Foodservice

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Consultant projects c-store food sales to surge 3.5% annually through 2015
LAS VEGAS -- "It's not just the hot dog on the roller grill," said Tim Powell. "Things are so much different than what they were even five or six years ago."

And so the $10.7-billion convenience foodservice industry has matured from a mere decade ago when extended shelf life and limited roller grill were extolled as progressive, high-margin opportunities for the convenience channel.

Today, shelf life means rapid-turning, reduced-preservative breakfast and lunchtime hand-held, grab-and-gos. Today, progressive means expanding into ethnic variety, soups and, for the [image-nocss] most daring, sushi. Today, high margin is measured not by just high percentage profits, but by turns, transactions and market-basket drivers.

Indeed, much has changed in the c-store's world of foodservice. And yet, for all the good deeds and back-slapping fare, c-stores are just entering the starting line in this robust race for America's on-the-go stomach.

Accompanying them are limited-serve restaurants, such as Dunkin Donuts, that are using girth and density to roll out flatbread sandwiches and use their economies of scale to expand their menu at low-cost prices. Then there are quick-casual, full-serve eateries, supermarkets and even drug chains eyeing the consumers' demanding belly.

This was the backdrop to a presentation led by Powell before dozens of distributors attending the annual American Wholesale Marketers Association (AWMA) Show this week in Las Vegas.

Powell, senior manager and c-store program director at foodservice trackers Technomic Inc., Chicago, shared how some of the convenience channel's leading food preparers are no longer vying against their traditional colleagues. Rather, companies like Wawa, QuikTrip, Quick Chek, Rutters and Sheetz compete daily against the quick-casual segment, delivering not only fresher food and coffee, but also more sophisticated packaging and accoutrements.

And so far, they and other like-minded c-stores are winning the battle. While 2009 foodservice sales declined by 3.8%, Powell said c-store foodservice grew 1.5%. Moreover, Technomic is projecting c-store foodservice sales to surge 3.5% annually through 2015 vs. 2.8% for the same period by competing channels.

As the convenience channel improves in its delivery and selection, consumers are becoming increasingly fussy and demanding. While the stagnant economy has hampered growth in wellness and healthier options, Powell exhorted attendees not to dismiss better-for-you as a fad.
"We're telling our clients to cut sodium," he said. "It's going to be there. You have to be ready for it."

Other key trends Powell identified:
Portability and transportability: Focus on hand-held options such as breakfast burritos and deli sandwiches. Deals: Even as the recession ebbs, customers will expect promotions and value offers to continue. Going upscale: Expect convenience chains to ramp up store designs and foodservice area. Social responsibility: Customers now demand that retailers be good corporate citizens and conservation stewards. All these steps are not just about delivering a good quality foodservice program, said Powell. They're about building a brand anchored in trust and shared values.

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