Selling fruits & veggies
in the fast lane.
BY PAT PA P E
ustomers of Tiger Farms Market in Burleson,
Texas, can fuel up, purchase made-to-order
smoothies and sandwiches, grab a bottle of
vitamins and fill a sack with colorful, fresh
produce in a single shopping trip. Since the
store opened eight years ago, it has offered patrons a wide range of typical c-store merchandise, plus organic and non-organic produce.
“We try to stay competitive with prices on our organic produce,” said Nena Iniguez, acting manager of
the Victron Energy-operated outlet. “Compared to local grocery stores and
Walmart, we’re fresher and our prices are cheaper.”
In addition to whole fruits and fresh fruit juices, shoppers can select from
assorted containers of cut fruit that were prepared and packaged in the store’s
kitchen. Anyone who purchases a sandwich is welcome to a complimentary
8-ounce fruit cup.
“We don’t have much that goes to waste,” Iniguez said of the store’s produce. “It
just goes in the juicer.”
reFreshing Convenience Stores
A decade ago, Tiger Farms Market would have been an anomaly. At that time, convenience stores were better known for
selling packaged sandwiches with a lengthy shelf life than
fragile fruits and vegetables. But as American consumers increased their demand for healthier food options, many convenience retailers have added produce.
To support nourishing noshing, NACS and United Fresh
Produce Association, which represents the nation’s produce
industry, partnered in June 2014, to identify the best ways to
boost produce sales in convenience stores.
The 152,794 convenience stores in the United States make
up 33.9% of all retail outlets, according the 2015 NACS/Nielsen Convenience Industry Store Count. But while fresh grocery sales were an estimated $43 billion in 2013, convenience stores captured less than 1% of that business.
According to Jeff Lenard, vice president of strategic
industry initiatives for NACS, selling produce
would be great for a retailer’s bottom line and
more nutritious offerings would give the convenience industry a refreshed image. An image boost
with a focus on freshness could help retailers as
they approach zoning commissions and city councils in an effort to get new stores opened or existing
stores remodeled.
Getting fresh produce into stores is just one aspect
of what’s being called the NACS reFresh initiative, which
addresses ongoing industry perceptions by focusing on three
distinct elements:
1 Creating tools that address NIMBY (not in my backyard)
issues by educating the public about the contributions
convenience stores make to their communities
2 Sharing facts and data that demonstrate the evolution of
the industry and corrects an outdated reputation
3 Forming partnerships/relationships with credible nutrition- and community-focused groups, such as the United
Fresh Produce Association
“reFresh is the ideal name for the program because it addresses our path forward,” Lenard said. “It’s about refreshing
our image and refreshing our offer w hile s till p roviding r efreshments of all kinds. The idea is to give retailers who want
more options — whether fresh produce or healthy options
— the tools to access the landscape and determine if it’s
right for them.”
Looking around, Lenard already sees more produce on
convenience store shelves than just
Kwik Trip stores sell a variety
of fresh foods along with 20
semi-truck loads of bananas,
apples, pears, oranges,
tomatoes, avocados, potatoes
and onions each week.
a few years ago. “Can there be more? Yes. But we’ve gone from
not seeing any to almost being surprised if we don’t see some
sort of produce offer at a convenience store,” he said.
Many convenience store operators agree. A recent survey of NACS members confirms the importance of produce,
with 62% of survey respondents saying that produce is important to their 2015 business plan.
“HOW TO” BOOK HELPS PRODUCE MORE SALES
As part of the reFresh program created by NACS and the United
Fresh Produce Association, a new 26-page publication has been
released to help convenience store retailers determine if fresh
fruits and vegetables are right for their stores.
“Building the Business Case for Produce Sales at Convenience Stores” combines analysis of the industry and consumer
trends with ideas for developing a produce program. It is
currently available at nacsonline.com/refresh.
This publication is the first of several “how to” deliverables to be released through the reFresh program this year. In
addition, educational sessions will be held during upcoming
industry events.
