CHICAGO — Necessity is the mother of invention, as the saying goes, and especially so in 2020 as convenience stores grapple with the ramifications of the coronavirus pandemic. Even with the NACS Show—the industry’s largest event of the year—moving to a virtual platform this year, it’s clear there is abundant motivation for suppliers to innovate and update their product offers to meet new needs.
Here, CSP editors offer their thoughts on what to expect from suppliers now and in the near future.
Alcohol sales have surpassed year-ago growth throughout the coronavirus pandemic as people are looking for ways to celebrate special occasions at home, according to IRI. Increased alcohol consumption at home isn’t a trend that will go away soon, either. Sixty-five percent of people say they are not inclined to go to restaurants and bars once they open, according to IRI.
Within the alcohol category, hard seltzers will remain standouts. Meanwhile, enhanced nonalcohol products continue to trend, including energy drinks, ready-to-drink coffee and enhanced waters.
Candy & Snacks
The stay-at-home orders forced by the coronavirus pandemic have likely accelerated the consumer trend of snacking more often and eating multiple times a day. That can be a boon to c-store retailers, but first half 2020 sales data from IRI suggests consumers have generally chosen grocery over convenience stores for snacking. Suppliers are likely to respond by innovating in the direction of consumer preferences. Five areas to watch:
- Indulgence remains a key driver in the snack and candy markets.
- Healthier profiles are becoming table stakes in the snacking game, including clean, natural, organic, no artificial flavors, gluten-free and non-GMO labels.
- Consumers are looking for snacks that are bolder, spicier, unique and have unexpected flavor combinations and global flavors.
- New shapes and textures provide variety. This includes more puffed and extruded; super crunchy; ultralight and dual-textured snacks.
- With fewer trips as a goal, larger package sizes have become important to consumers.
Grocery and refrigerated grab-and-go foods have surged in c-stores amid the coronavirus pandemic since roller grill and many hot-food programs have paused. For example, when Little General Stores Inc., Beckley, W.Va., halted roller-grill and self-service items, it focused on selling grocery and chilled grab-and-go offerings such as sliced meats and cheeses, pastas, breads, salads and more. Expect suppliers to consider packages that fit that evolved offer.
Meanwhile, the number of food and beverage menu entrees available in c-stores declined more than 5% in 2019, according to research firm Technomic, Chicago. Specifically, sandwiches decreased nearly 37% and sides dropped more than 12%. Focusing on one or two foodservice items—such as a popular sandwich or side—rather than an expanded menu may attract more customers, said consultant Jessica Williams of Food Forward Thinking LLC, Louisville, Ky.
“There’s strength in doing one product very well,” she said. “If you could pick one item for which you’d like to be famous, do that and do it great.”
Though the deadline for outdoor EMV liability shift has been pushed back to April 2021, plenty of c-stores will still have trouble converting their fuel dispensers to accept chip cards in time. Expect more innovation on this front, including fuel dispenser enhancements allowing retailers to upgrade their fuel dispensers without replacing them entirely.
Car washes will continue to become more efficient and customizable, as evidenced by the range of brushes, chemicals and other accessories from National Carwash Solutions and similar suppliers.
Finally, alternative fuels will be more prominent than in the past. One reason: the U.S. Department of Agriculture recently enacted a new grant program to help boost E15 sales nationwide. Also, New Mexico has established its first alternative fuels corridors to facilitate the availability of more alt fuels across state borders.
Expect to see more “no-contact” offerings, ranging from contactless payments to more paths for order-ahead and pickup options for both foodservice and center-store items. Meanwhile, the coronavirus has further complicated an already tangled web of regulations and restrictions that c-store operators must follow, including local mandates on cleanliness. Expect more suppliers to automate more back-office tasks and pay closer attention to data collection and analysis to simplify tasks. Other emerging trends, such as facial recognition technology, will find a new niche in this uncertain era. For example, Reflexis, a workforce management company, recently released a clock-in tool that uses facial recognition to identify employees, allowing them to clock in without physically touching a surface.
Tobacco is a category in the midst of a long transition. Where category sales go will depend on which products are approved by the U.S. Food and Drug Administration. Premarket tobacco applications (PMTAs) were due Sept. 9, after being delayed due to the coronavirus pandemic. Retailers will need to keep up on whether companies required to submit PMTAs for certain products have done so and what the result is. One segment showing potential today is modern oral nicotine, or MON. MON is expected to become a $400 million business in the United States this year. Products include snus, moist snuff and tobacco-free nicotine pouches, which can be placed under the lip.