SHEBOYGAN, Wis. — Old Wisconsin increased sales by 235% in the U.S. convenience market in the last five years, the sausage snack maker said.
This year, the company is celebrating 75 years sausage making. According to Sheboygan, Wis.-based Old Wisconsin, it has grown significantly since its beginnings in 1947, especially in recent years as its products resonate with snacking, protein, health-conscious and on-the-go consumer trends.
Old Wisconsin consolidated its product line to focus on ready-to-eat and shelf-stable sausage snacks, and it discontinued products with more limited distribution, such as grilling meats. This has enabled the company to widen its distribution channels beyond grocery retail.
The company has also seen a 312% increase across U.S. mass, club and drug retailer markets. Sales growth in e-commerce has increased by 66% in the past year.
Old Wisconsin was founded in 1947 as Thielmann’s, a small sausage shop owned and operated by Frank Thielmann and William Stolzman. It produces meats in a variety of shapes and sizes from cuts of beef, pork and turkey.
As pandemic lockdowns eased, retail foodservice vendors in 2021 are exhibiting optimism and solid planning for the near future. Read on to see the results of CSP’s State of Foodservice survey. In it, retailers explain how they are planning to meet the challenges of the coming months and years, as well as insights into trends in grocery foodservice and a peek at consumer trends.
Hopeful and Optimistic
How good were foodservice sales in c-stores in 2020? About as bad as foodservice sales were in 2020. More than 25% of retailers said sales were up significantly compared with 2019, while another 26% said sales were down significantly. The tiebreaker was decided in the “up slightly” or “down slightly” categories, where nearly 16% said up but 23% said down.
But after a year like no other, it’s easy to look ahead for relief, and retailers are looking hopeful in 2021. Nearly 39% said they expect foodservice sales to greatly increase compared with 2020, and only 2% expect any decrease at all. These percentages are about as hopeful as they were in last year’s survey, conducted just before the pandemic was declared.
Retailers are counting on some of their most popular beverage segments to bring growth to their foodservice offers, naming canned or bottled beverages, fountain soft drinks and specialty coffee drinks as the segments with the most growth potential.
Reaching the Consumer
From traditional avenues like self-serve coffee and dine-in seating to today’s loyalty programs and touchscreen kiosks, there are plenty of strategic options to boost foodservice. Self-service coffee narrowly leads the pack as a strategy that retailers are extremely likely to follow in the next year. Carryout is a close second, followed by social media/marketing efforts.
Catering is the least popular strategy, with 45% of retailers indicating it’s “extremely unlikely” they’ll turn to it in the next year.
There are other strategies in play as well, such as what to highlight on a menu and where to invest. When it comes to menu callouts retailers will feature to promote foodservice, “low-calorie/low-fat items” leads easily at nearly 50%.
Retailers reworked foodservice during the pandemic, tweaking their programs as customer behavior changed and the months wore on. Retailers, of whom more than three-quarters surveyed carried packaged foods, dispensed beverages, food made on-site and supplier-prepared food, altered programs in a variety of ways. Roller-grill offers suffered the most during the pandemic, while the most altered foodservice strategy, chosen by nearly 60% of surveyed retailers, was suspending in-store dining.
Even with the worst of the pandemic mostly behind us, retailers continue to see coronavirus limitations, including mask rules, store-capacity limitations and social distancing, among the most challenging issues they face. Still, minimum-wage issues top the list of retailers’ legislative concerns. Meanwhile, the labor pool, food costs and labor costs were rated among the most challenging business factors, while food safety and ingredient transparency appear to be mostly managed.
About the survey
Winsight’s 2021 State of C-Store Foodservice survey was conducted online from March 18 to April 15. Of the more than 100 responses from retailers, 86% have 50 or fewer locations, 2% have more than 500. Regarding foodservice, 89% offered packaged foods, 79% made food on-site, 77% carried supplier-prepared foods, and 16% had foods prepared in a chain-owned commissary.
Survey respondents say they expect disruption to continue.
ALEXANDRIA, Va. — Product procurement throughout the supply chain was a major challenge for convenience stores and their supplier partners during second-quarter 2020, and they expect that challenge to continue throughout 2021, according to two new NACS surveys.
Two in five convenience retailers (39%) say there were “significant” levels of disruption across the supply chain during second-quarter 2021, and 86% report that at least 10% of their orders were disrupted.
