McLane Brands Proprietary Pizza Program as Foodservice Evolution Continues

By: Melissa Kress | Executive Editor

The company also adds to its fresh food ranks with two new team members.

TEMPLE, Texas — A month after debuting its expanded retail foodservice program at its McLane Engage convention, McLane Co. Inc. revealed the name and branding for its new proprietary pizza program made for convenience stores: Prendisimo

Prendisimo, which translates to “take away” in Italian, is the latest in the McLane Fresh family of brands. McLane debuted Prendisimo at the 2023 NACS Show on Oct. 4 in Atlanta with an immersive culinary experience with an of available samples and marketing materials on display for the brand.

In addition to Prendisimo, McLane also featured CupZa!, its newly launched beverage program which includes bean-to-cup coffee, cold brew, iced tea and lemonade; and new products from Central Eats including a Texas toast grilled cheese, maple sausage waffle and cheeseburger.

“Prendisimo is more than just incredible pizza. It’s a highly marketable brand that attracts and appeals to consumers, supported by the end-to-end solutions that McLane Fresh offers,” said Vito Maurici, McLane’s customer experience officer. “McLane is scaling our offerings across the board, creating programs and products that are more accessible and customizable than ever. We are proud to introduce Prendisimo and look forward to partnering with our customers to make a variety of quality fresh foods a reality for convenience stores of all sizes nationwide.”

As the McLane Fresh program continues to grow, the company added to its team member ranks. Anne Hughes and Jeremy Reinicke have joined the team as category director, fresh food and commissary, and corporate executive chef, respectively.

With more than 15 years of experience working with quick-service restaurants and retailers, Hughes brings fresh ideas and proven marketing expertise to the expanding program, while Reinicke’s extensive professional culinary experience will invigorate menu innovation for the program.

“Anne and Jeremy share in our vision for the future of convenience, and their skills, experience and perspective will help bring that vision to life,” said Farley Kaiser, McLane’s senior director of culinary innovation. “We are excited to have these incredible additions on board the McLane Fresh team as we build on the momentum of our core brands to ideate new products, programs and extensions for our customers.”

Temple-based McLane Co. is one of the largest supply chain services companies in the United States. Through McLane Grocery and McLane Foodservice, it operates more than 80 distribution centers and one of the nation’s largest private truck fleets, and provides alcoholic beverage distribution through its subsidiary, Empire Distributors.

McLane is a wholly owned unit of Berkshire Hathaway Inc.

Source: Convenience Store News

Consumer Priorities Shift Beyond Discretionary Spending

By: Amanda Koprowski, Associate Editor | September 15, 2023

Edible and nonedible CPG sales continue to outperform general merchandise spending, according to Circana.

CHICAGO — In August 2023, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), remained unchanged compared to the same month last year while unit sales declined 2 percent. 

[Read more: Foodservice Customers Increasingly Dine Out on Deals]

According to Circana, discretionary spending declines continued with a 5 percent decline in dollar sales and 7 percent drop in unit sales compared to August 2022.

CPG spending gains slowed slightly from the previous, with 3 percent growth in food and beverage, a 2 percent increase in nonedible revenue compared to last year. Demand levels held steady from July across CPG, with unit sales falling 1 percent and 3 percent respectively in edible and nonedible segments.

“The purse strings are tightening and shifting when it comes to retail spending,” said Marshal Cohen, chief retail industry advisor for Circana. “Inflation is easing, but consumers continue to feel the pinch of still-elevated food and beverage prices. Impacts of higher prices, lower demand, and weather disruption may be starting to extend beyond discretionary spending.”

For food and beverage spending, households continued to look for deals and switch to lower-cost options to save money, though some specialty stores continued to see benefits in shifting spending habits. 

When recent trends in discretionary general merchandise, food and beverage, and nonedible CPG are viewed together, a picture of changing consumer priorities emerges. Over the past two years, Circana found the once minimal gap in spending changes has varied. A year ago, spending on food and beverages rose above both nonedible CPG and the general merchandise segment. Now, slowing growth activity has closed the gap between food and nonedible CPG, while their gains continue to outperform general merchandise, which has established a new baseline.

previous Circana report further observed that delayed purchasing during the key back-to-school season aligns with overall shifts in how and when consumers prioritize spending. 

“Manufacturers and retailers need to adjust to and align with the consumer’s priorities in order to maximize purchase opportunities through this year’s remaining shopping holidays and into the year ahead,” said Cohen, “Consumers are spending on their needs and on their schedule.”

[Read more: SNAP Households Cut Back on Food & Discretionary Spending]

Chicago-based Circana serves as an advisor on the complexity of consumer behavior. Through advanced analytics, cross-industry data and subject matter expertise, Circana provides insights and research that helps clients unlock business growth.

Source: Convenience Store News

C-store Retailers Can Keep Backbar Steady by Managing Downtrading

By: Renée M. Covino

Tobacco industry insiders offer four tips for leveraging the trend.

NATIONAL REPORT — Tobacco’s latest oxymoron is here: Downtrading is on an upswing.

Pressures from ongoing inflation and continued list price increases across all tobacco categories are forcing consumers to make difficult decisions to either buy less, buy cheaper or try to quit, according to Bonnie Herzog, senior financial analyst at Goldman Sachs.

“Retailers note consumers are increasingly making purchase decisions based on what is on sale or discounted, with one retailer documenting that nicotine salt e-vapor products are among the least expensive nicotine delivery formats,” Herzog stated in her firm’s “Nicotine Nuggets” survey from the first quarter of this year.

Inflation and rising prices throughout 2023 will continue to drive tradedowns to off-brands, private label and generics/subgenerics in the tobacco/nicotine category, predicts Alex Morrison, senior business analyst for Cadent Consulting Group, based in Wilton, Conn.

[Read more: Backbar Shifts Reflect Continued Pressures on the Tobacco Consumer]

Some good news is that there are multiple opportunities for convenience store operators to pivot a bit and take advantage of downtrading.

Keep Up With Value Trends

The most obvious way for c-store retailers to cater to cash-strapped tobacco consumers is to stock more items with a lower product quantity and/or lower price point and then, make note of these value offerings through in-store and window signage.

The top subsegments to do this in are value cigarettes, value moist, modern oral and vapor disposables, according to Don Burke, senior vice president of Management Science Associates Inc. (MSA), a Pittsburgh-based company focused on analytics and informatics.

“Being able to offer a strong product selection of value-priced items, while maintaining the right items in the higher-priced segments, will require some retail ingenuity,” he said.

In addition to stocking robust value brands, c-store operators should also keep up with the latest lower-priced premium offerings. For instance, Richmond, Va.-based Altria Group Inc.’s Marlboro Black Gold Pack nonmenthol cigarettes are the company’s latest answer to offset inflation-induced downtrading among its cigarette smokers. The product became available nationwide in May, coupled with increased marketing support for the overall Marlboro Black line. It is intended to gain back adult smokers who left the Marlboro brand, as well as keep those who are considering downtrading out of the brand.

