LAVAL, Quebec —Like many Americans during the holiday season, today’s foodservice market is bloated. The tight competition is written in restaurant chains’ sales results, according to Brian Hannasch, president and CEO of Alimentation Couche-Tard Inc.
Despite the challenging climate, Hannasch’s outlook is optimistic. “We feel good—there’s some macro trends that really create opportunities for the convenience channel,” he said on a recent earnings call. Trends toward less formal dining, snacking and an affinity for convenience stores among younger consumers are all bending in the company’s favor, he said. “We think the opportunity is there, and we’re seeing success in certain parts of our network and certainly some of our competitors are generating success.”
Here’s how the Laval, Quebec-based c-store chain is capitalizing on the momentum of those trends with several foodservice initiatives throughout 2019.
1. Grinding out beverage launches
Since its Circle K global rebranding effort and Holiday Cos. acquisition, the company has been unifying its global coffee programs under the Simply Great Coffee brand. The retailer this year tested bean-to-cup machines and will install the equipment in more than 1,500 stores over the next year. “We’re excited about the pilots where we’ve shown strong double-digit cup growth, reduced labor, reduced spoilage,” Hannasch said.
Over the summer, Circle K launched its “Your Cup. Your Rules” Polar Pop promotion. The brand’s first multinational campaign asked fans to share photos of how they cool down with the chain’s soda. He said the windfalls from their marketing efforts carried into second-quarter sales, with improvements across most of its geographies.
2. Rolling out additions to the grill
Since 2016, Circle K has innovated its roller-grill program with global and hyperlocal flavors, such as the Real Chicago, Real Southern Style, Real Cubano and Real Salty Dogs. The c-store chain has also added chef-inspired toppings such as Gouda-flavored crispy onions, macaroni and cheese and caramelized onions. Hannasch dubbed the rollouts a success and plans to add the chef-inspired dogs to 200 more stores by the end of the year. “And to support this effort, we’re building a seasonal program that captures on-trend flavor innovations that continue to make this category exciting and new for our customers,” he said.
3. Freshening up the bakery
Over the past year and a half, Couche-Tard has completed its fresh bakery rollout in the United States and Canada. The company also has a bakery in every European unit. In Texas, Couche-Tard plans to add kolaches and doughnuts in about 250 locations by the end of the year. The kolaches are a staple of CST Brands Inc., which the retail giant acquired in June 2017. Hannasch reported promising sales increases in the stores that now stock the items.
4. Capitalizing on Holiday synergies
The company also plans to launch six foodservice pilots based on learnings from Holiday over the next year or so. Hannasch did not provide details.
He said Holiday’s commissary has spare capacity, so it will be used as part of its pilot programs. “As we looked at our capabilities, our store configurations, the effects of labor [and] wage pressure, we feel that production offsite of the majority of our products—and limiting that to assembly and reheat—is a solid model for us, and Holiday has demonstrated that,” he said.