How to Plan Foodservice Growth Around Shifting Consumers
It’s no secret that convenience-store foodservice is a dynamic segment with many moving parts. Retailers are facing hurdles from menu-labeling laws to looming competition and labor challenges. But at CSP/Winsight’s second annual CStore Foodservice Forum, held May 3-5 in Chicago, one theme that clearly stood out was people—the customers who are increasingly coming into c-stores for food and drink and the employees who are central to creating a foodservice culture.
More than 30 retailer attendees met to brainstorm solutions for category growth and digest trends for food, flavor and operational strategies. However, the conversations kept veering toward engagement of people. How can c-stores capture and win the loyalty of a foodservice customer who keeps shifting course? How can operators attract and retain the kind of staff that truly gets the job done?
The good news is that c-store foodservice traffic continues to be robust, especially among a rapidly growing and increasingly diverse consumer base, according to data from Chicago-based Technomic (a sister company of CSP). Population evolutions are driving up visits among ethnic customer groups. A majority of Hispanics—71%—visit a c-store at least once a week, with rates among African-American (70%) and Asian (45%) consumers also high, particularly for breakfast, snacks and lunch.
Jana Mann, senior director of MenuTrends for Chicago-based Datassential, underscored the importance of ethnic and regional cuisines. At the same time, today’s younger, more diverse foodservice consumer is perhaps interacting differently with global fare than in years past.
“Ethnic is no longer ethnic,” said Mann. “Consumers aren’t thinking about cuisines—they want to experience foods. Instead of ‘Let’s go out for Mexican,’ they’ll say, ‘Let’s go out for tacos.’ Instead of ‘Let’s go out for Japanese,’ they’ll say, ‘Let’s go out for ramen.’ Today, ethnic is American.”
Mann specifically pointed to Gen Z consumers and how, more than any other generational group, they gravitate toward Korean fare for on-trend barbecue, Vietnamese for pho soup and Indian foods such as curries.
Presenters also spoke about meeting consumer expectations for better-for-you food, and what health means on the menu today. According to Technomic, c-store foodservice consumers are now calling fresh (84%), clean (80%) and real (71%) attributes the most important health claims on convenience menus today. Satya Jonnalagada, director of global nutrition science for Kerry Convenience, Lake Zurich, Ill., led an in-depth session on health preferences and behaviors, revealing that 52% of today’s consumers say they use nutritional information to guide their decisions when dining out.
In particular, protein content information is critical. About two-thirds (64%) of foodservice consumers now say that they are trying to get more protein when they dine out.
“Everyone is looking for protein; it’s not just for elite athletes anymore,” said Jonnalagada. However, the type of protein is important. “Today’s consumers are not just looking for traditional forms of protein from food—they also want more plant-based proteins from beverages. But it has to be the right quality of protein. That’s a concern.”
Complex flavor preferences, contemporary health claims and a continuing desire for freshness, uniqueness and convenience are converging priorities for consumers. How can c-store operators create a foodservice program and operational approach that satisfies all these needs?
One option: Craft a distinct foodservice culture. Jerry Weiner, a consultant and former foodservice director of York, Pa.-based Rutter’s Farm Stores, spelled out its importance.
“Having a foodservice culture is the most critical element of getting into food; it’s very difficult to be successful without it,” he said. “Culture plus customer service is how you turn your store into a foodservice destination. Creating this culture starts at the top.”
Everyone in the store is key to driving a foodservice positioning forward, whether they’re making sandwiches or running the front counter. He advised retailers to cross-train all employees and show them how to take care of the customer.
“Eliminate the wall between food and retail,” Weiner said. “Every team member should be working to make the sale.”
The store is a retailer’s brand, and the food represents the company, he said.
“That’s the bar,” he said. “Set your bar, train to it, and hold your team accountable for reaching it.” Reaching that bar depends more on training than hiring experienced staff.
“Spend your time and money on training and management,” Weiner said. “Good, well-trained managers will create a successful operation and well-trained employees will deliver the experience that will get customers to return frequently.” A targeted, well-communicated training program could be the first step toward developing a foodservice culture that keeps customers coming back.
He cited quick-service-restaurant chain Chick-fil-A for its practice of “the little things” and consistent service, which encourage customers to return.
“It doesn’t matter which Chick-fil-A I go to—at the end of each and every transaction with their employee behind the counter, I’ve always received a ‘Thank you,’ ” he said. “That doesn’t happen because of a box that employee checked on a job application. That’s training.”
Operational insights from menu engineering to digital tools were also topics of discussion, although menu labeling was arguably the most popular.
Rick Sales, president of Abierto Networks, York, Maine, fleshed out the upcoming—albeit delayed—U.S. Food and Drug Administration (FDA) regulations on menu labeling and its potential effect on c-store foodservice programs.
“The delay gives us the opportunity to continue to educate the government about what works and what won’t work for our industry,” said Sales.
Attendees weighed the implications of the regulations. While most agreed that menu labeling was a consumer-guided initiative that would ultimately be good for the customer, others were less optimistic about implementation at the store level.
“I think it’s disastrous,” said Hamid Razaeepour of United Pacific, Los Angeles. “The FDA isn’t thinking about our segment and how difficult it will be for us to comply with their requirements, which are unclear. If larger chains would have shared best practices earlier on, we’d all be less confused.”
Other attendees echoed the need for FDA-led best practices or templates for compliance.
“I wish the FDA would have given us examples or a path to follow,” said Linda Hulings of NOCO Express, Tonawanda, N.Y. “But I honestly think that the customer just wants to know what they’re eating.
“I’m embracing it,” she continued. “My take is: Let’s figure this thing out. We can help our customer.”
While this year’s conference highlighted how operators should work to remain ahead of fast-moving consumer preferences and legislative challenges, attendees were no doubt buoyed by the overarching message emphasizing opportunity.
“I can’t think of an industry that’s better positioned for growth around food as the convenience-store industry,” said Weiner.