ANKENY, IOWA — Prepared food is a big differentiator for Casey’s General Stores, Inc.

In a Sept. 22 presentation at the Sidoti & Company Virtual Investor Conference, Brian J. Johnson, senior vice president of investor relations and business development at Casey’s, said prepared food and dispensed beverage accounts for approximately 25% to 30% of the convenience store chain’s inside mix, a percentage he said is “considerably higher” than its competitors.

While pizza is Casey’s flagship product, the c-store has been hard at work trying to capture additional sales in the breakfast daypart, which accounts for approximately 25% to 30% of the prepared food and dispensed beverage top line, Mr. Johnson said. The challenges brought on by the coronavirus and its impact on food and travel restrictions may be limiting early morning commutes, but Mr. Johnson said Casey’s has been anxious to test out its improved culinary innovation capabilities, especially in the morning daypart.

“We really have a better culinary process to test new products,” he said. “And we thought that given that, hopefully, people start returning to work — I will say the Delta variant put a little bit of a wrinkle to this plan, but we thought that the breakfast daypart was really the perfect place to start with a significant launch of new products through our culinary innovation processes. And what that really meant was, first of all, our prepared foods — our pizza has always had a high-quality standard. I’ll say our secondary offerings, our breakfast sandwiches, our regular sandwiches, some of our snacks in the prepared foods, just weren’t at the same quality levels our pizza has always been. And so that's where our focus was on this latest launch.”

A new breakfast burrito has emerged as a favorite menu offering, Mr. Johnson said.

“It won't surpass breakfast pizza, but it certainly has proven to be very popular,” he said.

Casey's Signature Handheld and coffeeCasey’s also has added what it’s calling its “signature handheld.” Developed using the c-store’s made-from-scratch dough, the handheld is basically egg and sausage with dough wrapped around it.

“I’d almost call it like a breakfast hot pocket or a breakfast calzone type of thing, but it’s been very well received,” Mr. Johnson said. “We did a similar thing actually outside of the breakfast daypart a few months ago where we revitalized our cheesy breadsticks to actually use our made-from-scratch dough versus using a basically heat-serve frozen product, and that was also well received. So, that’s part of the reasons why we’re also trying to do some innovation around bringing in that made-from-scratch element to other items.”

One of the reasons Casey’s is working so hard to build its prepared foods business is that it’s the biggest synergy the c-store brings to potential acquisitions, Mr. Johnson said.

“The vast majority of acquisition targets we have just do not have the prepared food program in place,” he said.

As an example, he mentioned Casey’s May acquisition of Bucky’s Convenience Stores. Mr. Johnson said Bucky’s generates double the fuel gallons of Casey’s and about 1.5 times the inside business, but they only have about a 7% penetration for prepared foods.

“So, a tremendous opportunity with these smaller operators, even mid-sized operators, to incorporate our prepared food alongside their traditional convenience store offerings,” he said.