While Hispanics have been changing the makeup of the American consumer for some time, more traditional convenience retailers have had a hard time changing their cookie-cutter ways, being slow to respond to emerging and lucrative flavor profiles and tastes.
One of the more apparent sections of the store in need of review is fountain, according to Lee Greville, managing partner, IntelliBev, Orange, Calif. “A bulk of c-stores still treat their fountain business as a me-too offer,” Greville says. “It’s the same carbonated flavor dominant, traditional product lineup we’ve seen over the last couple of decades with little innovation.”
For retailers still skeptical about the importance of Hispanics, Greville says that in many communities, Hispanics have overtaken whites as the largest ethnic group. One-third of all transactions in c-stores are from Hispanic customers, he says.
“So to have an offer in your store that excites the Hispanic [demographic] is critical,” Greville says. “It doesn’t mean you have to have wholesale changes to the offer. Most Hispanics are 2nd and 3rd generation Americans and have grown up around the traditional product line-up. They’re not looking for a tailored offer, just home favorites that can supplement what they ordinarily purchase and that differentiate [your] store from the rest.”
Supplying over 2,000 c-stores under its “Blue Gecko” branded agua fresca products, Intellibev markets such flavors as the very traditional horchata plus new innovative flavors such as cucumber watermelon, strawberry guava, melon Dulce and mango.
Food is another area where delving into a decidedly Hispanic flavor palate can provide differentiation and demographic appeal, says Chris Scott, corporate director of fresh and food service, West Division, Core-Mark International, South San Francisco. Hispanic pastries, flans and baked goods using non-traditional flavors like mango, papaya and guava pose a unique opportunity.
“Instead of having French fries, why not have yucca fries,” Scott says. “It’s about changing their mix so they’re not a me-too, but unique.”
“The problem with a me-too strategy is that the only way to create traffic is through promotion or price discounting, Greville says. “The opportunity is to create traffic growth through differentiation, providing a reason that a customer comes to you.”
Offering a differentiated product has one clear benefit, Greville says. “The difference is selling a differentiated product at full price vs. the same [or a me-too] product at discount price.”
Culinary diversity can also have cross-demographic appeal, Scott says. “Millennials are looking for quality food and unique flavors at a reasonable price,” he says. “They’re still willing to pay for quality, but it has to be authentic.”
Scott points to an overlap in demographics as the age group just below millennials, Gen Z, who are growing in purchasing power at 11-to-18 years old, are 24% Hispanic.
The layering of trends over the burgeoning Hispanic population is also not lost on Greville of IntelliBev. He says that inside the c-store, multiple trends are fueling the demand for a more Hispanic profile at the fountain. The growing popularity of non-carbonated drinks over carbonated and the increasing importance of foodservice at c-stores. The No. 1 purchase with food is a beverage, Greville says.
“That’s the trifecta for us,” Greville says. “It’s the focus on Hispanics, the move from carbonated to non-carbonated drinks and the growth of c-stores into food with cross-purchased beverages.”
This post is sponsored by Core-Mark