8 Big Ideas From CSP’s 2019 C-Store Foodservice Forum

CHICAGO — Michael Fitzpatrick never thought convenience-store consumers would pay a premium price for food. He mainly stocked traditional quick, portable items such as snacks and candy and various refrigerated foods. But then he took a chance.

“We used to be low-priced, but then we implemented a $5 brisket sandwich,” said FitzPatrick, vice president of sales for EZ Go Stores, at CSP’s 2019 C-Store Foodservice Forum in Chicago. “It’s now our top-selling food product, and it has given us a whole new look: that foodservice is not always price driven, and that customers will pay more for good food.”

But innovating c-store foodservice takes more than one new menu item. Here are eight takeaways from CSP’s forum that explain how …

Companies often fail at foodservice because they don’t have a foodservice culture, said Jerry Weiner, a foodservice consultant for convenience-stores and restaurants. Weiner, who was formerly the vice president of foodservice for Rutter’s and director of foodservice for MAPCO, said developing a foodservice culture means having everyone—from upper management to cashiers—on board with the idea of new foodservice concepts coming into your stores.

“Until you’ve got the breadth of understanding [foodservice] throughout your chain, it’s difficult to move forward,” he said. “There are going to be hurdles: Developing the culture and understanding how to offer food and executing food safety is difficult. But we have to understand our role.”

Keeping your stores clean—inside and out—is another key to building a foodservice culture, said Jessica Williams, CEO of Food Forward Thinking, a food and beverage consultancy. Williams believes that if retailers can’t keep their stores clean, they surely cannot offer clean, fresh foodservice.

“If you’re in a management role or if you’re a supplier and you walk past a piece of trash and don’t pick it up, you’re setting a standard,” she said. “Keep it clean, and the expectation will be that you’re always cleaning and there’s no other option.”

Roller grills are one of the fastest growing components of convenience stores. The machines are expected to garner a compound annual growth rate of 5.1% between 2017 and 2020, according to data from CSP’s sister research firm, Technomic. This is due to roller grills’ alignment with portable items, as well as innovation—especially for new flavors, formats and premium foods, said Donna Hood Crecca, principal for Technomic, Chicago. 

“The top purchase drivers for roller grills are speed, that they satisfy cravings, offer items that can be eaten on the go, and that they offer good value,” she said. “Forty-three percent of consumers said a wide variety of roller grills items is important to their decision to visit a c-store, while 21% said the same for the availability of new and unique flavors of roller-grill items.”

Sixty-one percent of male consumers are heavy users of roller grills, meaning they use it at least once a week—more than any other demographic, according to Technomic. This is followed by millennials (40%) and females (39%). Despite the high usage from males and other demographics, however, many consumers don’t even know that rollers grills exist in some c-stores. While 65% of consumers are aware that 7-Eleven stores have roller grills, only 40% said the same for other leading c-store brands, Technomic said.

“The phrase, ‘If you grill it, they will come,’ is not true,” said Crecca. “The visibility needs to be raised. Sell the roller grill—it’s unique to c-stores.”

Part of the forum observed how other channels—especially restaurants—have built a foodservice workforce. Job growth in this industry is strong: The number of restaurant jobs with annual incomes between $45,000 and $75,000 grew 71% between 2010 and 2017, said Terry Erdle, chief operating officer of the National Restaurant Association. Moreover, restaurant jobs are expected to increase 1.9% by the end of this year, while total U.S. employment is expected to grow only 1.6%.

The restaurant industry still has its labor difficulties, though. Recruiting and retaining employees is the top challenge facing restaurants, Erdle said. These have been the top issues for the past three years running. Others include sales volume, competition and the state of the economy.

Cannabidiol (CBD), the nonpsychoactive ingredient in cannabis, has become one of the most sought-after products in retail. The substance is projected to hit $3.4 billion in edible sales and $1.6 billion in beverage sales by 2022, said Dave Donnan, partner emeritus for management consulting firm A.T. Kearney, citing data from the Brightfield Group.

But problems may arise regarding CBD edibles, he said. While inhaling cannabis takes minutes for the effects to kick in, eating the substance may take hours—pushing consumers to overuse the product for immediate gratification, he said.

“They’ll eat too much because they don’t feel the effects right away,” he said. “Suppliers are working on ways to get the CBD-onset faster.”

Menu labeling has become one of the biggest concerns among retailers.

“Labeling keeps me up at night,” said FitzPatrick of  EZ Go Stores. “Sometimes, it’s just not clear. We want to have the labeling out there.”

The big challenge of menu labeling is that it’s situationally dependent on the foodservice offering, said Jeanmaire Hryshko, consumer safety officer for the Office of Nutrition and Food Labeling for the U.S. Food and Drug Administration. And some foods—depending on how long they’re listed menus—don’t even require labeling altogether. These include custom orders, daily specials, general use condiments, self-serve items, foods that are part of a customary market test and limited-time offers (LTOs).

“LTO items can remain on menus for 60 days without labeling,” she said. “Foods that are considered part of a customary market test remain on menus for less than 90 days. Neither of these require menu labeling.”

Menu labeling isn’t the only thing keeping retailers up at night. Many agree that communication—whether for labeling or general safety procedures—makes them anxious.

“I won’t feel comfortable until every team member feels as comfortable operating our foodservice platform as they do the cash register,” said Brian Scantland, vice president of fresh food operations for Thorntons.