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Convenience Stores

Foodservice is becoming an increasingly worthy, and in some cases, driving component in producing convenience store revenues and deepening customer relationships, particularly during a time when gasoline price volatility can affect the bottom line. Time is money, particularly during this era of new growth potential. Heat up your business with industry insights in our articles below.

The Vollrath Company and The Stoelting Company offer a one-stop shop of products designed for convenience store retailers including a full line of profit generating items from award-winning soup warmers, frozen treat machines, display cases, microwaves, mobile serving carts and more. Now, that’s convenient.

 


The Hottest Trend in Convenience Stores

When the first gasoline service station opened in the late 1880s, it was little more than a pump sitting outside a Fort Wayne, Indiana, grocery store. In 1929, the industry expanded when Transcontinental Oil opened several Marathon stations in Dallas, creating the first convenience stores.1

In the days since, gasoline has been sold alongside everything from snacks and maps to fishing bait and knickknacks. Yet not everything on the shelves has the same profit margin. While gas and tobacco are key merchandise, for example, they don’t bring anywhere near the profit of foodservice, which offers stunning 60% margins.

These days, foodservice may be the solution to increasing economic pressures on convenience stores including:2

  • Employment
  • Pay at the pump
  • Credit card fees
  • Tobacco taxes
  • Online lottery sales

At a time when consumers are shifting away from traditional restaurants, convenience store foodservice fills an important void for customers who don’t have the time or budget for a sit-down meal. In fact, the average American now eats at restaurants only 74 times a year – the lowest number in more than 30 years. Yet Americans aren’t cooking at home more. Instead, they’re eating more prepared and packaged foods including pizza, Mexican food, sandwiches and yogurt.3 That’s why foodservice has become the hottest trend in convenience stores.

If your convenience store isn’t in the foodservice game yet, don’t miss an opportunity. Establish your presence in the increasingly important quick-food atmosphere.

1 American Oil & Gas Historical Society. http://aoghs.org/transportation/first-gas-pump-and-service-stations/
2 Technomic. C-Store Foodservice 101: Introduction to Convenience Store Foodservice. April 2013.
3 Ferdman, Roberto A. Americans Are Falling Out of Love with Restaurants—in 3 Charts. The Washington Post. November 12, 2014. http://www.washingtonpost.com/news/wonkblog/wp/2014/11/12/americans-are-falling-out-of-love-with-restaurants-in-3-charts/.


Expand Your Convenience Store Foodservice Offering

Like any business owner, if you run a convenience store you’re always looking for ways to improve profitability. Yet while your shelves are surely stocked with packaged snacks and beverages, maybe you haven’t made the leap to foodservice yet. Or perhaps you’ve just dipped your toes into the category with coffee, soda and hot dogs.

Wherever you are in the foodservice journey, it’s a great time to expand. According to Technomic, convenience store foodservice is an $11.8 billion opportunity. And while foodservice is currently just 19.4% of average convenience store sales,1 it has a 60% average gross margin.2

Convenience store levels

Foodservice novice?

If you don’t currently offer any foodservice, consider some of the most popular and easiest offerings such as hot dogs, pizza and beverages. If you’re currently outsourcing your foodservice, take a good look at expenses. While hiring additional staff and purchasing equipment can be a significant upfront cost, you may be able to recoup your investment quickly by keeping more of the profits on each item sold. Also, preparing food onsite instead of bringing in premade, prepackaged goods can increase the freshness of your offerings – something your customers will quickly notice.

Already an Intermediate?

Look for ways to expand your offering including:

  • Hot sandwiches
  • Breakfast sandwiches
  • Fried chicken
  • Burritos

Also, keep healthy food trends in mind. If you can offer fresh, nutritious food, you’ll be able to expand your audience and get more customers to consider your convenience store at mealtime. Top sellers include:

  • Cold sandwiches & wraps
  • Fresh fruit
  • Soup
  • Oatmeal
  • Yogurt parfait

Advanced?

Congratulations! You’ve already discovered just how profitable foodservice can be. Keep your eye on industry trends, and you’ll be in great shape. Also, if you don’t already have frozen dispensed beverages, check them out. Their profit margins are greater than 70%.2

1 Technomic. C-Store Foodservice 101: Introduction to Convenience Store Foodservice. April 2013.
2 Convenience Store News. 2014 Was Historic Sales Year for U.S. C-store Industry. April 15, 2015.


