After the recession-fueled hesitancy of the last couple of years, some retailers are once again investing in new foodservice equipment to add new items, boost sales of existing ones and streamline operations.
By Marilyn Odesser-Torpey, Associate Editor
When FriendShip Food Stores, based in Fremont, Ohio, decided to add frozen yogurt to the foodservice offerings at its newest store, which opened in December, the company jumped in with both feet, which translated to 15 flavors and 45 toppings.
“We went all in,” explained Kevin Bible, FriendShip Food Stores’ food service district manager, noting that the company invested between $80,000 and $100,000 in the program.
Beck Suppliers, the parent company of FriendShip Food Stores, was looking for a great foodservice offering that would be cost and labor effective and produce major profitability, Bible said. “We figured that if we really wanted this new foodservice offering to make an impact, we couldn’t go halfway and just offer a couple of flavors.”
In addition to the initial investment cost of the machines and other service items, the concept requires about 20 hours per week in extra labor to operate. “The machines and the service area around them must always be kept very clean,” Bible said. “That’s another critical part of doing it right.”
The goal, he said, was to make the store into a destination, so the company put in five self-serve machines and ice cream parlor-like seating to create what it calls a “Yogurt Paradise.” Even though the concept was introduced in winter, it was an instant hit with customers, Bible said. Some days the store gets over 100 yogurt customers and, during its first two weeks, there was a good deal of repeat business.
“I thought if we could do between 25 and 30 customers per day we would be doing well, especially in the winter,” he said. “But we’ve far exceeded that. I was there for an hour and saw 10 people come in for yogurt.”
According to market research firm Mintel, FriendShip Food Stores picked the right product at the right time to expand its foodservice offering. A recent report showed that the frozen yogurt sector grew from $279 million in 2011 to $486 million in 2013, showing a 74% increase in sales.
“The frozen yogurt segment has benefited from a perfect storm of factors, including the growing popularity of yogurt among U.S. consumers, the growing acceptance of frozen yogurt as a snack, and the perception of a higher health profile that coincides with increased attention on better-for-you products,” said Beth Bloom, food and drink analyst at Mintel.
At FriendShip, the frozen yogurt sells for 45 cents per ounce. Most of the sales average $4-$5.
The company is also looking to the concept to produce increased incremental sales. “Every time customers come in for the frozen yogurt, we have the opportunity to become their gas station and their beer, pop, cigarette and other convenience store products destination,” Bible said.
He noted that the concept attracts younger adults and families with children, two very desirable c-store demographics. “That’s where this industry is going. They’re the future for us and we have the chance to make them customers for life.”
Although it required a “major learning experience,” the company decided to go with its own proprietary frozen yogurt program rather than become a franchisee or licensee of a national branded concept. “First of all, we didn’t want to pay a franchise fee, but, even more important, we wanted to create a fresh, new concept and do it the way we wanted to do it. If we want to do smoothies and specials, we can. And we can design our own signage and other POS,” Bible said. “We can create any image we want and tweak it to accommodate wherever we want to go with it.”
For example, the store has linked the yogurt offering with its frequent shopper incentive program. Every cup of yogurt earns cents off a gallon of gas.
FriendShip is looking at a couple of locations for retrofitting the concept in markets where there is no frozen yogurt competition. The program will also be considered for inclusion in future new builds.
Designed to Win
At Rockland, Mass.-based Tedeschi Food Shops, the focus is not on introducing new products, but on finding new ways to merchandise existing ones more efficiently and effectively. In its Sharon, Mass. location, the company recently installed a new kidney-shaped, stainless-steel fresh case that was designed specifically for its stores.
A collaborative effort by Tedeschi Director of Fresh Foods Bob Goodwin and Southern CaseArts, a small, family-owned equipment firm headquartered in Bessemer, Ala., the new case takes up the same five-by-eight-foot footprint occupied by the usual island case, but features an additional shelf. “One of our goals was to make better use of the square footage the case takes up on the floor, especially in tight urban environments,” Goodwin said.
Another was to create a show-stopping showcase for the store’s sandwiches and other fresh selections. “We wanted modern, crisp lines and a little sex appeal to capture the customers’ attention, especially women and young adults, as soon as they come into the store,” he noted. “The kidney shape is intriguing because it provides a surprise around every corner as the customer makes her way around.”
Strategically placed LED lighting highlights the products on display. A specially-designed refrigeration system evenly directs air flow throughout the case for more efficient cooling and elimination of warm spots. Goodwin also said he decided to go with a remote rather than self-contained compressor to provide a quieter shopping experience for customers.
Shelves for the new case are designed to have less depth than the usual island display. “We wanted to keep less inventory on the shelves at any one time and make sure there were more turns to keep all of the items fresh,” he said. Goodwin noted that the new design is the prototype for Tedeschi’s fresh cases going forward.
The kidney case is divided into four merchandising quadrants—two sides and two ends. Sandwiches made in the company’s commissary occupy most of the front side of the case. Fresh fruit and premium beverages, such as Naked Juices, share the front and center positioning.
Snacking options occupy the back side of the case. Snacks include yogurts, cottage cheese, hummus, salsa, carrots or apples and dips, cheeses and slices of cheesecake. (A new surprise hit in the snacking category is an aseptic pouch of mixed olives, Goodwin noted.) On the front end of the case, breakfast options are on display. They include breakfast sandwiches, Texas toast and yogurt parfaits. The back end is for “comfort foods”— i.e. anything that requires heating in the microwave, such as soups, burritos and a new line of Indian foods.
Some equipment has uses far beyond its original purpose, making the investment even more worthwhile. For example, Jerry Weiner, vice president of food service for Rutter’s Farm Stores, introduced woks at Rutter’s five years ago, but he is still finding new ways to use them.“We first brought in the woks to do stir frys and to add a little theater to our foodservice,” he said. “But we soon realized they are as versatile as any grill surface and are safer to use. We cook everything from scrambled eggs for our breakfast bowls to cheesesteaks in the woks now.”
Rutter’s now has woks in 19 stores. They heat to cooking temperature in seconds and use an indirect heat cooking system, so while the pan heats up, the burner doesn’t. Weiner noted,“You could literally take the hot pan off the burner and put your hand right on the burner without any problem.”