open pantrys golden egg

Open Pantry Food Marts used its coffee program as the centerpiece for its new bistro-like stores. It’s been so successful that now the company is set to open its own standalone coffee shops.

Bubba has always been Open Pantry Food Marts of Wisconsin’s bread andbutter. But if it was going to attract female customers ages 18 to 50, it realizedit needed to create something that would appeal specifically to them—anexperience that would bring them back time and time again. What Open Pantrycame up with might not be Bubba’s convenience store per se, but it is a warmand inviting alternative a woman can appreciate—and Bubba is followingright behind her.

As Open Pantry began to spin its franchisee-based organization into a corporate-ownedmodel, the company wanted to highlight the difference between the old organizationand a new corporate initiative. About 18 months ago, the company took a hardlook at its offer versus its competitors’ and saw too many similarities.

“We felt the need to differentiate ourselves from our competitors; we all sell the same items and offer the same products,” says Jim Fiene, senior vice president of Open Pantry (Pleasant Prairie, WI). “We wanted customers to remember our stores—not for the fact they got something cheaper with us, but for the experience they had within the store.”

While establishing a plan of attack, the company turned its focus away from its convenience store competitors and started looking at who was actually stealing its customers. No, not the big boxes, but the coffeehouses. And changing its perspective of the “enemy” gave Open Pantry a new handle on its customer.

“We wanted to go after a customer base that our industry had handed over tothe coffee shops,” says Fiene. “About 15 years ago, our industry was the onlyplace someone could get a cup of coffee on the run, but over the years thousandsof coffee shops have taken our consumers away.”

But the lesson wasn’t lost on Fiene. “[Coffeehouses] have taught us that coffee wasn’t just a morning offering, but a full-day opportunity, and that it was the ambiance of the coffeehouse that had customers willing to pay almost $3 for a cup of coffee,” he says. “That [price] might be high, but it’s an expectation of quality that coffeehouses are delivering on. We realized if we could give our customers that same experience, they would feel good—or at least better—about the expense.”

Down by Willow Creek
In order to reclaim the coffeehouse customer as well as putting a focuson female consumers, Open Pantry decided to brand its coffee program and makeit the focal point of its stores. The company teamed with its coffee supplier,Consumers Choice Coffee out of Louisville, KY, to create the Willow Creek Coffeebrand—a name that was carefully selected for its relaxing connotation.

In Fiene’s eyes, the difference between buying coffee in a convenience store and coffee shop is the ambiance and the rich experience inside of the establishment. To that end, Fiene and Open Pantry President Robert Buhler began to examine the coffeehouse channel. They drank a lot of coffee and visited shops around the country to pick out the differences from one to the next, from brand to brand. Their research resulted in the development of a coffee area with slate flooring, stonework and rich woods. The company decided to use a bright color scheme inside the store that would contrast the warm woods. It didn’t want just any countertops in this section of the store; the new design called for full cabinetry from floor to ceiling. Open Pantry opted for subdued lighting in the coffee area and plush, wine-red leather couches where customers could feel comfortable spending some time and shopping at their leisure.

It was a bold plan, but one that couldn’tbe squeezed into the typical 100 sq. ft. most retailers dedicate to their coffee offer. So Open Pantry decided to dedicate 600 sq. ft. of its 3,200 sq. ft. stores solely to the coffee offer. Designating so much of the store might seem to put a crunch on a retailer with a finite sales floor, but Open Pantry knew committing the space was key to providing enough room for the experience. To that end, the chain took on the difficult task of cutting some slow sellers, which has contributed to spreading the coffeehouse feel throughout the entire location.

“We wanted to maintain all the SKUs any one of our other stores had,” says Fiene, “but we needed to weed out some of the items that were not conducive to the new bistro/martini bar look of our stores.”

The company looked at its product mix, and even though some of the eliminated items offered high margins, they didn’t move more than five times a month.

“In order for a consumer to remember you and choose to come back, we had todesignate money, effort and space to something they can say they’ve never seenbefore,” he says. “Retailers often have a hard time imagining their stores withoutthe traditional beer and soda displays, but that didn’t go with the image wewere tr ying to promote. We watch what sells and see that there are few goldeneggs out there. We simply took what we already knew was a golden egg—coffee—and devoted the space to it.”

Open Pantry’s commitment to the brand also led to changes in its approach to roadside signage. From the street, customers can see that “Willow Creek Coffee” gets equal billing with “Open Pantry” on the road sign, which Fiene says has been very successful in drawing in customers seeking a quality cup of coffee.

And what coffeehouse experience would be complete without the ability to check e-mail? Open Pantry has made this convenience open to any customer, not just those with laptops.

“Our coffee shops are also Internet accessible,” he says. “Customers can usetheir laptops, but we have our own computers set up for the customers wherethey can surf the Net or check their e-mail. There’s no cost to us because wehave a wide area network already set up at our stores; it’s just a matter ofmaintaining the computer, which is very inexpensive. It’s just something elsethat differentiates us from our competition because it’s a convenience thatno one else is offering.”

Just three of Open Pantry’s 30 Food Marts have the full Willow Creek coffeehousedesign, with another ground-up on the way in September that will expand thecoffee offer to 900 sq. ft. The company is also planning a 6,000 sq. ft. platformfor a future store that will dedicate 1,200 sq. ft. to the coffee concept. Thesestores, Fiene delights, will take the coffeehouse feeling even further withan element not typically found in most c-stores: large, inviting fireplaces.

But perhaps the most dramatic change to Open Pantry’s coffee business is yet to come. Next month the chain is set to open its first standalone coffee shop complete with full-blown cappuccino makers. Fiene feels it will add integrity to the brand and the company’s reputation for delivering quality coffee.

The company has invested about $25,000 to $30,000 in its remodeled sites, but the payoff has been remarkable.

“The ground up site, which has the Willow Creek sign as large as the Open Pantrysign, opened with 20% of its total sales as coffee sales,” he says. “In thisindustry, that’s almost eight times the normal coffee sales. And as the sitehas been open for seven months, coffee has settled to about 10% to 15% of sales.At a 70% margin, 10% to 15% of non-gas sales is a huge success. Existing storeswith the Willow Creek Coffee program have seen anywhere from a 50% to 70% increasein coffee sales.”

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