Convenience stores have made significant strides in their foodservice offerings, moving beyond the stereotypical day-old roller dogs and heated coffee to become serious contenders in the grab-and-go meal sector.
The evolution of c-store foodservice reflects broader trends across the food industry, driven by consumer demand for quick, convenient and innovative meal options. As we look toward the future, it is crucial for c-stores to learn from other foodservice segments, adapting and innovating to meet ever-changing consumer expectations.
Foodservice IP recently completed a comprehensive study on sandwiches in overall foodservice, and what follows are some of the findings and implications for c-store operators.
Consumer Demand and Industry Trends
The demand for quick and convenient meals is on the rise, with consumers increasingly gravitating toward grab-and-go and freshly prepared handheld options. This trend is evident across various food industry channels — from fast food to supermarket delis — and c-stores are no exception. The ongoing “chicken sandwich war” among major fast food chains highlights the competitive nature of this market segment. Driven by inflation and a consumer preference for new takes on classic offerings, fast food chains are battling to win over customers with innovative chicken sandwich offerings.
Plant-based options continue to grow in popularity, as consumers seek healthier or more environmentally conscious choices. Additionally, the push to speed up service has led to innovations such as Subway’s shift toward new signature sandwiches, which are quicker to prepare than build-your-own options.
Catering to Changing Preferences
Beyond quick service, there is a renewed focus on workplace catering. Chains like Wawa are expanding their reach by offering popular items such as Sizzli sandwiches and hoagies through platforms like ezCater. McAlister’s Deli is also revamping its breakfast program, introducing sandwich boxes and customizable bar concepts like build-your-own avocado toast, reflecting a trend toward more personalized and premium offerings.
Ingredient innovation is another key area of focus. Chains like Papa John’s and Panera are introducing new sandwich formats and bread options to capture consumer interest. The rise of premium-focused growth chains like Ike’s Love & Sandwiches, which offer unexpected flavor combinations, demonstrates the potential for c-stores to attract a broader audience by experimenting with bold, on-trend ingredients.
Key Findings From Foodservice IP’s Research
Recent research by Foodservice IP sheds light on the significant market for sandwiches, estimated at $196 billion in consumer purchases. Burgers and hot sandwiches, including chicken sandwiches, account for nearly half of this total. The category is expected to grow at a nominal rate of 3.5% through 2027, with overall foodservice growth expected to keep pace.
Consumers prioritize several factors when choosing a sandwich, with price-based value and cravings being top considerations. Fast service is also crucial, with 67% of consumers citing it as an important influence in their decision making. Menu boards are highly influential, often more so than special offers or discounts, in swaying consumers to try new sandwiches.
C-stores, along with restaurants and supermarket delis, attract strong patronage for sandwiches, benefiting from the convenience they offer. However, while consumers associate several factors with sandwich quality, they aren’t broadly willing to pay more for these qualities. Key factors that can command higher prices include meat quality, fresh preparation upon order and freshness of ingredients.
Combo meals remain a vital aspect of the foodservice value equation. Only 19% of consumers typically purchase just a sandwich; most prefer a sandwich, side and beverage combo. Operators face ongoing challenges, particularly rising costs and labor shortages, which are more pronounced in non-restaurant segments like c-stores. Despite these challenges, a majority of operators raised sandwich prices in 2023 and expect further increases in 2024.
Implications for C-Store Operators
To remain competitive, c-store operators must focus on ingredient quality and variety while addressing operational challenges such as labor shortages and cost pressures. The trend toward bolder flavor profiles and alternative proteins offers a clear path forward. For example, introducing breakfast sandwiches with unique protein options or bold flavors can cater to health-conscious consumers looking for something different. This approach has already proven successful in the burger segment, where alternative proteins like vegetarian options and bold ethnic flavors have gained traction.
Operators in non-commercial segments often lack the space and staff resources of larger chains. To compete, many are turning to micromarkets or grab-and-go counters in satellite locations. In these settings, frozen and fresh manufacturer products offer potential, allowing operators to maintain variety without the associated waste and labor costs.
Manufacturers can add value by creating frozen prepared sandwich programs that complement operators’ existing offerings. Such programs can help operators manage shrinkage and provide a wider variety of options to consumers, including allergen- or gluten-free offerings and bold, ethnic flavors.
While consumers rate price, quality and taste as top priorities, there is a growing interest in health-conscious options. The concept of “healthy eating” has evolved, with consumers increasingly seeking out natural, organic and nutrient-dense foods. C-stores can capitalize on this trend by highlighting the health benefits of their offerings, such as high-protein options or clean ingredient lists.
In conclusion, c-stores have a significant opportunity to grow their foodservice offerings by learning from other segments of the food industry. By focusing on quality, variety and innovation, c-stores can meet the evolving needs of consumers and continue to expand their share of the foodservice market.
Tim Powell is a principal with Foodservice IP, a research-based consulting firm based in Chicago. For more information contact Tim Powell ([email protected]) or visit Foodserviceip.com.
