Top-down support brings out the best in foodservice teams
A key ingredient for grocerant success is a top-down culture that respects and nurtures culinary talent, encourages foodservice innovation, empowers associates to creatively satisfy customers, prioritizes cleanliness, and invests in technology that lets customers control their retail foodservice experience before they enter the store’s parking lot.
These are some key takeaways from the Foodservice at Retail Culture panel session moderated by Phil Lempert, with panelists:
Mike Sherlock, Vice President of Fresh Food and Beverage, Wawa (725-store convenience chain)
Ryan Sheetz, Assistant Vice President, Brand Development, Sheetz (527-store convenience chain)
Steven Petusevsky, Chef, Foodservice Operations Advisor, Appetites+Innovation, Author of the "Whole Foods Market Cookbook";
Nicolas Granucci, Vice President and General Manager, Global Food Retail, Ecolab
“You can’t just take your deli manager, put him in charge of a grocerant, cross your fingers and hope it works. It’s a whole different business,” said Lempert.
With that, the panel delved into cultural themes. Here are some highlight quotes:
Challenges for traditional grocers:
Petusevsky: “The industry is changing. Consumers demand better prepared foods. We’re working with restaurant-quality chefs. The only thing that hasn’t changed for me in the past 20 years is the culture, and that is a very difficult aspect. Typically if I have a three year contract with a company, the first year is taken up by trying to explain to a typical supermarket chain what a culinary culture is.
Trying to run a restaurant program in a supermarket is like trying to make a vinaigrette with oil and vinegar using a chopstick to mix it. They are two completely different platforms. Everything about them is dissimilar.
The senior level must express organizational culture. Everybody must buy-in because this is a long-term investment. The only way supermarkets can differentiate today is through individual footprint and identity. Some food stores get 20% of sales from their prepared foods sales. It’s a gold mine if it’s done right.”
Challenges for convenience stores:
Sheetz: “Number one for me is consumer perception—to try to convince you that you can get quality, fresh prepared food at a gas station. Many people have a hang up—think stale hot dogs and crusty nachos, probably with petroleum residue all over it. That causes us to really work hard. We over-index on the foodservice part of our business. It drives our mentality, what we talk about, our projects, and our competitive set.
Gasoline is a blessing and a curse. We derive a lot of our profits from gasoline. That allows us to do some risky and cool investments on the foodservice side. But it presents a significant hurdle we have to overcome."
Food franchises and convenience stores:
Sherlock: “Back in the late 80s-early 90s, Wawa did some partnerships with Dunkin’ Donuts, Pizza Hut and Taco Bell. Our customers in focus groups said we had higher brand equity with our own brand name. So we divested those to focus on our own programs. We got a lot of key learnings from those partnerships as well—particularly about processes—that we could apply to our own programs. For a small operator, franchises are probably a good approach, especially initially. For ourselves, it’s really build up our own brand equity and programs, and allow customization and personalization to build brand trust with our customers.”
Empower teams and build a foodservice culture:
Sherlock: “Each of our 725 Wawa units has a full quality kitchen offer and espresso bar. We also operate two kitchen commissaries—most of our grab-and-go and ready-to-eat comes from those.
We take pride in investing in our people. It ladders up to us working hard to have a best-place-to-work culture. We are proud to be one of the top 10 places to work in retail in the entire country.
It all starts with valuing people and embracing change. We had an entrepreneurial manager back in the 1970s who brought in his own coffeemaker—now we’re selling 200 million cups of coffee per year. It’s about empowering employees, helping them develop programs with us, and achieving cross-functional buy-in.”
Sheetz: “An entrepreneurial or pioneering spirit is one of our DNA markers. This led to our foodservice today. We empowered managers in the 1970s and early ‘80s to do whatever they had to do to make a buck. Earl Springer of Williamsport, MD, had a pioneering mindset. He saw some people selling fresh prepared subs, and brought them into his store. It was pretty rough, but that pioneering mindset allowed people to jump in for us—and it eventually translated into really good foodservice.”
Sanitation, temperature integrity, food safety
Granucci: “Labor is the name of the game. That’s what Ecolab sees in 40,000 supermarkets we service around the world. Retail departments allocate a fixed number of hours. So if a person there doesn’t have the right culture, training and tools to do their sanitation and temperature checks and food safety care, they either cut corners and run risk—or you have to close earlier and lose sales because you have to not serve customers at the end of each shift.
Customers want help with ‘how do we keep that front-line labor well educated on why we follow certain food safety procedures, and how to do things well and efficiently.’ It can take three hours to close a deli, but you don’t have 3 hours [of labor in your budget].”
Making local sourcing safer:
Granucci: “It will be a differentiator for operators that find ways to manage [the food safety risk of local sourcing]. It can be done through good sourcing practices and third-party safety audits. Operators who learn to do that at scale, and offer it in a safe manner—the same could be said about sushi bars and other foodservice specialties—will differentiate.”
Empower and engage employees, including long-timers who’d rather not bother with foodservice:
Petusevsky: “I deal with it all the time. This is about someone in the organization having a vision, creating a very clear mission statement or being purpose-driven. John Mackey of Whole Foods Market had a vision, and empowered me to create a lot of the venues you see today, and these recipes, which didn’t exist before. It is dollars-driven.
When an organization realizes it can bring in tens of millions of dollars a year by doing these things right, it’s an incentive for them to invest in this program. Where many fall short is in not creating a clear mission statement for the culinary team. Remember these culinary teams that are now in supermarkets come out of a completely different environment. You have to give them a clear vision and set realistic expectations. Everything has to be out on the table. You have to be transparent with your employees, your team, and your customers. Otherwise, none of this works, the culture can’t take place and gain a foothold.”
