Strategy, Breakfast, Culture, Waste Among Foodservice Forum Subjects

ROSEMONT, Ill. — What is a good foodservice strategy? What has been the percent increase in breakfast value meal offers at fast-food restaurants over the last year? What kind of off-premise solutions should convenience stores be considering to boost service?

An array of subjects, from an array of experts, came across the counter at the 2022 C-Store Foodservice Forum, held June 13-15 in Rosemont, Ill. Jessica Williams (pictured), founder and CEO of Louisville, Ky.-based consultancy Food Forward Thinking, moderated the event.

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The combination of the pandemic and the economy is leading to a “shaky,” nervous feeling among people, said Donna Hood Crecca, principal at CSP sister research firm Technomic, Chicago.

Crecca showed a slide revealing that in the past six months, 32% of respondents said they believe that their financial situation has gotten worse. “That’s the highest incidence I have seen since joining Technomic 10 years ago,” Crecca said. “People are feeling the pressure.”

On a positive note, however, 38% think their financial situation will improve.

Regarding c-store consumers feeling this financial pinch, Crecca said people aren’t necessarily trading out of foodservice but are decreasing their frequency or trading down, looking for promotions and shifting from fast food to c-stores because it’s seen as less expensive.

“Those in fast food have all raised their prices over last two years—they had to because of increased costs like delivery,” Crecca said. “But then they took some opportunistic price increases because they saw people were willing to pay more.”

In other observations and Technomic data:

• Four in 10 c-store consumers continue to work from home. “This means you still have a lot of customers not on regular schedule, and we’ve seen the primary days for hybrid workers in office on Tuesdays and Thursdays,” she said. “Knowing those days can help you in foodservice day-of week-planning.”
• Everyone, including fast-food restaurants and coffee cafes, is going after breakfast. There has been a 109% increase in breakfast value-meal offers at fast-food restaurants over the last year, the top-growing element. A piece of good news embedded in the downturn is that younger consumers, those 18 to 34, are more likely to get breakfast weekly and monthly, so “it’s important to strategize around them in rebuilding your breakfast business,” she said.
• Most innovation in c-stores is happening in breakfast, she added, noting a c-store offering a sandwich on a brioche bun, a style of bun customers probably doesn’t have at home, which can help lure them.
• The top way to boost customer c-store visits is to lower prices, according to 44% of respondents in a 2022 Technomic first-quarter survey. This number was 35% in 2021. Offering higher-quality items is second, at 28%, and fuel discounts is third at 25%.
• 47% say they prioritize beverages over food when deciding which c-stores to visit for lunch. “Beverages can be a real differentiator for you,” she said.

Creating a foodservice culture is one of eight absolutes in the presentation “Getting Serious About Foodservice” from Howland Blackiston, principal at King-Casey. Westport, Conn., which works to improve the business results of foodservice industries. There is a cultural resistance to change in the c-store industry, Blackiston said, with retailers still thinking like c-stores rather than restaurants.

In creating a foodservice culture, there must be a commitment at all levels starting at the top, Blackiston said. “Create a foodservice mission and vision statement,” he said. “Identify and prioritize foodservice objectives in the annual business plan. Attend conferences like this to learn and implement ideas. Attend leading restaurant conferences, like the National Restaurant Association Show, to learn what QSR and fast-casual leaders are doing.”

From there, he said:

