We’re talking a single serve food that is delivered either chilled or frozen, but already cooked. The operator or the customer heats the selected product and out the door it goes.
What’s different these days is the range of products that fit this category, and the range of ways of cooking them. Whether the retailer chooses a simple microwave and microwaveable range of products, or a more complex piece of machinery, the basic rules apply.
It has to be easy to use, whether by customer or retailer, offer reliability, guarantee of quality and back-up, and given there is always a food handling issue, it must be easy to clean and maintain.
However, what perhaps is surprising is that despite the increase in variety of such easy-to-manage food offerings and the equipment to cook them, general food service isn’t as big a part of the business – and profit – as it could be.
According to the December 2003 State of the Industry Survey as released by the Australasian Association of Convenience Stores, just 5.9 per cent of total C-Store sales last year were attributed to food service. That figure includes all branded and non-branded on-site offerings as well as general foods such as pies, chicken rolls, burgers, sandwiches, hot dogs, donuts and muffins.
That figure too, was down on the same category for the same period in 2002 (6.21 per cent) and 2001 (6.90 per cent).
One possible reason, as expressed by one supplier, is the undeniable shake-up happening in the P&C market, with the advent of the major grocery chains turning their attention to selling fuel.
Obviously that is having an impact on C-Stores themselves, the way they do business and any subsequent change in buyers’ habits, which then impacts on the range and volume of products they have sold in the past. That supplier suggested food is definitely a ‘victim’ of the change in the P&C landscape, as well as other impulse buys.
His advice? “Don’t panic” and don’t give up doing the things that work for you – which can include a good, solid food offering. Others agree.
“ Stick to a simple retail offer when it comes to food – the tried and proven offerings,” says Sam Haritos, national sales manager for the Australian Convenience Foods Group.
“
The more complex offerings are expensive to produce, serve and support, so
it makes sense to go with volume for simple profit, rather than looking at
something that might seem to offer a bigger margin, but will cost you a lot
more in overheads.”
ACF handles distribution for a wide variety of food offerings including
the Aussie Hero range of hot rolls and cheeseburgers, Connoisseur Sandwiches,
Deli Dog Hot Dogs, Mexican Express’ Nachos To Go, Mrs Mac’s Pies,
Sara Lee and Signature Cheesecakes.
The most popular flavour with the end consumer would seem to be chicken, but Mr Haritos says it’s not the flavour that’s most important to the retailer.
“ We dominate the P&C market as a supplier and that’s because of the consistency of the products we work with, the taste and quality they offer and the shelf life.
“ We use modified atmosphere packaging with our microwaveable products that removes the air and reduces bacteria growth. That not only gives the product a longer shelf life [21 days] but also makes it safer from a health standpoint,” Mr Haritos says.
“ Shelf life is always an important consideration, especially for stores that don’t have a particularly high daily turnover, and no-one can ignore the whole food safety issue these days.
“We even have a frozen/microwaveable hot dog (Deli Dog) that offers 21 days’ shelf life, which would have to make it an easier, more manageable alternative than a fresh product and the traditional steamer,” Mr Haritos says.
Meat pies are perhaps the original ‘convenience’ food and the meat pie industry is one that has consolidated in recent years with the emergence of some big players and the disappearance of others. Mrs Mac’s (Bakewell Foods) and Four’n’Twenty (Patties Foods) are now the firm market leaders in the route trade with good national penetration. Both plan to maintain that lead.
“ The Australian pie market is a mature market. It has seen some slowing in recent times,” says Robert Cergogna, national accounts manager for Bakewell Foods.
“ But Mrs Mac’s – and others – have been working on some innovative new ideas and that seems to have arrested the downturn. Basically it’s about providing a range of options for different market segments – it is really important to keep referencing back to the consumer and ensuring that their needs are being met.”
Mr Cergogna says the pace and style of Australian life in general continues to offer convenience stores great opportunities at meal times.
