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Retailers balance novelty with practicality in 2019

CHICAGO — Convenience-store foodservice pros plan to clean house in 2019. Over the next year, some category managers are looking to source simpler ingredients and tighten up menus. Other retailers are sweeping up off-premise sales with more intentional delivery programs. And foodservice packaging certainly will not make it through this 2019 cleanse unchanged.

Here’s how a few c-store foodservice operators are pivoting to consumers’ cluttered definitions of health and convenience.

Hip to Health

So far, Miami-based Mendez Fuel has been able to keep up with brisk Instagram health trends. Think bee pollen-topped fruit bowls and mermaid toast. The five-unit chain also features growler and crowler filling stations in stores and a stand-alone cold-pressed juice concept.

In 2019, owner Michael Mendez plans to channel that culinary creativity into the brand’s coffee program. One of the more adventurous cafe drinks he intends to launch is a chaga mushroom latte, made with a fungus that reportedly has been consumed for its medicinal benefits for centuries.

Despite these millennial amenities, the store attracts a multigenerational, multicultural group of consumers, so it can’t stretch too far outside comfort zones. Last year, Mendez brought in nitro coffee machines, and the beverage did not receive the response he anticipated. “Maybe we’ve gone too far trying to be cute and trendy, and maybe we need to tone it down for customers,” he says. After Mendez saw shoppers’ eyes pop looking at all the options on his chalkboard menus, he decided to develop a simplified foodservice offering. At one South Miami Mendez Fuel location, Mendez turned one of its two bathrooms into a 300-square-foot deli, a model that’s much easier for both customers and employees.

Even though Mendez is considering ways to simplify his menu, he does not intend to shy away from healthier, vegan and plant-based

foods. Vegan versions of traditional Latin products, such as Cuban pastries, continue to drive growth for his business. “I don’t see us fermenting food or getting into anything that crazy, but I see us continuing to bring in vegan food and healthier products, and I see us making different types of partnerships,” he says.

One of Mendez Fuel’s nontraditional partnerships is with Alma, a small, local purveyor of muffins and cookies that are infused with cannabidiol (CBD), a nonpsychoactive component of cannabis and hemp that reportedly has therapeutic properties.

Mendez has also been working with suppliers to transition to more eco-conscious packaging, but the changeover has been rather difficult.

32%

Amount of consumers who purchase or would consider purchasing CBD products from a convenience store, according to Technomic’s Q1 2019 Convenience-Store Consumer MarketBrief

For example, late last year, when the stores shifted to local, organic coffee in a paper container, sales temporarily dipped. Miami’s coffee culture is all about Cuban coffee in a Styrofoam cup, and some old-school customers were unhappy about the change. After a brief adjustment period, however, customers returned, and now they love the coffee. “People don’t like change, but we’ve got to fight through that resistance, and people eventually get used to it,” Mendez says, acknowledging that change can be difficult—even for something as simple as switching from plastic to paper straws.

“Costs are definitely more expensive, and people don’t appreciate drinking out of a paper straw, and I don’t blame them,” he says. Mendez is considering testing reusable metal straws.

Unique and Craveable

Alimentation Couche-Tard Inc. has undergone a few foodservice changes of its own. About a year and a half after the Laval, Quebec-based c-store giant acquired Holiday Stationstores, the brands have been busy capitalizing on their shared synergies. This year, the company plans to launch six foodservice pilots based on learnings from Holiday, said Brian Hannasch, president and CEO, in a second-quarter fiscal 2019 earnings call.

Specifically, Hannasch said Holiday’s foodservice commissary has become a proven model for Couche-Tard. Tara Anderson, lunch daypart category sales manager for Holiday Cos. and CSP’s 2017 foodservice Category Manager of the Year, says the chain will continue to leverage its commissary and private-label vendors to create unique and signature items, such as last year’s Asiago bagel breakfast sandwich.

In 2019, Holiday is focusing on launching small plates, minis and popper-type items to satisfy snackers. “We try to create items that are both portable and craveable,” Anderson says.

This year, the commissary’s menu innovation might include more of an emphasis on health-forward options. Fresh condiments and sauces are another opportunity Anderson sees for growing Holiday’s customer base.

Quality and Consistency

Acquisitions are also shaping Yesway’s foodservice program. The West Des Moines, Iowa-based company has been gobbling up stores to reach its goal of being a 500-location chain; it’s now at 150 stores.

In 2019, the chain’s foodservice team is focused on execution and innovation. “In our situation, where we are continuously bringing on acquisitions, it is important that we have continuous improvement on our foodservice systems and processes,” says Jeff Keune, Yesway’s senior vice president of foodservice and innovation. To deliver on quality and consistency, Keune is improving the foodservice tools available to the newest members of the Yesway network. Part of that process is listening to operators’ ideas and setting them up to be successful and feel accountable, he says.

“We are looking at innovation on all levels—from product to service—but we are also very focused on doing the right thing for each store,” he says.

Like Holiday, Yesway is betting on health-conscious and busy consumers. “We as an industry should always have an eye on the health trend and make sure we are not underserving that need,” he says. “Having said that, there is a strong trend for flavor excitement and portable indulgence.” Keune is challenging his team to find simple, easy-to-execute ways to bring new on-trend flavors to guests.

Mastering Delivery

Masterminding more sophisticated delivery programs is another way operators are widening their consumer reach. Over the past year, Farm 2 Counter Executive Chef Paul Allen has been brainstorming how he can easily build out a delivery program while avoiding third-party delivery’s steep commissions. To take his organic and local c-store foodservice model off-premise, the Springfield, Mo.-based retailer began approaching Uber drivers and enlisting them to make deliveries. Allen sends out a mass text to the drivers, and the first to respond gets the delivery job. Allen gathers customer feedback on drivers and tracks delivery times to ensure service. In 2019, he will continue to build out and formalize his delivery program.

On the menu side, Allen is always on the hunt for products with clean labels. The store is stocked with items free of high fructose corn syrup, refined sugars and artificial ingredients. One of Allen’s favorite products from the past year is Coeur d’Alene, Idaho-based Tractor Beverage Co. fountain soda. The drinks are organic, non-GMO and come in fresh flavors such as cherry cream and lemongrass.

To cultivate its indoor farmers-market vibe, Farm 2 Counter will continue to host community events such as free haircuts and artisan parties. The retailer is also launching a YouTube cooking show with easy-to-follow but over-the-top recipes.

Click here for the complete 2019 Dispensed Beverage Report.

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