C-store Foodservice Equipment Give QSRs a Run for Their Money
JERSEY CITY, N.J. -- Good, inexpensive food, fast. While this description used to apply to quick service restaurants it is increasingly becoming affiliated with convenience stores. Susser Holdings Corp.'s plan for future growth includes a Laredo Taco Co. in every new Stripes convenience store. An Iowa couple celebrated their first meal as husband and wife with pizza from Casey's General Stores after a snowstorm threw a curveball at their December wedding reception. In January, Tedeschi Food Shops welcomed its outside commissary partner, DSD1, into the family under the Tedeschi Fresh Foods brand. And the list goes on.
With convenience store leaders thinking outside the box more often when it comes to foodservice, now may be the perfect time for the industry to wrestle the crown from QSRs. According to the authors of “AlixPartners North American Restaurant & Foodservice Review," the industry is in a prime position to reap the benefits and rewards of the uptick in the restaurant business. "A lot of convenience stores have taken advantage of quick, low price and healthy, and that's a good combination for today's consumers," Eric Dzwonczyk, co-author of the study and director in the Restaurant & Foodservice Practice of Alix Partners, told CSNews Online recently.
The study's other co-author Adam Werner, managing director, head of the North American Restaurant & Foodservice Practice for Alix Partners, added that the good news for c-stores is their food offerings carry that lower price point consumers are still seeking.
And that increased demand may be what Susser's CFO Mary Sullivan had in mind when she told an ICR XChange Conference audience that foodservice will continue to be a factor in the Texas-based company growth. Once Susser's began including a Laredo Taco Company in its Stripes locations, the company turned the tide in foodservice, she said. "Over 70 percent of the time our customers are buying something to go along with the food," Sullivan told the conference attendees. "It is one of the key drivers of our performance. Foodservice is almost 30 percent of our gross profit. We still have a lot of room to grow in foodservice and we are still learning."
However, c-stores cannot compete if they do not have the right tools. Larry Miller, president of Miller Management & Consulting Service Inc., caught a glimpse of the future of foodservice equipment at the 2010 NACS show and liked what he saw. One type of product that caught his eye was the next generation of rapid cook ovens. "Rapid cooking allows us to do more products in the store," Miller explained. "What took us 20 years to get to the first generation now took less than a year for second generation."
The first generation of rapid cook ovens married microwave and convection ovens, but were "energy hogs," he said. "They were not very efficient from a power standpoint but they did a really good job of cooking the food." But just as the rest of the business world looks to become more energy efficient, so does the foodservice industry. He pointed to Merrychef E Series ovens as one example of a rapid cook oven that uses very low power to cook food very quickly.
"It is an incredible advancement for our industry," Miller said. "People's expectations from convenience stores have been low quality roller food or food that comes in plastic and can be microwaved. There have been some advances in those areas but now with rapid cook ovens we can roast a whole chicken in a very short period of time."
To that point, food manufacturers like Tyson or ConAgra can ship chicken fingers that have been breaded, flash fried and then flash frozen to convenience stores where they are put into a rapid cook oven and cook in a very short period of time. "We can present to the consumer high-quality, good-tasting products," he said, adding that the latest technology eliminates the need for fryers and hoods —which can run on the higher end of the price scale.
Michael Sherlock, director of foodservice for Wawa, agrees that rapid cook technology is critical to the c-store industry, especially if it wants to compete with QSRs. "Our business is all about speed and convenience," he said. "Seconds count when it comes to helping our customers on their way and turning over parking lots, much in the same way that a restaurant focuses on speed of service to turning over table availability during peak times."
Speed is also the name of the game at Nice N Easy Grocery Shoppes. "One of the most important things about the latest foodservice equipment is the speed of it," said Jack Cushman, executive vice president, foodservice at Nice N Easy. "It is not so much the equipment itself; it is what you can do with it. You can do a million things."
For example, Cushman detailed how the company's c-stores are now using rapid cook ovens for its grilled cheese initiative. Nice N Easy took notice of consumer demand trending toward comfort food and considered grilled cheese as the perfect traditional comfort food to offer. "We rolled out the program a couple of months ago," he said. “It is doing really well and we are right out of the chute with it."
But grilled cheese sandwiches are just the tip of the iceberg when it comes to sandwich offerings with the latest foodservice technology. "Grilled cheese is a basic food item but you can do this with just about anything," Cushman added. "There are a lot things you can do with sandwiches. It opens a lot of different menu options."
Rapid cook ovens are not the only equipment on the horizon that may well play an important role in the future of foodservice. According to Miller, advancements in holding cabinets for convenience stores will also put the industry in the driver's seat when it comes to competing with QSRs. "About 10 years ago the food equipment manufacturers came out with warm holding cabinets for QSRs like McDonald's," he explained. "Instead of having to cook the food, wrap it up and keep it under a heat lamp, employees can cook meal components ahead of time [like hamburgers and chicken patties] and keep them in a warm holding cabinet. The temperature -- the amount of moisture -- is all tightly controlled so the food stays fresh and hot. Now those holding cabinets are being modified to be used in convenience stores."
But whether it focuses on speed or quality, the future of foodservice equipment needs to meet consumer demand -- first and foremost. "The next big thing is being able to offer any food any time of day without having to worry about product quality," Miller added.