Attendees of this year’s Foodservice at Retail Exchange(FARE), held June 18-20 at the Renaissance Schaumburg outside of Chicago, have plenty to feel positive about. Consumers continue to expand their away-from-home eating and need high-quality, convenient meal time options to match their busy lifestyles. Suppliers, meanwhile,are providing operators with innovative solutions to help meet those needs.More than 500 operators, suppliers and distributorsgathered at FARE to discuss strategies tocapture the opportunity for food service-at-retail growth.
This year’s FARE was bookended by a sessionon behavioral design in retail by Kevin E.Kelley of Shook Kelley, and flawless execution by Afterburner. The inaugural Culinary Competition challenged chefs and retailexperts to create a dish that was delicious,creative and convenient. Andit wouldn’t be FARE without some memorable socializing. Attendees celebrated a productive dayeach evening with pooland arcade games in the After-Dark Lounge. New this year, sports enthusiasts followed the Stanley Cupfi nals in the Slap Shot Lounge and theNBA finals in the Slam Dunk Lounge.
Other conference highlights includedthe Food Pavilion of nearly 80 suppliersshowcasing the latest foods, beverages, equipmentand supplies geared toward the foodservice-at-retail buyer; a presentation of exclusive foodservice-at-retail data from ManagementScience Associates; and the FARE LightningTalks, which saw out-of-the ordinary topicssuch as surviving big data, decoding the retail food servic experience, and biomimicry.
Read on for educational and photohighlights from this year’s event. FARE2014 will be held July 16-18 at the Gaylord Texan outside of Dallas/Fort Worth. Stay tuned to www.foodserviceatretail.com for details on nextyear’s show.
The Fantastic Four
Despite diverse settings andcustomers, all retail operatorscan recognize the hallmarksof an excellent foodservice program. Itdefi es expectations, transcends the typicaland improves the quality of the entireindustry with each meal served. To honorthe A-list, CSP presented its 2013 Leadersin Retail Foodservice awards, sponsoredby Tyson Foods, to four operators whobroke the mold. The honorees:
- Dan Henroid, director of nutritionand food services for the University ofCalifornia’s San Francisco (UCSF) MedicalCenter, oversees patient meal servicesat two hospitals, fi ve retail food operations and a catering service, as well as inpatientand outpatient nutrition services. As thedriving force behind the hospital’s $8 millionrenovation of its retail foodserviceoperations, Henroid introduced a sleek,modern setting with technology thatstreamlines replenishment and helps customerseat healthily.
- Camp Howard, director of campusdining for Vanderbilt University, Nashville,Tenn., encourages students to practice“thoughtful eating” at the school’s twolarge dining centers. This is embodied byVanderbilt’s meal plan, which supplies studentswith a set number of meals per week,as well as sit-down eating events meant tobuild a sense of community.
- Bob Pascal, as chief marketing offi -cer for Centerplate, Stamford, Conn., isresponsible for “executing extraordinaryexperiences” at 300 sports, entertainmentand convention venues in North Americaand the U.K., including hosting the SuperBowl, World Series and U.S. PresidentialInaugural Balls. It delivers by capturing theessence of a city or region through its food,and giving back to its communities.
- Michael Sherlock, vice presidentof fresh food and beverage for Wawa Inc.,Wawa, Pa., oversees the chain’s “fast-casualto-go” offer of hoagies, breakfast items,soups, salads and made-to-order hot andcold beverages. The finishing touch isWawa’s top-notch customer service andstrong employee culture.
UCSF Medical Center’s food operations and Wawa have common goals: Be viewed as a restaurant first. The hospital’s Moffit Cafe and Moffi t Cafe Express’ features include a wood-fired, stone pizza oven and a salad bar that brings in $750,000 in sales each year. Its Smart Choice program tallies up the nutritional data of items on each receipt. And users of the Smartphone appMyFitnessPal can track the nutritional content of 200 foods sold in the hospital cafés.
