Honing In

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Honing In

By Angela Hanson, Convenience Store News - 05/14/2016

Convenience stores are no longer newbies in the foodservice universe. Fresh food and beverages are now commonplace at c-stores across the nation — 100 percent of convenience chains sell prepared food and hot dispensed beverages, while 94 percent sell cold or frozen dispensed beverages, according to the latest Convenience Store News Foodservice Study.

C-stores have earned a place as a serious contender to other foodservice establishments: quick-service restaurants, fast-casual eateries, coffee shops, grocery stores, and more. But that doesn’t mean c-store retailers can rest on their laurels. The best-in-class in convenience foodservice are committed to continual reinvestment and refinement of their offer.

“The expectation customers have today is faster service and better quality. The customer is coming to us because they know they can find that value in what they’re buying,” said Guy Strayer, director of foodservice for Erie, Pa.-based Country Fair Inc., a chain of 72 convenience stores. “I push for us to continually exceed the expectations of the customer.”

Strayer was one of a dozen convenience foodservice leaders in attendance at the recent 2016 Convenience Store News Foodservice Summit, held in partnership with Tyson Convenience. During the event’s share sessions, one of the common themes heard from the retailers around the table was the concept of honing in — doing fewer things, but doing them better.

“Our opportunity is to be more focused. Less golden retriever,” noted one attendee whose chain of nearly 600 c-stores is five years into a chainwide store remodeling effort that puts fresh food front and center. “Gas will continue to be a driver. Cigarettes will be a driver. But food is where our money is going to come from. Right now, food is a store within a store and we compete against other [product] categories, but I know food will win out.”

This chain is just one example of how the best-in-class in convenience foodservice are likewise applying this concept of honing in to having a store design that gives the brand “the permission” to sell fresh food and beverages to today’s savvy consumers.

By the end of this year, Thorntons Inc. will have opened 47 of its new food-focused format stores in southern Indiana, Louisville, Ky., and the greater Chicago area, shared Samantha Couch, senior brand manager of fresh foods. The new format is meant to position Thorntons as a food and beverage destination. The stores feature a grab-and-go kitchen; hot prepared food including breakfast, lunch and snack selections; a full bakery case; and an ice cream bar with toppings.

“We are constantly evolving our menu to meet the needs and wants of our guests,” said Couch.

West Des Moines, Iowa-based Kum & Go LC also recently debuted a new store design, dubbed “Marketplace,” which puts an emphasis on the brand’s foodservice offerings. When customers walk through the doors, they are greeted by a fresh pizza and made-to-order sandwich station — something new to Kum & Go. The retailer also launched a new pizza recipe.

“Our goal is to act like a restaurant instead of a convenience store. Our new store model is one step on a long journey,” said Ben Boulden, foodservice category manager.

HONING IN ON CONSISTENCY & FRESHNESS

While there has never been a better time to be in the convenience foodservice business — one summit attendee said he believes “we’re in the golden age of convenience stores right now” with the sky as the limit — operators face their fair share of challenges.

“What isn’t a challenge? More than ever, we’re doing more with less,” said one retailer.

Even the largest, most successful c-store chains have limited resources and cannot necessarily do everything well. Still, customers expect consistency. For chains that have multiple store sizes under their banner, there is an extra degree of difficulty in achieving this, as their smaller stores are asked to do disproportionately more relative to their square footage. Additionally, chains with footprints in multiple areas of the nation must address the issue of regionalism and how, or whether to, keep the same roster of products in very different parts of the country.

Consistency also means delivering consistently “fresh” product, whether it’s made to order or grab and go. Retailers are rethinking how their stores define fresh and whether it is necessarily the same as “healthy.” While the c-store industry has made great strides in this area, summit attendees acknowledged that in certain regions, people just don’t yet associate freshness with c-stores. To combat this, one chain seeks to create the association with fresh by making as many of its foodservice items as possible in in-store kitchens that are viewable to customers.

Other chains take similar measures to promote freshness by leading with fresh — when customers walk in, fresh items are immediately obvious and accessible. For those that want to add healthy options but worry about alienating longtime, traditional c-store customers who aren’t especially interested in healthy items, the good news is that adding a fresh and healthy angle doesn’t have to mean wholly displacing existing items. Adding some options and simply creating the perception that fresh and healthy products are available will capture the attention of customers who would otherwise never have walked inside specifically to buy fresh food.

The retailers pointed to several signifiers of freshness that stores can utilize: the display of fresh fruit; availability of freshly prepared sandwiches; clear packaging that lets customers easily see the product inside; a green color scheme; and the use of “better for you” over “healthy.”

Overall, summit attendees agreed they are increasingly looking at the long-term rather than going from problem to problem. Now that more consumers trust c-stores for their foodservice needs, the goal is to have a plan to always live up to that trust and build a solid future.

HONING IN ON TRENDS

Speaking of consumers, they have higher expectations today than ever before. That’s because there is a foodservice revolution happening in America, according to Christopher Wolf, who leads the development of new innovation capabilities for Tyson.

“America is obsessed with food today, and this means consumers are interested in learning more and spending more,” Wolf said in a presentation during the Foodservice Summit.

He discussed multiple trends fueling the foodservice revolution. Among them:

  • Experiential Eating: Food procurement has become a fun hobby vs. a chore.
  • Procurement Promiscuity: Consumers visit at least five channels to buy their food.
  • Farm to Landfill: The importance of waste reduction is growing.
  • Food Tech Connect: How we find food items and share experiences is changing.
  • Eating De-Ritualization: Almost half of eating occasions are alone.
  • Value Paradox: Value lies in differentiation, not just price point.

Wolf told the c-store retailers that while these trends will continue to evolve, America’s obsession with food is not going to dissipate anytime soon. “If there’s a solution you’ve tried and it didn’t work, that doesn’t mean the trend is going away. This is here to stay,” he explained. “It’s just a matter of you figuring out what is the right solution for you.”

If c-stores give consumers a reason, they will spend more, he concluded. Case in point: During the recession, millennials traded down in number of visits, but traded up in where they went, choosing fast-casual establishments over quick-service restaurants.

“Our goal is to act like a restaurant instead of a convenience store. Our new store model [dubbed Marketplace] is one step on a long journey.”
— Ben Boulden, Kum & Go LC

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