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    Why C-stores Should Tap Into Healthier Sales

    Opportunities abound as consumers age and health care costs rise.

    By Melissa Kress, Convenience Store News

    NEW YORK — Overall, retailers have been faced with sluggish sales — roughly flat to 2-percent growth — in the past year and, according to Nielsen, the forecast for 2017 is 1-percent growth.

    As a result, retailers are keeping their eyes open for growth opportunities, and they could find one in the health and wellness category, explained Andrew Mandzy, director of strategic insights at Nielsen. 

    As he pointed out during a recent webcast entitled, "The 'New' New Year's Resolution," 49 percent of U.S. consumers are consciously eating more fruit and vegetables, 63 percent are trying to eat healthier, and consumers are exercising, on average, three times a week.

    "Consumers are taking active measures to manage their health and wellness," Mandzy said.

    Why is this happening? Nielsen uncovered five key factors that are driving this health and wellness trend among consumers:

    1. The Aging Population

    Americans over the age of 65 number 48 million and account for about 15 percent of the population. This figure is expected to increase to nearly one-quarter of the population — or 98 million — by 2060. 

    "This represents an opportunity for consumer packaged goods (CPG) and retail. We know that boomers and the generation older than them — the Greatest Generation — buy over-the-counter medications and health care products disproportionately," Mandzy said, noting these products include nutritional aids, pain remedies, diuretic remedies, sleeping aides, and throat lozenges.

    "Understanding where older shoppers are buying categories within the health care space is important to understand and allows you to focus on them as a consumer within that category," he added.

    There are also innovation opportunities within the health and wellness category to provide functional foods that include key ingredients boomers are seeking; easier-to-open packaging; easier-to-read labels; and senior-focused health care services.

    2. Increasing Chronic Diseases 

    Ailments will continue to rise as the population ages. Citing statistics from the World Health Organization, Mandzy said by 2020, 73 percent of deaths will be due to chronic diseases, up from 60 percent in 2001. 

    "Ailments are a concern and a focus. Today, almost one in four households in the U.S. suffer from some sort of ailment," he said. These include allergies, acid reflux, high blood pressure, and depression.

    On a broader scale, retailers and CPG companies need to understand how consumers use medicine and what influences their behavior.   

    "Ailment shoppers overall represent significant retail spend," Mandzy explained. For example, diabetics represent 24.8 million households and $154.1 billion in annual spending. "It is not just a story about medication; ailment management overall impacts the entire store."

    3. Rising Health Care Costs

    According to Nielsen, 53 percent of consumers said their 2016 out-of-pocket costs to visit a doctor rose vs. 2015. In addition, 50 percent said their prescription costs also increased during that timeframe. 

    "Consumers are really feeling the pinch from rising health care costs," Mandzy said, pointing out that in 2014, only 34 percent of consumers said the costs for their doctor visits went up year over year and 30 percent said the same about their prescription costs.

    "As a result, consumers are making health care-related tradeoffs," he said. They are looking for alternative medications, taking prescriptions less often than recommended, and taking over-the-counter medication before starting a recommended prescription medication. Adding to the issue is the predicted shortage of primary care practitioners, he noted.

    So what's the solution? According to Mandzy, consumers are taking a more proactive approach to managing their health and wellness; health care professionals are making care more efficient; and retailers are providing a path to health and wellness. 

    4. Demand for Transparency in Products

    In a recent Nielsen survey, 44 percent of consumers said they trust industrially prepared foods — meaning 56 percent, on some level, do not.

    Notably, 68 percent of consumers said they are willing to pay more for food and drinks that do not contain undesirable ingredients.

    "It's a push toward simplicity; a less is more, fewer processed ingredients. A sort of back-to-basics movement when it comes to the products we consume," said Mandzy.

    Transparency-driven claims are growing across the total store, as Nielsen is seeing the trend in indulgent categories like salty snacks and candy.

    5. Technology Access

    As Mandzy explained, technology is an umbrella that allows consumers to get information around the products they consume and around other aspects of health and wellness.

    In 2016, 68 percent of consumers used an online source to find health and wellness-related information vs. 48 percent in 2014.

    "Your health and wellness communication strategy must have a digital component to speak to them," he advised.

    By Melissa Kress, Convenience Store News
    • About Melissa Kress Melissa Kress joined EnsembleIQ's Convenience Store News in November 2010. Her primary beats include alcoholic beverages and tobacco. Kress has been a professional journalist since 1995. A graduate of West Virginia University, she began her career in community journalism before moving to business-to-business publishing in 2000, covering commercial real estate.

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