Sheetz: “You need leaders who put a stake in, and follow through the organization. At Sheetz, our customer looks at us as a damn good gas station, but we are driving to be the best restaurant in the world.
We have visionary leadership that sets that out there. But all of your projects, goals, results need to focus around that. You have to play that all the way through, hold your people accountable, set expectations, and line up rewards and incentives with the behavior you want to achieve. For us, it’s going all in on foodservice.”
Millennials and Generation Z openness to retail foodservice:
Sheetz: “We make more money than a restaurant because we have other aspects of our business that prop up our profitability. We have a pretty high tolerance for risk, a pretty long-term view on things, so we do some things that may be atypical for the rest of the industry. I love Millennials. They don’t have the same hang ups as previous generations. Getting gas and food in the same place isn’t a big deal. They’re very experimental by nature, willing to try different things, they value speed and convenience, and they value technology, which plays a big part in how Sheetz goes to business…It’s a pretty cool space to operate in. It has its challenges, but I don’t think I’d have it any other way.”
Customer control of the retail foodservice experience:
(Couples at Mariano’s have a glass of wine as they push their shopping carts around. They’ll stop, grab something to eat, and resume shopping)
Sherlock: “When we’re in the convenience business, part of our challenge is how not to be out-convenienced. How do we continue to evolve, and take the experience outside of the store with mobile ordering? Do they want something that’s grab-and-go, or self-service, or full-service? Can they get the sandwich choices and build their beverages however they want it? That’s what we’re trying to do more and more.”
Foodservice and the rest of the store:
Petusevsky: “For a large retail store, having prepared foods is like the holy grail for the rest of the store….It showcases the raw ingredients that are in the store. It teaches shoppers how to go to the produce department, how they can get the component ingredients to produce something like that at home. It ties the whole thing together in such a great package. Done right, there’s no substitute for it.”
The power of selling really good food:
Sheetz: “It allows you to become a destination. You have to drive traffic in this highly competitive environment. Your ability to offer really good quality food will be a differentiator.
“We’re very operationally and convenience-driven. When we said ‘let’s roll out a sampling program,’ the first thing we did was try to associate a concrete ROI to it, and we shut down sampling immediately. It’s just not worth it [in a convenience store]."
Trendspotting, to meet shoppers’ food needs today and tomorrow:
Sheetz: “We have an executive chef with an R&D team, and great partners like Technomic to catch the next trend. Know your customers and capture their voices. We talk with them constantly.”
Sherlock: “Last year we went to Japan, this year we’re going to the UK and Sweden. Sometimes we blend the best of what we see. We’ve seen packaging ideas in the UK for layered salads, and recipes on the West coast… We married the two, and now we have a kale and quinoa salad with dressing that is one of the most successful salads in our case.”
Petusevsky: "I’m a journalist for a number of publications. I get sent to places like the Blue Zone, where people grow very old and people want to know why, or countries where olive oil is their lifeblood. I’m lucky enough to go into kitchens and cook with them. I also look at retail markets if I’m in an urban area, and I can operationalize that back here.
My niche is health and wellness. I like to do foods that have that added bonus. I’ll operationalize those recipes and scale them. You’re lucky in a restaurant if you feed 200 or 300 people a night. When you do what we do, you’re affecting the dinner tables of millions of people per day. What we do is on a scale that’s immeasurable elsewhere in the industry. That’s why it’s important to do it right, and a lot of forethought goes into it.”
What keeps you up at night about foodservice at retail?
Sherlock: “Continuing to innovate and optimize menus within finite space, and cycle with consumers’ changing needs and trends going forward. Our stores are typically 5,500 sq. ft., and we’re starting to cull some legacy stores at 3,000-3,500 sq. ft."
Sheetz: “My biggest fear is something will happen to one of our people as they’re fulfilling our mission. Our biz is so complex these days. If we fall down on food safety, that can be a brand breaker. We had a pretty bad outbreak of salmonella in 2004. At the time, we were scared. I think we handled it in a textbook way. You have to know the food safety risks out there, and invest to mitigate those risks. Our food safety team protects the brand. They have the final say in our food operations.”
Petusevsky: “I worry there’s never one big thing that can go wrong on a daily basis. There are 500 small things 24/7 that if they don’t act in tandem can end up being a real problem. The greatest thing that keeps me up is that our retail industry tends to be very short-sighted. They have to understand that having foodservice in a retail store is a long-term investment that constantly needs nurturing and culturing. The stories I’ve heard six times in the past six months, that a foodservice director at a company 15 years is called into the office and told ‘this program is running pretty well, we can eliminate your position,’ [are disturbing]."
Granucci: “If something happens at one of our customers. Humans made mistakes, we go to great lengths…but nobody is immune from something happening. We’ve been able to help customers in early-onset of crisis. It’s not fun. We feel our brand and our customer’s brand are the same. The other thing not that obvious—when there are no outbreaks and no crisis —I get nervous that people will take it for granted, lower the edge of programs, and look for extra margin. That’s a slippery slope.
Clean stores sell more. Retailers have an edge over restaurants because people can see the food being made, can walk the perimeter, and sense different aromas. People will notice if you’re not following right procedures. Retailers have a genuine advantage to provide a better experience. It would be a missed opportunity if the industry doesn’t take that on.”
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