Are you playing to win in foodservice?

March 31, 2011

Copyright © 2011 Balvor LLC. All Rights Reserved.

117 South Cook Street #339

Barrington, Illinois 60010

phone: 847.722.2732

fax: 847.382.1801

[email protected]

Presented at

ARE YOU PLAYING TO WIN IN FOODSERVICE?

Copyright © 2011 Balvor LLC. All Rights Reserved. 2

To win in foodservice requires you to demonstrate that you deserve to be on the “A” team, but…


2.2x

1.0x

0.3x

Top Quartile Survey Average Bottom Quartile

Average Foodservice Sales per Store Index

3

…It’s clear that many retailers still have a lot of work to get on the “A” team and …

*Includes all dispensed beverages, food prepared on-site, and commissary & other packaged products.Source: CSD/Balvor 2011 Foodservice Outlook Survey, Balvor LLC, January 2011.

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1.7x

1.0x

0.6x


2010 Foodservice Dollar Sales Growth Index

4

…Making the cut is only becoming more difficult as the “A” team players are getting stronger

*Includes all dispensed beverages, food prepared on-site, and commissary & other packaged products.Source: CSD/Balvor 2011 Foodservice Outlook Survey, Balvor LLC, January 2011.




So, where do you need to strengthen your game first to improve the chances of winning?

Food Prepared On-Site

58%

Hot Dispensed Beverages

21%

Commissary & Other Packaged

Products 7%

Cold Dispensed Beverages

8%

Frozen Dispensed Beverages

7%

5

Source: NACS SOI Annual Report, 2009 data.

Share of foodservice dollar sales


85%

0% 5%10%

38%

33%

15% 15%

Morning (6am - 10am) Mid-day (10am - 2pm) Afternoon (2pm - 6pm) Evening (6pm - 10pm)

Hot Dispensed Beverages Food Prepared On-Site

6

Focus on improving execution in the core day-parts before attempting to build other segments

Q: Which of the major day-parts offers the most growth potential for each foodservice category respectively in your store(s)? Percent of retailers responding.Source: CSD/Balvor 2011 Foodservice Outlook Survey, Balvor LLC, January 2011.


Help get consumers to spend money in your store(s) by taking some pressure off their wallets

129

95

75

Top Quartile Mid Quartiles Bottom Quartile

Hot Dispensed Beverages Index

Q: Have you introduced any new products in the past 12 months that enable your store(s) to offer lower retail prices?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.


Think differently about how products are described on your in-store menu boards


Enhance the shopper experience around the coffee bar with new and/or improved equipment

134

102

63


Retailers Likely to upgrade hot dispensed beverage equipment-Index

Q: In terms of dispensed beverages, which areas will your company likely test or implement in 2011?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.


Leverage more combo deals to build transaction size –especially during the morning day-parts

121

96

83


Retailers Changing Quarterly or Monthly - Index

Q: How frequently do you change foodservice-related combo deals in your store(s), e.g., buy a beverage and a food item and save $$?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.


108 105

82


Retailers Using with Hot Dispensed Beverages- Index

159

121

0


Retailers Using with Food Prepared On-Site- Index

11

Reward purchase frequency from your store with special product deals

Q: Do you offer a club program in any of the following categories, e.g., buy 5 and get your 6th free?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.


Drive more customer traffic into store by promoting Food Prepared On-Site at fuel pumps

129

102

65


Retailers Using Monthly with Food Prepared On-Site- Index

Q: How frequently do you leverage signage at the fuel pump to promote special deals or products available in-store?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.


Be sure to refine the offering at times in order to satisfy the consumers’ changing preferences

167

96

50


Percent of Retailers Changing Type of Brand Offered In or Since 2009 - Roller Grill Products* - Index

* Based on retailers selling.Source: CSD/Balvor 2011 Foodservice Outlook Survey, Balvor LLC, January 2011.

Type of Brands

• Proprietary / Store

• Manufacturer

• Wholesale / Control


11%

32%

50%

11%

11%

25%

67%

55%

25%

11%

3%

Bottom Quartile

Survey Average

Top Quartile

Percent of Retailers Employing as Dominant Branding Strategy –Roller Grill Products*

Proprietary/Self Branded Franchise/License Branded Manufacturer Branded Wholesaler/Control Branded

14

Select the branding strategy that’s best for your store today and realize this may evolve over time

* Based on retailers selling.Source: CSD/Balvor 2011 Foodservice Outlook Survey, Balvor LLC, January 2011.


11.7%

10.0%

9.2% 9.0%

4.2%

8.3%

Food Prepared On-Site Hot Dispensed Beverages

2011 Sales Forecast - PCYA


15

* Sales weighted based on the number of stores operated. Source: CSD/Balvor 2011 Foodservice Outlook Survey, Balvor LLC, January 2011.

Wining in foodservice means improving your game in order to compete against “A” team operators


Public Accomplishments

White Papers

• Convenience Channel Opportunity: Insights for the Dairy Industry, Dairy Management Inc., 2010.

• Are Retailers Doing Enough? Preventing Underage Access to Tobacco at Retail, Center for Responsible Tobacco Retailing, Inc., 2009.

• Accelerating Cigar Profits Through an Increased Strategic Focus, John Middleton Inc., 2008.

• How to Succeed in Convenience Retail:A Practical Guide for Product Suppliers, NACS, 2007.

Industry Research

• State of Foodservice, Convenience Store Decisions, 2008 - 2011.

• Tobacco Retail Survey, Convenience Store News, 2008 – 2011.

• SKU Rationalization Survey, NACS/Balvor, March 2010.

• Motor Fuels Retailer Survey, Balvor/NACS, January 2010.

Current Industry Affiliations

• Convention and Events Committee, NACS, 2007 – present

• Supplier Advisory Board, Convenience Store Decisions, 2006 – present

• NACSPAC Member, 2008 - present

Biography

David is the managing partner of Balvor LLC, which is a sales and marketing firm that provides consulting, sales support, research, and analytic services to retailers, product suppliers, financial analyst and other organizations.

Balvor’s services support various food channels, covering both foodservice and retail classes of trade.

David has helped many leading retailers evaluate new retail concepts, enhance annual category planning processes, and develop new business support methods related to assortment rationalization, space allocations, or branding strategies.

He helps product suppliers improve their competitive positioning, trade programs, and category management capabilities by better understanding what retailers’ value while also benchmarking versus peer companies.

David also has extensive experience with activity-based costing, channel sales strategy, merchandising assessments, trade communication, and custom analytical support for both consumer packaged goods and foodservice industries.

Prior to founding Balvor in 2008, David spent 12 years at Willard Bishop in various positions, including most recently as partner. David began his career with The Levy Restaurants in operations for new store concepts where he focused on beverage and financial programs.

David Bishop Managing Partner, Balvor LLC

P: 847.722.2732

[email protected]

mailto:[email protected]

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Are you playing to win in foodservice?