CHICAGO -- In 2018, foodservice category managers are grappling with a good deal of uncertainty. Between a looming trade war, a jumble of regulations, an ever-tightening labor market and that sneaking suspicion staff aren’t actually washing their hands, convenience-store retailers gathering for CSP’s C-Store Foodservice Forum in Chicago have a lot keeping them up at night.
However, retailers can rest easy in one regard: The state of the convenience-store foodservice industry is strong, said Aimee Harvey, managing editor for data firm Technomic, at the meeting. Last year, proprietary c-store foodservice raked in $21.3 billion, more than half of which could be attributed to beverage sales, according to Technomic. To top it off, sales growth is on pace with the rest of the foodservice industry, with 3.8% sales growth in 2018, compared to 3.7% in total foodservice, she said.
Yet, the category’s evolution is far from over. Here's a look at some of the curveballs attendees are dealing with and how they are staying nimble in a challenging market ...
1. A good worker is hard to find
More retailers than ever before are stocking their stores with dedicated foodservice workers. Only 17% of stores had designated foodservice employees in 2008. In 2018, that number has jumped to 70%.
“Recruiting specifically for foodservice is no longer about setting yourself apart,” said Donna Hood Crecca, associate principal for Technomic. “It’s the norm; it’s where we are right now.”
With a declining workforce participation rate, however, finding those foodservice workers is getting tougher. Both baby boomers and prime-age men (between 25 and 54 years old) are dropping out of the workforce in growing numbers, Crecca said. While boomers are retiring, about half of the prime-age men not participating in the workforce are on daily painkillers, she said, citing a 2016 study from economist Alan B. Krueger.
In addition, Generation Z is a smaller group than millennials, creating a greater scarcity of labor. “We used to be able to say, ‘I’ll hire some high school kids and train them and let’s go,’ ” she said. “It’s harder to get those high school kids.”
2. Missed connections
C-stores might also be shopping in the wrong pool when it comes to labor. Operators use a lot of in-store signage, internal referrals and internal job postings to find people, but job seekers are looking almost exclusively online, Crecca said. “Recruit where the job seekers are looking,” she said. “We need to understand that the foodservice candidate is different, we need to go different places to hire them. It’s a different animal, and if we don’t address it as such, we’re not going to be as successful as we want to be.”
As more c-stores launch made-to-order foodservice options, deciding whether to hire for skills or for the “hospitality gene” is a crucial first step. If hiring for hospitality, operators need to take a look at their training program for foodservice workers. Training hours and budget for foodservice staff still lags behind store associates, with foodservice managers getting 13 less ongoing training hours per year compared to store managers, she said.
To change the narrative of what it is like to work in c-store foodservice, retailers need to spread the word. “Tell the story of how happy your employees are,” she said. “Tell it on Craigslist when you go to post your job listing. If you’re on the sidelines on this issue, you have to get off the sideline. You have to go to HR and say that the staffing issue can impact your profitability in foodservice.”
3. All is fair in love and tight labor markets
The good candidates out there already have jobs but that doesn't mean they're unhirable, said Erica Ventura, operations manager for Top Star Inc. based in Emmaus, Pa. Ventura recently held a hiring and recruitment meeting with the chain’s managers and role-played how to recruit store associates from different managers. “What I found doing this meeting was that a lot of our managers were extremely uncomfortable doing that,” she said. The managers learned how to approach talented associates from competing companies and share how they could benefit from growing with a smaller business. “If we stand there waiting for them to come knocking on our door, we’re going to be waiting for a very long time,” she said.
4. Young people might be into the roller grill
The core roller-grill consumer isn’t fading, and he’s not just a Gen X or boomer, said Sandra Deas, senior marketing director, platform innovation and foodservice, for Ruiz Foods Inc., Dinuba, Calif. The generations with the highest percent purchasing roller-grill items were Gen Z and millennials, Deas said. “Indulgent is an opportunity,” she said. “The opportunity is to elevate the appearance of the grill.”
Breakfast is one opportunity to update roller-grill offerings. About 79% of c-store consumers are interested in purchasing sausage off the roller grill for breakfast, said Sarah Babb, director of channel marketing and innovation for Johnsonville LLC, Sheboygan Falls, Wis. The company recently tested several breakfast flavors, including maple-chipotle sausage served in a toasted waffle bun topped with scrambled eggs for $2.49, which had a purchase intent of about 81%.
5. Teaching Sanitation
Trish Transue, foodservice manager for Top Star Inc., constantly reminds her crew to wash their hands, and occasionally appeals to how crew members might have a more thorough understanding of how colds get contracted rather than foodborne illness. “When I try to discuss handwashing in stores, I sometimes take the food aspect out of it, and I just say, ‘It’s flu season. Will you wash your hands?’ ”
6. Bubbas can be big spenders
To try to get customers to purchase different combinations of items, Top Star created some coupons. One of the promotions gives guests $5 off when they purchase three cold-sub combinations of $25 or more. “We weren’t sure if people were going to spend more than $25 in our store, but we really found that they did,” Ventura said. Top Star sees about a 4% return on its coupons.