More than half of the customers who walk through the doors of convenience stores are looking to buy healthy products—at least occasionally.
But one-third of them don’t think our channel is doing a good job of offering them.
“This screams opportunity,” says Donna Hood Crecca, senior director of Chicago-based Technomic Inc., which published these findings in its winter 2013 Convenience Store MarketBrief.
Indeed, Technomic’s survey showed that of non-c-store customers, 30% said healthy offerings would encourage them to shop the convenience channel more frequently.
“Everyone is aware of healthy foods these days, from truck drivers to urban executives, so they are an opportunity for all convenience stores,” says Melissa Abbott, senior director of culinary insights for The Hartman Group, Bellevue, Wash. “We’re starting to see healthy foods everywhere, even in convenience stores, and that’s where it could especially be bringing in new customers.”
However, there are barriers facing c-stores, such as additional inventory management and/or the labor required to maintain a selection of fresh produce, Crecca points out. Also, “consumers often perceive c-stores as having higher prices,” she says.
Supply chain and management’s mindset on shelf-stable products poses additional obstacles, says Jay Jacobowitz, owner of consultancy Retail Insights, Brattleboro, Vt. “This affects everything from ordering, shipping, receiving and storing to merchandising, and management will have to adapt, at some expense,” he says. “The purchasing mindset will also need to change and may require new people with perishables experience.”
These are not insurmountable problems. Fundamentally, though, c-stores need to assess the strategic role of healthy and how it plays into a broader brand message. Crecca suggests gradually integrating healthier products.
“You need to start slowly because if you are to completely revamp everything, you’ll lose customers,” she says.
Make It Fresh
Start with the products that communicate fresh and that have proven appeal, says Crecca, such as vegetables with hummus or yogurts. “Let customers see you chopping the vegetables in a spotless environment; let the packaging look fresh; and start to position yourself in line with customers’ desire to eat healthy food,” she says.
Sharon Kuncl, vice president of merchandising foodservice for Naperville, Ill.-based Eby-Brown, believes freshness is key to a successful healthy-food program.
“As c-stores start pushing fresh, healthy comes along with it, as you have foods that are healthier than the normal foodservice selections in a c-store,” she says. “If customers see a fresh case with yogurts and parfaits and fruit selections, that fresh perception will lend itself to a healthy thought process. It goes hand in hand.”
Freshness is on full display in Wawa stores, which have a refrigerated grab-and-go case with cut fruits, salads and snacks such as vegetable dips and yogurt parfaits.
Packaging is deliberately kept simple and is often clear on these products “to allow the freshness of the product to show through and so we can show the products as much as possible,” says Amanda Matyok, category manager of PM foodservice for Wawa, Pa.-based Wawa. “We want a customer who is looking for a snack or meal with fewer calories to come in and be attracted to our grab-and-go case, which is a destination for many of those choices.”
The Universal Calorie
Last month, Wawa began piloting an under-500-calorie menu in 30 of its stores. If successful, the 630-store operator hopes to roll it out chainwide. The items are all available through the retailer’s touchscreen ordering program, and customers opting for these items are given about 90 choices, which include hoagies, soups, sides and lattes.
Wawa chose to highlight calories in this program because, despite the clutter of attributes customers are hearing these days (natural, locally sourced, gluten-free, sustainable and so on), “calories speak to everybody,” says Matyok.
“We’re trying to make it easier for the customer to find the products that appeal to them in our store,” she says. “We’ve always had a wide variety of choice, including lower-calorie options, but we’ve now highlighted them with our under- 500-calorie menu.”
Tedeschi Food Shops, Rockland, Mass., also carries fresh, healthy foods, including 25 meals of 400 calories or fewer. The menu features English muffin breakfast sandwiches, chicken tikka masala, sushi rolls and celery sticks with dips.
“It has been strongly resonating with all customers, especially women and young adults,” says category specialist Sue Calnan. “The millennials are so aware of what they put in their body.”
Tedeschi also has a strong focus on shelf-stable healthy foods, and four years ago it rolled out a healthy endcap with “healthy” signage; the endcap sits across from the cash register and is refreshed at least twice a year, if not quarterly.
