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June 30, 2010
Copyright © 2010 Balvor LLC. All Rights Reserved.
117 South Cook Street #339
Barrington, Illinois 60010
phone: 847.722.2732
fax: 847.382.1801
Presented at:
Foodservice Webcast Series
Participant Summary
HOW CONVENIENCE RETAILERS ARE MANAGING FOODSERVICE TODAY
Copyright © 2010 Balvor LLC. All Rights Reserved.
Composition of Retailer Respondents(Retailers completed online survey between 5/12/10 and 5/31/10)
1- 10 Stores,
69%
11 - 50 Stores,
14%
201 - 500 Stores, 6%
500+ Stores, 3%
Number of Stores Operated(Percent of Retailers)
Top-Line Characteristics
• # of retailers: 97
• # of store represented: 21,914
• 1-10 store operator share: 69%
• Foodservice sales (APSM): $20,037
• Foodservice sales growth forecast: +2.6%
2
Q: How many stores do you operate currently?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
PERFORMANCE METRICS
Copyright © 2010 Balvor LLC. All Rights Reserved.
Foodservice Dollar Sales – By Quartile(Average per Store Month*)
$38,930
$25,163
$11,366
$7,552
Top Quartile 2nd Quartile 3rd Quartile Bottom Quartile
4
Q: What are your approximate foodservice sales on an average per store day basis? (Includes all dispensed beverage, food prepared on-site, and commissary/packaged sandwiches) *Projected up to monthly figure based on weighted average response.Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
2010 Dollar Sales Forecast(Percent Change vs. 2009)
3.0%2.9%
2.6%
2.1%
1.7%
Cold Dispensed Beverages
Hot Dispensed Beverages
Food Prepared On-Site Frozen Dispensed Beverages
Commissary/Packaged Sandwiches
5
Q: What is your company’s dollar sales’ forecast in 2010 versus last year for each foodservice category? Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Total Foodservice
Mean + 2.6%
Copyright © 2010 Balvor LLC. All Rights Reserved.
2010 Dollar Sales Forecast(Top vs. Bottom Quartile)
6.1%
3.8% 3.5%
2.9%2.5%
-1.8%
0.5%
-1.0% -1.2% -1.2%
Food Prepared On-Site Hot Dispensed Beverages
Cold Dispensed Beverages
Commissary/Packaged Sandwiches
Frozen Dispensed Beverages
Top Quartile Bottom Quartile
6
Q: What is your company’s dollar sales’ forecast in 2010 versus last year for each foodservice category? *Estimated projection.Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Total Foodservice*
Top Quartile + 5.0%
Bottom Quartile - 1.2%
Copyright © 2010 Balvor LLC. All Rights Reserved.
SHOPPER PERSPECTIVES
Copyright © 2010 Balvor LLC. All Rights Reserved.
Demographics – By Quartile(Percent of Retailers Perceiving Increases)
46%
29%
25%
17%
13%
29%31%
33%
23%
4%
20%
16%
12%
16%
12%
Teenagers* Females White Collar Males Moms with Kids** Kids**
Top Quartile Mid Quartiles Bottom Quartile
8
Q: How have your demographics been changing over the last 12 months relative to the following shopper segments? *13-19 years old **Under 13 years oldSource: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Shopper Interest In Healthier Products – By Quartile(Percent of Retailers Indicating “Yes”)
73%
61%
37%
Top Quartile Mid Quartiles Bottom Quartile
9
Q: Are your customers asking for your store(s) to sell healthier product offerings? Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
GENERAL STRATEGIES
Copyright © 2010 Balvor LLC. All Rights Reserved.
