Meeting the Growing Foodservice Demand

This is what happens: Dad breaks to one side of the store to choose a sandwich from the Hot Spot, which he complements with a cup of hot coffee and a bag of chips.  

Mom heads for the cappuccino dispenser, then works her way to a fresh salad kept cool in a temperature-controlled center-island display.  

The two kids, meanwhile, blitz the fountain drinks to mix their own concoction before assaulting the fresh, decadent desserts they find in the bakery case.  

Like a carefully trained team of combat consumers, this sample family unit is hunting for affordable foodservice options at convenience store chains like La Crosse, Wis.-based Kwik Trip Inc., where they can buy food that gives them the most bang for their battle-scarred buck.

“This is a trend I have noticed in the last few months in our stores,” said Paul Servais, foodservice zone leader for Kwik Trip. “How an entire family will walk into one of our stores and then fan out.”

It can take any variation. Mom to salad, dad to sandwiches, kids to candy. Maybe it’s just mom and the kids prowling for hot grab-and-go meals on the way home from basketball practice, or dad picking up a large pizza to take home to the family.

Any way you slice it, proprietary and co-branded foodservice in the convenience channel is appealing to consumers who want affordable, meal-sized solutions that can carry their coins a little further in a crippled economy.

“This whole process is great for our stores, and it shows me that what we are trying to accomplish with our food program is working,” Servais said of family shoppers turning to Kwik Trip’s fresh foods menu for meals. “Customers are recognizing the quality, value and variety we offer can satisfy any person’s craving and hunger, anytime. You can’t necessarily do this in a typical fast-feeder.”

The most important aspect of this, perhaps, is that Servais and others are seeing consumers turn to convenience store foodservice offerings as total meal solutions for lunch or dinner, rather than just fill-in segments to get them from daypart to daypart.

Rising Costs a Big Concern
A consumer study last month by Chicago-based market researcher Information Resources Inc. (IRI) found that shoppers are still “significantly concerned” about the impact the economy is having on their financial situation. And, as it relates to budgets, 84% of shoppers who make $35,000 or less said in the IRI study that rising food costs are affecting their financial condition—which means they’re still making tough choices and big changes in shopping habits.

The budget crunch has changed not only the way consumers approach the menu, but what they actually want to see on the menu. They’re bypassing beef products, for instance, and opting instead for less expensive proteins like chicken, according to a study last month by research firm Technomic, also of Chicago.

Technomic said changes in consumer behavior this year could usher in an entirely new structure to menus, whereby retailers offer more “Goldilocks” sizes—big, little and just-right—as well as “family-style entrees that can feed two or more.” This last bit of trending is prompting retailers like Kwik Trip to increase meal offerings with menu items that appease the budget triumvirate: value, variety and quality.

Likewise with foodservice managers at three other convenience chains in the Midwest, all of whom said they’re working on programs tailored specifically for consumers who want total meal solutions for dinner and lunch. All three said they aren’t ready to formally announce plans.

Some retailers have been in these trenches this past year.

Wawa, Pa.-based c-store chain Wawa, which operates 570 stores in five states, announced early last year it was turning the heat up on its dinner menu, offering a number of new items and combinations, such as three family-size menu items packaged for $9.99. Purchased individually, the items sell for $3.99.

“Over our history in the convenience store business, we certainly have a niche in the consumer’s mindset for breakfast and lunch,” Wawa CEO and President Howard Stoeckel said. “Dinners have always been underdeveloped.  

“Today we have a powerful lineup of products like we’ve never had before,” Stoeckel said. “We have a powerful lineup that should satisfy most any person’s need for dinner.”

Bigger Sizes, Better Value
While Wawa and Kwik Trip are operating their own proprietary foodservice programs, retailers like Love’s Travel Stops and Country Stores, which operates a host of co-branded programs, are also seeing more family sized purchases.

“Our co-branded offerings are looking at several concepts for home-meal replacements,” said Joe Cotton, director of restaurant services at Love’s. “We are starting to see developments for items that cater to that.”

Love’s partnership with Godfather’s Pizza, for example, has resulted in larger-sized pizzas rolling out at Love’s sites that feature the Godfather’s brand, while other specials include two pizzas, wings and sodas at a discounted price.

Jerry Weiner, vice president of foodservice at York, Pa.-based Rutter’s Farm Stores, said he, too, is seeing an increase in sales for combo meals, though he’s hesitant to chalk it up to any one cause just yet.

“I’ve added so many new options to that purchase that it would be hard to discern if it’s related to the economy or new offerings,” Weiner said.

Rutter’s celebrated foodservice program, also proprietary, is adaptable to lunch and dinner tastes. It offers hot and cold sandwiches, burgers, wraps, salads and its novel stir-fry program, truly suitable as a home-meal replacement.

At Kwik Trip, the lunch menu includes a value-priced “2 for $2.22” menu that offers hot grab-and-go items like cheeseburgers, chicken sandwiches, corn dogs and grilled cheese, all of which are strong sellers, Servais said.

Effective menu pricing can push sales in multiple dayparts, too. Kwik Trip offers its Thin Crust Cheese Mountain Pizza line for $5.99, and last year added a hot-pie sham and began offering pizzas—baked and ready-to-eat—from 4:30 p.m. to 6:30 p.m. daily, which has boosted daypart sales.

“We are becoming a destination for lunch in our markets,” Servais said. “In addition to the 2 for $2.22 lineup, we also offer other hot sandwiches, pizza slices, soup, roller grill items and an entire cold case of fresh sandwiches and salads. Customers like the idea of grab-and-go. The more prepared it is for them, the more likely they are to buy it.”

The dinner daypart is tough to crack, but Kwik Trip is making headway.

“We currently offer soup in heat-and-serve packages and take-n-bake pizzas for customers to pick up on their way home from work,” Servais said, adding that the take-n-bake pizza program is still being tweaked. “The idea is, a customer can grab dinner that’s ready to go and then head home.”

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