C-Store Parkland Corp Heat’s Up Food Focus

 

Grocerant niche Ready-2-Eat and Heat-N-Eat prepared food offerings have as regular readers of this blog have known have been growing since the early 1990’s and now are the key drives of growth in every sector of food retail today according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. 

Johnson, is not the only one paying attention to disruption within the retail food sector driven by customer migration from brands not proving what customers want to those focused on grocerant niche Ready-2-Eat and Heat-N-Eat food.

That’s right, you guessed it, Parkland Corp. understands those customer migration patterns as well, and that is why they are going to will acquire Mississauga, Ontario-based M&M Food Market, a premium, restaurant-quality frozen food retailer.

Now here is a company doing all the right things, starting with looking a customer ahead. The deal represents one of multiple steps Parkland is taking in its retail diversification strategy to expand its proprietary food offer, customer reach and its own food innovation pipeline.

Parkland’s Ian White, senior vice president of strategic marketing and innovation, stated, "This acquisition provides a platform to grow our food offer, expand our proprietary brands, and advance our digital and loyalty strategy," … "Consistent with our commitment to create convenience destinations, M&M's national store network, and innovative approach to food preparation and menu development positions us to offer high-quality food that complements our growing quick-serve restaurant offerings.

White continued, "We will grow these capabilities in all our operating regions and bolster our digital connection to customers by combining M&M and Journie rewards programs,"…. "We look forward to bringing On the Run and M&M together to help customers make the most of every stop."

The acquisition includes more than 300 standalone franchise and corporate owned stores; 2,000-plus M&M new non-traditional Express locations; and a well-established rewards program with approximately 2 million active members.

So, it’s this simple, M&M will create quality food options that Parkland customers can consume fresh-from-frozen, both on site and on the go, and prepared from frozen at home, the company said. Parkland plans to leverage these capabilities throughout its existing network and soon-to-be-launched standalone On the Run convenience stores.

Andy O'Brien, CEO of M&M, stated, "Parkland's On the Run brand is a convenience retail leader and we are excited to combine our two offerings," ... "M&M and its franchise partners share Parkland's customer focus and passion for quality food. The combination of our innovative food capabilities and Parkland's more than 3,000 retail locations in 25 countries creates an immediate runway of growth and expansion opportunities."

Here is how they are looking a customer ahead, as the acquisition enables key elements of Parkland's diversification strategy, including:

·         Advancing its enterprise food strategy: The deal adds a proprietary brand, experienced team, franchisee network and a scalable fresh and fresh-from-frozen food growth platform across all markets. Parkland will leverage M&M's expertise and track record of developing successful menus in its innovation kitchen to evaluate and develop additional fresh and quick-serve food choices across its network.

·         Advancing its digital strategy and creating a premier Canadian loyalty program: By combining Journie and M&M's reward programs, Parkland will create extensive cross-promotional opportunities and form one of Canada's premier loyalty programs.

·         Enhancing its On the Run customer value proposition: M&M will be integral to growing the On the Run network, bolstering Parkland's in-store, e-commerce and home delivery offers, and supporting its standalone convenience concept.

·         Capital-light: M&M leverages a well-established, highly efficient food preparation and distribution network, requiring limited capital investment to efficiently serve its retail locations.

·         Ratable cash flow with significant growth potential: M&M's royalty fee-based operating model creates a ratable stream of cash flow. Parkland aims to grow M&M's Canadian annual run rate adjusted EBITDA to approximately $55 million in three years.

Total consideration for the transaction is approximately $322 million, which will be funded out of existing credit facility capacity. Subject to approval under the Competition Act (Canada) and other customary closing conditions, the acquisition is expected to close in the first quarter of 2022. How are you looking a customer ahead?

Are you looking for a new partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.