Thinking Beyond Dayparts: How to Grow Foodservice at Your Convenience Store

Knowing your busy times is important for staffing and food prep. And for most convenience stores, the busiest time of the day is 11:00am-1:59 pm, a time frame that accounts for 34% of sales.1 Yet simply looking at the busiest times of the day for sales may not position your store correctly for foodservice decision-making. That’s because studies show it’s no longer when you eat: It’s what you eat.

This month we saw McDonald’s roll out all-day breakfast, and restaurant chains such as Perkins and Denny’s have long let diners choose a milkshake in the morning or pancakes at night. That’s because customers are increasingly seeking opportunities to dine that aren’t tied strictly to the clock.

Because many convenience stores are open 24/7, they have the distinct advantage of being able to offer customers whatever they want whenever they want it.

convenience store statsConsider these stats:1

  • 64% of people say a convenience store is their first choice for a snack.
  • 47% of food and beverage purchases at convenience stores are for snacks.
  • The remaining purchases are split: 23% breakfast, 20% lunch and 10% dinner.
  • Only 8% say a convenience store is their first choice for a meal.

As you’re considering your foodservice strategy, look for ways to get beyond being a convenient option for snacks to a consideration for meals. If you have the space, add a seating area. Tight fit? Add tables outside.

Also, don’t be afraid to have a range of prices. Burger King, for example, has been successful with sandwiches from $1.49 to $6.49. As you grow your foodservice program, look for ways to appeal to the wide range of customers filling up their tanks. While some customers are looking for cheap options, others are willing to pay more for better ingredients.

1 Technomic. C-Store Foodservice 101: Introduction to Convenience Store Foodservice. April 2013.


Heat Up Your Convenience Store’s Profits with Soup

Featured in nearly every cuisine type, soups are offered on 70% of the menus in American restaurants1 – and with good reason. They have profit margins from 40% to 60%2 and taste great even when they’ve sat in a warmer for hours.

42% of consumers purchase soup at least monthly from fast-food restaurants, and 29% choose soup at least monthly from convenience stores3 – presenting a great opportunity for growth. It’s particularly popular among women and Millennials.3

One great reason to offer soup is its versatility. It’s purchased both as a main course and as a side dish, which means it can be an excellent upsell to someone stopping in for a sandwich or salad. And one of the most interesting findings for convenience stores is that soup sells all day long. Some customers will eat soup for breakfast while others will grab a bowl as a midnight snack.

Whether you’re just considering your first soup warmer or you have a bustling soup business, take a look at the top soups in restaurants:1

  • Chili – 28%
  • Chicken noodle soup – 16%
  • Wonton soup – 13%
  • Chicken and rice soup – 13%
  • Egg drop soup – 10%

Of course, while egg drop soup and wonton soup are popular at Chinese restaurants they may not be good sellers at a convenience store. As you’re looking for soups that will appeal to your customers, think about the top ingredients: chicken, onions, mushrooms, corn, tomatoes and cheese.1 Also, many customers consider soup a healthier option. While that’s not always the case, it’s a great idea to call out your soup varieties that do have health benefits such as low fat or low sodium.

If you’re just getting started, you might lean toward buying a single soup warmer. Research shows, however, that customers want variety – and three options is the perfect number. Of course, if you have a bigger, busier store, give customers even more choices. Unlike some perishable foods, you don’t have to worry about moving soup immediately – it stays fresh for hours or even days.

1 Food Genius. Soups and Hearty Entrees: Menu Trends and Insights. Q3 2015.
2 Technomic. C-Store Foodservice 101: Introduction to Convenience Store Foodservice. April 2013.
3 Technomic. Soup’s On! (And Salad Too). January 27, 2014. https://blogs.technomic.com/soups-on-and-salad-too/.


Take a Fresh Approach to Convenience Store Foodservice

From the grocery store to restaurants to convenience stores, one trend is consistent: the desire for fresh. After decades of embracing processed foods, many Americans are paying close attention to what they eat – at home and on the go. 87% of adults think fresh foods are healthier, and 80% say they taste better. And these consumers aren’t just talking the talk. 78% are making a strong effort to eat more fresh versus processed foods.1

So how can you capitalize on the trend toward fresh? Consider these tips:

Make sure it’s fresh. In the convenience store environment, consumers consider “fresh” to mean something that’s been made on the same day or has the appearance of being made on site.2 Truth be told, this definition of fresh doesn’t necessary equate to healthy. But the smell of freshly baked chocolate cookies sure is tempting.

