Balmar 'Krafts' New Foodservice Program

Prepackaged products with familiar brand names prove profitable for Denver chain

DENVER -- A recent test of a new foodservice initiative has Balmar Petroleum/First Hand Management LLC, optimistic about its future in the category. Working with Kraft Foods, the Denver-based retailer developed its Real Food Snack Center, an open-air cooler stocked with Kraft's various lines of prepackaged entrees and snacks.

[We] merchandised the whole area as a deli center, Dean Dirks, vice president of marketing for the company, told CSP Daily News. We really built customer confidence and got a lot of return business.

Unlike [image-nocss] previous wedge sandwich programs the company has tried in past, having the cooler stocked with brand names consumers knew was a huge advantage. No one would eat [our own prepackaged sandwiches] for food-safety reasons. The presentation was horrible, Dirks said. With a brand name like Kraft and the packaging, consumers feel comfortable.

With little additional marketing beyond signage at the cooler, the result was a 55% lift in sales in the test stores. Most traffic made its way to the cooler in the morning and at lunchtime, he said.

We saw a lot of blue-collar people picking up sandwiches in the morning and taking them to work with them, said Dirks. Of course, lunch was big, but we really built business with female customers because of the salads.

The display includes Kraft's Snack Saks, Fresh Creations salads, To Go snacks, Lunchables and Oscar Mayer Deli Creations, as well as heat-and-serve single-serve hotdogs, cheese cubes and sliced deli meats.

As part of the program, we merchandised single-serve cheeses, pudding and other Kraft refrigerated single-serve products, said Dirks. These are ancillary sales because a guy would pick up a sandwich on the way to work and buy a single-serve cheese stick. That same consumer would not buy an 8-ounce brick of cheese.

The initial test was limited to two of Balmar's14 stores in the Colorado market, but the concept will likely begin to spread to other stores in the chain soon. I really believe that this form of [prepackaged] foodservice is a viable alternative for retailers who shouldn't be in foodservice, Dirks said.

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