Strategic Focus – By Quartile(Index)
105105
104 104
100
98
95 94
100
9899
97
10099
101
100
95
9798
102
101
104103
106
Lowering product supply costs
Investing more in off-site
communications
Improving in-store practices and
standards
Upgrading in-store fixtures &
equipment
Expanding the product range
offered
Evaluating supply-side alternatives
Using more limited-time-only
items
Offering more value-priced deals
Top Quartile Mid Quartiles Bottom Quartile
11
Q: How important are the following strategies in achieving your objectives in 2010? Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Core Foodservice Equipment – By Quartile(Percent of Retailers Indicating “Yes”)
73%
64% 64%59%
50%
69%
33%
69%67% 67%
79%
30%
39%
75%
65%
Hot Cases Fryers Convection Ovens Open Cooler Fixtures Roller Grills
Top Quartile Mid Quartiles Bottom Quartile
12
Q: What kind of equipment is driving your foodservice operations these days? Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
PROMOTIONAL TACTICS
Copyright © 2010 Balvor LLC. All Rights Reserved.
Off-Site Communication Usage – By Quartile(Percent of Retailers Indicating “More” or “About the Same”)
77%
64%
50%
41% 41%36%
27%
67%
45%48%
39%36%
42%
27%
60%
35%
20%25%
35%
10%
15%
Local event marketing
Website Radio spots Newspaper inserts
Social media Billboards Text messaging
Top Quartile Mid Quartiles Bottom Quartile
14
Q: How are you using off-site communications compared to last year to promote your foodservice offering?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Pump Signage Frequency – By Quartile(Percent of Retailers Indicating “Monthly”)
50%
27%
41%
23%
32%
39%
21%
42%
21%
30%
25%
15%
30%
20%
25%
Food Prepared On-Site Commissary/Packaged Sandwiches
Cold Dispensed Beverages
Frozen Dispensed Beverages
Hot Dispensed Beverages
Top Quartile Mid Quartiles Bottom Quartile
15
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.
Copyright © 2010 Balvor LLC. All Rights Reserved.
New Product Introduction Tactics – By Quartile(Percent of Retailers Indicating “Always”)
73%
36%
27%
23%
58%
36%33%
6%
50% 50%
15%
0%
In-store signage Suggestive selling by store team
In-store special deal Coupon for discounted or free item via coupon
Top Quartile Mid Quartiles Bottom Quartile
16
Q: How often do you promote a new foodservice product using the following tactics?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Combo Deal Duration – By Quartile(Percent of Retailers)
50%45%
20%
23%
12%
30%
Top Quartile Mid Quartiles Bottom Quartile
Quarterly
Monthly
17
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.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Club Programs – By Quartile(Percent of Retailers Offering)
59%
41%
32%
23%
14%
58%
30%
24%
18%
6%
45%
25%
0%
15%
0%
Hot Dispensed Beverages
Cold Dispensed Beverages
Food Prepared On-Site Frozen Dispensed Beverages
Commissary/Packaged Sandwiches
Top Quartile Mid Quartiles Bottom Quartile
18
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.
Copyright © 2010 Balvor LLC. All Rights Reserved.
ASSORTMENT TACTICS
Copyright © 2010 Balvor LLC. All Rights Reserved.
