The CS Products Forecast
Published in Convenience Store Products
What We’re Watching in 2014
OAKBROOK TERRACE, Ill. -- The calendars are turned, the resolutions are (we hope) not yet broken, and the experts have all pitched their prophesies for the year to come.
Convenience Store Products has its own list of trends for the new year—musings, theories and phenomena we’ll be watching in the 12 months to come. Some are already well underway—such as the rise of the single, offspring-free consumer—but have yet to be fully realized. Others are in the fuzzy, far-off future, such as the overlap of the e-cig boom with legalized marijuana. All of them should provide fodder for new ideas for your business. Happy 2014!
Customization Turns to Curation
Chipotle and Coke Freestyle have come to epitomize the consumer desire to “have it my way.” But there is a ceiling for the number of options consumers want. Hyper-minimalized burger joints such as Five Guys, with just a few options on its menu, is one example of the countertrend against too much customization. But what’s even more interesting is an adjacent trend toward “curating” an experience—best exemplified by the boom in subscription-based mail-delivery consumption.
It began with companies such as Birchbox, which sends consumers sample sizes of high-end beauty products that they can then buy if they like. The concept has spread to beer, clothing, coffee and—most notably in our industry—snacks. Even General Mills is trying its hand at this concept with its nibblr project.
The “curation” comes in that the user reviews the products online. The company then adjusts what it sends out each time based on users’ preferences. Eventually, you have a box of products landing at your door curated just for you.
"This has become status quo," Eric Stangarone, creative director of The Culinary Edge in San Francisco, tells us. "It’s not enough simply to buy food, to buy shoes, it’s all got to be curated for you. ... Consumers are expecting more value for their dollar. And a bad economy is a great way to spur that innovation.”
How might this curated consumption translate to the c-store? Consider “grab bags” of a few snacks and/or beverages, pairing well-known favorites with newer, more novel items, which could also help incremental sales.
Everyone is Competition
You know that feeling you get when you think about dollar stores and the impact these increasingly competitive players could have on your business? That’s the same feeling many QSRs have about you and the growth of c-store foodservice. Your share of foodservice sales continues to grow, and restaurateurs are taking note.
But really, restaurants are more concerned about supermarket-prepared foods—and you should be, too. The segment continues to elevate the foodservice experience with fresh, fast and convenient options and, according to The NPD Group, is managing to outpace the total industry in the persnickety dinner day-part. So keep them in your peripheral vision along with those vexing dollar stores.
The buzz around vending has been slowly building over the past few years, and it just might explode this year. Automated-convenience-store concept Shop24 opened another location at California State Polytechnic University Pomona in December, while new company Farmer’s Fridge launched its first fresh-food vending machine in November in Garvey Food Court in Chicago’s Loop neighborhood. Farmer’s Fridge vends a variety of fresh salads and add-ons such as chicken, lemon tofu and tuna salad, along with healthful snacks such as sliced vegetables with hummus. Food is prepared each morning in an off-site kitchen and packaged in recyclable plastic jars, which can be returned through a slot on the machine.
While on the surface vending looks like another avenue of competition for c-stores, the technology used to keep food fresh might be translatable to the convenience channel. Further, consumer acceptance of purchasing prepared meals from a machine may help c-stores’ own freshness perception.
Of all the product announcements that came across our desks in 2013, rare was the product that touted mere satiety. Rather, most new foods and beverages tend to offer some additional benefit—calming properties, hangover cures, an immunity boost.
The desire for packaged foods and beverages to provide quality-of-life attributes certainly resonates with millennials, The Hartman Group CEO Laurie Demeritt told us in a recent interview for our January/February issue on innovation. The proof is in the numbers: On the beverage side, dollar sales for the category of ready-to-drink “wellness and functional” beverages grew 3.9% from 2011 to 2012, making it a $65.3 billion category, according to the Beverage Marketing Corp., New York. The entire $143.5 billion ready-to-drink-beverage sector increased only 2.4%.
On the extreme end of this trend are a few c-store retailers in Oregon who are offering kombucha (a fermented drink with many functional properties) on tap for customers, including the Stop and Go Shell in Bend, and SeQuential Biofuels in Eugene.