C-Stores are Food Sales Daypart Disruptors

 

Just in case you were ever wondering why Convenience Stores started selling, then branding both pizza and chicken because they drive top-line sales and bottom-line profits.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® C-stores exploited restaurants weakness of daypart limitations. Most C-stores are open more hours and give consumers more of what they want to eat and when they want it. Let’s look at some of the reasons C-stores picked Pizza and Chicken:

1.       Pizza accounts for more than 10 percent of all food service sales

2.       94 percent of Americans eat pizza regularly

3.       93 percent of Americans have eaten pizza in the last month

4.       The highest-grossing single-unit independent pizzeria in the nation, Moose's Tooth Pub and Pizzeria, is in Anchorage, Alaska. Its annual sales are approximately $6 million.

5.       The top 5 pizza sales days are: Super Bowl Sunday, New Year's Eve, Halloween, The night before Thanksgiving, & New Year's Day

6.       Americans consume 8 billion chickens per year alone.That translates to an astonishing 21,917,808 chickens eaten per day. How many pounds of chicken does the average American consume in a year, you ask? Over 80 pounds!

7.       According to the National Chicken Council, it was reported that more than 1.42 billion chicken wing portions were consumed Super Bowl Sunday 2022.

8.       We had to include this fact: In Gainesville, Georgia it’s illegal to eat fried chicken with a fork. (Regular readers of this blog know that Hand Held Food of Immediate Consumption is a mainstay within the grocerant niche.)

Today more and more c-stores are looking to grow their foodservice offerings, including third party pizza and chicken programs that are helping retailers to drive sales and expand into new dayparts. Here are some examples from C-store Decisions:

When Pak-A-Sak convenience stores added a Hunt Brothers Pizza program, the change to its foodservice program was like night and day — literally. While the majority of the chain’s foodservice sales come at lunchtime, the pies have allowed the Texas Panhandle chain to successfully break into the dinner daypart, according to Russell Barber, district manager for Pak-A-Sak.

Sixteen of the 23 Pak-A-Sak locations offer the Hunt Brothers program. Two additional stores, which will also feature the pizza, are set to open next year.

Breakfast has also greatly benefited from the addition of the Hunt Brothers program.

Building a Larger Share of Stomach 

and a Larger Share of Wallet Requires

Looking A Customer Ahead

“We see customers not only purchasing our breakfast pizza, but regular and pepperoni pies, and (a Cheeseburger Pizza limited-time offer) as well,” he said. 

Barber pointed out that customers are eager to try the limited-time-offer (LTO) selections every quarter. The LTOs also create a buzz among the stores’ employees.

“Our staff couldn’t stop talking about the chicken ranch or alfredo pizzas,” Barber said.

Growing Sales 

The recipes for the marinade and coating may be secret, but it’s clear that chicken is a driving force behind High’s of Baltimore’s foodservice program.

“Fried chicken is one of the three cornerstones of our foodservice category, along with pizza and our own ice cream,” said Sherryn Diamond, director of foodservice for High’s. “Our chicken sales have increased between 20-25% year over year for the past five years.”

Currently, 17 of High’s 59 stores in Maryland, Delaware and Pennsylvania offer chicken. Every year, one to four additional stores get the chicken program, and it is set to be installed in remodels and new stores, stated Brad Chivington, senior vice president for High’s. 

“When we roll the program out in existing and remodeled stores, we see a dollar-per-dollar gain in sales in fountain, groceries and other categories,” Chivington said. “It also generates a higher earnings before interest, taxes, depreciation and amortization (EBITDA).”

High’s fresh, never-frozen chickens are injected with a flavorful marinade then hand breaded with “a secret blend of herbs and spices,” explained Dallas Wells, vice president of foodservice, branding and employee development at High’s. “It is cooked in small batches in a pressure cooker for maximum juiciness.” 

Fresh pizza sales have been increasing upwards of 40% year over year at High’s, reported Chivington. Forty of the chain’s stores offer seven- and 14-inch proprietary pies from front-and-center open preparation areas.

Despite the rise in food costs leading to an increase in consumer prices, pizza and chicken are holding their own at Kwik Stop Convenience Stores, which operates 26 stores in Nebraska and one in Colorado. While item sales in both categories are down 9% over a year and a half ago, dollar sales have risen 10%, said M. David May, director of food services for Kwik Stop.