“ Consumers are moving away from the practice of spending large chunks of their time on grocery shopping and cooking, performing these functions in smaller time blocks as needed.
“ More time spent on commuting and travelling has also led them to ‘multi-task’ while they are travelling, in order to save time, so they are more likely to eat on the move,” Mr Cergogna says.
Patties’ brand manager, Mark Connolly, agrees that pie specialists are perfectly placed to take advantage of this sort of demand by virtue of the type of product they produce. He believes the pie market is reasonably steady, showing a small growth pattern off a high base, but he says there is a good reason for their ongoing strength.
“ Pies offer a high level of convenience for the consumer. They’re also very good quality products, well priced, well distributed and they’re easily accessible at all hours of the day.
“ They’re also very convenient for the retailer - particularly a snap-frozen product that can easily be reheated. It minimises the number of orders and deliveries needed – and the product handling required with that – along with minimising wastage and any food safety issues.
“ The whole food safety thing is so important, and that’s why it makes sense for the retailer to stick to a well-known brand like the market leaders which have approved HACCP procedures in place.
“ Not only is it a more economical choice, but there’s a guarantee of quality there – and that’s important for the consumer too. That’s why consumers buy brands – they want to know what they’re getting, they want to know it’s high quality and safe,” Mr Connolly says.
Like pies, fried foods enjoy a fairly constant popularity, but in the past they may have been tricky to manage because of the issue of where to place the fryer and how to manage it - and the store - at the same time.
Michael Brick is the national sales manager for Perfect Fry which manufactures, sells and services a small, self-contained, fully enclosed deep fryer unit (the Perfect Fryer) and other food service equipment.
He says the Perfect Fry is one of the perfect answers to providing a good quality, reliable, popular food offering.
“ Labour can be a huge issue for a retailer. With some food offerings, you really have to balance out the costs because you need a lot of staff to make it work but you can ‘eat’ into too much of your profit with your labour costs.
“ Our fryer can be managed without extra staff. It’s about the same size as a microwave and can be installed in-store rather than ‘out the back’, and it handles any sort of fried food.
“ Sure, there is a lot of demand for a ‘healthier’ alternative these days, but there is still a very strong demand for fried food and it’s a good offering for a C-tore because there is minimal food handling involved,” Mr Brick says.
“ It’s frozen, so it stores well, there’s little waste and little risk, so you have a quick, convenient product that cooks well and sells well and offers big profit margins.
” Fried food can be a substantial meal or a snack and is a convenient ‘one-handed’ food for people on the go.”
Mr Brick raised the issue of ‘health’. It’s a trend no-one is arguing about because the simple truth is that many consumers are looking for a healthier alternative (although many are not, as Mr Brick says, because of the constancy of demand for pies, sausage rolls and fried foods). But the manufacturers are responding and Patties is just one.
“ We’ve developed the Four ‘n’ Twenty Lite Pie which has been extremely well received,” says Patties’ Mr Connolly.
“ You have to listen to what the consumers are asking for – and they wanted a healthier choice. Interestingly it hasn’t seemed to have affected sales of our traditional pies. It’s probably brought us another group of consumers, so it’s paying off.”
Boss Hogs Hot Dogs is another to see the benefits of fulfilling a new demand. Boss Hogs’ director Bill Alt says manufacturers and retailers have to take note.
“ You can’t ignore the trend towards healthier food stuffs. Just look at what McDonalds and Hungry Jack’s are doing - they had to introduce new healthier products because they were losing customers.
“ We’ve just developed some reduced fat frankfurts to meet that same sort of demand, and we’re confident they will do very well. People want that old familiar taste but they are far more aware of what they put in their body – if they think they can do both, then we’re probably winning back some consumers we might otherwise have lost.”
Mr Alt says his company is not only always on the lookout to meet consumer demands, but keen to make the retailer’s life easier too. The company is constantly researching cooking and storing methods that give the retailer the advantage of a longer shelf life – and the consumer a product that tastes as if it has just been cooked to order.
