Convenience Store Foodservice Trends in the U.S.

September 2011 | 100 pages | ID: C1980A1EA14EN
Packaged Facts

Abstracts

Packaged Facts’ Convenience Store Foodservice Trends in the U.S. forecasts convenience store foodservice sales to grow 5.6% in 2011, and we forecast sales to rise by 5.8% in 2011 and 5.3% in 2012, on the heels of aggressive foodservice platform build outs and increased convenience store foodservice patronage. In the process, foodservice is transforming the convenience store user experience, forcing players to improve their platforms or get left behind.

Convenience Store Foodservice Trends in the U.S. helps industry participants understand and leverage key trends shaping category growth, including:

• Analysis of convenience store users’ intended and actual purchases (by product category), to help participants develop trip consolidation strategies that increase guest traffic and leverage sales of other merchandise.
• Analysis of intended and actual foodservice purchases, to help participants leverage foodservice platforms as part of their trip consolidation strategies.
• Convenience store foodservice sales growth trends, by foodservice category (prepared foods, hot dispensed beverages, cold dispensed beverages, and frozen beverages), to help foodservice suppliers and operators develop menu items on trend.
• Prepared foods retail segment cross-usage analysis, to assess the degree of prepared foods competition among conveniences stores, grocery store/supermarket and fast food/QSR players and help position opportunity.
• Guest traffic analysis for the foodservice industry by segment; convenience stores, and convenience store foodservice, to identify opportunity among key demographic groups.
• “Quick Bite” food health attribute analysis, to develop on-the-go meal solutions and snacks in accordance with consumer health preferences.
• Convenience store foodservice purchase considerations, to develop and position menu items and craft marketing messages in accordance with consumer purchase rationales.
• Competitive foodservice analysis of five leading convenience store foodservice programs, to learn how these leading players are developing and adapting their foodservice platforms. Foodservice strategies, foodservice sales growth, menu analysis, and consumer usage demographics are included.

Contents

CHAPTER 1: EXECUTIVE SUMMARY

Introduction

Scope and Methodology

Scope

Methodology

Consumer survey methodology

Market size and forecast

Definitions

2: Share of Stomach: Convenience Store Foodservice Market Size and Forecast

Insight Capsule

Fast Facts

3: Product Mix and Competitive Foodservice Rationales

Insight Capsule

Fast Facts

4: Laying a Healthful Foundation

Insight Capsule

5: Guest Traffic Analysis

Insight Capsule

Fast Facts

6: The Consumer: “Quick Bite” Food Health Attributes

Insight Capsule

7: The Consumer: Convenience Store Foodservice Purchase Considerations

Insight Capsule

8: Purchase Intention v. Actual Purchase: The Foodservice Connection

Insight Capsule

9: Convenience Store Chains: Competitive Foodservice Analysis

CHAPTER 2: SHARE OF STOMACH: CONVENIENCE STORE FOODSERVICE MARKET SIZE AND FORECAST

Introduction

Foodservice is transforming the convenience store user experience

Margins are too good to pass up

Graph 2-1: Convenience Store Sales & Margins: Top Five In-Store Categories, 2009

Convenience stores wave foodservice carrot with trip consolidation stick

Segmentation structure

Employment trends suggest growth in convenience store-gas station hybrids

Table 2-1: Employment Trends, Convenience Stores and Gas Stations, 2006-11

Packaged Facts convenience store foodservice market size

2011 momentum

Graph 2-2: Convenience Store Foodservice Sales, 2006-13

Foodservice category and food type sales

60% of foodservice sales generated by prepared foods

Prepared food

Graph 2-3: Prepared Food Sales, By Menu Category

Coffee worth $5 billion?

Graph 2-4: Hot Dispensed Beverages, By Menu Category

Cold dispensed beverages

Graph 2-5: Cold Dispensed Beverages, By Menu Category

Daypart sales analysis

Graph 2-6: Convenience Store Foodservice Sales, by Daypart

CHAPTER 3: PRODUCT MIX AND COMPETITIVE FOODSERVICE RATIONALES

Introduction

Overview

Helping consumers make more efficient use of their time

Three minutes and counting

Against the backdrop of limited leisure time

Time-pressed women present convenience store foodservice opportunity

Table 3-1: Time Spent in Leisure & Sports Activity, 2006-10

Placing time in demographic perspective

It’s all downhill after 18

Have job, but no time

Harried parents need help

Table 3-2: Time Spent in Leisure & Sports Activity, Key Convenience Store Users, 2010

