Specialty Food Magazine

Winter 2019

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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95 "Seeking out independently owned urban markets is a great starting approach for someone trying to break into the c-store chan- nel," says David Browne, market research and retail consultant for the natural and specialty industry. "These smaller stores want to differentiate and are usually already skewed towards more premium products." Also, owners can usually make margin decisions that maybe the bigger chains can't and are willing to be more f lexible when it comes to pricing your item," he continues, "alleviating a customer 'grudge purchase' for an item with a 100 percent markup that they might find at a more traditional c-store." Know Trending Categories While grocery categories like beverages and snacks dominate c-store sales, subcategories such as sports and energy drinks, functional RTD beverages like kombucha, coffees, and teas are especially big. So are snacks with healthful and functional attributes and those with unique and exotic flavors and natural ingredients, as well as clean-label pre- pared products. Mike Fogarty, owner of Choice Market, makes sure products coming in jibe with the stores' values and is more apt to choose products that are relevant to in-demand categories like plant-based, functional beverages, and ancient grains. Kombucha, especially, has been a win for his store. "We have 1,500 highly curated items including 25 SKUs of RTD kombucha and a kombucha kegerator," says Fogarty, who initially worried the kegerator would cause some cannibalization. "It was the exact opposite, he says. "Sales for both are strong." Package with a Purpose Tony Gains, EVP sales for Advantage Solutions, a business pro- vider helping companies grow their brands in various channels, and Fogarty point out some product and packaging considerations when selling to c-stores. Functionality. Consider the consumer and offer ease of instant consumption. Products should be focused on ready-to-eat, heat- and-eat, thaw-and-serve, and/or be hand-, car-, and mobile-friendly, requiring little additional packaging or utensils for consumption. Examples include: resealable bags vs. traditional foil, single-serve Convenience Stores Are Cool C-stores are becoming community staples, where customers feel com- fortable popping in and out for a quick bite, cup of coffee, or snack. A July 2018 report by the National Association of Convenience Stores, "Convenience Stores and Their Communities," found that 63 percent of Americans report that convenience stores offer food they feel comfortable eating, while nearly two in three consumers say that convenience stores share their values. These attitudes are a result of c-stores building better in-store experiences and product selections, recognizing the need for health- ier, fresher items, and sourcing locally made fare. "There is no longer a 'downmarket' perception of convenience stores," notes Pruett. "It's becoming completely the opposite. While you can still get a familiar bag of chips, cup of coffee, and pack of cookies, you now have the option of more specialized items in these categories like cookies with a protein boost, or organic coffee." Foodservice, fresh, local, and better-for-you are the buzzwords. Foodservice sales, particularly in the prepared foods category, account for the largest component of the broader convenience store foodservice segment, (67.1 percent of total foodservice sales), according to NACS. Sales are largely from traditional items such as sandwiches, hot dogs, pizza, and chicken. However, an increas- ing number of convenience stores also offer high-end foodservice prepped in-house, and better-for-you options. Get to Know the Little Guys Beyond the ubiquitous Wawas and 7-Elevens, a new crop of con- venience stores with an entirely new footprint is popping up across the country and can be the gateway for specialty food makers to gain placement. These hybrids—like Choice Market in Denver, where 90 percent of the product mix is a combination of better-for-you-and local—combine traditional convenience store operating hours with modern positioning. They have a socially responsible philosophy, offer fresh in-house prepared meals, organic produce, and use technology—be it online ordering, payment kiosks, or app order- ing—to help time-starved customers get their shopping done in mere minutes. (continued on p. 101) If c-stores are going to build around natural and specialty products, they need complementary products that will make a strong set. Approach buyers with your products as well as competitive brands that complement them. FALL 2017 article bug 95 WINTER 2019 specialty food maker

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