Foodservice 201: Intermediate Insights

As volume increases, operators should begin spending money to develop their own branding, which will enable them to take full advantage of all the profits instead of sharing them with outside brands such as QSRs. Proprietary foodservice brand building will also differentiate your stores and your offerings from the competition.

KEY CONSIDERATIONS

If you are spending the money to create a brand image, most experts recommend creating a holistic food-service brand that encompasses food, fountain and coffee. A main advantage of propriety branding is it provides a "book of brand standards" — a lens used for all future foodservice ideas to ensure the company complies with the standards agreed to and remains true to the brand promise, one expert said. It becomes the road-map for all future development.

Developing your own brand is a challenging proposal, and some experts recommend hiring a branding agency to facilitate and drive the process, and build a sustainable and meaningful brand. Many operators will benefit from "outside eyes" and experience, according to an expert. Sometimes it is difficult to find all the expertise you need with one agency. Don't be afraid to hire several experts who can help with all areas of building a successful brand, such as food safety, distribution, marketing, training, image, etc.

Branding includes defining the brand promise and brand strategy from which you will develop recipes, training, marketing, advertising and all support materials. With a proprietary brand, you retain complete control of the brand and programs, and can also make higher margins, but you absorb all the start-up and branding costs.

Before embarking on a branding program, experts recommend conducting a situation analysis to determine exactly where you stand in relation to customers and non-customers, the competition and trends. Conduct a review of your current equipment, pricing, training programs, operational structure, marketing, packaging and financials. Some experts recommend using cross-functional teams to foster total organizational buy-in of the foodservice and branding programs when it is rolled out.

It's important to understand the consumer's current perception of your stores, your food and what you stand for before taking the program to the next level. These shopper insights will help guide your future actions. For example, if the shopper has a limited perception of you as a food provider, there may be internal issues to address that relate to quality and consistency — and the company's foodservice culture — before branding.

HOT TIPS

• Use cross-functional teams for the due diligence to foster total organizational buy-in of the food-service and branding programs.
• Consider hiring a branding agency to help build a sustainable and meaningful brand.
• Spend what you can on branding - but don't overreach - to get into a position to build sales and move to the next level of foodservice.
• Use your brand promise and standards as a lens for all future product and program development to ensure branding consistency.
• Focus on changing your company culture from a retail-centric model to a hospitality and foodservice mindset.

Do not underestimate the importance of a foodservice culture, according to the experts. One said he has witnessed operators spending large amounts of money developing great stores with great food menus, but over time, they fall apart because great retailers and not great foodservice operators run them. When the best foodservice operators in the convenience store industry are studied, you will notice that they have spent the time changing their culture to a hospitality and foodservice mindset.

Make sure you have the people and talent to consistently execute your food and beverage program at this next and higher level. Nothing will destroy a proprietary brand faster than poor food and beverage quality and poor execution.

PITFALLS TO AVOID

Below are some of the biggest errors experts see at this level of foodservice when it comes to execution and branding:

• Over-extending and trying to do too much without the proper financial support, talent and other key resources.
• Not defining what the brand stands for, and trying to be everything to everyone.
• Branding items that already have strong brand recognition (i.e. Tornados). You lose already established brand synergies and consumer resonance "rebranding" such products.

COST CONTROLS

Your foodservice volume, profit and budgets will ultimately determine how much and how far you can go with your branding program and whether it will be internally developed or developed with external agency support.

Clearly delineate budget parameters, and dictate the goals and scope of the branding project. Some key questions to ask include: How will the branding be executed initially (internal resources vs. outside help)? How will branding be maintained long term? What is the current and future state of the store brand? How will that impact the food branding (positive and negative)? How will the brand grow and evolve over time?

When choosing a branding agency, it's important to consider who they've worked with in the past. Have they worked with companies with similar goals? Are they accessible? Do they understand who you are now and where you want to go? Will you be given proper resources to accomplish the task? Are they within your price range?

That last question is pivotal. Too many operators exceed their budget limitations developing beautiful branding and image, and rolling it out to stores too quickly. Develop a sustainable brand within your budgetary means. You must be able to recoup the costs of branding in a reasonable time horizon, which will vary by company type and operation. The more food-service traffic you have and the higher your volume, the quicker the return on investment will be.

Also, make sure outside agencies you interview have worked in the convenience store foodservice arena before, not just the restaurant business — they could miss big points of difference between the industries.