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.
That means there’s the potential for some real money in home meal replacement (HMR), but it has to be done well, and in just the right locations. Then there’s that old stigma about c-store operators not thinking like traditional foodservice retailers.
“HMR, though not called that by consumers, has overachieved its potential in supermarkets that have created restaurant-like settings and credibility,” said Arlene Spiegel, president of Arlene Spiegel & Associates, a New York City-based foodservice consulting group. “It’s all in the sensuality—the see, smell, taste, touch—that provides credibility and proof of freshness and quality.”
At c-stores, on the other hand, “consumer perception of quality, freshness, taste and value across the board is still a little low,” Spiegel said. “Until they make a true commitment to restaurant quality and experience in the stores, HMR sales will be low and confined to grab-n-go items as opposed to meals.”
Chains excelling in foodservice, such as Sheetz, Wawa, Rutter’s and Nice N Easy, figured this out long ago. Others are still struggling to overcome consumer perception. “One of the reasons c-stores are at a natural disadvantage is that the original brand positioning of these stores is based on packaged goods, convenience and fast-food offerings, either branded or proprietary,” Spiegel said. “Operators need to realize that it’s all about credibility and commitment, and then getting the message out to the consumer that they are in the food business and not just selling fuel or magazines.”
While Sheetz and Wawa have been the leaders in HMR, others are making strides, said Tim Powell, the c-store foodservice program director for Chicago-based Technomic Inc. “7-Eleven last year started rolling out Turbo Chef convection ovens, which are really speed ovens, so they can have hot-food programs—hot sandwiches, breakfast foods and the like—which gives them more versatility.”
Value, Quality and Commitment
One of the strategies Technomic management sees c-stores following is bundling combo meals. “That’s probably been even more in the news lately,” said Powell. “Typically convenience stores can get a lower check average for a meal. For instance, a $2.99 value bundle in 7-Eleven as compared to a fast-food restaurant where you’re typically looking at a price point of $4.99. So the price is typically better at c-stores, and now you have a lot of suppliers, the Krafts and Pepsis of the world, who are really trying to push these bundled promotions in this new channel, where we’re seeing some growth.”
Having the expertise is key. “Many operators still have a c-store mindset. It’s still difficult for them to figure out a way to be foodservice operators, particularly when you have no dedicated foodservice person,” Powell said. “You don’t have someone who’s exclusively manning the four roller grills or the prepared foods case because he’s usually handling the money and people are paying for gas.”
In its recent Takeout Consumer Trend Report, Technomic found 39% of consumers questioned bought takeout food for lunch, only 24% for dinner. In addition, 75% said their main reason for buying a prepared meal from a c-store was overall convenience.
Build it from Scratch
“Home meal replacement is very new in the c-store channel, and I don’t know that too many people are actually doing it yet,” said Jerry Weiner, vice president of foodservice for Rutter’s Farm Stores in York, Pa. “I’m not even sure that what I’ve put together is right yet, but I’m going to build it from here.”
What Weiner did was assemble dinner products and put them on a touch screen order kiosk. Customers can select from nine dinners, including meatloaf, chicken Parmesan, meatballs, grilled or fried chicken, pot roast, and stir-fried dishes with seasoned chicken, beef or pork strips. Each comes with a choice of five bases. Items with meat are priced at $5.99, the vegetarian bowl at $4.99.
The meals arrive at the stores already cooked and can be assembled and heated by staffers in up to four minutes. Vegetables are sautéed fresh to order. Dinner rolls and garlic bread are baked on premise. Stir-fry products were introduced about 18 months ago.
The program is offered at both lunch and dinner and finished items range from 14.5–16 ounces, so it’s more of a dinner size portion. The program’s launch in early July coincided with the rollout of a kid’s meal, both aimed at stimulating family business.
While Rutter’s is having success with HMR, others are staying true to their consumer base. “We don’t do much of it,” Keith Clark, category manager for fresh foods for Kum & Go, in West Des Moines, Iowa, said of HMR.
What little meal service Kum & Go offers comes through its franchised Chester’s fried chicken. “We have some high-volume foodservice locations that have this offering, but still most of the foodservice business is either finger food that they’re buying for going down the road, or they’re eating in, like lunch for the blue collar workers,” Clark said. “We have takeout options there like an eight piece and a 20-piece chicken deal, but we even do very little of that.”
Overall, only nine of the chain’s 435 units offer the Chester’s program. “While there is a need for this type of offering for some chains, we know our customers, and they don’t want this type of offering right now,” Clark said. “That could change going forward and is something we’ll keep an eye on.”
Market to Your Customers
Art Potash, president of Potash Bros. Markets Inc. in Chicago, said food to go has been part of his store’s deli operation for a few years. His trio of stores sells meal packages with rotisserie or fried chicken with sides. Other entrees include meat loaf, shrimp, ribs and macaroni and cheese. Prices start at $4.99.
Potash said he is looking to expand its foodservice offerings “because fewer people seem to want to cook at home.” Customers cut across all demographic lines, Potash said. “We have a lot of people who work in the neighborhood, which is a mix of residential, commercial businesses and office workers.”
Weiner, of Rutter’s agreed. “I think that if you have a strong food presence, this is the next place to go,” he said. “There is an awful lot of money sitting on the table for whoever does this right. I can’t sit here and say that what I put together to start with is right, but I think it’s a good base to build from.” CSD