“If consumers had felt the need to trade out because they were under economic pressure, it gives them a space within the Marlboro franchise where they can reengage — or if a consumer comes under pressure, it gives them a space to continue to engage with Marlboro,” explained Altria Group CEO Billy Gifford.

Embrace the DIY Trend

When economic times get tough, consumers lean into the do-it-yourself (DIY) space and for tobacco consumers, that means roll-your-own (RYO) items. RYO is experiencing somewhat of a resurgence, providing adult consumers with “a less-expensive alternative to factory-made cigarettes and allowing them to build the perfect taste for themselves and making them feel that they’re crafting something themselves,” said Becky Roll, chief revenue officer at Glenview, Ill.-based Republic Brands, which bills itself as the world’s leading rolling company.

Considering downtrading, Roll recommends that c-store retailers choose to become a top-of-mind destination for RYO, carving out a dedicated space for this segment in-store.

MSA’s Burke also points to another resurgent segment of RYO — pipe tobacco — and suggests retailers consider carving out a small space for that adjacent to RYO.

Map Out Geography Trends

Retailers should keep abreast of geographic influences affecting downtrading or the lack thereof. An industry report released in June found that adults and young adults in 12 states — Alabama, Arkansas, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Oklahoma, Tennessee and West Virginia — have a 50 percent higher prevalence of smoking cigarettes, and smoke significantly more cigarettes per capita annually than people living in other states (53 packs vs. 29).

These states also have lower taxes, resulting in a pack of cigarettes costing nearly 20 percent less than in other states. And these states currently have virtually no flavored tobacco sales restrictions.

Focus on Digital Trends

Now more than ever, progressive retailers are harnessing the full power of digital capabilities, using adult consumer data from loyalty and app-based programs to become more efficient marketers and drive awareness of what matters most to them, such as the best nicotine prices and promotions. The digital space is also rapidly becoming a means of education for alternative products.

“The very best retailers are consciously making the investment today to leverage the data for the benefit of their adult consumer base, as well as their own retail operations,” said Matthew Hanson, chief financial officer/chief growth officer for Chicago-based Black Buffalo, a modern oral nicotine product that mimics moist smokeless tobacco but without the tobacco leaf.

Mike Wilson, vice president of trade strategy and operations for Reynolds Marketing Services Co., headquartered in Winston-Salem, N.C., echoes that the use of digital media to drive adult nicotine consumer engagement with c-store loyalty programs is a must for retailers that want to outpace their competition. New product introductions and reduced pricing/promotions are crucial messages for adult tobacco/nicotine consumers in these downtrading times, he said.

Altria, too, has increased its digital efforts at retail. At the highest level of participation, once a consumer is verified, a retailer can provide targeted offers and messaging within its app.

Source: Convenience Store News

Three Findings About Gen Z’s Snacking Habits

Fruity/chewy candy and meat snacks/jerky increased significantly in popularity.

CINCINNATI — Generation Z is disrupting many of the assumptions and conventions upon which marketers and retailers base their strategies, according to a new deep dive from neuroscience-based consumer insights market research firm Alpha-Diver.

The new report, entitled “Introducing The Snack 50 Psych Pulse Gen Z Edition: Surprising WHYs Behind Gen Z’s Snack Decisions,” delivers insights regarding the cohort’s snacking preferences. It is a follow-up to Alpha-Diver’s first-ever “Snack 50 Psych Pulse” report, released earlier this year, which measures psychological drivers of consumer decision-making when it comes to snacking.

The report analyses four emotional jobs — Functional, Experience, Conformity and Impulse — that different snacks do for consumers and shows the top two snacks for each “job.” The analysis studied 12 categories of snacks overall, with an emphasis on packaged snack and sweets brands.

Source: Alpha-Diver

The deep dive examines differences in preferences for snack “jobs” among Gen Z vs. the overall population, revealing how the cohort differs and what it means for brands.

The findings point to three macro differences for Gen Z when it comes to what categories and brands they decide to buy:

1. Choosing Chewy

Two categories increased most significant in popularity among younger consumers: fruity/chewy candy and meat snacks/jerky. Corresponding brands within these categories jumped similarly in their emotional importance to this generation.

Source: Alpha-Diver

Behavioral science offers an interesting insight regarding these improvements: these are the chewiest snacks included in the study, according to Alpha-Diver. “It’s been widely reported that young consumers are experiencing potent levels of stress and anxiety. The field of psychology has found that the physical act of chewing contributes to stress reduction. So, it’s likely no coincidence that ‘the chews’ are appealing to Gen Z,” said Alpha-Diver President Hunter Thurman and Director of Data Insights Mary Mathes, authors of the report.

2. Better-for-you May Not Be Better For Business

Snack categories like nuts reside in the “functional” space, meaning they make rational, practical sense. Typically, this is the domain of better-for-you, sensible options. Snack bars and pretzels also serve this emotional job.

Source: Alpha-Diver

[Read more: In the Driver’s Seat]

“With many headlines awash in the supposed importance of health and wellness for Gen Z, it’s surprising that snack nuts plummet in popularity among this cohort, dropping to No. 11 out of 12 (and the No. 12 spot belongs to pretzels),” Thurman and Mathes wrote. “Why don’t sensible snacks create the emotional voltage of their fun-forward (and generally less ‘healthy’) alternatives? Because snacking decisions for Gen Z are primarily about feeling better emotionally. Snacks’ role is to provide mental escape via an interesting experience, or just some feel-good satisfaction (and stress relief) that comes with salt, fat, and carbs/sugar.”

Alpha-Diver suggests marketers adapt their offerings to address not only BFY functionality, but also “better-to-you” emotional experiences.

3. Name Brands Matter

With ongoing economic uncertainty, most marketers are concerned about shoppers trading down to store brands and private label. However, the broader Snack 50 findings reveal that shoppers choose store brands not merely for prices, but because of social norms: shoppers perceive that other people like them.

Source: Alpha-Diver

For Gen Z, however, the importance of social conformity drops considerably when it comes to snacking. Individual experiences drive decision-making much more. As a result, the rankings of store brands in the list drop across the board.

“So, while the snacking decisions of Gen Z are often surprising, and counter to conventional assumptions, they are explainable. Experiences matter. Brands matter. And marketers have options beyond the price promotion race-to-the-bottom,” wrote Thurman and Mathes. “Brands that heed these explanations, serving the core emotional needs of these consumers, will enjoy strong potential.”

“Introducing The Snack 50 Psych Pulse Gen Z Edition: Surprising WHYs Behind Gen Z’s Snack Decisions” is available for download here.

Alpha-Diver is a market research firm that applies neuroscience to understand marketplace behavior more deeply. The firm’s neuroscientists and strategists work with leading brands, retailers and the Wall Street analyst community to explain, measure and predict consumer behavior. Clients include McDonald’s, Coca-Cola and Kellanova, among others.

Source: Convenience Store News

Three Key Dining Trends Emerge Among Young Adults

Y-Pulse: Millennial and Gen Z diners prefer convenience to cuisine, but also seek out communal meal experiences.

