A Hot Sales Opportunity?

Marketing your produce to alternative retail channels

Consumer Shopping Trends
Linked to the growth of fresh food at convenience and other nontraditional retail outlets are changes in how and where consumers shop. “For years, we watched four main forces impact the food buying consumer: health, convenience, value/quality, and new tastes or experiences,” explains Chris Balzer, associate client director at Nielsen Perishables Group. “More and more, fresh—produce in particular—is claiming ownership over delivering these consumer benefits. It’s one of the reasons fresh growth is outpacing the rest of the store.”

Part of the attraction to convenience stores and quick marts is the smaller, more easily navigated format, a distinct advantage to consumers on the run. This is backed up by NACS figures finding more than 80 percent of food bought at a convenience store is consumed within an hour of purchase.

A weak economy also influences buying habits, especially at dollar stores.

A September 2014 Jones Lang LaSalle retail research report credits price-conscious consumers for helping to spur growth at discounters, like dollar stores. As the recession of the late 2000s deepened, cash-strapped consumers—including many ‘trade down’ middle class and upscale shoppers—sought ways to increase their purchasing power.

The result has been a greater acceptance of shopping at discount stores even as the economy has recovered. In consumer surveys, Dollar General found only 7 percent of consumers had a negative view of the chain in 2012 versus 23 percent at the beginning of the recession in 2008. While market consolidation may impact store growth to a degree, dollar stores continue to increase revenues and have developed a strong market niche.

Experimentation & Evolving Demand
Convenience stores and other alternative formats began experimenting with product mix not only to tap into changing consumer trends but to open up new revenue streams. Convenience stores, in particular, sought to offset declining tobacco sales and low fuel profit margins—and what better way to attract shoppers than to offer a variety of healthy food options?

By 2013 fresh fruit and vegetables were sold in 72 percent of convenience stores, with 39 percent increasing the amount available for sale—and all of the top national and regional chains had plans to increase fresh produce and value-added products and meals. The nation’s top convenience store chain, 7-Eleven, began testing a new line of healthier foods from celebrity health and fitness guru Tony Horton, including sandwiches, salads, wraps, and cold-pressed juices. The company’s sales of fresh products rose 30 percent from 2012 to 2013, and 7-Eleven has reported selling “seven times more bananas than Snickers,” its top-selling candy bar.

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