In my previous post, I opined about the trends towards healthy eating and whether they are really having an impact. It has been shown that even though people are given the option to purchase “healthy” items, more often than not, they chose the “unhealthy” one. This can be due to cost, perceived taste of the product, or behavior conditioning.
So how should convenience stores respond to these trends? I think that it is important for a c-store to have a selection of healthy, or at least “healthier for you”, snacks and foods available for our customers. This is for a couple of reasons: The first is that it is the right thing to do. I don’t think limiting the size of fountain drinks is the right way to go. We have to treat our customers as rational adults and allow them to make the decisions. However, we need to give them options. Having a healthy alternative might provide help to someone fighting a weight problem.
The second reason is that it can help increase store profits. Research has shown that there is a segment of the population that is looking for healthy alternatives when they want a snack or meal replacement. If done properly, having a good healthy offer can increase traffic in the store, especially the hard to attract female demographics, while not alienating the traditional core c-store patron. The two customer segments can co-exist quite happily if a program is done right.
So pick whatever justification you want – or chose both.
What are we talking about when we mention “healthy” foods? In the typical c-store context this usually means an offering of health and protein bars, water and juices, an assortment of pre-packaged nuts, and an offering of a limited number fruits – usually bananas and apples. If someone has the space and food service expertise, it could include fresh salads, sliced fruits, frozen yoghurt, and grilled chicken sandwiches.
Don’t be under the impression that to be healthy you have to run a health food store. Just having a small selection of healthier options will provide your customers with a choice and, for those actively seeking healthier alternatives, a reason for coming to your store. A couple of categories with a total of fifteen to twenty SKUs are enough to give someone a legitimate option. With forty to fifty healthier SKUs you are starting to make a statement!
Two points that I think is important that many retailers miss are: 1) your offerings need to include true individual portion sizes. Portion control is very important to people who are trying to monitor their caloric intake. It is off putting if the average serving size is 140 calories but there are ten servings in the package. How is someone supposed to ration that and/or overcome the temptation to finish the whole package at one time? 2) A corollary to this is that people who are trying to eat more healthily are willing to pay more for items that make it easy for them. Referring back to the first point, your customer will be willing to pay more, per ounce, for a portion controlled product than the same item in a bulk bag. Therefore, your gross profit opportunity is higher with a wide selection of small packages rather than with a limited selection of large packages.
Unfortunately, it is a difficult space for c-stores to play in. Pre-conceived images, cost, space limitations, customer demands, and supply issues all contribute to making this a difficult category for the average c-store to promote successfully. In my next post I will talk about some of the specific challenges that c-stores face and a few suggestions for implementing a program.