Of all the components that make up the convenience store foodservice environment, perhaps the most overlooked and underappreciated of all is packaging. On the most rudimentary level, good packaging should protect the product from damage. But packaging also plays an important part in a product’s ultimate appearance — and in the foodservice sector, this includes prominently promoting the product’s freshness (or at least the perception thereof).
The convenience channel continues to gain ground year after year by promoting products that project an image of freshness. Many c-store retailers say their goal is to grow their foodservice sales, and to do so with fresher products.
This trend spills over to the dispensed beverages counter, including hot coffee, where formerly the emphasis had been on simply providing hot, ready-to-go, inexpensive products. Today, many c-stores have targeted the Starbucks consumer by offering a wide variety of upscale, fresh, good-tasting and reasonably priced hot beverages.
THE CULT OF FRESHNESS
Of course, just what “fresh” means is subject to interpretation.
“It’s important to remember that fresh is a continuum and not a singularity,” explained Convenience Store News How To Crew member Mathew Mandeltort, currently with distributor Eby-Brown Co. and formerly with foodservice consultancy Technomic. “So it’s not as if every single item offered has to have the same freshness attributes for cues (e.g. MAP packaging vs. hand-wrapped).”
There are several methods c-stores can employ to maximize consumers’ “fresh” perceptions of their foodservice operations. These include:
- Maintaining clean, bright stores.
- Merchandising techniques that optimally showcase the product.
- Implementing processes and procedures that ensure “fresh” perceptions are consistently messaged and reinforced in-store (i.e. proper product rotation, executing quality-driven waste strategies and tactics, etc.).
- Always keep in mind the importance of packaging to consistently enforce a strong “fresh” message.
- Simple, effective, easy-to-understand graphics are vital in the messaging process.
As important as providing fresh products and promoting an overall aura of freshness may be to the bottom line, many c-stores have a long way to go in implementing effective communication strategies regarding the quality of their foodservice operation to their customers.
“I think the convenience store industry has, in general, a poor image in terms of freshness and quality,” said How To Crew member Ed Burcher, president of Burcher Consulting, an Oakville, Ontario-based firm specializing in foodservice merchandising operations. “The research that I have seen and been a part of shows that we do not do a particularly good job conveying or executing on freshness, and it’s reinforced by our behaviors, product choices and merchandising.”
“[Graphics] are the key driver to enforcing the freshness image to customers,” said another How To Crew expert. “The more customers see FRESH, the more they will believe it.”
SHOW SOME RESPECT
Protecting the product is the primary function of packaging, and there are several strategies retailers can employ to safeguard foodservice merchandise from damage.
“Think Aretha Franklin: R-E-S-P-E-C-T,” said Mandeltort.
As silly as this may sound, it’s critical that retailers have respect for the quality of their food and beverage offerings.
“Sandwiches are not Timex watches,” he continued. “Though the latter may take a lickin’ and keep on tickin’, the former requires better care.”
It’s also important that your suppliers partner with you and take the necessary steps to ensure that temperature-sensitive products are held, shipped and delivered under appropriately controlled temperature conditions all the way to your door.
Some other procedures worth considering:
- Check that food items are properly packed and have arrived unscathed.
- Set quality standards for your food items and make sure suppliers understand and adhere to them.
- Make sure your staff takes the necessary steps to monitor the condition of food items to ensure those quality standards are maintained.
Generally speaking, spoilage is a much bigger issue than products damaged in shipping.
“Spoilage is what we concentrate on,” said one How To Crew expert, adding that suppliers can play a key role in the process. “A big part of keeping that number under control is giving the stores data to know what is spoiling and tips on how to lower it, or raise it if they are losing sales because there is no spoilage.”
COMMUNICATE YOUR BRAND
Communication with your customers is a key element in driving sales at your foodservice operation. With this in mind, think of packaging as an extension of your printed menu, as well as a branding opportunity for your store.
“People eat with their eyes,” explained one expert. “I ask clients to compare their communication executions with those of the national QSR [quick-service restaurant] chains. Look at how they use products, words, phrases and descriptions. In general, we have a long way to go to improve how we portray and communicate our products to our guests.”
Indeed, packaging is a critical component of the overall shopping experience. The types of materials employed will depend on the application. Portable, car-friendly, and drip- and leak-proof all come into play.
“It is best for retailers and product developers to think of how the guest will use the product and design from there,” the expert continued. “There are many different types of materials depending on whether the product is made-to-order or grab-and-go; hot vs. cold; and immediate consumption vs. food for later. Again, testing and understanding how the guest will use it is critical for designing the right packaging for the selected product.”
While communicating image (e.g. fresh, nutritious, good for you) throughout the store is integral to driving sales, understand that if your offerings on the shelves, in cold cases and at the foodservice counter don’t reflect it, your customers will catch on quickly.