Beverages were particularly a challenge in the quarter, with 72% of retailers reporting supply disruptions of packaged beverages and 67% reporting supply challenges with beer. Also, two in five industry suppliers (38%) said they faced “significant” levels of disruption for materials necessary to create their products.
Compounding inventory challenges in the quarter, three in four retailers (76%) say it was difficult to fill available positions. Only 2% of retailers surveyed said they did not face hiring challenges.
Supply chain disruptions also extended to equipment: 79% of retailers say they experienced delays with store equipment/hardware deliveries this year and 41% say they postponed store equipment orders or new store construction or remodeling projects because of supply chain delays.
Confidence is low among convenience retailers and suppliers that improvements are coming: Only 25% of retailers and 27% of suppliers are confident that supply disruptions will improve in the second half of the year.
Despite the challenges, in-store sales have rebounded to pre-pandemic levels at convenience stores, according to NACS CSX sales data ending April 2021. Fuel sales also have largely recovered. Finished gasoline supplied, which is tracked by the U.S. Energy Information Administration (EIA) and is a proxy for supply, is only 1.8% lower the last two weeks of June 2021 than the same period in 2019.
Disruptions throughout the supply channel also have led to a greater level of collaboration between convenience retailers and their suppliers: 66% of supplier companies say that their overall relationship with convenience retailers is better than a year ago and 44% say their level of partnership and collaboration with the convenience retailing channel is better than other channels.
“Our industry’s resilience has been on display throughout the pandemic and is even more apparent now as the economy continues to bounce back,” said NACS Chairman Kevin Smartt, who operates 48 Texas Born (TXB) and Kwik Chek stores across Texas and Oklahoma. “The value of convenience has never been higher, and the innovation within our channel to continually reinvent convenience to benefit our 165 million daily customers astonishes me. I look forward to a strong rest of 2021 and beyond.”
NACS Research conducted the NACS Retailer and Supplier Member Pulse Surveys in June 2021. Overall, 56 retailer members, representing a total of 1,497 stores, and 83 supplier member companies participated in the survey.
Founded in 1961 as the National Association of Convenience Stores, NACS is a trade association dedicated to advancing convenience and fuel retailing, The U.S. convenience store industry, with more than 150,000 stores nationwide selling fuel, food and merchandise, serves 165 million customers daily and had sales of $548 billion in 2020.
Tropical and spicy flavors are trending, according to the Sweets & Snacks Expo.
Ahead of its annual event later this month, the Sweets & Snacks Expo has released the top trends for the confectionery and snack categories in 2021.
The show, to be held June 22-25 at the Indiana Convention Center in Indianapolis, is sponsored by the National Confectioners Association (NCA) and brings together retail professionals and company representatives who showcase the latest in candy and snack products.
Many of those new products will fall into the following trends:
Smaller pack sizes: More companies continue to develop smaller pack sizes containing 200 calories or less, which allows consumers to make informed choices when they are ready to treat themselves to their favorite snack or candy, Sweets & Snacks said.
Tropical flavors: Tropical flavors, especially pineapple and coconut, are taking center stage.
Mix and match combinations: It’s all about getting the best of both worlds as candy and snack manufacturers develop products that are sweet and salty or fruity and tart.
Heat: Sweets & Snacks said some of the hottest new spicy snacks feature flavors such as chili, sriracha, jalapeno and habanero.
With last year’s show canceled due to the coronavirus, NCA President and CEO John Downs said, “This year is even more important as we get back to business. While consumer purchasing habits may have shifted to meet the new environment, manufacturers are exceeding expectations with new products, flavors and innovations.”
For National Candy Month, celebrated this June, the National Confectioners Association has revealed the most popular summer candy types and flavors that can help retailers looking to lessen the sales lull the category typically experiences during the hottest months of the year.
“Retailers are embracing National Candy Month as a promotional opportunity as they look to bridge the confectionery sales gap between Easter and Halloween,” Carly Schildhaus, a spokesperson for the Washington, D.C.-based association, told WGB. “In June 2020, about 575 retail locations executed a National Candy month promotion of some sort—and this year more than 31,000 retail locations have embraced National Candy Month as a way to drive incremental sales. There is great momentum and excitement for National Candy Month, as the industry eyes up this summer merchandising sales opportunity which is estimated to be worth up to $500 million.”
According to the NCA, strawberry, watermelon and cherry are the top three summer candy flavors for 2021.
The top three summer candy types are chocolate, gummies and hard candy, but Schildhaus noted that Americans also love marshmallows and salt water taffy during the summer.