Wawa’s recent move into Florida gave it license to reinvent itself, from the perspective of the store and the foodservice. The Florida sites feature outdoor seating and large glass windows to showcase the chain’s foodservice program. An open kitchen further underscores the first impressions. And unlike other Florida c-stores, Wawa does not sell hot dogs, choosing made-to order hoagies to communicate freshness.
Pascal’s challenge at Centerplate is to provide a sense of place in large venues filled with masses of people. His team relies on extensive consumer research and collaborates with local, up-and-coming chefs to personalize food to place. Of course, Centerplate also has to balance trend with tradition. Eighty percent of foodservice sales in its sports venues come from hotdogs, pizza and other standards. Items such as sushi provide variety, but clients and sales are most affected by fan favorites.“Here, we have the greatest opportunity to color their experience,” says Pascal. To accomplish this, Centerplate executes a “lift and stretch” strategy: lift the quality of traditional items while introducing related items to stretch from that core.
Howard of Vanderbilt has to satisfy not only average college students but also international students who have different expectations. While the school has a successful meal program, it also recognizes students like to dine out.
Romancing the Customer
Three creative thinkers challenged foodservice operators to think differently and look to competitors and to nature for new ideas.
This eclectic general session took a surreal twist: The presenters were each capped to 15 minutes in what was titled “FARE Lightning Talks: Innovation, Take Three: Decoding the Retail-Foodservice Customer Experience.”
Michelle Barry, president and CEO of Seattle-based Centric Inc., whipped through a witty 50-slide set that moved the audience from the farm to Orwellian uniformity and oversized, personalized sandwiches.
“In the past five to 10 years, we’ve seen incredible changes in how people think about food,” she said, citing the rise in healthy, sustainable, eco-conscious trends. Yet, she lamented, only a small percentage of convenience retailers have truly embraced this opportunity; most operators still are consumed by lowerquality, on-the-go options. To that, Barry offered several points:
Personalize: “It’s not just about customer service; quality is also about[knowing] that someone cares.” She cited hand-scribbled menu boards and other personal touches, as well as distinctive sandwiches and packaging that is creative and, ideally, biodegradable.
Differentiation: Stay away from mass uniformity, in which the foodservice looks like it’s coming from an assembly line. “Food is going through revolution—not an evolution,” she said. Blame it on the millennial and baby boomers, she quipped, pointing out that both care about healthier, tasty and, forth former group, value-based.“If we don’t innovate around convenience and quality,” she said, we won’t last long.
Barry offered several incremental steps toward improvement, including adding fresh condiments, reduced packaging, enhancing store ambiance, delivering personalized service and looking at adjacencies: “Why is there motor oil next to the bread?”
The Skinny on Biomimicry
Yes, that is a big word, and in short it means look to Mother Nature for inspiration.
Eric Stangarone, creative director of San Francisco-based The Culinary Edge, knew he was possibly taking the audience into a heady topic, acknowledging that only 2% of them might embrace this approach.
The concept is premised on the reality that in nature there is no such thing as waste; anything left over from one animal or plant is food for another species. He pointed to the lotus flower and then to BP’s brand moniker, saying, “an oil rig as a logo would be a lot less sexy.”
He also asked the audience to think about bananas. The exterior tells its story, whether it’s unripe, ripe or getting moldy. Instead of expiration dates, could thereby a more visual barometer to declare a product’s freshness? “Some people want to view the world in a new way,” he said.
Parsing Big Data
Ninety percent of the world’s digital data arose in just the past two years. Justin Massa, founder and CEO of Chicago-based Food Genius, sees data as a barrage of factoids capturing things long held to be unempirical. “But there’s a problem with all this data,” he acknowledged.“You don’t care about most of it.”Most operators and their management team want the granular goodies pertinent to their particular business. They don’t have the time or resources to weed through pages of numbers to pullout the one point they seek.
