As consumers’ desire for fresh produce expands to additional snacking and ready-to-eat occasions, convenience stores are stepping up to seize the fresh opportunity.
The Fresh Convenience Task Force formed by United Fresh Produce Association and the National Association of Convenience Stores met at the NACS show, Oct. 7-10 in Las Vegas, to continue their work to boost fresh produce offerings in C-stores.
The task force is co-chaired by NACS chairman Steve Loehr of Kwik Trip, a 435-store chain based in Wisconsin, and United Fresh chairman Ron Carkoski of Four Seasons Family of Cos., a Pennsylvania-based produce distributor.
Members of the task force come from both associations, representing produce shippers, fresh-cut processors and distributors, as well as convenience retail store operators and wholesale distributors.
Steve and Ron led off the meeting with stories of their own companies’ success with convenience produce growth, and their excitement about what fresh produce offers the entire convenience sector.
While the quality and nutritional value of food sold in convenience stores has improved in the past decade, many convenience stores are still challenged with procurement, handling and merchandising fresh fruits and vegetables.
The NACS-United Fresh task force is working to identify best practices in supply chain management to help educate retailers about how they can sell more fresh produce items while minimizing shrink.
Convenience stores sell meals like quick-service restaurants, and they sell take-home food items like grocery stores. But the one thing they specialize in more than any other channel is snacks.
Roughly 80% of food items purchased in a convenience store are consumed in an hour or less from the point of purchase — 57% are consumed immediately with 23% consumed within the hour. Fresh fruit and vegetable convenience items that are ready to eat hold huge promise to increase consumption of fresh produce and sales for C-stores.
NACS estimates that the average store in 2013 sold about $150,000 in snacks (salty, sweet and alternative snacks, and candy bars). Of that total, about 18% could be considered “healthy,” and only a small percentage of those snacks were fresh produce items.
While at a low starting point, produce sales at convenience stores rose 16.7% in 2013, significantly faster than sales in other retail channels.
Snacks are also growing in importance to consumers, making fresh ready-to-eat produce items even more on trend for consumers. The Hartman Group estimates that more than half of all eating occasions are snacking, with health being an increasingly important consideration in choosing snacks.
Nielsen Global Professional Services reports that snacking is a $124 billion business in North America, with 91% of Americans saying they snack every day.
With more than 150,000 convenience stores in the U.S, with an average of 837 in-store transactions every day (not gasoline at the pump), you can see the potential for fresh produce snack items to grow rapidly. We just have to get the supply chain right to serve this growing market.
That’s where our task force comes in.
Many of the convenience retailers on the task force are the leaders in stocking and selling fresh produce. Similarly, the shippers, processors and distributors are leaders in marketing fresh ready-to-eat items. These members are gathering success stories to share with others in the industry.
It’s important that we focus on stores of all sizes and capabilities. Whether they’re at a one-store operator or a national chain, we want to make sure that consumers can find an array of fresh produce items everywhere.
It’s also been interesting as the task force has begun its work to see the applicability of its efforts beyond traditional convenience stores.
Small footprint, limited assortment mom and pop grocery stores share many of the same attributes and challenges with space and merchandising. Many smaller retail and foodservice locations face similar challenges with infrequent deliveries and small drop sizes. Yet others have refrigeration and cold chain challenges, without adequate holding space or coolers for merchandising.
Finally, all of us in retail have the challenge of in-store training to maximize the customer experience with the freshest, highest quality fruits and vegetables.
So, while we’ve started out as a “fresh convenience” task force, it’s clear that the group is developing tools that will help sell more fresh produce through a variety of retail venues.
The good news is that the challenges we face are not insurmountable, whether in supply chain logistics and product assortment or in-store merchandising.
And consumer trends are definitely on our side. As demand for fresh produce continues to grow, smart retailers, distributors, processors and grower-shippers will step up to meet the challenge — and the fresh opportunity.
Tom Stenzel is president and CEO of the Washington, D.C.-based United Fresh Produce Association.
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