Effective development mechanism for public catering services in Azerbaijan

<p style="text-align: justify;" align="center"><strong><strong>DOI: <a href="https://doi.org/10.52340/ekonomisti.2025.01.03">10.52340/ekonomisti.2025.01.03</a></strong></strong> <p style="text-align: center;" align="center"><strong>Summary</strong> <p style="text-align: justify;">The purpose of the research work is to analyze the current state of public catering services in Azerbaijan. Also, the issue of researching and evaluating the development perspectives of public catering facilities by types was also considered. In the article, directions for improving the mechanism of regulation of public catering services in Azerbaijan were widely analyzed and important proposals for the further development of this field were considered. <p style="text-align: justify;"><strong>Key words:</strong> Public catering, bar, cafe, restaurant, canteen, fast food, coffee shop, confectionery, pizzerias, snack bars, meatball restaurants. <p style="text-align: justify;"><strong>JEL </strong><strong>– 014, </strong><strong>UOT</strong><strong> – 33</strong> <p style="text-align: center;"><strong style="text-align: center;">Introduction</strong> <p style="text-align: justify;">Public catering is a service sector engaged in the production and sale of ready-made food and semi-finished products. Public catering is an entrepreneurial activity related to the organization of the production, processing, sale and consumption of food products. In the post-Soviet years, public catering facilities in Azerbaijan were mainly divided into the following categories: <p style="text-align: justify;">1) restaurant - a public catering and recreation facility offering consumers a range of comprehensively prepared dishes, including made-to-order and signature dishes, as well as alcoholic beverages, with the mandatory provision of waiter services; <p style="text-align: justify;">2) cafe - a public catering and recreational establishment offering consumers a range of simple prepared meals, as well as alcoholic beverages, with the mandatory provision of waiter services; <p style="text-align: justify;">3) bar - a public catering and recreational facility offering snacks, desserts and confectionery, as well as alcoholic beverages to consumers; <p style="text-align: justify;">4) canteen - a public catering facility that provides independent services to consumers. <p style="text-align: justify;">The composition of modern public catering is broader, including pizzerias, meatball restaurants, snack bars, coffee shops, confectionery shops, fast food, etc., which has literally turned public catering into a wide service area. <p style="text-align: justify;">The presentation of menus to visitors in public catering facilities is recognized as an offer (public offer) to conclude a retail purchase and sale contract for the public catering goods specified in the menu. <p style="text-align: justify;">Many people do not like the word "catering"; for them, it is a relic of the Soviet era. When they mention catering, the image of shabby, faceless interiors of cafes with dirty furniture, chefs in greasy aprons, and slippery waiters with disheveled hair comes to mind before the eyes of older people. <p style="text-align: justify;">But even though there is no trace of that catering today, the word remains and gradually acquires a neutral, “non-Soviet” meaning. Public catering is a restaurant, a cafe, a pizzeria, a meatball restaurant, fast food... - all of this is public catering. For those who are completely disgusted by the word “catering”, there is a newer concept - “eating out” (eating away from home). <p style="text-align: justify;">It is difficult to imagine the modern service sector without food establishments. Restaurants, cafes, and eateries open their doors to numerous visitors with hospitality, trying to attract them with impeccable cuisine, quality service, and affordable prices. Statistics show that the network of public catering facilities and the number of visitors to them are increasing year by year. This industry is extremely interesting for investors and those who want to start their own business. However, despite all its attractiveness, the food industry is a labor-intensive and energy-intensive industry that requires significant financial investment. And only if you competently organize the production process, choose the right technological equipment for public catering, and organize the production of high-quality products that are in constant demand among consumers, you can earn real income.<strong> </strong> <p style="text-align: center;" align="center"><strong>Organization of an effective catering mechanism</strong> <p style="text-align: justify;">One of the main factors for the effective operation of public catering facilities is that they not only sell food, but also sell a beautiful atmosphere, pleasant entertainment and new experiences. If this factor is taken into account, it will distinguish you from your competitors and demonstrate the advantages that make customers choose you. In general, there are several conditions for the effective operation of the enterprise, which need to be considered: <p style="text-align: justify;">Unique selling proposition - “We deliver pizza hot” is a unique selling proposition. Regular master classes, tea ceremonies and live concerts can also be organized. You can organize the sale of artisanal wines in the restaurant, offer visitors dishes made from organic products from local farmers - all this will be a unique selling proposition. The main thing is that it works for you. . Make sure you know your target audience. Draw portraits of typical guests of the establishment based on age, gender, social status, place of work, income level, etc. But