Munch & Run

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Munch & Run

By Bob Phillips - 04/11/2016

A long with coffee, cigarettes and snacks, sandwiches may be the ultimate staple in any convenience store’s in-store portfolio — and a shining star in the foodservice arena.

According to Nielsen convenience store data, packaged sandwich unit sales increased by 5.1 percent in the 52-week period ended Dec. 19, 2015 over the previous year and accounted for a 10.6-percent increase in dollar rings to more than three-quarters of a billion dollars ($766.1 million) over the same period. Of course, that doesn’t even include the burgeoning growth of made-to-order sandwiches at c-stores across the country.

“Sandwiches are a perfect fit for a few reasons. They can be customized for the customer, or they can be featured in the grab-and-go case. There aren’t many food items that can work that way,” said Jeff Lenard, vice president of strategic industry initiatives for NACS, the Association for Convenience & Fuel Retailing. “Sandwiches are very versatile and like any convenience store food that sells well, are very portable.”

Elaborating on the topic of portability, Lenard pointed to a recent article in The New York Times that blamed a downward trend in cereal sales on millennials, who have passed baby boomers as the largest consumer segment in the U.S. marketplace. The reason millennials are shying away from cereal is the same reason for the growing popularity of sandwiches.

“They eat on the run,” said Lenard. “With cereal, they have to clean the bowl and the spoon. The opportunity with sandwiches — especially breakfast sandwiches — is enormous, particularly with millennials who prefer c-stores more than any other consumer demo.”

Consumers can eat sandwiches easily while driving, and there is virtually no fuss and no mess beyond discarding the packaging.

“Twenty percent of households today are single, and those households are largely millennials,” continued Lenard. “Singles aren’t inclined to race home, work on dinner for an hour, eat by themselves and then clean dishes. With the food options available, particularly at convenience stores, millennials are seeking sandwiches out as an option for dinner.”

To many consumers, a grab-and-go sandwich from a c-store offers a far better option than dining out alone, according to Lenard.

“Almost as bad as cooking and cleaning up for one is going to a sit-down restaurant and hearing the phrase, ‘Party of one?’” he noted. “So, the convenience store offers a perfect solution.”

Mathew Mandeltort, vice president of foodservice strategy and education at convenience distributor Eby-Brown Co. LLC, agrees that sandwiches are now considered a foodservice staple in c-stores — particularly if breakfast sandwiches are included in the mix.

“They define what I refer to as ‘road food,’” he said. “My spin on ‘street food.’”

According to Mandeltort, sandwiches should be: fresh, tasty, convenient, on trend, wholesome, customizable and portable.

BEYOND THE BASICS

The first thing that comes to mind when thinking of c-store sandwiches is probably ham, turkey or roast beef and cheese. Or maybe egg, tuna and chicken salad sandwiches. However, as people are exposed to a wider variety of cultures and cuisines, the options and variations for sandwiches can become quite literally limitless.

“You can specialize in South American sandwiches like Fast Gourmet, a store in Washington, D.C., does,” said Lenard. “Just fantastic sandwiches. At the gas station! And you’ll find bánh mì sandwiches in neighborhoods with a large Vietnamese population.”

Also, one can’t forget wraps, or other offerings made with tortillas, which expand the sandwich category greatly — certainly among Hispanic consumers, but also throughout the entire cultural landscape. “Is a burrito a sandwich?” asked Lenard, rhetorically. “Stripes and Sunoco are rolling them out on the East Coast, and I’m sure they’ll experience the same kind of success they had in Texas. So, it doesn’t have to be just the traditional turkey, ham or tuna.”

Along with their basic attributes and functionality, sandwiches offer c-stores an excellent point of differentiation, be it against another c-store in the immediate area or the nearby quick-service restaurant (QSR).

