Turnkey Foodservice Solutions
David O'Keefe's vision and dedication leads - and seals - Landshire Inc.'s fresh prepared foodservice offer.

Today's convenience store retailer needs to think about what it takes to get customers inside the store. And let's face it - our profits have been diminished by credit card fees and lower gasoline margins. As our industry continues to evolve and evaluate its offer, companies such as Landshire Inc., located in Belleview, Illinois, are providing products that help retailers drive profits and get people into the store.

It's no secret that foodservice programs - when executed well - are increasingly changing the landscape of how today's convenience stores operate compared to a decade ago. The 2006 NACS State of the Industry report identifies foodservice as the third most profitable category behind cigarettes and packaged beverages and most of our top quartile performers are in the foodservice business. In 2005, total industry foodservice sales were $17.9 billion, compared to just $10.2 billion in 1995.

GREG PARKER: Can you describe the culture of Landshire and how it has evolved?
DAVID O'KEEFE: Landshire is a family-owned business. Our culture today follows three simple mandates that our founder, Jody Trover, started his business with over 40 years ago: Always produce a quality product, do it with an exceptional service and stay in touch with the people who deliver that product. Our people within Landshire's companies are our greatest assets. And they deliver a quality product at the highest service levels. Despite the fact that the company has grown considerably, with distribution nationwide, it's always been worth our effort to keep in touch with the employees, as well as our customers.

What steps should retailers review when considering foodservice as a part of their operations?
The first component is the space retailers are willing to dedicate to the program. Secondly, retailers need to consider the position of that space within the store. Combined, both of these decisions are critical for retailers to be able to test the long-term success of the program.

Do you feel that foodservice is the ticket to driving in-store traffic in a time when many retailers are operating on very thin fuel margins?
A quality foodservice program will drive in-store traffic, as well as increase your operating margins. I believe that a prepackaged sandwich program combined with a hot foods program is the key to developing a destination store.

What foodservice trends do you see evolving and being addressed in convenience stores?
The hot-to-go program is a growing trend and continuing to build momentum. We're increasingly seeing customers who are looking for more variety in breakfast and lunch foods that are hot and ready for consumption. One of the things we work hard at in the convenience stores is to have these products available 24 hours a day so that customers have the option to grab a hot sandwich at any time. There are a lot of stores open 24/7, so having a product customers can grab and immediately consume drives sales and provides a great business opportunity.

So you like the idea of having a prepared foodservice sandwich available 24 hours a day?
Absolutely. And it depends on the size of the store and the market that you're serving. You want to take all those things in consideration because you can either overdo it or not have enough.

How important is the convenience channel to your overall operations?
The convenience channel is our core business channel. Our company has grown and evolved in this market segment and it represents about 60 percent of our overall sales.

Do you see foodservice changing public perception of our channel from gasoline stations that sell food and snack foods to restaurants that happen to sell gasoline?
The key to driving in-store sales and gross margins is a complete foodservice program that includes a quality prepackaged sandwich offering. We're already seeing foodservice changing public perception of the convenience channel to convenience markets that are destinations for quality, on-the-go hot foods.

Foodservice is going to help our industry's image and overall public appeal.
Absolutely.

What are you doing for the emerging healthy conscious consumer?
We have a line of products available that are largely being used in the schools. In the convenience channel, when we have come out with health-conscious foods, sales have been marginal. It's a trend that I believe is very important, but we haven't come across a particular item that has really exploded in sales.

How does Landshire separate itself from the competition?
Our customers are our best advertisement of the value our foodservice programs offer to the convenience channel. Our full-color graphics packaging distinguishes us from the competition and invites customers to purchase our products. We manufacture our quality breads, rolls and buns ourselves. This gives us a distinct taste that encourages the customer to buy our products again. And the final ingredient to our success is the Landshire people who deliver the quality service that is needed to have a successful foodservice program.

And other companies have prepared food operations similar to yours.
Correct. And I don't mind the competition as long as they produce a quality product. The biggest danger and the biggest threat to our business is people who don't produce a quality product and back it up.

How is Landshire able to capitalize on fresh, grab-and-go foodservice that maintains quality and taste from production to store shelves?
Quality and consistency is built in every item that Landshire produces. For example, our production facility operations adhere to strict sanitation guidelines that are verified with ongoing inspections from a quality insurance team. We partner with NP Analytical Laboratories in St. Louis to ensure that our quality control is consistently maintained throughout the production process. The gas-flushed procedure that we use in manufacturing, which removes almost 99 percent of the oxygen to prevent bacteria from growing, combined with the monitoring of our cold chain distribution, helps us ensure that each product is delivered fresh to each store in the markets we serve.

What new technologies do you use to drive products through the supply chain? Is there something you're doing that nobody else is?
Our new bakery facility utilizes the latest advances in technology available to the industry. It achieves a high degree of efficiency and sanitation. Our foodservice production facility uses automated stainless steel, computerized packaging equipment, and many of the changes that have occurred in our production facility are exclusive to Landshire to help increase efficiency and deliver a high grade of sanitation. Our distribution operation relies on a sophisticated logistics program that routes our delivery vehicles in a timely manner so that we can adequately meet our customers' service needs.

As consumers' taste buds continue to change, how do you ensure Landshire products remain relevant to consumers?
Realistically, we try to pick products that have broad appeal. We have a new products committee that meets weekly to discuss and test new ideas, and new product ideas are regularly reviewed and tested in various markets each month. Sales of existing items are also tracked and evaluated weekly in every market we serve throughout the United States. Our goal is to maximize the sales and profit margins of the space we are given to manage.

Are their limits to how far you look outside your channel for new ideas?
Our core channel is the convenience store, but our products can compete in a multi-million dollar fast food industry, and we look at those markets too. We pay attention to the channels that offer foods to go.

How important is store format, particularly as it relates to foodservice, to driving more loyal, frequent shoppers into the convenience channel?
This year's NACS State of the Industry report speaks volumes about what our customers want and demand in a particular store. We've found that a foodservice program that has an adequate amount of dedicated space positioned in a high traffic area has a better opportunity to be frequented by customers who will become more loyal, frequent shoppers at that store over time.

Whether it's a single-store operator or large, 100-store operator, what steps does your sales team follow to help retailers market and sell your products?
Our sales team tailors the needs of any size customer. We also have a wide variety of other foodservice programs that are supported with in-store training, as well as manuals to make sure that programs are executed and successful.

What are your views on the strengths and weaknesses of a convenience channel versus the other channels your company supplies?
The strength of the convenience store channel lies with any other market that it serves. I believe that no other channel can serve customers as well as the convenience channel when the execution is done correctly. The weakness of the channel is the various types of stores that exist in today's market. Ultimately, the customer will decide where to shop. And it's Landshire's goal to provide programs and partner with the convenience channel to be able to serve those customers in that particular market.

What skills do you consider to be the most important in your management team?
Our management team is tenacious in their ability to deliver quality foodservice products with exceptional service every day. They do it by working closely with their field teams to ensure that they have the resources to consistently drive our customers' sales. Their decisions are made with integrity, and a willingness to accept the responsibility.

What's the most important thing that you do in your role at Landshire?
I ask a lot of questions and I spend a lot of my time to just listening. My role is to continually evaluate our execution as a company, to look for threats, obstacles and opportunities, and provide an environment that allows our managers to grow individually as they grow our business. Landshire is blessed with a very dedicated management team.