FARE's High Five

Fifth annual FARE a show of milestones.

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The 2012 Foodservice at Retail Exchange (FARE) was a show of milestones. It marked the fifth year for this one-of-a-kind conference, and more than 500 attendees showed up in Schaumburg, Ill., for two days of education and networking.

Over the past five years, FARE has established a reputation for the unique cross-section of foodservice and retail channels represented, its broad education components and the familial atmosphere—the latter best illustrated in the nightly FARE After-Dark Lounge. Yet things are never quite the same at FARE as in years past. This year saw the inaugural Puzzle Solvers mass roundtable session; and Lightning Talks, in which industry leaders were challenged to speak on a specific topic in 15 minutes or less.

These new additions, combined with the annual Food Pavilion of the latest food, beverage and equipment products, made for a busy show where friendships were formed and education gained. Stay tuned to www.foodserviceatretail.com for details on FARE 2013, to be held June 18-20 at the Renaissance Schaumburg.

Food for Change

FARE award recipients say dark times drive change

Dark clouds often force light. Whether it’s increased competition on cigarette and gasoline sales or the challenging business of selling pharmaceuticals, the winners of the Leaders in Retail Foodservice Award at FARE spoke about what led to their innovative foodservice programs.

John MacDougall, CEO and owner of Nice N Easy Grocery Shoppes, Canastota,N.Y., spoke of the increasing competition from Indian reservations on cigarettes and gasoline that forced his chain of 37 company-operated stores to investigate foodservice in the 1990s.

Today, MacDougall’s chain has a foodservice division with executive leadership and three chefs who visit stores to train employees and boost visibility of the program. The company has developed $6.99 home meal replacements, with early success in chicken and pasta recipes. He talked of developing 25 different home meal replacements and having eliminated about four or five as slow movers.

“Like everyone else, we stumbled into [foodservice],” MacDougall told the general-session audience of about 500 attendees. “We had the coffee machine and roller grill, but it didn’t bring the customer base we were looking for.”

Having started its c-store history in 1980, the chain’s foodservice began more than a decade later with a franchisee’s idea and a breakfast program that still exists today. Early on, the company began developing foodservice processes and procedures that many c-stores are just now starting to grapple with.

The company’s foodservice mantra is straightforward enough: Hire, train, purchase, benchmark and innovate like a restaurant. That tactic has delivered double-digit foodservice sales growth every year for nearly a decade.

The evolution involved developing a team of foodservice managers and assistant managers at each store, as well as field people. The company built relationships with foodservice suppliers and instituted protocol for costing, ordering and labor. It developed a new store model with dedicated foodservice space. Then the chain began hiring foodservice professionals, including Jack Cushman, senior vice president of foodservice.

MacDougall spoke of a new, larger format store the company built last year in response to a community in the Syracuse, N.Y., area. He said the people there had no grocery store within 5 miles and wanted a place to go for fresh produce, red meat and other basics. The location has been a resounding success, he said.

Another award winner, Michael DeFazio, senior director of store concepts for Walgreens/Duane Reade, Deerfield, Ill., spoke of the growing challenges facing drug stores and the shrinking margins tied to pharmaceuticals. The strategy became one of increasing the profitability of the front of the store, developing “flagship” locations in urban centers such as New York, Chicago and Boston.

The new Walgreens locations feature central gondolas where sushi chefs prepare meals, and other employees man juice bars and coffee stations. The Chicago site has an expansive liquor area with 700 different types of wines. DeFazio said the flagship acts as a laboratory for what will eventually roll out to each of the chain’s locations, depending on area demographics and local economic factors.

The drug chain has needed time to embrace change, DeFazio said, with early successes winning over more and more people.

Dean Wright, director of dining services for BrighamYoung University, Provo, Utah, described an internal change coming from a need to adapt to today’s student—part of a generation far more mobile, technologically enabled and used to eating meals at retail locations. The university has several restaurants as well as five c-stores

“People are comfortable having food in a retail setting,” he said. “So why not go after that market?”

The fourth recipient of the was Terri Moreman, associated director of food and nutrition services for the U.S. Olympic Committee, Colorado Springs, Colo. Moreman, who was unable to attend the event, was honored for innovation in providing meals for athletes attending its sporting events.

Three Takes on Foodservice

From fresh to foodies, experts share big ideas to push boundaries

It’s amazing how much insight one can share about foodservice in 15 minutes. Three speakers at FARE were tasked with sharing a big idea in that short amount of time. The result included a tale of brand reinvention; research on an emerging, powerful consumer segment; and advice for future growth.

For Lon Sutherland, senior director of global food and beverage for Marriott International Inc., Bethesda, Md., and his team, the big idea was to get guests to consider The Courtyard hotel brand as a place for food. Customers shared that they often went on expeditions to find the nearest Starbucks while staying at The Courtyard; the team’s goal was to give them an alternative inside the hotel, but not a free breakfast buffet.

