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C-Store Exotic

By now, everyone has heard about the expansion of the Hispanic and Asian-American populations in the United States, and the new foodservice trends that those demographics have made popular — from empanadas to yellowtail sushi to Szechuan chicken. And it's true that adding menu items that appeal to Hispanics and Asian-Americans can foster loyalty and boost sales among those groups.

What's equally important, however, is that spicing up your menu can make stores a destination for other customer groups, giving Bubba a new reason to come in and drawing the female demographic that so many retailers covet.

Jodi Laird learned that lesson when she began offering taquitos and egg rolls in a Hop'n Sack in Pumpkin Center, Okla. Manager of one store in the Lawton, Okla.-based 11-store chain, Laird has seen her foodservice sales increase from $3,500 per week to about $5,100 since she introduced the Spicy Beef Ranchero, Chicken Alfredo and Spicy Chicken Jalapeno XXL Taquitos and Teriyaki Chicken, Peppersteak Beef and Orange Chicken XXL Chinese Rollz from Sioux Falls, S.D.-based Hot Stuff Foods.

For Laird, whose store is located in a rural community, the new items were not an easy sell; as she recalls, she told her vendor, "Give me a break here. These old farmers want pizza."

She agreed to try them, however, and convinced her customers to do the same through a combination of sampling and reminding them that she hadn't steered them wrong before. "Most of these people have been out here for so long, they know me," she said.

Sure enough, those "old farmers" have been driving the sales of those new items. "You have to understand, most of these farmers out here haven't ever seen anything that's rolled up with beef inside it," she said. "But it's these old cowboys out here who you never would have thought for one moment would like anything that was not plain old meat and potatoes or vegetables [who are buying the rolls]."

Laird started selling the taquitos about seven months ago, and the Chinese rolls two months later. She is currently selling about 175 to 190 taquitos and 55 to 90 Chinese rolls per week.

"The taquitos are $1.89, and we make a 40 percent return on them," she said "The Chinese rolls also sell for $1.89, but we only make 37 percent off of those. But our overall foodservice margins have gone up."

Even better, the new items are not cannibalizing existing foodservice sales. "The funny thing about it is, my pizza sales have not dropped significantly enough to say that it's cutting into something else," Laird said. "I've actually got a new market for them. New people are coming in, and they're buying the small pizza and a taquito."

The success of the Hispanic and Chinese offerings have given Laird the confidence to branch out into more ethnic foods. "I would really like to try something Indian," she said. "Anytime something new comes out, I'm always the first person to try it."

Integrating a few ethnic items into a strong existing foodservice program may be easier than starting right off the bat with something unusual. The success of sushi in 7-Eleven Inc. stores is certainly part and parcel of the Dallas-based chain's overall emphasis on fresh foods; since a major consumer hurdle to sushi purchases is concern about freshness, knowing that 7-Eleven gets daily store deliveries could be a major consideration prior to a purchase.

Implementing a sushi program in the right markets is another key element. "We have been selling sushi for several years in select stores on the West Coast, and have now added the New York/Long Island area," said Kevin Gardner, 7-Eleven's director of marketing communications. "We looked at markets where we felt there was consumer demand for the product."

Harry Gill, a 7-Eleven franchisee with three stores in West Hollywood, Calif., all of which sell sushi, agrees that it's all about location. "My three stores are all within a mile and a half of each other, and they all do differently" with sushi, he said. "One near a park and CBS Studios does great; so does another that's near some offices. It all depends on the demographic. The ladies like to eat these types of food to keep them in good shape, while a lot of Hispanic and African-American people don't eat it."

Gill, who started selling sushi three years ago, generally carries three 7-Eleven-branded sushi items and three from Sun Valley, Calif.-based Okami Foods, including plain California rolls, spicy California rolls and salmon rolls.

The 7-Eleven brands sell for $2.79, he said, while the Okami brands are $2.99. Margins vary, said Gill, depending on pricing from the vendors. "Sometimes they give you a special price and it could go up to 28 or 29 percent," he said. "Sometimes it's going to be less."

Because it is delivered packaged from his suppliers, branching out into sushi did not require any investment in equipment or training on Gill's part, as some foodservice initiatives do; he doesn't even need to worry about date-coding the product, since it arrives with the sell-by date stamped on it. "We just order it every day so it's fresh in the store, and display it nicely," Gill said.

C-store foodservice has changed radically since Gill opened his first store in 1986, and both the date-coding and the display are key indicators of that change. "7-Eleven used to just be about hot dogs," Gill said. "We used to have sandwiches coded for 10 days. Now everything is fresh, everything is under 24 hours. We have to change the customers' concept of 7-Eleven, and it's going to take a while to do that."
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