The Navy Exchange Service Com-mand’s (NEXCOM) fiscal 2012 foodservice program ended in

early February with its third consecu-tive year of record sales and profits.

According to Mark Lipovsik, NEXCOM’s foodservice development specialist, the exchange service’s total food program sales were $269.7 mil-lion, and NEXCOM’s total sales in its national branded fast food (NBFF) portfolio — excluding all non-brand-ed operations — were $239.9 million.

NEXCOM’s foodservice program experienced a sales increase of 5.41 percent during the fiscal year.

Lipovsik reported that NEXCOM’s food-service portfolio consists of 481 outlets with 398 concessions operated by franchisees/companies, and 83 being run directly. Of the 481 total foodservice outlets, 398 are in CONUS and 83 are in OCONUS.

FOOD TRENDSThe executive noted that the fiscal 2013 forecast

for its portfolio is strong, “based on having several site transitions and additional units in its develop-mental pipeline,” and trends will be heeded in order to reach sales and performance goals.

“From our recent system-wide foodservice sur-vey, our customers rated the top five factors when choosing a food outlet,” Lipovsik noted. “The results are that cleanliness ranked the highest, followed by taste and friendliness, then speed of service and last-ly, value for the money.

“Our overall customer satisfaction rating from 2011 and 2012 resulted in an improvement of three points, from a 78 to a score of 81. The ‘convenience’ factor still remains the primary reason for our cus-tomers to eat on base. Lunch remains the most popu-lar meal and highest-rated day part, with some sales gains made in breakfast and dinner day parts.”

HEALTHY FAREThe offering of healthy fare by these outlets has

gone beyond the trend stage, and now is almost ex-pected by patrons.

“NEXCOM has numerous brands that offer dif-ferent selections from their menus which can be con-strued as ‘healthy,’” Lipovsik said. “Our customers have told us that their top three areas of concern are fresh fruit/vegetables, low calories and low fat, all of which are important to them. We continue to work with our business partners to ensure these types of items/factors are emphasized.”

Lipovsik told E and C News that in terms of healthy fare, “There is much more work to do in terms of providing nutritional values at the point of sale (POS).”

The executive said that McDonald’s, one of NEXCOM’s most prominent fast food partners, “has led our portfolio in terms of posting nutritional calo-ries on its menu boards, versus other methods such as having a nutritional poster board hung near the registers or asking customers to research company websites.

“It is our contention that this information will be positioned on all menu boards or even on the touch screen-ordering devices in the near future. Our pro-gram is designed to provide options for our custom-ers, but the key to changing industry trends other than through laws is customer demands.”

WORKING WITH NEXCOMWhether looking at healthy eating choices or

standard fare, based on NEXCOM’s recent foodser-vice survey, Lipovsik said that opportunities exist in both the breakfast and dinner day parts, along with mid-afternoon comfort food that he said “can be an added value to our customers.”

Away from the food courts, Lipovsik noted that NEXCOM Mini-Marts can provide “additional food-service offerings with quality products and services.”

“Our goal is to standardize our Mini-Mart food and beverage bars to provide greater convenience and speed of service,” he explained. “Providing con-sistent, quality Grab-‘n-Go food items and beverages will be the key to making this program successful.”

Lipovsik said that although its portfolio is suc-cessful, NEXCOM is continually seeking new busi-ness partners “who can deliver the same high-quality foods and service as these brands do on a daily basis off the base in the commercial marketplace.”

He said that NEXCOM’s food program has most menu segments in its portfolio. However, “It is in our customers’ best interest to have multiple same-menu segments at our disposal to ensure each particular opportunity has a high chance of being successful for all parties involved.”

NEXCOM routinely meets with companies throughout the year who represent many segments of the foodservice industry, and when these meet-ings occur, “We share the NEXCOM mission and de-scribe the contracting process to conduct business,” Lipovsik said. “It is mutually beneficial for all parties to fully understand each others’ needs to be success-ful before pursuing into the contracting phase.

“Not all companies elect to pursue the opportuni-

ties within NEXCOM or other military markets due to their reluctance to work in our ‘non-traditional’ setting, but we still offer any company the invitation to discuss our program, market, and process, and how we can be-come true partners serving the best customers in the world: our U.S. Navy Sailors and their families, both active duty and retired.”

FOOD OPPORTUNITIES For those entities that are comfortable in this en-

vironment, the executive said that many opportuni-ties exist.

“The two franchisees that have expanded the most number of units in 2012 were Subway and Panda Express,” he said. “These two concepts were also recognized by our customers as having the high-est customer satisfaction scores as indicated in our recent foodservice survey. While these concepts rep-resent two separate menu segments, i.e., sandwiches versus Asian, they both offer numerous healthy se-lections from their menus, plus they are perceived as a value in terms of menu pricing.”

