Change On The Menu

Thorntons is making widespread improvements to grow its foodservice business

For years, Thorntons convenience stores have offered customers a variety of dispensed beverages, roller grill items, baked goods and cold and hot grab-and-go sandwiches. But lately, the company, like many other c-store retailers, has been asking itself: How can we do foodservice better?

From product to presentation — and most everything in between — the retailer is now answering that question by enhancing its prepared food offering, as well as its cold and hot dispensed beverages, in an effort to attract more foodservice customers and increase sales across the categories.

"We believe there's so much opportunity in these categories," said Melina Hall, senior category manager of foodservice, who oversees the edible food category for the Louisville, Ky.-based chain, while two other category managers partner on dispensed beverages.

Like many convenience retailers, Thorntons has singled out foodservice as a "strategic growth area," Hall noted. The changes underway at the company's 162 c-stores have been in the works for a few years now. In fact, at last year's Convenience Store News Foodservice Best Practices Roundtable, Hall shared with the group that Thorntons commissioned a study to profile its coffee and fountain drinkers, and was beginning to roll out changes based on those findings.

The research showed that while Thorntons had a good product, it didn't have the best setup.

"It wasn't convenient for customers to get in and out, and we needed to be more consistent from store to store," Hall explained. "We learned a lot about what the customer required and what made them comfortable. Then, we went in and looked at the floor plan of every store to give customers more landing areas for [dispensed beverages] and to improve the flow."

By May, Thorntons had upgraded the fountain equipment in more than half of its locations, which increased capacity and variety, and offered customers a more consistent experience across the chain. All locations now have Cornelius equipment, with the most common unit being the Cornelius Flavor Fusion. Stores actually have more heads now — on average, 24 to 32 — and every location offers flavor shots and has Scotsman Nugget Ice makers.

With more fountain heads to fill, Thorntons spent a lot of time working with the soft drink companies to identify the top-selling brands in each of its markets and develop store-specific fountain planograms, said Hall. "We believe the brands that sell well in a particular area need to be on the fountain machines in that area's stores," she said.

Such regional brands include Big Red and Diet Big Red in Louisville and Southern Indiana; Ale 8 and Big Blue in Lexington, Ky.; Squirt in Chicago; and Ski in Evansville, Ind. Jason Doyle, senior category manager for dispensed beverages, told Convenience Store News. Sunkist Orange and Orange Crush also are in certain markets, but not others, he said.

To ensure the highest quality of beverages, the chain launched a campaign around preventative maintenance. The facilities team makes quarterly visits to check cold dispensed equipment. The first thing this team did was install filtration systems, so Thorntons now uses 100-percent filtered water in all its drinks and ice. The company has given away free beverages to promote this fact. Going forward, maintenance at each store will include inspection of the filtration system, fountain equipment, air pumps and bag-in-box (BIB) pumps, Doyle said.

Hot dispensed visits are completed on a quarterly basis by the company's coffee supplier, Consumers Choice Coffee, and consist of inspection and calibration of the cappuccino machines, grinders and brewing equipment. Creamer units and fresh tea brewing equipment are checked as well.

Thorntons' hot beverage offer is still a work in progress. Doyle said the retailer is testing a new hot dispensed landing area that allows customers to access the condiments from any side. The large version can accommodate up to eight people at one time.

Plus, the condiment selection has been expanded in all stores to include PC-style creamers, bulk creamer, Coffeemate pump creamer and a "Hot Treat Center" featuring fresh whipped cream and sauces in a variety of flavors — chocolate, caramel, raspberry and white chocolate.

On the product side, Thorntons is working with Hershey's to develop limited-time hot beverage offers such as Hershey's hot chocolate, and York Peppermint Pattie and Heath Toffee cappuccinos. The retailer already offers seasonal flavors including Pumpkin Spice and Chai Tea.

Taking its commitment to hot beverages a step further, Thorntons is in the process of adding a coffee host position to every store. These team members will interact with consumers, make sure the area is maintained and provide feedback to the category management group, said Hall.

To support the new initiative, Thorntons will add 160 new jobs within the next year. Coffee host and hostesses will work the morning coffee rush, typically from 6 to 10 a.m.

