By: Angela Hanson | May 22, 2024
Convenience store retailers must tackle the operational issues that chip away at a foodservice program’s success.
a meal or snack is frequently all about the menu. Customers consider which c-stores are nearby, what types of prepared food and beverages they offer, and what they’re in the mood to eat that day.
For convenience store operators, having a successful foodservice program isn’t nearly as simple, and the things that make the biggest difference in profitability can’t be found on the menu at all.
“In a perfect world, a foodservice plan is built, the plan is executed, it is then analyzed, and tweaks are made,” said Wynne Barrett, cofounder and vice president of business development for Supplyit, a SaaS product by Jera Concepts. Regardless of how simple or elaborate the plan is, “the measure of a successful plan is the same for all: to improve profitability by growing sales and minimizing waste. But to do this, you have to ensure proper store-side execution.”
That’s easier said than done, industry experts agree, particularly when a program features fresh-made food and preparation methods that are more involved than heating up a ready-to-serve item. Inconsistency opens the door to problems that negatively affect the bottom line.
“Food is not perfect and it takes a lot of training to recognize this and be able to adjust while cooking,” said Paul Servais, retail foodservice director for La Crosse, Wis.-based Kwik Trip Inc., operator of 870-plus convenience stores in the Midwest. “We want to say, ‘follow the recipe,’ but that is not always enough. Check the product, verify temperature; if it doesn’t look right, it’s not. Sounds easy, but it’s tough to teach.”
The Consistency Conundrum
The root cause of prepared food inconsistency isn’t necessarily something like a particular product type or employee error — things that could be adjusted or corrected once to ensure the desired result from then on, according to Billy Colemire, director of marketing at Stinker Stores. The Boise, Idaho-based chain designed its fresh food program, Pete’s Eats, to incorporate significant redundancy in preparation with similar movements and muscle memory.
“Everything is a version of something else, but with added or removed steps. We really wanted to make it very easy to get right and very difficult to get wrong,” Colemire told Convenience Store News. “However, and I’m directly quoting Taylor Swift here, a master of both consistency and brand, ‘people are people and sometimes we change our minds.’”
A retailer’s goal should be realistic without requiring perfection, he explained.
“The human/people elements and warmth that make our program so successful must also be considered to ensure we are always driving the highest level of consistency,” Colemire said, citing the example of a team member inadvertently over-portioning the burrito scoop while in a hurry. “We don’t think we can eliminate inconsistency completely, as that would be a fool’s errand. Rather, we want to make sure we minimize inconsistency, such that it’s not obvious … to a tolerable and acceptable amount.”
Getting the consistency level where it needs to be requires a deceptively simple concept: “Training, training, training,” said Servais.
In a labor market where hiring and retention are still challenges, retailers may feel pressure to rush through training new employees in food preparation roles. However, taking the time to ensure they can do their jobs well can be the difference between hitting profit goals or not.
Training doesn’t have to be the sole purview of the foodservice team — Colemire noted that Stinker Stores’ human resources team was instrumental in building role-based customized training and development programs. “They’ve taken time to partner with all stakeholders to develop training that sticks,” he said.
To ensure effectiveness, training programs should be purpose-built to suit a brand’s individual needs and menu, and scalable to match future growth. The specific steps can vary, but numerous retailers have found success starting with online training modules reinforced by on-the-job training, rather than having new hires jump right into job shadowing.
Regular, early check-ins also help determine whether a training period was effective. “Follow up with teams,” Servais advised.
For convenience store chains, Supplyit’s Barrett recommends reviewing per-store inventory levels to evaluate how well food preparation is being executed. “To study consistency, you must also consider inventory use to see if products are made the same way in each store. Every retailer or commissary has employees who show personal preference,” he said, noting that some employees might like more or less pepperoni on their pizza, which could bias their production. “If you can match inventory use to what was produced, then it is generally assumed that products were made the same way each day. Too much or too little inventory use indicates you have a consistency issue.”