“The price of fuel has a tremendous impact on our foot traffic in the stores,” May explained. “Customers weren’t coming in as much or buying as much when gas was approaching $5 per gallon, but now that gas prices are retreating, we’re seeing our store sales go up.”

To attract cost-conscious consumers, May always tries to have some type of meal deal combining chicken and a small side for a value price of between $5 and $8.  

“We used to waste a lot of sides so even though I’m making less profit on the meal, at least those sides are not going to waste,” he noted. “At the same time, we’re getting customers to try something new besides the usual french fries, and sales of our specialty sides have increased.”

May noted that Kwik Stop is big on producing new items in its test kitchens for monthly LTOs. One that has just been introduced is a buffalo, pepperoni and bacon pizza with Frank’s Redhot Sauce.

Another original product is a pizza bite for which the proofed crust is cut into eight sections, topped and rolled up. The popularity of an original Buffalo Bite with cheese and Frank’s Redhot Sauce led to the addition of garlic bites with garlic and butter to the menu. 

“We look at our existing SKUs and think about what we can make out of them that would be exciting,” May said.”  What should you be selling next?

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us

In 2023 Your Consumer Behavior Changed You Need to Change as Well

 

Consumers are dynamic not static and you must evolve as fast as your consumers or your food retail company will lose customer relevance according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

If you are not focused at the intersection consumers, evolving food path to purchase, you are most likely missing out.  This year regular readers of this blog know that consumers are cutting back and changing their purchase priorities as economic pressures increase.

It is at the intersection the combination of rising prices, increased costs of living and ongoing social discontent prompted by the never-ending threats of the tri-demic (flu, COVID-19, RSV) has resulted in financial problems for many consumers. The consumer price index hit 9% in June, a level unseen since the early 1980s, an era before such industry sectors as fast casual and before chains like Chipotle Mexican Grill were even a dream. Gas prices over the summer hit an average of $5 a gallon, a record. The level of inflation influenced consumer behavior and challenged operators, almost none of whom had experienced an operating environment quite like it.

Restaurants raised menu prices at record levels and, even as inflation eased into November, were still raising prices at an 8.5% clip. Yet, with their own costs for food, paper and wages up in the double digits, their margins still thinned.

As a result, consumers are growing thriftier and changing their behavior, according to NielsenIQ. Here are industry insights NielsenIQ identified as five key trends that may well last into 2023:

1.       Change in priorities — Consumers are adjusting their spending habits and lifestyle behaviors in response to increased pressure on household budgets and ongoing concerns regarding a recession. Additionally, pandemic-prompted social disruption has pushed consumers to make mental and physical health their top priorities. Financial security is another important factor, which results in more restricted spending.

2.       Reduced discretionary spending — At the start of 2022, consumers surveyed by NielsenIQ planned to cut back on mini-splurges like dining out, gym memberships and away-from-home entertainment, focusing instead on the day-to-day essentials and prioritizing basic needs and necessities like utilities and groceries. These consumers plan to further tighten their belts as inflationary pressures continue to increase, resulting in greater cutbacks on food deliveries and other indulgences that they can instead enjoy at home.

The last time a significant decline in discretionary spending occurred was in 2020 during the initial months of the pandemic. Economic uncertainty is again causing consumers to adjust their behaviors across all aspects of life, from shopping to entertainment to maintaining a healthy lifestyle.

3.       Staying at home — Lifestyle trends that increased in popularity during the pandemic are again rising in favor. These include food preparation and dining at home (cited by 44 percent of surveyed consumers), spending less on clothes and grooming (37 percent) and cutting back on treats like dining out (34 percent) and vacations (24 percent).

4.       Selective shopping — In addition to being more mindful of how much they spend and what to prioritize, consumers are shopping differently. They intend to combat inflation by embracing a selective mindset.

Accordingly, many consumers are switching to buying lower-quality items and shopping more often at discount stores or traditional trade outlets. Brand loyalty has lessened, with 31 percent of consumers admitting to buying whatever is promoted; 27 percent buy whatever is cheapest; and 26 percent stop purchasing certain categories entirely.

This selective shopping is popular with all consumers who have been financially impacted by the pandemic and other economic factors, including those with high incomes who have not been strongly affected. Shoppers across the economic divide are seeking out discounts and promotional opportunities across multiple shopping channels and retail stores.