A FRESH START

These wide-ranging beverage changes are just one part of Thorntons' approach to growing its foodservice business. The other is a new, chain-wide fresh food program that not only grows the company's current commissary business, but duplicates it in other markets.

Up until recently, only 25 percent of the retailer's stores were selling fresh-food items supplied by the commissary that Thorntons owns and operates near its Louisville headquarters. The other 75 percent were selling thaw-and-serve sandwiches. The retailer's goal was to have all of its stores offer fresh-food items and continue marketing them under its QuickCafé brand.

The chain considered building commissaries throughout its footprint, or serving all 160-plus stores from its current commissary and contracting with a company for deliveries. Ultimately, Thorntons decided the best model would be to partner with a third-party commissary.

"We felt this was the most cost-effective way for us to get into the market with a consistent fresh program. We're in such an infancy stage with this program that it didn't make sense for us to build our own commissaries," Hall said. "We're developing this program from scratch, and what we've learned is that it takes time to build the business."

As of last month, all stores feature a cold case stocked with fresh sandwiches, salads, whole fruit, cut fruit and parfaits supplied by either the Thorntons commissary or the third-party commissary, which the company declined to name. Most of the cold cases are six feet wide and have three to five tiers. Generally, they are island cases that sit in a highly visible location within the store; however, in some locations, they sit along the back wall in an area dedicated especially to prepared food and dispensed beverages.

The commissary-supplied fresh foods carry Thorntons' QuickCafé brand, which has been given an overhaul as well. "We changed the packaging and the look of the label. We now use the color green and even include the word ‘fresh’ on the label," Hall explained.

The retailer created a similar label for its hot grab-and go sandwiches, also sold under the QuickCafé brand. "The new label gives the impression of a national branded program," said Hall. "We felt this was important to build the brand up, and make it look trustworthy and credible."

STRIKING A BALANCE

In addition to the new packaging, the cold and hot sandwich lines were refreshed to offer better variety, and strike more of a balance between value and higher-end. Before, Hall said, there was no range, so the sandwich lines didn't appeal to a diverse customer base.

"We have found that while some consumers respond well to lower price points, when we invest more into our products in an effort to offer a better-quality product, consumers also respond favorably," she told CSNews.

The QuickCafé cold sandwich line still includes traditional varieties such as turkey and cheese, ham and cheese, chicken salad and tuna salad. But through the refresh, Thorntons infused these items that were already selling with an added boost by changing the cheese, adding fresh condiments such as lettuce and tomato, and opting for fresh-baked breads.

Also as part of this refresh, the chain introduced a roast beef and cheddar sandwich on an onion roll, and a ham bistro sandwich with smoked ham and provolone cheese on a bagel bun. The Italian sub also is quickly becoming one of its most popular fresh items, according to Hall.

Most recently, grilled chicken Caesar and southwest chicken wraps were added to the line and are starting to pick up momentum, she said. Looking ahead to its next generation of cold sandwiches, Hall said the focus will be on different cheeses, breads, sauces and additional packaging changes.

In terms of the hot sandwich line, the c-store operator's goal is to "deliver a variety of great-tasting products at a great value to the consumer." In its breakfast line, Thorntons now offers a sausage biscuit; sausage, egg and cheese biscuit; bacon, egg and cheese bagel; ham, egg and cheese croissant; and a Canadian bacon English muffin. Its lunch line includes burgers, chicken sandwiches (both grilled and breaded), a rib sandwich and paninis.

Going forward, Hall believes the key to growing the hot sandwich category is to introduce new items on a regular basis as limited-time offers (LTOS). As such, she has worked up an LTO schedule for the remainder of 2011 and the first half of 2012.

While most of these changes are still relatively new, Hall happily reported that they appear to be paying off. The customer reception has been positive, she said, and the company continues to see foodservice sales climb month after month over the prior year.

"We've seen a huge lift in our sandwich sales, and the ‘other’ category, which includes everything but sandwiches, is quickly growing as well," she noted.

Hall believes Thorntons has only just scratched the surface of what's possible.

"We've made a lot of strides, and we're certainly moving the needle in the right direction," she said. "But we're not even close to where we want to go with these categories."

For comments, please contact Linda Lisanti, Executive Editor, at [email protected].