Boosting Fresh Food Sales

Americans are more amenable to buying meals at convenience stores, but won’t budge when it comes to quality, price or convenience factors like portability and packaging.

By Howard Riell, Contributing Editor.

Takeout food was invented for on-the-go consumers. But a takeout program has to do more than travel at high speeds. Today’s consumers want quality as well as portability and value, and more c-store operators are giving it to them.

The best operators aren’t resting on their laurels with their to-go menus. They are constantly evolving to meet the consumers’ changing needs. This spring, for instance, Stripes Convenience Stores successfully marketed its takeout program through social media by using digital billboards to stream Twitter comments about its tacos. The campaign was developed by the Firehouse Agency, and asked customers to send so-called “taco tweets.” They were streamed on eight digital billboards across Texas in San Angelo, Midland/Odessa, Lubbock, Laredo, Brownsville/Rio Grande Valley and Corpus Christi. The campaign ran from lunchtime to midnight, daily.

While you have to have confidence in your foodservice to run such a visible marketing campaign, the success of using social media to promote the food program underscores just who is buying fresh food in convenience stores.

In a survey of takeout food customers, Technomic, the Chicago-based foodservice consulting group, found that heavy users of takeout skew to younger age groups. Consumers ages 55 and older are far more likely to be non-users of takeout, which falls in line with convenience stores’ target demographic. Since takeout occasions are more prevalent with younger consumers retailers have a great opportunity to maintain this business as these consumers age.

Furthermore, the proportion of consumers who order takeout on the go from their cars, or elsewhere on their cell phones, is growing rapidly. Overall, convenience was found to be a main driver of takeout purchasing occasions. Takeout is becoming part of consumers’ everyday lives. Nearly half (48%) of those surveyed said that their most recent takeout purchase took place on a regular day that was no occasion in particular. Another 21% indicated it was a special treat not to cook.

Nontraditional retailers could become a threat to restaurants, especially as they increase their takeout amenities that speak to the consumer’s need for convenience. More than three out of four consumers (78%) reported that they have ordered prepared foods to go from a retail grocery store or supermarket. Consumers are increasingly seeing these retail locations as viable options for a quality, convenient takeout meal.

For the majority (74%) of takeout occasions, dining parties were made up of more than one person and the food was likely (55%) to be shared among the group as opposed to everyone eating their own individual meal.

Other takeout trends Technomic identified are:
• Quick-service restaurants see the highest percentage of consumer takeout occasions.
• Certain food categories, like pizza and Chinese, are stereotyped as appropriate for takeout. Consumers also indicate that these cuisines are considered “favorites” for takeout.
• Pizza and Chinese both carry intrinsic qualities that not only make them suitable for takeout but also lend credence to their popularity. These attributes include: value, ability to maintain integrity during transport, shareability and viability for leftovers.
• Burgers and sandwiches are also popular takeout options but consumer motivators for purchasing are likely different than those considered when ordering pizza and Chinese. Convenience and portability likely contribute to the popularity of these food items.
• Quick-service takeout is utilized more frequently during the weekday, while during the weekend a greater number of consumers turn to full service to meet their takeout needs.
• The majority of consumers anticipate their use of takeout will remain consistent over the coming year. However, those who indicated a shift in behavior are more likely to expect a drop in takeout usage rather than an increase. Consumers in the 18-24 age group are the only cluster more likely to say their usage will increase rather than decrease.

Back to Basics
The starting point for takeout—or for any food program, really—is mastering the fundamentals. “In anything related to food it’s about getting the basics right,” said Michael Davis, vice president of member services for NACS. “It’s making sure that you have been able to master some of the more basic items in our stores: hot dispensed, cold dispensed and the roller grills.”

Once proficient in those, operators should focus on mastering such tasks as controlling food costs, safety and sanitation, and inventory control.

“Once you have a good grasp of these operations, which requires a new way of thinking for many traditional convenience store chains, the operator is ready to do pretty much anything, whether that be tackling pizza or chicken on the fly,” Davis said. “Whenever anyone asks my opinion about foodservice I always stress that they first have to learn how to nail down the basics.”

