The Race Is On for C-stores to Gain Share of Stomach

— John Matthews, President & CEO, Gray Cat Enterprises

“Now more than ever, foodservice is a must.”

As c-store operators plan for their future in prepared food, whether that involves their own proprietary program or a branded partnership, they need to consider the story they want to tell, because stories strongly resonate with consumers, Mike Murnane, president and chief revenue officer for Uno Foods, noted during a fireside chat with CSNews Brand Director Paula Lashinsky. For example, Uno’s has the story of having invented Chicago’s famous deep-dish pizza, which “put restaurant DNA in our blood,” Murnane explained.

Innovation, approached in an orderly fashion, needs to be pursued despite the current labor shortage and supply chain disruptions, advised Joe Chiovera, principal at XS Foodservice Solutions. The former foodservice executive for Sheetz Inc., 7-Eleven Inc. and Circle K recommends c-stores take a three-phased approach to growth:

Foundation before differentiation Building a culture of simplicity Nurturing greatness

— Joe Chiovera, principal, XS Foodservice Solutions

“Strategic and proactive is the way to go when it comes to innovation, not rushed and defensive.”

Curbside pickup is one of the strongest opportunities for convenience stores to compete with quick-service restaurants (QSRs), according to Tom Cook, principal at King-Casey. While c-store operators have several commonly cited reasons for why they are hesitant to add curbside pickup at their stores — they fear a loss of add-on and impulse sales, it could increase labor costs, and they believe curbside requires a dedicated pickup area in the parking lot — Cook said they must consider the following key changes that have resulted from the pandemic:

Consumers show a preference for a touchless foodservice experience; Consumers have discovered the speed, convenience and comfort of off-premise offerings; QSR and fast-casual outlets are quickly expanding curbside and drive-thru while continually improving the convenience of the off-premise experience; and Leading QSR and fast-casual brands, including Starbucks and Taco Bell, have even developed curbside and drive-thru “stores of the future.”

— Tom Cook, principal, King-Casey

“It’s become a standard now, and it’s going to stay and continue to grow.”

Getting Past the Roadblocks

It’s a simple truth that labor issues are not going away any time soon, and supply chain difficulties will continue into 2022. There’s no way to sidestep these issues, but striving to simplify operations can make things run more smoothly, according to a panel of retailers moderated by Kay Segal, principal of the Business Accelerator Team. Consistency is key. The greater the number of differences from store to store, the more factors operators must take into account, and the more chances for things to go wrong. “Inconsistency … will absolutely kill your program with turnover,” said Chris Postlewaite, director of foodservice for Elizabethtown, N.C.-based Minuteman Food Mart. Minimizing preparation steps can be beneficial, too. Ben Lucky, foodservice category manager for La Plata, Md.-based Dash In, seeks to have everything in the ballpark of six steps. He tries to have as many products as possible made to the same taste profile, but is willing to experiment with items already in stock to create something completely different. “It’s doing more with the same items you already have, so you can amplify and be innovative with guard rails, without going too far afield,” he said.

Restaurant Closings During Pandemic Mean Opportunity for C-stores

Over the course of nearly two years, the COVID-19 pandemic has disrupted all aspects of life, including how people work, how people travel, and how people eat. Convenience foodservice faces a long list of significant challenges, but operators willing to address them have considerable opportunity still to achieve long-term success and profitability. According to John Matthews, president and CEO of Gray Cat Enterprises, the pandemic’s impact on retail foodservice operations is on the level of the 9/11 terrorist attacks and the 2010s housing crisis. Just like air travel and loan options were irrevocably changed by those events, retail foodservice will never return to “normal.” The closing of an estimated 15-20% of restaurants during the pandemic means there is significant opportunity for c-stores to gain share of stomach — and the race to do so is already on.

Convenience store retailers have persevered throughout the pandemic by focusing on what they already do best and how they can do it even better — which is likely to improve consumer sentiment about convenience foodservice in the long run. “We focused on who we were,” Heather Davis, foodservice director at Savannah, Ga.-based Parker’s, said during a retailer panel led by CSNews Editorial Director Don Longo. Eliminating lower-selling items that took up more time in the fryer in favor of “core champions” like its famous chicken tenders allowed Parker’s to avoid outages, while assuring its loyal customers that they could count on getting their favorite items, she noted. In the current environment, c-store operators can win by pursuing smaller forms of innovation, balanced with being cautious enough to make sure they can follow through on any new offerings, said Chad White, foodservice category manager at Rutter’s. The York, Pa.-based chain is currently “assessing and nimbly pivoting” to meet the needs of its customers and staff, he shared. “Menu rationalization and focusing on the most important aspects of the menu has helped us continue to innovate in small ways, while maintaining in-stock positions and service levels,” White said.

The Top Food Trends to Watch in 2022

While the labor shortage and supply chain disruptions have many convenience store operators focused on day-to-day challenges, it’s critical to always keep one eye on up-and-coming trends — because the future will be here sooner than you think. Johnson & Wales University Chef Don Brizes believes these are the top 10 emerging trends for food-focused c-store retailers:

1. Ghost Kitchens Also known as cloud kitchens or dark kitchens, these food preparation-only concepts have less overhead and can serve as centralized commissaries for retailers that want to boost their foodservice sales without adding to the workload of store employees who are already juggling non-food duties.

2. Plant-Based Offerings Adding vegetarian and vegan products can enable c-stores to better serve a wider range of customers with differing dietary preferences. It can also help to change the common perception among non-meat-eaters that the convenience channel as a whole is not one they can rely on for an easy snack or meal.

4. Mental Health Cooking Otherwise known as comfort food, consumers are gravitating toward items that fulfill their emotional needs as much as their physical ones.

3. Pantry Meals If a particular ingredient is only used for one or two menu items, why not brainstorm to see where else it can fit? Doing more with what is already on hand — or “in the pantry” — increases efficiency and allows c-stores to present more variety at a time when supply issues may hinder their ability to reliably offer innovative new products.

5. Flexitarianism An increasing number of consumers are trying the flexitarian diet, in which they cut down on meat without fully eliminating it from their diet, or restrict meat consumption to certain days of the week. Offering more fruits, veggies, nuts and other non-meat products can attract flexitarians to c-stores in their search for healthier products.

6. Carb Alternatives Options for low- and no-carbohydrate alternatives are growing in response to consumers who want to cut down on carbs as part of weight loss or for medical reasons. Cauliflower, in particular, has emerged as a tasty, extremely versatile alternative that can be used to replace everything from mashed potatoes to pizza crust.

7. Takeout Consumer demand for takeout meals spiked during the pandemic and shows no signs of waning. A retailer’s best option among delivery, curbside pickup or in-store pickup should be based on factors such as target market, store layout, and available labor.

8. Low-Waste Foods Similar to pantry meals, low-waste foods do more with less. For example, radishes are primarily valued for their bulbs, which can be chopped and used in a salad, but they often come still attached to their greens, which can become ingredients for smoothies, kimchi and more.

9. Elevated Desserts Getting creative with desserts — such as taking a simple s’more and adding cookie butter, berries or caramel to make it fancier — is an easy way to make something new and intriguing for customers out of an old standard.

10. Cold Brew Coffee Already the fastest-growing coffee drink, cold brew is an easy choice for retailers that want to draw in coffee fans who have largely been brewing their own java at home for the last two years. Cold brew coffee is set to explode in 2022.

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