CHICAGO — Over the last few years, young adult consumers have developed a reputation for their interest in exploring new foods and setting trends, while also seeking out both convenient and connival dining experiences. 

[Read more: Consumers’ Satisfaction With C-store Foodservice Shifts]

The newest findings on young adult preferences comes from a Y-Pulse nationwide study of millennial and Generation Z consumers which delved into the cohorts’ dining perspectives and experiences. 

“This study found more than half of the millennial and Gen Z consumers surveyed agreed that convenience was more important than cuisine, and that was surprising and a bit unsettling,” said Sharon Olson, executive director of Y-Pulse. “Yet as we took a closer look at the … dining options available in fast casual restaurants and on college and university campuses around the country, we soon realized that there is little need for young adult consumers to have to make that choice.”

Overall, 71 percent of millennial and Gen Z respondents said they prefer meals they can consume on the go. Yet, that does not necessarily mean they are consuming those meals alone. Ninety-one percent enjoyed sharing meals with other people rather than dining alone, while 87 percent reported that they enjoy taking their to-go meal somewhere else to relax and enjoy with others. Additionally, 72 percent reported that sharing a meal with a friend or family member in the car suits their hectic lifestyle

Beyond the car grab-and-go, 77 percent of survey participants said they like convenience stores that have café seating, while 88 percent liked food markets because of the ease of sharing a meal with others when not everyone in the party wants the same type of food. For c-store operators, the research suggests simply offering customers the option of seating to enjoying meals will be attractive to this particular demographic.

The new report also found a dramatic shift in the same age cohort surveyed in a 2017 Y-Pulse study that asked the same question about convenience. Six years ago, only 44 percent of those surveyed reported convenience as more important than cuisine in their dining decisions, compared to 59 percent in the latest study. 

[Read more: Consumers Continue to Choose Takeout or Delivery Over Dining Out]

Y-Pulse conducted the survey with 2,101 consumers representative of the U.S. population nationwide. Millennials included those born between 1981 and 1996, while the Gen Z group included those 18 years or older from the total cohort born between 1997 and 2012.

Founded in 2004 and headquartered in Chicago, Y-Pulse is a division of Olson Communications Inc. and a certified Women’s Business Enterprise.

Source: Convenience Store News

Eating on the Go Proves Popular Among U.S. Consumers

American consumers look for both convenience and variety in their on-the-go meal options, according to NCSolutions.

NATIONAL REPORT — Despite all of the changes in working Americans’ lives in the years since the start of the pandemic, the majority of consumers will still eat meals or snacks on the go at least sometimes.

[Read more: Consumers Crave Fruit Options for Snacking Occasions]

The findings came from a new consumer sentiment research survey commissioned by NCSolutions, a company focused on advertising effectiveness for consumer packaged goods brands. 

Of those surveyed, many quoted a hectic schedule as a key reason to rely on convenience foods for meals while traveling or commuting. Overall, 75 percent of respondents still eat meals or snacks on the go either “sometimes” or “always.”

Even with changes to commuting schedules and remote work becoming more common, the most popular times for grab-and-go foods remain the morning and midday. Lunch (52 percent) and breakfast (50 percent) are the most popular grab-and-go convenience item meals, followed by snacks (41 percent) and dinner (36 percent).

The report also found that customers often crave variety in their options, opening a possible channel of opportunity for c-stores and other retailers to tap into underserved markets. Just under half (48 percent) of Americans are only somewhat satisfied with the variety of flavors and options for convenience foods available, while almost one in three (31 percent) say they aren’t satisfied with the options for diet-specific choices offered in the grocery store, such as keto or gluten-free. 

Consumer dining habits continue to react and remain in flux due to the effects of the COVID-19 lockdown even three years on. Recent research by US Foods found American adults still prefer to eat at home and will more often choose takeout or delivery options over eating out. In the meantime, customer satisfaction with convenience foodservice has risen overall by seven percent year over year even as those who consider themselves “very satisfied” with c-stores’ prepared foods fell by 11 percent.

More information on NCSolutions’ research can be found here, along with a recent case study.

Source: Convenience Store News

Convenience Stores See Higher Sales in First Half of 2023

Labor remains a concern despite optimism about the rest of the year.

ALEXANDRIA, Va. — With more than half of 2023 behind them, convenience store operators are feeling good about the year so far and the remaining months.

Convenience retailers report that sales are up year to year and they are optimistic about that trend continuing through the rest of the year, according to new survey results from NACS.

Two out of three retailers (66 percent) report that their sales for the first seven months of 2023 were higher than sales during the same time period in 2022, while just 12 percent say sales were lower.

NACS’ CSX database of industry metrics shows similarly positive figures. During the first six months of 2023, in-store sales were up 9.4 percent compared to the first half of 2022. Inside transactions were also up 1 percent, according to the association.

[Read more: Food & Beverage Spending Drive Retail Sales Revenue]

Retailers are similarly bullish about the c-store channel’s sales for the remainder of 2023, as one-third (33 percent) of all c-store operators said that c-stores were the best positioned of six channels for success over the rest of the year. Thirty-two percent said online retailers were best positioned for success and 14 percent listed dollar stores.

Just 8 percent of c-store operators said the channel was the worst positioned for success in 2023. Retailers were more likely to name restaurants (39 percent), drug stores (25 percent) or grocery stores (12 percent) as being worst positioned for success.

Unsurprisingly, with unemployment near historic lows, the labor shortage remains a top concern, listed by 44 percent of retailers. Inflation, credit card swipe fees, government regulation, shoplifting and organized retail theft are also among c-store operators’ top industry concerns.

Retailers also shared their opinions on the top community-related issues facing the channel. More than half of operators (56 percent) listed preventing underage access to age-restricted products as the top community issue for the c-store industry to address. Addressing wellness (48 percent) and human trafficking (38 percent) were also top concerns.

The NACS Consumer Member Survey closed Aug. 4. A total of 170 retailer member companies participated. NACS Research conducts quarterly custom research with retailer members to identify key priorities and opportunities across the convenience and fuel retail landscape.

Alexandria-based NACS is a global trade association dedicated to advancing convenience and fuel retailing. NACS advances the role of convenience stores as positive economic, social and philanthropic contributors to the communities they serve, and is a trusted adviser to retailer and supplier members from more than 50 countries.

Source: Convenience Store News

No Foodservice, No Future?

The Convenience retail channel is reaching a turning point.

A distinctive, high-quality foodservice program is no longer a want-to-have for a convenience store operator, it’s a must-have. C-store retailers with existing foodservice programs must continue to evolve their offerings to meet the more demanding needs of today’s consumers, and those without foodservice programs must jump in fast to survive.

Although the evolution of convenience foodservice caught some by surprise, it’s been a long time coming, according to foodservice consultant and c-store industry veteran Jerry Weiner.

“This foodservice issue has been moving toward a ‘must-have’ for several years, even decades. I think now, more so than ever, you will need a high-quality food offering to have any success at all,” said Weiner, who has 45 years of experience in managing foodservice programs for both convenience stores and restaurants. 