5.       Private label preferences — Private label brands have a stronger opportunity as consumers shift their loyalties and make trade-offs. Alternate products that offer quality at a lower price provide greater appeal, with 20 percent of consumers saying they will opt for a private label to help manage their grocery expenses. In the United States, private label growth is prevalent in categories such as baking goods, health and beauty, dairy, household products and deli foods.

As consumers seek ways to cut back on spending while saving for the future, retailers and suppliers will have opportunities to manage pricing across portfolios as they seek to retain customers.

When asked how they would prefer manufacturers deal with rising prices, 27 percent of consumers said they would rather see bulk or economy size offerings vs. smaller sizes (8 percent) because it helps them deal with inflation. Other consumers seek to minimize waste (40 percent). These lifestyle changes and shifts in shopping behavior could become more pronounced across consumer segments if the cost-of-living continues to rise.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

In 2023 Food Consumers are Educated, Engaged, Empowered

 

Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food will be at the intersection of creating an educated, elevated, engaging family meal in 2023.  Food retailers including restaurants, convenience stores, grocery service delis and dollar stores will all be competing for a larger share of stomach in this sector driving down prices while saving consumers time in 2023.

According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, stated, “Price, Portability, Palate pleasing, will be the drivers of success in within the Ready-2-Eat and Heat-N-Eat fresh food space throughout 2023.”

 The price of food will also be top of mind in the new year, with shoppers looking for extreme flavors, nostalgic foods, global cuisines and more. Holistic health and wellness will also rate highly for consumers, especially as Mintel found that 78% believe healthful eating is important for their emotional well-being. Expect shoppers to seek out products that support cognition and focus, stress and sleep, and mood.

1. Supermarkets uphold “stomach share” gains from restaurants.

Grocery industry executives still remark at how the food-at-home trend has continued well beyond the pandemic, and many think it has now reached the point of behavior change among consumers. That is, consumers—many of whom continue to work remotely—like what grocery stores have to offer for their daily meals and find the value appealing. This sentiment is likely to strengthen as supermarkets boost their deli grab-and-go and foodservice offerings and food-at-home price inflation relaxes, providing consumers a strong option to the high pricing at restaurants.

Frictionless shopping, MFCs among hot technologies.

You can’t give new-year predictions without naming leading technologies. Here are two. Next year, more shoppers will expect to be able to skip the checkout line at chain grocery stores (and convenience stores) through frictionless payment systems such as scan-and-go, smart shopping carts and solutions like Amazon’s Just Walk Out. Also, expect more food retailers to roll out automated micro-fulfillment centers (MFCs) to support elevated online grocery demand and help build e-commerce profitability.

Value grocers add market share.

The trust that value-focused grocery chains built up with consumers amid high inflation will continue to pay dividends in 2023 in the form of more market share. Even with inflation easing up, food shoppers liked what they saw from these grocers—not just in terms of value, but also selection, quality and convenience—and will keep them in their grocery shopping mix.

One of 2022’s big labor stories was the sudden success unions found in organizing Starbucks and a number of small quick-service chains. Among the developments we’re likely to see in the new year is a shift in organized labor’s attention to full-service brands, with priority given to combating the tip credit.

Washington, D.C., has already lost the concession to full-service operators, and a Michigan court is deliberating right now on whether that state’s credit will be scuttled, too.

But that’s just the beginning. Republicans’ control of the U.S. House of Representatives makes the possibility of killing the credit on a national basis unlikely, but expect to see considerable activity on the state, county and municipal level.

Additionally, 41% of consumers are choosing low- to no-alcohol drinks to be healthier, according to Mintel sober bars study. There’s only a handful of completely alcohol-free bars now, but as sober socialization gains popularity, especially among Gen Z consumers, more of these will pop up. They serve inventive drinks made with alcohol-free spirits, and offer games, events and other fun activities to entice guests. There already are shops that sell only zero-proof spirits, beer and wine. The team at Foodservice Solutions® says don’t invest in one of these as the life span will be short. Why, existing outlet’s will be quick to invite a new set of consumers to avoid the ‘veto’ vote. 

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

In 2023 Are You Building a 

Larger

Share of Stomach?