Massa suggested retailers embrace a “Moneyball” mindset, based on the popular book and movie: Marry perspective with data. In other words, avoid the hype and the talking heads. He cited the example of poutine, french fries drizzled with brown gravy and cheese curds. Many restaurants and foodservice establishments sell the dish, and so-called experts predicted it would be a new sensation. But the data shows customer palates have pooh-poohed poutine. Thus, follow the data and not the talk.
With that, Massa encouraged retailers to know who they are, and if they’re going to take on a big challenge, jab into that elephant a bit at a time: “Don’t eat that elephant in one bite.”
Incremental Potential
The influence of foodservice on convenience-store sales and what sells alongside specific subcategories within foodservice were measured in a study exclusively produced for CSP and revealed at FARE.
Don Burke, senior vice president of Management Science Associates Inc., Pittsburgh, talked about what sold alongside everything from pizza to sandwiches, revealing the results of a 200-store study conducted over six months last year.
While gasoline and fuel were certainly a part of the mix, a surprising foodservice pairing was with additional meals, such as soup. “It could be that as they’re buying their breakfast, they’re trying to buy frothier second meal occasion,” Burke said.
Beverages from different subcategories were often paired. Customers going to the gym may buy a sports drink but then purchase another type of drink to rehydrate. Coffee often came with a purchase of bottled water, suggesting another advance purchase for later in the day.
Dispensed hot and cold beverages were often paired with gas, but the next secondary purchase was in the candy, gum and mints category. Other categories after that were salty snacks and lottery or gaming.
When looking at hot and cold foodservice, it accounted for only 7% of c-store visits in the study. Cold dispensed beverages, on the other hand, were in the 15% range. That said, a lot of opportunity exists, Burke said. For instance, while a high percentage of customers that bought cold foodservice bought gasoline too, it was at a significantly lower percentage than dispensed beverages and gasoline. That difference showed the potential of the cold foodservice category(sandwiches, salads, wraps, etc.) to be a destination category over gasoline.
Here’s a few of the foodservice paring she revealed, wherein consumers who purchased the initial category also bought an item from another category:
- Lunch sandwiches with bottled water and carbonated dispensed beverages.
- Pizza with carbonated dispensed beverages and coffee.
- Breakfast sandwiches with coffee and soup.
- Chicken with soup.
- Baked goods with service deli meats and eggs.
- Soup or salads with fruit and bottled water.
In delving further into the numbers, Jack Cushman, executive vice president of foodservice for Nice N Easy Grocery Shoppes, Canastota, N.Y., said that as one of the four chains in the study, the fact that Nice N Easy sells a “breakfast pizza” may have skewed some of the results.
To that point, Burke said the stores in the study were mostly in the Northeast and maybe why chicken did not fare as well, because that category often does better in the south.
A second panel speaker, Kris Klinger, director of USC Hospitality, Los Angeles, which caters mostly to college student sat the University of Southern California campuses, said for his sites, coffee is a big seller throughout the day, again further driving study results.
Much of the discussion centered on potential adjacencies, or what retailers could place near so-called “destination” items to drive ancillary purchases. To that issue, Cushman said his stores build shelving below their deli cases and stock them with proprietary branded chips. While some chains don’t see that as sales space, Nice N Easy saw an opportunity and has cashed in on it.
In talking about the sources of data, Burke said one was from the point-of sale, while a second source was cellphone surveys, which increased the younger demographic. With that in mind, he said, the study showed c-store foodservice consumers tending to be males ages 18 to 34. In terms of overall c-store shoppers, those younger males represent 27% of shoppers, but that number goes up when focusing on foodservice. Females in that age range of general c-store shoppers were 18% in the study, with foodservice-specific female shoppers falling from that percentage.
Ultimately, foodservice ends up being important not just for the dollars it brings as a stand-alone category, but also for the sales it drives in other categories, Burke said.
Rethinking Retail Hell
Shoppers are malleable creatures. But as easily as a retailer can create a happy shopper, that same retailer can create an old grump, just by the way the retailer organizes a store, according to retail-space designer Kevin Kelley.
