With foodservice becoming more entrenched in c-stores’ retailing repertoire, we looked at some of the distinguishing factors driving growth for both quick-service restaurants (QSRs) and casual-dining establishments that may also work for you.
Limited-Time Offers (LTOs)
Limited-time offers—known as LTOs—are an essential weapon in QSRs’ arsenal. By dishing up meals available for a short period of time, these restaurants are creating “wow” factors and a sense of urgency and surprise.
San Diego-based Burger Lounge offers LTOs almost constantly. “One usually comes right after the other to keep things exciting,” says marketing director Robert Lane. The concept has offered boar, bison and elk burgers, as well as corn dogs and roasted corn. “You want to pick the right LTOs so you aren’t left with product, but if the minimums [for us to buy] are too high, it’s something we probably won’t carry.
Steven Johnson, grocerant guru for Tacoma, Wash.-based Foodservice Solutions, says, “LTOs drive freshness perception, especially if you do them seasonally.”
“Part of the appeal for an LTO is it’s only available for a short period of time,” he continues. “Never run an LTO over six weeks, but preferably for more than three weeks to give people time to come in and come back.”
Tampa, Fla.-based Checkers runs LTOs for four to six weeks, says senior vice president and CMO Terri Snyder: “It can get you an incremental sale because customers often come back a second time.”
The freshness aspect of LTOs can really help. In April, Chicago-based market research company Mintel published a study, Convenience Store Foodservice-U.S., that showed that 38% of consumers would like to see higher-quality offerings at convenience stores. LTOs can help change the perception that food is not fresh in c-stores, says Julia Gallo-Torres, author of the report and Mintel’s category manager for foodservice.
“LTOs help keep the offer fresh and gives our usual customer another choice,” says Mike Sherlock, vice president of fresh food and beverage for Wawa, Pa.-based Wawa Inc. “You’ve built trust and credibility with your existing offer, and it’s easier to sell a new variety than trying to get another customer who’s not coming to your store already.”
Steal This Idea: Periodically add something new to your menu for three to six weeks. It will likely drive traffic, and it’s a great opportunity to test new food offerings.
Combo Meals
McDonald’s and Burger King are perhaps the original masters of the combo meal, but even smaller chains now use this formula. Chicago-based Wow Bao’s combo meals run $6.19 to $8.29. “People like them for value perception and believe they’re getting more options,” says Geoff Alexander, president. “It’s all about speed and price points.”
“McDonald’s has taught us to order by number,” says Gregg Rapp, restaurant engineer for Menu Technologies in Palm Springs, Calif. “Numbers also make it easier for people to remember [what they like] and to get someone else to order for them.”
And combo meals usually lead to higher sales, because consumers typically add items to them. Ideally, he says, select a top-selling menu item, then include two other—usually less popular—items in a combo with it. “The simpler it is, the better,” he says.
But the real benefit of combo meals is that customers can get in and out fast, says Johnson of Foodservice Solutions: “And if you can speed up service, that’s a perceived value.”
Steal This Idea: Bundle food items with a drink and give it a name or a number. Your customers will appreciate that you’re making life easier for them and you’ll probably see some incremental sales.
Local Food
Local food is prominent in many consumers’ minds these days, and many fast-food and limited-serve restaurants are capitalizing on that. Vancouver, Wash.-based Burgerville is a pro when it comes to local, sourcing mostly from Washington, Oregon and California, while Tender Greens in Los Angeles has a number of partnerships with local ranchers and purveyors.
Serving local food can be a great way for convenience stores to differentiate themselves, says Johnson. “It gives you depth of story,” he says, “so include farmer information, a picture or even a date picked or harvested.”
It’s also a good idea to bring in providers of local foods from time to time, he says, “because it offers authenticity and tells that story.”
Offering local foods illustrates that you’re not serving commodity items, says Rapp: “They have better value so people feel they’re getting a better price.”
But offering local foods is difficult, due to sourcing, distribution and delivery. An easier move is to highlight some local ingredients, says Gallo-Torres. “If just one ingredient is local, call it out and show consumers you’re trying to do something, which can change the perception of the whole meal,” she says.