Marco’s Pizza Empowering Customer Choice

 

Success does leave clues. Becoming customer centric, focusing on relevant consumer touchpoints is always a good thing according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Chain restaurants are in a fight to survive today like no other time in living memory. By mid-summer, we are told the pandemic will be moving on and consumers will return to a new normal.  Whatever normal is.  In the minds-eye of the Grocerant Guru®, that will include interactive and participatory meals and Marco’s Pizza wants to be center stage meeting that need-set.

Marco’s Pizza recently debuted all-new Build-Your-Own Pizza Bowls as a national menu item starting Mid-January. Empowering pizza lovers to enjoy a crustless pizza baked in a bowl with Marco’s original sauce recipe, three fresh signature cheeses, and their choice of up to four toppings for $7.99. Prices may vary depending on location with additional toppings costing extra.

Regular reader of this blog knew that, Marco’s became the first national pizza delivery brand to offer crustless pizza. The Marco's Pizza Bowl line allows consumers to enjoy its delicious pizza while following a higher-protein, lower-carb diet. The Build-Your-Own Pizza Bowl product joins its crustless pizza siblings, the Specialty Pizza Bowls, which come in three varieties: Deluxe, All Meat and Garden.

Marco’s Build-Your-Own-Pizza Bowls is a different way for consumers to enjoy Marco’s quality pizza, but without the crust. Marco’s gives pizza lovers permission to eat pizza with a fork, allowing customers to pick and choose their own ingredient combinations.

Chief Marketing Officer Chris Tussing stated “Our customers loved our Specialty Pizza Bowls and told us they now want to make their own creations,” …. “Whether it’s our signature Old World Pepperoni, freshly sliced Roma tomatoes, or our high-quality Italian sausage, we’re providing a different, more customized way for pizza lovers and their families to experience our premium ingredients.”

Senior Director of Culinary Innovation for Marco’s Andy Dismore stated, “Adapting to consumer trends is part of our DNA and this carb-cutting alternative proved to be a bold and refreshing move in our category, so we learned in. No one can match our original sauce, signature cheese and high-quality toppings baked into a delicious, crustless pizza experience.”  How, are you empowering customer relevance?

Looking for success clues of your own? Foodservice Solutions® specializes in outsourced food marketing and business development ideations. We can help you identify, quantify and qualify additional food retail segment opportunities, technology, or a new menu product segment.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

Battle for Share of Stomach

Casey’s General Stores Pizza Party to Drive Growth

 

Breakfast, breakfast, breakfast is the Achilles’ heel of the convenience store sectors grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food sales according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

When consumers are working at home there is no need to stop and get gas, coffee, a breakfast bakery snack, or breakfast sandwich according to Johnson, who explains that this is a short-term problem not a long-term view of the future specifically within the convenience store sector.

There was some good news at Casey’s General Store’ as they posted  an increase of 5.1 percent in total inside sales for its latest reported quarter, compared to the same time period a year ago.  That said, total prepared food and fountain sales at Casey's convenience stores were down 3 percent to $289 million during the second quarter of its 2021 fiscal year. Same-store sales in the category were down 3.6 percent.

Casey’s President and CEO Darren Rebelez stated, that Casey's saw sequential sales improve by 620 basis points vs. the first quarter of its fiscal year. Margins also improved sequentially.

Rebelez continued, "That being said, this area of our business continues to be the one most impacted by lower guest counts from the pandemic, especially in the morning daypart for many of our guests continue to work from home or deal with virtual schooling arrangements, …Bakery and dispensed beverages, especially coffee, are the segments being most adversely impacted, although both showed volume improvements vs. the first quarter.”

Looking a customer ahead, the most difficult daypart for convenience store foodservice to grow has traditional been dinner and evenings. So, it’s important to take note of the fact that Casey's pizza program is seeing sales tick up. According Rebelez, whole pie units were up 17 percent in Q2 compared to the same quarter in fiscal 2020, driven in part by Casey's digital push.

Rebelez noted "Digital sales were up 127 percent and make up over 50 percent of total whole pie orders,". Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food have been the key driver of customer migration from restaurants to convenience stores for the past 14 years according to Johnson. Dinner once the Achilles’ heel of the industry is now a bright light into what the future  grocerant niche fresh prepared food can do for not only Casey’s but the convenience store sector.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information.