use only criteria that really influence the choice, because segmenting visitors is for fun. Men and women may not like or dislike your offers to the same extent. <p style="text-align: justify;">Preferred format – the unique selling proposition and the format of the business should be compatible with each other. If the latter does not meet expectations, change it to a more suitable one. For example, there are already many restaurants that offer sushi. A cheap establishment with meat dishes, fast food, coffee shop, national cuisine or beer restaurant will be more popular with visitors. Based on semi-finished products, you can start a fast food business with minimal investment. <p style="text-align: justify;">Thoughtful menu – the experience of restaurateurs shows that in mid-priced establishments the menu should not be exaggerated. You can get by with 5-6 hot meat, 5-6 fish and 3-4 poultry dishes. However, even an elite restaurant should not have too diverse a menu so as not to confuse customers and not throw away kilograms of spoiled food. <p style="text-align: justify;">Standard services – this is one of the dominant success factors in the catering industry. Each establishment must adhere to generally accepted principles and have its own standards to meet the needs of typical customers. <p style="text-align: justify;">Marketing policy – ​​proper promotion of a restaurant provides the largest share in its success in the market. The main thing is to choose the right marketing tools. Experience shows that social networks are the best practice tool in the catering industry. To figure out which marketing tool will work specifically for your business, you need to test everything and draw conclusions based on the number of customers (don`t forget to ask what they`re saying about you), the size of the average receipt, etc. <p style="text-align: justify;">Restaurant staff – it is important to remember that the main employee of a restaurant is the chef. You will not be able to find a great advertising specialist, so build all your connections, contact the best recruitment agencies or promise a higher salary and ideal working conditions to your competitor’s chef. You can also invite a foreign chef who will bring status to the restaurant. Another important person in a restaurant is the administrator or manager, who is also the most trusted person of the leader. <p style="text-align: justify;">Prices – what should be considered when setting the prices of dishes on the menu? In the catering industry, as a rule, the lower limit of prices is the cost price plus a profit margin set by the restaurateur. The additional value depends on the location and appearance, interior, food and beverage design, additional services, etc. <p style="text-align: justify;">Product suppliers – don’t relax after signing a contract with two or three suppliers. It is important to remember that anything can happen in this field, they can disappoint you at any time. It is best to contact 5-10 other companies to place orders quickly. These should include both large suppliers and local farmers. Don`t rely on a few regular suppliers. Don’t rush the documentation process right away – a trial period with a liability check never hurts anyone. Include a clause that allows you to terminate the contract in the event of serious violations by the supplier. <p style="text-align: justify;">Cost management – ​​often catering establishments save on products, personnel, advertising and non-core processes (security, cleaning). This approach cannot be called effective. It would be better if you create control over all processes occurring in the restaurant and understand where you are losing money. This may be suboptimal planning and improper storage of products, or long idle time of employees. <p style="text-align: justify;">Additional profit – in 2020, food delivery was the leader in the restaurant market in terms of growth rates. This trend continues to strengthen in the following years. It is not clear how businesses that do not follow this trend will “survive”. So make sure to add an online ordering form to your website, or better yet, develop your own mobile app. If there are not enough resources for delivery within the city, consider delivering orders to the nearest areas or to several business centers located near the restaurant. <p style="text-align: justify;">In a market economy, the efficiency of an enterprise`s activities largely depends on the turnover of the enterprise, which in turn depends on the demand for products and services. The demand of the population arises from specific needs and requirements. Need is a demand that has taken a specific form depending on the level of culture and the characteristics of a person`s personality. Considering the hierarchy of human needs, it can be argued that catering establishments satisfy the basic physiological need for food, as well as various social needs - communication, belonging to a certain group, etc. <p style="text-align: justify;">Therefore, the main role of public catering is to meet the population`s food needs. In our opinion, the implementation of this role is very important, because properly organized nutrition in enterprises leads to increased productivity, which in turn affects the efficiency of the enterprise. Rational and quality nutrition in schools, universities, and other educational institutions affects the formation of public health. Studies conducted on school health have shown that 5 The main reason for this is the poor organization of meals at school.0 percent of them have eating disorders. Properly organized nutrition in hospitals and other medical institutions directly contributes to the recovery of patients. Organizing catering to the population outside of working hours, whether