October 23, 2012
by Donna Berry
Convenience store food offerings have come a long way since Clark Griswold, played by actor Chevy Chase, in desperation, said, “I’m so hungry I could eat a sandwich from a gas station,” nearly 30 years ago in the movie “National Lampoon’s Vacation.” Today, Mr. Griswold may be surprised to learn convenience stores have become not a choice of last resort but an attractive destination for sandwiches, as well as many types of foods — often with a premium positioning.
The trend was apparent at The Association for Convenience & Fuel Retailing’s NACS Show, an exposition targeted to the 148,126 convenience stores in the United States that serve nearly 160 million customers per day, and was held Oct. 7-10 in Las Vegas.
“C-stores have gained confidence in their ability to deliver quality food in addition to fulfilling the value and convenience propositions that have traditionally defined this channel,” said John Oros, senior manager of business development for c-stores with The Hillshire Brands Co., Downers Grove, Ill. “The industry has been successful at changing consumer perceptions and positioning c-stores as a viable alternative to other meal time venues instead of being thought of as a food destination of last resort.
“Food service has been a growing category in c-stores for some time and currently accounts for a higher percentage of gross profit margins than fuel or tobacco. Operators understand that selling premium products can generate higher-profit margins and enable them to earn more revenue.”
Kevin Miller, senior brand manager for the c-store division of Tyson Foods, Inc., Springdale, Ark., agreed.
“Food service has been playing a pivotal role for c-stores for several years, and it’s not going to change,” he said. “We talk often about how food service isn’t something that stores need just for sales, profit and growth, it’s something they’ll need for survival.
“In all areas of food service, consumers are gravitating toward, and even demanding better quality. Offering cheap food at a cheap price isn’t something that necessarily resonates with a lot of people today. Consumers often get skeptical if food is priced too low. They question quality, taste and nutrition.”
What is the attraction?
The name says it all: Convenience stores are all about convenience. They are embraced by time-strapped consumers who wish to multi-task by filling the gas tank and picking up a gallon of milk. Convenience stores also have become a destination for on-the-go refreshments and meals, with the average store registering more than $20,000 a month in food service sales.
“The leading retailers have greater insight to consumer behavior through both the use of technology and category/consumer research,” said Jim Christensen, director of sales to convenience stores at Bellisio Foods, Minneapolis. “This leads to making more strategic and insightful decisions on food options and overall pricing strategies.
“Our c-store food service approach is to build on retailers’ desire to reinvent how food is perceived and presented by offering innovative food combinations and deliveries. For example, our new Michelinas single-serve Deep Dish Pizza items offer an artisan, high-quality, non-traditional pizza shape. Our Grill’ems items are an innovative take on traditional roller grill products.”
The Grill’ems line features flavors such as macaroni and cheese, apple cinnamon granola and fried sausage and gravy.
“The past few years were challenging for quick-serve restaurants as many of their customers switched to c-stores for lower-cost breakfast and lunch solutions,” said Catherine Porter, senior manager of customer marketing for McCain USA, Lisle, Ill. “These consumers had higher expectations for food quality and variety, and c-stores definitely rose to the occasion. Many installed convection ovens, high-speed ovens and fryers, while some stores renovated their food service space. With these new capabilities, c-stores will continue to upgrade product quality and introduce new flavors, formats and varieties in order to offer consumers that restaurant-quality experience but in a value-oriented, convenient, on-the-go format.”
C.P.G. brands step forward
According to the International Dairy-Deli-Bakery’s (IDDBA) “What’s in Store 2013” report, convenience store foods prepared on-site experienced 13% growth in average sales per store in 2011. For consumers on the go, convenience stores are in a position to expand their offerings in the breakfast and snack categories, which have both experienced more than 20% growth in the past year.
McCain USA recognizes this opportunity and now offers its Early Risers hand-held sandwich to the convenience store channel.
“This is a popular item in our non-commercial business and a natural fit for c-stores,” Ms. Porter said. “Early Risers feature savory potato, egg and cheese in a crispy corn flake coating and are available in bacon or sausage varieties. They ship with packaging in the case and are designed to be merchandised in grab-and-go warmers. At 250 calories or less, these handheld breakfast snacks are a tasty and satisfying accompaniment to a morning coffee or even as an early afternoon snack.”
