Convenience Store Food Service Consultant- Dean Dirks: News, Articles, Events

October 28, 2008

Food Safety Paramount, Especially in C-store Business

Filed under: Articles — Tags: , , , , , , , — deandirks @ 12:26 am

 In a recent Better Business Bureau consumer trust survey, consumer confidence in businesses declined in 13 of the 15 industries measured. Overall, trust was down 14 percent from last September’s survey. One of the main reasons is higher fuel prices that had a wave affect on all industries. If consumers mistrust business in general, only imagine what they think of the c-store industry. In addition, the convenience store foodservice segment has to overcome the “gas station” image to fight for consumer confidence.

The last thing a retailer or our industry needs is a food borne illness outbreak. It is very hard or impossible to overcome an outbreak. We all remember the nightmare Jack in the Box went through even though the responsibility was ultimately found with a supplier selling beef with E-coli in it. Consumers didn’t nor should they care about whose fault it was, Jack in the Box was the corporate face and took the brunt of the blame.

Arby’s is in the middle of an alleged salmonella outbreak in Georgia against individuals who became seriously ill with salmonella serotype montevideo food poisoning after allegedly consuming contaminated sandwiches purchased at an Arby’s Restaurant located in Valdosta, Ga.

Attorneys filed five lawsuits against Arby’s Restaurants; Beavers’ Inc., the franchisee; Globe Food Equipment Co., makers of the food slicer used at the Valdosta Arby’s restaurants; and two additional defendants, a marketing firm and a food supplier.

As you can see, litigators are filing law suits against everyone both involved and barely involved. How can a slicer company be responsible for a salmonella outbreak? In our industry that means they would go after the Shells and Exxons of the world and work their way down.

Now that I’ve scared you sufficiently, how do you avoid a food borne illness?

— In your weekly newsletters or communications with employees, post articles about other retailer’s misfortunes or law suits. The point isn’t to smear other retailers but to keep the fear in the minds of your team. Don’t let associates go a day without thinking about it.

— Require your district managers, store managers and foodservice managers to become Serve Safe certified. This is a very intense course administered by the National Restaurant Association. Not only will it give them a great education it will scare them so they understand the danger they are dealing with on a day to day basis.

— Develop food safety audits to be completed daily at the store level and have regular audits completed at the district level. Record temperatures of refrigeration and product every four hours, date and rotate products, constant hand washing to name a few. All foodservice professionals know what needs to be done and inspected. The question being, are you doing it?

— Develop a food borne illness reporting procedure. Have a form on site that collects ONLY contact information and train your associates to NEVER comment other than to take the information. In addition, make sure the customer is given the corporate office’s contact information.

— Make it a policy that only the food service director or vice president (senior management) follows up on the call to the customer.

— A scripted list of questions should be used to record the customer’s comments. This list should be developed by a foodservice professional and reviewed by your attorney.

— If more than three customers call with the same symptoms then you legally have a food borne outbreak. The next step is to get the County Health Department involved. The worst thing you can try to do is hide it. Health departments can be very knowledgeable and in many cases catch the problem before it goes forward. If you get in a lawsuit the worst thing you want to do is in court is have to admit you didn’t contact the health department right away.

— If you feel you may have an outbreak in progress, the senior foodservice manager needs to involve the owner. Don’t let him or her get blindsided. Legal and the press will have to be dealt with. The worst thing imaginable is a store manager discussing the problem with the press.

Food borne illness can be avoided by education and day to day focus. Make the assumption it is going to happen, so you have the systems in place to reduce the legal and public relations exposure if it does.

This is October’s article I wrote for csnews.com; it can also be found here: http://www.csnews.com/csn/news/article_display.jsp?vnu_content_id=1003850433

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October 18, 2008

Foodservice Programs to Build Profits in C-Stores

Outline of the “Foodservice – Building Profits in C-Stores” speech I gave at the The Foodservice Distribution Conference & Expo earlier this week.

