Foodservice

A Winning Strategy for Convenience Store Foodservice

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Q&A with Herb Ring, Director, National Foodservice Sales, The Hershey Company

Many convenience stores gained business during COVID-19 when many restaurants shut down temporarily or closed their doors for good. What role did foodservice at c-stores play in that trend?

It actually started long before COVID-19. As an example, 17 years ago, Hershey participated in a c-store bakery program for the first time. Other companies were doing the same and pushed to provide made-to-order products. Eventually, we started seeing c-stores including ice cream and shakes, which was a big opportunity for topping and mix-ins for Hershey.

In my opinion, it’s true that the growing desire for food items at c-stores spiked during the pandemic as people wanted to make fewer stops and have less interaction with the public. Customers would fill their tanks and shop in the c-store to avoid going to a second food location and because many companies upped their game with better food offerings.

Do you think these habits will persist?

Yes. The mindset has really changed in the marketplace. Some newer stores are being built to include seating.There has always been a value to the food offered at c-stores. The increase in offerings has greatly improved, and stores do a great job of bundling their meals. You can get a soda and a hot dog for a great price. At Hershey, we take the same approach. We’re bundling Reese’s products with soda and have Kit Kat bars near the coffee machine. When you put all those pieces together—convenience, quality and value—that’s a strong play for convenience stores.

What's the difference between a retail location with foodservice versus one that doesn't?

Stores without Foodservice are, in my opinion, missing an opportunity for margin. But they must have the space and the ability to invest in the equipment. Simply adding a hot dog grill is a good first step.

Now we’re seeing owners bring in restaurant experts and strategizing with their Foodservice distributors to build out the space for freezers, ice cream machines, coffee machines, etc. That floor space for Foodservice should guarantee more dollars per square foot. It’s a longer-term investment, but the return is greater.

For stores that already offer foodservice, look at the competition. Are you able to offer the same quality meal as another location down the street? Do you have a craveable offering that differentiates you from the competition? We always try to help stores examine their strengths and strategize options for growth.

What about the role confection and baked goods play in building baskets?

Consumer insights show that basket rings are larger when they contain center of the plate, beverage, confection and treats. To me, it’s all about offering solutions that provide margin. We’re constantly looking at merchandising pairings too, like soda and a Reese’s product or a coffee and a muffin. Ideally, we want customers to bundle an entrée, beverage and confection or a dessert item.

What is the future of foodservice at c-stores?

Advertising is huge—signage at the gasoline pumps or on the pole barriers in parking spaces. We’re also starting to see more open kitchens so customers can see their food being prepared.

Are third-party delivery services having an impact on c-stores?

Convenience stores compete when they offer something craveable, and bundle other retail products too. There are third parties that have already started providing these services.

 

This post is sponsored by The Hershey Company

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