Foodservice: Branded or Do-It-Yourself?

Retailers weigh the pros and cons of proprietary foodservice

ATLANTA -- As convenience-store operators consider the advantages and challenges associated with launching a foodservice program, they grapple with the complex decision of either partnering with a branded quick-service restaurant (QSR) or developing their own proprietary food and beverage platform.

During an educational session at this year’s NACS Show titled “Branded Foodservice: Should You Partner or Do It Yourself?” industry veterans Leo Vercollone, president of VERC Enterprises Inc., Duxbury, Mass., and Mark Romano, vice president of Pilot Flying J, Knoxville, Tenn., addressed the complications of proprietary foodservice in comparison to collaboration with on-site QSR brands. The two explored a variety of avenues that c-store retailers can take when getting into the business of selling food.

For Vercollone, the path to success in foodservice became clear after New England-based VERC Enterprises partnered with Dunkin' Donuts to launch an in-store unit. The Dunkin’ kiosk was an immediate hit with coffee customers who thought of Dunkin’ as a must-have in the morning. Vercollone quickly saw the benefit in partnering with a QSR known for its signature coffee. “If you own the morning,” said Vercollone, “you can own the day.” Today, Verc’s privately held fuel-station c-stores house 22 Dunkin’ locations.

Romano echoed Vercollone’s sentiments on coffee programs -- and beverages in general. While the Sheetz and Wawas of the world are indeed executing on specialty coffee lines that put them on par with coffee cafes, uninitiated c-stores may do better when they team up with an established coffee brand. “Consider a beverage partnership,” said Romano. Teaming up with a QSR on coffee offers “significant gross profits and margins, with little to no waste.”

In its approach, Pilot Flying J focuses on a blend of both proprietary and branded foodservice. In addition to its own PF Marketplace program, featuring both ready-to-eat and grab-and-go fare, Pilot tailors the on-site QSRs it offers, including Subway and Moe’s Southwest Grill, among others, to regional preferences.

In order to develop a winning do-it-yourself foodservice program, Romano outlined several “core strengths” that convenience stores must first possess, including disciplined execution; food-safety expertise; technology initiatives; financial intensity; and an atmosphere that make it “a great place to work” in order to attract top-notch talent.

Also, proprietary foodservice requires capital – enough resources to implement a do-it-yourself venture. Here is where branded QSRs can offer the most benefit, along with the support and expertise necessary to succeed.

Romano wrapped up the session with key questions for c-store operators to ask themselves before deciding on brand partnership vs. going it alone:

• Which daypart should be targeted?
• Where should we build incremental traffic?
• Does the brand offer extensive support?
• Is the brand creative and innovative enough to align with consumers’ changing needs, particularly in terms of freshness and health?


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