“When it started, we couldn’t find healthy items to put on the endcap,” says Calnan, “but now there’s an overabundance of items we can choose from.” The biggest growth has been in bars, she says, and the most popular are bars with functional ingredients: brands Kind and Kashi, and those with Greek yogurt.
“Signage and endcap placement are key to making our customers aware that [our company] offers healthy alternative snacks,” she says.
The program has grown, and now 155 of the chain’s 189 stores feature healthy endcaps.
“Some demographics just won’t support it,” says Calnan. “When you get down to the more blue-collar areas, it’s just not there; they’re not going to support us putting the product into the stores. The big market is urban, but also suburban, where consumers are middle-income and affluent. But I’m guessing even Bubba will pick up healthy food occasionally, in the future.”
There’s also a “better for you” section in one Tedeschi store, in New Waltham, Mass. “It’s doing pretty good and draws attention as soon as you walk in,” says Calnan. It’s a 6-foot section with 30 linear feet of space.
“Tedeschi Food Shops will be placing this section or a modified version in newly remodeled locations where the demographics prove favorable for this type of offering,” Calnan says. “It’s time to expand the offering.”
Let’s Talk
Carrying healthy doesn’t mean a store is selling healthy. Communicating a story to the customer is critical. Making customers aware that a chain has healthy foods is another part of the problem.
“Our goal is to better communicate our healthy options,” says Wawa’s Matyok. “Customers are so busy and our job is to make their lives easier.”
Wawa highlights its under-500-calorie menu on its digital signage, and once it has analyzed data on this menu, Wawa will roll out an advertising plan.
Tedeschi Food Shops promotes healthy offerings on its website and through its TGIF program. Through the latter, it offers a free item—not limited to healthy items—every Friday via a coupon on the company’s Facebook page. The healthy offerings are also incorporated into monthly in-store promotions.
“Real estate is where the marketing investment is—in high-visibility, high-access locations,” says Retail Insights’ Jacobowitz. “So there should be more signage outside the store: simple, iconic imagery denoting ‘fresh,’ to get shoppers’ attention and alert them to the new positioning.”
In addition to the messaging, pay attention to price.
“The customer is going to pay a little more for healthy foods,” says Calnan of Tedeschi. “Originally, there was a higher cost for them. But as more manufacturers put them out, the costs are coming more in line with other things. Customers are willing to pay a little more for these; it’s worth it to them.”
The costs and profit margins to the c-stores are comparable—in the 40% range, she says. “We keep them in line with all the snacks we have.”
Be Fresh With Me
The key to moving into more healthy food offerings is increasing not only the freshness of what a convenience store offers, but also consumers’ perceptions of freshness.
Technomic’s winter Convenience Store 2013 MarketBrief demonstrates that consumers feel c-stores lag behind other foodservice locations in this regard. While 85% of respondents say that offerings at fast-casual and family-style restaurants are somewhat or extremely fresh, only 52% say the same is true for c-stores—and 21% say foodservice offerings in convenience stores are less than fresh.
Despite this, 48% of consumers polled say they are now looking for fresh food options when shopping in a c-store.
Last April, Bloomington, Minn.-based Holiday Stationstores completely revamped foodservice items in its Twin Cities stores to make them healthier. Not wanting to make this change half-heartedly, the chain partnered with contract foodservice management company Taher Inc., which operates foodservice programs in locations as diverse as schools, businesses and health-care settings.
Holiday’s hope with the new program was to promote healthy, fresh and quality food.
“We put real chefs in the stores,” says Shawn Taher, vice president of operations for Taher Inc. These chefs produce green salads, wet salads (such as pasta and rice salads) and snack cups and promote them as Chef Inspired Salads “to convey the message of freshness,” Taher says.
“We focus on freshness first,” he says. “We don’t use preservatives or additives; we don’t use precooked products.”
Vital to getting this program off the ground was getting customers to try the foods. “Sampling is crux,” Taher says. “It’s really important in the food business, especially when you’re introducing something new that may draw an added customer. And it makes for an enhanced experience for the people who are already there.”
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