Are You Fit for Fresh?
LAS VEGAS — The past two years have been about image and nutrition for convenience stores, according to Jeff Lenard, vice president of strategic industry initiatives for NACS, the Association for Convenience & Fuel Retailing. At the NACS Show educational session, "The Business Case for Fresh," Lenard shared data from Nielsen showing fruits and vegetables reign supreme as the most popular snacks for U.S. consumers. He also cited c-store produce sales reached $362 million in 2014.
“The term ‘re-fresh’ fits for our industry because we sell refreshments to our customers,” he said.
Joining Lenard in the session, Kelly Jacob, vice president of retail and emerging channels at PRO*ACT LLC, discussed how the "case for fresh" has been evolving for years. It started with Chiquita’s bananas to-go concept, followed by the opening of Jamba Juice, who needed fresh fruit and veggies for its smoothies. Last but not least, Starbucks brought a competitive edge to the market and made an impact by selling bananas for $1 to the on-the-go customer.
“This showed us that consumers are willing to spend for healthy options,” said Jacob.
She went on to say that c-stores are “food deserts,” and they can take advantage of going fresh. For example, in local, urban markets, small-format stores can provide fresh where big grocers can’t. In doing so, the small format for fresh has been adopted by colleges and universities, hospitals, hotels, airports and more.
In order to succeed, Jacob shared five key elements:
- Store conditions;
- Local resources; and
“Going fresh is the future and it’s what your customers want,” said Jacob.
Distribution plays a major role in delivering fresh to your c-store, added Sharon Kuncl, vice president of merchandising, foodservice, for Eby-Brown Co. She advised attendees of the session that more manufacturers want to work with c-stores because “they know we are emerging.”
In order be successful, the role of distribution must adhere to three focal points, the first being education. C-store retailers must find the right fit of a fresh program for their store, and once they find it, they must stay committed to it. Then, they must find the proper display locations (preferably in a high foot traffic area), and whether or not they have the proper storage and handling.
Secondly, retailers must assess their access. The important question they need to ask themselves is if there is efficient delivery.
Many retailers believe one delivery a week is sufficient, but in order to execute fresh successfully, deliveries three times a week will provide the c-store retailer with the right amount of fresh produce. This produce, Kuncl reiterated, must be of high quality and come from the right vendor partnerships.
The final focal point is having the proper management tools. This includes the cost of fresh produce moving in and out of your store; spoils, which ties into the number of sufficient deliveries made to the store each week; and product handling, which ties into storage.
Concluding the session, Joe Hamza, chief operating officer for Nouria Energy, tied together the points covered by his fellow panelists by sharing his experience with Tedeschi Food Shops Inc. as it made the move into fresh.
“Finding the right partner was difficult,” Hamza recounted. “[Manufacturers] couldn’t understand the unique opportunity c-stores had by selling small quantities of produce.”
But with the right elements in place, the c-store chain found success in getting fit for fresh. The necessary elements included:
- Corporate commitment;
- Partnerships and quality of suppliers and logistics;
- Establishment of product specifications and standards;
- Merchandising; and
- Targeting new customers.
Hamza drove home the importance of focusing on millennial and women shoppers. These consumers started the fresh trend, according to Hamza, and c-store retailers should be dedicated to reaching them through platforms like training to distinguish products from “the good, the bad and the ugly” and marketing that is “fun” to set yourself apart from your competitors.