Have You Joined the Fresh Convenience Revolution?
NATIONAL REPORT — The past year has seen many convenience store retailers introduce brand-new store concepts or newly updated store prototypes that are focused foremost on fresh food. The names include Pilot Flying J, Global Partners, Nouria Energy Corp., Dash In, Facetrac Markets, FriendShip Food Stores, Shell and more.
The c-store industry seems to have reached a turning point with foodservice where retailers realize it's either sink or swim — you either update your stores to reflect the new age of "fresh convenience" or you risk not being in business for much longer.
"Absolutely no question," Jerry Weiner, convenience foodservice veteran and president of Jerry Weiner Consulting, said when asked whether the industry has reached a turning point.
He believes the shift began occurring as far back as the mid-1990s when consumers in the Northwest started paying more attention to c-store chains doing fresh foodservice right. Weiner pointed to 2015 as a "sea change" when chains like Salt Lake City-based Maverik Inc. and La Crosse, Wis.-based Kwik Trip Inc. began driving the importance of better foodservice in regions of the United States that hadn't previously had significant category drivers.
Today, consumer expectations of fresh convenience have been firmly established.
For several years running, the annual AlixPartners Convenience-Store Consumer Survey has shown that the presence of healthy and better-for-you items is a top factor for customers when deciding whether to buy food at a c-store.
"In our most recent survey, when asked what specific attributes are most important, consumers cited 'freshly made in stores' and 'locally sourced/fresh ingredients," said John Benson, a director in the restaurants, hospitality and leisure practice at AlixPartners LLP. "Looking at the demographics of our respondents, we see this as being driven by millennials."
With profits from c-store industry mainstays like fuel and tobacco shrinking, and foodservice opportunities increasing, it should be a no-brainer for retailers to decide to recalibrate their strategic direction. However, logistical challenges often result in hesitation.
"With that comes great risk … If you figure out how to operationalize a robust food program, the potential is sky high; whereas if you don’t, you could end up with lost profits, unhappy customers and shrinking sales," said Joseph Bona, president of Bona Design Lab. "So, it is not for the faint of heart, but convenience stores are more and more becoming a destination for high-quality food on the go."
So, what does "fresh" really mean to consumers today?
The quality and sourcing of ingredients matter, but so does the customer's perception. This doesn't mean that the appearance of freshness is more important than its actuality — as consumers will quickly detect inauthenticity — but presentation is absolutely critical for conveying freshness.
"I'm a gigantic fan of open kitchens," Weiner said, explaining that watching an order be made or assembled is an important part of conveying freshness. "Do everything in front of the customer. Let them watch!"
Benson agrees, noting that "by far, the best way to showcase 'fresh' in your foodservice program is to make food in-store — either prepared in-store or, even better, made to order," he said. "We see c-store chains incorporating this into most of their new-build and remodel designs, featuring kitchen equipment and preparation stations front and center in full view of the consumer."
Other methods for conveying freshness include retailers communicating the shortness of their supply chains and highlighting local sourcing programs, such as Rutter's policy of labeling its local offerings in-store and online. This is one area where smaller retailers may have an advantage over the largest c-store chains.
"Operationally, it can often be easier for a smaller, regional chain with less than 100 units to source locally than for a large, national chain with thousands of units," Benson pointed out.
Common upgrades being made by convenience retailers that are getting serious about fresh food include changes to marketing, in-store presentation and improved merchandising. The most successful operators, though, are making changes in company culture, too.
Retailers will inevitably have to wrangle with logistics and practicality, but imagination is just as important, according to Weiner.
"There are limits to what you can do, but no limits to what can be created in terms of impression,” he said.
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