How Do You Develop the Right Menu and Manage It?

Once you decide to get into the foodservice business, there is no decision more important than the menu because it will drive all other key decisions, such as store layout and design, staff requirements, foodservice equipment, merchandising and the selection of your distributors and suppliers. While the menu is the driver of your foodservice program, it will also dictate your constraints in the future.

For example, if your original menu did not include any hot foods, retrofitting hot foods into a store designed only for cold grab-and-go items will be a hardship — or impossible as the store might be too small to accommodate the extra equipment needed. So, be sure to think through the pros and cons of the breadth of the menu you choose to ensure the work you do today will be relevant to your market for the next five to seven years. Be sure to also leave room for the foodservice program to grow in your store.

And of course, make sure the program you select is executable by your staff. It's better to start small and add on than it is to come out with a broad menu and fail in quality and consistency in the eyes of your customers.

You will certainly make adjustments to the core menu along the way, and you will add line extensions and limited-time offers (LTOs) because menu development is a continuous process. Once the core menu is established and humming along, your menu must and should continuously evolve, according to the Convenience Store News How To Crew. But in the beginning, the core menu will be the driver, so take your time and develop it correctly, giving it the optimum chance of success.

THE CORE MENU
So, where to begin? What menu items should you pick?

Most importantly, the menu selected must be based on market need, and consumer likes and dislikes. Every region has food preferences and it is important to tap into those when developing the menu. Visit local restaurants and study their menus. What makes them unique? What are their signature items? Signature items are items you can call your own.

After that, broaden your research to the state and national level. What foods and preparations are unique to your state? What ethnicities are prevalent in your region and in the state that have contributed to the food culture?

Then, expand to a national view. What flavors, spices and preparations are trending nationally? What are quick-service restaurants (QSRs) offering these days? QSRs spend an enormous amount of money on research and development so they get their menus right. Don't be afraid to use that market knowledge and adapt it to your menu, perhaps adding your own twist or local flavor.

There are many sources of food trends to study as you develop your menu, some of which include research reports by the National Restaurant Association (NRA), as well as Mintel and The NPD Group, to name a few. And don't forget the Food Network and Cooking Channel as trend resources that consumers rely on. Gather all the information available and see what food trend(s) will be most relevant to your market.

Scoping out food trends is something foodservice purveyors should do constantly, not just when menus are first developed. Keep your eyes and ears open every day, all the time for the newest flavor profiles and food combinations. Be a "foodie" and get out there and try new foods on a regular basis. Consider if and how they could be adapted to your stores' foodservice programs.

One CSNews How To Crew expert recommends retailers tap into the expertise of their food distributors for ideas about trends and what is selling in the market. Distributors go in and out of numerous stores and restaurants every day and have a lot of knowledge to impart about food, beverages and equipment.

In developing the core menu, it's important to know where you want your foodservice business to be in five to seven years so that you design your stores and the layout to accommodate future initiatives. For example, you might start with cold grab-and-go food only, but know you want to add hot foods down the road. Be sure to understand and consider the space requirements of adding a hot foods program.

ADDING NEW ITEMS
Once the core food and beverage menu is well entrenched and fine tuned, you are ready to add line extensions, which is different than adding new items.

For example, if you are selling a successful traditional sausage, egg and cheese biscuit breakfast sandwich, consider adding a new sausage variety (Italian, chorizo or kielbasa), adding another type of bread (bagel, English muffin or croissant), or switching up the cheese selection (Swiss or cheddar). With those options alone, you could expand your breakfast sandwich menu by leaps and bounds.

So, before adding completely new items to the menu, exhaust the line extensions on successful items that appeal to your market.

As you are experimenting with line extensions, be sure to talk to your customers and ask them about their preferences. The best ideas are often simple ones that come from customers. Include customers in your menu testing; they'll give you great advice.

One of the best-kept secrets about menu expansion is optimizing the ingredients you already have on hand. This is a simple, logical and cost-conscious way to approach line extensions and new items — design recipes that leverage as many ingredients that you already have in-house. If you already carry American, Swiss and cheddar cheese for your sub sandwich programs, use those for your breakfast sandwich line extensions. If you already have Italian sausage and kielbasa in the store for hot lunch sandwiches, stretch them into your breakfast program.