Chocolate and other confectionery treats often accompany consumers and their summer plans. NCA found that 94% of Americans will bring chocolate or candy with them while camping, 89% of beachgoers will enjoy chocolate or candy seaside and 93% of Americans say they’ll take along candy on their road trips.
“Whether you’re headed to the beach or to the pool, out for a hike or just to your backyard, chocolate and candy can add some sweetness to the summer,” NCA President and CEO John Downs said in a release.
Confection has remained resilient during the pandemic, with chocolate sales up by more than 5% and nonchocolate sales experiencing an increase of nearly 4%, Schildhaus said, adding that, “Consumers feel a magical connection to chocolate and candy—and they view them as treats that help boost their mood and lighten their perspective.”
n a report released earlier this year, NCA found that grocery-store dollar sales of chocolate candy grew 10.5% in 2020 and non-chocolate was up 9.9%.
CHICAGO — Mergers and acquisitions continued to hum along for convenience stores in the past year despite the COVID-19 pandemic. But what’s next?
Tune in for a conversation with Dennis Ruben, executive managing director of NRC Realty & Capital Advisors, about the state of M&A in the c-store space today and what to expect in the year ahead.
“At Your Convenience” brings industry experts and analysts together with CSP editors to discuss the latest in c-store news and trends. From mergers and acquisitions to foodservice and technology, the podcast delivers the story straight to listeners in short-format episodes, perfect for the morning commute or a quick break at the office.
The agency on June 3 made an announcement to clarify part of that process—the purpose of deficiency letters.
The longest and most thorough phase of this review process is the substantive review phase because it includes evaluation of the scientific information and data in an application and often includes follow-up questions of the applicant. The FDA generally sends a deficiency letter before it makes a final decision on a product based on substantive review.
A deficiency letter allows the FDA to ask applicants to provide additional information that it needs to continue its scientific review. The purpose of the letter is to communicate gaps in information identified during the review and is not intended to convey a list of concerns about the product, the FDA said; however, a complete response to the deficiency letter does not guarantee the applicant will receive a positive marketing order.
The FDA will make a final decision on any product at the end of the FDA’s scientific review, and the FDA will base that final decision on the applicable public health standard in the Federal Food, Drug and Cosmetic Act after reviewing the whole application and amendments, the agency said.
ALEXANDRIA, Va. — Convenience retailers anticipate that leisure travel and routine customer trips will return to pre-pandemic levels this summer, according to the results of a new NACS survey of U.S. convenience-store owners.
C-stores, which sell 80% of the fuel purchased in the country, experienced a 13% decrease in fuel sales and less customer traffic throughout the pandemic; however, most (52%) say that summer travel and commuting patterns will be close to pre-pandemic levels, although this is not shared optimism: 28% don’t expect to see traditional travel patterns emerge until 2022.
Retailers anticipate growth in categories like dispensed cold beverages and coffee (43% foresee growth), as well as immediate consumption prepared foods (62% foresee growth). Various state and local restrictions affected and continue to affect these self-service categories.
The pandemic-related decrease in commuting and vehicle miles driven during the past year led to shifts in morning traffic and sales at c-stores, with coffee and breakfast food sales off by 10% to 15%. Convenience retailers are reestablishing their locations as morning daypart destinations: 40% are offering discounts for repeat purchases, and 27% are promoting offers that incentivize shoppers to return for discounts.
“Retailers are optimistic that traditional driving routines are returning—from the morning commute to the family summer road trip—and that’s great news not just for our industry but for the overall economy,” said NACS Vice Chairman of Research and Technology Andy Jones, who operates Sprint Food Stores, based in Augusta, Ga.
Before the pandemic, most items sold at c-stores (83%) were considered immediate consumption, like snacks, beverages and confections, and were consumed within an hour of purchase. But as more consumers have relied on c-stores for take-home items, retailers also expect those sales to increase: 36% are focusing on multi-serve meals and prepared foods for future consumption, and 13% are expecting more stockup grocery and pantry item sales.
Convenience retailers also say they will continue safety protocols, with 71% encouraging their employees to get vaccinated. The most common incentives offered are paid time off to get a vaccine (34%), coordinating a vaccine location specific to their employees (26%) or offering monetary incentives (10%).
When asked which retail innovations they saw in 2020 that they will apply to their stores, most convenience retailers said contactless payments and last-mile offers like home delivery and curbside pickup will grow. Tying together new offers that emerged during the pandemic, 20% will expand services like drive-thrus, delivery and curbside pickup.
