It’s not as if convenience stores are morphing into small versions of Whole Foods or Trader Joe’s, but make no mistake: There is a movement afoot among consumers wanting healthier food and beverage products.
And while supermarkets may win most of that consumer spend, c-stores have become increasingly proactive in attracting these consumers.
“We’ve been talking about healthy for as many years as I’ve been here, knowing it’s important,” says Lynn Hochberg, director of product development for Wawa, Pa.-based Wawa Inc., which has more than 645 locations.
One of the problems with “healthy” is that it isn’t a category unto itself. Rather, it is a relatively small group of products at the high end of virtually every food and beverage category. Indeed, the very term “healthy consumption” is so amorphous that it can mean just about anything to anyone—and make it challenging for the c-store retailer to manage.
“A few years ago, we decided that this is something we had to get a handle on,” says Hochberg, who has been with Wawa for 18 years. “There are so many definitions of what is healthy, there is no one thing you can follow. There are guidelines, but you can’t manage ever person’s specific needs.
“We’ve taken the approach of managing the basics of what people continue to go back to time and time again—calories and fat.”
The trend is similar at Whitehouse Station, N.J.-based QuickChek, a family-owned convenience chain with more than 120 locations throughout New Jersey and New York.
“We don’t have a specific ‘healthy segment’ per se,” says Jennifer Vespole, QuickChek’s director of foodservice. “We market via callouts on signage and our computer touch screens. We have yet to make it a major external marketing campaign.”
Although there may be no “healthy” category to monitor, sales data confirms that many product groupings perceived as “good for you” are growing in the convenience channel—some more than others. Bottled water, a $3.2 billion category in c-stores, grew at a healthy 4% rate in dollar sales and 2.75% in unit sales for the 52-week period ending July 13, 2014, according to IRI’s Convenience AllScan data. Sports drinks, a $2.6 billion category, shot up 6.6% and 5.6% in dollar and units, respectively. (Click here to see sales data chart.)
According to Chicago-based IRI, the long-term growth trend of “healthy” categories in c-stores is also, well, healthy. In its report Category & Department Growth Trends: High-Growth Categories, IRI shows that shelf-stable canned juices more than doubled their unit volume in the convenience channel from 2008 to 2012.
Ain’t No Stoppin’ Us Now
“Good for you” isn’t slowing down. Angela Angelilli, executive vice president of Hinsdale, Ill.-based Royal Buying Group, a major purchasing consortium for the convenience trade, sees the trend continuing.
Angelilli points to Kellogg’s snack and beverage lines, including Bear Naked, Special K Protein Bars, gluten-free Special K Popcorn Chips and Breakfast 2 Go Shakes; and General Mills (Greek yogurt, meal bars and the Nature’s Valley line of products) and Oberto meat snacks as examples of proactive manufacturer initiatives.
Even some not-so-good-for-you products are feeling the love spill over. “In the tobacco category, we partnered with Smokey Mountain to provide a premium tobacco-free herbal snuff,” says Angelilli.
And in July, Royal Buying Group partnered with Dr Pepper/Snapple to offer their c-store customers a “Kid’s Zone” initiative that included Mott’s Juice, and Mott’s Healthy applesauce snacks. “We have also partnered with Cowberry Farms Frozen Yogurt to offer a low-fat alternative in the foodservice category,” she says.
In the world of fresh foodservice, things are clearly changing. Take Wawa’s proprietary Built-to-Order kiosk offerings.
“We’ve always had turkey and mustards,” says Wawa’s Hochberg. “You can build a sandwich that’s very healthy. Within the past few years, we’ve added extra sandwich toppings like fresh spinach and fresh cucumbers in addition to what we already had—lettuce, tomatoes and onions.”
If a customer enters Wawa to order a sandwich, he or she will find a separate button on the kiosk offering a 500-calorie-or-less menu. It includes breakfast, sandwich items, soups and beverages so shoppers can easily find the selections. In addition, Wawa recently updated the nutrition page on its website to help patrons calculate the nutritional value of food items.
“All our Wawa-branded food is on our website so that you can create your meal,” says Hochberg. Wawa also has introduced a common symbol on some low-calorie salads and breakfast sandwiches.
“We’re trying to highlight those lower-calorie grab-and-go items, things like salads under 400 calories,” she says. “We want to make it so that they easily stand out for customers who may want them.”
CONTINUED: Counting Calories
Counting Calories
“Good for you” is more than lip service at QuickChek as well.
“We offer signature recipe green salads made to order or premade, all made in-store,” says Vespole. “We’ve had various salads available like this for many years. In fact, 20-plus years ago we offered salad bars in some of our locations.”
The chain features a variety of low-calorie and low-fat items across its line of subs, sandwiches and wraps. “These have been available for a while, but within the last year we have put more focus on communicating this via signage,” Vespole says. “The computer touch screens list the calories for every signature recipe and have the ability to tally the nutritional information for every customized order.”
QuickChek’s breakfasts also includes healthy products, such as egg whites and turkey sausage.
