The Daily Dilemma

A look at the future of daily fresh-food deliveries, and what’s in their way.

Abbie Westra, Director, Editorial, CSP

Samantha Oller, Senior Editor/Fuels, CSP

Article Preview: 

But what about fresh, multi-day or daily deliveries? Eby-Brown is paying attention to the conversation and is prepared to meet its customers’ needs, but recognizes the obvious challenge for most retailers.

“The issue is paying for it, and that I think is the conundrum that is facing our channel,” Coppel says. “Are there more products in the future we can bring in on a daily-type basis? Will foodservice grow in the stores at a rate that takes it from two deliveries a week to three, from three to four?

“Our mindset is open, and we’ll continue to analyze, to study and to look at what it’s going to tak,” he continues. “But the one certain answer has to be more critical mass of products than a couple trays of sandwiches, a couple trays of doughnuts.”

His concern is akin to a retailer going all-in on a pizza program, only for it to go bust six months later, leaving the company with a graveyard of pizza ovens, dough cabinets and cheese slicers. For distributors, daily, fresh delivery is a multimillion-dollar risk tied to the whims of the retail community and its customer base.

“You can get too far ahead of the curve. It’s a real delicate balancing act,” says Coppel.

“As more consumers are used to going into a c-store and getting more of a foodservice offering, that will lift all ships.”

A Different Path

While retailers and distributors play a tug of war with costs and volumes, some top chains have taken matters into their own hands.

Many, including Sheetz, Wawa, Kwik Trip and QuikTrip, have adopted a self-distribution model. They also control at least some element of manufacturing, be it commissaries or the whole kit and caboodle, such as in Kwik Trip’s case, which makes generating a profit off distribution less necessary.

The move to self-distribution solves not only the fresh-food problem, but also the other supply-chain inefficiencies this industry has taken on over time.

“They’ve all gone to self-distribution because no one would do this for them,” says Core-Mark’s Hobson. “They’re controlling their own destiny.”

Some regional chains, meanwhile, opt to go the route of traditional restaurant distribution—which is no easy solution either.

Nice N Easy Grocery Shoppes, Canastota, N.Y., does not work with c-store suppliers for foodservice. Instead, back when the 86-store chain began getting serious about foodservice in the late 1990s and early 2000s, it enlisted a foodservice distributor, Deli Boy, and started the long process of getting on the radar of traditional foodservice vendors to gain access to product that was restaurant-quality but already at a level of preparation that was realistic for a c-store chain without a commissary.

Once the company started building volumes, vendors’ doors began opening, and now they’re knocking on Nice N Easy’s door. Today, Nice N Easy is Deli Boy’s top account.

As c-stores gain more visibility on the greater foodservice stage, these relationships will likely become more common. In August, York, Pa.-based Rutter’s Farm Stores entered into a three-year agreement with U.S. Foods Inc.

Rutter’s is working with two chefs at U.S. Foods to help stay ahead of industry trends and elevate the menu at Rutter’s to the level of a restaurant and not be “constrained by the convenience-channel label,” the company said in a statement released in August.

All 58 of Rutter’s c-stores, located in central Pennsylvania, will be supplied by U.S. Foods’ Allentown, Pa.-based distribution center.

Of course, Rutter’s and Nice N Easy operate differently than the majority of their c-store brethren, sourcing ingredients to prepare food onsite vs. items premade elsewhere.

C-store veteran Chiovera has a vision of an industry in which retailers band together to find regional assemblers and distributors by market. “The more people that get in the pipeline, the more wheels on the street, the more efficient it is,” he says.

Chiovera sees a number of commissaries, bakeries and other fresh-food “assemblers,” as he calls them, eager to get into the c-store foodservice game, as well as foodservice for supermarkets, mass retailers and drug chains. “They are looking for synergies and efficiencies,” he says.

Click here to download full article