Fresh and Fresh-Cut Fame
When Kwik Trip stores of La Crosse, Wisconsin, began selling
fresh bananas more than a decade ago, even some of the chain’s
leaders were skeptical. Today, the 476 Kwik Trip stores are famous for moving about 20 semi-truck loads of bananas each
week, along with apples, pears, oranges, tomatoes, avocados,
potatoes and onions.
“Fresh produce works for us because we have daily delivery to every store from our own distribution center; howev-
er, depending on the market,
smaller chains could work
with a wholesaler,” said John
McHugh, manager of corporate communications for
Kwik Trip. “Daily delivery is
critical to the process. The
standard fresh cases available
in the industry are fine, but
delivery is the key.”
Another factor in Kwik
Trip’s success is a strong commitment to employee training.
“We educate them on what to
look for in terms of freshness
and when product should
be pulled from the shelf,”
McHugh said. “Fresh produce
requires more attention than simply restocking the beverage
cooler. Our training even deals with specific issues like not
exposing bananas to temperatures below freezing for even a
brief period of time.” Rutter’s, the 60-store convenience retailer based in York,
Pennsylvania, has carried a selection of both fresh and cutand-packaged fruit for the past seven years. Customers can include fruit in a combo meal, add it to a kid’s meal or substitute
fruit for fries.
“Our food program lends itself to a fresh image by having these options that are perceived as healthy and fresh,”
said Jerry Weiner, vice president of foodservice at Rutter’s.
“We do a much bigger business with the cut fruit. The bananas are a home run in any convenience store, but the
fresh-cut fruit is a big part of our business, and it’s all grab
and go.”
There are many reasons to offer fresh-cut produce in
a convenience store. It has a significantly longer shelf
life than whole fruit, ranging from three to 13 days
for bagged salads and vegetables to 21 days for
bagged apple slices and baby carrots. In addition, fresh cut is usually ready to consume,
requires no additional washing, doesn’t
need to be weighed and can be scanned at
the register.
Rutter’s purchases cut-and-packaged
fruit from an outside provider. An order placed at night is delivered within 24
While fresh grocery sales
were an estimated $43
billion in 2013, convenience
stores captured less than
1% of that business.
cup and it goes into the [car] cup holder. Cup holders today are for a lot more
than drinks. Cup holders are how people eat today. In many cases, the cup
colder is the new dining room table.”
Getting Started
hours and has a
shelf life of about
eight days. With seven different and desirable fruits available almost
year round, Rutter’s operates a produce program with minimal spoilage.
“We have a wedge-cut watermelon that sells
extremely well,” said Weiner. “Two thin slices
are in a container shaped like a wedge of watermelon. At $1.49 it’s relatively inexpensive
compared to some other fruits, and it’s pretty
popular. Everybody loves watermelon.”
Lenard believes that sliced fruit, such as
cut melon or individual grapes in a cup,
would be an ideal offering for most convenience stores. “Produce can be sealed
and come from a distributor,
or it can be something you
prepare on site,” he
said. “Put it into a
Redwood Oil Company operates 23 Redwood Market convenience stores in Northern California, 16 of which have a made-to-order food
program and in-house restaurant called Aztec Grill. Last
year, the chain ordered produce racks they discovered at the
NACS Show and in November launched a fresh fruit program
at all Aztec Grill locations. Today, those select stores sell
limes in the beer cooler and oranges, apples and bananas on
the racks. Eventually, management hopes to add other produce, such as avocados and tomatoes.
“The perception of freshness is a huge thing, and our customers feel like they have healthy alternatives,” said Brian
Adam, category manager for Redwood Market. “It’s also a
great opportunity to cross-merchandise. Our vendors are
clamoring to get in on promotional opportunities. For example, ‘buy two waters and get a banana free.’ It’s a wonderful
opportunity for those synergies.”
Consistently sourcing the high-quality merchandise that
customers demand is a challenge. “We have a few locations
where we actually send our managers out to purchase fresh
fruit,” said Adam. “We had problems getting quality fruit, especially bananas, so we ended up going that route.”