  1. Food Service – Building Profits in C-Stores
  2. State of the Industry-Fuel
    Fuel companies- least trusted out of 20 industries
    Volatility of fuel prices- inventory management- $3.50 in ground and selling it for $3.25
    Capital tied up inventory-$100,000 per site
    Fuel customers are not entering the store
    Credit-card fees- 10 cents a gallon, margins are averaging 11 cents. Net margins of 1 cent
  3. Last line of defense
  4. State of the Industry
    Cigarette margins are as low as 10% vs. 20% in the late 1990’s
    Proposed Federal excise tax of .61 a pack
    Wal-Mart ‘s “Market Side” small-scale stores
    Car wash sales (90% margin) have decreased as much as 50% in some markets
    Lottery sales are down due to inside traffic
    Increased labor , $8.50 in Washington in 2009
  5. Industry Trends
    Oil companies are selling company owned convenience stores to retailers
    New construction has slowed down
    Large retailers (Circle K) will continue to buy out smaller (10-100 store) retailers
    Retailers are looking for other streams of income; prepaid phones, phone cards, etc.
    RETAILERS SEE FOOD SERVICE AS ONE OF THE FEW OPPORTUNITIES LEFT
  6. Food service sales growth
    Food service sales grew 11 percent in 2007, largest category increase
    Foodservice eclipsed cigarettes in gross margin dollars for the first time in 2007
    Sandwiches increased sales 16 percent
    Roller grill sales rose 9.6 percent
    Coffee sales rose 8.2 percent last year
  7. Food Service Trends
    Environmentally safe “Green”
    Obesity issue
    Healthy
    Meal Replacement – take home meals
    Organic
    Any program that will reduce labor
    Programs that have low investment
  8. Branded food service Subway, Godfather’s
    Branded peaked in the 1998,down 35% in 2007
    Royalties of 8-12% and low volumes have driven this downward trend
    Retailers need to weigh brand equity and national advertising
    Taco Bell and others have exited the market
  9. Leveraging a food service brand
  10. Unbranded food service “Jim’s Sandwiches”
    Unbranded food service increased 19% in 2007
    Requires food service expertise
    Creativeness, systems and food safety
    7-11’s new menu pizza, wings, tenders, and burgers
    Retailers need a partnership with suppliers, such as; Turbo- chef, signage, and menu development
  11. Unbranded concept
  12. Unbranded Food Service
  13. Semi- branded food service Hot Stuff –Piccadilly Circus
    15% increase in 2007
    Appearance of brand equity
    Systems and training in place
    Low labor
    Pre-made quality products
    Royalties are built into the supplier price
  14. Semi-branded
  15. Semi-branded
  16. Roller grill
    Roller grill sales increased 9.6% in 2007
    Overcoming “Two dried up hot dogs” image
    New items, taquitos, scramblers, fiesta rolled dogs
    Retailers are looking for a complete package, menu board, item identifiers, promotional materials
    Food safety issues may threaten this program
  17. Roller grill of the past
  18. Roller grill of the future
  19. Roller grill of the future
  20. Pre Packaged Program sandwiches, burritos
    C-stores have a stigma of gas station food
    Over come the “Wedge” sandwich image
    Small investment and low risk
    Confidence- Kraft, Pierre, Oscar Meyer
    No extra labor
    Open air cooler, signage, merchandising
  21. Pre-packaged of the past
  22. Pre-packaged of the future
  23. Open air merchandising
  24. Replacing the “wedge”
  25. Product confidence
  26. Breakfast
    Breakfast hours sales grew 30.7 %
    Customer counts are heavy in the mornings
    Breakfast is the biggest growing segment
    Retailers want products that won’t increase labor costs
    Need for microwave products
    Portable items are needed
    Attractive display cases at the register
  27. Donut program
  28. Executable- counter top
  29. Coffee
    Starbucks look
    Quality that can compete with Starbucks
    6 blends of coffee
    Cappuccino machine with 6 flavors
    6 flavored packet choices
    BIG SUPPLIER PROBLEM- service from third parties. 8hrs to 2 days
    Direct suppliers, service is 4 to 8 hours
  30. Coffee of the future
  31. Fast food war
    Discounting, McDonald’s $1 menus, Taco Bell less than $1 menu, and Subway $5 subs
    QSR aggressive focus on growing breakfast
    McDonald’s success with premium coffee
    Espresso on McDonald’s menu in 2008
    Portable growth, breakfast and snack wraps
    McDonald’s $1 soft drinks to steal C-store sales
  32. Supplier partners of the past
  33. Supplier Partners of the future
  34. Supplier Partners of the future
  35. Supplier opportunities
    Unbranded partnerships
    Comprehensive roller grill program
    Prepackaged sandwich-burrito
    Executable breakfast products
    Upscale coffee with service
    Signage and merchandising

October 17, 2008

Recently Quoted by Convenience Store News Oct. 3, 2008

Filed under: Articles — Tags: , , , , , , — deandirks @ 8:49 pm

I was quoted recently twice in the Oct. 3’rd Convenience Store News article – The Winds of Change.

This article talks about the public’s opinion on the current state of the economy, and the current and future conditions affecting the c-store industry.

Quotes:

“I think wholesalers are to have to be better partners and move
towards net pricing” A lot of the rebates are driven by volume. The smaller
retailer can’t drive enough volume for the higher rebate structure.”

and

“Qsr restaurants like Subway, McDonalds’s and Quiznos and most fast feeders
are committed to discount pricing. This is training customers to only
purchase $5 subs, for example. The problem is that food, labor, rent and
utilities go up. margins are pinched and volume is the only way to cover
this.”

Read the full article here: http://www.csnews.com/csn/search/article_display.jsp?vnu_content_id=1003853795

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