Since the COVID-19 pandemic arrived, it has steered the course of consumer trends with a heavy hand, advancing the adoption of technology while simultaneously altering food and beverage preferences and demands. Even as convenience store retailers rushed to adapt, food sales suffered at many c-stores.
Convenience foodservice sales overall declined an estimated 8.6% in 2020, with prepared foods down 13%, according to Chicago-based research consulting firm Foodservice IP’s “2020 C-Store Foodservice Report Reflecting COVID-19 Impact.”
But 2021 holds the promise of a major rebound. Foodservice IP predicted c-store foodservice will return to historical growth levels in the latter part of the year, and many retailers share the same optimism.
“I think, when this pandemic ends, sales are going to explode,” said Paul Servais, retail food service director for La Crosse, Wis.-based Kwik Trip, which operates 700-plus c-stores.
New trends and technology born out of the pandemic are expected to grow, and c-store retailers that have continued to invest in foodservice and update their food programs in line with current trends are poised to come out ahead.
“The trends that emerged as a result of the pandemic have quickly accelerated and are becoming a permanent part of our landscape,” said Raj Kapoor, senior vice president of food and beverage for 7-Eleven.
One such trend is increased interest in comfort foods. As the pandemic brought mass upheaval and uncertainty, customers turned to foodservice favorites like pizza and fried chicken for comfort. Meanwhile, there’s also renewed interest in healthy, plant-based and international options, as the definition of mainstream, ‘American’ comfort food continues to evolve.
Technological disruption has brought sweeping changes, too. To facilitate food ordering during lockdowns and social distancing requirements, delivery, curbside pickup, mobile ordering and numerous other technologies have become an integral part of doing business for restaurants and c-stores alike.
The industry also doubled down on its dedication to sanitation and took huge strides to ensure the safety of both customers and employees.
Now, retailers are looking forward and positioning themselves to reap the rewards of foodservice success once the world begins to reopen.
While some speculate that customers, accustomed to home cooking during the pandemic, could be less inclined to return to dining on the go, Kwik Trip’s Servais expects just the opposite. “I don’t believe that for a minute,” he said. “Especially in the Midwest; people will return to their offices. People are going to be busier than ever making up for the lost year.”
Laying the Foundation
“At GetGo, we used this past year to reinvent our menu,” said Jon Cox, vice president and chief merchant for Pittsburgh-based GetGo, which operates more than 260 locations in western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana.
In 2020, GetGo removed slow-selling items and did a complete SKU rationalization, Cox said. It also updated its made-to-order kiosk flow and design, and it added a laundry list of menu items: bowls, burritos and its ‘GoBig Menu’ with larger portions and a ‘double-the-meat’ option. Plus, salads and wraps, fried chicken, spiked slushies — the list goes on.
In 2021, GetGo plans to continue expanding its grab-and-go offer and dinner kits and introduce new limited-time offer (LTO) made-to-order items.
And GetGo wasn’t the only c-store that used 2020 as a chance to reenvision its foodservice program.
Baltimore-based, 54-store High’s also updated its menu in 2020: 100% Jumbo Lump Crab Cake and Crab Soup, with plans for Take & Bake Crab Cakes in 2021.
“Marylanders are very choosy about crab cakes,” said High’s Director of Food Service Sherryn Diamond, “and it is exciting to offer a restaurant-quality crab cakes in a convenience store.”
In 2021, she said, High’s will continue to look for local, restaurant-quality destination food items.
El Dorado, Ark.-based Murphy USA, which operates 1,500 sites located primarily in the Southwest, Southeast and Midwest U.S., hired Ryan Riggs as its senior director of food services in August. Riggs previously worked for Sheetz and then Alltown Fresh, both known for their foodservice programs. In December, the company acquired Whitehouse Station, N.J.-based QuickChek, a 157-store brand.
“QuickChek’s really become a foodservice destination that also sells fuel,” said Riggs.
He believes the breakfast daypart in particular is a “huge opportunity” for Murphy USA. And while he’s careful to note that it won’t be adopting QuickChek’s menu, or even its strategy, per se — they’re different brands in different areas with different customers, perhaps even catering to different occasions — there’s no doubt that foodservice will play a greater role in Murphy USA’s future — and other fuel-first retailers like it.
While we may not truly know or understand all of the pandemic’s effects for years, maybe decades, to come, it’s clear that it quickly forced the convenience industry’s hand when it came to technology.
“I think the industry is seeing more of an acceleration of best practices that allow retailers to streamline operations and serve customers faster,” said Bill Bustin, marketing director for Sayre, Pa.-based Dandy Mini Marts, with 65-plus locations in the Twin Tiers region of Pennsylvania and New York. “Delivery, online ordering, contactless payment; these are all things that were already on a lot of folks’ radars but may have been pushed to the front of the priority line due to the pandemic.”
For example, Wawa, with 900 locations in six states and Washington, D.C., opened its first drive-through c-store in December and its first standalone drive-through location this January as it continues to test new concepts.