Steal This Idea: Going local is a big undertaking, so emphasize one or two items on your foodservice menu to show that you’re on the pulse of this trend.
Healthy Kids’ Meals
There are changes afoot for children’s food, and the days of chicken nuggets and pizza may be numbered. In July, Taco Bell announced it was phasing out kids’ meals.
But for those that still offer them, there’s a rustling of change: Chick-fil-A now serves applesauce for its young diners, Subway has sliced apples and yogurt, and Burger King also dishes up apple slices.
“Kids are eating what their parents are eating now,” says Melissa Abbott, senior director of culinary insights for the The Hartman Group, Bellevue, Wash.
So, she says, the opportunity for convenience stores is in carrying adult food in smaller portions, such as servings of hummus or half-sandwiches.
“You can get your kid something that you feel good about,” she says.
Boston’s Restaurant & Sports Bar, Dallas, Texas, is looking at several components of its kids’ meals, adding new items to the children’s menu and reformulating existing items, according to Bill Hancox, vice president of food service.
The restaurant is promoting fruits, vegetables, whole grains and low-fat dairy while limiting unhealthy fats, sugars and sodium, while still making sure its kids’ meals have appeal and acceptance.
Moe’s Southwest Grill, Atlanta, has an entire section of its menu board that meets the guidelines established by the National Restaurant Association’s Kids Live Well program. These include an entrée having 600 calories or fewer, less than 35 percent of calories coming from fat and no more than 770 milligrams of sodium. The items include the Moo Moo Mr. Cow burrito and the Power Wagon taco.
The menu boards don’t detail all the nutritional information (though that’s on Moe’s website) “because parents know we’ve done all the work for them,” says chief marketing officer Paul Macaluso, “and they really appreciate that.”
Having cute names for the menu items also helps. “Kids get excited to just order that funny name,” he says.
Steal This Idea: Treat kids like little adults but make it fun: Dish up healthy adult food in small portions and give it a funny name. Your youngest customers will get a kick out of it.
Smaller Portions
White Castle’s been doing it for decades: offering small portions of regular food. And now other fast-food feeders are jumping on the bandwagon, such as McDonald’s and KFC, which are offering snacks such as, respectively, Snack Wraps and Chicken Littles mini sandwiches.
Wow Bao is a master of the art of small. Its signature menu item, the bao (Asian street food), is a soft, sweet dough with meat, vegetables or something sweet inside. The chain sells them individually for $1.69 apiece or as a combo (two and a side).
“Everyone is mobile so you need something portable and easy to eat,” says Alexander of Wow Bao. “And I think a lot of people are eating in smaller portions for dietary reasons and a lot of people want to snack and pick. The more people can choose, they more they love it.”
This mixing and matching ability is ideal, says Abbott, because “no one wants to commit to anything any more.” These small portions also allow the consumer to be in charge and in control, she says.
“We are trying to cobble together snacks that mimic what meals are like, which allows us to continue to graze throughout the day,” she says.
Steal This Idea: Offer some small portions, but make sure there’s a nutritious component in there so customers can treat them as a meal or a snack.
Gluten-Free Options
According to The NPD Group, around a third of us are now cutting back, or down, on eating gluten, so much so that even pizza chains such as Domino’s and Russo’s New York Pizzeria are offering pizza crusts with no gluten.
Boston’s Restaurant & Sports Bar became aware of the gluten-free trend about six years ago. And learning that just one or two grains can knock a celiac sufferer down for the day made the chain realize the enormity—and difficulty— of going gluten-free and how important it was that it didn’t cross-contaminate anything.
“So we decided to focus on the pizza, and we isolate the ingredients, even down to the knife,” Bill Hancox says. The chain has even painted the outside of the gluten-free pizza pans with fluorescent paint so they’re not used for anything else, and they are stored separately.
The concept also brings in a gluten-free brownie, ice cream and beer, all of which are prepackaged “so we can focus on the pizzas,” he says.
Going gluten-free has been a challenge for Moe’s, says Macaluso. Because of the issues with cross-contamination, Moe’s doesn’t offer a gluten-free environment, but its ingredients are friendly to those who are gluten-intolerant. “We can make a meal and all the individual ingredients don’t have gluten in them. But there could be traces on a spoon, so we are very careful not to say we are gluten-free,” Macaluso says. “There is still gluten in the air because of our tortillas.”
