With convenience at their core, c-stores take a bite out of the foodservice market
Milk. Bread. Tobacco. These are the traditional staples that drew customers to convenience stores. Tradition is changing. More and more it’s foodservice selections—everything from authentic shawarma to vegan pizza to gourmet burgers—that are attracting customers and keeping them coming back.
C-stores are offering more diverse food options and emphasizing high quality, hoping to reduce the stigma of “gas station food,” says Julia Taylor, c-store segment leader with Cargill Foodservice in Gibsonia, PA. “They are focusing on having desirable and distinct products that build their brand reputation to create loyal customers and build their food business by becoming a foodservice destination.”
The efforts are paying off. U.S. convenience stores experienced a 16th straight year of record in-store sales in 2018, according to the National Association of Convenience Stores’ (NACS) most recent state of the industry report. There, foodservice sales accounted for 22.6% of in-store sales, while in Canada it’s estimated to be about 13%. This category continues to be a key focus for the convenience store channel, according to NACS, which defines foodservice as a broad category that primarily encompasses prepared food, as well as commissary foods and hot, cold and frozen dispensed beverages.
Evolving to accommodate foodservice
The growth in foodservice also has led to an increase in store size. Overall, the average convenience store is 3,230 sq. ft. However, as newer stores feature touchscreen food-ordering kiosks, add space for in-store seating and waiting areas and incorporate an open-kitchen design, the size of new stores has increased to 4,991 sq. ft. in rural locations, and 4,603 sq. ft. in urban locations.
Investing in food is time and money well spent, says Taylor. “Operations looking to offer broad mix solutions will be rewarded by their customers. Shoppers are seeking a place that gives them a break in the action of a hectic daily routine—a place that bails them out and always has their back.”
Catering to consumers’ tastes
Indeed, selection and quality is such that many customers are turning to c-stores instead of fast food outlets. “Convenience retailers with compelling foodservice programs are a growing threat to quick service restaurants,” says Frank Beard, convenience store trends analyst at GasBuddy, an app company based in Boston. “Data show that people choose convenience stores over fast food locations because of the convenience of an all-in-one stop for fuel and food, followed by a preference for the taste of the food at c-stores.”
Diversity is a cornerstone. Today’s foodservice options go well beyond pre-wrapped sandwiches, muffins and soup. “Convenience brands are well-positioned to cater to consumers’ tastes because they aren’t pigeon-holed into one type of cuisine,” Beard notes, adding that younger consumers prefer more variety, particularly with newer menu items like burritos and pizzas.
7-Eleven Canada, for example, has added Beyond Meat Pizza to its existing Hot to Go menu. Made with 100% plant-based Italian sausage crumbles, the new slice plays a dual role for many Canadians: it satisfies their craving for pizza and their desire to eat more healthily. "By expanding the fresh food assortment offered to our customers, we hope to provide options for every preference," says Doug Rosencrans, VP and general manager of 7-Eleven Canada in Vancouver. "Beyond Meat has created excitement around plant-based protein alternatives and with the introduction of the Beyond Sausage and Roasted Veggie Pizza, we are providing our customers with what they want."
Quality items that appeal to a broad customer base at the right price point are important for convenience stores, stresses Taylor. “Creating and offering signature, desirable items elevates c-stores from a convenience stop to a portable dining destination. Give customers options that go beyond the current selection and utilize promotions to encourage consumers to change up their habits.”
Tyson Foods, Inc., for instance, has launched Pact, a new line of functional refrigerated protein snacks created to help people harness the natural benefits of food. Pact Snack Bites are literally packed with nutrition. Made with real fruits and nuts, they have 10-plus wholesome ingredients per serving and contain ingredients like kombucha, matcha and turmeric. “Consumers are looking for delicious, convenient foods to deliver essential protein and other functional benefits,” says Noelle O’Mara, group president of prepared foods for Tyson Foods in Springdale, Ark.
Such offerings are also space savers. Operating in the contemporary foodservice environment does not require a large investment in equipment or significant and additional space to serve up delicious meals. Combi ovens, for instance, are growing in popularity. These ovens, which enable pressureless steam, convected heat, and a combination of both in a single piece of equipment, are more expensive upfront, but save owners from buying and servicing two ovens, while also taking up much less space.
Toronto-based PizzaForno is making it even easier for stores squeezed for interior space to feed hungry customers. There are five 58-sq.-ft. PizzaForno kiosks located outside of convenience stores in Canada, providing 24-7 access to artisan pizzas cooked in an automated oven in just three minutes.
“The PizzaForno kiosks located in front of c-stores have been very effective in not only generating pizza sales, but also increasing in-store sales on items such as beverages, snacks and cigarettes,” says president and co–founder Les Tomlin, adding a turnkey PizzaForno license, including all equipment and set-up, is $150,000. “Operators are required to keep the machine stocked, which can be a daily or every other day task. PizzaForno handles everything else—all the maintenance and service, credit and debit reconciliation, as well as all marketing programs.”
The concept speaks to the critical components for foodservice areas, which include bright, visible signage and food that is easily accessible. Research also indicates speed is a relative issue: customers are willing to wait five minutes for their meal.
What is essential is portability, says Taylor, highlighting the company’s Supreme Egg Bites in the U.S. “C-stores should explore ways to facilitate on-the-go eating through bite-sized offerings and packaging that supports dashboard dining.”
In Canada, for instance, Cheesewich is tapping into this trend with Bacon N Eggs to go, as well as its award-winning Cheesewich egg and salami sandwich without the bread.
Cargill also works with c-store owners to enhance their foodservice offerings. “We hold innovation sessions to build relationships and find trends in the market,” says Taylor. “And, we can work with our research and development team to create proprietary SKUs for c-stores that meet the unique needs of the segment.”
That segment is changing as more and more customers turn to c-stores for lunches, snacks and on-the-go meals. Oh yes, they might pick up a carton of milk and some bread while they’re there.
Originally published in the November/December issue of Convenience Store News Canada.