Convenience Stores Support a Speed-to-Mouth Lifestyle
By KATE BERTRAND
New packaging materials and structures, merchandising tactics and private-label brands are reshaping the convenience-store channel.
Convenience stores today face an interesting mixture of opportunity and challenge. They stand to benefit as our time-obsessed culture grows ever more so. But, at the same time, c-stores face stiff competition as other retailers, including grocers and club stores, aggressively promote the “convenience” selling proposition that was once uniquely their own.
As a result, brand managers and retailers such as 7-Eleven are working both jointly and independently to create products, packaging, private-label brands and merchandising strategies that will make convenience stores a destination for consumers, driving sales of product other than gasoline and cigarettes—the perennial best sellers for the channel.
According to a January 2005 report from Retail Forward, c-store will undergo a transformation in the next five years. “Progressive c-stores operators will try to develop a winning convenience store concept, one capable of delivering a quick, consistent and quality in-store experience relevant to shopper needs,” the report said.
Another study, conducted by market research firm TNS NFO for the Coca-Cola Retailing Research Council, grouped c-store shoppers according to their purchasing styles: “grab and go” and “immediate consumption”.
“For the ‘immediate consumption’ consumer, it’s about speed to mouth and instant gratification,” says Bill Bishop, president of Willard Bishop Consulting, a member of the research team for the Coca-Cola study. Hot and cold beverages and fresh and packaged goods are good targets for this consumer group, Bishop says.
The “grab and go” shopper, on the other hand, reflects what Bishop calls a “hand-to-mouth” lifestyle. “These consumers are not putting a menu together. But they are moving, grabbing, going.” What they tend to reach for, he says, are staples like milk, soft drinks and beer.
More and more, microwaves are playing a central role in delivering this experience—especially for the lunch crowd. Advances in packaging materials are opening the door to sales of a much broader variety of foods for these heat-and-run consumers.
Canadian-based Sepp’s Gourmet Foods is breaking new ground with a microwaveable grilled-cheese sandwich in a form-fill-seal pouch that offers the same crisp texture as its conventionally prepared counterpart.
“Consumer and buyer reaction is excellent, although we have to overcome the preconceived notion that you cannot microwave bread,” says Carl Tillberg, president of Sepp’s Bakery Division.
Made of Graphic Packaging International’s (GPI) “quilt wave” material, the product ensures the bread stays crisp by channeling moisture out of the package (which is cut open before heating).
And though it ships frozen, the grilled-cheese sandwich cooks in one minute; the packaging material expands during the heating process to create air pockets that insulate the package exterior, leaving the product cool to the touch. The sandwich is cool enough after cooking to eat directly from the pouch.
For the Campbell Soup Co., a microwaveable “can” made its Soup at Hand line a natural for convenience stores. The contoured high-density polyethylene container, which features an easy-open metal pull ring and a plastic sipping cap, fits car cup holders. The company also markets Campbell’s Chunky soups and chili, packaged in microwaveable bowls, via convenience stores.
“Campbell’s recognizes changing consumer shopping behaviors and the role of the c-store channel in trial and awareness—targeting the ‘on the go’ consumer,” says George Loesch, Campbell’s vice president-national sales, convenience stores. Products like Campbell’s Soup at Hand and Chunky Soup in microwaveable bowls have made it more convenient for consumers to enjoy microwaveable soup that can be eaten any time, anywhere,”
A new convenience-store program from Kraft Foods takes the microwaveable packaging idea a step further, creating an in-store kiosk for its Tombstone pizza brand. The free-standing kiosks, which the company started installing in stores in January, incorporate a microwave oven and a freezer for storing the single-serving Tombstone Express pizzas.
“Pizza is a difficult concept for convenience stores,” says Mike Murnane, category business director for convenience stores, Kraft Food Service Division. The 18-to-45-year-old male on the go is a key demographic for these retailers and a group that “eats a lot of pizza. There’s a lot of demand—but they don’t necessarily think of the convenience store as the place to buy it.”
The kiosks are designed to change that perception. Commonly, convenience stores sell pizza as a food service item, which leads to a great deal of waste. Murnane calls Kraft’s new turnkey approach a “self-serve and self-cook concept” that highlights the Tombstone brand.
Susceptor materials in the product’s carton ensure high-quality results with microwave cooking. After heating the item for two minutes, the consumer places it in a restaurant-style box for transportation out of the store.
Packaging provides convenience
As the microwave-susceptor packaging examples illustrate, innovative packaging structures and materials are an important element in the way brand owners are addressing convenience.
Some of the most intriguing examples of such packaging innovations are in the beverage category, probably because drinks are such strong sellers in convenience stores.
And because coffee is such a significant part of non-alcoholic beverage sales for c-stores, packaging designers and suppliers are creating containers and lids that improve consumers’ convenience-store coffee experience.
WP Beverage Partners reportedly plans to offer Wolfgang Puck gourmet coffees in convenience stores in a self-heating package developed by OnTech Delaware. The coffee products launched initially through The Kroger Co. earlier this year.
Consumers activate the container’s self-heating feature by pulling off the tamper-evident cover at the bottom of the can and pushing the button underneath. This lets calcium oxide and water in the package’s inner chambers mix, which generates heat. The coffee, in a separate outer chamber, heats to about 145 degrees Fahrenheit within a few minutes and stays hot for 30 minutes and warm for up to an hour.