And Wawa has been proactive in adding good-for-you options into its breakfast menu, including, says Hochberg, a popular egg-white omelet sandwich “that has really resonated with our consumers.”
The key is to give customers a choice that aligns with their values. “You can customize your sandwich, making it as healthy or indulgent as you want,” she says. “But maybe you’ll go for something more indulgent later in the day because you had an egg white rather than an egg omelet for breakfast.”
At RaceTrac, the Atlanta-based regional giant with 600 locations throughout the South, the “good for you” theme runs through the entire store. The chain has added nutritional information to its private-label food packaging calling out its “better for you” and low-calorie options.
“We continue to surprise and delight our guests with a variety of expected and unexpected food options, from boiled peanuts and fresh salads to our low-fat frozen yogurt, Swirl World, featuring fresh toppings such as strawberries and raspberries,” says Bob Derian, RaceTrac’s executive chef.
More Than Words
One of the keys to getting a handle on healthy consumption in the convenience channel is to define it.
Wawa, for example, defines “good for you” based on two basic criteria: calories and fat content. But what about items that are high in sodium? Just about everything that’s processed uses sodium benzoate as a preservative.
“We can’t possibly manage everyone’s diet,” Hochberg says. “You can make yourself crazy over what ‘healthy’ means. Now you’ve got gluten-free products in the mix as well as sodium. This makes it very difficult to manage any sort of ‘healthy’ program, and that’s why we stick to the basics—low calories [500 or less] and low fat.”
Alerting health-conscious consumers without turning off the rest of a consumer base is another sticky wicket for retailers to consider.
“One thing we do know is that people do not want their food and beverages to taste bad,” says Hochberg. “So we try to avoid signage that says ‘low fat’ or ‘low’ this or ‘low’ that. The connotation may be that it has a negative effect on the item’s taste profile, and we know people don’t want things that taste bad.”
After all, the concept of what’s healthy and what’s not is in a state of perpetual change.
“Our research indicates that consumers want more fresh and healthy options,” says Blaine Becker, senior director of marketing for The Hartman Group, a Bellevue, Wash.-based consulting firm specializing in retail technology and packaged goods research. “The more convenient the better, which is something that c-stores have nailed. Consumers consider fresh and healthy foods to be higher-quality foods, and they’re willing to pay more for them.”
Just a few years ago, consumers would probably have had a hard time finding a decent selection of fresh fruits and salads in a typical c-store. The challenge for convenience retailers is to change their shoppers’ expectations by offering a variety of products that meet their needs.
“Convenience is heading in the right direction, broadening the line to offer ‘healthy for you’ options to meet all consumers’ needs,” says Derian of RaceTrac.
While core items and products need to remain central to a c-store’s overall business plan, Derian sees 'healthy’ as a major growth category with limitless potential.
“[It] can improve overall profits, and will remain a segment of the c-store,” he says. “But with limited space in convenience, I do not see [healthy] replacing any of the current top categories. Rather, I see stores adding a ‘better for you’ product mix to grow each of the top categories.”
CONTINUED: Drink to Your Health
Drink to Your Health
In terms of beverages, all sorts of juices, sports drinks and, of course, bottled water can be considered healthy consumption items in the cold vault.
As noted earlier, sales of bottled water yielded $3.2 billion in the convenience channel for the 52-week period ending in mid-July. On the other side of the ledger, although a gargantuan category in terms of sheer dollars generated ($8.5 billion), carbonated soft drinks are nonetheless in a state of perpetual decline, having dropped nearly a percentage point (0.83) over the same 52-week period.
The reasons are many, but two stand out: the all-natural perception of bottled water (including flavored and enhanced), and innovation in the bottled water category vs. the relative lack thereof in CSDs.
“Bottled water is in a state of constant innovation,” says Butch Felton, merchandising manager for Plaid Pantry, a 109-store chain based in Beaverton, Ore.
That, and the fact that everyone drinks water. “Everybody,” Felton says. “Mothers have their kids drinking it, and if you’re into sports or exercise, you’re not drinking pop anymore, you’re drinking water or isotonics.”
Among CSDs, neither diet nor sugar-free is faring terribly well, perhaps surprising considering these are segments one might assume appeal to health-conscious consumers’ sensibilities.
“Actually, sugar-free is declining today,” Felton says, blaming its fall on artificial sweeteners. “Consumers are looking for natural sweeteners.”
CSDs are acting in a similar fashion nearly 3,000 miles due East at Wawa. “We have a number of diet selections, and we’re constantly trying new products in the case,” says Hochberg. “It’s hard to break consumers’ habits, though.”
There is one trend, primarily occurring during the lunch day-part, that has had an ongoing positive effect on CSD sales.
“That whole Diet-Coke-and-a-burger thing,” Hochberg says. “People laugh about it. But if you want a burger, and you don’t want to spend all your calories for the day, then that’s the way to do it. You move your calories around based on where you are, what you’re doing and what you feel like having.
“So I don’t laugh at the Diet-Coke-and-a-burger thing.”