The consumer has changed, too, and seems more willing to try convenience foodservice and “less likely to denigrate it to ‘gas station food,’” noted Tim Powell, managing principal of Foodservice IP, a research-based management consulting firm that specializes in foodservice. 

To develop a distinctive foodservice identity and not just a program that blends in with all the other food programs out there, a c-store retailer must have excellent food, a super friendly staff, a clean store and innovative limited-time offers, and be constantly using social media to connect with end users in a productive way, not just selling, according to Powell.

“They must think like restaurants for the food portion, but a grocery store for commodities,” he said. “It’s not an easy task. Each brand has a different mission and perception by its patrons.”

A distinctive, high-quality foodservice program is no longer a want-to-have for a convenience store operator, it’s a must-have.

Advances in Convenience Foodservice

Kevin Smartt, CEO of Spicewood, Texas-based Texas Born (TXB) — honored as Prepared Foods Innovator of the Year in the 2022 Convenience Store News Foodservice Innovators Awards — recognizes high-quality foodservice as a key driver in bringing fuel guests into the store. 

“Our industry is often criticized for serving unhealthy foods and being unclean. C-stores trying to break through this stigma are offering healthier, fresh snack and meal items like take-home salad kits, veggie kits, sandwiches and fresh fruit,” he explained. 

Smartt also noted that offering multiple modes of receiving meals, such as prepackaged grab-and-go options, theater-style made-to-order stations and mobile ordering availability, is enabling c-store retailers today to better compete against quick-service restaurants (QSRs). 

Additionally, he pointed to the increased use of technology in a variety of ways as the most important advancement in the prepared food space over the last 10 years. This includes mobile ordering, self-checkout stations, artificial intelligence (AI) technology to quickly identify store needs, customizable mobile apps and loyalty programs. 

Although the COVID-19 pandemic served as a huge catalyst for these advances due to customers shying away from human interaction and high-touch areas, their usage has stayed high even as pandemic protocols have slowed or disappeared entirely. 

“These are all extremely valuable tools to ultimately help our guests get in and out of the store as efficiently and comfortably as possible, while taking some of the pressure off our employees as well,” Smartt said. 

The role of technology in food at convenience store retailer Casey’s General Stores Inc. is also growing, said Art Sebastian, vice president of omnichannel marketing for the Ankeny, Iowa-based chain of 2,500 stores in 16 states. Casey’s has been honing its handmade pizza program for more than 35 years. 

The intersection of technology and food has been growing “over the last four to five years as we’ve assembled a new leadership team and started down this journey of becoming bigger, bolder, more contemporary both on the guest-facing side, but also on the team-member side as of late,” he shared.  

Sebastian anticipates technology becoming more and more integral to the category. 

“On the consumer side, we know that the role of technology in lives in general continues to increase, right? The stats around how many U.S. adults have a mobile device, the stats around how many hours they spend on the mobile device, the blurring of apps. Now, you can transact through social media channels directly. You can one-tap order. There are so many ways to order. So, for consumers, there’s a significant amount of change in that space,” he explained. 

A Chicago native, Sebastian has been pleasantly surprised by how quickly Casey’s guests have embraced technology. “I will bust the myth that rural America doesn’t use technology. They do. And that’s proven to us statistically in the fact that 6.3 million rewards members have downloaded our app and elected to engage with us digitally,” he said.

“I will bust the myth that rural America doesn’t use technology. They do.”

–Art Sebastian, Casey’s General Stores Inc.

“And we’ve shared in past earnings calls more statistics around our growing digital business that’s coming from our rewards members ordering in the mobile app,” he continued. “So, we continue to see mobile app usage, both for ordering pizza but also participating in our rewards program — and that means saving offers, using unique one-time-use offer codes, playing the games that we built in our app experience, and so on.”

On the team-member side, like many c-store retailers these days, Casey’s is taking on the challenge of making its employees’ jobs easier and more efficient. Sebastian likes to call it “the shift from clipboard and pen to technology-enabled ways of working.”

“For us, that’s going to continue to grow because we have to be efficient in order to keep up with the growing volumes our stores are seeing,” he said. “And as you know, this labor market is a challenging market and you’ve got to be a good place to work in order to keep your talent. A good place to work does not involve clipboards and pens; it involves what most team members are used to now: applications and technology.” 

No End in Sight for Evolution

Looking ahead to the next 10 years, Weiner expects “a great ride for those out there that are working in foodservice.” The use of more high-quality ingredients and more creativity in the product offering are on the horizon, he said, while the days of “fresh food” equating to a frozen packaged burger or breakfast sandwich being microwaved and placed in a heated grab-and-go display are “basically over.”

“Fresh prepared and assembled onsite is the future,” he predicted. “Made-to-order and/or some level of hot and cold grab-and-go is where this goes in the near future and for the long run, dinner plates of a complete meal will be part of this. Snacktime offerings will also encompass high-end foods and sides that can be a snack or an add-on to a meal.”

“Fresh prepared and assembled onsite is the future.”

–Jerry Weiner, Foodservice Consultant

Smartt envisions a similar future. “Especially competing with QSRs, it’s critical c-stores are innovating in this space as customers are grabbing and taking meals home now more often than ever. We expect the future to also be filled with fresher options. No longer will guests have to decide between convenience and health or flavor,” he said. 

The chief executive also foresees “added convenience” as a major focus for the next decade. “The future of c-stores is improving guest convenience options,” he stated. “This will mostly be through mobile ordering, mobile payment, third-party delivery and simple pickup options. For example, we’ve begun adding heated food lockers for easy, quick pickup.”

The nation’s transition to electric vehicles (EVs) and the rollout of EV charging stations are poised to have a major impact on convenience foodservice as well, making it even more important to prioritize fresh food as a means of drawing customers in.

As Smartt pointed out, it’s “not only providing EV charging stations, but finding ways to make EV guests comfortable. They charge their cars for at least 20 minutes as opposed to gasoline cars needing only a few minutes. How can we appease EV fuelers to choose our location to charge? Is that enticing them with healthy meal options and providing comfortable places to sit and eat while their car charges?”

Regarding the future of convenience foodservice, and particularly how the shift to electric vehicles will impact the business, Powell believes it’s all going to depend on how quickly convenience stores can make the transition. Parking garages are now mostly empty and aspiring entrepreneurs will see this as an opportunity to develop car charging destinations, he said. 

“We will likely see less dependence on fuel as driving consumers in. If c-stores can be the go-to spot for EV charging, then coffee and bakery products will be popular,” Powell added. 

Weiner speculated that while the transition to EVs is “the inevitable future,” it will likely take at least a generation for its effect on c-store foodservice to be measurable. However, the change will be felt gradually as the upward trend continues over the years, with EV charging becoming increasingly available at QSRs and fast-casual restaurants, plus drugstores, dollar stores and more.

“Their availability will make it imperative that c-stores have a destination offering other than gas to get customers on the real estate, and some form of inside seating that will also make the stop of EV charging and eating a viable alternative,” he said. 

