Lindley Catering: Sales pitch

One hundred thousand pints of beer were drunk when Oasis played Manchester City's stadium in June 2005. Not the total downed at the backstage party, but the amount swigged by 60,000 fans from 250 beer taps that flowed continuously for seven hours.

Each fan spent an average of £6, which saw stadium caterer Lindley Catering take £360,000 on one day. According to Lindley chief executive Alex McCrindle, it's a lucrative example of the how the football stadium keeps ticking over after the final whistle has blown.

With football matches accounting for only about 60 trading hours across 25 match days per year, it's no wonder clubs are keen to broaden their horizons. Last year conference and events represented a third of the total £6m turnover at the stadium, and it's the slice of the cake with the biggest potential for growth.

In addition to holding about four music concerts per year, Manchester City and Lindley have worked hard to steal event and banqueting business from the city's hotels and conference centres - and, of course, a certain red-coloured rival across town.

Nigel Forbes, managing partner of Litmus Partnership consultancy, believes it is a growing trend among sports stadiums and venues such as stately homes. "It's a vital part of their business, and they can trade on the uniqueness of the venue. At a football ground that is the pitch and the good parking."

It's worked pretty well so far at Manchester City. McCrindle says: "Remember that we started from zero when the stadium opened in 2002. We did £1m-worth of business in the first year and doubled it in two years." Conference and banqueting turnover now stands at just over £2m.

Manchester City head of sales David Chell puts the growth down to careful market research. "From the offset we decided to get under the skin of the opposition. We looked closely at what the competition was offering and asked customers what they wanted."

The answer was something innovative and slick. "We were very creative in our menus and product offer," says Chell. "Some rival brochures were just A4 folders with a photocopied sheet of paper inside." Chell says the club also tailored its brochures to the wedding, corporate hospitality and Christmas markets - something many rival city centre hotels didn't do.

He admits it was a necessity, given the traditional image of football stadiums. "We have had to fight harder than our rivals, because stadiums were seen as big concrete places where people play football and where there were problems on the terraces in the 1980s."

Manchester City now spends about £150,000 per year on marketing (between 2% and 5% of turnover). Chell concedes it is more than other football clubs and small hotels, but the investment has resulted in a string of regional tourism awards and two gold medals at the 2006 Meetings and Incentive Travel event for best independent marketing campaign and best UK venue brochure (which cost £22,000 to produce).

A 30% growth in the lucrative Christmas party market this year is further evidence the policy is working. Chell says: "We have grown from 3,000 covers at Christmas three years ago to 16,200 this year. Turnover here is up from £550,000 last year to £800,000 in 2006, whereas at some hotels the market is declining." The growth is also against the backdrop of five new hotels having opened in Manchester in recent years.

Food service consultant Jonathan Knight says there is no reason why the conference and events slice of a football club's hospitality income shouldn't overtake the match-day sales and hospitality revenue. "It's where clubs can really sweat their assets. Grounds have traditionally been designed to watch football in, but they are increasingly being built as multipurpose facilities."

Music concerts provide a quick hit of cash in the close season and Manchester City held four last summer: two nights by Bon Jovi and two nights by Take That. Over the four days Lindley took £1.3m - £700,000 of which came from the Take That fans. Chell says: "Out of the 120,000 fans over the two nights, 114,000 were female, so more alcopop drinks were sold."

Knight believes there is room for growth in the gig market. "The good thing is that fans come early, and there is a significantly longer dwell time than at matches."

McCrindle warns that crowd levels have to be high to make events like that viable. Another downside, he points out, is the effect on staff. "At an Oasis concert they are dealing with people who, putting it nicely, can lose their inhibitions after a few beers. It's like dealing with a volatile football crowd but for seven hours rather than two." As a result, Lindley has to make sure staff get frequent rests and get reliable logistical support.

McCrindle hopes to boost revenue at concerts by introducing more upmarket food, while admitting that "a Rod Stewart fan is never going to have the same needs as an Oasis fan".

"It's a slow process. But we're introducing new polystyrene trays, for example, that mean fans can hold a pint and a tray of curry and rice without it burning their hand," he says.

Lindley Catering at Manchester City

City of Manchester stadium

• Floor space 7,000sq m (5,000 people seated)
• Conference rooms seven (room hire between £500 and £5,000)
• Executive boxes 70 (£15,000-£25,000 per year or £1,500-£2,000 for a match day)
• Car park 2,500 spaces (free of charge)

Lindley Catering was set up in 1968. It operates 60 contracts, including racecourses, showgrounds and 46 football clubs. Its clients include Tottenham Hotspur and Oxford United football clubs, Chester Racecourse and the Royal Centre theatre and concert venue in Nottingham.

The 10-year Manchester City contract, which runs until 2013, turns over £6m per year. This divides into equal thirds for match-day public catering, match-day hospitality, and conference and events revenue. The average home crowd is 42,000 and turnover for public and corporate hospitality match-day business is about £200,000 per match.

Ask an expert

Chris Stern, managing director of Stern Consultancy, on the new venues opening up to function and conference business…

The quest for interesting venues combines neatly with the need for most organisations to maximise the return from their property portfolio. We now have the choice of football stadia, racecourses, film studios, museums and even corporate offices for functions.

This is big business. Indeed, in some cases turnover from functions can overtake the organisation's core business. Significant investment in function and conference facilities is common, with administrative business activities being moved out to less commercially attractive offices to make way for more external business.

Attractive buildings such as the Royal Institute of British Architects (RIBA) and British Medical Association headquarters are being remodelled to appeal to the function and conference market.

Contracts to operate these venues are typically highly commercial. However, it is interesting to see that traditional catering contractors such as Charlton House (RIBA) and BaxterStorey (English National Opera) are dipping their toes in the water.