The company ran focus groups to determine guests’ key needs and constructed a test lobby to gauge customer reaction to different layouts. Influenced by the “third place” feel of Starbucks, the new Bistro was designed as “a coffee house meets an open kitchen,” with ready-to-go food for breakfast, lunch and after hours.

The foodservice and lobby area was designed around the laptop user, including a communal table lined with outlets. On the menu, guests have choices of fresh and healthy breakfasts and lunches, and specialty and alcoholic beverages. Marriott also added calorie counts to the Bistro menu to help customers make healthy choices. “Anywhere we’ve made a decision that’s right for the customer, it’s always right for us,” said Sutherland.

Thanks to the success of The Bistro, The Courtyard’s foodservice profits have grown by triple digits. More than 530 Bistros have been opened, with the plan to install one in 92% of Courtyard properties by 2013.

Foodies were the big idea for Sharon Olson, executive director of the Culinary Visions Panel, a Chicago-based research firm that provides insights into new products, menu development and emerging trends. The group surveyed 2,000 foodservice consumers over the past year to determine what makes a foodie tick compared to the mainstream customer. Some of the findings: While the mainstream consumer may be drawn to sweet and salty comfort foods, the foodie consumer is drawn to ethnic foods and  those with bitter, sour and umami characteristics. They value quality, brand names and healthy items on the menu, whereas mainstream eaters tend to place a greater emphasis on price

At c-stores, the foodies judge items by quality, past experience and a combination of price and convenience. More of these consumers rate healthfulness as an important attribute to see on a menu but, like the mainstream eater, want it on their own terms, reserving the option to indulge. What is a way to offer both mainstream and foodie customers an attractive item? Take dark chocolate as an option, said Olson, citing it offers not only the sweet for mainstream eaters but also a bitter edge for those with foodie tastes. Bill Reilly, senior vice president of marketing for GPM Investments’ Fas Martchain, Richmond, Va., drew on his experience at The Walt Disneyworld Co., Marriott Hotels, MAPCO Express and Sheetz Inc. to share big ideas on the future of retail foodservice. The main thrust: Retailers need to develop a strong foodservice brand that “screams” fresh in its approach, presentation and design. He urged attendees to first conduct a SWOT analysis on their current offer, and use all five senses in designing anew brand and menu, harnessing technology wherever possible to maximize the development and delivery.

Of course, getting fresh offers to the consumer has been a struggle for this industry, Reilly acknowledged. And many retailers are moving from a culture of controlling expenses to indulging the senses, which can be a tough mental barrier. But, as Reilly sees it, this is a transition that must happen for the channel to progress, and it can’t be done half-heartedly.

“At some point, you have to go all in,” said Reilly. “Don’t do it timidly—be aggressive with your approach to foodservice.”

Translating Trends in Foodservice

Retailers define day-part shifts, new competitive sets and food for all

While foodservice at retail encompasses a broad swath of operators, it’s easy to find agreement on some of the biggest trends shaping the category today. At a panel that matched recent research with retailer insights, three operators provided perspectives on four foodservice evolutions

For example, take the “day-part tango” that has consumers snacking more often and eating items originating during different day-parts at different times of the day. According to data from The NPDGroup, there was a 13% increase in meals that included breakfast items in c-stores, and a 19% jump in snack foods’ share of prepared-food sales at grocery stores. Also consider that many retailers now offer all-day breakfast.

“Our volume is so large, we struggle with normal day-parts,” said Angelo Mojica, director of food and nutrition services for UNC Hospitals, Chapel Hill, N.C. He has seen many customers arrive for lunch at 11 a.m. or 1:30 p.m., trying to beat the noon rush. The hospital has also begun offering “Black Hat Chef Meals” from 2 to 4 p.m., special menu items designed to shift customers to a different, less popular day-part.

At Los Angeles-based University of Southern California (USC), alerts on Twitter and Facebook draw students into the dining halls and campus restaurants for before- and after-lunch specials, said Kris Klinger, director of hospitality. US Coffers all-day breakfast at some venues—a practice also followed by Quick ChekCorp., Whitehouse Station, N.J. As director of foodservice Jennifer Vespole said, while the audience is small, “you may get someone looking for something less expensive,” such as a breakfast sandwich, in the afternoon.

Another area of sales crossover is competition. According to a survey by Packaged Facts, consumers bought prepared food items at both c-stores and supermarkets an average of 5.7 times each month. When c-store customers were asked where they would buy prepared food if they couldn’t get it in ac-store, 38% said supermarkets would-be the top choice. Conversely, only 8% of supermarket fans chose c-stores as their next-best option. Also consider the home fridge a competitor; with recessionary pressures, many consumers are brown bagging lunches.

