INSIGHTS AND PERSPECTIVES

‘Check strategy’ light points to drug store food service opportunity

BY Bill Pizzico, Synergy Group

At one time or another, every person who owns a car has had the dreaded “check engine” light come on. When it happens, most truly do not know what it means, what is wrong, or how long they can continue driving before their trip to the mechanic becomes necessary. They know something is wrong, but they rationalize and delay because all is good for now. The car is running, and maybe the light will go out.

In today’s marketplace, changes are coming at lightning speed no matter your position in the supply chain. Whether you are a manufacturer or retail operator, chain or independent, the time is right to act on that blinking strategy light.

The past decade has turned on “check strategy” lights in market segments from supermarkets to convenience stores, each with channel problems, ranging from product assortment, inventory, logistics management and customer profiling.

Drug store food service, in particular, also will be a challenge to your marketing department, your merchandising group, your communications strategy and, above all, your boardroom. Now is the time to take those tasks head-on and make your trip to your boardroom to see what the light is really telling you. You will learn that this new market segment has very quietly and, with little notice, jumped to the front of your action agenda.

The convergence of retail and food service now has matured into a very real market channel with the biggest advantages to drug stores being the constant customer traffic and a firm knowledge of your customer profiles.

Candidly, right now, drug store operators have a small slice of this $200 billion pie, with a very cautious product assortment in their refrigerated cases. Yet the opportunity is there. Cold case prepackaged foods “to go” are plentiful. Today’s operators, no matter the segment, are in full tune with what shoppers are looking for — quality, convenience and variety.

Whether you are a manufacturer or operator, chain or independent, the time is right to act on that blinking strategy light in venues that go well beyond the traditional store formats. Consumers are buying what they want wherever they may be shopping, and in whatever format these three criteria are available. No longer will the traditional market segments or formats be without a food offering in some convenient and distinct, quality-driven presentation.

Absolutely check your strategy light, or you will find yourself on the side of the drug store food service highway watching your customers drive to a competitor down the street. Developing a drug store food service strategy starts with recognizing the light is blinking, finding out the requirements and then acting on them.

You can start your strategy check with these five keys to getting past the blinking light:

  1. Know firmly how much space you can dedicate to food service;
  2. Know exactly which suppliers to call for product assortment assistance and logistics management. You can certainly look to broadline distributors, but a closer look at convenience store distributors may serve you well as a “jump start” and, perhaps, someone to grow with;
  3. Keep your assortment simple to start. Look to sell by dates not being too far out, so your customers know you are presenting fresh food;
  4. Buy quality, not price, and have your own internal focus groups within your stores and corporate offices. After you have made your common-sense selections, call in your distributors of choice to see if they can accommodate; and
  5. Identify a brand strategy. It will be a brand solution for today and tomorrow. The more you control your brand, the more you can control your message, product assortment and pricing.

Take your “check strategy” light seriously. It is not necessarily predicting doom, but may be spotlighting the opportunity that takes your business to its next level of performance.


Bill Pizzico is president and CEO of Synergy Group

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