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Fresh prepared food departments are the fastest growing departments in the supermarket and can be particularly relevant for independent grocers fighting for a point of differentiation. But retailers struggle with making sense -- not to mention profits -- from this burgeoning business.
Progressive Grocer's Editorial Director Joan Driggs moderated the "Grocer or Restaurateur?" panel at The 2016 NGA Show, which took place in Las Vegas Feb.28-March 2, 2016. Panelists Dan Shanahan, president of Ohio-based Buehler Food Markets; Kent Dimbath, CFO of Dayton, Ohio-based Dorothy Lane Market; and Mike Lovsin, chairman of Freson Bros., based in Alberta, Canada, shared their approach to fresh prepared food operations, the cultures they're building, marketing and outreach strategies,
Retailers balance local tastes with the nation's passion for food. In some respects, retailers are inviting their customers to be part of the process. At the 15-store chain Buehler's, an annual barbecue competition invites customers to enter their own barbecue sauces, with the winner having their recipe bottled and sold in stores as the sauce of the year. Dorothy Lane Market continues to experiment with wine bars, outdoor seating, and special evenings that pair foods with craft beers or wine. "It's an evolution, not a revolution," says Dimbath, of the three-store chain.
Freson Bros. has 15 stores in rural areas of Alberta, and in some instances might be the only game in town. Lovsin says his stores balance chef-developed recipes with standards that regulars come to depend on.
All agree that the business model for grocerants is dramatically different from traditional grocery retailing. "Even the language is different," says Shanahan, who, with his team, underwent training to understand foodservice operations. It also means different approaches to hiring and training. Shanahan says Buehler's learned the hard way that it takes recognition of the contribution, along with competitive salaries, to attract and retain talent. Freson's Lovsin says that in his small towns, competitive salaries are a must, but that the company is making some gains as the oil industry dips. Dorothy Lane's Dimbath shared a pleasant surprise: Millennial employees, many of whom are college students, look forward to working the grill, seamlessly clearing what could have been a major hurdle.
Retailers shared their passion for quality, great-tasting food, the importance hospitality plays for an exceptional experience, and the understanding that in today's environment, competition is everywhere, including the restaurant down the street.