Keeping the Focus on the Customer

To stay on top of consumers’ foodservice wants and needs, technology will be essential. 

Smartt sees the rise of AI in retail as another opportunity for convenience stores to evolve and improve. TXB is testing SparkCognition’s Visual AI Advisor solution at its Georgetown, Texas, store. This solution enables it to learn the store’s demographic mix of shoppers; where and when people traverse the store and spend time; service-level measures at the foodservice and checkout counters; and movement of customers from the forecourt to the store.

“This is extremely insightful for us as we’re able to identify when shelves are low on product faster, how many times someone has entered the restroom and how often we need to go in and clean, when there is a line at the register and more employees need to be at the counter to help checkout, etc.,” he said. “We’re excited to keep working with SparkCognition and their technology to further improve our customer service.”

Keeping the focus on the customer is a vital part of developing a foodservice identity that enables a c-store retailer to stand out instead of blending in with the competition.

“Retailers who are looking to develop a distinctive foodservice identity should always start with the consumer,” Smartt advised. “You will quickly identify community needs, preferences and ultimately gain their trust.”

Retailers who are looking to develop a distinctive foodservice identity should always start with the consumer.

–Keven Smartt, Texas Born

Weiner suggests c-store operators study their competition and take note of what is working — and what isn’t. “I don’t mean to suggest that you should copy them. The last thing I believe in is a ‘me too’ approach,” he clarified. “However, looking at what they are doing that appears to be working will help in leading you down a path.”

Food that is new and different can yield very positive results.

“I am a great believer in unique but executable food,” Weiner said, recalling an instance where his company launched a fresh-off-the-grill cheesesteak in a region where no one else offered it. “Don’t be afraid to step out of the typical c-store box, but ensure you are keeping it high-quality and fresh.”

Source: Convenience Store News

Five Tips for Creating a Successful Bakery Program

By: Alyssa Barrett, Rich Products | July 27, 2023

An engaging bakery experience can lead to increased shopper frequency and impulse purchases.

With mounting challenges like inflation and labor shortages, convenience store operators are examining the bottom line now more than ever.

Foodservice is a bright spot in the dim economic landscape, as convenience retailers saw a 14.3 percent year-over-year increase in total foodservice sales, based on the 2022 NACS “State of the Industry” survey. A vital component of every c-store foodservice program is the bakery case.

C-store customers are looking for an everyday treat, at any time of day — a morning pick-me-up, an afternoon snack or a late night treat. Craveable, snackable items satisfy these cravings, like cookies and doughnuts.

“The Future of Fresh Bakery” study from Rich Products reveals that 31 percent of consumers say they’re purchasing more baked goods for an “anytime treat” now vs. previously.

This proprietary study examines how retailers —including c-store operators —can drive growth by evolving their fresh bakery portfolios, marketing and merchandising. The report, which analyzed data from 2020 through 2022, determined that an engaging bakery experience can lead to increased shopper frequency and impulse purchases.

Five key recommendations from “The Future of Fresh Bakery” study are:

1. Know Your Shopper

The consumer landscape is evolving. Five distinct shopper segments emerged in the study, based on consumer behaviors from the IRI Consumer Network Panel with attitudes, needs and usage survey information. Of the five bakery shopper segments, c-stores should focus on three:

  • Engaged Explorers are the sweet spot for c-stores. They spend the most per bakery trip and make up 16 percent of fresh bakery buyers. They are devotees with a love of exploration and variety. This segment indulges in satisfying a craving for themselves, sharing a fun treat with kids/friends, and including food in a social occasion with other adults. Engaged Explorers frequent the bakery case in the morning and also enjoy sweet snacks throughout the day. C-stores can reach them by creating visual stories, focusing on flavor variety across all fresh bakery categories, and creating limited-time offers (LTOs).
  • Special Treat Seekers make the most trips and comprise 24 percent of fresh bakery buyers. They crave baked goods with an eye on value and an appreciation for the specialness and fun of the fresh bakery. Special Treat Seekers make purchase decisions driven by price, especially compared with packaged bakery products. To score their sales, c-stores should offer special deals, promotions and a variety of smaller-sized options to create more “treatable moments.”
  • Health Balancers are an important audience as they make up 15 percent of fresh bakery buyers and are health-focused shoppers with a preference for “better for you” baked goods. Since they believe “food is fuel,” c-stores can win them over by providing premium experiences in a transparent, permissible way with smaller, individual or bite-size portions.

2. Create Ambiance

When a retailer understands its target audience, it’s easy to create an environment that attracts, inspires and leads shoppers to purchase. All three of the target audiences —Engaged Explorers, Special Treat Seekers and Health Balancers —prioritized freshness as a key purchase driver for bakery items.

In the study, consumers ranked the attributes that drove their purchases, aside from taste, price and freshness. The bakery case’s appearance rated highest in importance at 65 percent. Other top attributes were having a variety of options to choose from (55 percent), convenience (53 percent), and the aroma of fresh baked goods (48 percent).

Given these results, c-stores must keep the bakery case stocked and looking fresh throughout the day. This is why Rich’s spent over three years developing extended shelf-life recipes for Fully Finished Donuts. All eight flavors maintain an airy, soft texture, fresh flavor and longer ambient shelf life.

3. Offer Variety

The study uncovered three types of anytime treats that every retailer should offer. The first is snackable breakfast and mini-meal items that are portable for eating on the go. To satisfy snack attacks later in the day, c-stores should also offer bakery items that are fun, flavor-forward treats that can be enjoyed every day. And another solid menu item is a delicious, “better for you” snack with an enticing, unique twist or flavor.

Premium bakery items deserve a place in the case since they were a purchase driver for 37 percent of consumers. Two out of three shoppers bought these indulgences because they said they “like to treat myself/my family.” When asked what attributes signal “premium,” shoppers stated fresh fruit (46 percent), visible inclusions (42 percent), unique flavors (42 percent) and some type of decoration (39 percent).

Popular brands also rated highly as 35 percent of consumers said that brand is important when buying baked goods. National favorites like Hershey’s and Reese’s are popping up in bakery items like brownies, and consumers are eating them up. Plus, brand recognition is a high driver in digital ordering and is a key catalyst for future growth and expansion.

4. Co-Locate Impulse Drivers

Brownies ranked as the highest impulse bakery purchase at 61 percent. Other items that enticed shoppers include cookies (51 percent), cinnamon rolls (47 percent), doughnuts (46 percent) and muffins (42 percent). To tempt consumers, c-stores should merchandise these high-impulse items adjacent to planned purchases, such as placing brownies by the fountain drinks and placing doughnuts by the coffee counter.

5. Leverage Loyalty

Consumers are making fewer trips to retailers and incorporating new ways of shopping, such as ordering via an app and using delivery or pickup options. The key to reaching these consumers is inspiring impulse purchases on the app. C-stores can do this by featuring LTOs, bundling discounts, and offering loyalty points for bakery purchases. The sight of a premium baked good bundled with coffee in the morning will tempt hungry morning commuters.

