Challenges That Drove Change
Foodservice award winners talk about what led to their innovative programs
SCHAUMBURG, Ill. -- From increased competition on cigarette and gasoline sales to the challenging business of selling pharmaceuticals, award winners at the annual Foodservice at Retail Exchange (FARE) spoke about what led to their current, innovative foodservice programs.
C-store retailer John MacDougall, CEO and owner of Nice N Easy Grocery Shoppes, Canastota, N.Y., spoke of the increasing competition from Indian reservations on cigarettes and gasoline that forced his chain of 37 company-operated stores to investigate foodservice in the 1990s.
Today, MacDougall's chain has a foodservice division with executive leadership and three trained chefs who visit stores to train employees and boost visibility of the program. The company has developed $6.99 home meal replacements, with early success coming with chicken and pasta recipes.
"Like everyone else, we stumbled into [foodservice]," MacDougall told the general-session audience of about 500 attendees from multiple retail channels and various institutions. "We had the coffee machine and roller grill, but it didn't bring the customer base we were looking for."
MacDougall spoke of a new, larger-format store the company built last year in response to a community in the Syracuse, N.Y., area. He said the people there had no grocery store within five miles and wanted a place to go for fresh produce, red meat and other basics. The location has been a resounding success, he said.
Another award winner, Michael DeFazio, senior director of store concepts for Walgreens/Duane Reade, Deerfield, Ill., spoke of the growing challenges facing drug stores and the shrinking margins tied to pharmaceuticals. The strategy became one of increasing the profitability of the front of the store, developing "flagship" locations in urban centers such as New York, Chicago and Boston.
The new Walgreens locations feature central gondolas where sushi chefs prepare meals and other employees man juice bars and coffee stations. The location in Chicago has an expansive liquor area selling 700 different types of wines. DeFazio said the flagship locations are acting as laboratories for what will eventually roll out to each of the chain's locations, depending on area demographics and local economic factors.
The drug chain has needed time to embrace change, DeFazio said, with early successes winning more and more people over.
Dean Wright, director of dining services for Brigham Young University, Provo, Utah, described its internal change coming from a need to adapt to today's student--part of a generation far more mobile, technologically enabled and used to eating meals at retail locations. The university has several restaurants as well as five c-stores.
"People are comfortable having food in a retail setting," he said. "So why not go after that market?"
The fourth recipient of the 2012 Leaders in Retail Foodservice Award was Terri Moreman, associated director of food and nutrition services for the U.S. Olympic Committee, Colorado Springs, Colo. She won the award for innovation in providing meals for athletes attending its sporting events. Moreman was unable to attend the event.
FARE, now in its fifth year, is the only event dedicated to the needs of operators and manufacturers from nontraditional and noncommercial foodservice channels, targeting on-the-go customers.
FARE 2013 will be held June 18-20 at the Renaissance Schaumburg. Stay tuned to www.foodserviceatretail.com for details.