More c-stores are gaining ground in the ready-to-eat (RTE)/made-to-order (MTO) foodservice market by offering their own food items prepared on site – further blurring the boundaries between traditional c-stores, grocery stores, and quick serve restaurants (QSRs). Their speedy service, convenient location and targeted selection gives them a competitive advantage over others.
In today’s fast-paced society, many individuals, and millennials in particular, are less likely to sit down for full meals and are more inclined to snack throughout the day. Mintel's Convenience Store Foodservice US 2017 report states that this generation, along with males (who are core c-store customers in general) have positive views of purchasing MTO foods at a c-store. Protein-rich foods such as hot dogs, sausages, and chicken products, including nuggets, wings and strips, are quite popular as affordable meals and savoury snacks across the generations.
Chester’s International, as one of the largest store-in-store foodservice franchise concepts to the C&G channel, has over 1,200 locations across North America, 110 of which are in Canada, and include Anytime Food Mart in Hamilton, Ontario and A&R Laundromat & Confectionary in Air Ronge, Saskatchewan. According to William Culpepper, vice president of Marketing at Chester’s International, their most popular protein-based products are fried chicken tenders and fried bone-in chicken.
Fresh meat volume sales, in particular, are forecasted to grow 7.5 per cent in
Canada from 2017-2022.
“The demand for fried chicken products is on the rise,” says Culpepper who cites breaded chicken sandwiches, chicken nuggets and chicken strips as the fastest growing menu items in C&G foodservice in the US. “As a result, we’re exploring various product extensions like our Honey Stung Boneless Wings, BBQ Chicken Sandwiches, and Red Hot Sauced Tenders.”
A number of Hasty Markets in Ontario have been selling protein-based foodservice items for over a decade. Tagged “more than just a convenience store” on their corporate website, these independently owned and operated franchises offer shawarma, roast chicken, and chicken wings – with shawarma being the most popular. According to Yvonne Farah, vice president and general manager for Hasty Market Canada, the franchise is always looking to expand its foodservice category.
Mike Habib, owner/operator of Jubilee Junction in Halifax, Nova Scotia, has been offering a complete foodservice menu at his convenience store for over four years. His protein-based foodservice items are fried, grilled and freshly prepared on-site – everything from classic to gourmet, such as chicken fingers and wings, pizzas, chicken breast burgers and 100 per cent homemade beef burgers, as well as fresh deli sandwiches – with chicken fingers being the most popular of the bunch.
“Once you have a taste for something, you stick to it,” says Habib about his foodservice program and his loyal customers. While many customers call in advance to place their orders, others make impulse purchases based on what they see and smell and don’t mind waiting the seven to 10 minutes it takes to prepare their meal. “Seeing and smelling a fresh baked pizza come out of the oven definitely encourages impulse purchases,” adds Habib.
“A proprietary foodservice program has good dollar value comparable to tobacco sales,” says Terry Frei, category manager, Western Canada Foodservice for Mac’s/Circle K. Across his 13-year career in the C&G industry, Frei has seen extensive growth in foodservice programs. From basic beverages and roller grills to sophisticated equipment that allows the owner/operator to quickly prepare a wide range of quality hot protein-based foodservice items on the spot.
While it may be easier to partner with a brand foodservice provider, c-store owners with their own foodservice program have the potential to turn a profit at the two-year mark once initial investments are covered. Junction Jubilee is a prime example. With a full-service kitchen in his c-store, Habib believes his foodservice program has the potential to surpass his traditional c-store product sales.
Whether you work with a brand or go independent with your foodservice program, Culpepper stresses the importance of partnering with a provider who can deliver a food product that is high in demand and has broad appeal, but also with one who can provide great on-going support to drive traffic and increase profitability.
Mac's/Circle-K has tuned in to foodservice profit potential since the early 1990s with their introduction of hot dogs and corn dogs. “A roller grill is a great entry point into foodservice for any c-store,” says Frei. Sixty-five per cent of Mac's/Circle-K locations in Western Canada have a roller grill program. “It’s fairly inexpensive, easy to operate and recognizable for the customer.”
Since then, Mac's/Circle-K has developed its foodservice program into three segments: baked goods featuring donuts; roller grill which includes hot dogs, corn dogs, taquitos, angus dogs and proprietary signature dogs on a self-serve and full serve basis; and hot foods which includes pizzas, sausage rolls, chicken pieces, chicken fingers, hot wings, kabobs and burgers.
This year, two stores within the Mac's/Circle-K banner are piloting pizzas and wings – sauced, rubbed and made in-store. Based on its success south of the border, Frei expects the pilot to do well with more stores following suit. Frei adds: “Going forward, customers can expect to see more on-site quality food preparation. That’s where we see c-stores progressing.”
Core-Mark has plans to roll out a turnkey, proprietary fresh chicken program called Bird Shack in late 2018 after achieving positive results in the US last year. Core-Mark’s Bird Shack is a fresh approach to a fresh fried chicken concept. According to Core-Mark International’s Director of Fresh and Foodservice Marc Rex, Bird Shack is the best of a brand without the burden. Buy what you need, and use Bird Shack resources as you need them. Perfect for owner-operators seeking flexible ways to deliver a craveable fried chicken experience, Bird Shack lets you grow a branded business on your terms. Rex adds: “We build and foster positive relationships with key suppliers and reduce the risk for store owner-operators by providing quality products.”
Besides influences from the US, a number of factors are considered when deciding if a c-store is set up for foodservice success. These deciding factors include location, current sales and economic features in the area.
According to Frei, c-stores located near schools, sports complexes, off a highway or in a rural area have greater opportunity for foodservice success. Habib couldn’t agree more. Junction Jubilee is near Dalhousie University and is pleased to feed hungry students who, for an average of $5-$8, can enjoy a hot protein-based item with a drink. Despite nearby QSRs, Junction Jubilee has gained its share of the competitive foodservice market and even delivers to its customers. Habib believes you have to try new things in order to stay relevant. Quality foods conveniently prepared in-store and delivery services are just two examples that contribute to his success. As the owner of the building he operates his c-store, Habib has the freedom to make these decisions and benefit from its profits, compared to certain rules and restrictions associated with renting.
“The one thing I would want to stress is that you don’t want to make the investment in foodservice if you’re renting the business,” says Habib, who is looking to expand his foodservice offering based on its growth and success over the years. “You want to own it and keep the profits.”
With investments in quality foodservice programs that include a variety of protein-based items, catered to the likes of target customers, and the industry trend that we’re on, there is little doubt that c-stores can be selling just as good, if not better, foodservice items than QSRs.
1. Location, location, location. If you’re located near a school or sports complex, close to a construction or industrial site, in a rural area or off the highway, you have prime advantage of a target customer base who may support a c-store foodservice program.
2. Deliver a select variety of popular protein-based products that support the needs of your target customer base and ensure their availability and quality at all times.
3. Own versus rent. There’s a cost associated with a foodservice program – be it investments in equipment, product and storage. Various rules, regulations and profit sharing restrictions may be associated with renting a business versus owning it.
4. A high-quality foodservice operation provides a great opportunity for c-store owner-operators to drive additional traffic to their location and increase profitability. It is important to find the right partner to deliver a food product that is high in demand and has broad appeal but can also provide great on-going support in terms of marketing, training, and follow-up visits to help ensure success.
Meline Beach is a Toronto-based freelance writer.