Retailers must save customers from visual chaos, or “retail hell,” and usher in order, touchstones and even inspirational elements to drive sales at their locations, Kelley said. The physical design, displays and messaging of stores inside and outgoes a long way in boosting sales potential, said Kelley, whose design firm is based in Los Angeles.
Taking as an example motorcycle icon Harley-Davidson, Kelley said the independent dealers who run the chain’s stores are a tough group to persuade to adopt consistency. He showed slides of chaotic displays in which too much merchandise caused visual clutter, mannequins poorly dressed for the targeted audiences failed to move product, and dark sales spaces contributed to poor sales of relatively expensive motorcycle jackets.
Removing clutter and creating order and logic among the different product categories helped store owners communicate specific ideas, be they about HarleyT-shirts, jeans or expensive motorcycle jackets. He pointed out that the brand has a lot going for it, with a loyal group of bike riders who could relate to its image and the rebellious, masculine lifestyle it promotes. Retailers need to take a page from that text and connect with the story their brand is telling, he said.
Visual cues are very helpful in creating that retail environment. Bringing up theist Hanover, N.J.-based Nabisco brand, Kelley said efforts to develop a shelving area around its Oreo cookies using cues such as cookie jars and rolling pins—a display reminiscent of a country-style kitchen—all helped connect shoppers with the product and ultimately increased sales.
Kelley also talked of a small grocer that needed to compete with big-box, high-volume merchants that were getting into groceries. His firm managed to draw out stories from the company’s history to create a butcher-shop area and a “smokehouse.” He used messaging and farm-inspired signage to communicate that grass-roots backdrop, successful lyre-energizing a family business.
Breaking down psychological elements in play with shoppers, Kelley cited three things:
- Context: Putting the brand against a larger picture or idea, such as Mother Earth or nostalgia for days gone by.
- Cues: Visual components that automatically establish and define things such as time and place.
- Triggers: More elements that tap into the psyche, stirring emotion or larger ideas of inspiration and aspiration.
Many of the ideas Kelley mentioned break the mold retailers are used to regarding shopping patterns. For instance, he said the long supermarket aisle is a dated solution. Cutting aisles into thirds, for instance, can encourage a circular shopping pattern around those three islands, which is more conducive to sales. Even putting “parking” areas, or visual elements that break the aisles down into thirds, can help provide logic and respite. Shelving materials can also playa role, with packaged baked goods doing better when shelves have the look and feel of wood vs. metal.
“Environment affects behavior,” Kelley said. As a company, “we brought together business, science and design, which believe it or not were groups that were far apart in how they viewed the world. We had to create a new language of ‘perceptual design’ that was about how people viewed the world.”
How to Tap into Beverage Boosts
After fuel, beverages are the second-most purchased item at c-stores by dollar sales and are a powerful catalyst for even greater sales if managed well. “It’s an opportunity to convert the casual user,” said Tim Powell, director of research and consulting for Chicago-based Technomic Inc., during “Keeping Beverage Sales Hot.” Beverages encourage add-on sales and can attract new consumers. C-stores also rate higher than quick-serve restaurants on quality and variety, according to Technomic consumer surveys.
There are a few keys to strengthening beverage sales: execute consistently, increase variety, focus on freshness and home in on a store’s core demographics, Powell said. In hot dispensed, coffee dominates with 79% of sales, although it has been growing at a slower rate as of late, with a projected growth rate of 2.5% from 2012 to 2015. “Consistent coffee is key,” said Powell, citing QuickChek Corp. as “one of the best” in executing its program consistently well.
Hot chocolate has more of a “snacking position,” Powell said; while it supplies only 3% of sales, it has the highest projected growth rate, up 3.0%. For cold dispensed, CSDs supply 77% of sales, though they have continued to lose share since 2005, according to Technomic. Energy drinks and new functional beverages have been siphoning off sales. Iced tea, with 10% of sales, has seen growth across all segments; juice, at 7% of sales, is another key player. But for all of these beverages, quality is paramount.
