Optimizing the Foodservice Formula

Krispy Krunchy Chicken’s simplified menu and streamlined supply chain leads to more profits for retailers.

Optimizing the Foodservice Formula

June 2024   minute read

By: Lauren Shanesy

According to NACS Convenience Voices, 25.7% of customers said they planned to buy quick service or fast food somewhere else within 30 minutes of visiting a c-store. To cut down on food leakage and capture those customers, c-stores need to offer a competitive foodservice program.

Krispy Krunchy Chicken has served the industry for decades and is undergoing a major evolution. Today, the brand has nearly 3,000 locations and plans to open over 700 stores by the end of 2024, and is making moves to attract even more c-stores. “For example, we revamped our offerings and built a premium sandwich with quality ingredients that is competitive. So instead of losing those chicken sandwich sales to the fast-food place across the street, c-store operators are able to be much more relevant and competitive,” said Joe Gordon, chief execution officer.

Krispy Krunchy has conducted extensive market research to build a best-in-class foodservice offering. In response to the same trends that retailers know too well—a contracting labor pool, supply chain woes, food spoilage and more—the foodservice solution provider has narrowed down its menu to the most-efficient, best-selling items and streamlined its logistics and supply chain processes.

“The biggest key to success is really being able to understand the c-store industry, especially its challenges, and then attack those with solutions,” said Jim Norberg, CEO of Krispy Krunchy Chicken. “For example, one of the things we heard from operators a few years ago was that our operating model just had to be simpler, and be easy for one person running the counter to do if they’re in the store by themselves.”

Krispy Krunchy took that feedback and implemented it at every level of its business, from the menu to the supply chain. Here’s how.

On This Menu, Less Is More

Krispy Krunchy cut the menu down to fewer—but more carefully curated—items. It’s counterintuitive, but with less options, profits went up. But it wasn’t as simple as just taking things that didn’t sell off the menu.

“When conducting menu optimization, a lot of brands will just look at how much they sell,” said Alice Crowder, chief marketing officer. But that doesn’t tell the whole story. “What if I have two menu items that both sell, say, five items a day? If I cut one of them out, will everyone just order something else and not care, or will I lose five customers?”

That’s a question that can be answered by a TURF analysis, which stands for total unduplicated reach and frequency, a study that determines the impact of product choices on consumer purchasing decisions.

“TURF tells us the unique value of every item on the menu. And it helps us craft an offering that attracts the most people, the most frequently, with the least items,” said Crowder.

What Krispy Krunchy found was that its menu had a lot of redundancy. “We came down to a smaller group of products, but that reached the same amount of people and generated the same frequency.”

Not only did Crowder’s team look at what was offered on the menu, but at how it was displayed.

“The previous menu had family meals listed first and then individual meals. But most people visit for an individual meal, so you’re signaling to them that this menu isn’t for them,” said Crowder. “We did research on menu architecture and figured out which design got people engaged the most quickly. How you organize the menu impacts your check average.”

There’s a world ahead for c-stores as they redefine what having good food at a gas station really means.”

When Krispy Krunchy took items off the menu initially, there was trepidation from retailers who assumed that offering less would mean fewer transactions. “But we can actually sell more by having fewer items, plus it’s less labor and it’s less waste. We saw all of those things happen in the testing,” said Gordon. “And now that we’ve taken slow-moving, high-waste items off the menu, that gives back time and labor to focus on the core products that are the bigger movers.”

Crowder echoed that, saying she had operators who at first said “if I don’t have X item on my menu, it’s really going to hurt my business—but their margins actually went up. We don’t do anything without a mathematical, insights-based reason for doing it. And our licensees are responding to that.”

Taste Test

Krispy Krunchy has historically been focused on the operator as the end user—not the chicken-sandwich loving c-store shopper. The company realized it had an opportunity to reach potential fans directly to build awareness.

“We were named by Thrillist as ‘the best fried chicken you’ve never heard of.’ I’ve put my own spin on that phrase, and now say, ‘We’re the best fried chicken you’ve never heard of … yet,’” said Jim Norberg, CEO of Krispy Krunchy Chicken.

To promote the launch of its new Cajun Chicken Sandwich, Krispy Krunchy widened its scope and sought to reach a new pool of potential customers. Krispy Krunchy offered in-store sampling for customers who were already there, but more importantly, set up tents in landmark destinations, handing out sandwiches in New York’s Times Square and the beaches of Florida, among other locations, to get the sandwich in consumers’ mouths. They also engaged nearly 50 influencers and tested geo-targeted media. “Once people see us and taste us, they’re hooked,” said Alice Crowder, chief marketing officer.

And as c-stores position themselves as a destination for food that customers will go out of their way for, Krispy Krunchy’s brand awareness efforts are critical for bringing more foot traffic into stores.

“I think there’s a world ahead for c-stores as they redefine what having good food at a gas station really means,” said Norberg. “And it’s not necessarily just attracting the customer who comes to get fuel but doesn’t go inside, it’s about getting that customer who lives in your community and uses your store in different ways, and how you can capitalize on that to give them what they need.”

A Streamlined Supply Chain

Just as important as the menu is what customers don’t see—the back-end operations behind how the food gets in front of them in the first place. With supply chain disruptions a common challenge in the channel, having efficient logistics cuts down on food waste, spoilage and delivery times.

Krispy Krunchy transitioned its model from one that used 14 independent distributors to just one. The centralized distributor works with 70 local suppliers, which means “we’ve moved product closer to the markets and we’re not doing stretch distribution, plus we are able to recover much faster if something goes wrong,” said Gordon. “So we are providing a much better service and a better shelf life, because the food now is in many more distribution points much closer to the end consumer.”

The simplified menu also alleviates supply chain pressure from dwindling chicken supply. “We moved away from offering the eight-way product [referring to eight different cuts of chicken meat] because the bird size for that is getting harder to source,” explained Gordon. Instead of selling so many different cuts, Krispy Krunchy now focuses on tenders, wings, drums and thighs, and the new improved chicken sandwich.

“We still have the crucial options consumers want, but instead of fighting for the limited, diminishing supply to try to get the eight-piece cut up in our size, now we can buy chicken from a lot of different manufacturers,” he said. “We’re able to leverage that to bring prices down for those items, and we also have more availability of the product and fewer supply chain interruptions. We were buying from two different suppliers before, but now there are 20 suppliers that can provide our mix of products.”

And those benefits—and savings—get passed on to retailers.

“Our major focus this year is on improving operator profitability, which we have already been able to do with the menu simplification. We’re able to pass on a lot of those savings to operators,” said Gordon. “We are continuing to leverage suppliers, reduce freight rates and improve our logistics initiatives to make our operators more profitable. Our program is about raising all of their c-store sales—not just their food sales, but we think about how we can be a more profitable program for them so that they’ll want to sell more Krispy Krunchy and take more dollars to the bank.”

Lauren Shanesy

Lauren Shanesy

Lauren Shanesy is a writer and editor at NACS, and has worked in business journalism for a decade. She can be reached at [email protected].

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