through the sale of ready-made meals in catering facilities or through culinary departments, reduces the time spent on preparing meals and helps to facilitate women`s housework. <p style="text-align: justify;">Directions for improving the mechanism for regulating public catering services in Azerbaijan: <p style="text-align: justify;">Public catering is one of the most profitable industries of all time. That is why there is so much interest in this field. . Modern public catering is full of innovations. This is natural, there must be healthy competition in order to develop, and innovations are at the root of healthy competition. Currently, the demands of modern customers have also changed, and attractive facilities, quality food, and low prices are among the factors that attract modern customers. If entrepreneurs pay attention to these facts, they will see that public catering is a truly profitable industry in the truest sense of the word. In the catering industry, it is not enough to just have a beautiful facility. . In general, public catering facilities should be provided with the necessary devices and equipment. In this area, special attention should be paid to refrigerators for high-quality storage of products, an ideal ventilation system for regulating temperature and humidity in the service hall, furniture, dishes, tools, etc. <p style="text-align: justify;">So, why is public catering considered an important sector of the economy? <p style="text-align: justify;">Public catering is considered an important sector of the economy for several reasons: <p style="text-align: justify;">- Meeting the population`s nutritional needs - properly organized nutrition in enterprises leads to increased productivity, which affects the efficiency of activities. <p style="text-align: justify;">- Job creation – public catering establishments provide employment for the population by creating stable sources of income. <p style="text-align: justify;">- Growth of the gross regional product - the development of such a network of enterprises helps to increase the region`s contribution to the country`s economy. <p style="text-align: justify;">- Budget replenishment - the activities of food service establishments strengthen regional budgets through tax revenues. <p style="text-align: justify;">- Improving the standard of living of the population – public catering provides services that help save time, improve leisure time, and strengthen social interaction. <p style="text-align: justify;">The growing interest in the public catering sector in the Republic of Azerbaijan is reflected in statistical indicators. When looking at the statistical data for 2021, it becomes clear that for that year, the catering turnover in Azerbaijan increased by 9.2 times compared to 2006, reaching 979.1 million manat (see table 1). <p style="text-align: right;"><strong style="text-align: right;">Table 1</strong><strong style="text-align: right;"> </strong> <p style="text-align: center;"><strong style="text-align: center;">Key indicators of catering turnover</strong><strong style="text-align: center;"><br /></strong> <table style="width: 631px;" border="1" cellspacing="0" cellpadding="0" align="center"> <tbody> <tr> <td valign="top" width="209"> </td> <td style="text-align: center;" valign="top" width="70"> <strong>2006</strong> </td> <td style="text-align: center;" valign="top" width="70"> <strong>2010</strong> </td> <td style="text-align: center;" valign="top" width="70"> <strong>2015</strong> </td> <td style="text-align: center;" valign="top" width="70"> <strong>2019</strong> </td> <td style="text-align: center;" valign="top" width="70"> <strong>2020</strong> </td> <td style="text-align: center;" valign="top" width="70"> <strong>2021</strong> </td> </tr> <tr> <td valign="top" width="209"> <strong>Catering turnover, million manats</strong> </td> <td style="text-align: center;" valign="top" width="70"> 106,2 </td> <td style="text-align: center;" valign="top" width="70"> 417,8 </td> <td style="text-align: center;" valign="top" width="70"> 1111,2 </td> <td style="text-align: center;" valign="top" width="70"> 1655,2 </td> <td style="text-align: center;" valign="top" width="70"> 759,6 </td> <td style="text-align: center;" valign="top" width="70"> 979,1 </td> </tr> <tr> <td valign="top" width="209"> <strong>Including</strong> <strong>state</strong> <strong>non-state</strong> </td> <td valign="top" width="70"> 7,1 99,1 </td> <td valign="top" width="70"> 10,5 407,3 </td> <td valign="top" width="70"> 15,2 1096,0 </td> <td valign="top" width="70"> 15,4 1639,8 </td> <td valign="top" width="70"> 5,6 754,0 </td> <td valign="top" width="70"> 8,6 970,5 </td> </tr> <tr> <td valign="top" width="209"> <strong>Physical volume indices of the exchange turnover, in percentage terms compared to the previous year</strong> </td> <td valign="top" width="70"> 128,3 </td> <td valign="top" width="70"> 16,3 </td> <td valign="top" width="70"> 114,0 </td> <td valign="top" width="70"> 106,7 </td> <td valign="top" width="70"> 45,4 </td> <td valign="top" width="70"> 123,2 </td> </tr> <tr> <td valign="top" width="209"> <strong>state</strong> <strong>non-state</strong> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> </tr> <tr> <td valign="top" width="209"> of business engaged in catering </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> </tr> <tr> <td valign="top" width="209"> <strong>state</strong> <strong>non-state</strong> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> </tr> <tr> <td valign="top" width="209"> of in catering facilities, </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> </tr> <tr> <td valign="top" width="209"> <strong>Catering turnover as a percentage of </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> </tr> <tr> <td