One best practice—home in on a store’s core consumer—can be illustrated by looking at a key c-store demographic: Hispanics. One-half of Hispanics surveyed by Technomic said they visit a c-store once a week, and 25% visit two to three times per week. Retailers must keep their needs and preferences in mind for beverages. Hispanics tend to be price-sensitive but also factor in health and wellness, according to Technomic research. The heaviest c-store beverage consumer skews young, male and Hispanic, with a high school diploma, and tends to earn less than $25,000 per year. “Focus on these customers first,” said Powell. “It’s easier to build check averages here.”
Global Look at Foodservice Trends
Each food trend begins as a seed; depending on how it is nourished, it grows in different ways, with consumer behavior at the root. “We used to think the development of food trends was linear,” said Eric Stangarone, creative director of The Culinary Edge, San Francisco, to attendees of a session on global foodservice trends. That is, we assumed trends started at fine dining and filtered down to c-stores and QSRs. And while some trends probably follow this path, most take a “spoked-wheel” track, wherein the globalmarket reacts to itself. For example
Flattening of flavor: Taste profiles with North American origins—barbecue, hamburgers, Cajun, Mexican foods—are being picked up far from their source and translated. In China, premium burgers are picking up pace, while Mexican and barbecue concepts have taken root in London.
Dining going casual: Trends that once appeared to run downhill now happen in reverse. Take as an example fish and chips served on plastic tableware at a fine dining restaurant or a machine that bakes and dispenses baguettes in Paris. Stangarone also highlighted the most trend-worthy countries:
Japan, which combines technology and innovation—see: laser-cut, designer sushi, or frozen draft beer.
Brazil, where creativity and conscious consumerism are expressed through offerings such as edible packaging, and a cafe that offers customers a free salad if they arrive on a bike.
United States, where “we’re pushing out, creating and bring in trends,” said Stangarone. He cited “non-subtractive” health as a trend, which finds ways to be healthy without losing anything—for example, using nutrient-dense superfoods such as kale and blueberries.
Before adopting a trend, retailers must ask: Is this core to my brand? What guest behavior does it fulfill? And who has navigated this trend well and how? “Everyone wants to be Chipotle,” said Stangarone.“Yes, it’s brilliant, but it’s not the right thing for every single person out there.”
Going Knife to Knife
Pair a group of non-commercial chefs and traditional c-store operators together for a culinary competition, and what do you get? A banh mi mock taco, a Tuscan stew with panzanella salad, a grilled chicken cob sandwich with ranch remoulade, and a deconstructed chicken salad served with sautéed root vegetables—all packaged to go for convenient consumption. Four teams competed in the inaugural FARE Culinary Competition. They were challenged with creating and cooking a dish that not only looked and tasted great, but also would fit well on a foodservice-at-retail menu.
The winning dish: the Asian banh mi “maco” from Andrew Franco, executive chef for Nice N Easy GroceryShoppes, Canastota, N.Y., and Laurence Shiner, executive chef for Western Illinois University, Macomb, Ill.
Participants were given 75 minutes to prepare, package and serve an original, innovative on-the-go-style meal item. They were judged on a 10-point scale in four categories, each weighted equally: taste, creativity/innovation, presentation/appearance and portability/convenience. The dishes could be considered grab-and-go or made-to-order and either travel well for later consumption or be easily eaten quickly or on the go.
To create their dishes, teams had to use at least one product from each of the sponsor companies, including chicken from Pierce Chicken, breads from Amorist’s Baking Co., salad dressings from Kraft Foods Inc., to-go packages from Sabert Corp. and condiments from French’s Foodservice. Contestants also had a pantry of staple items to work from. Ingredients were revealed one week prior to the competition, so teammates could begin the brainstorming process.
The winning teammates received personalized FARE2013 chef coats and lodging at FARE 2014, which will be held June 16-18 at the Gaylord Texan outside of Dallas/Fort Worth.
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