“If you offer a unique sandwich that you can’t get from the station down the street, it gives the customer a reason to come to your store, besides the price of gas,” said Lenard. “It also starts to shift that model from, ‘I’m going to get everything I need from the place with the best gas price’ to ‘I’m going to the place that has the food I like and oh, by the way, I’ll get my gas there as well.’”

Jeff Wallace, vice president of operations for Kahala Brands, the parent company of Blimpie, observed that while sandwiches have long been a staple in the country overall, only recently has the convenience channel realized the full benefits of offering their customers freshly prepared, high-quality, branded foodservice options in a quick, convenient, grab-and-go format.

“Such a program goes a long way toward attracting new customers — customers who may have previously been inclined to go to a QSR,” said Wallace. “By catering to these all-important customers’ needs, convenience retailers have been able to significantly boost their foodservice sales. Especially when consumers are pressed for time, the Blimpie On the Go program is a perfect solution to their needs.”

Of all the key attributes in a foodservice operation, taste and quality should be at the very top of any retailer’s list. And in no other category is this more important than sandwiches.

“The quality of products in premade sandwiches has been improving dramatically over the last five years,” said Paul Pierce, former vice president of fresh foods and dispensed beverages at 7-Eleven Inc. and now vice president of sales at Eby-Brown.

One of the main reasons for the improved quality is the dramatic improvements in packaging in recent years. This has allowed premade sandwich products that include lettuce, tomato and other condiments to hold up in cold merchandisers for up to a week — unheard of in days gone by.

“Artisan breads are being used today,” added Pierce. “Varieties in cheeses, meats and spreads have all drawn greater attention to the category. Chains are improving their distribution, many are adding their own commissaries, and we are seeing more and more made-to-order programs. Additionally, many chains are looking to hot sandwich offerings.”

Still, while the quality of premade sandwiches continues to improve, thanks largely to the improved technology in packaging, nothing calls out “freshness” quite like a sandwich made in-store, believes Chad Prast, senior category manager of fresh foods and dispensed beverages at convenience store operator Murphy USA Inc. “In terms of overall quality, it is hard to beat made-to-order sandwiches,” he said.

C-store retailers must also remember that when it comes to quality, perception is more often reality to the customer. With regard to sandwiches, packaging plays an integral role in perception.

“If the packaging format conveys a handmade look and feel, consumers will view it as fresh,” explained Nancy Todys, vice president of convenience marketing at sandwich supplier AdvancePierre Foods Inc. “Merchandising premade sandwiches near other perceived fresh-made items like salads and fruit cups reinforces the consumer’s fresh perception. But most important, the sandwich must deliver fresh flavor. Sandwiches served hot convey the fresh message. Offering a fresh flavor guarantee will also gain consumer confidence for trial.”

CHANGES IN ATTITUDE

While as a category, sandwiches may be as old as the hills, consumer preferences are constantly evolving. Wise c-store operators will stay abreast of what’s hot and what’s not, and incorporate those trends into their foodservice operation.

Chef Bob Derian, director of food and beverage innovation at convenience store chain RaceTrac Petroleum Inc., sees two trends taking place simultaneously in the sandwich category: consumers’ demand for higher quality, and the use of non-traditional breads such as pretzel buns, ciabatta, or even longtime favorites like croissants and biscuits.

“People will make an initial purchase based on price, a promotion or perhaps a suggestion by an associate, but quality is what will ensure they become a return customer,” noted Derian. “For this reason, quality and food safety need to be at the top of the list when developing a sandwich program. This should be considered an industry best practice.”

Indeed, high-quality breads seem to be raising the bar in the c-store sandwich category. Some larger retailers are empowering bakeries to formulate breads engineered to stay fresh longer by avoiding moisture absorption from the other materials used in making a sandwich, according to industry consultant Joe Chiovera, who has held executive foodservice positions at leading c-store companies such as 7-Eleven, Sheetz Inc. and Alimentation Couche-Tard Inc.

