When retailer Clay Lambert met foodservice specialist John Miller, the two sensed the beginning of a beautiful partnership.
It was four years ago and Lambert, an audacious person with audacious goals, was growing his Metro Petro store in Minneapolis [CSP—March ’13, p.62]. He was seeking a bold foodservice offering when he encountered Miller, who was working with sandwich specialist Deli Express, a c-store food supplier based in Eden Prairie, Minn.
“For independents like me, foodservice is difficult because of the cost of entry,” Lambert says. “But Deli Express is not shy in risking a lot with me. They provide all equipment free of charge to test out.”
Yet foodservice is more than just expensive—it’s difficult. “If you don’t do it right,” Lambert says, “you’re going to damage your brand and your business.”
This is not a typical branding relationship or space rental story. This is about a retailer and vendor just miles apart who are experimenting, innovating and pioneering, using Lambert’s new-build store Metro Petro as a willing test lab for new products and programs.
For the past four years, the two have turned the c-store into a stomping ground for foodservice innovation. Deli Express has been soaking up experience and expertise since it was established in 1955. When Lambert was hatching his store, Deli Express helped him think through the categories he wanted to focus on, talked about his food safety concerns and suggested ways to deliver a foodservice program sensitive to the limited labor resources of the independent operator.
Today, Miller, a senior foodservice sales consultant who has been with Deli Express for 41 years, is on Clay’s speed dial.
Having Miller’s decades of experience a phone call away is a valuable asset for Lambert, but he’s not the only party to benefit.
Deli Express can test things in Clay’s store before rolling them out toothier retailers. “With Clay, we have a unique opportunity to do a lot,” Millersays. Deli Express saw in Lambert an emerging opportunity to provide foodservice for independents. The company developed a program called Quick Time Deli from scratch and filled a third of Metro Petro with signage and displays of ready-to-eat breakfast sandwiches, burritos, roller grills, pizza and, of course, specialty sandwiches, rolling out the program as the store opened its doors for the first time.“I know that John also sells his sandwiches to CVS, and that gives me some residual sales,” Lambert says. “Customers see the labels and recognize it, so they’re more comfortable eating them.”Quick Time Deli has its staple items, but it’s also a foodservice experiment. Here, Lambert and Miller try new things. Some succeed, some fail, but they all result in valuable lessons.
Scoring Big
Lambert knew from the outset that if anything had to be spot on, it was coffee.“I’m located in a college town and all these students are coffee snobs,” he says of the University of Minnesota kids who frequent his store. “In my community, the coffee has to be right.”
Deli Express found Timothy Tolluch, owner of European Roasterie Inc. in LeCenter, Minn., and struck gold—literally.Tolluck developed an exclusive lineof blends for Deli Express that includes a black gold roast, a black gold decafroast, a Colombian signature roast and a dark roast. Lambert tagged along for the tasting session to offer his input, and Deli Express made the final selections. The line is called 500 Mile, named for its ability to power customers to drive 500 miles on just one cup. When Lambert opened his store, the new coffee line was ready to go, “and our sales went through the roof,” Lambert says. Miller’s introduction of a line of upscale Market Sandwiches in July 2012 also met with success. The sandwiches, which retail from $3.09 to $4.39, include creations such as smoked turkey and cheese on wheat bread, and chicken salad on buttery croissants. “We wanted to offer something with a fresh look,” Miller says. “I called Clay up and he said to bring the sandwiches on over.”
Miller conducted a taste test with Lambert’s team and got the go-ahead before coming up with a cooler display positioned close to the front counter. He stocked a door with sandwiches, but the next day, he got an email from Lambert.
“He told me that the cooler door pulled the wrong way, so I ordered a new cooler,” Miller says. “We installed it when it came a week and a half later, and the rest has been history.” Lambert knew his customers well enough to recognize the traffic flow that would work to grab the product, and Miller knew Lambert’s understanding of his customers was worth listening to.
The sandwiches were visible to the customers and looked fresh, and the results were immediate. Out of the gate, the Market Fresh line commanded a 25% to 30% lift in sandwich sales. “We end up cleaning out that cooler twice a day,” Lambert says. “People in line see how good the Market Sandwiches look, grab one, and deposit whatever they were going to eat in its place.”