Commissary / Packaged Sandwiches – By Quartile(Percent of Retailers Offering Products in Store)
95%91%
77%82%
97%
82%85%
91%
84%
47%
74% 74%
Sandwiches Salads & Sides Thaw, Heat & Eat Ready to Eat
Top Quartile Mid Quartiles Bottom Quartile
20
Q: In Commissary/Packaged Sandwiches, what is the dominant branding strategy associated with your core offering in each sub-category?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Commissary / Packaged Sandwiches – By Quartile(Branding Strategies Based on Percent of Retailers Offering in Store)
48% 48%
5%
38%
53%
9%
25%
63%
13%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Sandwiches
Top Quartile Mid Quartiles Bottom Quartile
55%
30%
15%
63%
37%
0%
44%
33%
22%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Salads & Sides
Top Quartile Mid Quartiles Bottom Quartile
21
Q: In Commissary/Packaged Sandwiches, what is the dominant branding strategy associated with your core offering in each sub-category?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Commissary / Packaged Sandwiches – By Quartile(Branding Strategies Based on Percent of Retailers Offering in Store)
18%
82%
0%
29%
61%
11%14%
71%
14%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Thaw, Heat & Eat
Top Quartile Mid Quartiles Bottom Quartile
56%
44%
0%
43%47%
10%14%
71%
14%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Ready to Eat
Top Quartile Mid Quartiles Bottom Quartile
22
Q: In Commissary/Packaged Sandwiches, what is the dominant branding strategy associated with your core offering in each sub-category?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Food Prepared On-Site – By Quartile(Percent of Retailers Offering Products in Store)
77%
64%
100%
86%
79%
85%
97%
82%
47%
84%
95%
63%
Pizza Hot Dogs/Roller Grill Sandwiches/Wraps Bakery
Top Quartile Mid Quartiles Bottom Quartile
23
Q: In Food Prepared On-Site, what is the dominant branding strategy associated with your core offering in each sub-category?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Food Prepared On-Site – By Quartile(Branding Strategies Based on Percent of Retailers Offering in Store)
36%
57%
7%
39%
50%
11%
25%
56%
19%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Hot Dogs/Roller Grill
Top Quartile Mid Quartiles Bottom Quartile
59%
36%
5%
47%
41%
13%
39%
50%
11%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Sandwiches/Wraps
Top Quartile Mid Quartiles Bottom Quartile
24
Q: In Food Prepared On-Site, what is the dominant branding strategy associated with your core offering in each sub-category?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Food Prepared On-Site – By Quartile(Branding Strategies Based on Percent of Retailers Offering in Store)
35%
65%
0%
46% 46%
8%
22%
33%
44%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Pizza
Top Quartile Mid Quartiles Bottom Quartile
42%47%
11%
41%44%
15%
25%
58%
17%
Proprietary/Self Branded
National/Manufacturer Brand
Wholesaler/Control Branded
Bakery
Top Quartile Mid Quartiles Bottom Quartile
25
Q: In Food Prepared On-Site, what is the dominant branding strategy associated with your core offering in each sub-category?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Frequency of Limited-Time-Only Items – By Quartile(Percent of Retailer Indicating “Quarterly” or “Monthly”)
55%
45%
36%
32%
27%
52%
42%
52%
27%30%
16% 16%
32%
21%
16%
Food Prepared On-Site Commissary/Packaged Sandwiches
Hot Dispensed Beverages
Cold Dispensed Beverages
Frozen Dispensed Beverages
Top Quartile Mid Quartiles Bottom Quartile
26
Q: How frequently do you introduce limited-time-only items onto the menu in the following categories?Source: CSD/Balvor Foodservice Survey, Balvor LLC, May 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Introduction of New, Value-Driven Products(Percent of Retailers Indicating “Yes”)
50%
45%
41%
45%
33%
55%
37%
26%
42%
Food Prepared On-Site Hot Dispensed Beverages Commissary/Packaged Sandwiches
Top Quartile Mid Quartiles Bottom Quartile
27
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.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Putting it all into context(What does this all mean?)
28
• Work continually on improving core products and practices
• Expand ways value is delivered to the consumer
• Focus on reaching a broader set of your target consumer
• Increase visibility of food-related promotions at the fuel pump
• Motivate store visits and product trial via special deals
• Leverage new products to maintain interests in offering
• Drive demand for new products by removing barriers to trial
• Remember it takes time, commitment, and resources to become a top performer
Copyright © 2010 Balvor LLC. All Rights Reserved. 29
Notable Public Accomplishments
White Papers
• 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 Retaill:A Practical Guide for Product
Suppliers, NACS, 2007.
Industry Research
• SKU Rationalization Survey, NACS/Balvor, March 2010.
• Motor Fuels Retailer Survey, Balvor/NACS, January 2010.
• State of Foodservice, Convenience Store Decisions, 2008-2010.
• Private Label Trends in Convenience, NACS, 2008.
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.
David leverages his experience to help product suppliers improve their
competitive positioning, trade programs, and category management
capabilities by better understanding what retailers’ value while also
benchmarking versus peer companies.
He’s also has broad 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