“We’re seeing breads being properly engineered for refrigeration. If you’re able to take care of bread’s No. 1 nemesis, refrigeration, as well as absorbing moisture from the produce or deli meat that’s on it, then you’ve got yourself a quality product,” he continued. “So, it’s important to understand the functional intent of the product — needing production plus four or five days.”

At Wawa Inc., a leader in the convenience channel in sandwich sales, both made-to-order and premade sandwiches are offered. Yet, they are intentionally not offered in the same formats.

“We have a good wrap business, and we’ve added some lighter sandwiches in the last few years,” explained Lynn Hochberg, director of product development for Wawa. “We like to keep our premade and made-to-order sandwiches differentiated so that there’s no duplication or misunderstanding of what you get.”

In response to the “good-for-you” trend that’s been impacting virtually all product categories over the past decade, Wawa has introduced “healthy” sandwiches into their premade program mix. “Certainly, healthy consumption is important to our consumers,” said Hochberg. “We have a special symbol on our premade sandwiches that are under 500 calories.”

THE SEARCH FOR VALUE

Consumers are always looking to get the biggest bang for their buck — that’s a central component in Retailing 101. Thus, it’s imperative for c-store retailers to follow the lead of QSRs and market their foodservice operations, with sandwiches front and center.

“More than ever, consumers are looking for value,” agreed AdvancePierre’s Todys. “Quick-serve restaurants have trained consumers to look for deals on their favorite foods, like classic cheeseburgers and chicken sandwiches. Convenience stores are in a great position to compete by offering bundled meal deals or twofer deals on hot or cold grab-and-go sandwiches.”

Todys also pointed to a huge advantage c-stores can offer their consumers vs. the QSRs. “The wait is usually considerably shorter than at a fast-food drive thru,” she said.

Due to their ability to be easily and effectively merchandised, sandwiches have strong appeal with the core convenience store shopper — the on-the-go, quick-in, quick-out shopper.

“If the store is a little crowded and you don’t have time to wait, it’s a great option,” noted Wawa’s Hochberg. Often when people come into the store in the morning, they’ll also pick up their lunch and it’s much easier for them to buy something prepackaged.”

A comprehensive sandwich program has the power to draw the QSR loyalist into the convenience store instead, by making it unnecessary for that consumer to make an extra stop in his/her busy day, according to Kahala Brands’ Wallace.

“A program such as Blimpie On the Go provides more choices for the consumer who wants to get in and get out quickly and yet still enjoy a high-quality, better-for-you food option,” said Wallace. “It offers more choices that fit their lifestyle.”

Consumers are looking for sandwiches that don’t look like premade sandwiches, he added. “Ones with fresh, high-quality ingredients, bold flavor profiles, and with healthy options.”

But the popularity of sandwiches doesn’t stop there. Perhaps their most important attribute to the c-store operator is that sandwiches appeal to virtually every consumer demographic.

In fact, with their wide array of healthy attributes such whole-wheat bread, low-fat cheese and low-sodium meats, sandwiches have become a useful tool to attract women into the c-store.

“Sandwiches are crossing several segments,” said Ryan Krebs, foodservice director at Pennsylvania convenience store chain Rutter’s Farm Stores. “Female customers are trending toward the cold case as whole-grain, non-deli meats, alternative bread options and more diverse flavor profiles are being added to sandwich offerings.”

Because sandwiches span all consumer segments and all dayparts, there is still a lot of growth opportunity for the convenience channel, particularly among those consumers who want a sandwich for now and a sandwich for later. Indeed, that very well may have been the consumer’s plan all along, rather than an impulse decision.

“People are seeking cold, premade items for later in the day, such as picking up lunch while they’re getting morning coffee,” advised Krebs. “Grabbing a sandwich that can be refrigerated at work and eaten later is more of a plan than a quick decision.”

“Female customers are trending toward the cold case as whole-grain, non-deli meats, alternative bread options and more diverse flavor profiles are being added to sandwich offerings.”
— Ryan Krebs, Rutter’s Farm Stores