Focus on seasonal and limited-time-offers, which will create differentiation from other retailers.

Delighting the three target shopper segments will pave the road to sustained growth. However, note that there’s room to increase frequency across segments and categories. Rather than focusing on one shopper opportunity, c-stores should develop longer-term roadmaps to develop, innovate, measure and refine strategies.

Alyssa Barrett is a customer marketing manager, convenience channel, for Rich Products, a family-owned food company with over 75 years of success. Rich’s offers foodservice solutions for every corner of a convenience store, including the bakery, pizza counter, grab-and-go items and beverages. C-store operators can review the detailed results of “The Future of Fresh Bakery” study by contacting a Rich Products representative.

Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.  

Source: Convenience Store News

C-store Operators Are Optimistic Beverage Sales Will Continue Upward Trend

However, the hard seltzer category is taking a hit, according to the latest “Beverage Bytes” survey.

NEW YORK — Beverage sales are picking up in the convenience channel, and retailers are optimistic that the trend will continue.

According to the Goldman Sachs second quarter “Beverage Bytes” survey, retailers expect beverage sales to increase approximately 6 percent this year, compared to approximately 5 percent previously. The survey represents roughly 36,000 retail locations or 24 percent of the convenience store channel.

[Read more: C-store Retailers Hold Cautious View of Beverage Sales]

Of particular note to retailers, according to Bonnie Herzog, Goldman Sachs senior financial analyst, is Constellation Brands Inc. — which is expected to see 11 percent year-over-year growth this year — and the energy drink category — which is expected to see double-digit growth this year.

However, retailers “remain concerned about broader economic pressures/fears of recession, impacts from cooler weather (in the second quarter) and negative impacts from the recent Bud Light controversy,” she said.

Anheuser-Busch’s Bud Light faced declining sales after a promotional post by Dylan Mulvaney, a transgender influencer, sparked controversy among consumers this spring.

The key takeaways from the second quarter “Beverage Bytes” survey include:

  • The pricing environment remains healthy/rational with the majority of retailers expecting incremental pricing by both nonalcoholic beverage manufacturers and brewers this year;
  • Beer promotional activity has increased in the last few months, particularly in the wake of the Bud Light controversy, as well as in nonalcoholic beverages. Goldman Sachs’ retailer contacts highlighted that manufacturers/brewers have started to promote more in an effort to stem volume pressures;
  • The big winners of incremental shelf/cooler space this year are energy drinks;
  • The hard seltzer category growth declined again in the second quarter and retailers’ are incrementally more negative with their outlook for the category; and
  • Out-of-stocks remain an issue in both alcoholic and nonalcoholic segments. Nonalcoholic beverage out-of-stocks getting incrementally better, but alcoholic beverage out-of-stocks appear to be worse.

Source: Convenience Store News

Private Label Sales Continue Upward Trends

The beverage category experienced the largest store brand dollar sales gain over the past 52 weeks.

NEW YORK — Private label sales continue to hit their stride.

For the first half of 2023, store brands again posted record sales and share — similar to the past 18 months, according to a report from the Private Label Manufacturers Association (PLMA). The success of store brands at the checkout includes outdistancing national brands in two key metrics.  

Store brand dollar sales across all U.S. retail outlets increased 8.2 percent vs. 5.1 percent for national brands year over year for the six-month period ending June 18, according to Circana data. That extends store brands’ powerful two-year run. Measured against the first six months of 2021, dollar sales during the same period this year improved by 16 percent, or roughly $17 billion ($91 billion in 2021 vs. $108 billion in 2023).  

Circana provides PLMA members and retailers with exclusive market insights and monthly sales data of hundreds of product categories and subcategories on the company’s Unify+ platform, a data visualization tool on

[Read more: Private Label Brands Continue Double-Digit Growth Trend]

In unit sales for the six months ended June 18, private brands were nominally even, down 0.5 percent, while national brands fell 3.4 percent. That gap may be lengthening, according to Circana. For the month of June alone, store brand units were off slightly at -0.6 percent and national brands dropped 5.1 percent. 

As a result of this performance, store brand dollar share rose to a record 18.8 percent for the half-year, while unit share rose to 20.5 percent, also a new high. Total store brand dollar sales for the first six months of this year were $108 billion and unit sales were 26.4 billion. Totals last year were $100 billion in dollar sales and 26.5 billion in unit sales.  

“These numbers may grow as student loan repayments resume and borrowers of all ages lean further into strategies to tighten household budgets, including adding more value-friendly store brand items to their grocery lists,” said Mary Ellen Lynch, principal at Circana. 

PLMA President Peggy Davies agreed that the headwinds of an uncertain economy weigh heavily on consumers’ minds. Plus, many marketers are holding on to recent inflation- and supply chain-related price hikes. 

Most importantly, store brands have benefitted from several years of unprecedented consumer trial, which research says is the industry’s best friend.  

[Read more: Private Label Sales Reach Nearly $229B in 2022] 

“Having opted for a store brand over the national brand for the first time, there’s a strong likelihood the shopper will stick with the store brand,” said Davies. “In addition, we are also seeing retailers doubling down on product innovation in food and nonfood to take advantage of the flow of new store brand customers.” 

Among the major departments that Circana tracks for PLMA, the beverage category experienced the largest store brand dollar sales gain over the past 52 weeks, up 19 percent, followed by general food and refrigerated (both ahead 16 percent), then frozen and general merchandise (both up 8 percent).

Home care (7 percent), beauty (5 percent) and health (3 percent) were also winners. In the two smallest departments, dollar sales in liquor were ahead by 20 percent, but in tobacco they fell 13 percent.  

Departmental unit sales followed much the same pattern. In the major sections, beverages led the pack, up 6 percent in store brand units, followed by refrigerated and general food (both up 5 percent), then home care (up 4 percent), health and general merchandise (both 2 percent). Frozen came in even and beauty shed 2 percent, while liquor was up 22 percent and tobacco was down 14 percent. 

The Private Label Manufacturers Association is a nonprofit trade organization founded in 1979 to promote the store brands industry. With executive offices in New York and International Council offices in Amsterdam, PLMA represents more than 4,500 member companies worldwide.

Source: Convenience Store News

New Data Finds Same-Store Sales Continue to Increase Year Over Year

Purchases of beverages, tobacco, candy and snacks contributed to higher basket rings.

NEWARK, N.J. — NRSInsights, a provider of sales data and analytics drawn from retail transactions processed through the National Retail Solutions (NRS) point-of-sale (POS) platform, found same-store sales increased 7.7 percent year over year (YOY) for the month of June.

As of June 30, 2023, the NRS retail network comprised approximately 25,200 terminals scanning purchases at independent retailers, including bodegas, convenience stores, liquor stores, grocers, and tobacco and sundries sellers nationwide, predominantly serving urban consumers.