valign="top" width="209"> <strong>state</strong> <strong>non-state</strong> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> 99,1 </td> <td valign="top" width="70"> </td> <td valign="top" width="70"> 99,1 </td> </tr> <p style="text-align: indicators of <p style="text-align: the data in it becomes clear that in 2021, million manat of the catering turnover on the and million manat on the state The table also shows that the number of business engaged in catering activities increased times compared to 2006, reaching in In general, of the catering turnover in to the and to the state <p style="text-align: In the cost of paid services provided to the population in Azerbaijan increased by compared to 2020, reaching million The turnover of public catering increased by times in compared to the reaching million (see table </strong> <p style="text-align: <p style="text-align: indicators of paid services and public catering provided to the </strong> <table border="1" cellspacing="0" cellpadding="0" align="center"> <tbody> <tr> <td valign="top" </td> <td valign="top" <p style="text-align: </td> <td style="text-align: center;" valign="top" <strong>2021</strong> </td> <td style="text-align: center;" valign="top" </td> </tr> <tr> <td valign="top" of paid services provided to the million </strong> </td> <td valign="top" </strong> </td> <td valign="top" </td> <td valign="top" </td> </tr> <tr> <td valign="top" </td> <td valign="top" </strong> </td> <td valign="top" </strong> </td> <td valign="top" </strong> </td> </tr> <tr> <td valign="top" </td> <td valign="top" </td> <td valign="top" </td> <td valign="top" </td> </tr> <tr> <td valign="top" services to the previous in </strong> </td> <td valign="top" </td> <td valign="top" </td> <td valign="top" </td> </tr> <tr> <td valign="top" </strong> </td> <td valign="top" </td> <td valign="top" </td> <td valign="top" </strong> </td> </tr> <tr> <td valign="top" of paid services manat </strong> </td> <td valign="top" </td> <td valign="top" </td> <td valign="top" </td> </tr> <tr> <td valign="top" services, million manat </strong> </td> <td valign="top" </td> <td valign="top" </td> <td valign="top" </td> </tr> <tr> <td valign="top" services to previous year, in </strong> </td> <td valign="top" </td> <td valign="top" </td> <td valign="top" </strong> </td> </tr> <tr> <td valign="top" catering turnover, million </strong> </td> <td valign="top" </td> <td valign="top" 979.1 </td> <td valign="top" </td> </tr> <tr> <td valign="top" catering turnover the in </strong> </td> <td valign="top" </td> <td valign="top" </td> <td valign="top" </strong> </td> </tr> <p style="text-align: in <p style="text-align: at the data in it becomes clear that the share of the cost of public catering services in the paid services is which is more in <p style="text-align: justify;">The establishment of a profitable catering system is one of the main factors in the development of In the development of the of quality and service in restaurants must with the of great work is in this in as in the The constant increase in the creation of modern and beautiful catering facilities in the by is a clear of all <p style="text-align: <p style="text-align: justify;">In order for a catering to with a stable it is necessary to develop a number of to increase the volume of its as a rule, the of the is the is and the technological equipment for public catering is at to the most catering establishments have a where are for In the areas are where a certain range of and goods are <p style="text-align: justify;">It is to sell your products through a culinary It is with and has the necessary types of including which the of goods into storage <p style="text-align: restaurant industry that it is necessary to a of public catering because consumers should know in what to when a of that of food and the and level of service, not the of the menu to the status of the <p style="text-align: justify;">In public catering establishments of any and the of and health of consumers and the of their must be and and technological and as well a and for food industry enterprises meat, fish processing, confectionery, and are based on and which have a number of for food industry to the for food products, certain are also on of catering and of public catering establishments must mandatory medical to public health and the of must be <p style="text-align: justify;">The has the right to of for consumers that do not the of over to the at the when the hall, the sale of products from outside and the provision of additional services in public catering facilities are by the or service should be a for each product prepared in public catering The menu and should be based on for each and When with consumers in public catering facilities, an the cost of the public catering service provided value on the and the of the dishes and products in the service must be with the The must provide consumers with the necessary about the hours, culinary products and services provided of <p style="text-align: the efficiency of public catering is based on the principles of production to the national economy - the principles of with the of and It is necessary to improve the of of in public catering, to the of and The social of of in public catering include the processes of and <p style="text-align: it can be argued that public catering is an important of social the role of public catering is significant and is at the main of social - creating a of conditions for development and the of <p style="text-align: center;" style="text-align: of the of of the Republic of Azerbaijan and the of of the Republic of Azerbaijan on to facilities in the field of public catering to the level of service, of the of of the Republic of Azerbaijan on of the for and other types of services in the Republic of in indicators of