Going gluten-free is not easy, especially for a convenience store with a small kitchen, and/or whose sole focus is not foodservice, says Gallo-Torres of Mintel.
One idea she points to is Chuck E. Cheese’s. The Irving, Texas-basec chain offers an externally made pizza that’s cooked and served in a bag with a special set of scissors. It also has a gluten-free brownie that’s served in a bag. “This protects both the consumer and the operator,” she says.
Steal This Idea: Offer some prepackaged heat-and-serve gluten-free items to ensure you’re not contaminating food for sensitive individuals.
Innovative Drinks
Convenience-store retailers who don’t have an exciting beverage program are missing out. According to Mintel’s study, 87% of consumers say they’re interested in cold drinks in c-stores.
Starbucks has already jumped on this bandwagon with its Evolution Fresh juices, which are fruit and vegetable blends such as Sweet Greens and Lemon. Other chains are doing their own beverages, such as Sonic, which is dishing up a peanut-butter-and-bacon milkshake, and Dairy Queen, whose s’mores frozen hot chocolate is a big seller.
Beverages are filling a need with the amount of snacking we do these days, especially because they’re so portable, Gallo-Torres points out: “They can also be a way to separate yourself from the competition—look at 7-Eleven’s Big Gulp and Slurpee.”
“Innovation is very important with beverages,” says Wawa’s Sherlock. “We compete with Starbucks, McDonald’s, Dunkin’ Donuts, regional convenience store players, as well as with packaged beverages. Beverages stand across all day-parts, so it’s a big opportunity and a big area of growth.”
Coffee programs can also be popular, says David Morris, managing consultant for market research company Packaged Facts. “The catch-22 is clearly the price point. Convenience stores could maybe experiment with co-branding so they can use brand awareness to help with perceptions of quality.”
Moe’s has been offering huge variety in its drinks selection since it started using Coca-Cola’s Freestyle machine two years ago, and it’s about to take things to the next level. It is working on a proprietary beverage, Vanilla at Peachtree, which will be available from the machine and will pair well with its Southwestern food.
“People want to customize,” says Macaluso of Moe’s. “And this is an interesting way for us to make drinks new and cool. We have a core beverage menu that people love, but a certain group of consumers wants to try new things.”
Steal This Idea: Bring in a brand to help you with dispensed or packaged beverages. The brand can provide the ideas and will already have consumers’ trust.
Customizable Food
Perhaps a reflection of the self-sovereign world of social media and online buying, today’s consumers are used to getting what they want—even in foodservice.
“Individualization and customization are the driving factors of foodservice,” says Johnson of Foodservice Solutions. “When you empower customer choice, you drive sales and loyalty. They’ll pay extra to wait in line. And, there’s another advantage in waiting: They might find something else they want to buy.”
Burger-and-fries concept Mooyah, Plano, Texas, is all about customization. In fact, a company tenet is “a million ways to love your burger.” Customers can choose the burger, the bun, the toppings and the additions.
“It gives guests the ability to really see what’s available and [for them] to play a chef,” says Alexis Barnett Gillette, director of marketing. “People really want the ability to do things their way and they’re more likely to engage with us, and more often. By having a lot of options, we are more approachable.”
Truckstop chain Pilot Flying J, based in Knoxville, Tenn., uses its combo meals to give customers options and will emphasize “Make It a Meal” in 2014. Customers can create their own breakfast (eggs, meat and a side) or dinner (roast chicken and two sides) combo for $7 to $9.
A c-store chain that’s already way ahead with customization is Wawa. Its stores have touch-screen POS terminals where customers build their own sandwich, hoagie or breakfast sandwich.
“You can order any sandwich, and then it prints out a slip; you can go shop while it’s being made,” Sherlock says. “There are also upsells, so at certain times of the year customers can add a soup or a side of mac ‘n cheese or a warm chocolate chip cookie for a special combo price.”
Steal This Idea: Let customers create their own meals, sandwiches or drinks so they feel in control.
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