While Starbucks was a rude awakening for the convenience industry, competition formorning traffic has further increased as quick service restaurants and fast feeders, like McDonald’s, have begun offering better cups of coffee for 69 cents, regardless of size.
In an effort to secure those morning dollars, convenience retailers have added bakery programs, which they hope will in turnboost their coffee sales. The challenge is to find a high-quality program that complements their upgraded, upscale coffee programs,but doesn’t break their backs with labor.
Labor? It’s Covered
Nice N Easy Grocery Shoppes Inc. (Canastota, N.Y.) is no foodservice novice. The company has culled its expansive family ofproprietary brands under the Easy Street Eatery umbrella, whichremains a popular foodservice destination in its upstate New Yorkmarket. But Nice N Easy was fine-tuned as a baking operationwhen it began acquiring convection ovens for its sub program.
“It’s an expensive piece of equipment to have for just one purpose, so we started baking muffins along with our fresh baked subrolls,” said Jack Cushman, executive vice president of foodservice for the 84-store chain.
Nice N Easy sometimes uses local bakeries for some of its products and complements its fresh baked items with thaw-and-serveitems from its direct-store-distributor (DSD), such as the halfmoon cookies so popular in New York. The company bakes freshmuffins, cookies and it’s most recently added scones to its repertoire. For these items it uses a scoop-and-bake pre-mixed batter.
“If you want your coffee program to grow, then you have tohave a good bakery program, and vice versa. It’s a synergybetween those two areas,” said Cushman. “Scones really appeal toour market—good flavor, good treat and it’s not too sugary sweet.We buy the mix, scoop it into a muffin pan and bake away.”
Since expanding its fresh baked items, Nice N Easy has seena tremendous lift in overall sales, which includes its coffee program. To that end, the company has the luxury of assigning a staffmember specifically to baking, but even with that it is workingsmarter, not harder.
“We don’t have a dedicated person, we have a dedicated staff,”Cushman said. “Our coffee host is a real multi-tasker. He does thebulk of our baking while servicing the coffee bar and talking to customers. It comes down to economies ofscale—volume cures a multitude of sins.
“Nobody can satisfy everything and trying to do everything will be the end of you,”he added. “Like with our bagel program,we don’t have the space or staff to boil ourown bagels. So we have a par-baked program. We receive them frozen, heat them at350 degrees for 12 minutes and its enough to caramelize the surface. Some call it ‘fakeand bake,’ but it’s what works for us. Thaw-and-serve and scoop-and-bake are methodsthat let us satisfy our customers withoutbreaking our backs.”
Sweet Salvation Delivered
TravelCenters of America (TA) certainlyhas the scale with 163 stores, but the company doesn’t have the time or space tohandle its own foodservice. It’s teamedwith several branded programs that varyfrom site to site, available to service customers 24/7.
But after recently upgrading its coffeeoffer—branding it TA Cafe Express andreplete with exotic blends like its Europeanand TA Extreme (a highly caffeinated blend)—it wanted a bakery program to go with it while keeping labor to a minimum. TOA found its answer at the 2006 National Association of Convenience Stores (NACS) Show in Prairie City Bakery.
“We reviewed Prairie City’s products and found them to be high-quality,” said Sharon Foster, convenience category manager for the Westlake, Ohio chain. “We invited them in to further discover what they have and how it will fit, and we’re very impressed with what we’ve seen so far.”
As of January, Travel Centers added Prairie City’s “Four-Pack” program to its stores. Prairie City packages its flash-frozen product in four-packs (four to a box, six to a master case), delivers them to stores where retailers can thaw as many as they need in groups of four in just 45 minutes, and have a fresh product to offer customers. It was designed specifically with c-stores in mind that have limited time and labor to spare for baking.
“The problem with fresh delivered bakery program is that the product is actually baked the day before. And if a rush comes in and cleans out the case, then that retailer is left with nothing until the next delivery,” said Bill Skeens, president of Prairie City Bakery. “Customers want variety in a bakery program, even if they buy the same thing every time, they want to know they have options. With our flash-frozen four-packs, retailers can thaw a variety of product in amounts where they can control their waste. It’s the right size pack operationally for a c-store. They can thaw product as needed, and it’s actually at its freshest once it’s thawed, making it the best possible quality for customers.”
TA is currently offering three flavors of cinnamon rolls, four flavors of Danishes and four muffin flavors.
“We can put out a four-pack in a case and have variety of flavor without large cases of product thawed and potentially wasted,” said Foster. “Labor and execution is always a factor. The more convenient and easy an item is to work with, the better execution and fresher offer we can give our customers. And this program seems to provide exactly what we need.”
While some TA stores have full bakery cases in place from previous bakery DSD deliveries, the bulk of the stores are utilizing small acrylic display cases provided by PCB, right on the to-go counter near the coffee offer, and according to Foster, it’s doing the trick.
Tip From The Top
“Customers are voting with their dollars everyday,” said Skeens. “The key for c-stores is to meet the needs of their customers. If you don’t have the right price for a quality product, they’ll take their business elsewhere.”
And one thing customers will splurge on is a great cup of coffee and a sweet treat to go with it. According to Skeens, 20% of coffee purchases in c-stores include a pastry, but as coffee programs are being upgraded, retailers can’t simply offer a Twinkie to go with it.
Not only has Prairie City put a great deal of time and research into developing its products, but it’s also keen to the varying regional and demographic preferences. It shares this knowledge with its customers to help develop the best mix for individual locations. But even though the company’s research might suggest that one or two products will sell great in a particular store, Skanes cautions retailers not to limit their selection.
“Retailers often ask me if they can just carry the two best-selling products we carry,” he said. “If you want to be a serious competitor, we recommend selling at least six or seven items. Sure, we’ll help retailers create the best mix for their stores, but they won’t convince anyone they’re in the bakery business with just two items.”
Another tip that Skeens offers is to make the decision to buy the product easy for the customer. Signage is key to making noise with a bakery and coffee program. If done right, it will have a nice lift on retailers’ bottom lines.
“Customers are typically in a store for about 90 seconds and in that time there’s a lot to take in,” said Skeens. “Bundle your coffee and bakery programs together—even if you’re not discounting the