Quick Chek has been fortunate in that its traffic c has remained stable throughout the recession. Vespole credits the value appeal of its proprietary foodservice program to its large base of labor-class and blue-collar customers. At the same time, high-quality ingredients draw mobile professionals.

Mojica said brown-bagging and operations run by foodservice provider Aramark are his food venues’ biggest competition. The hospital-run restaurants have had some success offering employees a 20% discount on food purchases, and with different specials to showcase variety. At USC, foodservice operators try to keep students engaged and eating on campus with interruption points: carts placed strategically throughout the campus, such as a “breakfast bike cart” that offers cereal, to stop busy students on their way to and from class.

The rise of foodie culture was another trend that all of the operators have in their sites. QuickChek offers sauces with high flavor profiles for its made-to-order sandwiches, and it has eschewed the roller grill for a gourmet, made to-order hot-dog program heated up in a TurboChef oven to attract customers with discriminating tastes.

Beyond the food, there’s no denying the effect of experiential elements on the ultimate quality of the foodservice experience.

“The facility speaks volumes,” said Vespole, citing that Quick Chekre launched its store brand five years ago to emphasize its fresh convenience offer. Included in this offer is the employee’s performance. “The buck stops with execution and how the store team delivers.”

Food Safety First

Consider the state of U.S. food-safety laws as a patchwork quilt. Different states have adopted different versions of the U.S. Food & Drug Administration’s(FDA) Food Code, which was most recently updated in 2009; meanwhile, local municipalities and counties may have their own additional regulations, which supersede the federal code. “We are not singing out of the same hymn book,” said Tara Paster, president of Paster Training, during a session on navigating the food-code landscape. What’s a foodservice retailer to-do? Paster offered the following pointers:

  • Attend the Conference for Food Protection (CFP), where recommendations are crafted through discussions between the government, industry, academia and consumer organizations on food-safety issues, for FDA’s consideration in developing policy. Visit the CFP’s Website (www.foodprotect.org) for up-to-date info on the issues addressed, how they were voted on, and a forecast of how the FDA may change the Food Code in 2013.
  • Follow the most stringent guidelines when you have a choice between a federal, state or local regulation.
  • If an inspector requests a site shutdown, consult with him or her over whether there is a temporary fix that will avoid closing the store. If a regulator insists you shut down and you disagree or are confused about why, fi le an appeal.
  • Ask suppliers how they are securing their own site and their food.

Tips From a Menu Tracker

Want to know what’s trending on menus across the country? Ask Mark DiDomenico, director of business development for menu-item tracking firm Datassential, Chicago. Typically ingredients, ethnicities, geographies and other defining elements of a menu item track over four different stages:

  • Inception. Cutting-edge restaurants start using the element. (Think of the Japanese citrus fruit yuzu.)
  • Adoption. It starts to appear at fast casual restaurants. (Think of the French dressing remoulade.)
  • Proliferation. Chain restaurants join in. (The Italian blue cheese gorgonzola.)
  • Ubiquity. (Think the chili pepper and Mexican restaurant chain chipotle.)

Re-Engineering a Foodservice Brand

Juan Martinez asked a pretty sizable question to start his FARE session “Foodservice and the Art of Industrial Engineering”: “What’s getting in the way of your employees in delivering on your brand promise?”

While answers vary widely, Martinez, principal and founder of ergonomics and industrial engineering consultancy Prodigality, had a succinct solution: “It’s about having the right labor in the right place at the right time.”

To that end, Profi tality maps the steps employees take on a standard foodservice order, for example, and suggests ways to streamline processes by redesigning a kitchen layout or relocating equipment

“If you were to do a time study on what your managers are spending time on, you’d be very surprised,” Martinez said. “Following a team member is pretty eye-opening experience.”

Martinez offered a seven-step checklist—Optimum Integration of the Operating Investment Parameters—for retailers to consider. On the list: process, procedures, platforms (equipment),place (facility), people (labor), product,(menu) and promotions.

“Ask yourself, ‘What have you done for your brand lately?’ What you’re doing today won’t work tomorrow,” Martinez said. “You have to have a continuous improvement mentality. … How do you disturb the market before it disturbs you?

Under the Influence

Speaking to the fundamental elements of “lasting influence,” consultant Ty Bennett of Leadership Inc. gave five ways people can cultivate a deeper, lasting influence over others:

  • Develop outward thinking—Move from a self-centered mindset to a selfless mindset, thinking of others first.
  • Invest in people—Knowing individuals and cultivating relationships is paramount.
  • Be interested, not interesting—Be “present” in conversations and learn to listen.
  • Practice the Platinum Rule—Similar to the Golden Rule, the Platinum Rule is about treating people how they would like to be treated, instead of treating them how you would want to be treated.
  • Seek to serve—Consider a life of contribution.


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