Miller appreciates Lambert’s willingness to experiment. Sometimes even the seemingly far-fetched products go quickly. When Miller called to ask Lambert if he’d try out Fruitier, a frozen-fruit smoothie in a disposable package, Lambert thought the price point was high, but he remained open-minded. The result? “It sold like crazy,” Lambert says. “We think we know everything, but we don’t. It’s really humbling.”
Experience as Teacher
If the successes in foodservice experimentation at Metro Petro are humbling, the failures are most certainly self-effacing. Lambert was convinced that the Minute Maid juice dispenser Deli Express brought in was a no-brainer, but he couldn’t get customers to gravitate to it.
“The technology of the machine was such that it wouldn’t have spoilage,” he says.“The compartments were good sizes to make the concentrate, it was shelf-stable, it was a taste-test-proven product, it was name brand, it had a long shelf-life and the price point was amazing. Everything about it was right. But we couldn’t give it away.”
The juice dispenser is a textbook example of the most common foodservice problem, he says: “It’s hardly ever the equipment; it’s misjudging what customers want.” Most of the equipment is well tested, top of the line and engineered for c-stores specifically, “which means simple and bulletproof,” Lambert says.
“Customer perception and adaptation is the real trial and error.”
A high-end cappuccino machine called the La Cimbali, distributed through Minneapolis-based Espresso Services Inc., had a similar fate. The Italian-made equipment, worth $15,000, ran flawlessly on a simple, easy-to-execute, one-touch system. But customers were simply not buying the $5 espressos.
“We trained employees on it, we advertised, we gave it a fair shake,” Miller says. The equipment was designed with the c-store channel in mind, but: “It wasn’t the machine. It was the consumer adaptation.”
Sometimes the problem isn’t the product, the equipment or consumer adaptation. Sometimes it’s the execution. When Deli Express introduced fresh-baked cookies from Best Maid Cookie Co., River Falls, Wis., they were prepared in the back. But without the aroma of fresh baked cookies filling the store, there wasn’t much incentive for customers to buy them when the prepackaged Best Maid cookies next to them were larger and cheaper. After a few weeks, Lambert removed the freshbaked ones from the store.
With decades of experience behind the company, Deli Express usually makes its calls based on what Lambert calls “a gut check.” “A lot of it is really intuition,” Lambert says. “They get their feelings about things from their years of experience.”
Often, though, that intuition and observation is informed by data collected through “customer intercepts,” or taste tests and surveys conducted with customers in the store by Deli Express marketing reps and/or by third-party researchers.
When Deli Express introduced a newline of paninis at the NACS Show, the sandwiches generated a lot of excitement. But when they were rolled into stores such as Metro Petro, the sales numbers failed to reach forecasts.
The problem? “We used a brown wrapper with a window on it, but customers wouldn’t buy unless they saw more of the Panini,” Miller says. Lambert observed that the packaging also prevented the product from warming up evenly.
The Panini problem is a lesson in knowing that what looks on the drawing board doesn’t always play out on the assembly line. As Miller says, “We ‘redoing things right. We’re doing things wrong. We’re learning.”
The Innovation Goes On
With Deli Express headquarters so close to Metro Petro, it’s easy for Miller to give Lambert lots of personal attention. Miller believes his job is done best by taking care of Lambert. “If I do that, the rest falls into place,” he says. “It really is a collaboration.”
Lambert feels the love: “It would be easy for Deli Express to say, ‘Clay, you haven’t been brought up in this industry, so why do you even think you can beat the table here?’ But they don’t. I told them, ‘Maybe I have a fresh perspective and maybe you should listen.’ And they did. I need people who are on board with me right away. I don’t have time to convince them.”
Looking forward, the two hope to ramp up Metro Petro’s coffee sales. They’re drafting new designs for the hot-beverage displays that tell the story of the unique coffee blends.“We underestimated the success of the program,” Lambert says. “We need to dedicate more square footage to it.”Lambert hopes to double the 5 to 6 linear feet the coffee display takes up today
ambert and Miller are also looking to try more affordable versions of Turbo-Chef convection ovens, and they’re planning to supply Metro Petro with more fresh foods and salads. Deli Express has invested in new refrigerated trucks to make that possible. In short, they’re full of new ideas. Failure doesn’t scare them off and, because of that, success is surely on the horizon.
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