Developing a Value Menu with Appeal

The coming of summer means a lot of things—chief among them an insatiable hunger for hot dogs, burgers, sausages and brats. No c-store foodservice program is complete without them or the opportunities they represent.

“Who doesn’t like a hot dog?” said Kim Loniecki, director of branded foodservice for Wesco Inc. in Muskegon, Mich. “When you’re looking at product development, you’re looking at things that have the widest possible appeal, that would appeal to the largest part of your customer bases, and really, who doesn’t like that?”

Done correctly that menu could range anywhere from a basic, fundamental hot dog to a roller-grill type of program to more sophisticated items like spicy taquitos that can be prepared on the same equipment. “My perception is that in this program you can really get out of it what you put into it. It can be something that defines and differentiates you,” Loniecki said.

With that in mind, 51-store Wesco is studying hot dog programs around the country and planning to launch its own in the next several months. It expects to begin testing its new roller grill program by mid-summer.

Convenience Rules
“There is nothing more convenient than a hot dog, a brat or a sausage,” said Tom Super, director of media outreach for the National Hot Dog & Sausage Council in Washington. “They’re already cooked, they just need to be reheated, and for the most part they’re pretty uniform in their shape. That means a storeowner can know the exact size and weight of a product and have it available with minimal preparation time. They also know how many can be sold in a given time, which helps reduce waste and spoilage.”

They are just as convenient for the consumer, Super added. “It is a warm meal. It is relatively inexpensive, and you pretty much only need a napkin to eat it. It doesn’t get very much more convenient than that.”

For the 52-week period ending Jan. 24, 2010—smack in the middle of the nation’s economic downturn—hot dog dollar sales were up 2.5%, with both volume and unit sales up slightly, as well, according to data provided by the National Hot Dog & Sausage Council. “I’m not saying that the hot dog is recession-proof, but I would bet that it’s probably as close as any food can get,” Super said.

Super called roller grills a “very popular” way to prepare hot dogs in convenience stores. “Fresh sausage, of course, needs to be cooked thoroughly. But for a hot dog all you need to do is reheat it. You can do that on a roller grill, you can do it in a microwave and, if you have the equipment, you can put it right on the pan or grill.”

Not-So-Big Dog
For years, the trend has been to make the products bigger, but that trend appears to be waning.

“We’ve gone to a smaller hot dog and are mainly driving it with price,” said Chad Prast, director of foodservice for VPS Convenience Store Group in Wilmington, N.C., which operates the Village Pantry and Scotchman chains. The chain made the switch about two months ago.

Getting the size of the hot dogs down—from six to eight per pound—has brought the cost down and allowed the retailer to price them for as little as 69 cents. The larger dogs were priced at $1.29 each or two for $2.

The results have been extremely encouraging. The number of units being sold has doubled, according to Prast, while overall sales dollars have almost doubled as well. A side benefit has been that store employees are more involved with the product than in the past. “That’s because they have to put more out, which makes them more interested in it than if they just put some out and then throw them away. And of course it makes the customers happy.”

Prast has never preferred larger grills in the way that others like QuikTrip have. “We think it’s harder to drive sales out of bigger grills,” he said. “So we use smaller grills, but do a better job focusing on other things like fresh sandwiches and fried chicken.”

Village Pantry also has 30 stores that offer brats prepared in a counter-top steamer unit. The program does well, Prast confirmed, but could do better. One negative about the stainless steel steamer is that it doesn’t have a see-through top. Customers have to lift the lid to see the product. “Once (the manufacturer) gets that fixed we’ll roll it out to more stores,” he said.

The company also makes three-ounce hamburgers in the store and merchandises them in the cold case along with fresh sandwiches. Customers can also get made-to-order burgers in 55 of the chain’s 387 stores. Still, Prast pointed out, approximately 90% of the burgers are sold cold because it’s quick. “It’s our No. 1 sandwich. The customer grabs it, throws it in the microwave and heats it.”

Prast plans to increase the number of locations selling hot food, with as many as five coming online by year’s end. At the same time, the cold deli sandwiches and bakery items will go into another 50 units. The company is also slowly expanding the variety of its burgers. It added a jalapeño variety to its original last year and, more recently, a bacon-cheddar burger. Prast is pleased to report the new flavors have not cannibalized sales. “That is a good thing. Usually, when you add a new flavor it impacts the current menu, but this has all been incremental business.” They are priced at $1.59 each and two for $2.

Effective promotions are as basic as the dogs themselves, said Prast. Signage in the windows and near the grills and outside on pumptoppers all call attention to the food program. A recent promotion at Village Pantry in April and May offered an Oscar Mayer hot dog or Coca-Cola fountain drink for 69 cents; a hot dog and fountain drink for 99 cents; and two hot dogs with a drink for $1.99. For the summer months, a lot of the chain’s focus is going to be on its sandwiches and bakery. Executives will probably stick with that 69-cent price at least until the fall in order to build as much customer loyalty as possible.

Expanding Dayparts
While conducting her research, Loniecki has been impressed with the range of items available, from hot dogs to bratwurst, Polish dogs and others. “From there you can roll into a crispito or taquito type of item where there is a slightly harder shell filled with chicken, spinach, different types of spices. I’ve even seen breakfast taquitos and crispito items—with that same type of a flour-based shell—filled with scrambled eggs, cheeses, peppers and spicy sauces.”

The breakfast aspect is key. Roland Harris, operations manager for GoCo Ltd. in Butler, Ala., said his 16-store chain offers a trio of popular sausage-based dishes for breakfast, combining patties and three-inch links with, among other items, eggs, bacon and cheese. Store personnel report that the items are popular not only for their taste but mobility and ease of handling.

Lonieki agreed, “When you talk about a hot dog offering you’re talking about lunch and dinner time. But what do I do with that roller grill in the morning? Is it just going to sit there not generating any type of revenue or sales for us? You can address all dayparts with that one piece of equipment. There are items that are available that will keep you in foodservice all day long.”

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