Can better-for-you foodservice be better for business in the convenience channel?
This was the question asked by Donna Hood Crecca, senior principal at CSP sister research arm Technomic, Chicago, in her Health in C-Stores report.
C-stores for years were the go-to spot for indulgent foodservice items such as doughnuts and frozen beverages, Crecca said. However, “as consumers embraced healthful eating patterns in prior years, many c-store operators incorporated better-for-you items into their offerings, only to experience lackluster sales and high waste.”
Today’s c-store consumers are bringing their more current approaches to wellness to c-stores, “driving an elevated expectation of healthy offerings,” Crecca said in the November report.
Meanwhile, the rising use of GLP-1 medications is a new and evolving market dynamic, she said.
“Is better-for-you foodservice a viable growth opportunity in c-stores, or will convenience operators and their supplier partners be burned again?” Crecca asked.
Today, 53% of consumers say they seek out nutritious foods and 45% report looking at nutritional information frequently when ordering or buying prepared foods and beverages, according to Technomic data.
“Consumers who frequent convenience stores for foodservice align with this trend, with 52% confirming increased interest in healthy eating in the past year,” she said. In addition, 45% of c-store customers expect c-stores to offer healthy foodservice items, up from 40% in 2022.
C-store recognize changing demand
Convenience retailers recognize this evolving demand, with 74% now agreeing that better-for-you foodservice offerings boost their ability to compete with other c-stores and quick-service restaurants, Crecca said. She added that 69% are increasing healthy prepared beverages and 74% are expanding prepared food selections to meet consumer expectations.
Satisfying the better-for-you demand while ensuring sales velocity and profitability “requires that convenience operators and their supplier partners understand key dynamics of healthful eating occasions in the convenience channel,” Crecca said.
“C-store consumer approaches to eating healthy shift throughout the day,” Crecca said. For example, 44% are likely to choose more healthful items during breakfast, up 16 points from 2022, while dinner ranks second, at 37%. However, more consumers seek indulgent items at lunch, at 22%, up 4 points from 2022, while afternoon snack has the lowest tendency to seek healthy options, “likely as consumer look to treat themselves.”
Elsewhere, Technomic data reveals a disconnect between consumer and operator perspectives on healthy attributes in convenience foodservice items. Low sugar and high protein are top of mind for consumers, while operators lean in on more general attributes, such as organic and all-natural.
“This data suggests c-store operators are lagging consumer priorities in healthful eating,” Crecca said.
GLP-1 use speeds demand
The use of GLP-1 medications will accelerate demand for healthier food and beverage items, Crecca said.
“As the insurance and regulatory environment shifts and availability of these medications at mass merchants, including Costco and Sam’s Club, increase access and affordability, usage is expected to rise rapidly,” she said. “GLP-1 users are more likely to enter a convenience store actively looking for better-for-you prepared food and beverages.”
A strategy is required to make sure that c-store foodservice offerings satisfy consumer and business goals, Crecca said.
Actions include assessing offerings to identify “healthful attributes that are top of mind for consumers and can be called out across menus, marketing and packaging,” she said.
In addition, “Showcase value in healthful items by highlighting taste and flavor, as well as other attributes, such as portion and brand,” she said. “Consumers will not sacrifice taste and flavor for health.”
Finally, identify foodservice formats “where better-for-you options will differentiate and drive traffic, sales and margin,” Crecca said. “For example, calling out protein content of roller grill and hot case items can heighten the consumer appeal of these formats and may enable premium pricing.”
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