Turning a Profit at the Roller Grill

TOP PERFORMERS
  • Oscar Mayer (Kraft)
  • Ball Park (Sara Lee)
  • Hillshire Farms (Sara Lee)

HONORABLE MENTIONS

  • Ruiz Food Products
  • Johnsonville Sausage
  • Don Miguel

Roller grills, the backbone of many convenience store foodservice programs, continue to provide chains with an inexpensive, labor-friendly foodservice concept that allows store operators to expand their fresh food offering at a time when other categories are declining.

The category is appealing to retailers and consumers alike because variety and innovation is offered regularly through the introduction of new products. Throughout 2009 retailers saw regular line extensions on the roller grill that included spicy flavors and larger sizes.

“Data show that Generation Y (16-to-28-year-olds) skew towards spicy food, which means that Hispanic food has mainstream growth,” said convenience store foodservice consultant Dean Dirks, president of Dirks Associates LLC.

The growing Hispanic population appears to be driving the spicy trend. As a result, new products are hitting the market to meet the demand. “We believe the Hispanic market is the average consumer buying from the roller grill, so I think everybody is focused on it as much as we are,” said Paul Servais, retail foodservice director for Kwik Trip, which operates 353 c-stores in Wisconsin, Minnesota and Iowa.

In addition, more retailers are adding breakfast sausages to the roller grill to entice hungry customers in the morning who stop by  for coffee on the way to work. Pleasant Prairie, Wis.-based Open Pantry found that in the summertime their morning daypart attracts landscaping crews between 5 a.m. and 7 a.m. The company pumped up roller grill sales with a bigger selection and targeted promotions, which helped carry sales from this demographic during the winter, long after the landscaping season has ended.

Steps to Success
Retailers can help keep their roller grill program enticing to consumers by keeping it fully stocked with fresh items and by bundling meals such as a roller grill item, a bag of chips and a fountain drink at a discounted price.

More than ever, consumers are looking for value and QSR restaurants are meeting this desire with cheaper daypart options, like the dollar menu deals offered at McDonald’s, Wendy’s and others. Open Pantry is targeting this trend by offering wallet-friendly deals centered on the roller grill, such as discount hot dogs at two for $2. At the same time, the chain continues to reach its customers who are willing to pay a little more for high quality by offering premium, higher end roller grill products like Johnsonville hotdogs for $1.69.

Today, customers desire a large array of options, but also want to know that their store sells their favorite products. Talking to customers is a great way to get feedback on what’s working, although retailers say customers are not shy about being vocal if their product is missing. Many retailers are sticking to tried-and-true brands and flavors, but meeting the demand for variety with an extensive condiment bar nearby that allows customers to dress their brat or hot dog to fit their preferences.

Chevron, for example, began rolling out its ExtraGood To Go foodservice program at its ExtraMile stores, which makes foodservice a strong destination within the store. Banner advertising with beauty shots of daypart items greets customers at the pump, and inside the store, uniform signage and strategically placed spotlights draws customer focus to the roller grill, food warmer and menu board.

The oil company has focused on emphasizing the brands consumers know, and all roller grill items have a designated place on the roller grill, so customers can locate their favorite quickly. In addition, all roller grill items are precooked, which ensures the meats are served safe and heated to the optimal temperature. As a result, what customers see is ready to eat rather than a sign asking them to come back in 15 minutes, as some chains do when cooking items directly on the roller grill.

Chevron goes a step further in making sure all their stores offer the same roller grill products, so customers can go to any Chevron ExtraMile store and find their favorite roller grill item.

Even with the influx of new foodservice options, from in-store stirfry to co-branding with pizza or sandwich shops, roller grills will continue to meet an important need.

Jay L.E. Ellingson, the director of food safety and quality assurance for Kwik Trip, predicts that even 10 years from now roller grills will continue to be a prominent fixture in convenience stores. “A variety of roller grill products will come and go, but hot dogs will still be a destination item,” he noted.

The Numbers
Data from the 2009 NACS State of the Industry report which polled 156 retail firms with 20,553 stores as of Dec. 2008 found foodservice accounts for 4.2% of overall sales at c-stores, up 3.9% from the previous year and accounts for 13.9% of average monthly sales at c-stores, which totaled $114,010. Foodservice was the top merchandise category with a 2008 gross margin percentage of 52.1%. In the foodservice category, hot prepared food brought in $11,618 in average sales.

CSD’s 2010 Brand Preference study surveyed 49 key decision-makers from 48 chains about their roller grill programs. Buyers voted Oscar Mayer (Kraft), Ball Park (Sara Lee) and Hillshire Farms (Sara Lee) as the top performers in the category, with honorable mentions going to Ruiz Food Products, Johnsonville Sausage and Don Miguel.

In the last 60 days, 20% of buyers reported seeing sales presentations from five or more companies, while 20% said they were visited by three or four companies and 43% met with one or two companies out of the 12 in the market. Of the 49 buyers of roller grill products, 16%, or eight key people, reported no sales presentations from roller grill suppliers in the last two months.

In the last two months, buyers reported being visited by Oscar Mayer (Kraft) (39%), Ball Park (Sara Lee) (35%), Johnsonville Sausage (31%), Ruiz Products (31%) and Don Miguel (29%), among others.

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