Food for thought

Keeping customers hungry for more can mean bigger profits

Hot food is an increasingly important weapon in the convenience and impulse outlet operator's sales-generating arsenal ... and it's one which is delivering very healthy profits indeed.

While the traditional warm snack sold through the convenience channel remains the good old Aussie pie or sausage roll, there are a host of other highly attractive options that are emerging and helping to keep hungry customers spending up big in store.

As with all categories, an understanding of the consumer and his or her purchasing motivation is an essential starting point on the road to improving sales figures.

C&I outlet sales are driven by situational convenience so it is an absolute basic that that the right hot food products are always available in store. Furthermore, eye-catching presentation and positional prominence are keys to promoting higher impulse sales. It means operators will need to stock and merchandise hot food products in locations that are, for example, visible from pay point in order to tempt consumers to purchase.

However, many operators also need to be more disciplined in ensuring adequate stock is on show around the clock.

With hot food, potential consumers are pretty much anyone that comes into the store, whether they are doing so to buy fuel, or are local tradesmen or office workers on a break.

Traditionally hot snack purchasers in convenience could be said to be impulse-driven males who want situational convenience, that is the product must be in the store when the consumer wants to purchase. The product will then be eaten in the moment or in the car. This consumer also looks for value for money and satiety in a tasty hot offering.

While the purchase occasion can vary greatly depending on the time of the day, there are a number of important purchase occasions that all C&I outlet operators should be aware of.

A hot offering in the morning may give a tradesman or a local worker the filling snack or breakfast option he or she seeks. Of course, lunch time is a critical time for the likes of sandwiches and pies, and the 'late night filler' is critical for the protein torpedoes, those males wanting a hot snack between 10pm-3am.

Well stocked & well presented

While the need to keep the hot food merchandiser well stocked and well presented can hardly be overstated, perhaps of even more critical importance is employing the right merchandisers in the first pace. The impact on sales can be dramatic.

Avem, which is a full service company that supplies a broad range of food equipment solutions, says its Modular Counter series of merchandisers which come in three or four levels are the most suitable for C&I outlets. While they can be bought as 'serve over' or 'self serve', Avem's Business Development Manager, Arno Rieuwers says the self-serve option increases sales by 20% by eliminating a customer barrier.

Avem says the FriJado range of Hot Deli merchandisers are also highly suitable to the convenience environment.

The company offers outlets taking its merchandisers full training, as well as ongoing maintenance support.

"Hot units must be cleaned daily, which is about a 15-minute exercise," said Mr Rieuwers. "You just have to look at the sale of hot pastries, pies and the like to know that customers now expect hot food to be available in convenience stores."

He says a modern hot food merchandiser help to increase impulse sales and these are often a better option than attempting to prepare hot food for customers.

"Customers in convenience stores do not like to wait," he said. "And cooking to order is not always simple because of timelines."

What C&I customers want … quickly

Australian Convenience Foods (ACF) is another company which understand the importance of giving C&I customers what they want and when they want it ... and that's normally very quickly. It offers a range of bread-based microwave products including burgers, rolls and hot dogs. It also supplies fresh sandwiches, filled Turkish, croissants, fresh salads, desserts and cold bakery items – all under the ready go eat banner brand.

"Our most popular hot products are microwave burgers, sub rolls, ready go eat Banger Kransky Sausage and Deli Dog hot dogs as they meet the need for single-handed, portable consumption," said an ACF spokesperson. "They are also available any time night or day, provide high levels of satiety and are a great product to bundle with a drink or dessert."

The ready go eat Banger which is a premium Kransky Sausage, infused with cheese and wrapped in pastry, has only just been launched and is proving highly popular with the core convenience store hot food consumer ... the hungry tradesman.

"The ready go eat Banger is not a pie nor a sausage roll but is designed to offer an alternative to the current product offerings in the pie warmer," said the ACF spokesperson. "The bright modern look of the packaging is designed to attract the attention of the 'pie warmer' shopper and drive initial trial."

The advent of better hot snack packaging and newer, fresher offerings with more appetite appeal means that convenience customer's shopping habits are changing and they are therefore shopping the category more often.