Consider freshly cut fruit and veggies. Ever looked at the price difference between whole and cut fruit or veggies at the grocery store? It’s remarkable – and it’s an opportunity you don’t want to miss. Place cups of these freshly cut snacks right near the register in bins of ice, and watch how frequently customers grab them on impulse. If you’re serving veggies, pair them with hummus or dill dip. There are a variety of great new tools out there that make cutting fruits and veggies quicker and easier than ever before.

Add a soup bar. 29% of American adults choose soup at least monthly from convenience stores,3 and that number is growing. Pick up a few soup warmers, and get in the game. The great thing about soup is you can prepare it fresh onsite or purchase pre-cooked varieties and freshen it up with cheese, freshly diced onions or fresh herbs.

Offer customization. If you have the space, add a salad and sandwich bar, and let customers choose exactly what they want. You can set up a self-serve area with a breath guard, or – you have the staff – keep ingredients behind the counter and whip up made-to-order creations like popular sandwich chains do.

Pay attention to health-conscious trends. Sure, it can be hard to keep up with every food trend, but some may be easy to implement. For example, if you serve pizza, consider changing to a thinner crust – something desired by many people trying to watch their carb and calorie intake.4

Keep it clean. Don’t just focus on your foodservice area. Make sure your whole convenience store is clean – especially the bathrooms. Customers will notice, and they won’t be tempted to purchase fresh foods from a less-than-appetizing environment.

1 Technomic. 2014a. The Consumer Healthy Eating Report. and MSI. 2014a. The 2014 Gallup Study of Cooking Knowledge & Skills.
2 General Mills. Fresh Perspective for Your C-store. http://www.generalmillscf.com/industries/convenience/support-tool-categories/foodservice-101/fresh-perspective-for-your-c-store.
3 Technomic. Soup’s On! (And Salad Too). January 27, 2014. https://blogs.technomic.com/soups-on-and-salad-too/.
4 The average thin-crust cheese pizza slice has 208 calories while the average thick-crust cheese pizza slice has 305 calories. Source: Centers for Disease Control and Prevention. Incorporating Away-From-Home Food into a Healthy Eating Plan. http://www.cdc.gov/nccdphp/dnpa/nutrition/pdf/r2p_away_from_home_food.pdf.


Top Food Safety Tips for Convenience Stores

Whether you’re preparing food on site or serving up premade items, food safety is a major concern for convenience stores – no different than restaurants, schools, homes and any other location that’s serving food. In fact, each year one in six Americans gets sick from contaminated foods or beverages. And of those people, 3,000 die.1

The good news is you can prevent most food-related issues with four simple steps:

  1. Make sure all employees wash their hands regularly and have good personal hygiene.
  2. Avoid cross contamination.
  3. Cook, store and serve foods at proper temperatures.
  4. Make sure all surfaces are properly cleaned and sanitized.

What’s cross contamination?

Cross contamination occurs when different foods touch each other and spread bacteria. Typically, it’s when juices from raw meats or germs from foods that haven’t been properly cleaned touch foods you’re about to serve.

By using color coding, however, you can prevent cross contamination. Choose cutting boards, utensils, food storage containers and other items designed with these colors, and use them only on the type of food designated.

Color coding

What’s the correct temperature for serving food?

In general, follow these rules:

  • Hot foods should be served at >140°
  • Cold foods should be served at <40°
  • Reheated foods should be served at ≥165°

As you’re purchasing equipment, look for items that let you easily monitor food temperatures and preventing tampering.

What other tips should we consider for food safety?

If you have an open serving area, such as a salad bar or custom sandwich bar, be sure to install a breath guard. Also, check out germ-resistant products such as serving utensils with antimicrobial handles and dispensers with antimicrobial properties and sanitary design.

1 Centers for Disease Control and Prevention. CDC and Food Safety. Available at: http://www.cdc.gov/foodsafety/cdc-and-food-safety.html. Accessed October 24, 2015.


