Don’t confuse operational innovation with operational improvement, said Stephanie Hurt (pictured second from left), head of food innovation and development at Tulsa, Oklahoma-based QuikTrip.
“Innovation is the process through which we turn strategy into new products or services,” Hurt said at a session on menu innovation at the 2023 NACS Show in Atlanta. “Saying, ‘Oh, if I just change one thing I’m innovating.’ That’s not innovation. I’m talking about a whole new process, a new way of doing something. New methods, new processes and services.”
Breakthroughs are not just operational changes but deep changes, Hurt said at the session, moderated by Jessica Williams (far left), founder and CEO of Louisville, Kentucky-based consultancy Food Forward Thinking. “It’s a real powerful weapon if you can harness this in an economy overdosing on hype,” she said. “It offers a meaningful and sustainable way to get ahead.”
In a slide titled “Deep Change” that Hurt presented, it read, “Mere operational improvement is not enough to win the game. Excellence in execution can win a close game, but it can’t break the game wide open.”
One example Hurt gave was Taco Bell years ago revamping its food preparation process, cutting costs by concentrating on assembly in restaurants rather than creating all the ingredients, some of which they outsourced. “They got it to 34 seconds from the time you start making it to giving it to the customer,” she said. “This changed their game, lowered cost and increased customer satisfaction,” she said.
A second example was Walmart’s innovation in the area of docking products at stores, which boosted efficiency so much that some products never had to be stored and went directly onto store shelves. “This was huge for them,” she said. “They went from $44 million in revenue in 1972 to $44 billion 20 years later.”
“Identify and defy a constraining assumption,” another slide that Hurt presented read. “At its heart, every operational innovation defies an assumption about how work should be done.”
Hurt said that operational innovation is a “little homeless” on company organization charts. “You have to be the catalyst as an innovator,” she said. “If you’re not the leader, find someone with enough imagination and charisma to drive change, because it’ll change your product development game.”
Chad White
Chad White (pictured second from right), foodservice category manager at York, Pennsylvania-based Rutter’s, said c-stores should aim to drive profits while limiting complexity.
“We have a very complex menu, but in that we strive to make it easy for our team members,” he said.
“Streamline the menu and optimize inventory,” White said. In doing this, focus on offering a concise selection of high-quality, popular items. Use effective inventory management practices to reduce waste and control costs. This reduces operational complexity and ensures faster service.
This strategy includes trying to elevate the bottom 20% of the menu items, either by modifying them to boost their appeal or removing them. “We had ribs that were a good product but tough on the crew because it was complex to prep,” White said. “We chose to remove it, and employees were very happy.”
C-stores also should reuse ingredients, he said. “If you can cross-utilize property, you reduce waste and increase profit. We added chicken and deli meats to a salad, which elevated the item and allowed us to gain more margin out of it.”
Tony Sparks
When reviewing his most important points in menu development, Tony Sparks (pictured right) named “product” number one.
Sparks, who runs Lubbock, Texas-based Curby’s with the title “head of customer wow,” said it’s crucial to have a product on one’s menu that differentiates the convenience-store chain from competitors. “It doesn’t have to be the entire menu,” he said. “It can be one line, but create new items that guests will love.”
Quality was another crucial point, along with speed of service and having a development team.
In addition, Sparks said to augment data with research.
“If data was the only factor, we’d all be successful,” he said, noting that data is all from the past, “so you have to have some forward thinking and take risks. Don’t be too dependent on data. Get out of the office and visit food trucks. Take four weeks and visit restaurants.”
Sparks also recommended hiring QSR people. He said he has former Starbucks and Dutch Bros employees running his dispensed beverages and former Taco Bell and Chick-fil-A people in charge of foodservice.
Finally, Sparks spoke on the profit-margin power of dispensed beverages, of which Curby’s offers a multitude, including 40 dispensed iced tea servers. “We’re making tea all day long and can’t keep up with production,” he said. “Ninety percent of our cold beverage business is cold coffee.”
Sparks said they sell anywhere from 800 to 1,200 of these drinks daily at an average of $5.50 each—at a 65% profit.
Jessica Williams
In closing, Williams said “Curiosity forces us to ask important questions.”
She said retailers should formalize their menu process via documentation, let curiosity improve design and allow convenience to drive menu development.
“Asking questions can lead to breakthroughs in process and products,” Williams said. “Take every back-of-house tour offered to you. You’ll always learn something.”