CSNC EXCLUSIVE: Make a splash with more than milk
While convenience stores used to be a late-night destination to grab a litre of milk, they’re now a hive of innovation as dairy suppliers launch award-winning products—from flavoured milks to plant-based products, drinkable yogurt and grab-and-go healthier-for-you snack items. Canadians are constantly looking for innovative, fresh, healthy and delicious products that are easy to find and consume. As the convenience sector evolves, we asked major vendors about what’s flying off the shelves, and what retailers can expect moving forward.
Meeting consumers’ needs
To meet Canadian shoppers’ needs, convenience stores have become a destination for single-serve and take-home packages in different formats, with a longer shelf life that consumers can buy for a competitive price, says Rose Donatelli, director of fluid sales for Lactalis Canada.
“Our job is to make sure we're innovating based on consumer needs and preferences, and industry-wide, we're noticing protein, low-sugar, and options that benefit overall wellbeing are things consumers are looking for,” says Donatelli.
“That's what we've been doing with the c-stores we work with—optimizing the assortment to make sure products are available for consumers when they're visiting. For us, that means high-protein milk items and sports nutrition; and we have plant-based items coming to market in early May.”
With shifting dietary needs, consumer behaviours have evolved, reports Wayne Barker, director of impulse sales for Danone Canada.
“While always looking for more convenience in this space, consumers are equally looking for an offering that reflects their everyday dietary preferences, balancing that with the opportunity to try new products on the go before making purchases in traditional grocery channels,” says Barker.
Thinking beyond the cooler
“C-stores are also growing their foodservice, QSR and food programs, which has been huge in changing the perception around c-stores as a food destination with customers.”
As a common household staple, retailers often used milk to drive traffic to their stores, adds Jeff Schnekenburger, national director of foodservice sales for Saputo Dairy Products Canada.
“Convenience store operators had a ‘set it and forget it’ way of looking at dairy—it was an after-work or late-night purchase if a household ran out of milk, but today, the convenience channel is focusing more on foodservice and take-home items as well as ‘grab and go’ items, from 4L jugs of milk to single-serve options for both indulgence and healthier options like protein-enriched single-serve,” says Schnekenburger. “Dairy products also play a role outside the cooler door. Important traffic-driving programs like coffee, Slush programs and foodservice items all include dairy products to help drive sales.”
New and evolving products
Stocking cooler shelves with enticing offerings keep customers wanting more, and Schneckenburger notes that new flavoured milk in single serve up to 1L jugs is a hit, with the introduction of new flavours adding excitement to Saputo’s existing line.
“Soft-serve ice cream in Slush drinks is also popular, while flavoured coffee creamers and plant-based products are helping with coffee sales in coffee programs,” he reports.
Cheese—perceived by consumers as a healthy snack—is also gaining popularity in the deli sections of c-stores, and Saputo launched Armstrong Combos to capitalize on this growing convenience trend, adds Schneckenburger.
“This product contains cheese and meat sticks in one pack—a perfect fit for the convenience channel,” he says.
Saputo recently launched a 1.89L protein milk in a carton under its Dairyland (Western Canada) and Neilson (Ontario) brands.
“Protein has been a growing consumer trend in dairy that appeals to various demographic groups,” explains Schneckenburger. “We already have bottled protein milkshakes—Milk 2 Go Sport and Milk 2 Go Sport Pro—that do quite well in convenience stores, so having a larger offering in a traditional milk carton seemed to be a natural fit.”
Donatelli notes that Lactalis stays at the forefront of giving consumers what they want, and that strategy is paying off.
“Our number one SKU over the past three years is Beatrice BFIT; it has 34 grams of protein, and it’s in double-digit growth since we launched. The total sports nutrition category is up 64% and BFIT is growing about 80% of those sales—we couldn't have guessed it was going to do as well as it has,” she reports.
“We're always looking for opportunities to innovate and respond to the market, demonstrated by product innovations with less sodium, less sugar, higher protein, and giving consumers healthy alternatives and quick grab-and-go. We're going to continue to find ways to develop that category.”
Barker notes that Danone is seeing an increase in the popularity of existing and new dairy, plant-based and coffee creamer products destined for c-store and QSR channels.
“Dairy yogurt drinks and plant-based beverages are increasingly becoming a go-to for customers looking for healthier snacking options. These are not new products, but their increasing availability in the channel are unlocking new opportunities,” he explains.
Active families and changing demographics in Canada are driving a lot of change in the channel as consumers seek more nutritious on-the-go snacking options, he adds.
“We’re seeing a very positive response to our So Delicious plant-based single-serve ice cream—it’s a delicious dairy alternative available in several flavours including Salted Caramel and Double Fudge.”
Consumers are continuing to choose food for health reasons and favouring benefit-led options.
“Protein is the third most important dietary need for Canadians, with four in 10 looking for foods that are a good source of protein; yogurt is one of the top foods those ‘increaser’ households have turned to for protein,” says Barker, adding that interest in probiotics and gut health also continues to grow year over year.
Generating buzz with cool activations
Saputo produced a unique campaign in 2023 where consumers were invited to guess a mystery flavour.
“With single serve being a major category in convenience, Saputo wanted to drive excitement in bottled milk,” explains Schnekenburger.
“New flavours drive trial, and we’re always looking for opportunities to generate consumer interest in the category as well as the brand. Mystery flavour Milk 2 Go added excitement with a national contest to guess the flavour with a $10,000 vacation prize, which was won by a consumer in British Columbia.”
The new flavour—Raspberry Cheesecake—was officially unveiled and is now available for purchase as a limited-edition, he adds.
To raise awareness about new products or upcoming launches, dairy manufacturers are leveraging brand partnerships, adds Barker.
“Our most recent partnership with Tim Hortons has been a major development in bringing plant-based products through our Silk brand to Canadians from coast to coast,” he says. “Our focus is to continuously ensure that we are providing nutritious and delicious options to Canadians who are on the go.”
Eyes on the future
Donatelli predicts dairy will head even more towards plant-based offerings, sports nutrition and protein.
“Consumers want to purchase products that are better for them. Giving them an option to make better food choices is important for us as we look to innovation,” she says. “That's where plant-based fits within our strategy: We’re coming to market with six new SKUs in early May—all will be unsweetened, single nut products in the chilled category, with added protein.”
Foodservice items will be a large focus moving forward in the convenience channel, notes Schnekenburger.
“As convenience stores focus more on traditional quick-serve restaurant items like pizza and sandwiches, dairy manufacturers will need to supply high-quality cheese products for these programs while still focusing on the important single-serve and take-home components of the convenience channel,” he says, noting that the lines between traditional grocery stores, drugstores, foodservice, and convenience continue to blur.
“It’s an exciting time to be a part of the convenience channel community—a collaborative group of professionals working together across the country, from operators to vendors and distributors.
New innovations are always going to be paramount, but what inspires me is that the convenience channel has become a destination shopping experience.”
