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Foodservice Rap
C-store distributors with panache are spicing up sales and wrapping up customers – just takes a little creativity and effort.
by Bob Gatty
At Texas-based Grocery Supply Company (GSC), Fred Miller loves to sell sandwiches. And pizza. And burgers. And pastry. And even chicken. Actually, Miller loves to sell the stuff that lets you sell all of those things if you happen to operate a convenience store.
For GSC, making foodservice products, equipment and systems available to c-store customers has become an important part of the overall enterprise. In fact, according to Steve Shing, corporate vice president for marketing and trade relations (Miller’s boss), it’s become about 10 percent of the company’s business.
That’s not bad when you consider the range of products handled by GSC—everything from automotive products to sporting goods, from dry, frozen and refrigerated grocery products to soup, and yes, even to nuts. And they do it in a 19-state distribution area ranging from New Mexico to Illinois to Alabama.
"We’re like any distributor that’s up against the broadliners of the world," says Miller, the company’s director of foodservice. "When our customers can get all of their needs met on one truck, it makes it a lot easier for them, and it helps us."
Miller, who likes to say he hails from LA (lower Alabama), is a practical, common sense-focused person who is not prone to running off on tangents or following fancy fads.
But he firmly believes that offering a solid and affordable foodservice program encourages the loyalty of GSC customers, provides those customers with an important way to differentiate themselves from their competitors, and helps them build their own loyal customer base.
In fact, that’s often a key motivator for c-store distributors in establishing a foodservice program and providing the necessary support that goes along with it.
"Once we go in with branding and a point-of-sale program, the chances of them leaving us is very slim," says Justin Erickson, co-president of Harbor Wholesale Grocery, Tumwater, WA, which serves some 2,000 convenience stores in Washington, Oregon and Idaho. His company launched a new private label foodservice program last year and has already expanded offerings from their Mountain Fresh Deli products to a line of Mexican food called "Mexigo."
Setting Yourself Apart
"A box of candy bars is a box of candy bars," Erickson said last fall shortly after Harbor Wholesale launched its kiosk-based program, which includes sub sandwiches, pizza, salads and wraps. "We see this as an opportunity to differentiate ourselves from our competitors.
"It also blunts sales pitches by big foodservice companies like Sysco, where as before if they came in and said they had cheaper turkey breast, they’d get the business," Erickson notes today. "This is going pretty well. We have about 11 accounts signed up for Mountain Fresh Deli and five on the Mexigo program. We are offering a store-branded concept, training and support, without a franchise fee or royalty payments."
With today’s slim margins on gasoline and tobacco, Harbor Wholesale sees foodservice as "a big opportunity" for growth. "This allows us to grow our sales with better margins," Erickson says. Products in the program include everything it takes to prepare food onsite at the convenience store, including deli meats, dough for making bread, fresh produce, and all of the necessary ingredients for tacos.
The company’s commitment goes beyond providing the kiosks, the concept, the recipes, the supplies, the signage and POS materials.
"We have two guys out in the field dedicated to implementing and training," Erickson says. Their job is to help store operators with analyses of their customer base to determine what is appropriate, help implement the program, train store personnel in food preparation, and then go back to follow-up and provide ongoing assistance as needed.
"We see this as a good avenue for expansion," Erickson explains. "There is some up-front cost with signage, point-of-sale creative materials, and such, but it increases our drop size at the convenience store, and drop size is what it’s all about. And we are seeing some great increases in profits as a result."
The GSC Strategy
The approach at GSC is somewhat similar, but it is also broader and more comprehensive.
The company has a multi-focused foodservice program that includes:
Deli-Fast Foods, a branded program that includes a Chicken Shop, Hamburger Shop, Sub Sandwich Shop, Pastry Shop and Pizza Shop. It offers manufacturer rebates to retailers, requires no franchise fees, royalties or advertising fees.
A generic foodservice program with supplies provided by GSC to allow customers to establish, operate and maintain their own specific foodservice program with their own brand.
Bellarico’s pizza and Sub Express, both branded programs supplied by OMNI Food Concepts, headquartered in West Mifflin, PA, near Pittsburgh.
Piccadilly Circus Pizza and cold sandwiches, supplied by Land Mark Products, Inc., Milford, IA.
"Deli Fast Foods is a branded program we offer," Miller explains. "Our suppliers support it to support our customers. We have a lot of small customers who don’t qualify for rebates on their own. This gives them a branded image; all they have to do is invest in the signage of the brand."
On what basis do customers decide which option is best for them?
"When I meet with retailers, I try not to push one program over the others," Miller says. "They usually have a pretty good idea in the back of their mind what they want, but I go through the different programs that are available and explain how they work. What works for one c-store operator might not work for another."
Both OMNIFood Concepts, Inc. (www.omnifoodconcepts.com) and Land Mark Products, Inc. (www.pcpizza.com) offer substantial support to distributor customers, including marketing and advertising materials, signage, banners, kiosks, menus, flyers, creative ideas, plus supplies, paper products, and more.
