Top performing beverages, based on data the association collected from around 19,000 stores, included enhanced water (12.3% increase year-over-year), sports drinks (+4.5%), and bottled water (+3.9%), a trend which Jeff Lenard, VP of strategic industry initiatives at NACS, said signals “a move by consumers toward healthier and functional beverage options.”
These figures echo IRI’s list of most successful new brands in the convenience store category , which includes coconut water-based sports drink Bodyarmor at number five, having completed $55m of sales in its first year on store shelves in calendar year 2016 (the top product in this list was DairyPure milk with $385.9m sales)
Benefiting from the snacking trend
Results from a survey done on NACS members revealed that an increasing percentage of retailers are optimistic about food sales. This year, 53% of all retailers optimistic about their business prospects cite food sales as the reason.
“Our industry’s food offer has expanded, and we are fitting in with the trend toward snacking more,” Lenard told FoodNavigator-USA. In fact, it’s not just consumers’ penchant for any snacking that convenience store retailers are succeeding to meet—they’re also trying to include healthier options for healthy snackers.
A national survey of consumers conducted by NACS found an increasing number of c-store shoppers choose their gas stations based on the quality of the food inside the store. Additionally, 57% of retailers say that sandwiches and meals will grow their sales, with 35% citing healthy packaged snacks and 28% citing fruits and vegetables.
Rosy outlook for the convenience store channel
Increases were posted for categories throughout the convenience store channel. Biggest gains came from ‘alternative snacks,’ which the association defines as jerky and other meat snacks with a 5.9% increase year-over-year. Then came beer with 4.8%, followed closely by packaged beverages (non-alcoholic) at 4.7%, and salty snacks at 4.3%.
Though tobacco products made up 36% of in-store sales dollars, it accounted only for 18.2% of gross profit dollars, defeated by foodservice with 35.2% of gross profit dollars, and packaged beverages with 18.5%.
Consequently, convenience store owners are optimistic about their role in providing food and beverage options to shoppers. “Gas prices are certainly modifying behavior at stores,” Lenard said. “Convenience stores sell 80% of the gas purchased in the country and people are more likely to buy something inside the store with lower gas prices.”