A Healthy Alignment: Fresh-cut moves into convenience stores

When it comes to being able to buy fresh-cut salads, fruits and vegetable snacks in convenience stores, it seems everyone is on the same page.

Customers want it. And convenience stores see the value in offering it.

“We have surveyed members and asked them what they are selling, what are you doing more of, what does the future hold, and members are increasingly selling produce,” said Jeff Lenard, vice president for strategic industry initiatives for the National Association of Convenience Stores.

“A lot of times when you have trends, what the retailer wants to do and what the customer wants isn’t necessarily aligned. But with fruit sales, it is aligned. The customers are seeking more in the way of health choices, and retailers see it as an opportunity to attract more sales.”

The association has some 2,000 member companies representing about 151,000 convenience stores in the U.S. Of those, about 95,000 are one-store operators.

“Even when you see stores that have the branded gas station, most likely the relationship ends with the brand of gas,” Lenard said. “Inside is a one-store operator trying to figure out how to serve customers.”

And offering fresh-cut produce is an growing facet of that.

Steve Wrobel, who works in public relations for La Crosse, Wis.-based Kwik Trip, operating 400 convenience stores in Wisconsin, Minnesota and Iowa, said the company sells a variety of fresh-cut offerings under its Kitchen Cravings Label.

“Kwik Trip offers a variety of 5.5-oz. cut fruit cups such as pineapple, cantaloupe and grapes,” he said. “Cups of mixed fruits like strawberry/blueberry/kiwi are also popular.

“Our veggie trays with dips are offered in 5.5-oz. and 12-oz. sizes. We also have a number of fresh salads.”

The company rolled out fresh cases in all of its stores in 2004, making salads in its own commissary and using a combination of suppliers for its cut fruit and veggie trays.

QuickCheck has 137 convenience stores in the New York City metro market, with locations throughout New Jersey and southern New York. Category Manager Amanda Rose Shymanski said the company has long offered a core group of fresh-cut fruit and vegetables to its customers. However, a partnership with The Safeway Group in Vineland, N.J., has helped the company expand and get more creative with what’s available.

“We currently offer a celery and peanut butter mix, fresh-cut veggies with ranch dressing, a traditional fruit mix, a seasonal fruit mix and apple slices with a caramel dipping sauce,” Shymanski said.

Green leaf salads are made at the store level and range from an All Natural Chicken Bacon Ranch and Spring Mix Garden, to Classic Grilled Chicken Caesar and regular Chef Salad. A baby spinach leaf option was set to debut in February. And working with Safeway, they’re introducing three new 3-oz. side salad options: Mediterranean Pasta Salad, Cheese Tortellini Salad and a Wheat Berry Salad. Prices on the fresh-cut fruit and vegetables are typically $2.99, with 3-oz. side salads ranging from $1.29 to $2.29.

“The category has really evolved with the expansion of the green leaf offerings and the 3-oz. salads,” Shymanski said. “For years, we only offered romaine lettuce and we are now able to hit additional customers by giving them the option of romaine, spring mix or baby spinach.

“I see the category growing into a destination for the grab-and-go customer. Our goal is to introduce new and exciting offerings that continue to allow us to grow our fresh image.”

Amy Erianne, Safeway vice president for business development, said about 90 percent of the company’s fresh-cut snack and salad customers are in the convenience store sector – most of them ordering with their own private label. Safeway also produces some products under its own Sunnyside Farms brand.

At one time convenience stores were selling whole fresh fruits. Now the grab-and-go snack and salad options have exploded.

“Convenience stores have started to venture out,” she said. “What we have seen is each individual company has really grown as a destination for fresh foods – and it’s usually front and center when customers walk in.”

As the segment grows, the biggest challenge for convenience stores is inventory control and keeping offerings fresh.

“The fresh category absolutely needs behind it a great supply chain – the cold chain being handled all the way through as well as frequency of deliveries,” Erianne said. “When we look at new customers, we recommend at least three deliveries a week. Those that are the best in class are getting deliveries every day.”

Quick turnaround on fulfilling orders is also essential, she added.

“We get an order the day prior and we produce it the next day and in most circumstances, we deliver that evening or customers pick it up that evening,” she said. “Delivery is basically to order and it’s a quick turnaround.”

Tackling the challenges is worth it, though, said Lenard, who describes the growth of fresh and fresh-cut offerings in the convenience sector as “a two-decade-long overnight success.” That’s because as the major oil companies began to divest their gas stations, resulting in eroding profit margins for operators, stores had to look beyond fuel to make a profit.

“The dynamic is still about 70 percent of your sales dollars come from the pump, but about 70 percent of profit dollars come from inside the store,” he said. “What’s happened is retailers are continually looking to grow their in-store sales. Over the last decade we’ve seen more of an emphasis on food service.”

At the same time, the public is clamoring for healthier options. Women and younger consumers are two important customer segments – women for liking the ease of a healthy snack to take on the road or back to the office, and younger consumers who are more apt to grab a quick bite over a sit-down meal.

“I think fruit is the statement, though,” Lenard said. “If you sell fruit and vegetables and you sell them well, it’s a statement on how the rest of your store is. If the fruit and vegetables look great, the halo carries over to all the other elements of the store.”

By Kathy Gibbons, contributing writer