5 Keys to Couche-Tard's Foodservice Growth

By 
Aimee Harvey, Managing Editor, Technomic

Circle K

LAVAL, Quebec -- Three months after detailing its domestic and international blueprints for fresh prepared food and beverages, global convenience retailer Alimentation Couche-Tard outlined where its focus will lie as it expands its foodservice offerings and integrates fresh-food programs and operational practices across its CST, Circle K and Holiday Stationstores brands.

Here are the five primary points highlighted by Couche-Tard executives during its recent first-quarter fiscal 2018 earnings call ...

1. Simply Great Coffee

Circle K coffee

A new coffee program will lead Couche-Tard's enhanced foodservice program.

“In the first quarter of 2018, we continue to push to make Simply Great Coffee known to our customers throughout the network,” said Brian Hannasch, Couche-Tard’s CEO. “This category is now available in over 2,800 stores globally and continues to have noted success in Europe. As advertised, this is … coffee with an exceptional taste at more than a competitive price. And I am confident that it will be a leader in the stiffly competitive coffee market in years to come.”

The retailer is currently offering free cups of the new coffee, developed by Concord, N.C.-based S&D Coffee, in select markets in the United States. Following the promotion, all coffee drinks will cost less than $3.

“Americans’ coffee preferences are evolving to include more gourmet espresso-based drinks, especially among millennial coffee drinkers,” Mark Ostoits, vice president of Circle K Southeast, told the Charlotte Patch. The new line will ditch the “barista fuss” and serve up a cup of great tasting coffee in under a minute, he added.

2. Polar Pop dispensed beverage program

Circle K Polar Pop

Couche-Tard has moved quickly to roll out its core Circle K Polar Pop beverage program into the legacy CST Brands stores; within two months of its initial rollout, more than 1,000 CST stores now carry the Polar Pop brand.

3. Mapping out plans for Europe

Circle K Europe

Beyond heavy promotion of the signature coffee program, Couche-Tard’s fresh-food initiative in Europe is focused on two areas: expanding a new Mexican food concept out of Dublin, Ireland, and launching it thus far in five stores in Norway; and debuting a new hot-dog pilot program in Ireland to see if the product will be successful in that market.

4. Growth in North America

Circle K hot dog

In the United States and Canada, “we will continue to invest in other cold beverages and bakery products and explore expanded prepared-food items in several major markets,” said Hannasch. “In the Quebec market, we have recently piloted a new bakery program, which is a prepared on-site process. Results have been very positive, and we have begun to introduce it to our CST legacy stores here in Canada.”

Additionally, the company is revamping its hot-dog program in both the United States and Canada, and is introducing a pilot concept in 27 stores as it looks to “make our stores a destination in that category.” The goal is to roll out the new hot-dog program in a total of 273 U.S. stores and 85 Canadian stores in 2018.

Couche-Tard is also targeting U.S. regions within the Great Lakes and Arizona markets to debut higher-quality, on-site fresh baked goods and other foodservice offerings driven by a proprietary commissary and providing multiple deliveries each week of fresh food products to hundreds of stores in these markets.

5. Integrating best practices

Corner Store Marker CST Brands

Synergizing best practices across Circle K and CST Brands stores was underscored as a key avenue to growth. Couche-Tard will continue to explore ways to combine its made-to-go offer (available in about 117 stores) with CST’s made-on-site food and bakery programs (available in about 800 locations) and commissary-delivered food offerings.

“Our first step in the first 60 days is to combine the best talent from the Circle K or Couche-Tard team with the best talent from the CST team and challenge them to optimize all three levels of offer—the full made-on-site, the medium offer of bakery with a very limited number of SKUs and then a commissary-delivered approach,” said Hannasch.