CHICAGO — Never say never, they say, but foodservice and dispensed beverages are two product categories that might never be the same post-COVID-19.
Looking at 2022 and beyond, these categories have undergone foundational shifts that see no sign of reversing, be that for reasons of efficiency, customer satisfaction or both, talks with finalists for CSP’s 2022 Category Manager of the Year Awards reveal.
“(COVID) forced me to think outside of the box and become more flexible and creative,” says Billy Colemire, director of marketing for Boise, Idaho-based Stinker Stores. “It encouraged me to search out and create meaningful relationships with potential new vendors while trying to grow the partnerships with all current vendors.
“It humbled me greatly and taught me that having multiple contingency plans is the new rule and not the traditional exception.”
The pandemic helped Sean Miller, foodservice category sales manager for Tulsa, Okla.-based QuikTrip, realize he is never in the safe zone with supply.
“You have to surround yourself with vendors that have contingency plans and/or support yourself with more than one vendor on a product you carry,” he says. “We like to try to keep ourselves set up with a contingency plan in case one of the vendors cannot supply us.”
Ben Lucky took the adage of being prepared one step further, saying COVID’s most challenging aspect, supply-chain issues, forced him to be as creative as possible right in the kitchen.
“When everybody’s up against the wall trying to do something with the same products, you have to be creative with your ingredients, and perhaps that means if you can’t get a particular ingredient—we couldn’t get sausage for a while, steak, even hot dogs and certain breads—you have to be willing to maneuver and pivot,” says Lucky, senior category manager, foodservice, for Wills Group-owned Dash In stores, La Plata, Md. “Then, since everybody’s using the same smaller pool of foods to choose from, you have to be creative in adding seasonings, spices, sauces and so forth.”
Lucky adds that he’s been able to offer alternative products without stretching too far outside the norm. “We try to stay within certain guardrails, so we don’t scare people off. But at the same time, if we can add a Sriracha Old Bay lime to something, that would make us stand apart from the competition. We did Old Bay honey wings this last year, and it took off so well that people actually consider that one of our signatures now.”
But this road to innovation wasn’t without its bumps, says Lucky. “Getting ingredients we have selected and spec’d out on time and every time has created lots of work-arounds, guest frustrations and store frustrations, and that has impacted our credibility and our sales.”
Just as Lucky and others were forced to be more creative, so too were they steered and spurred in new directions in other areas of foodservice.
“The pandemic created greater demand for delivery options and out-of-store options,” says Anjuli Wilkie, senior category manager, foodservice, for Irvine, Texas-based 7-Eleven Inc. “That shift was in our plans, but the pandemic sped it up. Interestingly, that trend has turned into an incremental growth driver. We’re in the convenience business, and people find it really convenient to have food delivered to their door.”
Some items 7-Eleven now delivers include its growing menu of chicken offerings, proprietary versions of boneless and bone-in wings with trending flavors, Wilkie says. And as c-store customers become more attuned to healthy eating in general and demand for non-meat protein in particular, 7-Eleven researched and developed a black bean burger, a limited-time release in March. “We know consumers today want us to be different, to be bold and to bring them convenient, high-quality flavorful hot foods,” she says.
In general, 7-Eleven has experienced an increased demand for fresh hot food, both in-store and for out-of-store consumption, that Wilkie says “has become an enormous growth driver for 7-Eleven. The easier we make it for consumers to pick up something that is high quality, unique and satisfying, the more they are turning to us, and the more they turn to us, the more we get to develop new things they are going to love.”
For example, demand for chicken and pizza is surging, she says, and data from CSP sister research firm Technomic supports what she’s seeing. Operator penetration of chicken entrees at c-stores jumped 65% from fourth-quarter 2020 to fourth-quarter 2021, and pizza jumped 69%.
“Many customers are looking for high-protein meals and seeking alternatives to red meat,” Wilkie says. “As a result, chicken now represents about 60% of our hot food sales. We have grown our boneless wing sales by more than 130% this year.”
To feed that demand, 7-Eleven is developing and launching new flavors, such as hot honey and spicy sweet chili, and working with enhanced seasonings and breading, she says.
Another COVID-19 byproduct is more fresh-food delivery. “All of our new food products are available for delivery, sometimes in larger quantities to feed an entire family instead of just one person during their immediate consumption trip in store,” she says.