One of the motivating factors behind the development of NACS CAFÉ (the Center for Achieving Foodservice Excellence) was to help convenience store retailers learn how to create a foodservice culture to build and grow an effective, profitable foodservice program.

“We want to make sure retailers understand how to profitably run a foodservice operation,” Davis said. “That starts with hot and cold dispensed beverages and roller grill, as well as understanding where there might be a niche. There is a lot of competition for pizza, whether it’s a takeout company like Domino’s or Little Caesar’s or the local supermarket. Obviously, you’ve got to find out what that niche is.”

Davis drew a distinction between takeout and food intended for immediate consumption.

“There is a little bit of a difference there. Most of what we sell is consumed within minutes of its leaving the facility,” he said. “They’ll start eating it at the door or they’ll start eating it in the car—that is where we get the term ‘dashboard dining.’ Takeout carries the connotation of buying something and taking it home.”

The difference is more than just semantic. “If we as NACS don’t articulate the differences, then it’s easy for somebody to be confused about it,” added Davis. “I could never be in the takeout business because I can’t compete with Domino’s or Chili’s, which have a to-go business.”

Don’t Overlook Packaging
Lynn Dyer, president of the Foodservice Packaging Institute in Falls Church, Va., suggested that convenience store operators take a look at one of the most often overlooked parts of their takeout programs—food packaging—as one way of bringing their programs to another level.

“People need to rethink what they’re doing with their packaging as far as how it’s working for them and what it’s actually doing,” Dyer suggested. “There are a lot of different materials in the marketplace these days. Operators certainly have more choices, and there have definitely been a lot of performance improvements.”

Indeed, Dyer said, more c-store operators are realizing that the packaging can actually help to build sales and be a branding opportunity. “We like to think of foodservice packaging almost as a walking billboard. It’s an opportunity to help promote the operator’s name,” she said.

Product quality can also be improved with some newer packaging designs. For instance, a container with vending slits prevents hot items from making the container fog up. Ridges on the bottom of packages let grease or other liquids go somewhere besides resting on the food itself.

“This may not sound like much, but to consumers it’s the difference between a satisfying meal and a bad dining experience,” Dryer said.

An Action Plan for Menu Labeling

The U.S. Food and DRUG ADMINISTRATION has yet to release final guidance on the Health Care Bill requiring that calorie counts be posted on restaurant menus. Convenience store chains with more than 20 stores and more than 50% of revenue from food are included in the bill. Despite opposition from NACS and other convenience industry leaders, c-stores likely will remain part of the law.

The law is based on good intent—giving consumers information to help them make more healthful food choices. But questions arise in the details of implementing the law, particularly for the convenience store industry. Do motor fuel sales count as part of total revenue when determining the percentage of food sales? Exactly where and in what measurement should calorie counts be posted for self-service foods and beverages? How and why should custom orders be labeled: does each potential ingredient of a customer’s turkey sandwich need its own calorie count posted?

These are just a few of many questions NACS and others have raised during the FDA’s review of the bill. Even if c-stores miraculously get a hall pass on menu labels, many c-stores with major foodservice programs plan to include calorie information on their menus regardless.

“You need to have a plan in place to know the calorie counts of your foods at the very least,” said Jack Cushman, vice president of foodservice for Nice N Easy Grocery Shoppes in Canastota, N.Y.

Consumers expect and use nutrition and ingredient labels on packaged foods. Once restaurants begin adding calorie counts to their menus, consumers will come to expect that information as well, Cushman predicts.

“Fast forward five years as a c-store guy if everyone’s got a calorie count on their menus and you don’t,” said Cushman.

Getting foodservice product lines analyzed for calorie and nutrition details, purchasing and installing new menu boards and designing and printing new menus for each location in a c-store chain will come at a heavy cost. But c-store foodservice operators who opt out might experience greater cost over the long haul.

 

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