7-Eleven stores aim for more fresh food

12/26/2012 02:06:00 PM
Tom Karst

Not just for Slurpees, coffee and glazed donuts anymore, 7-Eleven convenience stores are aiming high in their fresh food ambitions.

In a New York Times interview in late December, the retailer said it aims to have 20% of sales come from fresh foods in its American and Canadian stores, which would be double current levels.

Bistro pack from 7-Eleven“We’re aspiring to be more of a food and beverage company, and that aligns with what the consumer now wants, which is more tasty, healthy, fresh food choices,” Joseph DePinto, the chief executive of 7-Eleven, a subsidiary of the Japanese company Seven & i Holdings, told the Times.

The world’s biggest convenience store chain, founded in 1927 in Texas, now operates, franchises and licenses approximately 7,550 stores in the U.S., according to the company’s website. The company said it sells 320 fresh bakery items every minute and 169 million donut and pastry items in a year.

In total, 7-Eleven chain has 48,000 stores in 16 countries.

Steve Lutz, executive vice president of the Nielsen Perishables Group, said he couldn’t speak to 7-Eleven’s performance with fresh foods because those numbers are not public.

“We know that in general fresh foods are doing pretty well in a number of these small quick serve alternative format stores,” he said.

Lutz said prepared sandwiches, deli items, prepared meals on the go, and convenient and prepared fruits and vegetables are being offered to cultivate consumers who want to eat healthy on the go.

“Those stores are getting traction in food and to the extent that fruits and vegetables are becoming more convenient friendly, the products become more workable for those formats.

The Times story reported the chain has assembled of culinary and food science experts to help it develop new convenient and tasty menu items. One new menu item cited is called the Bistro Snack Protein Pack, featuring mini pita rounds, cheddar cheese cubes, grapes, celery, baby carrots and humus.

More and more of the nearly 150,000 convenience stores in the U.S. are looking at expanding fresh food sales, said Dick Meyer, president of Mesa, Ariz.-based Meyer & Associates, a convenience store consulting firm.

Of the 150,000 convenience stores in the U.S., about 90,000 are operated by single-store operators.

“Those people are a mixed bag and they are as good as their distributors,” he said.

Core-Mark International, South San Francisco, Calif., is a distributor to 29,000 retail operations in North America through 28 distribution centers, and Meyer said the company has ramped up its fresh offerings to convenience stores.

Temple, Texas-based McClane Company Inc., is the biggest distributor to convenience stores, Meyer said, supplying perhaps about 40,000 convenience stores, including 7-Elevens, Valeros and others.

Foodservice demands daily deliveries, which is difficult for a convenience store that usually gets weekly or twice a week delivery.

Highlighting fresh food is the latest ways that some convenience stores are appealing to changing consumer needs, Meyer said. In the 1970s, convenience stores had only begun to offer gasoline. He said it didn’t take long for convenience stores to become the top outlet for gas.

Fresh food is more complicated than gas or coffee, Meyer said, and not all convenience stores have embraced the challenge since fresh food began to appear in stores in the 1990s.

Meyer said the highly regarded QuikTrip Corporation, headquartered in Tulsa, Okla., increased its focus on fresh foods about five years ago. The $10 billion chain has 600 stores in 11 states. Now QuikTrip has daily delivery of fresh foods from its it distribution centers.

Kwiktrip, based in Lacrosse, Wis., is another convenience store chain that has had success with fresh. “They have their own commissary and trucks going every day to the store, and they sell 10 million pounds of bananas every year,” Meyer said.

He said Subway, which has been a client of Meyer, has been successful in expanding its restaurants in convenience stores into a billion-dollar division.

Lutz said Schotts and Wawa convenience stores have also been strong performers with fresh and prepared foods.

Meyer said convenience stores have more points of distribution than other retail sector, so those outlets have tremendous opportunities because of the traffic they draw.

Convenience stores have more ATMs, sell more coffee and sell more gas than any other retail outlet, Meyer said. “They’re convenient, they are on the way to work, they are on the way home, and it takes five minutes to get in and get out,” he said.

The key for produce suppliers is finding stores that can successfully execute fresh food and providing them the logistical solutions to make fresh food work, Meyer said.

Lutz said foodservice distributors often bring products to convenience stores because they are familiar with delivering product in small batches.

“Produce has an opportunity to have find the good operators,” he said. “If you have (successful operators) and distribution daily so things are fresh, boy, you can sell them anything,” he said.



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