Executives from Hy-Vee, Kwik Trip, Sobeys and Coca-Cola Refreshments mapped out for Summit attendees the specific kinds of support and benefits retailers could expect from foodservice suppliers, in a panel moderated by SupermarketGuru Phil Lempert.
Panelists were: Jeremy Gosch, Executive Vice President of Strategy and Chief Merchandising Officer, Hy-Vee; Jim Bressi, Director of Research and Development, Kwik Trip; Richard Allardyce, Executive Chef & Senior Director-Merchandising and Commercial Programs – HMR, Sobeys; and Randy Raymond, Group Director-Strategic Initiatives, Coca-Cola Refreshments.
Here are some topical excerpts:
Challenges of working with brands:
Jeremy Gosch, Hy-Vee, which operates 108 Market Grille full-service restaurants, and an Express order model: “A large challenge for us is being recognized as a restaurant [because] we have two separate business units inside of a facility known for selling groceries. Figuring out where strategy and innovation through manufacturing could link up to our brand, to have synergy moving forward to drive sales and usage, and give a food experience that separates us from most restaurants we compete with.”
Richard Allardyce, Sobeys: “One challenge is to get the retail and foodservice sides of the business speaking together to truly understand that we are that foodservice opportunity within the store. Too often I see the deli clerk going out and grabbing a package of gnocchi, grabbing a 250ml jar of al fredo sauce, grabbing parsley – we need to start leveraging those foodservice pieces much better. Its within the manufacturers…and understanding we need those two sides of the business coming together as one. That’s where we started to see some great success.”
What grocerants can expect from suppliers:
Randy Raymond, Coca-Cola Refreshments: “An entire spectrum. If [a newer operator needs] basics, we can share what’s going on in restaurants, the primary competitors. We have decks on fast casual, what’s going on in the channel, foodservice trend insights to build business and try to leapfrog what a lot of restaurants are already doing. Also, culinary trends, and restaurant trends by channel…to help build your concept out.”
Richard Allardyce, Sobeys: “Manufacturers have so much data and so many insights. If we can distill it down and present to senior leadership in a way that shows an understanding of where we want to go and why we’ll get there, we’ll build the case that much easier. I come from a multi-unit foodservice background, so I have an opportunity to say ‘this is why we’re doing it – we want to pair this beverage to build that meal, build the average check in our department, get that trip frequency up, and get them in 1 or 2 times a week as opposed to 2 to 3 times per month.’ So we have the benefit of show the data, explain it in a way that talks about pocketbooks, top-line sales and bottom-line contribution….”
Jim Bressi, Kwik Trip: “It’s about being a hero. Say someone sends you out for cream cheese, you want to be able to bring home a name brand, not something that c-stores are notorious for either having a private brand or an off-brand of sorts. More importantly, as we try to become a destination, we want to have the most to offer in the shortest period of time….We don’t have the SKU capacity of supermarkets, which have room for both. We do create a lot of private labels in order to operate in the states we operate. But with our limited shelf availability, we want to make sure we have name brands out there…..We rely heavily on companies and manufacturers, especially for data….We spend enough money where we warrant getting that information. It’s one of those things you become reliant on when you don’t have the resources yourself.”
Jeremy Gosch, Hy-Vee: “It’s about having the right resources from all the manufacturers fitting into our business. Most CPGs know how to sell 12-packs of … [product], but they don’t have the culinary side. They don’t have the right chefs in the store that have the expertise. A lot of your fresh manufacturers get it, but many CPGs don’t. That’s where I think there’s a line that’s still hard for us to get through, because we need the right people in the room with restaurant expertise to work with us on product efficiencies. That’s what we struggle with – one-time-use ingredients, and small individual packets – we need access to the other book of goods.
“We’ve done a lot, but one program we haven’t done a lot with is we have a room off of our Market Grilles for groups that make meals for the week. It is Blue Apron that they prepare themselves. We get groups between 15 and 25 people booked in every store it’s in…they can drink wine…Frankly, we should go to manufacturers for putting recipes and plans together. We do it all internally now, but there are huge opportunities for us to merge the two together as we go down this path together to create meal solutions for at- store and at-home.”
Richard Allardyce, Sobeys: “Bringing in outstanding products from manufacturers, and getting deli clerks to understand a 4-liter pouch of al fredo sauce will save costs in packaging, will have better efficiency from cross-utilization across the counter. We need to explain the whys to our team, give them the reasons we want to do it, improve their knowledge base. We have traditional clerks who’ve been serving barbecue chickens for 30 years….it’s tough to go into the delis and tell someone I want you to slice your green onions on a bias with a chef knife, not a paring knife. It’s reality right now.