[Read more: Food & Beverage Spending Drive Retail Sales Revenue]

Retail same-store sales highlights include:

  • Same-store sales increased 7.7 percent YOY (vs. June 2022). Average sales per calendar day for June increased 1.5 percent compared to May 2023.
  • Same-store sales in May 2023 increased 7.1 percent vs. May 2022. Average sales per calendar day in May increased 1 percent vs. April 2023.
  • For the three months ended June 30, 2023, same-store sales increased 6.2 percent compared to the three months ended June 30, 2022.
  • The number of items sold during June 2023 increased 7.3 percent compared to June 2022 and the number of items sold per calendar day increased 1 percent compared to May 2023.
  • The average number of transactions per store in June 2023 increased 4.3 percent compared to June 2022 and the average number of transactions per store increased 1.4 percent compared to May 2023.
  • A dollar-weighted average of prices for the top 500 items purchased in June 2023 increased 2.9 percent YOY, a slight decrease from the 3.2 percent YOY increase recorded in May 2023.

“Same-store sales by NRS retailers again increased robustly during June, rising 7.7 percent year-over-year, driven by both increased traffic and average ring per basket,” said Suzy Silliman, senior vice president, data strategy and sales at NRS. “Category growth leaders included prepared cocktails (both spirits and wine-based), tequila, smokeless tobacco, packaged cookies, energy drinks and sports drinks, as well as salty snack and candy categories.

“Our neighborhood retailers’ three-month rolling, year-over-year same-store sales increase of 6.2 percent continues to exceed the U.S. Commerce Department’s comparable retail same-store metric, likely because our sales overweight food, household essentials and other necessities compared to the broader retail marketplace,” she added.

The NRS average three-month moving average same-store sales has outpaced the U.S. Commerce Department’s Advance Monthly Retail Trade data excluding food services by 4.9 percentage points, on average.

The NRSInsights data have not been adjusted to reflect inflation, demographic distributions, seasonal buying patterns, item substitution, or other factors that may facilitate comparisons to other periods, to other same-store retail sales data, or to the U.S. Commerce Department’s retail data, NRS stated.

The NRSInsights monthly Same-Store Retail Sales Reports are intended to provide timely topline data reflective of sales at NRS’ network of independent, predominantly urban, retail stores.

Same-store data comparisons of June 2023 with June 2022 are derived from approximately 148 million transactions processed through the 14,284 stores on the NRS network that scanned transactions in both months. Same-store data comparisons of June 2023 with May 2023 are derived from approximately 204 million transactions processed through 20,883 stores.

[Read more: Convenience Store News Industry Report 2023: Reaching New Highs]

Same-store data comparisons for the three months ended June 30, 2023 with the year-ago three months are derived from approximately 416 million scanned transactions processed through the NRS network in both quarters.

The NRS network comprises approximately 25,200 active POS terminals operating in approximately 21,900 independent retail stores.

Source: Convenience Store News

McLane Elevates Annual Trade Show Experience

The invitation-only event will feature more than 160 exhibitors and include a new products showcase.

TEMPLE, Texas – McLane Co. Inc., will bring a newly imagined trade show experience to its convenience store customers and suppliers through the upcoming McLane Engage convention.

The three-day, invitation-only event is being held Aug. 29-31 at the Hilton Anatole in Dallas. It is supported by title sponsor Reynolds American Inc. and platinum sponsors The Hershey Co., Kraft Heinz, Altria Group Inc. and TSN – a Bunzl company, among others.

[Read more: McLane Bolsters Leadership Team]

The event will feature booths from more than 160 exhibitors and include a new products showcase. It will also provide the opportunity to build meaningful connections with industry powerhouses and to learn from notable experts at a series of educational sessions, according to the company. 

Featured keynote speakers will include Daymond John, CEO of FUBU and investor on ABC’s “Shark Tank,” as well as Chet Garner, host of the Emmy-award winning PBS show, “The Daytripper.”

“McLane Engage is a strategic decision to transform an important industry event, our annual National Trade Show, into a world-class engagement opportunity that drives growth and connection,” said Chris Smith, president of McLane Grocery. “There is immense value in facilitating an exchange of ideas among thought leaders, experts and key players in our industry, and we are proud to bring that to our partners.”

During McLane Engage, the company will also unveil new products and programs, including beverage programs, commissary products like fresh sandwiches and salads, and meals for all dayparts. The programs are intended to be bolstered by McLane’s full-service solutions that provide retailers with access to equipment, training and menu innovation resources.

As part of the new initiatives in the foodservice retail division, McLane named its first vice president of retail foodservice, Jon Cox. The industry veteran brings more than 25 years of leadership experience across retail, grocery and c-store organizations, including Giant Eagle Inc., Giant Food and H-E-B. Prior to joining McLane, Cox served as the chief merchandising officer for GetGo Café + Market.

More information about McLane Engage is available here

[Read more: McLane Co. to Hold Third National Hiring Day]

Founded in 1894 and based in Temple, McLane Co. is one of the largest supply chain services companies in the United States. Through McLane Grocery and McLane Foodservice, it operates more than 80 distribution centers and one of the nation’s largest private truck fleets, and provides alcoholic beverage distribution through its subsidiary, Empire Distributors. McLane is a wholly owned unit of Berkshire Hathaway Inc.

McLane was named the 2023 Category Captain for General Merchandise by Convenience Store News.

Source: Convenience Store News

Spitless Tobacco Unit Sales Boosted 30.4%

By Erin Del Conte | June 15, 2023

As tobacco-free nicotine pouch sales climb, retailers point to health perceptions, return to office and inflation as trends driving the increase.

Smokeless tobacco sales at c-stores continue to rise, lifted by sales of tobacco-free nicotine pouches as sales of moist smokeless tobacco dip. As they look ahead, retailers are watching flavor regulations as well as inflationary pressures that are pushing customers to trade down both within the smokeless segment and the tobacco category as a whole.

Dollar sales for the smokeless tobacco category totaled $9.09 billion for the 52 weeks ending April 23, 2023, up 5.7%, per Total U.S. Convenience data from Circana. Unit sales for the category rolled in flat (up 1%). Chewing tobacco/snuff dollar sales dipped 1.1% for the period, with unit sales down 7.7%. Spitless tobacco saw dollar sales rise 37.4%, with unit sales up a whopping 30.4%.

Retailers are seeing these trends play out at store level. “Moist smokeless units continue to slowly decline while the nicotine pouches just keep growing. Customers are continuing to gravitate towards the nicotine pouch segment at higher rates,” confirmed Jesse Dix, category manager for Dandy Mini Mart, which operates more than 65 stores in Pennsylvania and New York.

“The tobacco-free nicotine pouches have really exploded over the last 18 months,” agreed Mike Jones, category manager for S&S Petroleum Inc., which operates more than 80 locations in Washington, Idaho and California, under the primary banner Royal Mart.

Jones attributed the trend toward tobacco-free nicotine to people returning to the office. Because smoking and vape are prohibited in most workplaces, customers are turning to tobacco-free nicotine pouches to discretely use nicotine, he suggested.

“Consumers want to be able to enjoy their products and — depending on their situation and local regulations — are moving to items that afford them that,” Jones said.

