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CHICAGO — While many attendees of the 2015 National Restaurant Association (NRA) Show are focused on fine dining, a significant number gathered to learn about the latest advancements in retail foodservice offerings in convenience stores and grocery stores, which have expanded significantly in recent years and show no signs of stopping.
Consumers today view retail foodservice as a convenient opportunity to get meals for themselves and their families, and prepared foods are heating up as time-crunched shoppers embrace ready-to-eat and ready-to-cook meals as alternatives to eating out, said Jim Dudlicek, editor-in-chief of Progressive Grocer and moderator of the panel "Foodservice Advancements in the Grocery and C-store Channels."
Major factors influencing this changing eating behavior include the increased buying power of millennials and Hispanic consumers, aging baby boomers and smaller households.
Convenience stores are also seeing major change when it comes to prepared food. "Most convenience stores offer some kind of foodservice," said panel speaker and Convenience Store News Editorial Director Don Longo, who noted the c-store industry has come a long way from the days when it was known for selling "smokes and Cokes."
The growth of foodservice in c-stores has outpaced that of in-store merchandise for the past decade. "Foodservice has become the most profitable category in the store," Longo cited.
Products driving this growth include sandwiches and wraps, hot dogs, pizza and chicken, with frozen treats marking notable improvement despite the segment's small size.
The NRA Show panel, which took place May 17, also included discussion of foodservice program development at convenience store chain Kwik Trip Inc., presented by Retail Foodservice Director Paul Servais, and grocery story chain Price Chopper Supermarkets, presented by Vice President of Culinary Concepts Lewis Shaye.
Shaye described how both food and service create memorable guest experiences that turn casual customers into brand ambassadors, while Servais talked about how Kwik Trip is able to keep complete control over its supply chain through the vertical integration of the company's various arms.
Fresh sandwiches and salads "continue to explode" at La Crosse, Wis.-based Kwik Trip, according to Servais, while the soup business is tough but a quality product does develop a following. Bakery items also do well and offer good profit margins for the c-store chain.
SHOW FLOOR TRENDS
On the NRA Show exhibition floor, suppliers pointed to new flavors, limited-time offers (LTOs) and sustainability as important current trends.
Flour-milling and ingredient company Ardent Mills gave tours of its Mobile Innovation Center at a special pre-opening event May 18. The fully functional bakery, culinary kitchen, research and development site and meeting space is housed on a former NASCAR vehicle-transporting bus that tours the country.
CEO Dan Dye explained the company's goal of mainstreaming whole grains and "winning in an age of enlightened eating." People are thinking differently about their food, and it's about more than just eating healthy, he said. Enlightened eating is a "megatrend" created by the desires for local, ethical and pure food, and "the effects are real."
Farmer Bros. Coffee confirmed the importance of millennials and Hispanic consumers in the marketplace, and reported that specialty coffee is no longer a niche. Even compared to just five years ago, there is more interest in flavor development. A company representative compared the premiumization and specialization of coffee to the sharp increase in the popularity of craft beer.
Also in the dispensed beverages category, the top soda companies highlighted the importance of choice. PepsiCo Inc.'s customization-focused Spire fountain dispenser now offers a selection of curated flavor combinations alongside its selection of sodas and flavorings. A company official noted that while the Spire is not yet placed in c-stores, the company has plans for this in the future.
Meanwhile, The Coca-Cola Co. has added three LTO Share a Coke mixes to its Freestyle fountain dispensers: BFF, VIP and Legend. The Freestyle also now offers SmartPak technology, which combines reusable and recyclable components in space-saving cartridges. A company representative also said in the frozen beverages segment, sour flavors are a big trend today.