"Generally suppliers and retailers are applying more focus to snack foods and as a result the quality is improving and driving the consumer's interest," said the ACF spokesperson. "Single serve and dual pack portion controlled packs are also growing in popularity as consumers aim to balance between the growing trends of indulgence and health."

Certainly, health is still an emerging trend in C&I outlets but it is still a fact that convenience consumers don't generally have the time to shop and time to read nutritional information on pack in the same way as they might do in grocery.

"We are starting to see a slight trend towards healthier eating in this category but there is a need for a concerted effort by both retailer and manufacturer to educate consumers about benefits of healthier eating," said the ACF spokesperson. "The market for hot food will always exist but, as consumers continue to self manage their eating habits, trade-offs in consumption will continue to grow."

It will come as no surprise to learn then that, as people's lifestyle become increasingly hectic, hot food sales through the convenience channel are expected to grow. Snack products address the convenience and portability needs dictated by the channel and, as quality and variety continues to improve, hot snack foods will continue to become an even more significant category.

Why chicken is hot

As the demand for hot food has grown in convenience and impulse, an increasing number of outlets have turned to the sale of branded products cooked in-store to help them maximise the potential for sales and profits.

The introduction of an established system with established procedures and a set menu, combined with the advantages of selling an already well-known brand makes a compelling case to some C&I outlet operators. The arrival of hot chicken based food outlets into convenience has been a particular success story as it appeals to the traditional C&I demographic.

Companies such as Rosie's Chicken, Golden Fried Chicken (GFC), and Country Fried Chicken have helped boost customer numbers and sales in convenience outlets around the country.

One of the biggest selling points is the fact that the introduction of these systems is relatively easy.

Country Chicken & Pizza Express, for example, offers an add-on fast food system, which has been purpose designed for convenience stores and service stations.

The minimum space requirement to implement the system is approximately three square metres and Country Chicken & Pizza Express CEO, Peter Austin, says that, due to the fact that there is no need to use money or space providing a range hood, extractor system or grease trap, the system is ideal to suit any convenience store.

"Without the need of a lot of equipment, all that is required is room for the Bain Marie, Impinger pizza oven, counter space and menu boards, and a small prep area for the burgers," he said. "We have an in-house design service, and can provide clients with artist impressions of how their store can look, and how we can best utilise the space available."

Mr Austin says that a branded hot food operation offers enormous potential for increased profits.

"We are all leading busier lives, with most families now being dual income families, and it is fast becoming the way of the world that more and more take away meals are being purchased," said. "Convenience Stores are aptly named to be able to offer their customers the convenience of easy shopping, so convenience stores need to make sure that they don't miss out on their share of profits in this growing market."

Rosie's Chicken

Rosie's Chicken is another 'add-on' fast food business concept that custom-makes internal and external signage for each individual business and provides all equipment and professional training.

With a menu of hot and cold ready-to-eat seasoned chicken products, Rosie's CEO David Coles says the system can be incorporated into any existing takeaway food business. He says that the only requirement in a convenience store is a kitchen preparation area incorporating such facilities as a range hood and tiled walls.

"There is no minimum space requirement so Rosie's can be shoe-horned into any takeaway food operation," he said. "Our system is not standardised and we can format Rosie's to suit any existing food outlet."

But can it work in a convenience store that continues selling traditional convenience products?

"Not only can the store continue to do so, but we advise potential clients that they can expect all other product sales to increase," said Mr Coles. "All cooking and display equipment and signage is tailored to each location so Rosie's can work anywhere – there is no limitation on size."

Rosie's Chicken is not a franchise and so there are no ongoing fees for C&I outlets.

"In our experience, Rosie's operators become self-sufficient very quickly ... they are usually experienced food handlers to begin with and Rosie's is not a 'start-from-scratch' franchise scenario," said Mr Coles. "Cooking and preparing chicken is not rocket science. We can show anyone how to do it."

Training occurs over a three-day period and work patterns are implemented to optimise labour productivity, and all Rosie's products are 'ready-to-go'.