Health-conscious behavior may also be behind the trend toward pouches as some customers remove tobacco from their routine, noted Lenny Smith, vice president and general manager for Crosby’s, which operates 87 stores in western New York and northern Pennsylvania. “From my understanding, they feel it’s a healthier option by not having the tobacco in there,” Smith said.

The rise in inflation has also been impacting customer behavior across categories, including tobacco, as shoppers have less expendable income, Smith pointed out.

“When you’re looking at the tobacco-free nicotine pouches, they’re also less expensive than tobacco/snuff,” Smith said. “We do have some people probably trading to still be able to get the nicotine, but not at the same cost as the tobacco (product).”

Prices of chewing tobacco/snuff increased 7.2% to $7.05 per unit during the 52 weeks ending April 23, 2023, while spitless increased 5.4% to $5.04 per unit, according to Circana.

Jones noted that while inflation is having an impact, he sees it positively impacting the smokeless segment.

“As cigarette prices continue to rise, consumers are looking to a more affordable option,” he said.

And that’s driving some cigarette customers to the smokeless category.

“When consumers can achieve the same function and flavor all while saving money, it is a great option,” Jones further elaborated.

Regulations & Pricing

At S&S Petroleum’s stores, customers are looking for flavor options from the smokeless category. Jones noted that core flavors like wintergreen and mint are leading the way, but customers are likely to try different flavors.

“ZYN from Swedish Match has really dominated the space, and with its products and flavor profiles has owned the tobacco-free nicotine pouch category,” Jones said.

ZYN is also leading the category for Dandy Mini Mart.

“(ZYN) accounts for over 50% of our total nicotine pouch sales,” Dix said. “A new emerging brand that is starting to see positive growth for us is Black Buffalo. We have seen double-digit growth on the value-priced lines of moist smokeless such as Longhorn, Kayak and Stokers.”

While smokeless is still flying under the regulatory radar in most states, retailers are watching the effects of flavor regulation in California, while monitoring flavor ban proposals in 11 other states.

In December 2022, California’s Proposition 31 went into effect, banning flavored tobacco products, including menthol, in the state. Premium cigars and hookahs are exempt.

“It has caused some serious pain points,” Jones said. “I can see other states that we operate in soon following suit. Clearly this will be a challenge as we look to alternatives to move to. I have already had conversations and am working with products that are both nicotine and tobacco free, but have the same flavor profiles and mouthfeel, and mimic the functionality of the traditional product to introduce as an option for consumers. Time will tell, however, if this will actually resonate.”

Still, Jones expects the category to continue growing as retail price pressure and overall public sentiment pushes some customers to trade down to smokeless from traditional cigarettes.

“That said, regulations, like in California, regarding flavors could change the dynamic, and then we will see how the consumer and the manufacturer choose to respond,” Jones said.

Meanwhile, New York State recently rejected proposed legislation that had aimed to ban flavored tobacco, including menthol, wintergreen and mint.

“Anytime that there is a restriction of people being able to buy stuff in the state of New York, consumers will potentially go to other states to buy the product,” said Crosby’s Smith. “You have the Native American reservations where they would be able to go (to buy the product), depending on where they’re located. So, they’ll still find a way to buy. We’ll just lose from the state standpoint of being able to sell it in our stores.”

While this flavor ban attempt failed, there is still another standalone tobacco flavor ban bill under consideration in New York, per Thomas Briant, executive director of the National Association of Tobacco Outlets (NATO).

Additionally, New York is set to raise the tax on cigarettes from $4.35 to $5.35 a pack as part of the state’s budget plan. Smith noted the tax increase could push some cigarette smokers to trade down to the smokeless segment as they choose to seek out a lower-cost alternative for nicotine.

Nonetheless, Smith expects the smokeless segment to trend down this year, as well as the entire tobacco category overall.

“I say that because even with people trading — if they’re going from cigarettes into smokeless — you’re not going to make up the difference,” Smith said. “I think New York has a very strong message against tobacco, and I think we have less people coming into the market that are tobacco users for that reason.”

With cost increases, taxes and manufacturer and vendor price increases, Smith noted the price of smokeless tobacco keeps rising, and some customers could be priced out of the nicotine categories due to the increases.

“People can only absorb so many price increases before they begin to look for other options,” Dandy’s Dix agreed.

As prices rise, Dix sees traditional moist smokeless customers, who have long been loyal to the category, starting to trade down.

Looking ahead, Dix expects the trends to continue.

“We (predict) moist smokeless will continue to decline based on costs, as well as the continued boom of the nicotine pouch segment,” Dix said.

Source: C-Store Decisions

Fifteen Suppliers Selected as 2023 Convenience Store News Category Captains

February 7, 2023

This year’s winners zeroed in on shopper insights to help their retailer partners grow sales.

CHICAGO — Convenience Store News has selected 15 suppliers as winners in its 2023 Category Captains awards program. Now in its 10th year, the competition recognizes excellence in innovative, creative and profit-generating category management platforms.

The convenience store landscape is still proving difficult to navigate as operators grapple with such problems as lingering supply chain issues, labor shortages and higher prices due to inflation. This year’s Category Captains honorees zeroed in on shopper insights to drive decisions within their categories and shared these insights with retailer partners to help grow their sales.

Above all else, a Category Captain’s efforts contribute to the growth and success of an entire category, not just the supplier’s own products or brands. This year’s winners demonstrated in their entries the innovative ways they do this and highlighted the ample resources they devote to supporting overall category growth. They also showed an ability to customize their programs to meet the specific needs of different retailer accounts.

All entries were judged based on factors such as product innovation; creativity in merchandising, marketing, promotion and advertising; use of consumer insights to drive entire category sales; innovative and dynamic category management tools and technologies; and fact-based evidence of market-specific or account-specific results.

The 2023 Category Captains are:

  • Alternative Snacks: Old Trapper
  • Beer/Malt Beverages: Anheuser-Busch
  • Candy: Mars Inc.
  • CBD: E-Alternative Solutions
  • Foodservice/Cold & Frozen Beverages: Frazil
  • Foodservice/Hot Beverages: Franke Coffee Systems
  • Foodservice/Prepared Food: Core-Mark
  • General Merchandise: McLane Co. Inc.
  • Health & Beauty Care: Lil’ Drug Store Products Inc.
  • Other Tobacco Products/Cigars: Cheyenne International
  • Other Tobacco Products/E-Cigarettes & Vape: E-Alternative Solutions
  • Other Tobacco Products/Overall: Swisher
  • Packaged Beverages: The Coca-Cola Co.
  • Packaged Sweet Snacks: Hostess Brands
  • Salty Snacks: General Mills
  • Wine & Liquor: Beam Suntory

Past Times Marketing, a consumer research and product evaluation firm based in New York, once again judged the entries based on information supplied by participating companies. Past Times President and CEO Susan Durtschi has more than 40 years of experience as a buyer, merchandise manager, private label product developer and online marketer for a variety of national and regional retailers and her own retail company.

Look in the March issue of Convenience Store News for spotlights on the winners. 

Source: Convenience Store News