LAS VEGAS — There are three phases to creating a great foodservice program, according to Joseph Chiovera, foodservice retail/manufacturing executive at Premium Brands Holdings. But only a handful of convenience-store chains have reached the final phase: Nurturing Greatness.
Most are in the first two phases: Foundation Before Differentiation and Building a Culture of Simplicity, which Chiovera broke down at the 2022 NACS Show in Las Vegas.
A successful foodservice program is about “getting your customer into your door—more than once—coming back, expecting it and making it a destination, more than anything else,” he said. “And the way you do that is you start from the bottom up with a good foundation.”
It’s all about the non-sexy things, Chiovera said, like setting the culture, labor, training and functional intent. Stores should segment categories of foodservice into the following four categories:
- Dominate: Best practice/market leader; focus on offer, equipment, delivery.
- Compete: Market leader or follower; focus on sales, offer improvement.
- Participate: Strategically “playing nicely,” stay the course with the competition.
- Innovation: Dominate or compete potential only, disciplined focus approach, be true to chain’s culture and brand.
The key is focusing on the core items and what the chain does well, while being disciplined with innovation, he said.
Moving into creating a culture of simplicity, chains should continue with menu rationalization and product refinement and optimization; work on customer and internal culture; and focus on gross product dollars, Chiovera said.
With menu rationalization, a convenience store will have to make tough decisions. Look at legacy programs and decide how much of it sticks and how much of it goes away, he said. Programs must also refine products, using pantry ingredients to still stay creative and innovative.
Keeping the process simple for employees is key, too, he said, as a simple program for them means it will be simple for customers as well.
Finally, focus on the dollars, not margins, he said. If a chain has cultivated a great chicken tender program over the years, for example, it’s not worth jeopardizing it by cutting down on size or upping price just to save margins in the short-term.
“Watching margin leads to bad decision making in food—it is not retail. Look at your gross profit dollars,” Chiovera said.