Success does leave
clues and Steven Johnson,
Grocerant Guru® at Tacoma, WA based Foodservice Solutions® is one of
the best at picking them up, sharing them, while helping service deli’s,
restaurants, and c-stores drive top-line sales and bottom-line profits.
So, according to Joyce Baird, strategic
account manager at research and consulting firm Foodservice IP. During a
presentation at the recent 2021 CSNews Convenience
Foodservice Exchange event, she discussed various factors affecting the current
convenience foodservice market and steps retailers can take to boost their
programs. Let’s look what she had to say:
1. Been There, Done That
"We've been there, we've done this,
we've been through crises," Baird said, pointing to major historical
events such as the 1918 Spanish Flu, the stock market crash, and The Great
Recession.
While all of these events had major
effects on society, they weren't the end of the world or of any retail
channels. Similarly, retailers that persevere and deal with the effects of the
COVID-19 pandemic, such as the labor crisis and disruptions to the supply
chain, will eventually find themselves on the other side as things improve.
2. Prepared & Delivered Food Is
Thriving
A wide range of away-from-home food
options are taking off. Ghost kitchens, turnkey solutions and wholesaler/distributor-provided
commissaries are just a few examples of services that existed prior to the
COVID-19 pandemic and are thriving now.
3. Ecommerce Has Accelerated During
COVID-19
Consumers across all demographics have
increased the number of foodservice purchases they make via ecommerce vs. more
traditional means. And it isn't just a temporary measure until the pandemic is
over. Baird pointed to a retirement community that brought on a tech person
specifically to teach residents how to use smartphones, including for delivery
services.
To make the most of this, c-store
retailers need to keep in mind the reasons customers purchase more through
ecommerce (quality, cost savings, and convenience), and what will push them to
purchase less (a poor experience or substituting other channels.)
4. Foodservice Is Necessary
In America, people plan going out to eat
more than they plan anything else. Not everyone has time to prepare food,
making the foodservice category necessary.
Consumer sentiment is changing with age.
"Bubba" is no longer the primary c-store customer, and younger
consumers tend to view c-stores as places they can get anything, rather than
falling back on the stereotype of bad gas station food.
5. C-store Foodservice Is Positioned
to Fight for Share of Stomach
The foodservice category at c-stores is
estimated to reach $12.2 billion in 2023, according to the Foodservice
IP 2021 Convenience Store Foodservice Report, with hot snacks, chicken and
pizza leading the way.
With category growth comes competition
growth. C-store operators should treat all food outlets including
fast-food restaurants, regional quick-service restaurants (QSRs) and
coffee/doughnut stores as competition. Doing so will keep them better
positioned to fight for share of stomach.
"Make sure you're looking at what
all is around you," Baird said.
6. Seek Strategic Advisors, Not Vendors
Vendor partners shouldn't just be
companies that supply product, they should be advisors that know foodservice.
Strong knowledge of how the category works is key, and they need to be aware of
what keeps retailers up at night.
Retailers should expect supplier
companies to do their homework and come to the table with solutions; know hard
and soft costs, including detailed product information down to the last
ingredient used; deliver product and service innovation, including good
communication, trust and a willingness to bring new ideas such as marketing
initiatives; mutual investment, with the ability to commit and reinvest in
their business; and the willingness to prioritize the retailer.
Vendors should also be able to show they
are already familiar with competitive offerings, provide fact-based evidence to
support their ideas, and come up with two or three ideas that fit a c-store's
concept.
7. Rigorously Execute on the Restaurant
Basics
A winning value proposition consists of
consistently solid basics (including service, food and unit appearance)
combined with resonating points of differentiation (such as customer lifestyle
integration, hospitality, menu desirability, atmosphere, concept essence, and
manager presence.) C-stores that position themselves to follow through on
these basics will be in a solid competitive position.
8. Prepare for Post-COVID
Changes
Safety and cleanliness are part of the new
foodservice reality. Customers may not even know they're looking for these
things, but still feel relieved when they see cleaning products inside a store.
Contagion concerns, poor ventilation and
lack of masks are among the reasons customers give for not feeling safe in a
store. Retailers need to have a plan for addressing these concerns to make
their customers feel welcome.
It's impossible to know what is coming,
but c-store operators are capable of planning for multiple outcomes, whereas a
lot of companies just have one strategy.
Retailers should evaluate implementation
steps, not just the end result, and remain a "stubbornly" agile and
flexible culture. Basing their decisions on what's happening in practice, not
in theory, will lead to better outcomes.
10. The Forecast Is Bright
C-stores experienced a negative impact in
2020 due to the pandemic, but they have had a leg up on competitors in 2021,
and will continue to, as essential businesses. They also benefit from consumers
viewing them as similar to QSRs.
Looking ahead, foodservice will remain an
integral part of c-store profitability and patron desires. Not all stores
will be a fit for prepared food and dispensed beverages but, as a whole, the
industry can expect good things from the category, according to Baird.
Success does
leave clues. One clue that time and time again continues to resurface is “the
consumer is dynamic not static”. Regular
readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA
based Foodservice Solutions®. Our
Grocerant Guru® can help your
company edify your brand with relevance.
Call 253-759-7869 for more information.
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