Highlights from the third annual FARE (Foodservice at Retail Exchange).
Did you make it to the After-Dark Lounge? What new products did you try at the Food Pavilion? Did you meet anyone new? Questions such as these swirled through conversations at the third annual FARE, the only cross-channel conference dedicated to retail foodservice. For three days in late June, more than 500 retailers and suppliers gathered at the Hotel InterContinental O’Hare to hear knockout speakers, attend more than a dozen breakout sessions and hang out at the After-Dark Lounge for fun and networking. Read on for highlights of the conference.
Find a Way to Create the ‘Wow’
Never underestimate the importance of the “wow” factor in attracting repeat business, according to Christopher Koetke, dean of the school of culinary arts at Chicago’s Kendall College. “Whoever your guest is, as they walk out, do they look at each other and say, ‘Wow’? If your guest doesn’t leave with a ‘wow,’ you do not have them as a repeat guest. The ‘wow’ could come from a variety of areas—great food, clean location or customer service. But get it somehow.” Koetke also addressed the state of the foodservice industry, saying he’s seeing “hopeful signs” for the rest of this year. “The reality is, the industry is growing,” he said. Koetke outlined several trends that foodservice operators should think about:
- Upscale/downscale—How can operators give customers something for less money that still feels like getting more?
- Ethnic influences and specialties— Koetke said operators need to focus more on ethnic cuisine. Start with a broad term such as Africa but focus on regions. Look for cuisine from regions of Mexico, Morocco, Brazil and Southeast Asia.
- Kids’ offerings—Data suggests that kids mimic parents, so offering kids only chicken fingers and burgers is a missed opportunity. If operators can get the kids, they can get the parents. He also suggested printing pictures of the menu items so kids can point to what they’d like.
- Breakfast and snacking—Offering breakfast all day is becoming more popular, as are snack items. Koetke recommends looking to fast food to see what works. The reality is that three traditional meals are going away, he said; operators can’t afford to be limited to those three. Koetke also discussed the importance of local purchasing, healthy options and sustainable practices. “Getting rid of Styrofoam is one of the easiest changes and will be the change most noticed,” he said.
“Seventy-five percent of consumers say they are trying to eat more healthy foods. So the question is, how do we put taste and nutrition together successfully?” —Lindsey Ramsey
FRESH NOT EASY
Retailers offer ways to promote, communicate c-store ‘freshness’
Freshness: It’s a very simple concept that’s very difficult to execute, especially for convenience retailers. It was one of the most mentioned words during all the sessions at this year’s FARE. And it turned into the crucial theme that the panelists of the “Mining for Gold in the C-store Channel” session sought to solve. Behind that one-word mission lies a checklist of actions: calculating waste, communicating your message, ensuring food safety, inducing trial and, in the end, becoming a foodservice destination.
Waste continues to be a thorn in the side of c-store foodservice, because a percentage of waste is the price you pay to convey freshness through abundant merchandising. “It’s something we talk about every day,” said panelist Bob Derian, director of foodservice for Atlanta-based RaceTrac Petroleum. “If you want to reduce spoils by putting out less food, you’re going to reduce sales. Instead, you have to control spoils by keeping an eye on it.”
One way to ease waste for RaceTrac was to reduce the number of foodservice products that were delivered frozen. Derian then replaced those products with fresh-food SKUs, which require quicker turnover. Not only did the adjustment increase food turnover, but it also better aided limited-time offers.
For Michael Sherlock, director of foodservice for Wawa, communicating those freshness cues is a constant exercise. While the Wawa, Pa.-based retailer has a strong foodservice reputation in its existing markets, it nonetheless struggles to reach such acceptance when it moves into new regions. The company does that, Sherlock said, by getting the customer in the store with traditional cstore items such as fountain beverages, and then driving the foodservice message once they enter the store.
Another pain point, and one the panelists agreed the industry should work on, is food safety. “[It’s like driving] 55 miles per hour in a school zone, and sooner or later you’re going to get caught,” said Derian. Even programs with little to no food prep need to have strict standards and protocol in place, he said.
Power Mart’s deli/foodservice manager, Danielle Limbers, urged attendees to always ensure equipment is functioning in compliance with food-safety regulations. That includes proper temperatures on her three Chicago-area stores’ numerous types of hot and cold display cases.
At Wawa, store-level food safety training includes computer-based training, as well as requirements for vendors and distributors.
As competition continues to heat up between c-stores and QSRs, creating a point of differentiation is crucial. Limbers has found success highlighting regional Chicago foods such as Italian beef and pizza. She also suggested retailers sample at the right times to induce trial. “As soon as our pumps are full, we go out with trays of food,” she said.
“For us, it was about research— learning who your customer is and what drives them,” said Sherlock. He asks vendors to supply him with key data, and the company conducts focus groups and intercepts.
Yet in the struggle to succeed with freshness, all three panelists agreed retailers must not lose sight of what they are: convenience retailers. Sherlock explained how Wawa was trying to compete with QSRs on bundling and combo meals. While a QSR has the advantage of delivering all the items of a combo meal—sandwich, drink, side—in one place in the store, the cstore’s point of differentiation is the hundreds of drink options and the countless sides. So instead of worrying about making it a one-stop interaction, the chain created synergies across the store through signage.
“It’s all about convenience,” Derian said. “You cannot lose that.”
