Share of Stomach'
Blumenthal: "Sell foodservice as if your life depends on it, because it does"
CHICAGO -- "This is war folks," Ira Blumenthal told the room of convenience store executives. "A war for share of mind, share of market and share of stomach." During a session on "Foodservice Opportunities" at the 2009 NACS State of the Industry Summit in partnership with CSP, held last week in Chicago, Blumenthal, president of Co-Opportunities Inc., made the case for foodservice. "You need to market, merchandise and sell foodservice as if your life depends on itbecause it does."
Blumenthal's session, moderated by Fran Duskiewicz, senior executive vice president, Nice N [image-nocss] Easy Grocery, followed a number-crunching session from The NPD Group's David Portalatin. As Portalatin explored the patterns of profit among the top and bottom quartile of convenience stores, one idea rang clear: the opportunities for success through foodservice are abundant. One thing the top quartile companies had in common was a strong foodservice program. "If you didn't get that from David Portalatin," said Duskiewicz, "then you missed the point."
Blumenthal urged attendees to think about the customer who stops at their store, fills up the tank, and then drives 50 feet away to the Arby's for lunch. "That is an absolute sin to have that kind of capture, but not the credibility."
So to compete with quick-service restaurants (QSRs), he said, you better start thinking like one:
Focus on daypart and occasion. Think about a purchase in terms of a breakfast, birthday, lunch, dance recital, birthday, Superbowl or late-night craving. Focus on "systems." McDonald's is not a restaurant; it is a system with operating manuals, standards and practices that make a Big Mac in Sydney taste like a Big Mac in Dallas. Nurture a hospitality culture. A study from the National Restaurant Association found that more customers are likely to return to a restaurant with average food and great service than one with average service and great food. Why? Hospitality is the linchpin of foodservice. Aggressively market your offerings. "In the world of foodservice, if they try it and like it, they'll come back for more." Bounce-back coupons, sampling and frequency programs will all get customers back in your store. Understand the metrics of foodservice. The same metrics you apply to your c-store business do not translate to foodservice. Create a separate P&L for your foodservice program based on foodcosts, waste, labor and marketing costs. Engage in local store marketing. Understand that everything communicates. From uniforms to nametags to the tiles on the floor, you are sending a message. Is it the right one? Know the importance of off-premise dining. Not just dashboard dining, but ready-to-heat meals that can end up on the dinner table. Obsess with speed, value and uniqueness. What is your Big Mac? What is your Frosty? What is your "sustainable, discernable point of uniqueness?" Blumenthal also stressed the power of kids, who he calls "the veto vote," and the increased number of female c-store shoppers.
Everything is lining up: proven success from foodservice in c-stores and threats to the traditional c-store profit centers. The time is now, said Blumenthal, if your culture can support it. Both Duskiewicz and Blumenthal recommend hiring someone from outside the c-store channel to lead your foodservice program. Visit your local hospitality school to learn about the metrics of foodservice and the concepts behind hospitality. Talk with your vendors who also work with restaurants for their own expertise. And consider the one advantage you have over QSRs: packaged goods and many, many SKUs.
Blumenthal waxed poetic after an hour of energizing ideas. "It's the set of the sail, not the gale, that tells you where to go."
Click on the links below for previous SOI Summit 2009 coverage:
'Zero Petroleum Growth'
Petrowski details what industry can do today to position itself for future market demands
Hunting for Capital
It's out there if you know how to get it, Ratajczak tells SOI Summit attendees
NACS SOI survey presents opportunities to grow amid the economic malaise
Keep Your Powdwer Dry
It may get worse before it gets better, Zimmermann tells SOI Summit attendees
Economy of Need
Convenience retailers should capitalize on one of the most basic consumer needs: food