The Power of Pizza in the C-store

JERSEY CITY, N.J. -- We have all heard of American as apple pie, but what about as American as pizza? It may not be that much of a stretch. Once sold mainly in pizzerias, pizza -- either by the pie or by the slice -- is popping up at a variety of venues: sporting arenas, bowling alleys, big-box stores and, most notably, convenience stores.

But as pizza has grown in popularity among consumers, the industry has struggled to find a way to do it well. Last month Flash Market Inc. opened a Pizza Inn at its Flash Market store in Saraland, Ala. The site marked the fourth collaboration between the Dallas-based Pizza Inn and Flash Market, based in West Memphis, Ark.

"We have tried to do pizza before through local vendors but this is different," explained Keith Brown, director of foodservice for Flash Market. "In the c-store environment you need quality to be successful. We decided to go with Pizza Inn and we like their program."

In total, Flash Market has more than 70 convenience stores and approximately 30 different food concepts, including Subway, Quiznos and Dairy Queen, in those locations. Flash Market and Pizza Inn first teamed up about a year ago and plans are on the drawing board to open a Pizza Inn in a fifth Flash Market by the summer, Brown added.

Flash Market has delivery-carry out options at a few locations and a pizza express at one; it is looking to offer a buffet at some of its stores down the road. The pizza operations in the Flash Market stores make their own dough and make the pizzas fresh. They also offer large-sized pies, once seen only in traditional pizzerias. "Convenience stores have always been identified with small individual pizzas," Brown said. "We do those too, but also offer a large pizza."

But why pizza? "The concept of 'build it and they will come' still works. It is going to be a good program for us and we are very excited," he explained, adding that customer response has been very favorable. In addition to pizza as an in-store foodservice option, Flash Market is hoping its partnership with Pizza Inn will open other avenues for the company's stores. "Pizza Inn is very marketable. With it we can do a lot and we are hoping this opens the doors for us with catering," Brown said. "We can bring what we learn from that to other foodservice options."

Village Pantry, part of Wilmington, N.C.-based VPS Convenience and one of the top 20 company-operated chains in the c-store industry, has also added pizza to its foodservice menu. "We've had pizza in a lot of our locations for years now," explained Chad Prast, foodservice director at Village Pantry. "We have changed the branding and variety as new improved opportunities have come along."

To date, the 40 Village Pantry locations have the company's private label pizza program and 12 locations feature Hunt Brothers Pizza. When bringing pizza into the mix, Village Pantry decided not to eliminate another foodservice item, he added. "Pizza was an add-on to our other food programs to give the customer more variety," Prast said. "We didn't have to remove or delete any items to add it."

He said that adding the private label pizza to its locations required only a minor investment because the stores use the equipment from the existing foodservice program. "In the 12 stores where we added Hunt Brothers Pizza we had a capital investment and overall we are happy with the return," Prast said. Most of the Village Pantry stores with pizza sell it by the slice, he added, and the stores with a Hunt Brothers Pizza sell it by the slice and by the pie. In addition, Village Pantry is testing a take-and-bake program for whole pizzas sold out of the deli case at 10 sites.

A take-and-bake program is already in place at Rutter's locations, according to Jerry Weiner, vice president of foodservice. The convenience store chain also offers made-to-order pizza through its order kiosks, he said. "This is a pretty new product that we rolled out about two months ago," Weiner explained. "Pizza is a staple in terms of food to offer."

And while he sees value in adding pizza to Rutter's menu, Weiner did not want to go head-to-head with pizzerias. "I didn't want to compete with the abundance of pizza places that do a great carry-out and delivery business," he said. "Instead of the typical 14-inch pizza, we offer a nine-inch pizza which is ideal for individuals or, if for a family, two children."

Since launching the program, pizza is now available at all Rutter's locations that feature electronic order kiosks, which total 38 stores. "The early signs are pretty good. I was looking at the take-and-bake program to get us into the thought process of the consumer and it's working pretty well," he said. "We are ahead of where we thought it would be at this time."

While Weiner explained that Rutter's did not necessarily eliminate a foodservice item to make room for pizza, he does conduct a SKU management process twice a year to see what is working and what may have fallen off.

And similar to some Village Pantry stores, Rutter's found adding a pizza program to be a minimal investment because it utilizes the existing foodservice equipment. "The pizza cooks in our high-speed convection ovens," he explained. "Previously we had pizza operations in five stores but took it out because of space requirements and the extra equipment needed. It was also labor intensive. But now we can incorporate it into the existing foodservice model."

Flash Market, Village Pantry and Rutter's are just a few examples of the growing trend to bring pizza to the convenience store consumer. But there are many, many more. According to Keith Solsvig, vice president of marketing for Hunt Brothers Pizza, the Nashville-based company is in more than 6,000 convenience stores and is fast approaching the 6,500 mark. "We are growing by leaps and bounds," he said. "One of our best years was 2010 in terms of new stores and we are on a great track this year as well."

Don Hunt founded the company 20 years to reach consumers who lived in rural areas with limited access to pizzerias. He set up his first shop in a small corner store and it has grown from there by finding places where there were little or no pizza options.

"There is a huge opportunity especially when you look at the change in the convenience store environment. It is moving away from big oil and more toward single-unit operators," Solsvig explained. "A lot of our pizza business is with single-unit operators who may not have the expertise or the financial means to pay huge franchisee fees."

A typical investment for a Hunts Brothers Pizza program ranges between $15,000 and $20,000, and the store operator gets the equipment, branding and merchandising. Once in place, the pizza operations become part of the convenience store and are run by the store staff, he said. "They can have more flexibility in terms of staffing," Solsvig added. "Employees can work the pizza operations during the lunch rush then stock shelves when things slow down and move back to pizza during the dinner hours."

And while Hunt Brothers Pizza may have its roots in small town USA, it has experienced growth in suburban and inner city neighborhoods. The city locations tend more toward a walk-up business, he said, adding that the suburban locations see more of a grab-and-go market. "We started in rural markets, and we are still doing great there, but we are growing in suburban and city areas as well," Solsvig added.

But any way you slice it, pizza seems to be here to stay and what better place to find it than in a convenience store?