Charlie McIlvaine, chairman and CEO of Coen Oil Co., shared from the stage of the NACS State of the Industry Summit in April that there’s great potential for retailers that focus on food. In-store growth for U.S. convenience stores in 2018 was powered by foodservice, the second largest sales provider at 22.6%, after cigarettes at 31% and before packaged beverages at 15.3%.

Prepared food makes up 73.3% of all c-store foodservice sales and generated nearly $370,000 in annual sales dollars per store in 2018. The category is the largest sales and gross profit driver within foodservice, and convenience retailers rely on their prepared food offers to differentiate among the competition and leverage their last-mile strategies.

For many in the convenience industry, growth mandates accommodating a future that’s being driven by food. Take store size, for example: Per NACS data, the average convenience store is 3,244 square feet. But as newer stores feature touchscreen food-ordering kiosks, add space for in-store seating and waiting areas and incorporate an open-kitchen design, the size of new builds has increased to nearly 5,000 square feet in rural locations and about 4,600 square feet in urban locales.

At the Summit, McIlvaine also commented on the potential for the c-store industry to own immediate consumption—83% of what’s sold inside the store is consumed within an hour of purchase—which translates to an enormous opportunity for retailers that execute a safe, fresh and high-quality foodservice offer to become a food destination.

Key to Success

Many convenience stores are putting their food offer front and center. Cheesy pizza, juicy cheeseburgers, fresh-made sandwiches with crisp toppings, hot soups and breadsticks, specialty coffee and espresso beverages and fresh-baked donuts and pastries headline websites and social channels, and easy navigation via online or a mobile app streamlines food orders for pickup or delivery.

Casey’s General Stores is confident that food will continue to be the key to its success, along with the ability to meet customer needs in a more digital and mobile world. The retailer launched a newly designed Caseys.com website in April with upgraded features and a more frictionless ordering and payment experience. Casey’s is also launching a new native mobile app to enable easier and faster ordering, and the retailer will be able to customize messages for users based on their preferences.

The new site design and imagery ensures that the food appears just as appetizing as the menu items customers can choose. Site upgrades allow customers to quickly find and customize their favorite orders and select their preferred store location, method of payment and delivery address. Users can also personalize their pizza with specific toppings, substitute sauces and toppings, and adjust how much or how little of each ingredient to use. “The new Caseys.com makes our food the hero of the digital experience, helping to solve the daily meal dilemma,” said Art Sebastian, Casey’s vice president of digital experiences, in a press release.

Many convenience store companies are putting their food offer front and center.

Casey’s spent time with customers across all 16 states within the retailer’s operating area to learn more about how the company could better streamline the online-ordering experience. “Our goal is for customers to shop Caseys.com anytime and anywhere, when it’s most convenient for them,” said Sebastian.

What makes pizza at Casey’s so successful? For one, Iowans love pizza! Chris Jones, senior vice president and chief marketing officer, explains that the retailer’s dough is handmade from scratch daily at each store location. “We cut our fresh vegetables versus having them shipped pre-cut, and we only use 100% whole mozzarella cheese on all of our pizzas. These are the keys to making the pizza our customers love,” he said.

Casey’s specialty pizzas are also a success, particularly a Midwestern favorite known as the Taco Pizza: refried beans, salsa, beef or chicken and mozzarella cheese topped with fresh lettuce, tomatoes, taco chips and cheddar cheese.

Mealtime Solutions

The meal kit market is quickly evolving from an online and subscription-based model to an online and in-store offer, according to NPD Group; however, there’s still about 93 million consumers who have never tried a meal kit but are willing to give it a shot.

“There is an untapped market for meal kits, and it’s up to meal kit providers and retailers to find out what it will take to get a potential meal kit user to become one,” said Darren Seifer, NPD food industry analyst, in a press release. “The subscription model is likely to remain relevant, but it’s important to remember consumers are looking for meal solutions both online and in stores.”

Millennials who have households with kids and a higher income are more likely to be meal kit users, says NPD Group, with the online and in-store meal kits appealing to consumers with higher income levels and children younger than 13 years old. “Meal kits are here for the long-term because they’re meeting the needs of consumers by providing a level of convenience and shortcuts to meal prep while also providing fresh foods,” said Seifer.

When Midwest grocery chain Hy-Vee opened its first Fast & Fresh location in Altoona, Iowa, in February, the retailer was able to rely on its commissary operations to deliver mealtime solutions such as meal kits to its new convenience store concept. The chef-prepared kits are sold inside the store alongside other take-home meal solutions, as well as “short cuts:” pre-cut and pre-packaged produce that comes in a variety of assortments like bell peppers and red onions.

Food Finds

Becoming a food destination has led many retailers on a journey to become famous for something. So, look no further than a local convenience store to find—and satisfy—just about every type of food craving:

A healthy breakfast, anytime
Alltown Fresh in Plymouth, Massachusetts, offers an all-day breakfast menu with vegan, vegetarian and organic fare like the “Green Smash” with fresh avocado, raw pumpkin seeds, chia seeds and Himalayan sea salt on a choice of bread, and the “Forage Porridge” with quinoa, coconut milk, dried dates, dried cranberries, cashews and mint.

Catering to health-conscious eaters
Dublin, Ireland-based Applegreen introduced a new vegan range of prepared foods, including a vegan sausage roll made with a blend of soybeans and chickpeas. The range also includes a Moroccan salad bowl with couscous and quinoa, a vegan falafel and hummus wrap, fruit salads and cold-pressed juices.

A unique Indian experience
Hoover, Alabama-based Encore Stores offers Indian Chinese Fusion menu options, including Mongolian beef, chili chicken, fried rice, orange chicken, pepper steak and noodles and soups.

For the pizza lovers
Mia Pizza at Hy-Vee Fast & Fresh is a fresh prepared, woodfired pizza concept where customers can choose from a menu of signature pizzas or create their own from a variety of sauces, fresh toppings, seasonings, meats and cheeses.

Upscale dining in a gas station
Chef Point Café in Watauga, Texas, boasts Better Than Sex Fried Chicken that’s marinated and seasoned with secret sauces and spices. Other menu options include lobster bisque, roasted duck and Jamaican seafood étouffée.

Consumers are looking for meal solutions both online and in stores.

Seafood from a c-store
York, Pennsylvania-based Rutter’s caters to Mid-Atlantic seafood cravings with its customizable menu options that include a crab cake sandwich, clam boat, fried shrimp tacos and a tavern-battered cod sandwich.

Tacos are not just for Tuesday
Fuel City in Dallas, Texas, has customers lined up for barbacoa, al pastor and picadillo tacos. The retailer also serves elotes: spicy cups of corn mixed with butter, lemon pepper seasoning, sour cream, hot sauce and cojita cheese.

A few of these food-forward retailers will appear in the latest installment of the NACS "Ideas 2 Go" video program, which will make its debut at the 2019 NACS Show on October 3 in Atlanta. To view past Ideas 2 Go episodes and unique food finds in convenience stores, visit www.convenience.org/ideas2go.