Denver-based Choice Market’s fourth store, set to open this March, will be frictionless. And Hudson Group, which operates c-stores in more than 1,000 airports, train stations and tourist destinations in North America, is adding Amazon’s Just Walk Out technology to its stores, beginning with the opening of a c-store at Dallas Love Field airport called Hudson Nonstop. At Just Walk Out-enabled stores, customers can use a credit card to enter, then select products and go.
High’s is offering order-ahead and curbside pickup through Skip, a mobile payment brand, and delivery through Grubhub.
And Savannah, Ga.-based Parker’s, with 66 stores in Georgia and South Carolina, has been working to implement Smart Kitchens, which use machine learning to predict how much to cook by location at any given time of the day.
“This information is sent down to kitchens, and our team is able to have the right amount of food available at the right time to maintain the highest level of quality possible,” said Parker’s Director of Food Service Heather Davis. “The Smart Kitchen manages product hold times and alerts the team when to refresh an item that is approaching its expiration.”
Meanwhile, 7-Eleven expanded its contactless checkout options and accelerated the rollout of contactless delivery through its proprietary 7NOW delivery app. And with a presence on Uber Eats, Grubhub, Instacart, Postmates, DoorDash, Google and Favor, the c-store chain, with 12,000 locations in North America, now offers on-demand ordering to more than 90% of its footprint.
“7-Eleven customers always want convenience, but with the strains the pandemic was placing on them, we saw that become even more important,” said Kapoor. “People quickly tired of making every meal at home, and there was a surge in demand for easy meal options — meal kits, ready-to-bake pizza, ready-to-bake wings and taquitos. They also wanted these options through convenient delivery — 30 minutes or less.”
While the cost of delivery is a significant barrier for some retailers, Foodservice IP’s Managing Principal Tim Powell noted it’s important to have a presence on these apps. You’re no longer just competing with the retailers around your brick-and-mortar store; you’re competing, digitally, with every c-store, quick-service restaurant (QSR) and restaurant on every third-party app.
And by offering delivery through these third-party apps, he said, retailers may be reaching new customers they wouldn’t have otherwise had.
For their takeout and delivery orders in 2020, consumers turned to comfort foods — a category c-stores know well.
Pizza in particular proved a pandemic-proof offer at many stores, alongside fried chicken, which has been trending since Popeyes kicked off the infamous “fried chicken sandwich wars” in 2019. Now, McDonald’s is throwing its hat in the ring, with the launch of not one, not two, but three fried chicken sandwiches this month. Not to mention KFC, Shake Shack, Boston Market and even salad chain Sweetgreen, all of which announced new fried chicken sandwiches since the start of the new year.
C-store chains like Parker’s have long been key players in the fried chicken game. Tenders are a mainstay, but Parker’s, which prepares its offers fresh on-site daily, also added a chicken tender sandwich in 2020, with plans for new spicy sauces, sandwiches and biscuits in 2021.
As c-stores continue to compete in the QSR space, more and more are adding new programs or partners to their foodservice offer.
“Southern food, and fried chicken in particular, seem to be an ever-lasting favorite,” said Joe Cotton, vice president of restaurant services for Oklahoma City-based Love’s.
The company, which operates more than 540 travel stops and country stores across the U.S., added Bojangles to its long list of QSR partners in 2020, with 40 locations now in the works.
“Love’s is always looking for high-quality brands to add to locations,” Cotton said. “Bojangles provides the quality food we want to serve customers and is also known for their customer service — these trademarks align with Love’s customer commitments. We’re excited to continue to introduce the Bojangles experience to customers in 2021.”
Kwik Trip added a proprietary fried chicken program in 2019 and has since expanded the offer to its more than 700 locations. And GetGo launched its own chicken program in 2020, with plans to introduce new sauces alongside an expanded lineup this year.
Cliff’s Local Market, which operates 19 stores in central New York, saw fried food sales increase 16% for the year, said Director of Foodservice Derek Thurston. The chain’s fried food offering includes items like cheese sticks, chicken tenders and boneless wings. And while pizza slice sales at the chain dipped 7% in 2020, he said, whole pizzas were up 12%.
Nielsen Total U.S. Convenience data’s not far behind, with deli pizza sales up 8.8% for the latest 52 weeks ending Dec. 26, 2020, and up 10.4% for Q4 of 2020, compared with the previous year.
Dandy Mini Marts also saw success with whole pizzas this year, as well as with new menu items like loaded fries and its ‘Chicky Bisky,’ a chicken biscuit sandwich with hot sauce and honey.
Among its plans for 2021, the c-store chain will launch a “Pizza of the Month” promotion, for both slices and whole pies.
“It’s a great tool for our foodservice team to experiment with different toppings and flavor profiles while getting feedback on the pizza program as a whole,” said Bustin.
Mike Kostyo, trendologist for market research firm Datassential, confirmed that sauces and flavors are “quite possibly the most effective way to introduce consumers to new and exciting (offers) because they are so versatile, and you can use them on products that they already know and love.”