Mr Coles says that in a typical existing food operation, no additional staff are generally required.

"Hot products require a dedicated staff person during the major meal breaks but the cold products have a long shelf life and are ready throughout the business' hours of operation," he said. "This is one reason why Rosie's is popular with 24 hour fuel sites."

Golden Fried Chicken

Golden Fried Chicken, established in 1989, is another fast food system that is designed to suit individual outlets according to size, location and the goals the operator intends it to achieve.

The system was originally conceived back more than 20 years ago and is very much designed to fit in with existing food offers and work with, not against what an outlet is already selling. The idea being to keep everything simple.

"Golden Fried Chicken, from its very conception 21 years ago, was designed to be very simple to produce," said the Principal of the Golden Fried Chicken System, Terry Slade. "Convenience stores need a food offer that anyone can operate ... it keeps labour and wastage down and builds a strong customer base."

The space required for a Golden Fried Chicken system depends on whether the system is to be added on, substituting an existing offer or whether it is intended to be stand-alone in its own right.

"We can condense to as small as a couple of square metres or as large as a full size 40 square metre stand-alone store," said Mr Slade. "The menu mix of a Golden Fried Chicken system focuses on the most popular and profitable products that have the lowest labour content."

Indeed, Golden Fried Chicken builds the menu mix to suit the site and once a Golden Fried Chicken outlet is up and operating, the company gives as much support as possible.

"We have a lot of phone contact with our outlets," said Mr Slade, "The Golden Fried Chicken System is so simple to operate, that after the initial training, most issues can be resolved in a simple phone call."

The reasons why fast-food hot chicken operations such as Golden Fried Chicken are so successful are many but one of the most important is the fact that, these days, just about everyone is in a hurry! Consumers are typical C&I outlet customers ... school kids, mums and workers on the run, office workers, truckies, and tradespeople.

"There are Golden Fried Chicken outlets that have been operating for 21 years," said Mr Slade. "These people will tell you that from the day they put their Golden Fried Chicken system in, right up to now, the huge difference it has made, and is still making, to increased profits, customer flow and to the increase in sales of other products."

Country Chicken & Pizza Express

Peter Austin from Country Chicken and Pizza Express has also noticed that customers who come into an outlet for hot food will then generally end up buying other products from the convenience store, as well.

"Research has shown that impulse buying can account for up to 62% of sales on supermarket products," he said. "In a well laid-out store, with attractive marketing and good point of sale material, these all encourage customers to act on this trend of impulse buying."

He says that Country Chicken's brightly coloured and easy to read menu offers customers a great range of chicken pieces, chicken burgers, chicken pizzas and chips.

"Our Country Chicken and Pizza Express system is essentially two food systems in one, and some menu items offer clients more than 100% gross profit," he said. "As our products come pre-prepared, we know that our products will consistently have the same great taste which will bring repeat business."

The company says that as there is little or no preparation required, no handling of oil, and no wastage, stores will not need to employ any additional staff.

"All staff need to do is to place the frozen product on the automated impinger oven, freeing their time up to be able to serve customers while the product is cooking," said Mr Austin. "Our products are healthier than most, very tasty, and customers will be confident that due to our cooking processes that each time they purchase Country Chicken or Country Pizza they will consistently be buying the same great tasting product over and over again."

Ultimately then, the success of an introduced branded fast food operation in a C&I outlet is dependent on the quality of the food produced and the efficiency of the food preparation systems put in place. If it is done right, it can not only produce greater hot food profits but also drive other spending in-store.

"We have overwhelming evidence that all other product sales are driven by the introduction of Rosie's," said Rosie's Chicken CEO, David Coles. "This is a standard claim we make to all prospective clients."

He says that, without exception, Rosie's boosts both turnover and bottom-line profit. "Turnover is not profit. Turnover is simply work," he said. "Rosie's increase both but also converts existing turnover into substantially better profit margins."

And that is all good news for any convenience and impulse outlet seeking to cash in on the growing profit opportunities presented by hot food. Incorporating a fast food outlet into an existing operation can certainly give the hot food category in store a major lift and drive sales and profits.