Testing New Products
As new products earn their way onto your menu don’t forget about the equipment.
“Let’s say you’ve got a roller grill and you’ve been selling hot dogs forever,” explained Larry Miller, president of Miller Management & Consulting Services Inc. in Sanford, Fla. “Now somebody brings you a handheld Mexican product, like a taquito, and you want to see if it works. Well, to me, doing a test is almost immaterial. What you’re really doing is putting it out there and seeing what your customers think of it.”
The only way to get an effective trial, in Miller’s opinion, is to look at what the majors do. “Look at Chick-fil-A where sampling is a huge part of introducing new products,” he said. “C-stores need to embrace sampling as traditional restaurants and QSRs have done because it is a proven way to get product in your customers’ hands and hear what they think.”
How many items a store can test at one time and how often it should test new products depends on the store’s equipment package. With a single grill, for instance, an operator needs to leave room for its normal foodservice volume and test new products with the rest. “Now, if you’re going to bring in another roller grill to dedicate new products to, I’d say test as many new items as you can in order to see what works,” Miller said.
Keeping a menu fresh means ongoing change. Keeping change profitable means work.
“I wish I could tell you that there is one blanket strategy that would work for everybody,” said Larry Miller, president of Miller Management & Consulting Services Inc. in Sanford, Fla. “That’s not the case. Menu is what drives customers to the site. If you have a Mexican offering, for example, chances are you’re only going to attract those customers that flavor profile appeals to.”
Miller regularly tells clients that they first have to find their niche in the arena in which they compete. “You need to look around and find what food category or menu items are in demand, but missing in your area. If you try to do a ‘me-too’ offering you’re at a disadvantage.”
For example, if you’ve got three Subways and a Subway knockoff in the market and you decide to do a sandwich program, chances are you’re not going to do well. “It seems so simplistic, but a lot of people in our industry get very fixated on what they hear is doing well in other chains,” Miller said. “Take pizza. It does real well in some places, but it’s not for everybody.”
Know Your Options
Retailers have little excuse for not doing their homework, said Iris Yost, a multi-unit 7-Eleven franchisee in Las Vegas. “There all sorts of avenues for finding new products and product information,” she said. “Our current partners introduce them. Then there is NACS, the McLane trade shows and our 7-Eleven franchise owners association trade show. If you want information, it’s out there.”
In 7-Eleven’s case, many of the menu additions are tested in corporate kitchens and then in select stores nationwide before being rolled out to franchisees. To earn a permanent place, they need to display consistent quality, cost-effectiveness and sales.
According to Yost, the help she receives from suppliers includes upfront funding on the first order, discounted products for the specified introduction period and coupons for add-on purchases. “Plus, they provide consumer feedback and, depending on the item, work with us to target a specific time of the year or special occasions like the Super Bowl to push promotions and new products,” she said.
A recent strategic addition at Yost’s stores has been breakfast taquitos. The goal was to beef up morning foot traffic and sales now that kids are hiking back to school each day. Penciled in for the months ahead, she added, will be various other hot foods specifically developed for the roller grill.
Recommendations from suppliers can be useful, but they should be just one step in the menu development process. “Unless your suppliers are looking at your market closely and coming to you with a plan devised just for your store, I wouldn’t let them decide what food products you’re going to carry,” Miller said. “That is a dangerous approach.”
Given the vast array and quantity of customers entering their doors in various need states, convenience store operators have a huge opportunity to compete in the quick-serve/fast-casual foodservice arena, said veteran foodservice consultant Karen Malody, president of Culinary Options in Seattle.
“In so doing, they have a further opportunity to strategically dispel the myth that all food served in c-stores is bad fast food or elevated junk food and take a smart-snacking position,” Malody said. “There is no law that says c-stores cannot be on the leading edge of offering consumers intelligent, nutritional food that follows today’s trend of all-day-snacking versus the old three-meals-a-day.”
Most convenience stores, Malody suggested, have easy access, including great locations with front-door parking. “With some clever foodservice intelligence brought into their thinking, I could see c-store operators easily stealing business away from classic foodservice operations, especially since they can also offer customers the opportunity to do some fill-in grocery shopping, which restaurateurs cannot do,” she said. “The group that figures this out first, given the higher margins on good food offered in a safe, clean, serviced environment—versus classic grocery margins—could boost their overall profit.”
In addition, Malody insisted, they could easily become known as the new legitimate place to stop and get something sensible to eat on the run. “There are no drive-through lines and no worries about parking at c-stores,” she said. “Just go in, choose your snack or sensible meal, pay and leave. I think it is a giant opportunity to create value-added brand identity, additional profit and excellent customer service. I anticipate that within this next year a considerable amount of my work in setting up foodservice systems for operators will fall into the c-store category.”
Stake in the Ground
When the decision is made to get into foodservice or expand the existing menu, retailers must complete a comprehensive due diligence plan. Next, they have to execute their new strategy better than anybody around them.
One tactical misstep, according to Miller, is when retailers resist testing new products, promotions or other marketing strategies. A 40-year industry veteran, he has noted a fundamental difference between convenience stores and restaurants in this regard.
“In c-stores we’ve always expected the suppliers to fund a product trial, whether it’s through free goods or placement allowances. In foodservice it’s done differently. You pick what you are going to specialize in and then you go to a supplier that can find the food products that will support that,” Miller said. “Many times retailers want the supplier to give them free products to see if it works. You have to be more aggressive.”
Miller believes operators need to begin approaching the process differently, like being more willing to take risks such as offering free sampling and even recipe contests. “Ask your customers what they want. Give out prizes to someone who tells you things you should be carrying,” he said. “People don’t listen to their customers enough.”