NEW YORK — Convenience stores have evolved from the old model of “gas, Cokes and smokes” into a food-forward destination, said Frank Beard, trends analyst at GasBuddy, a Boston-based technology company.
“The industry today is building bigger stores, cleaner stores, becoming that real destination for high-quality products,” Mr. Beard said during a June 24 panel discussion at the Summer Fancy Food Show in New York. “It’s moving very rapidly in a more specialty direction.”
He described the traditional environment of “undifferentiated products, basic snack selection, one-size-fits-all promotions, really no reason to visit other than impulse or necessity.”
Today, convenience store shoppers may find premium coffee and fresh, healthy food offerings, he said. As a result, gas stations are stealing market share from quick-service restaurants. Food service accounts for nearly 23% of in-store sales at convenience stores, up 3% in the past five years, and 56% of consumers said they purchase meals at least monthly at gas stations or convenience stores, according to GasBuddy research. Twenty per cent of 18- to 29-year-olds purchase food at convenience stores three to four times a month, and 25% of 30- to 44-year-olds purchase food at convenience stores five times or more per month.
“We analyzed foot traffic during the recent weekend of Memorial Day and found that convenience stores drove a higher visit uplift during that weekend than Q.S.R.s and coffee shops,” Mr. Beard said.
Seventy-five per cent of consumers said they believe convenience store food service has improved in the past five years, he said.
“Consumers actually prefer convenience stores over drug stores and warehouse stores for packaged goods,” he added. “Fresh and healthy is a big part of this.”
At Kwik Trip, a convenience store chain with 650 locations in Wisconsin, Minnesota and northern Iowa, shoppers buy 400 lbs of bananas on average per store per day, Mr. Beard said.
“By embracing a wider diversity of products, they can cast a wider net,” Mr. Beard said. “Customers have higher expectations and need more than just roller dogs.”
That was the idea behind The Goods Mart, a “better-for-you, socially conscious convenience store” with locations in New York and Los Angeles.
“If 7-Eleven and Whole Foods had a baby, that’s us,” said Rachel Krupa, who founded The Goods Mart in 2018. “We take everyday convenience store finds and upgrade them… and we set core principles and values of what our store is meant to be… Everything in our store has no artificial flavors, no preservatives, no G.M.O.s.”
The stores sell “ugly” organic fruits and vegetables alongside more than 250 specialty food and beverage items.
“Normally healthy and convenience don’t go hand in hand, especially with accessibility,” Ms. Krupa said. “Everything in our store is under $20… We want everyone to come in and find something.”
With 154,000 locations across the country, 93% of Americans live within 10 minutes of a fuel or convenience store, Mr. Beard said.
However, the convenience store industry faces challenges from changing consumer behaviors and new sources of competition, such as restaurant delivery and food trucks, said David Donnan, senior partner with A.T. Kearney, a Chicago-based global management consulting firm.
“We’re seeing more people eating at home even though they’re not necessarily cooking at home, so the innovations around home delivery have made this a new convenience market,” Mr. Donnan said. “Is convenience being defined by where you go, or is convenience defined by what can come to you?”
Another business that is redefining convenience is Farmer’s Fridge, a Chicago-based operator of fresh vending machines. The company prepares salads, sandwiches and snacks for daily delivery to more than 300 units located in office buildings, hospitals, university libraries and other busy spots. The products are packaged in transparent jars or boxes.
“What we find is before customers look at our menu or price point on the user interface or the touch screen where they can order and make their purchase, they’re actually looking in the fridge at the avocados and tomatoes,” said Shayna Harris, chief growth officer of Farmer’s Fridge. “We have a culinary team in-house, and we’ve won a ton of awards for the freshness of our foods … really demonstrating what’s possible in a vending format.”
Product development for Farmer’s Fridge is a combination of familiar favorites, such as a Southwest salad or turkey and white cheddar sandwich, and innovative offerings, Ms. Harris said.
“One of the new items we rolled out is an Asian chopped salad that has watermelon radishes and grilled pineapple, and it’s doing fantastic, and it’s one of our top-sellers,” she said.
A recent launch is macaroni and cheese featuring broccoli and a roasted cauliflower and butternut squash cheddar cheese sauce.
“We’re a very plant-forward menu and try to incorporate vegetables in different ways because we want to appeal to a wide variety of consumers, but also show them that eating your vegetables can actually be delicious,” Ms. Harris said.