Charlie & Barney's operates only three full-service, stand-alone eateries. Yet its chili is showing up everywhere, from the Good To Go BP in Warsaw, Ind., to the Village Pantry in Cambridge City.
It's worked out better than any of the other self-serve programs [image-nocss] that we've had, Shane Neal, director of operations for C&G Oil Co., which offers self-serve Charlie & Barney's chili at its three Indiana Petro Stopping Centers, told the Indianapolis Business Journal. There seems to be good name recognition with it. ... And I know that I'm seeing it in more of the convenience-store/truck-stop-type locations.
Indianapolis-based Village Pantry is testing the crock program in 15 of its stores, positioning the crock next to a Frito rack for cross-promotional sales. It sells an 8-ounce cup of chili for $2.29 and what it calls a Frito Pie, which includes a 1-ounce bag of Fritos, for $3.29.
The sales looked strong the first week, director of foodservice Chad Prast told CSP Daily News early on in the test.
Expect to see the product in even more such places in the next few years as the company expands both in Indiana andif all goes as plannedthroughout the Midwest and perhaps the East Coast.
The way we prepare our chili and serve it fits the model of a self-service convenience store, Richard Hogshire, founder and chairman of Charlie & Barney's, told the newspaper. Our expansion is basically selling the chili. Rather than doing more of those sorts of stores in other towns, we decided to go to the convenience-store market.
The modest expansion idea was the brainchild of both Hogshire and Bill Church, 41, the company's president and chief operating officer. Formerly a vice president at Roly Poly Rolled Sandwiches, Church met Hogshire when Roly Poly started offering Charlie & Barney's chili.
We came up with this concept of going into truck stops and convenience stores, Church said. I decided to become a partner with Dick, and we're rolling them out across the state right now.
The partners declined to disclose the company's annual revenue, but industry publication Nation's Restaurant News pegged it at $2.5 million four years ago, when it had five restaurants operating.
About 40 establishments now offer its chili in some form. Some clients offer a scaled-down version of the restaurant with a truncated Charlie & Barney's menu. But the more popular option is the basic crock program, in which customers simply set out a crock of chili along with a rack of 12-ounce, self-service bowls. Almost 30 locations have signed up.
We display our cups on a rack next to the crock, Church said. And the retailer will simply buy the chili from one of our distributors. The staff heats it up in the microwave and it will hold in the crock. The consumers self-serve. It has a very small footprint on the counter, and it doesn't take much labor. It's just a real convenient item.
The crock program costs $250 plus chili. Stores don't need to sign a franchising agreement to get a crockthey just need a bit of counter space.
In the convenience stores, we're at $3 for a 12-ounce bowl, Church said. That same bowl at one of the sit-down stores costs $5.
The typical outlet, in Hogshire's estimation, sells 50 to 100 orders each day. Those crocks, often placed near roller grills, also have created an interestingand profitableresult.
When they merchandise this crock right next to their existing roller-grill program, all of the stores have seen a 10% to 12% increase in their hot dog sales, Church said. Customers are putting a ladle of chili across their hot dog and making a Charlie & Barney's chili dog.
The push right now is to make sure convenience-store distributorsthrough which Charlie & Barney's operators purchase their chiliall offer their product. Once the pipeline is assured, expansion should continue apace.
I can see this in five years being a real strong regional brand for maybe a five-or six-state region, Church said, Midwestern and maybe East Coast.
Indiana University professor Theresa Williams thinks the folks at Charlie & Barney's may be on to something.
Extending the brand into grocery stores would be a terrible idea because competition there is fierce, she said, but selling it ready-made in convenience stores would allow the company to carve out its own niche.
I think it's a good idea because of the lack of competition, said Williams, director of the Kelley School of Business' Center for Retailing. And there's ... a large area of opportunity for distribution.
There's just one major hurdle, in her opinion. The company has to maintain a strict quality-control program to make sure all those minimum-wage workers who heat and present the chili do it properly. If they don't, the Charlie & Barney's brand could suffer.
The execution would worry me a little bit, Williams said. That's the biggest barrierquality control and being consistent.
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