CHICAGO -- In a foodservice world that now has restaurants testing drone deliveries, supermarkets coming up with meal kits and gas stations going gastronomic, a question arises: Who owns convenience today? The answer was long found in the fast-food drive-thru lane, but the borders between foodservice channels are blurring.
Convenience stores are enjoying a shift in consumer perceptions about the channel’s foodservice capabilities. Today, 67% of millennial consumers say c-stores are just as capable as restaurants in providing fresh food and beverages, according to Technomic’s Consumer Brand Metrics, powered by Ignite.
That’s a vote of confidence from a coveted consumer base. It’s also a desire for convenience that noncommercial operators on college campuses are attempting to serve in a big way—especially when used as a piece of a dining department’s overall story.
Food-focused colleges and universities are exploring convenience formats in a way that students find compelling. All of a sudden, a competitive threat to c-stores has emerged on campus as university dining services leverage a captive audience of younger consumers hungry for variety, quality and speed of service.
The University of Massachusetts Amherst campus has more than 30 foodservice locations, including a half-dozen retail outlets. All accept the university’s meal plans, Dining Dollars and UCard debit card, as well as cash and credit cards. The meal plans are tiered programs, offering everything from unlimited access to a limited number of purchases at the school’s dining halls. In the Dining Dollars program, students set aside a dollar amount to use at the university dining halls, retail dining locations, University Club and restaurants, as well as food trucks and concessions.
This plethora of options is important to students, 82% to 83% of whom remain on a university meal plan for their entire undergraduate careers, says Ken Toong, executive director of auxiliary enterprises for the university.
“Students want to use meal plans anyplace, anywhere, anytime. They want convenience,” he says. “And while we do want to give our customer convenience, we don’t want to be another 7-Eleven. Our retail locations have to reflect our campus’ overall dining philosophy.”
That means providing options positioned around quality—from grass-fed beef to free-range chicken and sustainable seafood, for example—in an upscale setting that emphasizes ultra-fast service. At Harvest Market, the campus’ newest retail concept, a hot bar with Indian, Ethiopian and traditional American dishes shares space with prepackaged takeaway foods, including grab-and-go salads, sandwiches, all-natural and organic snacks, made-to-order smoothies and a yogurt bar that caters to on-the-run customers.
Authentic, globally inspired snacks are a key focus at retail grab-and-go locations; genuine Asian snacks in particular are an ongoing trend on campus. “Why would you walk off campus for an ordinary snack when you can get something like that?” Toong says.
While Harvest’s retail unit provides a convenience-oriented foodservice option, the $5.75 to $7.25 price range for a grab-and-go sandwich and $7.75 price point for a prepackaged salad likely puts the customer’s average spend above that of a typical convenience store. Nevertheless, price doesn’t appear to be a barrier for students; Toong says Harvest sees $4 million in annual sales.
“It’s a myth that this younger generation is frugal. They’re just careful,” says Van Sullivan, Amherst’s director of retail. “If you can present them with a value proposition centered on quality, freshness and authenticity, they’re willing to spend to experience that. They don’t want to throw junk calories down their throat; they’ll pay for better-for-you indulgence.”
Convenience stores require humans to run cash registers, supervise customers and answer questions—and campus operators certainly aren’t flush with manpower. Enter the next frontier of micromarkets: self-service c-store/vending hybrids. Campus operators are using the tech-forward, cashless mini c-stores to capture on-the-go dining dollars.
One example is the On the Spot micromarket module from Sodexo Vending Services’ Convenience Solutions. The market is designed to fi t in a variety of campus and noncommercial spaces, and it’s said to offer a “swipe, shop, go” option for customers and a 24/7 automated destination for fresh food. Patrons swipe a credit or debit card to unlock the doors of the vending equipment. Once the doors are opened, customers can choose whatever they want, and smart technology automatically reads what is removed. Once the door is closed, the card is charged and the customer is on their way.
Whether the micromarket is developed as more of a vending solution, or as a mini store layout, these types of retail venues are flexible enough to fi t into just about any footprint.
Chris Moravec, general manager of convenience retail for Brigham Young University (BYU), cites startup cost, customer satisfaction and expanded selection as just a few of the reasons similar micromarkets have become a central facet of the Provo, Utah, school’s vending operations.
Student acceptance of the micromarkets and their prepackaged sandwiches, wraps and salads was swift, if not surprising.
“Our first micromarket was in a residence hall complex with about 2,000 residents,” Moravec says. “This was a new facility with no previous vending operation. We had more than 500 students attend the open house—far exceeding our wildest expectations. Daily, we have about 200 students shop at the market. In our end-of-school-year survey, out of the 25% of the students who responded, 95% had shopped at the market at least once and more than half shopped weekly.”
While some micromarket kiosks allow for payment by credit or debit card, BYU’s locations accept only dining services’ Cougar Cash card payment system. Regular inventory spot checks, secure card access and security cameras keep theft at less than 1%, Moravec says.
The upside of micromarkets vs. conventional vending machines is in the reduced labor hours and in the bigger profit margins.
“We have since opened two additional markets that replace existing vending banks,” Moravec says. “The first location replaced three existing machines, and the sales with the market are about 300% higher than with vending machines. The second replaced four machines, and the sales are about 175% higher than with vending machines.”
Campuses are also playing with drive-thru formats to offer another convenient food pickup option.
At BYU, a takeout program called BYU Food to Go is making the “shopping experience as convenient and frictionless as possible,” says Cordell Briggs, director of finance for BYU’s dining services. The department recently converted a former drive-thru bank building on campus into a pickup point. Customers who have placed their orders in advance go to the drive-thru lanes and dial for assistance using their cellphones. Those with larger catering orders routinely frequent the format.
“Our attendants immediately deliver the order to the customer’s car and collect payment with a remote POS device, and our guest is ready to go, usually without even getting out of the car,” Briggs says. BYU Food to Go offers a full range of beverages, baked goods, breakfast, deli fare and hot foods, including barbecue, chicken entrees, pasta dishes and vegetarian options.
If new mini markets, kiosks and c-stores in unconventional spaces are happening now, forward-looking formats, such as home delivery of meal solutions, could be next. Such a program is already available at Amherst.
The home-meal program was largely geared toward faculty and off-campus customers, says Toong, but it took off surprisingly quickly with students. It was yet another example of how multifaceted the convenience narrative has become for colleges and universities, even among an emerging customer base that previously may not have expected campus dining services to fulfill a high-quality retail meal solution in this way.
“How do we continue to tell our story? It’s an audacious idea,” says Toong. “But our guests expect the best.”