NEXCOM and its food partners are on the fast track to break ground, both literally and figuratively, on delivering various menu options around the world.

One recent example of this occurred on Dec. 26, as NEXCOM and its Subway business partners opened the first U.S. NBFF franchisee in Northern Africa at Camp Lemonnier, Djibouti (see E and C News 2/13, and the interview in this issue with NEXCOM Direc-tor Rear Adm. Robert J. Bianchi, SC, USN (Ret.)).

“The customers’ response and appreciation of bringing ‘a little taste of home’ to them was over-whelming and very gratifying,” Lipovsik said.

Another first for the program was the Nov. 13 grand opening of a freestanding Pizza Hut/Wing Street restaurant, pier side, onboard the NS Norfolk, Va., installation. This site represented the first free-standing, full-service pizza delivery platform of its kind built on a Naval installation as a NEX public-private venture.

“This is a casual dining facility that affords guests

Lipovsik

NEXCOM’s national branded fast food program sales increased 5.41percent during fiscal 2012.

he Navy Exchange Service Com-

Record Sales, Profits Point to Strong 2013

NEX

CO

M PH

OTO

S

EXCHANGE and COMMISSARY NEWSMAY 2013

NEXCOM Name Brand Fast Food (NBFF)

an opportunity to enjoy quality pizza or wings while watching one of several televisions, or customers can call in to place on order for delivery,” the executive said.

Lipovsik said that the Djibouti and NS Norfolk sites are just two examples that provide insight into what the NEXCOM food-service program is dedicated to accomplishing: “Providing qual-ity, top-tier name brands that meet the desires of our customers via the concessionaire business model.”

2013 NEXCOM Name-Brand Fast

Food Sites*

Concept Number of SitesSubway . . . . . . . . . . . . . . . . . . . . . . . . . .95 McDonald’s . . . . . . . . . . . . . . . . . . . . . . .30 Rice King . . . . . . . . . . . . . . . . . . . . . . . . .18 Taco Bell . . . . . . . . . . . . . . . . . . . . . . . . .18 Seattle’s Best Coffee . . . . . . . . . . . . . . . .13Starbucks . . . . . . . . . . . . . . . . . . . . . . . .11Sbarro . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Dunkin’ Donuts . . . . . . . . . . . . . . . . . . . . .8Popeyes . . . . . . . . . . . . . . . . . . . . . . . . . . .8Baskin-Robbins . . . . . . . . . . . . . . . . . . . . . .7Freshens. . . . . . . . . . . . . . . . . . . . . . . . . . .7Pizza Hut . . . . . . . . . . . . . . . . . . . . . . . . . .7Panda Express . . . . . . . . . . . . . . . . . . . . . .6KFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5Famous Famiglia . . . . . . . . . . . . . . . . . . . .4Burger King . . . . . . . . . . . . . . . . . . . . . . . .4Five Guys Burgers and Fries . . . . . . . . . . . .3Manchu Wok . . . . . . . . . . . . . . . . . . . . . . .3Quiznos . . . . . . . . . . . . . . . . . . . . . . . . . . .3A&W . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Bruegger’s Bagels . . . . . . . . . . . . . . . . . . . .2Great Steak . . . . . . . . . . . . . . . . . . . . . . . .2IHop Express . . . . . . . . . . . . . . . . . . . . . . .2Rollerz . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Tim Hortons . . . . . . . . . . . . . . . . . . . . . . . .2Tropical Smoothie . . . . . . . . . . . . . . . . . . .2Blimpie. . . . . . . . . . . . . . . . . . . . . . . . . . . .1Charley’s Steakery . . . . . . . . . . . . . . . . . . .1Chili’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Del Taco. . . . . . . . . . . . . . . . . . . . . . . . . . .1Firehouse Subs . . . . . . . . . . . . . . . . . . . . . .1Long John Silver’s . . . . . . . . . . . . . . . . . . . .1Pizza Hut/Wing Street . . . . . . . . . . . . . . . .1Taco Del Mar . . . . . . . . . . . . . . . . . . . . . . .1 * Partial listing of what NEXCOM considers to be its “top-tier” name brands, or those brands typically operating in at least 10 states, both military and civilian sites. Other NBFF brands — some of a regional nature — are not included in this chart. NEXCOM has a total of 481 outlets: 398 conces-sions and 83 direct-run restaurants. Of the 481 concessions, 398 are CONUS and 83 are OCONUS.

Source: NEXCOM

NEXCOM foodservice outlets operate in both brick-and-mortar and other types of venues. Here, a Pita Pit food

truck serves customers at NS Norfolk, Va.

EXCHANGE and COMMISSARY NEWS

NEXCOM Name Brand Fast Food (NBFF)

MAY 2013