Foodservice sales at select Orton Oil locations have increased by double digits since the company brought in branded foodservice to four of its 25 stores.
About four years ago, the Walker, Minn.-based company added Hot Stuff Pizza and was pleased to see overall store sales jump.
“It was a great move,” said vice president Frank Orton. “There’s a certain level of expertise needed for foodservice and also for the scale of supplies, so it really helped to partner with Orion Food Systems.
“It’s not to say you can’t come up with these things on your own, but you need some help to do things like labeling, new product introductions and marketing,” he continued. “A branded food program brought all that to the table and, for a smaller operator like us, it’s nice.”
What Orton Oil is seeing with foodservice mirrors industry trends. According to CSX data shared during this year’s NACS State of the Industry Summit, foodservice sales rose 5.6% last year. At the same time, gross-profit margins for foodservice were up 7%, which puts the category in the No. 1 spot for gross-profit margins in store—ahead even of tobacco.
Farmers Union Oil of Kenmare, N.D., also added Hot Stuff Pizza & Subs to its three stores, replacing unbranded premade sandwiches. Two of the locations will also add Chix Chicken, which offers breaded chicken and comfort-food sides.
“Our foodservice sales have doubled since I put those brands into two stores,” said CEO Jamie Hoggarth. “And we’ve also seen an increase in overall store sales in our Bowbells store by around 25% since we put in Hot Stuff last November. We’re capturing the market that was already coming in and increasing the spend.”
Orion offers four branded foodservice programs for convenience stores: Hot Stuff Pizza; Gourmet Grub (upscale burgers); Chix Chicken; and Chopz (salads, burritos, wraps and subs).
C-store retailers can offer one of these brands, several or all of them, said district manager Adam Harp. But the key advantage, he said, is that no matter how many brands retailers have, they deal with just one foodservice company.
“It means one call to the consultant if they have any issues or needs,” Harp said. “If they want someone to visit, it’s one person. So it streamlines it. You always know you call your consultant, who also checks in pretty regularly—every two weeks to monthly. It’s frequent visits and, operationally, that’s huge support.”
And for retailers that opt for more than one brand, it means one back-of-house operation, he said. This means only one set of equipment is needed and all employees are cross-trained. “It makes the operator a little bit more set up for different situations and prepared to handle many different things,” Harp said.
There’s another advantage of featuring Orion’s foodservice brands: the option to use the company’s iGnG technology, “which is what ties all this together and takes it to the next level,” Harp said. The technology tracks everything, including what’s sold and when it’s sold, so operators can adjust their offerings accordingly.
Using this has made Orton Oil much more accurate with its waste, Orton said. It also has helped with inventory. “You can go back and figure out which products are and aren’t selling and manage the SKUs better,” he said.
Hoggarth concurred: “It helps you dial in and fine tune your operation.”
This post is sponsored by Orion Land Mark