“Understand that the market is constantly changing and that your packaging has to adapt to those changing influences, whether it’s driven by demands of a changing consumer or mandated by government legislation,” said Mandletort. “Understand, too, that packaging can be a critical part of your brand. It’s important to know who you are in terms of your foodservice. What is your positioning? Your packaging has to then be consistent with your positioning.”
Retailers typically experience a sales lift of up to 30 percent when switching from first-generation plastic packaging to more contemporary packaging.
“Packaging is a component of your environment,” added Burcher. “It is the first and last thing a guest usually touches and sees as they consume it. It is an extension of your brand.”
THE COST OF COMPLIANCE
New Food and Drug Administration (FDA) regulation will require nutrition facts to be featured on packaging as well as on menu boards at chains with 20 or more stores, which begs the following questions:
- How important is reliable calorie and nutrition information to the typical c-store foodservice consumer?
- All in all, is it worth the time, effort and expense to provide said information?
“Reliable calorie and nutrition information is as important to the typical c-store consumer as it is to consumers who frequent QSR, fast-casual and casual-dining restaurants,” said How To Crew panelist Tom Cook, principal at design firm King-Casey. “Our research indicates that consumers clearly want calorie and nutrition information, and want the brands and operators to be upfront and transparent, meaning don’t ‘hide’ high-calorie menu items.”
Consumers make their order decision based on what they want to eat and drink on a particular dining occasion. Calories and nutrition come into play based on whether the dining occasion will be a splurge or a health-conscious meal.
According to How To Crew member David Bishop, managing partner of Barrington, Ill.-based Balvor LLC, there are a range of costs associated with complying with the new regulations.
Fixed costs, expenditures that a chain can allocate across its store base, include legal expenses as well as nutritional analysis of covered food and beverage items. These costs are driven in part by the breadth of the foodservice menu available across the chain, as well as existing processes or practices that an operator may have had in place before the regulations.
“If you don’t have the nutritional component established already, this will trigger additional costs that could run between $280 and $1,030 per menu item, and it may not matter whether the item is sold in one store or the entire chain,” Bishop said.
Why the broad range? Menu items vary in complexity, and the process that operators use could involve different resources such as nutritional databases and contracting with testing labs. “Operators really need to understand how this impacts the business,” noted Bishop. “I wouldn’t be surprised if some operators rationalize marginal menu items based on an expanded cost-benefit analysis.”
In addition, there are variable costs, such as updating menu boards and training employees and managers. These outlays are driven by a variety of factors, including the number of stores operated, number of foodservice employees, and the operational model used. For instance, according to Bishop’s analysis of the FDA’s final impact analysis, the initial cost associated with bringing menu boards into compliance could run from $600 to $1,200 per board, and training store teams could easily cost $200 per store. “If an operator has a drive-thru window, the external menu boards also need to be compliant,” he added.
There are also recurring expenses driven by new menu items or changes in store personnel. Bishop suggests operators leverage industry resources to help understand how to become compliant. Otherwise, non-compliance could subject the operator to civil and criminal penalties under current law.
Ultimately, though, are the regulations beneficial to either the consumers or retailers? And, perhaps most importantly, given the costs involved, do consumers need or even want the nutritional information inherent in compliance?
“I’m not aware of any research that analyzed existing markets like this in some way,” said Bishop. “If it has been done already, it would be very helpful to understand the findings as it could affect policy decisions and how the regulations are implemented. We definitely need to better understand how these regulations improve health outcomes based on more rigorous research methods. While some research shows that consumers want this type of information, other research shows that providing it has limited if any effect on changing behaviors.”
Even on the topic of behavior modification, there are varying views driven by different methodologies. Proponents highlight more qualitative research based on consumer surveys, while opponents show quantitative measures based on operator sales data.
A key assumption driving the regulations is that consumers will make different choices if nutritional information is made available at these types of establishments.
“If we are to assume that premise is valid, then a free-market view would suggest that operators who do not comply, even if they’re not required to by law, will be at a competitive disadvantage,” said Bishop. “To test this hypothesis, we could examine markets where menu-labeling laws are in place already to understand how companies with less than 20 locations are performing and what, if anything, they’ve implemented related to menu regulations. Then compare results from those markets against markets that do not currently have any similar regulations in place.”
In the end, retailers need to look at the big picture. Indeed, compliance should be incorporated into the marketing and communication executions. “The costs of non-compliance are in losing guests to those retailers that do provide the desired information,” concluded Burcher.
“Sandwiches are not Timex watches. Though the latter may take a lickin’ and keep on tickin’, the former requires better care.”
— Mathew Mandeltort, Eby-Brown Co.
“Packaging is a component of your environment. It is the first and last thing a guest usually touches and sees as they consume it. It is an extension of your brand.”
— Ed Burcher, Burcher Consulting
“Our research indicates that consumers clearly want calorie and nutrition information, and want the brands and operators to be upfront and transparent, meaning don’t ‘hide’ high-calorie menu items.”
— Tom Cook, King-Casey