Storage space is a luxury in convenience stores and the fewer ingredients you use — or the more you maximize each ingredient — the more you maximize each from a cost, inventory and space perspective.

When adding brand-new items and programs to the menu – such as pizza, hot snack foods or hot meals – be sure to consider all the line extensions you will want to have and get the ingredients on hand. You can't start a pizza program and only sell plain pizza. You need to have pepperoni, sausage, mushrooms, peppers, olives, onions and other local favorites to offer the variety customers expect.

An excellent way to test new menu items is to introduce them as LTOs, enticing customers to sample something new that will only be around for a short time, and allowing operators to evaluate the success of the new items in a low-risk manner.

Of course, unit sales volume is the best indicator of an item's success or failure. It is particularly helpful if you can track sales volume hourly or by daypart. And stay on top of food costs, food waste and labor, which are all considerations that will help you decide if an item is a winner, loser or just borderline.

If an item doesn't sell well, find out why and try making adjustments in preparation, presentation and/or marketing. If adjustments still leave the new item's sales lackluster, it just may not be the right product for your customer base, one retail expert noted.

Remember, the good thing with LTOs — if you are leveraging all your ingredients in-house and perhaps adding only a special sauce, condiment or spice, or various meat and cheese combinations — is that you can minimize exposure to a menu bomb. And if LTOs are successful, consider adding them to the permanent menu, or rotating that LTO back seasonally.

SHOUT IT OUT
One of the biggest mistakes that operators make is developing really nice and sellable menus without investing and giving proper thought to marketing and merchandising the menu items inside and outside the store. Build marketing and merchandising plans for every new item developed, including line extensions and LTOs.

How are you going to let customers know about it? What in-store signage will you use and where will you place it? How will you promote it out at the gasoline pumps if you sell gas? How will you merchandise it in the stores so customers can see and/or smell it? How will you promote the new item at the cash register? How will you train your employees to sell it?

It's important to make a big deal with store associates and store managers about new items to get them excited about the programs. Make sure employees sample the items so they can be your best advocates and promoters. Create contests around new menu item sales and provide rewards for the store that sells the most in a given period of time.

There are many good restaurants and convenience store foodservice programs with creative menus that have failed. In some cases, it's just because they did not communicate what is unique and special about their offerings to the target customer. Unless you shout it out with advertising, social media and all the marketing and merchandising tools at your disposal, customers won't know what you have. Break through the clutter with creative marketing that gets your stores, and foodservice programs noticed.

Top 10 Steps for Developing a Successful Menu
Foodservice consultant Maurice Minno, partner with MPM Group and a member of the Convenience Store News How To Crew, offers the following 10-step process to develop successful menus and new menu items.

1. Identify and understand your target foodservice consumers.

2. Focus on targeted consumer shopping occasions that will drive your foodservice business (meal occasions, fill-in shopping, gasoline fill-up, snack and beverage occasions, etc.).

3. Establish a process for the ongoing ideation of new menu items. Make this part of your corporate and store culture.

4. Identify new product roles within your overall foodservice offer.

5. Categorize the high-potential new products by the potential role they serve in the overall offer — either as a signature, core or supporting item.

6. Prepare a concept plan for each high-potential new product. Concept planning fully enables the product to move forward, or not, in the development process.

7. Create the business case justifying the product's development, which defines the product and the scope of work required to develop it fully and bring it to market.

8. Test products with target consumers in your stores to measure reactions.

9. Plan in detail all aspects of the product launch, including the marketing and merchandising plan.

10. Evaluate how well the product performed. Were sales and profitability targets achieved? How has the customer responded? What product improvements are required? How did the new product's sales affect the overall menu mix?

Convenience Store News' How To Do World-Class Foodservice report is researched and written by Maureen Azzato, a freelance content developer and editor with more than 20 years of business publishing experience, with a primary focus on foodservice and retailing. Previously she was the founding publisher and editorial director of On-the-Go Foodservice, a publication for cross-channel retail foodservice executives, and publisher and editorial director of CSNews, where she worked for 17 years.