He called out sweet-and-spicy flavors as the latest trend, including hot honey, as well as mango habanero, the Mexican spice Tajín and Nashville hot — which Kostyo said was the fastest-growing sauce, flavor or spice overall in the past four years, growing a massive 727% on menus.
“It’s quickly becoming a mainstream offering,” he said, “and c-stores should look for ways to feature it beyond chicken.”
What’s considered mainstream, ‘American’ comfort food versus ‘international’ or ‘ethnic’ food is subjective, and it will continue to evolve and expand as this country does.
Pizza, after all, is from Italy. Now it’s as American as apple pie — which, by the way, originated in England.
“It’s so important to stay on top of the trends that resonate with each new generation of consumers, and that includes the types of foods consumers find comforting or nostalgic,” said Datassential’s Kostyo. “When we think of comfort foods, we may immediately think of options like mac and cheese or pizza, but many younger consumers grew up eating a wider range of foods and find them to be comforting. That’s particularly true when it comes to global options.”
He pointed to Mexican food as an example, which consumers have said they’re craving more than any other cuisine while at home during the pandemic.
7-Eleven Senior Vice President of Corporate Operations and Restaurant Platforms Brad Williams said the chain’s first Laredo Taco Co. location in its Dallas Evolution Store in 2019 saw immediate success, which led 7-Eleven to explore expanding the restaurant concept, known for its authentic, fresh Mexican flavors — breakfast tacos wrapped in handmade flour tortillas, homemade salsas prepared on-site, enchiladas and seasonal favorites like tamales. To date, there are 35 new Laredo Taco Co. restaurants throughout San Diego, Texas, Washington, D.C., Oklahoma and Florida.
“Although COVID-19 presented each new location with a unique challenge, each restaurant has been performing exceptionally well,” said Williams. “We plan on opening over 100 new Laredo Taco Co. restaurants this year.”
While Mexican food is certainly a widespread consumer favorite, there are numerous other types of cuisine to look to for the next takeout-friendly offer — Korean bibimbap, curries from any number of South or Southeast Asian countries, South American arepas, Chinese bao buns.
Ramen is another food that resonates with younger consumers, noted Datassential’s Kostyo.
In addition to Bojangles, Love’s Travel Stops recently added Naf Naf Middle Eastern Grill to one of its stores in Illinois, with plans to open 10 more locations in the next five years.
The menu, inspired by the founders’ Israeli upbringings, includes pita, chicken shawarma, hummus, falafel and more.
“We know that our customers love options when it comes to food choices, so we wanted to give them something different,” said Love’s Cotton. “Naf Naf offers customers a variety of fresh, flavorful and quick options when it comes to dining.”
Healthy & Plant-Based
International foods also offer a whole host of new ways to incorporate both healthier and plant-based items on menus — like Naf Naf’s falafel and hummus — which consumers will be looking for in 2021 and beyond.
At GetGo, Cox said he’s most excited about increased customization, which enables the chain to cover all the bases.
“If they want a burrito without a tortilla, we have it. If you have a gluten allergy, we have a gluten-free wrap,” he said. “Trying to eat a little healthy? We have made-to-order salads. Or, if you want to splurge, order something from our GoBig Menu, or a double — or even triple — cheeseburger.”
Although it may seem counterintuitive for foods like pizza and fried chicken to be trending alongside healthy foods, there are a few things to consider: First, there will be customers who have been eating more traditional comfort foods during the pandemic who then decide to eat healthier in the new year, or once the pandemic subsides. According to a Jan. 12, 2021, CivicScience survey, 49% of U.S. adults said they plan to eat healthier in 2021.
However, healthy food and comfort food may also be different occasions for the same customer.
And while it should be noted that ‘plant-based’ is not synonymous with ‘vegan’ nor ‘healthy’ — most french fries, for example, are vegan — they do often go hand in hand in consumers’ minds.
In fact, CivicScience data shows a correlation between those who enjoy plant-based meats and frequent exercise, suggesting that health may be one of the driving factors behind consumers’ interest in this growing market.
In other words, the demand for plant-based foods may increase as people make choices they perceive as healthier.
According to a Jan. 11, 2021, CivicScience survey, 15% of U.S. adults said they are interested in made-to-order plant-based meat products at convenience stores. And Nielsen Total Convenience data shows meat alternative sales were up 16.7% for the latest 52-week period ending Dec. 26, 2020, compared with the previous year, and 40.1% for Q4 of 2020.
“There’s no doubt that more QSRs and c-stores will add more plant-based items in 2021,” said Kostyo, pointing to McDonald’s upcoming McPlant line this year.
We’ll also see increased innovation from the category. In December, the Singapore Food Agency gave regulatory approval for the world’s first lab-grown meat product. And according to Barclays, the market for meat alternatives could be worth $140 billion within the next decade, or about 10% of the $1.4 trillion global meat industry.
“With prices dropping, formulations improving and continued consumer demand for plant-based alternatives and sustainable products,” Kosyto said, “the plant-based market shows no signs of slowing down.”