Taking the Pulse of Health & Wellness in the Convenience Channel

Press enter to search
Close search
Open Menu
Graphics depicting health and wellness like sleep, fruit, and exercise

Taking the Pulse of Health & Wellness in the Convenience Channel

By Melissa Kress - 09/18/2017
Graphics depicting health and wellness like sleep, fruit, and exercise

ROSEMONT, Ill. — With the increasing importance of health and wellness in the United States, the convenience store industry has an opportunity to capture those dollars.

"Health is in everything we do — the brands we shop, the items we buy," said Carl Elliott, director of Nielsen Convenience Channel. "Health has become more important." 

To highlight the significance, Elliot pointed out that 49 percent of U.S. consumers are consciously eating more fruits and vegetables, 63 percent are trying to eat healthier, and 32 percent of U.S. households said they followed a diet in 2016.

Speaking during the 2017 Convenience Store News Convenience Foodservice & Beverage Exchange event, he also outlined the five overall drivers of health and wellness:

  • Population differences;
  • An increase in chronic diseases;
  • Rising healthcare costs;
  • A demand for transparency; and
  • Technology access. 
     

According to Elliott, aging baby boomer shoppers present an opportunity at retail, and specifically they are looking for more functional foods, easier-to-open packages, and easier-to-read labels. On the other end of the demographic spectrum, millennials are looking for functionality and transparency.

Age aside, "ailment shoppers" represent significant spend, Elliott noted, citing there are 25 million diabetic households and 34 million obese households in the U.S. In addition, there are 5 million heart disease households — which overindex in the convenience channel, spending 34 percent more in a convenience store than a typical household.

"Convenience can support shoppers with the right assortment," Elliott said, explaining heart disease households shop for items such as tobacco, candy, ice cream, nuts, candy, and carbonated beverages.

With the rising cost of healthcare, retailers can help provide consumers a path to health and wellness. According to Elliott, retailers are already taking several measures, including:

  • Prioritizing health and better-for-you foods;
  • Rolling out private label health and wellness products;
  • Banning certain ingredients in prepared foods;
  • Posting nutritional facts in the store; and
  • Emphasizing fresh.

 

Retailers taking these steps are seeing "significant sales translating from health and wellness," he said.

Manufacturers, too, are taking cues from the 56 percent of households that say they don't trust industrially prepared foods and launching "cleaner products." When it comes to cleaner products, small manufacturers are growing at 9 percent vs. 5 percent for large manufacturers, according to Elliott.

"Transparency is not going to go away; it is not a passing fad," he said. "The shoppers who are coming into our stores are looking for transparency and reading labels more than before."

In addition, they are willing for pay for it. Specifically, Nielsen found that 68 percent of U.S. consumers say they are willing to pay more for food and beverages that do not contain undesirable ingredients. In fact, 53 percent said removing undesirable ingredients is more important than the inclusion of beneficial ones.

Elliott also explained that with consumers more connected today, the convenience channel has the opportunity to expand the categories it sells and the way it services customers with mobile ordering, delivery, and drive-thru windows.

"All of that is going to become more prevalent in the next five to 10 years," he said, adding c-store retailers should keep an eye on what competitors like Amazon, Walmart and Starbucks are doing. "It is important to think about how we use technology to drive more customers to our stores."

Overall, when it comes to health and wellness, the definition differs by category and retailers need to understand how the consumer uses each category, according to the Nielsen executive. In beverages, it means low sugar while, in popcorn, it means non-GMO.

The Better-for-You Beverage Tsunami

The health and wellness trend and shift toward better-for-you products comes as consumers "are getting bigger and, quite frankly, fatter," Kent Cunningham, vice president, Marketing & Innovation for Glanbia Performance Nutrition, told attendees. 

As he sees it, three forces are converging to form a beverage tsunami: a public health crisis, fiscal policy, and consumer trends.

On the fiscal policy front, more municipalities are taking a closer look at implementing sugary drink taxes, similar to Philadelphia and Cook County, Ill.

As for public health, according to Cunningham, the culprit is sugar — which has become "demon du jour." With a lot of sugar consumption coming from soda, there is a connection being made between soda and bad health, he noted. This is leading to the third force as consumer trends shift away from sugar without giving up flavor. 

Globally, functional foods and beverages are forecasted to have a compound annual growth rate of 8 percent from 2017-2022. With that is a move toward gluten-free, organic and natural products, he explained.

The 2017 Convenience Foodservice & Beverage Exchange took place at the Donald E. Stephens Convention Center in Rosemont Sept. 12-13.