"Simple" Swiss Farm Planning on Growth

"Tweener" retailer also intends to become franchisor

Published in CSP Daily News

BROOMALL, Pa. -- Swiss Farm Stores, Delaware County, Pa.'s 10-unit drive-thru convenience store chain, plans to open another 10 locations by 2008, including locations in Clifton Heights, Aston and Concord, reported the Delaware County Times.

The 10 new sites are part of the expansion plan led by Swiss Farm's CEO Ed Costantini as a way to enhance the company's profit, said the report.

Costantini, who was among a group of investors to purchase Swiss Farm Stores in August 2003, said the chain will also be branching out into Chester [image-nocss] and Montgomery counties, southern New Jersey and Delaware.

For almost four decades, Swiss Farm Stores has been serving Delaware County residents with bread, milk, juice and other provision items that shoppers pick up in between trips to the grocery store, all from the convenience of their car. "We're a 'tweener' store. We're a store you go to in between your large shopping every two weeks or so," Costantini told the newspaper.

The company's last new-store opening was in 1975, Costantini said. The classic white silo will go up in Lionville, Chester County, in April, Clifton Heights in July and East Goshen, Chester County, in September.

The region has long been the territory of Wawa; however, Marty Meloche, professor of food marketing at Saint Joseph's University, does not expect the expansion to make for serious competition. "Certainly, the customer that [Swiss Farm Stores] most appeals to is not the same as the Wawa customer or the 7-Eleven customer," he told the paper. "They are a true convenience store. You don't have to get out of your car; you can drive through. They're addressing something that, obviously, people want."

Meloche added that the time benefit for shoppers is a major draw in a fast-paced society. "The fact is that many consumers are just rushed, and trying to find a parking space and get in and shop the store...they're reaching the need of a specific target market and they're successful at it," he said.

Along with fill-in basics, new refrigerated Italian entrees and packaged salads, as well as snacks and coffee, have helped add to the chain's bottom line, the report said.

"It tastes of the '50s, but it's definitely 21st century," Costantini said of the company's formula. "Fresh, fast and friendly, and we don't see that ever going out of style."

Costantini said after the new openings, he plans to make the company a franchisor, giving entrepreneurs the chance to operate some Swiss Farm Stores. "Ultimately, we believe that the company will be an excellent model for franchising, with the main reason being that you don't make anything," he told the Times. "The product comes in one door and goes out two. It's relatively simple."

Under Costantini, the stores open at 6 a.m., not 9 a.m., and offer breakfast fare and coffee, added a Philadelphia Inquirer report. They also have snacks, prepared salads, and refrigerated Italian entrees until 10 p.m. High-quality, low-cost refrigerated prepared meals have a huge potential, Costantini said, noting that 20,000 Italian entrees, prepared by Ristorante Primavera in Wayne, Pa., have sold since October.

Annual sales at the stores are in excess of $13 million, Costantini said, adding: "We expect to grow that by 15% to 20% a year." Two-thirds of the sales are milk and all-natural drink products such as iced teas, lemonade and fruit punch, he said, and the stores "sell over 2-1/2 million gallons of product [milk and drinks] a year."

The original Delaware County stores were opened, starting in 1968, as outlets to sell milk from Wengert's Dairy in Lebanon. Costantini still gets the stores' milk and drink products from that dairy, now Swiss Premium Dairy. It was acquired by Dean Foods, a dairy conglomerate, but the product has not changed, Costantini said. "Our milk was probably in the cow three days ago," he said. "You can taste the difference. We get a delivery every single night of the week," he said. The most popular milk is the Swiss 2% reduced-fat milk, which sells for $3.59 a gallon.

Costantini, 51, who was CFO of a trade-show display company that grew from a $4 million to a $100 million operation, tried to buy the stores from the son of dairy owner Harlan Wengert several years ago, but was turned down. He opened his own store, Alpine Farm, in Bensalem, Pa. Once Wengert's son, David, saw the new store, he agreed to sell, Costantini said. He closed that Bensalem store, and the modular building will be the new Lionville store.