Waste Not, Want Not
Ordering the right amount of ingredients and other foodservice supplies to avoid either running out or having too much food waste at the end of the day is another major area where retailers can tighten up their operations to boost profits. Whether they team up with a technology partner or go it alone, Barrett suggests retailers build their foodservice plans using time-based sales data.
“While real sales data does not account for shrink, it should give you an accurate set of guardrails of what to build and when,” he said. “To help drive sales, a strong forecast should also allow a retailer to define product minimum offerings at different times of the day. Product minimum requirements help build sales in off-peak times.”
When analyzing customer traffic patterns, operators may discover them to be “consistently inconsistent to the point of being consistent,” Barrett added. “Think about delivery drivers and how they run certain routes on certain days or landscapers who cut lawns in an area on certain days. Those days are the same each week and build the purchase patterns for each store.”
Retailers that haven’t updated their backend ordering tools in a few years may find themselves startled at how quickly options are changing — and improving.
As seen at NRF 2024: Retail’s Big Show in January, artificial intelligence (AI) is moving beyond being the latest buzzword, progressing from the theoretical stage to practical application, particularly when it comes to tools for inventory management and production planning.
Operators can now use AI to optimize forecasting, ordering and inventory for both fresh food and the center store. The high level of diversity based on store location and shopper composition means that efficient, effective ordering will look very different for a highway convenience store vs. one that caters to a local neighborhood, according to Mike Weber, chief marketing officer at Upshop, an AI-powered ordering platform whose food and beverage solution features a forecast, a recommended order, and a real-time view of fresh and prepared inventory.
“We’re seeing really smart merchandisers in c-stores that want to make individualized calls based on community, based on types of cohorts they have of stores. So, they need a forecast that helps them do that,” Weber said. Once that forecast is in hand, “they can inform themselves; they can tweak based on what’s their presentation, what’s the safety stock they need in that store, what are their hero items vs. just the everydays. And we enable them to play with those levers to get to this final forecast by store.”
Streamlining the ordering process not only cuts down on backroom waste, but also potentially frees up employees to interact with customers and engage in suggestive selling or other key tasks.
Being able to avoid pre-ordering too much product for fear of running out will also ensure freshness that customers can taste. “You can use technology to forecast but then, more importantly, get the ordering synced up and make sure your on-hand inventory is as optimal as possible. That’s the key,” said Weber.
Rethinking the Kitchen
On a day-to-day basis, the physical space that foodservice employees work in can make a big difference in how well a foodservice program is executed. Retailers with the resources to make foodservice a serious priority can take this into account in new builds but, more often, they have to make the best of what they’ve got with existing stores.
“Having an efficient workflow can lower ticket times, reduce errors and increase throughput,” said Chef Mat Mandeltort, an industry veteran and cofounder of ChefWorthy, which helps operators find the right foodservice equipment through trustworthy reviews and ratings from vetted users. “However, optimal workflows can be constrained by a physical layout that affords little opportunity for change or rearrangement.”
If they can’t change their kitchen space, c-store retailers must lean harder into sourcing the right equipment for their goals. Even if what they currently have works fine, recent innovation centered on reducing labor and streamlining operations makes it worth looking at options.
“At Stinker, we have been and continue to invest heavily in our equipment. What’s that old saying … you have to spend money, to make money. I’d paraphrase and say, you have to spend money in the right way, at the right time, to make money, scale and grow,” said Colemire.
Mandeltort recommends that operators consider the nuances of why they are considering new equipment and what they want it to do before they start looking at options.
“The first question retailers (large or small) need to ask themselves is: Why do we need to upgrade this equipment? Is it because of new menu items? Are we looking to deal with increased demand? Did the previous equipment break? Does it help with labor costs? Does it produce better-quality food? Can it help us do more with less?” he explained. “Once they determine the why, they can focus on the what.”
