With fresh food sales booming, operators are turning their attention to take-out packaging and finding that with so many options available, choosing the proper solution can be as tricky as selecting the foodservice program itself.
By Joe Bush, Contributing Editor.
Convenience store foodservice programs have been big business and growing for a decade thanks to the industry’s keen focus on providing quality foods at a great price. An equally important component that has contributed to the industry’s success is that operators realized early on that presentation and packaging is just as important as the food itself.
To convince customers to buy prepared food or quality coffee, convenience store chains have focused on presenting clean locations, investing in specialized employees, products and equipment and putting a lot of thought into their foodservice packaging.
In other words, gone are the days of convenience store operators merely providing vessels to hold liquid and containers to enclose and transport food. As Lynn Dyer, executive director of the Foodservice Packaging Institute (FPI), said, “Until a couple years ago, we weren’t getting contacted by convenience stores.”
All-white Styrofoam cups conjure memories of Jiffy Lube waiting room coffee, while Styrofoam clamshells bring back memories of fast-food burgers and non-biodegradable litter. Consumers want to see sturdy, insulated and attractive beverage cups, and fresh-looking food, especially when they pick it up from a center-island gondola. See-through clamshell packages help with this.
This is not supposition. Food industry research firm Technomic did a takeout packaging survey in August 2009 that focused on convenience store operators, with other channels represented for comparison. Given the statement, “We view packaging as a means of enhancing our takeout program,” 51% of convenience store operators answered “Yes,” 8% more than all operators combined.
Forty-three percent of all operators said they view disposable packaging as an added cost, not a program enhancement. Just 33% of convenience store operators said the same. C-store folks were also less likely to buy the least expensive packaging—39% of all operators said they do, compared to 34% of convenience store operators.
Bottom line: The packaging may not make the product taste better, but it brings convenience stores closer to their fast-casual and fast-food foes.
“C-stores have been a good area of growth for packaging companies because c-stores are now grasping the importance of packaging as part of the overall image,” said Tim Powell, Technomic’s director of research and consulting. “That shows that c-stores are finally starting to understand how to do food right. You can’t have the Styrofoam, you can’t have the aluminum foil. You have to have the quality packaging you would see in one of your competitors.”
Furthermore, if you want to be a viable restaurant offering, your image really comes through in how well your packaging performs. “As you move from offering just beverages to specialty beverages to prepared foods, then your prepared foods need to have better packaging,” Powell said.
Even in tough economic times, convenience store operators were not only voting on packaging with their wallets. Technomic asked how operators made their packaging choices, and gave survey respondents eight criteria: quality; availability from distributor; price functionality; environmental friendliness; ability to customize company logo; breadth/depth of supplier’s line; and supplier’s brand name.
Convenience store operators chose product quality first and availability second. Pricing was third. For all operators, price was first, functionality second and quality third.
“Convenience stores are saying, ‘We have to invest if we want to grow,’” Powell said. “It’s part of your program; just like keeping your stores clean and having your staff friendly and knowledgeable, you need to have packaging as a component, too.”
Retailers of all sizes are getting the message. “Pricing is the main thing, but it isn’t everything,” said Linda Cavanaugh, director of foodservice for 34-store Pak-A-Sak, the retail arm of Jay Petroleum of Portland, Ind. “You don’t want packaging that leaks.”
Indeed, bright colors and company logos don’t mean a thing if customers get messy or worse, burned as a result of flimsy packaging. As in Cavanaugh’s case, the branding of packaging sometimes is not an option, even with signature offerings.
Pak-A-Sak has 12 Subways, three Noble Romans and a Taco Bell. Cavanaugh doesn’t have to worry about buying packaging for them, but in four stores, Pak-A-Sak has a proprietary fried chicken program.
While Pak-A-Sak’s coffee and fountain cups sport the chain’s logo, the take-home containers for the chicken do not. The reason is simply a matter of economies of scale—there are only four chicken locations, but all Pak-A-Saks serve coffee and fountain drinks.
Getting Foodservice Right
Jacksons Food Stores of Meridian, Idaho, has the scale, but not a proprietary food program. Still, any chain-wide decision for 160 stores over four states is a major one, and in the past 18 months it has made two changes to its foodservice packaging, neither one for better price.
Jacksons’ cold drink program—fountain, iced coffee and frozen—used to feature an assortment of 12 cups and eight lids. This was cut to five cups (16, 30, 32, 44 and 54 ounces) and four lids—two flat and two domed—when the chain decided to switch to translucent cups from Solo Cup Co., branded with the Jacksons logo.
“It was confusing to the employees, and it was confusing to the customers because there were different cups for everything, and they had to try to figure out which lid to use,” said Rich Levin, Jacksons vice president of marketing.
The change helped Jacksons to organize its fast-food counters. “It also allowed us to reduce our inventory by cutting a bunch of SKUs out of the system,” Levin said.
Jacksons has also introduced an innovative package to its roller grill program: individually wrapped hot dog buns manufactured by Dunford Bakers of West Jordan, Utah. Each bun comes in its own plastic bag, like a Twinkie.
Again, Levin explained, this move was not motivated by price. “Even though we pay a little bit more for them, we feel customers are more comfortable with our food offering,” Levin said. “First of all, it keeps the bread fresher for longer. Second, the customer doesn’t have to worry whether anyone else has touched their hot dog bun. It’s allowed us to have a consistent offering across all of our stores rather than buying from each local bakery because they come from our grocery wholesaler.”
Jacksons also has to deal with a relatively new cultural phenomenon: the prohibition in certain communities on using Styrofoam and non-recyclable or non-compostable packaging. It does business in Issaquah, Wash., and Portland, Ore., both of which ban polystyrene foam (Styrofoam) food containers. Jacksons uses paper cups from Solo in those towns and adds a sleeve to protect customers on hot beverages.
“We’re expecting more and more municipalities to adopt this legislation, so we are prepared,” Levin said.
Dyer, of FPI, said two factors need to be considered when a retailer contemplates environmentally friendly packaging: what the packaging is made from (recycled content, bio-based) and whether or not it is compostable.
“Green means something different to so many people,” Dyer said. “It’s not going to go away, so choose wisely.”