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Frischwerk: Lekkerland's innovative store concept for petrol stations

Leading German wholesaler Lekkerland launched an innovative store concept at the end of 2016 that takes a fresh look at petrol stations and food services. The Frischwerk concept was honoured at the NACS Insight Convenience Summit last year. They are now about to open three more sites in Germany. We speak to Frank Fleck, Senior VP for Corporate Strategy & Business Development, about the concept and state of the German convenience market.

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Frank Fleck has been working with Lekkerland for six years. He was involved in the development of the company’s future strategy: Convenience 2020. After that he actually had the chance of implementing that strategy when he became Managing Director for Lekkerland Germany – their biggest market. Since 2016, he went back to strategy and business development including the foodservice unit. Before joining Lekkerland, which posted a group turnover of €13 billion in 2016, Fleck worked at Unilever for 15 years. In between, he was responsible for marketing and business development at Carl Zeiss Jena International, a leading producer of eyeglass lenses, for four years

Could you give our readers a brief explanation of what does Lekkerland do and which are its major markets? 

Historically we are a wholesaler and logistics service provider for the convenience channel, with focus on gas stations (60% of the business) and other type of convenience formats such as kiosks and organised foodservice. We currently offer products, services and processes for the convenience channel in six countries: Germany, Switzerland, Austria, Belgium, Holland and Spain.

What made a wholesale and logistics company want to offer a full retailing concept such as the Frischwerk store?

It has always been our aspiration to support our customers in continuing to be successful. In terms of developing their business that starts with category management but you also have to analyse how you want to present a product, the infrastructure, the hardware... Our clients started asking us if we could help with their bistro concept. Once you develop a nice bistro concept, the rest of the shop doesn't look so good, so we had to think about changing the whole store concept. I think it is a natural step to not only consult our clients on products but also on full solutions: layout, setup, marketing, training... we can do everything apart from running the shop. That’s the clear competence of our customers.

Last year you opened the first two Frischwerk store concepts, one Aral-branded in Aalen and another with Esso in Hamburg.  How do these stores adapt to the current trends in the convenience market? 

Over the years we have developed other modular solutions where, for example, we a built a bistro section. With Frischwerk, we asked ourselves, should we do a future store? But that was too far away from what our customers needed. We needed a concept that could be rolled out sooner.

We constantly continue refining the concept and you will see some learnings and new ideas in the three new stores that will be added to the two initial ones in the next weeks. We asked many of our customers and suppliers what they're learnings were and we carried out a massive consumer research. There was a lot of emotional, in-depth feedback from customers on how they felt in a c-store or gas station, and we included all that information in our concept. One key finding, for example, is the demand for a clear division between two zones, which can be referred to as ‘traditional’ and ‘modern’. Food services and everything related is 'modern', while all that’s related to car care, petrol and cigarettes is 'traditional'. We asked them how they would like to divide those spaces; we showed them execution models and propositions... The key thing is that, visually, it has to be split, but especially from an operation stand point, there must be two different people working in the two areas clearly linked to each section. 

What other important findings did you discover for the Frischwerk concept through consumer research?

The other key word that consumers referred to was "atmosphere" - a lot of shops don't have a shopper friendly atmosphere. If that doesn't fit, I don't buy anything fresh or anything at all. I want get in, pay and leave. In the pursuit for a quality atmosphere we didn't want to be too fancy as you could lose traditional customers. It was about finding a compromise that was acceptable to all of these customers. We looked at trends in convenience stores around the world and did a lot of research to come up with our design. Apart from the atmosphere, one critical element was the prices at gas stations in Germany which are often perceived by consumers as too high or the pricing structure is not consistent. So we developed a pricing model as a recommendation to our customers that also includes the competition in the area around the station. An element we took from the UK was the idea of the 'meal deal', which is nothing new but it wasn't really being done in German petrol stations so far: three items for a single, good price. 

When developing such concepts, are there any particular characteristics of the German consumer compared to other nations? 

I think the consumer needs are, from a psychological point of view, relatively similar. However, market circumstances are to a certain extend different. Switzerland has different market conditions than the Benelux area. In Germany, for example, we have a high density of supermarkets, discounters and bakeries which obviously influences the required solutions in gas stations to be successful. Furthermore we have many regional mid-size fuel retailers with 20 to 100 sites, which all have their specific concepts. However, from a consumer need perspective, the trends are pretty similar all around: a really good atmosphere similar to some quick-serve restaurants and bakeries; more and more fresh food, either packaged or prepared on site; more variety; and lunch and dinner solutions. That’s the same for all markets.

You mentioned before that you are about to open three new sites. Apart from that, what plans does Lekkerland have for the Frischwerk concept in the near future? Will you take it outside Germany? 

With Frischwerk, for now we are focusing on Germany as you can also see by the name [laughs]. On the one hand, we will open three new stores very soon and there certainly will be differences to the existing stores. The new ones will be even more focused on food service and, as I said, we see a big opportunity in lunch and dinner solutions. Based on what we've learned and the insight we have, the next step is to offer the concept to a broader audience.

Apart from Frischwerk, we are working on innovative shop concepts – both modular and holistic – in other countries as well. One example is Eet & Gerei in the Netherlands, which also has a clear focus on foodservice, but emphasises the approach of testing (and changing) ideas even more. 

When you started to think about this concept you had the idea of designing the convenience store of the future. Obviously, your current Frischwerk concept includes many of today's trends such as quality coffee, open spaces and fresh food. Are there any elements that you identify today that will be key in say, five years? 

One component that we all work on is how to better use technology and digital. For example, we are testing a digital screens solution in and outside the stores where we can offer products or promotions depending on different consumer need states. So we are closer to consumer needs than the classical four weeks, 24/7 promotions. A consumer could love certain offers in the afternoon but maybe not at 5AM. We do promotional offers via these digital screens that vary depending on the time of the day, time of the week (weekday versus weekend) and the weather - there are different needs when the sun is shining than when it rains. Looking further ahead, artificial intelligence and big data could use self-learning to make the appropriate offers at specific moments to specific customers. Then you could link it to the supply chain so that shop staff can focus on serving costumers instead of doing all the admin stuff. 

Are the two Frischwerk stores currently active identical? Will you adapt the look of the stores depending on your clients? 

From a ‘look and feel’ perspective, they are basically the same. In terms of structure, logic and portfolio, they are also very similar. There is one key difference; one is a newly built site where we could translate everything we knew into it, while the one in Hamburg has a more traditional lay out that we had to adapt to. We have to find a concept that is possible in existing stores as the majority of them are like this. The newly built store is interesting because we have a counter in the centre. When you enter, you walk straight into the bakery. The atmosphere that you create is very positive – that seems to change the way consumers see the station and how they shop. We will apply this insight into our future stores, including the ones that are already built. 

Does Germany or DACH pose any specific challenges compared to other countries that you have studied? 

If you look at some of the winners at the NACS Insight Convenience Summit, which came from Ireland, South Africa or the U.S., you see that the average size of a gas station shop is dramatically bigger than the ones we have in Germany. During a US trip last year some petrol station companies told me that they will mainly invest in shops which have a size of  400-500m2. In Germany you could fit about 5-6 shops into that space. This is a key challenge for us because the average shop here is about 80m2. Adding more food service and hot kitchens is difficult regarding processes, the type of product offered and the quality of it. That is Lekkerland’s strength – we have the people and the knowledge to put all this into a small box of 80 to 100 square metres.


Interview by Oscar Smith Diamante 

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