New equipment, though, isn’t necessarily an easy fix to problems in the kitchen and can bring challenges of its own, noted Kwik Trip’s Servais. “New equipment costs and current equipment repair costs/wait times are becoming a roadblock to having a successful food program,” he said. “We have pumped over $1 million into speed-oven repairs in the first 24 weeks of our fiscal year.”
Equipment investments that have been helpful, he added, are those that enable employees to save time and effort. “FOG Tanks can reduce the amount of scrubbing required to keep pans, filters and oven parts clean. Meat shredders can reduce the time and muscle strains when picking chicken. Video screens with cameras on the hot food area to help coworkers know what they need to make saves them steps,” said Servais.
Smart units that can be remotely updated and managed are also a plus for chains. However, Mandeltort warns operators to be cautious about equipment that claims to do too much too well.
“It’s not a given that an upgraded piece of equipment will automatically increase efficiency or streamlining. They may just be trading a headache for a stomachache,” he said. “Surprisingly, not every piece of equipment performs as advertised. It’s essential that retailers do their research and not just fall in love with the latest bright, shiny object that comes their way.”
Players in the convenience foodservice space need to invest time in doing due diligence upfront to reap increased benefits in labor. Often, simplicity is what wins out.
“Lean on equipment [that] can eliminate the artistry of foodservice, reducing it to simple, easily repeatable acts,” Mandeltort said. “Many pieces of equipment, like high-speed ovens, can be programmed to produce consistent results. If you’re baking pizza, set the oven to ‘pizza’ and assuming it was programmed correctly at the prescribed temperature and time, out comes a perfectly baked pizza, every time.”
Strengthening the Commitment
While convenience stores were traditionally known as a destination for “Cokes and smokes,” foodservice has emerged as a critical growth category for the future. Still, the act of launching a food program isn’t enough to guarantee profitability — retailers must continually invest time, money and effort into the category.
“Commitment to foodservice is the biggest stumbling block we see with small and independent operators,” Barrett said. “Our advice regardless of size is to invest in the plan. Invest in the food safety and preparation processes and, most importantly, invest in training employees to do things right. This will give them a chance to be successful.”
Investing in a foodservice program also means investing in getting the word out. Marketing efforts should cast a wide net, but do so in areas where the retailer is most likely to get the message out to the consumers it wants to reach.
“You need to do it all if you can: social, digital, billboard, newspaper/shopper, sports, streaming,” Kwik Trip’s Servais said. “You have to get your message where people spend their leisure time, and every person spends their leisure time differently. There are not a lot of people left that watch the 6 a.m. and 10 p.m. news regularly.”
Colemire encourages his fellow marketers to have fun and stay nimble with social media. “We have a true creative behind the helm of our social and digital engagement strategy, James Campbell, category manager of loyalty and digital engagement. He’s so quick to jump on pop culture trends and finds a way to convey the original moxie of the brand,” he said.
Retailers can also benefit from straightforward social media posts that highlight their best offerings. “On social [media], we often post Reelz and videos featuring fresh food. Those tend to get the most traction,” Colemire added. “Stories have been trending with higher clicks recently when compared to comments, likes and shares.”
Foodservice should always be a top focus when entering a new promotional period. “At least 50% of our exterior signage is usually dedicated to fresh food and beverage programs,” Colemire said, pointing out that while Stinker Stores has historically teamed up with consumer packaged goods partners, it has begun doing more bundling with private label products. “Bundling items together that can only be found at Stinker further differentiates us from everyone else and gives our customers another great reason to keep coming back.”
Ultimately, the operational tactics that optimize foodservice profits are links in one connected chain.
“Everybody’s looking for that hero item,” said Upshop’s Weber. “You’ve got to make sure your associate is on point to deliver because those heroes are where you’re going to get tested. So, if you want to scale that, you’ve got to get the ordering right, you’ve got to get the recipe management, and then you’ve got to get the foodservice on point.”
Source: Convenience Store News
