clubs with the strongest financial performance are consistently the ones with the greatest losses on food and beverage; and that those in the weakest financial position are consistently the ones that break even, or turn a profit, on their F&B operations. How is this possible?

Let us look at what Club Benchmarking say in their published papers. In their original paper five years ago, by Club Benchmarking founder Ray Cronin and the Monterey Peninsula Country Club’s General Manager, J. J. West, they note how the common question is built on a faulty premise:

“The common question heard in boardrooms and finance committee meetings in pondering F&B finances in a club is “why can’t we make money like a restaurant?” There are a couple of points of logic behind this question. Which restaurant do we wish to emulate in making money? The 60 percent that fail within three years (according to a study by Cornell University), the McDonalds down the street or the high-end, expensive, chef-owned restaurant downtown? They all have different business and financial models. Would a restauranteur open a restaurant that can only serve a specific five to seven hundred people? Would a restauranteur offer a breakfast service trafficked by a handful of customers? Would a restauranteur consistently allow patrons to order “off menu” as a matter of practice?”

And this line of thinking is, if anything, becoming increasingly out of step with reality. The new report by their research & innovation director Bryan LaBlue notes how some 92% of clubs surveyed make a loss on their F&B ledger, with the trend leaning towards F&B becoming even more unprofitable, even though the club sector as a whole is booming.

Clubs making a profit/loss on F&B, 2010-2024. Source: Bryan LaBlue, 2025 Food & Beverage White Paper: How F&B Impacts Club Financial Outcomes (Club Benchmarking, 2025).

Their argument, rooted in extensive data, is that clubs are in the dues (subscriptions) business, not the F&B business.

The implications of this are considerable. Their model, which emphasises capital income and investment in the club (which ultimately translates into value for members), argues that subscription income is far more important than F&B income; moreover, subscription income dwarfs F&B income, and works best when F&B is consciously subsidised. It encourages member use of the F&B facilities, and value for money for the member, all the while still delivering far more secure, guaranteed income for the club. They see F&B as an amenity - and one run at a loss, just like a club’s golf course would be.

Their latest research paper is worth reading in full. It spans a much wider scope than the ground covered above, also considering, for instance, wider trends around how clubs have become less reliant on outside banqueting & weddings since the pandemic, and looking at the wider implications of all this for club finances. And it provides plenty of supporting data in an area where assertion has tended to come before facts, with lots of food for thought.

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