“We had expanded into a prolific menu. Now we want to be able to speak with manufacturers and say ‘here’s our strategy, here’s where we want to get to in 5 years and have targeted development – not just have a product presented to add to the assortment.’ It needs a program, it needs transformation to something a lot bigger with that cross-utilization of products. I tell manufacturers I don’t just want a product. If you bring me a product, I want 9 applications for that product…to really start thinking like a restaurant.
“The manufacturing world has some of the best executive chef teams in the country. They understand multi-unit foodservice. We need to share that passion within the grocery retail standpoint because nobody knows…What I see as the basics aren’t being executed at store-level right now. So we have to go back – that’s where the culinary teams can help specifically on the data and insights, and how to bring it to life consistently across the country. We’ve got 1,650 stores. Those are a lot of factories trying to do the same thing. When we decide what we want to stand for, what we want to produce in store, we have an opportunity then to outsource some of those other products to get consistency in all those stores across the country.”
Jim Bressi, Kwik Trip: “We certainly want their ideas and products they represent. Our trade association NACS [National Association of Convenience Stores] brings us together to do a lot of this collaboration. We also have peer groups. What’s unique about Kwik Trip is we’re a manufacturer as well. We’re two food companies within our c-store business. The culinary aspect is different in the c-store business – we had to teach everybody how to use a knife. That was a challenge when we first got into the food business 13 years ago. But it has evolved. We had a lot of people just selling gas. They didn’t know anything about food. But today we’re a restaurant facility…. Sheetz is one of our share partners…they’re very similar to Kwik Trip in that they have their own bakery and commissary.”
Randy Raymond, Coca-Cola Refreshments: “Success is really leveraging what everyone brings to the table. We’re not a culinary company. Rich’s and others will help you build your food. We have some insights to help you do that, but you have other CPG companies that probably do a better job, they have culinary staff. We can complement with strengths on the merchandising side. How do I think about menuboards, communicating the product, path to purchase, bundles, merchandising, and how to drive average check? That’s where Coca-Cola can definitely help. Our expertise is building the basket.”
BRANDING, AUTHENTICITY & TRAINING
Richard Allardyce, Sobeys: “We need the consumer to trust that anything they’re going to buy from our stores is going to be absolutely delicious, fresh, and they don’t have to worry about the price point….Until you have that credibility, you need to work really hard on messaging and romancing the product, and make people want to buy it.
“It comes back to training. Manufacturers can help a lot with digital training videos….Everyone has a phone, can scan a QR code, and can go to a video of me in the kitchen - a quick 30-second visualization that brings it to life. A lot of our manufacturer partners have facilities and resources to share. That’s key. Once we can build the branding piece, in those 30 seconds we can talk about the key attributes of the black garlic, the beautiful 35% cream being used in the al fredo sauce, whatever the key message points are that they can take in front of our customers. Now we can really tell the story [of the dish] because we’re empowered by the knowledge. Digital training videos enable us to engage with consumers.
“Culinary knowledge and life-stage in foodservice determines what brands should do for a specific grocerant. If just starting out, the chef has the knowledge, and could be that credible person standing in front of the camera talking about product. Further down the path…it is more powerful if in-store chefs, who are known faces in the store, are on camera. When they can deliver that message with passion and the strategic vision of the company, that is when you really see feet hit the ground, and really see buy in.”
Jeremy Gosch, Hy-Vee: “Most of what we do and create in all our departments has some kind of story. Where we can be authentic and talk about it – such as our artisan bread and fresh cream cheeses in bakery – [we message about] fresh blueberry cream cheese made here from Michigan blueberries gotten from the produce department this morning. These are on placards now in front of all our cream cheese, so the customer understands it is artisan without calling it artisan, because we’ll tell the story of our product. We tell customers so they understand food is made here in an authentic way as an original product.
“As we try to get our restaurant credibility, our dessert menu is Cheesecake Factory. Where we can partner with manufacturers that are good at what they do…if you can’t beat them, join them. Our protein and smoothie bar is Mark Wahlberg’s. We’re the exclusive supplier of Mark Wahlberg-inspired protein in the Midwest. The product has a story and purpose, and it is all natural. There are things like that we can do with manufacturers and brands that helps us tell a story, gives us credibility…and lets us win in those areas. For us, it’s a combination of partnerships such as Cheesecake Factory, and spots [such as cream cheese] where we feel product can’t be replicated, and is second to none.”
Jim Bessi, Kwik Trip: “Absolutely, we can have authenticity in a convenience store….Over 250 companies from Minnesota, Wisconsin and Iowa have products in our stores. We tell that in our PR and packaging, though not with fancy language that often gets lost on people. It is about the in-depth localization of product brought forth in your packaging and some of your sublime messaging.”