Tyson 'Discovering' C-Stores

Hopes to sell more "valued-added" foods in convenience channel


SPRINGDALE, Ark. -- Tyson Foods is looking beyond the supermarket, seeking to sell Buffalo chicken bites at many of the gas stations and 149,000 convenience stores across the United States, according to a BusinessWeek report.

Springdale, Ark.-based Tyson, which had $33.3 billion in sales in its last fiscal year, is building up its line of prepared foods to go head-to-head with Hormel Foods and Hillshire Brands, said the report.

The c-store strategy is designed to capitalize on a shift in shopping habits, the report said. Gas station/c-store sales are growing, while revenue at traditional food stores is falling. Tyson is betting that seasoned, breaded and partially or fully cooked foods will help it boost annual earnings per share by 10% on average. It's aiming to increase sales of its "value-added" foods.

At Tyson's headquarters "Discovery Center," chefs and food technologists working in 19 test kitchens create new dishes that can be easily reheated for sale at c-stores. Tyson's prime targets are moms rushing to pay for a tank of gasoline or a quick cup of coffee, Eric Le Blanc, the company's vice president of marketing for deli and c-store foods, told the publication.

Tyson also has to increase the number of hot entrees and snacks it sells at such outlets.

The company said its Buffalo bites, sold in packs of four or five boneless pieces, are already available at one regional c-store chain. Now Tyson's pitching several hot prepared foods, including ready-to-eat charbroiled burgers for a meal on the go and a plastic-sealed Cajun tortellini dish that can be microwaved later. Tyson said it believes such offerings will resonate with c-store owners.

"Convenience stores want to upgrade their food and image," Greg Luchak, a principal food scientist at the Discovery Center, told the publication. "They want to become a food destination."

Last year, Tyson won the contract to supply all 7-Eleven stores nationwide. Kelly Buckley, Dallas-based 7-Eleven's vice president in charge of fresh food innovation, told the publication, "The channels are blurring."

Click here to view the full BusinessWeek report.