CONTINUED: Seven Tips for a Healthier C-Store
Seven Tips for a Healthier C-Store
▶ Offer some foods and beverages with little or no solid fats or added sugars. Solid fats and added sugars make up about 35% of the average American’s calorie intake.
▶ Encourage customers not to skip meals. Missing meals will not result in any long-term weight loss or management. Rather, the right food and the right portions are key.
▶ Weight loss should be a slow, gradual process. A person doesn’t have to reach a healthy body weight to start experiencing improvements in health. Losing 5% to 10% of a person’s current body weight can have immense health benefits.
▶ Offer calorie counts. Several leading chains that use food-ordering kiosks ensure the customer is fully informed, with sufficient choices between healthier and indulgent.
▶ That leads to the importance of variety. From cold vault to prepackaged and fresh, explore low-calorie, low-sodium options, including low-fat and fat-free cheeses, and low-sodium hot dogs (or turkey dogs).
▶ The fountain is a site of supercharged calories. Be sure to offer at least one sugar-free offer here and at the frozen beverage/slush unit.
▶ Whether at the fountain, the coffee bar or food court, be sure to educate. Post signs informing customers of healthier options available. Let customers know you’re in the game of health.
Select ‘Healthy’ Categories
C-store sales, 52 weeks ending July 13, 2014
| Category | Dollar sales ($ millions) | PCYA* | Unit sales (millions) | PCYA* |
| Bottled water | $3,187.4 | 4.0% | 2,039.1 | 2.8% |
| Sports drinks | $2,561.5 | 6.6% | 1,492.8 | 5.6% |
| Shelf-stable bottled juices | $1,404.0 | 0.4% | 888.0 | -0.6% |
| Refrigerated juices/drinks | $581.3 | 5.9% | 249.5 | 4.5% |
| Shelf-stable canned juices | $348.3 | 26.5% | 295.0 | 17.6% |
| Yogurt | $63.7 | 0.9% | 40.2 | -0.1% |
| Aseptic juices | $63.0 | 33.5% | 21.9 | 31.0% |
| Dry fruit snacks | $36.4 | 8.9% | 22.7 | 6.5% |
| Dried fruit | $21.3 | 31.8% | 10.6 | 22.0% |
| Canned/bottled fruit | $16.9 | -1.7% | 9.7 | -1.5% |
| Frozen juices | $11.6 | 6.4% | 4.2 | 4.3% |
| Cottage cheese | $6.2 | -9.5% | 2.6 | -12.1% |
| Vegetables | $5.6 | -1.0% | 3.3 | -4.8% |
* Percent change from a year ago
Source: Information Resources Inc.
CONTINUED: The $64,000 Diet-Soda Question
How ‘Good’ Is Diet Soda for You?
According to the Mayo Clinic, a non-profit medical research group based in Rochester, Minn., artificial sweeteners are synthetic sugar substitutes but may be derived from naturally occurring substances, including herbs or sugar itself. Artificial sweeteners are also many times sweeter than regular sugar.
Sugar substitutes can be an effective tool in curbing weight gain and for type-2 diabetics. In the 1970s, saccharin was found to promote higher incidences of bladder cancer in laboratory rats, and was required to carry warning labels stating that the product may be hazardous to your health. That warning was rescinded in 2000. According to the National Cancer Institute, there is no sound scientific evidence that any of the artificial sweeteners approved by the FDA cause cancer or other serious health problems when used in moderation.
Natural sugar substitutes, of course, are preferable to artificial sweeteners. Among the most common natural sweeteners are honey, molasses, maple syrup and agave nectar. But many so-called “natural sweeteners” undergo processing and refining, and may not be as “natural” as one might think.
Stevia is a natural—albeit processed—sugar substitute, a derivative of leaves found on several different plants in the subtropical Americas. The Japanese have been using stevia for decades in treating type-2 diabetes. But beware: Consuming too much added sugar—even natural sweeteners—can lead to tooth decay, poor nutrition, weight gain and increased triglycerides that can increase the risk of heart disease. Also keep in mind that just because a product is marketed as sugar-free does not necessarily mean it has no calories. Processed foods, often containing sugar substitutes, do not offer the same health benefits as whole foods such as fruit, vegetables and natural grains.
As for artificial sweeteners and weight loss, research indicates there is no quid pro quo between consuming diet soft drinks and weight loss. In fact, the exact opposite may be true. Researchers from the University of Texas Health Science Center monitored 475 adults for 10 years and found that people who drank diet soda had a 70% increase in waist circumference over the course of the 10-year study compared with those who didn’t drink any soda.
And those who drank more than two diet sodas per day saw a 500% waist expansion. A separate study by the same researchers suggested that aspartame may be one of the main culprits. Marketed as NutraSweet and Equal, aspartame, an artificial sweetener, raises blood glucose levels, which ultimately leads to weight gain. When a person’s liver encounters too much glucose, the excess is converted to body fat.
The bottom line is that just as with anything else a person puts into his or her body, moderation is the key.
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