Sonoco supplies the retortable containers, which include a blow-molded, polypropylene cup and inner cone, injection-molded components, a full pull-off metal cover, a stay-on tab and a printed foam label. A thermal ink spot indicates when contents are ready to drink.
To improve consumers’ experience with hot-dispensed coffee, Metaphase Design Group worked with the Solo Cup Co. to design the Traveler Plus recloseable lid, which recently rolled out regionally in 7-Eleven stores. The lid’s structure guards against spills yet provides easy access to the coffee consumed on foot or in the car. The easy-open-and-close design also helps keep coffee hot and lets consumers adjust their coffee’s flow rate.
The two-piece lid incorporates an internal rotating disk with a vertical lever that protrudes through the main lid component. Consumers can adjust the sip hole by sliding the lever with one finger. Both lid components are made of polystyrene.
Metaphase says they based the lid design on extensive ergonomic and usability research, with attention to lip and hand anthropometrics, one-handed dexterity, and the ergonomics of drinking. “We can make a cup of coffee taste better, because the experience is better,” says Bryce Rutter, Ph.D., founder and CEO of Metaphase.
Role of merchandising
Retailers themselves are redefining the c-store experience by modernizing their look and feel in ways that not only differentiate their brands but also improve suppliers’ sell-through.
For example, ChevronTexaco’s Extra Mile Markets are currently rolling out a store redesign and re-branding effort that includes an updated store logo and colors. An important element of the re-design is the establishment of discrete product categories through fixtures and signage, which create “shops within the shop,” according to Joseph Bona, president of GroupRed, the Coleman Brandworx company that created the redesign and re-branding.
One of Extra Mile’s new in-store “shops” is the Suava Java Café, a coffee station offering ChevronTexaco’s private-label coffee and coordinating products such as muffins, bagels and breakfast sandwiches.
“Suava Java is the umbrella brand, and coffee is the ‘hero’” in the in-store café,” Bona says. “It’s a way to get the other products around the coffee and repackage the whole thing. It changes the perception to something upscale.”
By putting together products that complement each other in one aisle, café or kiosk, the retailer increases the chance that consumers not only find what they are looking for but also see things they may not have realized they needed.
Point-of-purchase merchandising also can be helpful in creating those incremental sales. With that in mind, Cadbury Adams USA uses a variety of displays for its gums, chewy candies and cough drops, including the Halls, Dentyne, Bubblicious, Sour Patch Kids, Swedish Fish and Trident brands.
According to Dan Antico, director-destination marketing for Cadbury Adams USA, the convenience-store channel represents 40 percent of the company’s sales. “For any confectioner, the convenience-store channel is very important,” he says.
The location of displays is “highly critical,” Antico adds. “In a convenience store, the prime location is the check-out. That’s why we offer counter unit programs—because the product gets on a check-out where 100 percent of the people go through.” BP
The author Kate Bertrand, is a San Francisco-based writer specializing in packaging, business and technology. Contact her at email@example.com.
Where to go for more information...
Brand identity and package design. At GroupRed, a Colemanbrandworx company, contact Crystal Bennett at 212.404.7932 or firstname.lastname@example.org.
Management consulting and market research. At Retail Forward, contact Katherine Clarke at 614.355.4009 or email@example.com.
Ergonomic package design. At Metaphase Design Group, contact Bryce Rutter, Ph.D., at 314.721.0700, ext. 123, or firstname.lastname@example.org.
7-ELEVEN MAKES ITS MARK WITH STORE BRANDS
Selling private-label or store brands is an increasingly popular strategy for convenience-store chains. This approach makes the store a destination after the brands develop a following among consumers. Private-label products also generate higher margins than national brands.
7-Eleven Inc., has enjoyed success with its private-label Santiago Cerveza de Oro imported beer. The product’s blue and gold labels and six-pack carriers resemble packaging for Corona beer, with which Santiago competes.
The Santiago brand complements 7-Eleven’s other private labels, which include Slurpee beverages, Big Gulp fountain drinks, Big Eats baked goods and sandwiches, and 7-Eleven Coffee.
Expanding on its coffee franchise, 7-Eleven recently introduced Coffee Wipes. Developed jointly with Enzyme Solutions, the product meets an unfortunately common need of 7-Eleven’s on-the-go coffee drinkers—removing coffee stains from clothes. The biodegradable towelettes are individually packaged, six per carton.
Of all its private-label products, 7-Eleven reports it sells more fresh-brewed coffee than anything else: more than 1 million cups each day.
Leveraging the channel’s strengths
Recognizing the opportunity for Beer Nuts peanuts in convenience stores, where beer is one of the best selling products, Beer Nuts brand snacks created a package concept specifically for the channel. The package, a composite can that looks like a beer can, features an aluminum flip-top closure and a recloseable lid.
Beer Nuts developed the package in collaboration with 7-Eleven. With its beer theme, the package is a good fit for the company’s tagline, “Please Snack Responsibly.” The goal of this package was to generate trial among 21- to 27-year-old consumers.
Convenience stores have become Beer Nuts’ major marketing focus, says Thomas Foster, the company’s director of new business development. “Due to the demographics of the c-store consumer and the dynamics of the retail environment, the c-store segment is integral to our success,” he says.
“We are looking to move the c-store consumer who goes to the beer cooler as a destination to also purchase our discretionary product.”