Investing in a Foodservice Future

At first look, boosting business with breakfast sales may seem like a strange idea in these tough economic times as today’s high unemployment means fewer workers stopping for breakfast en route to work.

The fact that teenagers and men between the ages of 18-35, who are some of the c-store industry’s most frequent visitors, have higher jobless rates isn’t helping matters, nor are McDonald’s and Dunkin’ Donuts new breakfast menus and Starbucks’ recent entry into Subway with its Seattle’s Best brand.

Nonetheless, determined and innovative channel retailers are proving once again that the convenience industry can grow its customer base in the face of fierce competition, using a potent blend of innovation and determination to expand existing breakfast programs and launch new ones.

Taking Food to the Next Level
Jerry Weiner, vice president of marketing for York, Pa.-based Rutter’s, boosted the chain’s breakfast offering by taking its menu to a new level.

“We wanted to add some items that are not so much the norm, things that are unique and especially made for customers with appetites that lean toward the gourmet,” Weiner said.

To that end, the 55-store chain added a fresh, made-to-order breakfast burrito to 36 of its stores and introduced a stir fried breakfast bowl in 12 stores, which is similar to a scrambled omelet that offers customers a choice of fresh-sautéed vegetables, meats and cheeses. The eggs are served over a bed of hash browns.

“The breakfast bowl was an excellent product launch, and I was surprised at how quickly it came together,” Weiner said. “Customers watch their scrambled omelet being created in front of them, which is pretty cool. It fell together perfectly from the first try.”

Rutter’s also provides breakfast fare for the more traditionally-minded customer, and offers combo breakfast packages with a drink and side as well. “We run a hot grab-and-go as well as a kiosk program for breakfast as we do for all dayparts,” Weiner said. “We have the typical sandwich selection, offered on bagels, croissants, English muffins, biscuits or ciabatta rolls, all freshly baked in our stores.”

Connecting Through Coffee
Though Weiner said Rutter’s has made changes to its coffee program, such as adding Rainforest and Guatemalan blends and enhancing condiments, those changes didn’t come about in relation to food, but to customers’ changing coffee preferences and growing beverage sophistication.

“Coffee to me is about choices and selections,” Weiner said. “I’m a firm believer that coffee is a very personal beverage, far more so than other beverages, and I’m always looking for the next piece for that.”

With all the competition at the coffee bar, customers have come to expect new options, freshness guarantees and a good price when selecting their next cup.

“I think the way to compete with all these coffee places is giving people more to choose from and a lot of options in condiments,” Weiner said. “People really want to get in there and make it exactly the way they want to consume it, and they can’t do that in a lot of coffee places. Giving them those options has had a big impact on our business. Of course, delivery and execution is always key.”

Bundling with Bakery
Rick Lawlor, vice president of retail sales and marketing for Hess Corp., said his company began growing breakfast sales when it added an old favorite for customers who want a sweet with their coffee: doughnuts.

“There are a number of ways we’ve been growing our breakfast business, the most significant being our exclusive Dunkin’ Donuts self-serve program,” Lawlor said. In January 2008, we began rolling out Dunkin’ Donuts coffee, baked goods and hot chocolate at many Hess and Hess Express locations, and our customers love the product and the convenience. It allows us to provide a one-stop shop for commuters and fuel customers.”

Lawlor said Hess stores have seen a significant increase in its breakfast business at the 300 locations where it installed the Dunkin’ Donuts program. As a result, it plans to continue rolling out the concept across its entire network of stores up and down the East Coast.

“With today’s customers demanding value, quality and convenience, our plan was to find the best offering we could to meet their needs,” Lawlor said. “Dunkin’ Donuts allows us to offer a meal solution throughout the day, plus it’s a really strong brand that can draw customers on its own. It’s the best of both worlds.”

Run Special Promotions
“Alarm clocks, lights and roosters have conspired against us for centuries. Waking us up. Telling us to get to work. Reminding us we slept through class. You know the deal, you’ve woken up before. And waking up causes one thing—Morning Face.” So reads the Web site copy for Kum & Go’s new “Fight Morning Face” promotion, one which company spokeswoman Meggan Kring said is packing customers into its 425 convenience stores across 11 states.

At www.fightmorningface.com, Kum & Go invites customers to share their morning faces with the world by uploading pictures of themselves taken just after awakening, before they primp, floss or shower. The highest rated Morning Face each week wins a Kum & Go prize pack, which includes a $50 Kum & Go Gift Card.

Kum & Go launched the Fight Morning Face campaign on Oct. 1, and this is its first year doing it. “Our goal was to focus on increasing morning traffic and promote our everyday value-priced cappuccino,” Kring said, and to encourage customers to come in for one of the company’s six breakfast offerings. “The promotion has generated a significant amount of online buzz and word-of-mouth marketing that we are thrilled with.”

Kring said Kum & Go’s top-selling breakfast sandwich is a sausage, egg and cheese croissant, and its top value-priced sandwich is a sausage and cheese biscuit, which it sells at $1.39 or two for $2. The company continues to look for new breakfast items and plans to launch several more value and regular-sized breakfast offerings.

“Kum & Go loves the breakfast customer, so we make every effort to provide consistent offerings for customers, value and great tasting food,” Kring said. “We are mindful of the marketplace and make every effort to bring the customer what they want, when they want it, so they continue to return to our stores.”

When to Stop Competing

Sometimes it makes much better economic sense to put your competition to work for you instead of using your energy to battle them. That’s essentially the decision Scott Shealy, vice president of Asheville, N.C.-based Citizens Fuel Co. made almost two years ago when he elected to put Dunkin’ Donuts in three of the company’s 10 Citistop stores.
Citistop locations are among the few Dunkin’ franchises in North Carolina that offer the complete Dunkin’ line, which now includes a complete breakfast menu, Fair Trade-certified espresso drinks, flatbread sandwiches and personal pizzas as well as doughnuts and its extensive beverage list.

The decision has proven to be a wise one, especially given today’s tight gas margins and growing gas sales competition from a large regional grocery chain and Wal-Mart.

Interestingly, in one of Shealy’s stores, the Dunkin’ franchise is alongside the convenience store, meaning customers can walk through an interior door to the coffee house. Given the easy access, you’d think that all the c-store coffee-drinking customers would walk a few steps to buy their morning cup of Joe, but some continue to buy their coffee in the Citistop store, ignoring the much larger coffee menu nearby.

“It goes to show that if you create a good coffee program, which we think Citistop has, that customers will remain loyal no matter who moves in next,” Shealy said. “Throw in our c-store promotions and a strong condiments bar and we’re sure we can compete with anyone, even ourselves.”

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