No one sells food that is both fresh and convenient in the U.S., sniffed a retailing analyst quoted by the London Economist last year. “The typical American convenience store consumer is Homer Simpson.”
Oh, really? Tell that to the hundreds of customers who stood in line waiting for giant British food retailer Tesco’s first Fresh & Easy markets to open their doors.
The huge positive consumer response surprised even Tesco employees. “We actually had a hard time keeping up with demand during first week or two,” said company spokesperson Brendan Wonnacott. The company’s fresh offerings—which include a very un-British carne asada burrito—make up 50% of its SKUs and sold out almost immediately.
Fresh Takes Commitment
That c-store customers would be so eager to buy fresh comes as no surprise to Rutter’s Farm Stores President and CEO Scott Hartman, whose company is famous for its wide array of foods that are fresh, healthy and quick. Upscale entries into the U.S. market like Tesco and Famima, Hartman noted, will raise the bar for everybody.
“I really think it all starts back in the commitment side,” Hartman said. “If you’re skeptical and not committed to food, it’s very to succeed.”
Healthy grab and go is an evolving area, Hartman pointed out, and when it comes to your brand and image, fresh and healthy is good positioning, especially if you can execute it with a bunch of different products. New beverages, yogurt drinks with digestive enzymes and naked juices, all commonly available in Europe, are now hitting the U.S. foodservice market.
American consumers’ growing desire for convenient fresh foods is the reason upscale convenience marketer Famima, a subsidiary of FamilyMart Japan Co., launched stateside. “I think this is where convenience stores have a real opportunity,” said Hidenari Sato, vice president of Famima Corp. USA, which now operates 13 stores in the Los Angeles market. “Why go to a supermarket when you can find gourmet and specialty goods, healthy ready-to-eat meals and fresh groceries in a convenience store?”
Famima’s fresh grab and go sales are not only healthy, but increasing, especially during breakfast hours, when its stores promote fresh fruits and croissants along with sausage, bacon and egg muffins and breakfast burritos. Though currently located only on the West Coast, Sato said the chain anticipates branching out and franchising its stores in a couple of years.
Customers Willing to Pay For Fresh
Jennifer Vespole, senior category manager for QuickChek Food Stores in Whitehouse Station, N.J., where $2.49 7-ounce fresh fruit cups are a major seller, said that most fresh food buyers aren’t too concerned about cost. But she admitted that attracting people interested in fresh food is still somewhat challenging.
“There’s still that incorrect perception in many places that c-stores don’t sell fresh food,” said Vespole, who oversees foodservice operations at the company’s more than 100 convenience stores in New Jersey and New York.
The demographics of regional tastes clearly play a part along with perception in buyers’ responses. By SKU, Vespole says that QuickChek’s most popular fresh grab and go item is its fresh buttered roll, a star of the chain’s huge and successful breakfast daypart. “Northeasterners prefer buttered roll to the sweet pastries so popular in the South,” she noted.
One of Famima’s more and successful, innovative food lines is its partially prepared dinners. Items such as meats and vegetables pre-sliced for stir frying enable busy consumers to enjoy the advantages of both a prep cook and of cooking gourmet meals quickly in the comfort of their own kitchens rather than spend time chopping vegetables or settling for takeout.
Though other convenience store chains have been slow to follow suit, several have experimented with this idea in the past, somewhat ahead of the consumer learning curve. “We tried that at least five years ago, but there weren’t enough sales then to make it worthwhile for our market,” said Hartman, of Rutter’s Farms, adding that while partially prepared dinners clearly have an urban appeal, the idea is just starting to spread to less populated areas.
QuickChek has been playing with the idea of expanding its fresh section to include some dinner offerings for a while. “In the immediate future we’re looking to expand grab and go for lunch,” Vespole said.
The company also rotates its various lunch menu items such as Tex-Mex subs and fresh snack nachos in and out, keeping a core group of items available all the time. Sometimes a rotated item becomes permanent: the company’s roasted tomato and garlic spread, rotated in almost a year ago, has become such a signature spread it’s clearly there to stay.
Even Small C-Stores Can Get Fresh
While larger chains like Rutter’s and QuickChek clearly enjoy economies of scale and the advantages of a larger workforce, Hartman was quick to point out that even two- and three-store owners can reap the benefits of the fresh food marketing movement by partnering with other local businesses that can supply appealingly fresh grab and go choices.
A sandwich shop with proprietary wrappings and some fresh fruit are a good way to begin. “Trying to do it on your own in a single store is very, very difficult,” Hartman said. “Find one or more third parties to see what solutions they might be able to provide.”
Finding a supplier that can do the work for you doesn’t necessarily exclude small chains either, said Chris Girard, president and CEO of Plaid Pantries Inc., in Beaverton, Ore.
Plaid Pantry is working with its food supplier Core-Mark to put together a program it can easily manage in its 101 stores. “We’re just not food-oriented at all,” Girard admitted. “We’ll do whatever our supplier comes up with, test it in a few of our stores first, but we’re not going to do commissaries or our own distribution.”
It’s a trend that Core-Mark—which serves 21,000 retail outlets across the U.S. and Canada—is clearly supporting. Last year the South San Francisco, Calif.-based distributor took some of its customers to Europe to view small format retailers like Tesco and Pret a Manger that focus on fresh offers.
“Tesco and Famima have identified rising consumer demand for freshness and brought a heightened awareness to the c-store marketplace,” said Chris Murray, Core-Mark’s vice president. “Adding categories like fresh-cut fruit and vegetables, yogurt-based snacks, whole fruit, high end fruit juices like Odwalla and upgraded sandwich programs makes a lot of sense.”
Upgraded fresh grab and go selections Murray sees as having the best opportunities for success in the c-store format include fresher sandwiches, fresh-cut value-added fruit, immediate consumption salads, including some with proteins, yogurts, berries and premium juices.
Core-Mark is developing scalable offers that will make sense in a variety of formats. The company’s Vendor Consolidation Initiative targets 10 categories for which Core-Mark can pass savings on to its retailer customers.
“We understand that there is not a single ‘fresh’ solution for every store and we are moving forward with that in mind,” Murray said. “We realize that locations differ with regard to footprint and base volume and our offers will have the flexibility to meet those unique needs.”
Satisfying Cross-Cultural Tastes
When British-owned made-to-order chain Pret a Manger opened 10 stores in New York, industry observers were curious to see if the same sandwiches popular on one side of the ocean would sell as well on the other. The company—in which McDonald’s bought a 33% non-controlling interest in 2001—offers sandwiches (wrapped in cardboard instead of plastic to emphasize their fresh nature) filled baquettes, soup, salad, desserts and coffees.
According to Pret manager Patrick Hoke, offerings often have slightly different menu names. “What we call a Bell & Evans chicken avocado sandwich they call a chicken avo,” Hoke said. “They bake their chicken an we grill ours, but the sandwich is basically the same.”
Perhaps not all things translate so easily, however. When QuickChek Food Stores decided to cash in on the growing popularity of what are often called upscale foods about five years ago, the company partnered with a local Japanese manufacturer to test sushi in a few of its stores to gauge consumer interest.
“Some stores did well but some were only fair and operations was concerned about waste,” reported Vespole, QuickCheck’s senior category manager.
“Most likely we’ll look at it again in the next year or two because all the supermarkets around us are offering it, but I think that the most successful are actually preparing it on site rather than offering packaged sushi, which makes customers wonder how long it’s been there.”