Rollover on a roll again Rollover on a roll again

With the average American eating 60 of them a year, the humble hot dog is as American as it gets. By contrast, only 15 million are eaten per year in the UK [TNS] - but they are growing in popularity, at least if the recent sales surge of Rollover, the UK’s largest foodservice hot dog supplier, is anything to go by.

Last year, sales rose 23% to £9.2m and this year, chief executive Simon Vine expects Rollover to post sales of £12m, with £15m the target in 2013. Has the nation suddenly gone hotdog crazy? Where’s all this growth expected to come from? The answer, as simple as the hot dog itself, lies in Rollover’s fastest-growing segment - c-stores.

Vine only started targeting the convenience sector in 2009. And the Slough-based business was in a spot of bother at the time. Founded by entrepreneur David Sanger in the early 1990s as a chain of sandwich shops, Rollover had mutated into a fast-growth hot dog wholesaler, setting up concessions in sports stadiums, cinemas, theme parks and universities before Sanger sold a majority stake, in 2006, to Piper Private equity for £7m. When Vine was approached to take over as CEO, the food industry stalwart - who started his career at Coca-Cola before working for Hillsdown - was attracted by the PE firm’s brand-oriented approach, and leapt at the chance.

“The wastage is about 5% on hot dogs but on bake-off products it’s about 30%”

Simon Vine

But by 2009, after Jamie Oliver’s healthy school eating campaign put paid to Rollover’s schools business, recession was starting to bite, with bad debts and declining sales from leisure centres and theme parks eating into profits. And while Vine was clear that a supermarket trial in Asda was not the way forward - abandoning the rollout owing to the “atrocious margins” - he admits the entry into convenience retail was fortuitous. He received a tip-off that Martin McColl was looking to update its food-to-go offer, and nearly didn’t take the call. After a successful trial, however, the c-store chain introduced Rollover’s counter-top hot dog machines. Musgrave, Mace, Spar and Premier all followed suit, sold on the fact that the concept is simple. “It’s free, on-loan equipment,” says Vine. “We provide the steamer, sauce station and a base unit if they need somewhere to put it and we then sell them our products - sausages, baguettes and sauces.”

For retailers, one of the main draws is the lack of wastage, with the hot dogs boasting a six-month shelf-life. “Hot grab-and-go is typically underdeveloped in convenience retail. They’ve had quite a lot of bake-off products, but sales are sluggish and wastage is high. Typically, bake-off will involve about 10 SKUs, and wastage of 30%, whereas a hot dog is just one SKU, with wastage of about 5%.”

The hot dogs sell for £1.69 and most retailers shift 150 a week, says Vine, with breakfast providing a big sales opportunity. “We’ve got retailers making £10,000 a year profit at the top end but most make a little bit less than that.” And Vine believes there’s plenty more scope for growth. “We’re in 1,600 at the moment, but there’s 40,000 c-stores out there, so we’re looking to be in several thousand over the coming years.” Operations in France are also planned.

Servicing convenience stores is a world away from the supply of hot dogs to football stadia (more than 5,000 hot dogs are sold at Old Trafford on matchdays), with a dedicated sales force - which aims to visit every customer at least every six months - and increased telesales support. But despite the extra costs involved, with convenience “the Cinderella of the retail industry”, Vine hasn’t just won the lottery. It’s a Rollover.