Heat Up Your Sales with Frozen Beverages

These days, a cola just isn’t cutting it for many convenience store customers. As the rise of gourmet coffee shops has shown us, consumers are increasingly sophisticated in what they drink. Frozen drinks, such as smoothies and frozen coffee, are growing quickly in popularity, and they’re seen as a healthier alternative than sodas – and a great snack or even meal replacement. And they’re not just for kids. In fact, the target demographic is adults age 18-34.1

For the convenience store that capitalizes on this opportunity, the profits can be incredible. In fact, the average gross margin percent is 78% for frozen dispensed beverages and 77% for cold dispensed beverages.2

The good news is adding a wide variety of frozen drinks to your foodservice offerings is easy. The newest machines are easy to use, and mixes are readily available – including healthy, fruit-focused alternatives to the sugary drinks that have long tempted kids and teens. Some machines allow you to switch easily between cold and frozen beverages. You can unfreeze your mix overnight to save on energy and then have it automatically freeze back up at your chosen time. There are even WiFi-enabled models available that allow you to access data on everything from the amount of product being served to when the machine was last cleaned.

1 NACS State of the Industry Report.
2 Technomic. C-Store Foodservice 101: Introduction to Convenience Store Foodservice. April 2013.


Controlling Food Costs at Convenience Stores

If you’re running a successful convenience store, you’re probably a budgeting pro. And each decision you make – like stocking extra cold beverages during a holiday weekend – can make or break your weekly bottom line. If you offer foodservice, stay on top of costs with these tips:

Adhere to serving sizes. For convenience stores with foodservice, paying close attention to what you order is only part of the issue. Making sure you serve the right amount of food can make an even bigger impact. To ensure proper portions, look for color-coded, precisely sized ladles, dishers and other utensils.

Over-portion costsFrom sauces and soups to veggies and fruits, precise portions can help you keep your costs in control as your team is prepackaging food behind the scenes. For example, dishing up the right amount of egg salad or chicken salad from a batch can enable you to sell extra sandwiches – and earn higher profits. For example, imagine each ½ oz. over-portion costs $.19. At 50 servings per day x 365 days, those over-portions would cost you an extra $3467 per year.

Save energy. When you’re purchasing serving equipment, look for energy-efficient gear. Induction food warmers are one great example.

Keep extras fresh. Don’t need that whole stack of cheese slices right away? Diced enough onions to top your soup all week long? Use a vacuum sealer to ensure extra ingredients stay fresh.

Eliminate waste. Food isn’t the only area where waste can drive up costs. Look for opportunities to have less and more affordable packaging. For instance, could using paper wrap for breakfast sandwiches save over boxes? Also, choose packaging and condiment dispensers that distribute precisely what your customers need, so you’re not left throwing out extra lids, straws or ketchup.


Maximizing Your Foodservice Footprint: 3 Tips for Convenience Stores

It doesn’t matter if you have a spacious new suburban store or a cramped, decades-old location in the city: Space is a concern. Like any convenience store owner, you know anything that takes up valuable floor space needs to have a good return on investment. And you also know that where you place items can make a big difference in sales – especially with impulse purchases.

As you’re building a foodservice business, make sure you’re maximizing your footprint. Consider these top tips:

Go mobile. Consider modular designs for foodservice areas, so you can experiment with what works and make changes if needed – long term and even throughout the day. With easily movable countertop equipment, you can offer more coffee in the morning, for example, and more cold options later in the day. Similarly, you can swap out a breakfast sandwich warmer for soup warmers. This flexibility will also allow you to easily respond to future food and beverage trends.

Bring the food to the front. Don’t hide food in the back of the store. Instead, place it near the front where the smell and appearance of food will entice customers who thought they were just stopping by for gas or a cold drink. Remember that food service has 60% average gross margin1 – much higher than many items you might currently have in prime locations.

Look for space-saving designs. Don’t rely solely on countertop displays. Choose bakery and other cases with multiple display layers, so you can squeeze more products into a smaller area. If you’re preparing foods in a kitchen area, look for space-saving equipment there too.

Find multi-use equipment. Having a separate machine for every food item you serve isn’t an option when you have limited space. That’s why it’s crucial to find multiple uses for equipment. For example, can a cold-storage tray hold yogurt parfaits in the morning and salads in the afternoon? Also, look for serving equipment with integrated graphic merchandising so you can attract buyers without cluttering up your limited space with signs and posters.

1 Technomic. C-Store Foodservice 101: Introduction to Convenience Store Foodservice. April 2013.