In fact, the latest OMNI newsletter announces new outdoor banners. "These, along with ceiling danglers and breakfast sandwich POS, are meant to reinforce the advertising campaign of the "Bite here!" message," the newsletter says, noting that they are provided at no charge for both pizza and sub products. "These pieces are to lay the ground work for the yearly promotional plan."
According to Miller, the programs from both companies are offered without franchise, royalty or advertising fees.
Miller acknowledged that many c-store operators with pay-at-the-pump systems are challenged to draw their customers into the store.
"With newer pumps today, you can put specials and menus on the pump, and with some, you can actually place an order right there and then pick it up inside the store or at a drive-up window. But the biggest thing to get customers from the pump into the store is advertising. I always tell my customers, ‘If you are going to skimp on signage, don’t do it. You have to be serious to succeed."
Some Survey Results
Just prior to deadline for this article, AWMA conducted an informal internet-based survey of members regarding foodservice. Of 20 respondents at press time, (a 5 percent completion rate at that point), half said they currently operate a foodservice program and six more said they plan to add one in the future. Six said they currently use a private label program for foodservice offerings.
Only four respondents said they offer retailer customers management assistance for foodservice sales, such as that offered by both GSC and Harbor Wholesale. One company said it provides equipment, space, kiosks, branded and non-branded image concepts, item selection, and menu planning. Another said it provides "sales specialists," and a third said it offers "cuttings, training, solutions." The fourth did not specify what services it provides.
Asked what type of foodservice products they carry, responses included:
- Convenience
- Slush drinks
- Frozen, refrigerated, dry, chemical, paper
- Complete frozen, cooler, dry, and supply
- Frozen beverage, hot beverage, prepared sandwiches
- Coffee, deli, bakery, beverage, frozen bulk
- Pizza, hot dogs
- Meats, bakery, beverage, prepared, bulk, produce
- Pastries, cappuccino, coffee
AWMA members were also asked in the survey if they use foodservice offerings to draw customers from gas pumps into the store, and if so, how. Those who said they do say they use:
- Pump toppers
- Suggested bundled promotions
- Cross-marketing promotions, national product promos
- Ads, banners
One member said, "Our customers do. Some use pump talkers, others advertising at location, and a few use loyalty programs that ‘talk’ at the pump about specials inside."
Two Big Programs
Both Wawa stores and 7-Eleven have major foodservice offerings that serve to bring customers from the pumps inside the store. In fact, Wawa, based near Philadelphia, PA, has developed a local reputation for its hoagie sandwiches and coffee, and it’s no accident, given the advertising marketing support that its high quality program is given.
"Sometimes I go to my local Wawa five times a day," says one 30-something New Jersey resident. "For coffee and breakfast, snacks, more coffee in the afternoon, another snack, and something to eat for dinner, and then a late night snack after partying with my friends. Their hoagies are fantastic."
7 Eleven announced in March that it has hired a team of chefs that will serve as "part of a fresh food product development team determined to make consumers believers in the quality, flavor and value of the expanded line-up of 7-Eleven fresh food items," a company statement says.
The company says "the 7-Eleven team follows food trends in restaurants, not just fast-food, but also sit-down casual, to develop new sandwich flavors and ingredients exclusive to 7-Eleven."
According to Executive Chef Phil Butler, "bold is beautiful in flavor combinations today," so the company’s team has developed an exclusive line of sandwich spreads that includes tomato basil, roasted pepper, tomato feta, olive pesto, Southwest mayonnaise and jalapeno hollandaise.
"Our emphasis has been on creating foods with bold flavors and unusual recipes," Butler says. "If we have a sandwich with fire-roasted chili peppers, you can taste the peppers’ distinctive flavor. If we have a sandwich with grilled chicken, you can taste that the chicken has been grilled."
Meanwhile, 7-Eleven announced in March a new line of "Big Eats Wrap sandwiches, Turkey and Capicolla Ham Club and Chicken Breast with Southwestern Mustard. The company says the new wraps are made fresh daily in local USDA-inspected kitchens," and retail for $3.69 each.
In keeping with the company’s expanding menu of "high-quality and gourmet-style" fresh food items, the goal was to create lighter-tasting menu substitute to heavier lunchtime options, and one that is portable, according to Joanne DeLorenzo, 7-Eleven vice president of fresh foods merchandising.
The company worked closely with packaging suppliers to develop an exclusive package that holds the wraps in an upright position. "Of course, the package had to fit in a car cup holder, something we’re known for," DeLorenzo says. "The wrap comes inside a plastic cellophane bag with easy tear-off pouch that sits inside a cardboard package. It will easily travel in a car cup holder or sit on a desk."
While many c-store distributors don’t have the luxury of hiring an executive chef or the resources to develop their own unique packaging for sandwich wraps and such, there are many opportunities to develop effective and affordable foodservice programs for customers.
Harbor Wholesale and Grocery Supply Company are two good examples to consider.
Bob Gatty is a freelance writer based in Poolesville, MD. He can be reached at bob@gattyedits.com.
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