Fresh fruit sales trending upward at C-stores
Scan data shows that over the past year, almost a quarter of a billion dollars of fresh fruit was sold at convenience stores (C-stores) in the United States, putting the category on par with other popular snacks such as popcorn and pretzels.
To be sure, when spread across the more than 150,000 C-stores that operate in this country, $242 million in sales is not a gigantic number, but it does point to a growing trend.
Jeff Lenard, vice president of strategic industry initiatives for the National Association of Convenience Stores, told The Produce News that cut fruit sales increased by 14 percent in the past year and now account for more than half of all fruit sales. The banana, offered as a whole fresh fruit, leads the fresh fruit category ($81 million) followed by mixed fruit ($65 million), which is a cut fruit item. There are a handful of other leading items in the fruit category including watermelon, grapes, pineapples, mangos and apples, offered as whole, dried and/or cut fruit.
Several years ago, the United Fresh Produce Association and NACS launched an initiative to increase fresh produce sales at C-stores. United Fresh wanted to increase the consumption of fresh produce while NACS wanted to offer its members a way to grow their businesses while helping to alter the perception that C-stores are junk food dispensers. The two associations collaborated on creating a blueprint, if you will, for C-store proprietors looking to get into the fresh produce lane.
NACS has continued to build on the idea as it recently began partnering with the Produce Marketing Association on its “eat brighter!” program. The effort allows food retailers to promote fruit and vegetable sales at convenience stores through the use of Sesame Street character images on packaging and marketing materials, including signage at various places throughout the store or at the fuel island, in the case of C-stores.
The “eat brighter!” program is a partnership among the Produce Marketing Association; Sesame Workshop, the nonprofit educational organization behind Sesame Street; and the Partnership for a Healthier America (PHA).
For its efforts in promoting healthier choices for C-store customers, NACS was name a Partner of the Year for PHA.
“This award recognizes both the efforts of our industry to make the healthy choice the convenient choice and the power of PHA to provide the connections and resources to make a difference in communities,” said NACS President and CEO Henry Armour. “Convenience stores serve 165 million Americans per day, and most customers are in and out of our stores with their food and beverage purchases in about three minutes. That is why it’s so important for retailers to provide cues that can help their customers make healthier choices.”
The partnership with PHA and other nutrition-focused groups, including PMA and United Fresh, has helped NACS share ideas with its members as to how convenience retailers can offer a greater variety of healthy options. NACS research confirms this progress:
More than two in five NACS retail members (41 percent) said they stocked more fresh fruit and vegetables over the first six months of 2018 and 24 percent stocked more cut fruits and vegetables.
Convenience stores have expanded their selection of health bars (45 percent of retailers surveyed said they stocked more), nuts/trail mix (35 percent stocked more) and packaged salads (37 percent stocked more). This follows similar increases in 2016 and 2017, making the increase cumulative.
More than half of all NACS retail members (54 percent) said they sold salads in 2017, a 10-point increase from 2013.
Lenard said that adding fresh food at C-stores continues to be a growing trend as it is fresh food that drives profits for that retail sector. He revealed that two-thirds of revenue for the C-store industry comes from fuel sales but two-thirds of profits come inside the store. He noted than an average fuel sale of about 10 gallons of gas creates about $1 in profit, whereby a sale of one prepared food item, such as a value-added salad, can easily surpass that profit level.
The NACS executive advised produce suppliers looking for C-store sales to “put their item in a cup. If it fits in a cup, it will fit in a cup-holder,” which is a huge selling point for consumers on the go. “We sell immediate consumption,” he said, adding that 83 percent of the food purchased at a C-store is consumed within one hour.
Because of this fact, C-stores have not yet seen internet food sellers take a big bite out of their sales, as the immediacy of a convenience store purchase is hard to duplicate.
However, Lenard said that food delivery services, such as Door Dash and Grubhub, could be a threat as they up their game and reduce the time between order and delivery.
“Small format (C-stores, dollar stores, small footprint outlets) is holding its own against the internet, but we are being affected by other channels,” he said.
That is why C-store owners are constantly looking for new products and ways to distinguish themselves from potential competitors. On its website, NACS has a video section called “Ideas 2 G” that shows its members what other C-store owners are doing to capture sales. A common theme among more than a dozen videos was the inclusion of fresh, prepared and locally produced foods.
Lenard said bananas have become common in C-stores, but there is much room for growth in the category. He reiterated that the key is to offer products that are appealing to these consumers that have very little time on their hands.
The average C-store customer spends three minutes in the store. The majority (53 percent) walk into the store to get a drink, and may buy a food item if it appeals to them. Thirty percent go into the store looking for a food item.
For these reasons, Lenard said a successful merchandising plan includes putting these food items near the drink stations or cooler doors. For example, he said a basket of bananas near the coffee counter is an excellent idea. “To increase sales you have to put items like bananas in multiple spots.”
He said the open-air cooler, which is now commonplace in C-stores, is another great location for fresh produce for obvious reasons. It’s a popular destination within the store and it helps extend the shelf-life of these perishable items.