“Online ordering attached to a quick local delivery is not a new idea, but it is one that demonstrated significant use this past year. This has shown consumers that it is possible, and it will drive more usage and expectations, making it a standard option for retailers to provide,” said Charlie McIlvaine, CEO of Coen Markets Inc., based in Canonsburg, Pa.
Other retailers agreed that focusing on basic operations like inventory control and customer service will pay off as the pandemic recedes. “We saw the value of customer service—it’s essential for us to be friendly and act locally to continue earning our community’s support,” said Malik Yousif, president of Manassas, Va.-based MYS Energy.
NACS Research conducted the NACS Retailer Member Pulse Survey in March 2021. A total of 70 member companies, representing 3,524 stores, participated in the survey. NACS Research conducts quarterly custom research with retailer members to identify key priorities and opportunities across the convenience and fuel retail landscape. The association will release complete 2020 industry performance metrics and analysis of trends driving this performance during the live virtual NACS State of the Industry Summit on April 14
Alexandria, Va.-based NACS has 1,900 retailer and 1,800 supplier members from more than 50 countries.
Confection trends for 2020 saw nonchocolate peg bags and take-home packages driving growth.
CHICAGO — From a macro level, convenience retailers battled supply issues, wholesale price increases, fewer in-store promotional campaigns and lack of innovation in the confection category in 2020.
On a micro level, retailers watched segments such as mints/breath fresheners (down 28% in dollar sales) and gum (minus 24%) falter due to consumers de-emphasizing fresh breath throughout COVID-19. A reliance on home consumption, also owed to the pandemic, saw family-size confection packages hold down sales of single-serve candy formats.
Despite the many challenges, chocolate and nonchocolate confections both landed in positive dollar territory by the end of 2020, with 1.6% and 4.4% growth, respectively, according to data from Chicago-based IRI, reflecting c-store channel performance for the 52 weeks ending Dec. 27, 2020.
The saving grace for confections in 2020: formats such as nonchocolate peg bags and stand-up pouches. At Bardstown, Ky.-based FiveStar Food Mart, part of Newcomb Oil Co., the category grew in lower double digits. Nonchocolate peg bag formats, however, registered a 20% increase in same-store sales at FiveStar.
“The peg segment was a bright spot for us, particularly nonchocolates,” says Tim Young, category manager center store for FiveStar and a 2021 finalist for CSP’s Category Manager of the Year Award for center store.
“Seasonal candy was a huge win in 2020.”
At the chain of 80 stores, nonchocolate brands such as Haribo, Hi-Chew and Jolly Rancher came up big, while FiveStar also saw success merchandising 2-pound bags of Swedish Fish and Sour Patch Kids brands.
Similarly, nonchocolate standup resealable and peg bags represented the lion’s share of sales at Long Beach, Calif.-based United Pacific, which owns and operates 451 c-stores across four retail brands in five West Coast states.
In a broad sweep of the category, Robyn Gettleson, senior category manager of snacks and candy for United Pacific, says nonchocolates have been growing steadily, with new and existing gummies driving sales. Holding the candy category back, however, was gum, which lost 35% of sales in 2020. “Mint sales suffered too, but we’re talking about a much smaller share,” says Gettleson, another of three finalists for CSP’s CMOY Award for center store.
Chocolate Candy: Where the Gains Are
C-store sales, 52 weeks ending Dec. 27, 2020
The decline of candy sales in c-store accelerate in 2020 across categories. Unit sales of chocolate candy larger than 3.5 ounces saw the smallest erosion, while gum and breath fresheners plummeted 29.2% and 29.9%, respectively, according to IRI.
The MAPCO Express chain found in-store promotions a vital part of its go-to-market strategy in 2020.
Kelley Gutierrez, category manager of candy and snacks for Franklin, Tenn.-based MAPCO, says the emphasis on in-store promotions started with an overarching goal to simply win general sales from local customers at a time when many were scouting for safe stores and even channel shifting to new non-core channels, when necessary.
Mapco unveiled a “buy 2, get 1 free” Reese’s King-size deal that resulted in a “great buy rate,” says Gutierrez, the winner of this year’s CMOY Award for center store. This was part of a plan to stimulate “growth multiples” of chocolate, larger sizes down to singles. It was a big contributor to sales, and all part of a “stock-up mentality” that consumers espoused. “With the emphasis on multiples, it was often a case, too, where customers would buy two Snickers or two Reese’s at the same time. Our loyalty program helped facilitate this.”
