Weighing a Sandwich Strategy

Whether doing it themselves or finding a national partner, convenience store operators are developing food programs with fresh ingredients and quick service.

By Heather Henstock, Contributing Editor.

Convenience store strategies for sandwich programs are as customizable as the sandwiches themselves. Some opt to develop and prepare sandwich lines in their own commissaries or via made-to-order programs at store level. Others partner with branded sandwich chains by becoming franchisees or renting store space to a franchisee. Other chains prefer to outsource sandwich production to foodservice companies who design, prepare and deliver packaged ready-to-sell sandwiches to each location.

All strategies or combinations thereof have distinct advantages and their own challenges. But c-store foodservice operators agree that sandwiches bring in more customers and boost sales of other items in c-stores. Sandwiches can provide a healthful food option for customers, and they’re   not just for lunch anymore. Breakfast sandwiches are the latest sandwich trend to hit the c-store foodservice category.

“You don’t need to go to more than one place to do all your morning runs before you go to work if you come to our store,” said Paul Servais, the retail foodservice director for Kwik Trip stores in Lacrosse, Wis.

Kwik Trip, which operates its own commissary, offers both hot and cold sandwich lines in its 380 stores. Kwik Trip’s nine breakfast sandwiches are extremely popular, and the company plans to dedicate more marketing to its breakfast value meals, Servais said. All of the chain’s sandwiches are merchandised for grab-and-go sales, and customers can customize sandwiches to their own unique tastes at a fully stocked condiments bar positioned nearby.

Labor savings, food quality and consistency, and the flexibility to develop new products at will are the key advantages to commissary operations. Because sandwiches are made in one place and delivered daily to stores, Kwik Trip has gained consistency in its products and streamlined safer food handling. “We have 10 people making sandwiches for 380 stores instead of 380 people making sandwiches,” Servais said.

Designing Your Own Brand
The key advantage to doing sandwiches yourself is the ability to develop your own distinct menu. Khalid Sirhandi, a Shell dealer in Kansas City, Mo., who turned down national brands to launch Papu’s Café in his stores two years ago, has never looked back.

Specializing in Middle Eastern fare, Papu’s Café’s best-selling sandwich is its chicken shawarma, which is shaved chicken wrapped in pita bread. Sirhandi opened his first café as the economy went south because he was looking for another big draw to attract customers. Papu’s Café prepares most products from scratch in its store, including hummus, falafel and its signatures sauces.

“After looking at the market we saw an opportunity with the type of food offering,” said Shuja Sirhandi, general manager for Papu’s Café. “We’ve introduced this type of food to the Kansas City area. People come in, smell the food and ask all kinds of questions. I can’t believe some people have never had a gyro before.”

Partnering for Perfection
While independent c-store operators often develop their own sandwich programs, larger chains find advantages in partnering with nationally branded chains, such as Subway, Quiznos and Arby’s. C-stores that work with national brands benefit from instant brand recognition and turnkey operations. Subway, the largest restaurant chain in the world in terms of locations, is also the largest sandwich chain partner in the c-store industry. The company has more than 4,000 locations in c-stores and truck stops internationally, and it sees continued opportunity for future growth in the industry.

Kangaroo Express, operated by The Pantry Inc. in Cary, N.C., has 240 nationally branded foodservice restaurants, including more than 145 Subway restaurants.

“Partnerships with leading quick-service restaurants are a complement to our foodservice program,” said Julie Krupa, manager of restaurant development for Kangaroo Express. “They play an important role in providing our store guests with fresh food choices, adding to the mix of healthy on-the-go, value-oriented food options. Kangaroo Express is continuing to expand these partnerships, which drive store sales.”

The chain’s strategy is to use national chain partnerships to complement its existing Program FRESH, a proprietary offering of grab-and-go meals and snacks introduced last year.

“We introduced a wider assortment of on-the-go meals and snacks, including fresh pastries and bakery items, breakfast and lunch sandwiches, salads, fruits and cookies–all displayed in new open-air refrigeration cases conveniently located near the coffee bar at the front of each store,” Krupa said.
The company is continuing to introduce Program FRESH throughout the Kangaroo Express system.

Whether c-store operators partner with national chains as their primary foodservice vendor or as a complement to existing programs, c-store operators need to prioritize their goals and decide how much commitment they want to make to foodservice. If they are solely looking to piggyback on name recognition and increase foot traffic, renting space to a franchisee might be the best option. Becoming a franchisee requires more investment, but it also gives c-store foodservice management more control and profit potential.

C-stores also have the advantage of their existing infrastructure, which reduces start-up costs of adding a sandwich chain franchise. They usually already have freezers, coolers, soda fountains and bathrooms, for example, and many c-stores position a branded concept in an area of the store that had already been set up for foodservice.

Seeking Expertise
Shying away from a franchise system, but still looking for support from a large foodservice company, c-store chains can choose to outsource sandwich production to companies like AdvancePierre Foods, McLane or local commissaries. Because food is their business, such companies provide well-established, organized distribution networks. Product variety is vast and constantly changing as experienced culinary professionals develop new sandwiches tailored to c-store grab-and-go sales and to meet the latest consumer trends.

Food production costs, obviously, are lower when c-stores outsource to a foodservice company. But, investment in sandwich displays, signage and staff to maintain sandwich merchandising are necessary with any program. Foodservice companies offer an array of attractive self-service coolers and merchandising equipment that can be customized with signage for c-store brands.

How c-stores handle their sandwich lines in-store can determine the success of their programs. Grab-and-go sandwich programs still need dedicated staff to maintain displays and condiments bars. Sandwiches should be prepared with high quality ingredients. Customer flow needs to be considered when positioning sandwich prep stations and merchandisers for convenient, speedy purchase.

Sandwich customization has been a key draw for Kwik Trip’s grab-and-go sandwich sales. Its condiments bars are fully stocked with lettuce, pickles, onions, sauerkraut and cheese in a cold well. Condiment offerings include ketchup, mustard, ranch dressing, honey mustard and chipotle sauces, as well as cheese and chili sauce.

All this needs to be maintained and serviced. Customers do not want to search for someone to refill the pickles and will leave stores dissatisfied if something is out of stock and service is slowed because of it. “Our food business has grown so much that we have foodservice managers in all our stores to make sure customers are always satisfied,” Servais said.

Marketing at Every Level
When it comes to marketing and advertising, nationally branded sandwich chains have a clear advantage. Sandwich chains are constantly rolling out limited-time only (LTO) offerings and backing new products with major television, print and on-line ads.

Independent c-stores may not have the financial backing of national marketing campaigns, but they still need to promote the qualities that differentiate their sandwich brands. For Papu’s Café, social networks, such as Facebook, and consumer restaurant review sites, such as Yelp and Urbanspoon, have been a huge boon to business.

Customers are always looking for fresh, original food at a good value. When they find something special, they are excited to spread the word. And social networks have made it easier than ever for them to share.

“I think people are intrigued when they see how good our reviews are and find out we’re in a gas station,” Sirhandi said. “You can see our reviews; we’re pretty happy.”

 

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