Produce In C-Stores

February was a banner month for believers in the marriage of fresh produce and convenience stores. First, the United Kingdom’s largest retailer, Tesco, announced its much-awaited entry to the U.S. market would be through a convenience store format. Days later, Chiquita announced it was introducing a specially packed single-serve banana as a test — its second in a decade — of the c-store channel.

Before these recent developments, there had been signs that a few c-store operators already understood the powerful combination produce provides in bottom-line returns and top-of-mind fresh image. Wawa and Sheetz spring to mind first from personal experience. Taken all together, could it be c-stores are finally following in the footsteps of conventional supermarkets, supercenters, clubs and quick-serve restaurants in putting produce closer to center stage?

For the past three decades, fresh produce has played a critical role in the growth pattern of American retail and foodservice channels. Give consumers fresh fruits and vegetables that consistently deliver on taste, convenience, and health, and they keep coming back for more. One part image, one part health, one part profit and all parts consumer demand, fruits, and vegetables have moved into the spotlight in the evolving drama we call food marketing.

Colorful retail bulk displays of the 1980s rode what futurist John Naisbitt termed the High-Tech, High-Touch megatrend. Fresh-cut came along in the next decade and showed technology and smart packaging could play a key role in delivering labor-saving convenience to consumers and foodservice operators alike. And then along came supercenters, driving supply chain efficiencies and the convenience of one-stop shopping.

Convenience, however, has many meanings. Our industry often associates convenience immediately with fresh-cut produce. That is unquestionably a big slice of the market. But convenience for consumers can mean a lot more than opening a bag of washed salad or not having to peel and cube a melon. Convenience also means being able to find fresh produce whenever and wherever the next eating occasion arises.

The conventional wisdom is that most Americans seldom speak of convenience stores and fresh foods in the same sentence. C-stores sales here are primarily about gasoline, cigarettes, and beverages (soda and beer). At 11 percent of inside sales, foodservice sales (sandwiches, pizza, hot dogs and other foods) are dwarfed by the volume of gasoline and cigarettes sold.

But Tesco and Chiquita may be riding a wave of changing perceptions. Better yet, their actions could speed that wave along. Deciding to dig deeper into what Americans are willing to buy at c-stores, PMA has conducted two surveys of c-store shoppers through Opinion Dynamics Corporation. The three most important reasons given by respondents for not buying produce in c-stores were: all produce was bought at a supermarket, the cost in c-stores was higher and produce quality in c-stores was not up to expectations.

In April, among a sample of nearly 400 consumers who say they routinely purchase fresh produce at c-stores, bananas topped the list at 79 percent purchase frequency. Close behind were apples, with oranges third.

The news for fresh-cut marketers was also encouraging. Single-serving vegetable salads have been purchased by nearly 40 percent of the produce buyers, with 12 percent of this subset saying they buy them “a lot.” For single-serving fruit salads, these numbers are 30 percent and 17 percent, respectively.

At Wawa, whose 550+ stores regularly carry nearly 50 produce SKUs, it is the fresh-cut fruit and vegetable salad bowls that reportedly sell best. Not surprisingly, the store-level people who work at Wawa or Sheetz typically demonstrate an understanding of fresh foods that make some other c-store food purchases seem like adventures one could do without. After all, caring for fresh foods is an altogether different discipline than monitoring gasoline sales or dispensing cigarettes.

Indeed, the biggest barriers preventing more consumers buying fresh produce from c-stores today are not in product offerings, distribution constraints or building in convenience. Rather, they lie more in the states of mind both of industry and consumers. Because the most powerful convenience factors c-stores can offer to produce consumers and marketers alike are their reach of neighborhood locations and the speed of the shopping experience. That is what makes convenience stores convenient. And a fresher range of food products is the cornerstone in transforming the tired image so many Americans have of c-stores.

Which is precisely why it may take an English invasion to show most of the American c-store sector how to really put convenience into c-stores. Tesco plans to focus its U.S. rollout on its highly successful Express concept stores. More than 800 Express stores now operate in five countries and serve 8 million shoppers each week. And Tesco is a company whose insights into actual consumer buying behavior through its Dunnhumby subsidiary are almost legendary and clearly relevant. It also has plenty of experience entering new markets overseas.

The type of convenience store Tesco has in mind for the United States will surely be very different from the picture most of us here have of c-stores. For a growing number of consumers and produce marketers, that could be a highly desirable and fresh start. Who said the English couldn’t teach Americans something about food?