Smokes on the ropes

Table 3-3: Prevalence of cigarette smoking among U.S. adults aged 18 years and over, 2000-09

Get off the gasoline yo-yo

Graph 3-1: Motor Fuel Consumption, Pricing, and Revenue, 2004-10

Competition from supermarkets and grocery stores

Cross-channel usage is common

Table 3-4: Convenience Store Prepared Foods Use & Mean Use Among Grocery Store Prepared

Foods Users

Table 3-5: Grocery Store Prepared Foods Use & Mean Use Among Convenience Store Prepared

Foods Users

Competition from restaurants

Table 3-6: C-Store Usage Frequency Analysis, Key C-Store User Groups

Table 3-7: Fast Food Usage Frequency Analysis, Key C-Store User Groups

Table 3-8: Fast Food Brand Usage, Key C-Store User Groups

If you can’t beat ‘em, join em

Or build your own restaurant brand

Or build your foodservice platform

Speedway ratchets up prepared foods program

Menu expansion

CHAPTER 4: LAYING A HEALTHFUL FOUNDATION

Introduction

Overview

Health conundrum: do as I say, not say as I do

Health not a top-of-mind purchase rationale

Healthful connotations

Targeting the base

More produce produces results

Portability, meet health; health, meet portability

Packaging innovation helps drive growth

Fresh is the word: “Program Fresh”

Fresh program philosophy

A trip consolidation strategy

Table 4-1: The Pantry, Inc.: Fresh Program Highlights, 2011

Enhancing quality

Coffee: ubiquitous and a foodservice growth lever

Convenience Store Foodservice Trends in the U.S. Table of Contents

September 2011 iii

Fiercely competitive

Generating coffee loyalty

CHAPTER 5: GUEST TRAFFIC ANALYSIS

Introduction

Overview

QSR foodservice footprint dwarfs convenience store foodservice footprint

Upside potential

Graph 5-1: Foodservice Usage, by Restaurant Type and Daypart, 2011

Foodservice usage, by foodservice establishment type

Fast food and convenience store foodservice share youth appeal

Usage among 55+s plummets

Table 5-1: Foodservice in Past Month, by Foodservice Outlet: Gender, Age & HH Income

Convenience store foodservice usage varies by race/ethnicity

More of an urban phenomenon

Table 5-2: Foodservice in Past Month, by Foodservice Outlet: Race/Ethnicity, Region & Population

Density

Foodservice usage, by daypart

Lunch and dinner exhibit widest usage

Target female snackers

Table 5-3: Foodservice in Past Month, by Daypart: Gender, Age & HH Income

Hispanics a breakfast opportunity?

Urban versus rural

Table 5-4: Foodservice in Past Month, by Daypart: Race/Ethnicity, Region & Population Density

Convenience store usage

Overview

Enviable traffic trends

Trip consolidation strategies have strong potential

Graph 5-2: Convenience Store Use: Population Assessment, by Usage Frequency, 2011

No gender equality here

Graph 5-3: Convenience Store Use: Population Assessment, by Usage Frequency, Gender, 2011

But such potential!

Incentivizing older consumers a different story

Graph 5-4: Convenience Store Use: Population Assessment, by Usage Frequency, Age, 2011

Working America: convenience store fans

A locational nexus between work and c-store purchasing

Table 5-5: Location Prior to Convenience Store Purchase, Work Relationship, 2010

And limited leisure time

Table 5-6: Time Spent in Leisure & Sports Activity, Key Convenience Store Users, 2010

Graph 5-5: Convenience Store Use: Population Assessment, by Usage Frequency Employed People

in HH, 2011,

Drilling into convenience store foodservice usage & mean use

Let them eat snacks

Wooing women

Table 5-7: C-store Foodservice Use & Mean Use, by Daypart: Gender & Age

Racial/ethnic groups exhibit varied usage

Urban appeal

Table 5-8: C-store Foodservice Use & Mean Use, by Daypart: Race/Ethnicity & Population

Density

Convenience store foodservice users: mean usage trends

Female users close frequency gap

HH income not a strong determinant

Table 5-9: C-store Foodservice Use & Mean Use, by Daypart: Gender, Generation & HH Income

CHAPTER 6: THE CONSUMER: “QUICK BITE” FOOD HEALTH ATTRIBUTES

Introduction

Overview: Food health attributes that determine choice of a “quick bite”

A guide with many uses

And the survey says

Graph 6-1: Food Health Attributes, Degree of Importance When Getting a Quick Bite

Food health attributes: gender analysis

Graph 6-2: Food Health Attributes, Degree of Importance When Getting a Quick Bite, Gender

Salt, fat and trans fat, oh my!