• Create a menu strategy to optimize menu communications, Blackiston said. To do so, create business objectives such as selling more food attached to beverages, or increasing the ticket, he said. “And then you rank these, and then for each objective, you develop your strategies to sell more food attached to beverages. How are you going to do that? What’s the perfect pairing? Then you look at your categories and identify them and prioritize them. What category will best help toward those business objectives, and then look at the products—which product is most relevant to your business? They can’t all be equal.” This will affect advertising, etc., he said.
• Have a proprietary/signature menu category, he said, noting TXB, Wawa, Parker’s, and Buc-ee’s for their BBQ.
• Brand your foodservice business. “Give it an identity,” he said, noting something as simple as putting “kitchen” at the end, such as in Parker’s Kitchen. “Then develop a vision for the brand as a foodservice, and that’s what American Natural did with its The Eatery concept,” he said. “They wanted to be the Panera Bread of c-stores. They had a very clear vision of what they wanted to be. … And that guides you: ‘We’re going to make high-quality custom made-to-order sandwiches and fresh soups—an elevated sandwich concept.’”
• Offer strong off-premise solutions, including digital ordering and delivery, pickup/curbside service and then drive-thru. But, Blackiston said, “Discourage selling everything at the drive-thru at a c-store. It’ll slow everything down.”
• Design a distinctive foodservice environment. “Visually show you’re all about food,” he said, showing a slide of the Whole Foods Market Ramen Bar.
• Innovate through technology, he said, noting the burger-flipping Flippy machine at White Castle, which does manual work employees usually do.
• Embrace continuous improvement. At Starbucks, zone-specific innovation and improvement teams each continuously focus on identifying and solving improvement opportunities, he said.

Liza Salaria, senior principal consultant at Impact 21, Newtowne Square, Pa., dove into the nitty-gritty of improving foodservice operations at c-stores in “Innovation Within a Chassis.” When she was senior director of merchandising at Giant Eagle’s c-store’s division, GetGo, she had to go work in a store for a year to see everything in person.

Salaria focused a few of the following eight areas of waste: extra processing, inventory, nonutilization of talent, defects, transportation, overproduction, motion and waiting.

Regarding extra processing, she said it’s important to be aware of having to manipulate items and nonvalue-added activities. “Sometimes an activity like dicing has to be done, but it doesn’t often add to the quality of the product. Streamline this.” She talked about the extra processing time it took for a c-store employee to remove paper dividers and cut 2-pound packages of cheese into triangles with a knife. It was taking 30 minutes daily. The employee started tearing the slices instead, saving lots of time and saving thousands of dollars per year in labor chainwide.

Elsewhere, they were filling condiment bottles. “It’s disgusting and was taking an hour a day to fill them all.” The solution was using a Volpack for condiment dispensing.

Other highlights from Salaria:

• “Unknown demand plus batch production equals loss in sales and increased waste,” she said.
• In a made-to-order scenario on a food production line, use down time to perform fixed activities.
• Continual replenishment in fresh grab-and-go is the secret to optimizing inventory management. “In fresh food, there can be too much or not enough,” she said. “Inventory management on items with minimal shelf life is the challenge.”
• Regarding nonutilization of talent, she told the story of college students washing dishes at a c-store. “These remedial tasks were the best example of nonutilization of talent,” she said. To remedy this, at the suggestion of one of the students, they started cooking beans and rice in the pans in which they were served, eliminating several pots that now didn’t have to be cleaned. Praising the student, she said, “People closest to the work have most of the answers,” she said. “We significantly reduced dishwashing time and could reinvest that time into value-added activities.”
• Salaria also noted how Chipotle operates on just two production lines. “If you try to innovate within the same rails, you’ll reduce complexity.” One Chipotle line is the make line for tacos, burritos and bowls. The other is the cooking line: the stovetop and flat grill. “That’s how they keep complexity down and innovation high.”
• If bringing in new pieces of equipment to drive innovation, “be very thoughtful or else you’re driving extra complexity and labor, such as training and cleaning,” she said.

“What can we do consistently in our store determines how we build,” said Greg Ekman (right), Louisville, Ky.-based Thorntons, director of fresh food. “It’s easy to add a topping on a burrito. Let’s be really good at giving you the best experience daily; the way to do that is stay in our lanes. For example, a fresh-baked biscuit is a puck on a pan, and so is a cookie,” and so it’s easy to produce both of these well, he said.

Ekman spoke at a retailer panel at the forum moderated by Mitch Morrison (left) of Winsight, parent company of CSP.