Ms. Porter added that there is growing interest in hot afternoon and evening snacking solutions, and as a result, traditional restaurant appetizer items are making their way into convenience stores.
“The awareness and popularity among consumers with these items from restaurants, plus their portable, hand-held quality make them a natural fit for on-the-go snacking,” she said.
A number of popular consumer brands are expanding into the convenience store channel with products designed for the store’s limited facilities and time-crunched clientele.
“Our new line of Ball Park handheld sandwiches builds on the success and equity of our Ball Park brand of hot dogs and hamburgers, which are popular with consumers in both food service and retail environments,” Mr. Oros said. “The new handhelds include trendy combinations such as bacon double cheeseburger and spicy chicken, as well as home-style favorites on a sandwich, such as barbeque pork and pot roast.
“Our new Hillshire Farm smoked sausage flavors include beef hot links, spicy Italian style smoked sausage and spicy fajita flavored smoked sausage and feature high-quality ingredients, such as real mozzarella and Monterey jack cheeses and authentic spices, to deliver on-trend, ethnic flavors in formats that cater to the roller grill.”
At the NACS Show, Tyson Foods introduced a new line of heat-and-eat wings and pasta entrees called Tyson Deli Market, which are a fit for the convenience store channel.
“All of the items are formulated to appeal visually and deliver a great eating experience for the consumer,” Mr. Miller said. “Tyson Deli Market products are easily heated on the spot in the c-store or later at home or even at work. The packaging is simple, not over-engineered, with product that is visible. The product line uniquely meets the c-store’s need for ease, as product is shipped frozen. Products are intended to be merchandised in the refrigerator and have a 10-day shelf life from the time of thaw.”
Airline food for the masses
LSG Sky Chefs, Irving, Texas, the world’s largest provider of in-flight services, including catering for more than 300 airlines worldwide with operations in some 200 customer service centers in 52 countries, is now offering customized, freshly prepared sandwiches for the convenience store channel.
“We found that a lot of c-store operators wanted to migrate from traditional extended shelf life sandwiches to fresher, tastier alternatives that are delivered to stores more frequently and have shelf lives of three to five days from production versus the 30-day modified atmosphere packaged product they were offering,” said Tony Gonzales, managing director-retail, LSG Sky Chefs Supply Chain Solutions Inc. “Our research also shows that the consumer will pay more for tastier, healthier bread, cheeses and meats.”
LSG Sky Chefs’ network of flight kitchens and dedicated retail production facilities across the country allows for a unique manufacturing and distribution system.
“We can offer a production footprint across many regions, allowing our customers to have consistent product from Seattle to Miami,” Mr. Gonzales said. “Products carrying our new business-to-business brand — Fine Choice — have been customized to meet our customer’s needs. Our retail team has two full-time dedicated chefs to track product trends and build customized fresh-food programs. For example, for the Philadelphia market, our chefs developed a cheesesteak sandwich. For South Florida customers we offer a Cuban sandwich. We have hundreds of ingredient combinations to suit whatever customers and consumers want.”
Darin Lucas, vice-president of Burrito Kitchens Enterprises, Longmont, Colo., said consistent, fresh, natural and premium are powerful trends for the convenience store channel.
“Consumer demand for more healthful options has helped fuel our success,” Mr. Lucas said. “We started out some 13 years ago manufacturing our all-natural line of burritos for local health-conscious enthusiasts, such as hikers and back packers. In the past year, our sales have nearly doubled, while competitors with inferior products have consolidated or shuttered operations altogether.”
Burrito Kitchens Enterprises was introducing its Banini at the NACS Show. The new product is a ready-to-eat breakfast sandwich that crosses over the lunch time day-part. The product features ingredients such as eggs and cheese inside a Tuscan bread shell. The product is available in four varieties: bacon breakfast, Mediterranean chicken, Southwest veggie and spicy breakfast sausage and egg.
Quality food service at convenience stores is a rapidly expanding business and is an opportunity for all types of food manufacturers.
Mr. Oros concluded by saying, “The arrow is definitely pointing up for c-store food service. Traffic and check average have been up consistently quarter over quarter compared to last year. Operators are increasingly more committed to growing food service by investing in higher-quality products, more sophisticated equipment and full-time staff.”