Allan Taylor, sales manager for Mexican Express, knows exactly what he’s talking about, because it is a constant issue for manufacturers striving to produce a versatile product. Mexican Express makes Nachos To Go, a ‘heat’n’eat’ nachos that is distributed by ACF.
“ A fresh-tasting product, distribution and good shelf-life is an absolute priority in the convenience store industry, as is visibility of the product to encourage impulse buys.
“
Our Nachos is shelf-stable for four months, and there’s no refrigeration
necessary. The retailer can simply display it next to the microwave and it’s
ready to go once it’s heated.”
Mr Taylor says one of the advantages of Nachos is that it’s not just a traditional ‘meal-time’ seller.
“ Our best sales are on Thursday, Friday and Saturday nights when people are looking for a healthy snack straight after work or after they’ve been out – when they’re having an attack of the ‘munchies’, so it’s an add-on that’s not seen as a specific meal.”
At the moment, Mexican Express
only offers one variety of nachos. They have tried
others – and will again – but for the moment nothing will change. There’s
a good reason for that.
Several of our experts said that while consumers may talk about wanting something
new, or trying something new, they don’t always stick with it. Several talked
about launching new products without huge success, despite serious marketing
budgets aimed at making them work.
“ I have to assess new product ideas all the time and it really is hard to pick a potential winner,” says ACF’s Mr Haritos, “but pies and sausage rolls and our Aussie Hero’s rolls and burgers always work.
” It is really interesting to note that people’s tastes don’t change that much. The top 10 chocolate bars of today are pretty much the same as the top 10 chocolate bars of 10 years ago and I find that it’s much the same in most product categories.”
Patties’ Mr Connolly agrees, saying the company’s meat pies and sausage roll are its consistent best sellers.
“ We have done well with new products because people do like a bit of variety – but nothing too different. The whole hand-held thing is very important, no knives and forks.
“ And people say they want a ‘normal’ pie – there’s a comfort thing there, even if they like to try something new, the familiarity of an old favourite, a good quality pie, is always a winner,” Mr Connolly says.
“ P & C is about serving people who are on the go,” says ACF’s Mr Haritos.
“ Be realistic about why people really visit your store and what they need, and provide that. Leave the fancy stuff to the restaurants and your food offering will work for you,” Mr Haritos says.
Charlie Casimis agrees with that totally, as does Rodney Jay. Mr Casimis is the proprietor of Ampol Dingley in suburban Melbourne while Mr Jay’s Caltex Baxter StarMart is a little further out.
Both provide a basic food offering – essentially pies, sausage rolls, hot dogs and microwaveable foods – that work extremely well in the two outlets.
“ You need to have good, clean premises with good service and a quality product and you can’t go wrong,” Mr Casimis says.
“ We do about 200-plus hot dogs a week in the steamer, and about 25 boxes of Mrs Mac’s pies and sausage rolls. We like products that don’t have to be handled and our customers do too – they appreciate that it is fresh, good quality and safe.
“ The biggest issue we have is when we do meal deals – the customers love them and they definitely increase sales, but a lot of the manufacturers involved won’t help out. I’d certainly like to see more assistance in that area, because we’ve proved that it increases sales, so it’s good for them as well as us, but we’re the ones carrying the cost,” Mr Casimis says.
While the Ampol store enjoys both impulse and destination buyers, Mr Jay says his Caltex store is a drop-in point at mealtimes for local tradesmen – and late at night for people looking for a snack.
“ We have quite a wide range of products including our own fresh biscuits and things like that, but it’s the microwaveable rolls and pies and sausage rolls that are the winners every time.
“ They’ve done up the local shopping area with a heap of parking and the baker offers some lovely fresh pies and rolls, but I think the convenience thing is a big issue – parking is easy at our site and they know they get a quality product ready to go. We’re definitely a destination point when it comes to heat’n’eat food and we do very well out of it.”
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