What’s for Dinner?

When it comes to meal segments and convenience stores, what do you think of? Breakfast, of course. Grabbing a fresh cup of coffee and a donut from a c-store is part of the morning routine for millions of Americans. How about lunch? These days fresh sandwiches, soups, or maybe a familiar quick service restaurant chain are helping c-stores give traditional eateries a run for their money with the lunch time crowd. But dinner? Who thinks of c-stores and dinner?

Not many people, says Mike Deuser, vice president of food service for Tripifoods, Inc. in Buffalo, NY. But that may change.

"I think it is a very, very important area to focus on," he says. "As share of dollar gets smaller and the industry gets more and more level, upper management of c-store chains will focus on where else to build foodservice. The next emphasis will be on dinner. C-store retailers need a plan to cope with home meal replacement and improve the dinner hour as an industry. It will take a good advertising program, themes, and concentrated labor."

Not that c-stores are likely to become synonymous with fine dining. But they can help meet their customers’ needs when it comes to a quick meal to take home or the ingredients to help throw together a meal when they get there.

It Takes Commitment

Beefing up a c-store’s dinner-related business presents some challenges. A typical c-store does most of its business in the early morning and at lunch. Store managers arrive early, and the bulk of labor is on duty in the daytime. Storeowners or managers may have to decide whether they are willing to put in the extra hours needed to boost the dinner segment, train staff, or even bring on additional help.

Customer attitudes can be different as well. Breakfast customers are just out of the house, and at lunch they may be taking a break from the office. But dinnertime customers are likely to be racing home from work at the end of a long day. They want to get their food and get out of there. They may be thinking in terms of feeding a family rather than just themselves. Their emphasis is on the convenience of convenience stores.

Customer awareness is a huge issue. With so many choices in so many channels, how do you get customers to start thinking of a c-store as a dinner-related option?

"It takes a concerted effort on the part of the owner or manager," Deuser says. "You need an ad program and a specially designed menu tailored to the local demographics. Check your competition to get an idea of what works."

What to Offer

As with the other meal segments, focusing on dinner means both foodservice and off-the-shelf products. When it comes to foodservice, c-stores that partner with QSR chains may not have much say in menu choices. They remain fairly standard. A burger or piece of chicken can work for either lunch or dinner. One key difference between the two meals that QSR chains have been quick to exploit is the desire for more food at dinner. Combo meals or family-size portions are popular sellers. C-stores that handle foodservice themselves can take a lesson.

Pizza can be a popular choice. In fact, ask folks in small towns in nine Midwest states where they go for pizza and they’re most likely to say Casey’s General Store. Casey’s sold 10 million pizzas last year, placing the c-store chain among the top 10 or 15 pizza sellers in the country.

Casey’s pizza uses all fresh ingredients right down to the flour and water for the crust, says Jim Shaffer, Casey’s CFO. "We sell pizza by the slice for lunch and whole pies in the evening, although it depends on the store. We have a lot of toppings. A large portion of our evening sales is custom made orders that are phoned in and picked up. Casey’s does not deliver.

When the first Casey’s General Store opened its doors in 1968, convenience stores were something of an anomaly, Shaffer recalls. Unlike many c-store chains that head for areas of high population, Casey’s created a niche for itself by focusing on small towns. It has proved to be a successful formula. There are now 1,261 corporate-owned Casey’s and 73 franchise stores. Some 61 percent of the stores are located in towns with a population of less than 5,000 and half in towns with less than 3,500. It many towns, it is the grocery store, pizza parlor, and gas station wrapped into one.

That affects business in a number of ways, says Shaffer. Casey’s carries a broader line of products than a typical c-store, including more grocery items. When it comes to foodservice, it offers more than pizza.

"We are constantly revising our menu in the prepared food line," notes Shaffer. "We have to have some variety because we have repeat customers. At the same time, our foodservice has to be operated by a single person. If we introduce a new product, we take something out. We also look at specialty and seasonal items."

A new chicken tender product has been a big hit, ranking second only to pizza in popularity. Casey’s also offers a line of fresh-made sandwiches, including a breaded pork tenderloin sandwich typical of the Midwest.

Traffic patterns and store locations dictate which meal segment is the busiest, Shaffer says. A major construction project may cause a temporary shift in meal concentration. That’s what happens when you’re one of the only games in town. But convenience is always very important to customers, he says. The real secret to success for a c-store is offering a quality product, convenience, and cleanliness.

Off the Shelf or Out of the Case

In deciding which dinner-related products to stock, Kim Feil, division president, worldwide innovation for Information Resources, Inc. (IRI), urges retailers and distributors to consider these facts:

• In a recent study, 72 percent of respondents indicated they buy more frozen and meal kit options than two years ago.
• More than half serve frozen or refrigerated meals 2-3 times a week.
• Ready-to-heat or ready-to-eat components are key ingredients in cooking today.

Skillet and bowl meals are now a $700 million category. In addition, meal kits increasingly are becoming comprehensive, Feil says. Products like Louis Rich Dinner Starters and General Mills’ Tuna Helper Complete have the meat or fish right in the package. There are many products coming on line today – frozen, refrigerated or shelf stable – that allow a retailer to augment their fresh food offerings and offer a comprehensive meal replacement solution while holding down in-store labor. But how many will make it into c-stores?

"A lot of c-stores have gotten away from dinner to go," says Frank Reid, director of business development for Dearborn Wholesale Grocers in Chicago. "There is a constant fight for shelf space. The grocery section is shrinking in favor of snacks and confections."

Reid believes product selection is cyclical and that the grocery section will expand in the future. He envisions more shelf-stable items being included in more planograms in 2003, particularly those viewed as "healthy" or convenient, like Kraft’s Pasta Anytime.

"There are a lot more shelf-stable items that can work in c-stores," he says. The whole market is expanding."

But don’t look to c-stores for groundbreaking items, Reid cautioned.

"C-stores are not pioneers in the grocery area," he says. "Products have to have a good track record in large grocery stores."

Settling for Some, Not All

One way for c-stores to cash in on the dinner segment is to think in terms of providing something a customer can take home that may not be a complete meal but part of one, says Deuser. He predicts c-stores will carry a larger variety of shelf stable microwavable items that technology is now making available.

Companies like Campbells and Uncle Ben’s have a good idea, he says. Campbell’s is happy if it can convince consumers to think of eating soup at dinner, and Uncle Ben’s has vegetable dishes or bowl entrees.

Manufacturers are doing a better job of listening to retailers and coming up with products and displays that work well in c-stores. He pointed to tiered racks that have a small footprint but call attention to products and say, "Here’s a little something to go with dinner." It’s great for impulse buying, Deuser says.

Smart c-store companies are beginning to focus on dinner as a way to boost sales. It worked for breakfast and lunch. It can work for dinner, too.

Cecelia Blalock is a food industry writer based in Jessup, MD.