Graph 6-3: Food Attributes, Degree of Importance When Getting a Quick Bite, Gender II

Catering to food education and food portioning

Graph 6-4: Food Health Attributes, Degree of Importance When Getting a Quick Bite, Age

Complementing the menu

Graph 6-5: Food Attributes, Degree of Importance When Getting a Quick Bite, Age II

CHAPTER 7: THE CONSUMER: CONVENIENCE STORE FOODSERVICE PURCHASE

Considerations

Introduction

Convenience stores live up to their name

Product differentiation an issue

Graph 7-1: Convenience Store Foodservice Purchase Considerations

Satisfying hunger

Graph 7-2: C-Store Foodservice Purchase Considerations, Hunger: Gender & Generation

Competitive leverage: Purchase non-food items along with foodservice ones

Graph 7-3: C-Store Foodservice Purchase Considerations, Non-Food: Gender & Generation

CHAPTER 8: PURCHASE INTENTION V. ACTUAL PURCHASE: THE FOODSERVICE CONNECTION

Introduction

Intention versus action: An overview

And the survey says!

Purchase intention

Purchase result

Graph 8-1: Purchase Intention v. Actual Purchase, by Product Type

Problems closing the deal?

Graph 8-2: C-Store Prepared Food Purchase Intention v. Actual Purchase

I went to get prepared food, but I got . . .

Table 8-1: C-Store—Foodservice Intention: Products Purchased; Foodservice Purchased: Product

Purchase Intention

CHAPTER 9: FOODSERVICE OPERATIONS OF LEADING COMPANIES AND BRANDS

Introduction

Top 5 convenience store brands

Table 9-1: Top 5 Convenience Store Chains: Foot Traffic Analysis, by Gender & Age

Second 5 convenience store brands

Table 9-2: Second 5 Convenience Store Chains: Foot Traffic Analysis, by Gender & Age

7Eleven, Inc.

Strategic direction

Aggressive expansion

Private label to differentiate and drive margins

Going Digital to connect and promote

Food & foodservice strategy

Aggressive food sales growth target

“We want our food to be better than restaurant quality”

Remodeling to emphasize prepared foods and beverages

Retrofitting coffee to court Millennials

Ramping up fresh produce to differentiate

New menu introductions

Table 9-3: 7-Eleven, On the Menu, 2011

7-Eleven Consumer Universe

A more urban footprint; key convenience store user groups accounted for

Table 9-4: 7-Eleven Consumer Demographic Profile, 2011

7-Eleven by the numbers

Merchandise sales share: fresh foods ring up $1.6 billion

Table 9-5: 7-Eleven Inc., Sales by Product Category, 2011

U.S. existing same-store sales rise modestly

Table 9-6: 7-Eleven Inc., Selected Metrics, 2008-2011

Sheetz

Not just a convenience store, but a convenience restaurant

Food first; convenience products second

Sheetz Bros. Kitchen

Sheetz Bros. Coffeez

Sheetz Bros. Creamery

Sheetza Pizza: round 4

Produce aplenty

Sheetz menu analysis

Table 9-7: Sheetz, On the Menu, 2011

Sheetz by the numbers

Table 9-8: Sheetz, Selected Metrics, 2010

Wawa

Aggressive expansion planned for 2011

Fresh food, home meal replacement, and own-branded flair

Coffee is the foodservice foundation—goes thermal

Wawa Consumer Universe

Table 9-9: Wawa Consumer Demographic Profile, 2011

Wawa by the numbers

Casey’s General Stores, Inc.

Takeover tug-of-war

Growth and acquisitions

Products offered

Prepared foods growth

Prepared food growth reflects strategy to promote high-margin products

New store format makes room for foodservice

Current momentum

Casey’s store menu

Casey’s by the numbers

Foodservice sales growth outstrips merchandise sales growth

Table 9-10: Casey’s by the numbers

Alimentation CoucheTard

Inc.

Growth and acquisition strategy

Notable acquisitions

Foodservice strategy

Circle K Consumer Universe

Table 9-11: Circle K Consumer Demographic Profile, 2011

Couche Tard by the numbers

Table 9-12: Couche Tard by the numbers

QuikTrip Corporation

Placing foodservice front and center: new store format analysis

Food enhancements

Beverage enhancements

A food-centric experience

QuikTrip Consumer Universe

Table 9-13: Quick Trip Consumer Demographic Profile, 2011