And for those who want to enter a c-store for their meal, QuikTrip has been remodeling its kitchens with equipment that increases automation. “We feel that’s going to help employees be more efficient and deliver a fresh product to the consumer,” Miller says. “Food has taken on a big role from the convenience-store aspect of things. Our goal was to display and offer the freshest, most efficient food we can get out there. We also have updated our warmers to have a larger capacity and keep product fresher longer.”
This warmer upgrade ties into QuikTrip’s initiative to give customers access to self-serve hot food cases, a trend that’s a byproduct of the don’t-touch-this pandemic.
“We’re making it easier for customers to grab the food they want when they want it, instead of waiting for an associate to prepare and serve it,” he says. “If customers are looking for a meal to take home for later, we also have our ready-to-bake platform for core items like pizza, chicken and taquitos. Customers can go to the cold case, buy a pack of chicken wings, and take it home to heat up. This has been a tremendously successful complement to our hot grab-and-go foods.”
In dispensed beverages, Nate Louden, senior category manager of coffee for 7-Eleven Inc., says COVID shifted customers’ buying habits. Fewer morning visits and coffee sales due to more working from home has been more than offset by the success of the company’s delivery business, “which we were able to ramp up quickly in response to the pandemic,” he says. “As a result, we have seen younger consumers shifting to delivery for their hot and iced-coffee beverages. That’s why we doubled down on our 7Now delivery platform, expanding our beverage deliveries, promoting them with special offers and loyalty rewards, and introducing new private-label take-home coffee products.” One key area is cold and nitro brews, which Louden says are experiencing rapid growth, particularly with Gen Z and millennials. “They have really changed the coffee category because customers are now looking for options beyond traditional drip coffee to meet their needs,” he says. “They continue to drive new customers into stores. Our research tells us that there is enormous potential with this platform, and I’m excited to push it forward in 2022.”
That potential currently stands at 30.8% of c-stores carrying cold brew on their menus, according to Technomic, with the number of retailers adding cold brew increasing 100% from fourth-quarter 2019 to fourth-quarter 2021.
As customers have been warming to cold brew, they’ve also grown fonder of preparing coffee themselves at coffee stations. “We see continued growth for our unique self-serve model, with many customers growing tired of standing in lines waiting for barista service,” Louden says, adding that customers appreciate being able to “create the beverage they want, the way they love it, with the quality ingredients they expect, but much more conveniently and less expensively.”
To enable that, Louden says he identifies new flavor trends in the coffee category to expand 7-Eleven’s beverage lineup for hot and iced coffees, part of an effort to make the experience more special. “Our customers have told us they want new ways to customize their beverages, which opened a door for us to do more to create a personal experience for each one,” he says. “We are also continuing to watch the growth of iced coffee and new beverage equipment that creates an enjoyable experience in our stores for our guest.”
While assessing its dispensed-beverage program during pandemic slow times, Stinker Stores found it wasn’t getting the best cost of goods in its hot-beverage program because it had three suppliers and three different types of coffee across the three states in which it operates. “By digging in there and consolidating down to one brand, it increased our buying power and gave us the ability to create consistent experiences from one store to the next, from one state to the next,” Colemire says.
In addition, the assessment revealed half of Stinker Stores “were leasing their frozen uncarbonated beverage equipment from the former company whose products we were selling,” says Colemire. The financial analysis showed it was smarter financially to buy the equipment outright “vs. leasing and paying the markup every week and being tied to their logos, etc.”
Another cost-saving measure, at Cuba, Mo.-based Wallis Co., came in reaction to the shift in customer morning routines. Wallis Co. operates the Dirt Cheap and U-Gas c-store brands and franchises the On the Run convenience brand.
Chris Vestal, director of foodservice, says the company started brewing less coffee earlier to prevent waste. “We moved that heavier capacity to mid-morning rather than making it and throwing it away in the morning,” he says. “I know it sounds simple, but we want to match our food production to that time.”
In addition to daypart shifts came altering the test times of a pilot product, Vestal says. Gone, at least for now, are the days of a two-year test pilot, use-case scenario, he says.
“If something isn’t working, we could move more quickly when we’re seeing these trends because they’re really here to stay,” he says. “I think what we learned is nothing is just a blip anymore. When we have these supply-chain issues, they’re not just for a week. They’re for months. So, what are we going to do? We’re not going to have cappuccino now. What are we going to do about it?
“Well, the main thing is we have backup, and backup vendors, and backup to the backup vendor,” he says.
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