Prepackaged sandwiches may be considered old school by some in the convenience store industry, but new generation shoppers appreciate that such food choices fit their busy lifestyles.
By David Bennett, Senior Editor
If beverages and tobacco products are the backbone of traditional c-store merchandising, then pre-prepared sandwiches arguably might be the the foodervice legs in the sense that packaged sandwiches—in addition to roller grill items—were one of the original grab-and-go foodservice options identifiable with the industry.
The question of convenience among U.S. consumers seemingly is looming larger than ever. A new Nielsen study finds that many shoppers today don’t want to linger in a grocery store or warehouse club location.
Almost half of the shoppers Nielsen surveyed (46%) see grocery shopping as a chore and only 10% of those surveyed plan ahead as far as the meal they’ll be having later that day.
This lack of enthusiasm for shopping, as the study indicates, has resulted in a decline in major, stock-up grocery trips in favor of more need-based store visits. These changing shopping habits could explain what has been happening in retail segments that rely on stock-up shoppers, such as warehouse clubs. Such consumer habits, however, could prove advantageous for convenience retailers and the services they bring to the table.
Moreover, the capability of c-stores to produce convenient food options remains an important retail dynamic.
BREAD WINNER
Sandwiches are still popular with c-store customers and are now tailored to a variety of tastes, dietary preferences and dayparts—not to mention that few foodservice items can hold their own as do sandwiches when it comes to portability and convenience. Just how important are sandwiches as a consumer item in convenience retail?
In the year ending June 2018, prepared sandwich servings at c-stores rose 3% compared to same period year ago, according to a NPD Group/CREST report published recently. In total number of servings, that’s 5.1 million.
Among sandwiches, the servings growth leaders in the period were: breaded chicken sandwiches, which jumped 17% over the previous year. That was followed by roast beef sandwiches, up 13%; cold-cut combos, up 11%; and egg sandwiches up 7%.
Most pre-prepared sandwiches are eaten somewhere other than where they are purchased—which means packaging that works well for transport matters. That’s a logical benefit for c-store patrons. Conversely, there are built-in advantages for convenience retailers that are able to develop effective prepackaged sandwich programs as part of their foodservice model. Some are outlined in Datassential’s “The Keynote Report: Convenience Stores,” from 2016, the last year such data was compiled by the market research firm for the food industry.
Among the findings:
• 43% of c-store visits are mid-day (lunch or afternoon snack).
• 50% of operators say that small store size/lack of physical space are a limitation to their foodservice program—so even if they wanted to offer freshly-assembled sandwiches, many c-stores simply don’t have the space.
• 40% of operators say limited staff is a challenge too, especially as the industry endures staffing shortages in the foodservice channel overall; c-stores struggle to have qualified staff to build sandwiches on-site or fresh-to-order.
• 32% of operators are very interested in offering foodservice around the clock—having pre-made options is important to doing this.
• 32% of operators are trying to reduce the labor needed for their foodservice offerings.
Of course, c-stores must balance such numbers with meeting customers’ expectations.
Square One Markets in Pennsylvania has shifted its focus away from prepackaged sandwiches to keep up with customer demands, said Lisa Dell’Alba, president and CEO of the Bethlehem, Pa.-based chain of nine c-stores.
“We are now offering pre-prepared sandwiches at most of our locations and we have a full service food offering at one of our stores,” said Dell’Alba. “We have definitely seen a shift in customer demands and trends with respect to what they are looking for. For several years now, customers have increased in their desires for fresh and local offerings. While this, at times, can be an uphill battle when sourcing products and ingredients from store to store, we find that our customers appreciate the value.”
Demand for particular sandwiches and related food items vary depending on the geographic location of each Square One Market store.
“Italian hoagies still reign supreme in this area,” said Dell’Alba. “We see chef salads being in pretty high demand in particular and adding them was a result of utilizing product for our sandwich program.”
PACKAGING MATTERS
More recently, many U.S. consumers have become almost as concerned with the packaging encasing their sandwiches, as what’s inside. More and more packaging must look appealing and help keep sandwiches fresh—even in prepackaged sandwiches. Some analysts point out that Millennials look for eco-friendly packaging while other-age shoppers want to be able to view the sandwich offering they’re buying.
There might be a grain of truth to such a perception. McDonald’s, earlier this year, announced it wants to have 100% of its customer packaging come from renewable, recycled or certified sources by 2025.
Ann Golladay, senior project director at Datassential, said given McDonald’s sheer size, anything it does is bound to impact the industry overall and of course, their direct competitors. However, it’s unclear if the impact of making a packaging change will be quite as noticeable as the fast food giant’s transition to 100% cage- free eggs.
“Packaging is a different beast than eggs or other agricultural products. Having one business that offers sustainable packaging doesn’t mean that entire factories need converting or those other permanent changes must be made to the supply chain,” said Golladay. “Companies are more likely to change their packaging due to customer demand than simply because of what one major competitor is doing. Also, McDonald’s packaging is largely for freshly-prepared sandwiches, which is different than grab-and-go type offerings which are more common at c-stores.”
Some consumers look for a combination of service factors.
“Consumers are certainly looking for both better packaging and fresher foods. This is likely stemming from increased awareness of environmental issues, but also because especially among younger consumers, there is a willingness to pay more when eating out,” said Golladay. “But, these consumers also expect more when dining out; they will reach deeper into their pockets, but they still insist on value and want more—better ingredients, better packaging, etc.—for that higher price tag.”
Packaging is an important consideration to Dell’Alba, especially as it pertains to clean labeling.
“Label requirements are a huge topic. Many consumers today are managing calorie intake and macronutrients, which creates a huge demand for transparent labeling,” said Dell’Alba.
“I always consider my own habits and those of my family members and it is something I personally manage. I think that this has made on premises preparation a little more challenging with respect to transparent labeling. Although we have decreased our offer with respect to prepackaged sandwich items, the labeling concerns do make this a more viable and safe option. Small businesses like ours do not always have the resources to do this properly and it could ultimately hinder sales.”
At Flory’s Convenience, Gas & Delis, based in Fishkill, N.Y., labeling remains an important component of its deli-infused foodservice program. The retailer’s patrons want to know what they are getting and the chain of four stores provides that information daily, said Jamy Flory, company vice president.
“Co-branding ourselves with quality foods such as Boars Head Deli meats puts us in a good position to use clean labels along with our simple barcodes showing ingredients and nutrition facts using the Boars Head logo,” Flory said.
Flory explained that at his stores, there is a constant demand for high quality fresh foods packaged for grab and go “made several times throughout the day, not just daily.”
QUALITY ASSURANCE
Because of customer customization and more emphasis on a quality product, the gap between made-to-order programs and pre-prepared sandwich programs appears to be narrowing, which in turn is influencing the packaging decisions that c-store retailers make.
“Obviously on-site customization changes what packaging is available, since sandwiches aren’t sitting around pre-made for a few hours, but portability is still key,” said Golladay. “C-stores are a favorite source for sandwiches because they are fast and convenient and packaging needs to work well for the consumer who is very unlikely to eat the sandwich on site. Most purchased sandwiches are eaten somewhere other than where they are purchased, which is especially true of c-store sandwiches.”
