The Graze Craze

Blurring of day-parts gives retailers new opportunities for grabbing that grab-and-go consumer.

By
Erik J. Martin, CSP Correspondent

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Hankering for Healthy

The most noticeable consumer change in snacking observed by Nolan of Family Express has been the migration away from chips to less guilty products such as nuts and trail mixes, signifying a move to healthier snacking.

“With more on-the-go lifestyles, there’s less sit-down eating. It’s more convenient to eat a PowerBar or bagged nuts in the car or between meetings instead of messy burgers or sandwiches,” he says.

The top-selling snack today isn’t processed or packaged at all—it’s fruit, according to 2012 data from NPD’s National Eating Trends In-Home and Away-FromHome database. The industry has also seen double-digit growth in nutrition/energy bars, and yogurt, popcorn, oatmeal and nuts/seeds continue to trend high.

 “Better for you (BFY) and fresh snacks are on the rise as consumers are becoming smarter and more aware of what they eat,” Fulford says. She cites Global Mapping International research released in January indicating that 63% of c-store shoppers say they want more BFY products in c-stores; 51% say if BFY products are carried in a c-store, they would shop there more often.

Higar, who virtually lives out of a suitcase while spanning the country for great food ideas, agrees: “There’s a renewed focus on healthier eating and quality of life, which is why we’re seeing more fruits, salads, veggie chips and organic foods being offered by convenience retailers.”

Raman Goyal, regional manager for 13 Shell- and Chevron-branded Vintners stations in southern California, says his stores are enjoying strong register rings for fresh fruit and healthier packaged items such as energy bars, trail-mix products, mixed nut snacks and Greek yogurt.

This doesn’t mean operators should forgo traditional indulgence. Rather, they must find that balance, which will swing largely by demographic and competition.

“Don’t discount hot-selling indulgent items like ice cream, cookies, gum, candy and carbonated drinks,” says Seifer of NPD. “But make apples, bananas, Greek yogurt, granola and protein bars available, too.”

The latter category has been a particularly sweet cash cow for Ray Johnson, operations manager for Speedee Mart, the Las Vegas operator of 20 76-branded gas stations. “The snack picks of choice at our stores used to be brownies, Rice Krispies Treats and Pop-Tarts,” says Johnson. “Now it’s PowerBars and Special K bars, which yield a higher profit margin because the ticket ring on these items is three times higher than those of traditional snacks.”

Greater Variety and Portability

Shoppers are increasingly on the hunt for novelty and variety to keep their snacking tastes from becoming stale. A wider variety of portable hot edibles and fresher foodservice offerings with more complex flavor profiles are also in greater demand, as evidenced by the growing popularity of ethnic food snacks such as empanadas, potstickers, eggrolls and steamed dumplings that can be easily held and consumed while driving and multitasking.

“Consumers don’t want to compromise on flavor, and they’re also much more willing to try a unique new product in a snack format because the risk is smaller at this lower dollar amount,” says Higar, who suggests that c-store retailers should continually introduce new and unique snacks to cater to this demand from frequent snackers. Offering locally produced specialty items with more upscale ingredients is also smart, he says.

Overall, c-stores have to integrate themselves into a consumer’s lifestyle by offering better quality, selection and convenience. “These foods have to taste good but also travel well,” Higar says, “which is why you see more colorful and tasty yet portable choices available today like zucchini fries, Parmesan potato wedges and even cake balls (chocolate-dipped cake batter on a stick).”

Hence, don’t just think on the go; think also portability. “Look at how many candy companies have switched to handy pack bags with bite-sized portions that can fit in your cupholder,” Johnson says. “Today’s snacks have to be easily eaten in the car, and the average customer is going to consume whatever snack he or she buys within 2 minutes.”

Beverages also fit nicely in cupholders, and, in the form of smoothies, milk drinks and other calorie-rich liquids, they can function as a snack or at least a trigger for purchasing a solid snack food. “Picking up a beverage like a specialty coffee gives them a cleansing break that gets their minds off what may have been a bad start to the day,” says Higar.

Enterprising Merchandising

Retailers can capitalize on emerging snacking trends by focusing on customer need states, assortment and location, says Fulford. “It’s important to have the breadth and depth of assortment to deliver against varying consumer needs. And with the average consumer only in the c-store for less than 2 minutes, we need to get better about marketing to the mission,” Fulford says. “This includes creating adjacencies and organizing the store layout by similar day-parts and need states.”If the snack product is not in the right place for the customer to find quickly, that’s a key missed opportunity, says Fulford.Case in point: granola bars, which are often buried deeper within the c-store and combined with cookies, crackers and other bars. Fulford says it makes more sense to merchandise granola bars closer to other key products linked to morning purchases, such as coffee, pastries and doughnuts.“Don’t place it in the back where you have to hunt for it; make sure customers can find it fast,” Seifer says. “Also, place fruit stands right near the entrance with yogurt coolers nearby, put a mini cooler with string cheese near the front, and stock bananas right at the checkout counter to drive extra revenue.”

Goyal says he places salty snacks “next to the beer cooler and sweet snacks in line with or next to the soda fountain or energy-drink cooler. That way, when a thirsty customer comes in for a drink, we can attract them with impulse snack items.”Retailers may also want to consider adopting a multivendor mixed approach to stocking snacks.

“Create an eye-catching endcap of snacks, and have a rack of the best-selling SKUs of salty, sweet and alternative snacks to drive customers deeper into the store to get something,” says Kit Dietz, principal of Dietz Consulting LLC, a firm that provides consulting services to the convenience industry. He emphasizes how important it is to focus on the core products—considering that 4% of SKUs drive approximately 50% of total c-store sales, according to a recent study his firm conducted with Willard Bishop Consulting Ltd. “Consumers are very responsive to promotions, so utilize endcaps, displays and shippers to drive impulse sales.”

Also, try devoting as much space and attention to non-candy snacks as you do to the candy items.

“Most operators don’t give energy bars, cookies and crackers the proper space and SKU count,” says Johnson of Speedee Mart. “You may see 4 total feet of space for all three categories combined in some c-stores. Actually, each of those categories should be given 4 feet.” 

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