Specialty Food Magazine

SUMMER 2015

Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.

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to city centers, and Tesco Express serving as more of a gas station and traditional convenience store. The number of Tesco Metro and Tesco Express stores has even overtaken the supermarket count in the chain's repertoire. (See Grocery Giants Go Small, p. 28.) The Fit for Specialty Food Joe Quintero, regional sales manager for artisanal cheese company Vermont Creamery, says his company's association with specialty convenience stores like Harvest Grocery & Supply has been extreme- ly positive and beneficial for business. "Those are the stores that gave us the opportunity to grow to the company we are now," he says. Specialty products continue to gain in popularity—and are easier to find in all kinds of outlets, including traditional conve- nience stores—as the American consumer has developed a more sophisticated and discerning palate, according to the Specialty Food Association's 2015 "State of the Specialty Food Industry." The overall specialty food retail market's continued rise has mainly been due to a combination of successful new product innova- tions and increased penetration in outlets that are readily accessible to a wider American audience, as is the case with convenience stores. Rosenblum suggests the growing smaller-format store model will create more opportunity for specialty manufacturers and dis- tributors as those retailers continue to grow their healthy, natural, and organic offerings. In the case of Kroger, the Ohio-based super- market chain, its good-for-you and specialty sections have become stores within the store. "All [retailers] are focused on incorporating or expanding spe- cialty," Rosenblum says. "It meets shopper need, drives traffic, and, in most instances, is very profitable." For NACS' Lenard, catering to consumer desires—whether that be specialty packaged goods or a hot dog—is of the utmost importance. "You have to know what the customer wants," he explains. "You can't push things and presume that trends will dictate what your sales will be." Managing the Challenges Independent neighborhood markets meet a particular need for con- sumers, but the specialized format can come with its own problems. Several shop owners point to an inability to stock diverse product options like standard grocery stores, and others see issues with com- petitive pricing. "We do sometimes struggle with customer expectations," explains Hopcroft. "While we've tried to hit all the major categories, we obviously can't mimic the selection and variety of a traditional supermarket." Harvest carries three cereal options and four pasta options, so customers have to be a little f lexible when they visit. If a recipe calls for gigli pasta, Hopcroft says, a customer might have to settle for farfalle. "The major downside is how geared toward scale the entire gro- cery industry is," he says. "We are trying to transcend novelty and be a truly useful part of people's food-buying habits. That means we stock things like toilet paper, black beans, and ketchup, [though] working with large distributors to keep these things on the shelf can be a challenge." Friedberg says Each Peach Market runs into similar issues. "We can't have the same variety of products as the big grocery stores," she says, "and we can't buy enough product at a time to get the price deals that bigger stores get." Larger retailers tend to have a leg up on independents in terms of knowing exactly how to manage a business and also cater to particular customers. "Their scale, experience, and understand- GAS STATION MINI-MARTS UP THEIR GAME E ven owners of traditional gas station stores are recognizing the opportunities to be had by improving their offerings. Jeff Lenard, vice president of strategic industry initiatives for the National Association of Convenience Stores, says consumers visit gas stations and convenience stores more often than virtually any other retail outlet. With 80 percent of convenience stores also selling gas, working to appeal to health- conscious, time-strapped consumers is becoming a no-brainer. Kwik Trip, a convenience store and gas station chain based in La Crosse, Wisconsin, has made a commitment to stocking healthier snack options like fresh produce and fruit parfaits, as well as sandwiches, salads, wraps, and good-for- you family meals. "They move a fair amount of produce and healthy options," Lenard says. The convenience chain also sells more than 400 pounds of bananas per store per day in 400 of their locations. "All retailers are focused on incorporating or expanding specialty. It meets shopper need, drives trafc, and, in most instances, is very proftable." 30 ❘ SPECIALTY FOOD MAGAZINE specialtyfood.com

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