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Foodservice: A Business Within a Business

NACS Show educational session highlights the differences between a foodservice culture and convenience retail culture.
October 16, 2013

​ATLANTA – Convenience store operators who are hoping to break into the foodservice industry must think like a chef, suggested Keith Boston, director of foodservice for Framingham, Massachusetts-based Cumberland Farms Group of Cos., during Monday’s educational session, “Engraining a Company Foodservice Culture.”

Better yet, leaders should hire an actual chef to head the new segment of business. “Chefs learn business in culinary school,” said Boston, who holds degrees in both culinary arts and foodservice management. “Do professors teach culinary and foodservice skills in business school?”

Experts agree that to stay competitive in the c-store industry, retailers must have a solid foodservice program, he noted. Foodservice in today’s world is changing, and convenience stores need to change with the industry. Foodservice offers many benefits, from higher profit margins and an opportunity to “build the basket” — encouraging shoppers to buy multiple items in a single sale — to loss coverage and meeting customer demand. But you can’t run a foodservice program the way you run your convenience store.

“Developing a winning foodservice strategy requires a radical change in the corporate culture,” Boston said.

If you run the foodservice component with a retail mentality, you will have a difficult time accounting for food waste, among other issues. “Food waste is not a standard operating procedure in retail, so you will misinterpret rising food costs,” he said.

For example, if a roll costing $1 in a retail environment goes stale, managers are wary of tossing it. But in a foodservice environment, that same roll may cost only $0.20, so management is more accepting of having to throw away the product. On the flipside, when a convenience store foodservice program is properly planned, you will use the proper foodservice accounting methods, hire and train employees especially for that environment and be committed to making the changes needed for continuous improvement. All waste is controlled and documented, and food cost reflects waste.

Some challenges a retailer may face when adding a foodservice program include production, storage and merchandising space requirements; the costs of purchasing new equipment; adding additional skilled labor outside of one’s comfort zone; and restructuring systems and processes.

“Although there will be financial pressure to produce profits quickly, a foodservice program requires long-term strategies and an organization’s ability to re-evaluate and change products or services that are not working,” he said.

Boston admits it sometimes took up
to three years to begin making significant profits in foodservice programs he has implemented. Another challenge is changing customers’ perceptions of the foods they find in a convenience store.

“Offer what customers want, create credibility, earn trust and then exceed expectations,” he advised. Just don’t be too ambitious. Instead of immediately offering sushi, start first with a roller grill and then slowly add to your food offerings until you have a branded foodservice program built. Otherwise, your customers will become suspicious of the food and your organization.

It all boils down to having a passion for food. When you develop a culture centered on foodservice, you’re offering service and hospitality, offering craveable products, creating a “wow” experience for every guest and creating relationships with your customers that will last, Boston said.