Meanwhile, as retailers wait for social distancing orders to ease, Young says FiveStar has yet to reinstate floor merchandisers removed to allow more floor space. Instead, he says, the hope is that a new FiveStar loyalty program, launched in March 2020, might trigger more endcap and power wing shippers to return by Memorial Day. In fact, he cites holidays as a key period for candy sales in 2020.
“Seasonal candy was a huge win for us in 2020,” he says. “We pre-ordered Halloween candy in July and by September had to order additional supply. We strive for 85% to 90% sell-through and easily exceeded that. It was indicative of how much people wanted to celebrate Halloween during the pandemic—and were able to.”
4 Trends Driving Confection Sales
Package preferences. Family-size confection packages performed well for many retailers, as customers bought in bulk, often on a weekly basis.
The COVID-19 effect. “We captured traffic from folks who would regularly frequent quick-service restaurants (QSR),” says Tim Young of FiveStar. “Some local QSRs shut down at one time, so we placed a heavy focus on the depth of our food offer, which to some people might not have been known. [They] might have come for the food, but would also reach for center-store varieties, including candy.”
Healthy vs. indulgent. FiveStar typically offers six to seven SKUs of organic or sugar-free candy. But in 2021 that mix will be reduced based on consumer buying priorities. “I think you hear people say they plan to buy healthy candy, but then you see what they actually buy, which is indulgent brands,” Young says. “This led us to perform an SKU rationalization.”
Confection innovation. Young says he looks forward to a return to product innovation in 2021 and would have welcomed more this past year. One new product Young cites as a category booster: Reese’s Snack Cakes, two cakes intended for a snack or breakfast packing a whopping 380 total calories.
CHICAGO — I’d like to take a moment to acknowledge the sad state of the toilet paper in my home. Where two-ply once ruled the roost, today we’re just as likely to be dealing with a one-ply reality that leaves much to be desired.
On the bright side, even at the height of the toilet-paper hording that gripped the United States in the early days of the pandemic, we never found ourselves without the product necessary to—ahem—do the job. But more than a year later, we still find ourselves settling for whatever is in stock at the local grocery store, often unfamiliar brands of occasionally insufficient quality.
There were periods in the past year, however, where we did find ourselves looking elsewhere to meet our toilet-tissue needs, walking the often-ignored HBC aisle of area convenience stores. Turns out my family wasn’t the only one!
Digging the Details
Not surprisingly, toilet tissue sales in c-stores grew 23% in dollar sales during 2020. Laundry detergent sales increased 20%. Soap was up an amazing 493%!
This was not a year of incremental gains. Spitless tobacco product sales grew 67%. Beer sales were up nearly 14%. Novelty candy sales rose nearly 13%, suggesting consumers were looking for a reason to smile.
But for every remarkable gain, there was a potentially devastating thrashing. CBD-product sales in c-stores saw dollar sales drop 38%. Gum was down a painful 24%. Even reliable segments like bottled water struggled. In this case, water dollar sales dipped 5%, while unit sales dropped 11%, not because consumers stopped drinking water, but because they were buying it in bulk somewhere else. Water sales were up 11% in the grocery channel.
But the strength of this issue of CSP is in the details. Yes, CBD-product sales declined 38% overall, but CBD-enhanced bottled water sales were up 30%! 2020 tested product allegiances and helped pinpoint where consumers are willing to spend a little extra or go out of their way to find an elusive product or product type.
This most unusual past year makes this the most insightful edition of our Category Management Handbook ever. Why? Because the real challenge is: What happens next? Will consumers continue to stock up on case packs of bottled water rather than return to single-serve purchases? Can packaged beer maintain its shine even after bars and restaurants reopen? Bottom line: Are these new behaviors now permanent or will consumers revert back to old habits?
For this issue, we talked to dozens of category managers to get their take on the year past and the one ahead, and their insights are significant. What were they most thrown by? Just like my family’s toilet-paper dilemma, it was out-of-stocks.
We like to say this issue of CSP has a 12-month shelf life, that it’s one to refer to again and again as you consider new products or a category reset. If you still have the April 2020 issue of CSP, I’d recommend looking at these issues side by side. In 2019, cheese snacks were the hero of the salty-snack category, growing more than 4.5% in unit sales. A year later, that same segment declined nearly 9%. How do your store numbers compare? Somewhere in between is the insight for how you should treat that segment going forward.
I hope you find the Handbook as valuable as I think you will!