How to Fulfill International Dining Expectations
Global customers aren’t very different from those stateside except for one detail—their most valued expectation in dining is pleasure. So said Valérie Lobry, managing director of the agriculture and food division for Comexposium, a Paris-based firm that hosts global food-industry shows SIAL. “Though consumers’ needs are the same everywhere, they are expressed differently abroad,” Lobry said. “There is no food globalization. Concepts must be adapted to local habits and cultures.” Lobry presented five expectations that global consumers have for retail dining:
- Pleasure: As Lobry said, pleasure is the most important expectations for international consumers as they look for high-end ingredients balanced with reasonable price. Locations that do this well include sandwich/salad concepts Miyou, Ouest Express and Paul, all in France.
- Play: Some concepts employ interactive features such as touch screens and cell-phone scans.
- Health and Physical: Concepts that fulfill these expectations focus on healthy, natural and fresh food, along with sustainable practices. They also highlight foods that improve memory, digestion, allergy concerns, etc. One example is Exki, a Belgium concept that features all-natural fresh food.
- Convenience: Although an obvious expectation for U.S. operators, it is something that concerns international consumers as well. Lobry said they want to feel at home while experiencing value for the money.
- Ethics: Somewhat tied to the health and physical expectation, ethics is more concerned with products that are Fair Trade, sustainable and natural. Lobry recommended Paris, Brussels, London and Shanghai for inspiration on how foodservice overseas is evolving. —Lindsey Ramsey
Tech Buzz: Mobile Marketing
Mobile marketing is emerging as a dominant tool as cell phones or similar mobile devices replace computers as a primary way people access the Internet, according to Rodney Mason, a tech futurist and CMO of Moosylvania, and Josh Karpf, senior manager of digital media communications, PepsiCo, Purchase, N.Y. Here are some growing trends:
- Technologies based on global positioning systems (GPS) that allow users to let friends know where they are, and at the same time grants a “badge” or credit for visiting the location. It allows players to earn titles such as mayor of the location for getting the most badges. One of the better-known services handling this medium is called Foursquare.
- Bluetooth. The technology used for wireless phone use can also allow short-range communication between a retailer and any customer who grants permission. It makes on-site promotional messaging a convenient possibility.
- Snap tagging. With a simple sticker applied to a product on the shelf, a customer can take a photo with his or her cell phone and access coupons, additional information or video.
- Phone apps. Downloadable applications allow customers to access menus, store locations and even credits for visits, similar to the GPS-based technologies.
Social-Media Best Practices
When Kraft got involved in social media, the company’s legal team “got nervous,” according to Barb Pritikin, senior promotions manager and for Northfield, Ill.-based Kraft Foods Inc. As social media has stepped to the forefront, she cautions, “You don’t control your brand—your consumers do.”
Still, benefits of social media can include engaging in a continuous conversation, learning from consumers by listening, fostering consumer advocacy and earning stronger brand equity.
Among the best practices that Kraft has since outlined:
- Define objectives and have a sound strategy prior to engaging. Pritikin suggests developing a social-media style guide to define your brand voice and having a social-media content calendar.
- Move beyond a checklist approach, and use integrated marketing.
- Build a social strategy based on where and how patrons engage.
- Be transparent and authentic when engaging.
- Engage cross-functional teams.
THE GOLD STANDARD
Fare award recipients discuss best practices that brought them to the top
Balancing the “wow” factor with value is a main concern for most foodservice operators, and the winners of Fare magazine’s first Leaders in Retail Foodservice awards showed that they’ve learned to walk this tightrope.
The winners were introduced during the session, “Gold Standard: Insights from the Best in Channel,” moderated by Fare executive editor Abbie Westra. They are Byron Hanson, director of delis and food service for Lunds/Byerly’s; Jerry Weiner, vice president of food service for Rutter’s Farm Stores; Steve Hammel, dining services program manager for the Navy Region Southwest; and Ken Toong, executive director of dining and retail services at the University of Massachusetts Amherst.
Getting customers to try new options is half the battle, according to Weiner. He said he sends employees out to the gas pumps with samples to try and entice them inside.
“I think sampling is the most effective way to way to build new business,” Weiner said. “The most important thing to remember is to sample when the item is at its peak of freshness.”
Weiner also recommended sampling different day-parts. “If the customer is coming in for breakfast, give them a sample of a lunch item to encourage them to come back for a different day-part,” he said.
All the panelists agreed that it is vital to negotiate sampling product into vendor deals. Hanson said he prefers to hire someone special to man the sampling tables because that interaction is vital to the sale. Ensuring that employees sample the product is also important because they can often be the best salespeople.
Solving the value equation was also a big concern for the panel. How do you price items so they are perceived as high quality yet are still considered a good value? Hammel says he increases profit margins by upselling and offering combo meals. “We offer a $5.99 lunch buffet,” he said. “We can offer that buffet as an advertisement for our other more expensive buffets. So it’s not just about that day’s offering.”
Toong says when he first came to college dining, students missed about 45% of their meals. To increase value, he implemented continuous operating hours so students could eat when they wanted. They also started allowing parents to eat for free, which encourage the kids to get more involved in the dining program. Consistency is also key to keeping up the value perception; to that end, Toong brings in student secret shoppers to look for areas to improve.
Hanson agreed that consistency is a big factor in creating value. “You always hear that it’s better to be mediocre consistently than have periods of greatness,” he said. “When you set the level high, you’ve set yourself up to fail. Set it at a level you can maintain.” Hanson offers a lot of seasonal items for a limited time to encourage customers to buy now or miss the chance.
The panelists also touched on spoilage and offered some insights into how to manage it. Because of strict military restrictions, Hammel said he has to keep his spoilage to less than 1%.
Weiner said while he is nowhere near less than 1% for spoilage, he manages it by building it in to any new product. “I put it in on the expense line so it was easier to track,” Weiner said. “We can’t just not put product out there or it would bring sales down. Developing a reasonable spoilage line that is built into expenses works for us.”