When asked about whether to jump on a trend while considering available equipment, Ekman said it’s important to “find that sweet spot, but the moment you follow a trend in a way you can’t deliver on it, you’ll get too cute and fail.” As an example, he discussed a bean-and-cheese burrito Thorntons considered implementing. The problem was each single-portion of the product required being heated differently than any other foodservice item—and then be assembled. “It was a complex item that was going to sell for a price lower than any other foodservice item,” he said. Thorntons decided not to sell the product.

Alex Iscaro (center), category manager hot foods (pizza, snacks), Atlanta-based RaceTrac, shared a story about a pulled pork sandwich they developed with Sweet Baby Ray’s sauce. “We had to cook a whole bag of the product, but we weren’t used to scooping a certain amount onto a sandwich—we were used to one burger patty and slice of cheese—so it was a challenge for us, and there was also the waste factor: How many sandwiches can we create in given time?” RaceTrac wasn’t selling enough sandwiches. “We probably should have dove into the operational procedure more before launching,” she said.

When asked about their marketing strategy, Iscaro said they have had two big cobrandings lately, a BBQ chicken pizza, and a pulled pork sandwich, both with Sweet Baby Ray’s, and asked them for money to help pay for billboards.

Ekman said Thorntons is not currently using billboards and instead focusing on c-store messaging. “We all sell 20-ounce Cokes and Red Bulls,” he said. “We’ve shifted away from leading with price to leading with a quality message, such as ‘Here’s a great new product, try it,’” he said, mentioning a few fast-food restaurants that do LTOs well with great messaging via signs on their building windows. “They might not sell many of the products on the window signs, but you bring awareness that there’s food inside.”

Ekman said Thorntons’ social media team is very good at finding where the c-store is mentioned and resharing such posts. “A lot of times user-generated content is better,” he said. “They’re telling our story for us and usually it’s a lot more exciting and organic.”

A small change on a menu can make a huge impact, said Tracy Hall, restaurant operations consultant, US Foods, Menomonee Falls, Wis., in “Mastering Menu Optimization.”

“Focus on what sells,” she said, then showed a slide with the “80-20 Rule.” “We found via surveys that the top 20% of items you sell are typically driving 80% of your revenue,” she said. “So, the other 80% are the bottom feeders and might be hurting your business.”

She gave an example of taking a key, popular menu item and raising it from $5 to $6. Selling 250 weekly brought in an additional $13,000 extra per year, she said.

Other observations from Hall:

• Know the importance of gross profit dollars. “Know your contribution to margin for every plate or to-go package,” she said, noting that go-to packaging is now a major cost consideration due to the pandemic’s effect in elevating carryout.
• Analyze the data regarding what you’re selling, and consider portion control.
• Know the “dogs,” the items not popular that aren’t making money. One survey she did for a company found that just one item in a pasta dish—roasted vine-ripened tomatoes—was turning off customers. “They removed it, relaunched, and it sold,” she said.
• Regarding the proper prioritization of labor, ask if a step is taking too much time and making a big contribution. “If it isn’t, remove it,” she said. “Why spend 40 hours per week slicing and dicing a big, 50-pound bag of onions when you can buy it presliced?” Hall asked. “It makes sense (to do it yourself) if you’re not burning through it; that leads to waste.”
• Track waste with a log and perform active inventories, physically counting items and figuring out what’s missing and why.
• Pay attention and informed regarding market conditions. “Stay ahead of commodity prices,” she said.
• Drive profit with menu design by drawing attention to profitable items. Use callout boxes (on higher-profit margin items), distinctive fonts, graphic elements and bold colors. Also, “Put the price at the end of a menu item description so, hopefully, the customer already is sold on the item by the time they see the price,” she said.
• Conduct profitable pricing strategies, she said. “Update pricing on key menu items,” she said. “Focus on high-volume items from the past three months and those menu items most heavily impacted by inflation.”
• If considering adding global cuisine, know the ingredients. “Don’t have too many ingredients to avoid waste,” she said.
• When marketing new items: research it, differentiate it (perhaps by renaming the product), track results (did it sell?) and promote it. “Have fun,” she said.