Managers shop for fruit twice a week, and while there are
company guidelines for produce selections, they have a lot of
discretion. “We go for some ripe and some not-so-ripe produce and let it ripen in the store,” he said. “We’re working on
a solution [to manager shopping], and we hope to build some
momentum to increase those turns so we can depend on the
local fruit and vegetable suppliers.”
While there are increased amounts of waste associated
with produce, the margins for fresh produce are still higher
than nearly all other in-store items, according to the NACS
State of the Industry Report of 2013 Data. At convenience
stores, perishable grocery is 43%, merchandise overall is
29% and fuels margins are 5.4%.
Redwood Market’s produce program has weathered a few
waste issues, but “it is something that we were prepared for
and budgeted for,” Adam said. “We’re still in the early stages,
but having fruit up front and center helps the brand image.
And we’re selling a ton of it.”
Tiger Farms Market in
Burleson, Texas, offers a
wide range of typical c-store
merchandise as well as an
extensive array of organic and
non-organic produce.
Overcoming Challenges
The reasons convenience retailers hesitate to sell produce
are the same now as they have always been: a short shelf
life, temperature requirements, additional deliveries
and merchandising methods that keep the produce moving. Industry leaders involved in
the reFresh program (including retailers,
suppliers, academics and other organizations) are looking for ways to tackle each
of those challenges.
Currently, participants in reFresh
are examining ways to manage costs, increase deliveries, enhance merchandising
and minimizing spoilage, and they’re open to
hearing new ideas and welcome new collaborators to the team. “This is the beginning, and the
idea is to raise awareness and interest,” said Lenard. “Our
next step is to deliver tools to those who are interested. Retailers who want to get involved [in reFresh] should get in
touch with us. There is plenty of room at the table to
share ideas.
“Convenience stores know how to sell packaged products
very well,” he said. “So do a lot of other retail channels. However, by offering more fresh products or produce, convenience
stores have a great opportunity to differentiate themselves
from other retailers who sell packaged goods.”
Pat Pape worked in the convenience store industry for more
than 20 years before becoming a full-time writer and communications consultant.
NACS Magazine
APRIL 2015
41
QuickHits
BY THE NUMBERS
FRESH CUT OPPORTUNITY
While produce of any kind in c-stores is a good thing, fresh cut produce could be a tremendous untapped opportunity for
convenience stores. Overall, estimates put fresh cut sales across all retail channels at $10-15 billion per year.
Fresh cut has significantly longer shelf life than whole fruit, ranging from three to 13 days for bagged salads and cut vegetables
to 21 days for bagged apple slices and baby carrots. There are other advantages, too. The product is customer friendly: Many items
can fit in vehicle cupholders. Fresh cut also is ready to consume on the go without need of additional washing and is more recipe
ready, eliminating prep time required to fix meals.
From the retail perspective, fresh cut has a longer shelf life and is scannable, something that may not be as easy with whole
fruits and vegetables.
Whole Fresh Versus
Pre-packaged Produce
Pre-packaged
Produce
A CUT ABOVE
Whole
Produce
Less Expensive
14%
86%
More Environmentally Friendly
15%
shelf life of
FRESH CUT PRODUCE
Fresh cut vegetables and bagged
salads can last up to 13 days;
bagged apple slices and carrots
can last up to 21 days.
85%
WHOLE FRUIT
Fresher
16%
FRESH CUT FRUIT
Not as Easily Scannable
Retail Friendly Packaging
84%
Healthier
17%
VS
83%
Higher Quality
22%
78%
Safer
33%
67%
More Convenient
18%
82%
(Source: “Imagine of Fresh Cut Toolkit,” United Fresh Produce Association)
Other
While increased amounts of spoilage and
labor are associated with produce, margins
are still higher than nearly all other in-store
items. At convenience stores, according to
NACS State of the Industry data, perishable
grocery is 43%, merchandise overall is
29%, and fuels margins are 5.4%.
This article, which appeared in the April 2015 issue of NACS Magazine, was reprinted
with permission from NACS: The Association for Convenience & Fuel Retailing.
www.nacsonline.com.
For more information on METTLER TOLEDO weighing solutions for convenience
stores, visit www.mt.com/us-cstores or call 1-800-METTLER.