CStore Decisions March 2024

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VP EDITORIAL — FOOD, RETAIL & HOSPITALITY

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Leading Through Innovation

CStore Decisions is a three-time winner of the Neal Award, the American Business Press’ highest recognition of editorial excellence.

EDITORIAL ADVISORY BOARD

Robert Buhler, President and CEO Open Pantry Food Marts • Pleasant Prairie, Wis.

Lisa Dell’Alba, President and CEO

Square One Markets • Bethlehem, Pa.

Raymond Huff, President HJB Convenience Corp. • Lakewood, Colo.

Bill Kent, President and CEO

The Kent Cos. Inc. • Midland, Texas

Olivia Beck • Operations

Beck Suppliers Inc. • Fremont, Ohio

Reilly Robinson Musser, VP, Marketing & Merchandising Robinson Oil Corp. • Santa Clara, Calif.

Bill Weigel, CEO Weigel’s Inc. • Knoxville, Tenn.

NATIONAL ADVISORY GROUP (NAG) BOARD

Vernon Young (Board Chairman), President and CEO

Young Oil Co. • Piedmont, Ala.

Joy Almekies, Senior Director of Food Services Global Partners • Waltham, Mass.

Mary Banmiller, Director of Retail Operations

Warrenton Oil Inc. • Truesdale, Mo.

Greg Ehrlich, President Beck Suppliers Inc. • Fremont, Ohio

Doug Galli, Real Estate/Government Relations

Reid Stores Inc./Crosby’s • Brockport, N.Y.

Derek Gaskins, Senior VP, Merchandising/Procurement

Yesway • Des Moines, Iowa

Joe Hamza, Chief Operating Officer Nouria Energy Corp. • Worcester, Mass.

Brent Mouton, President and CEO Hit-N-Run Food Stores • Lafayette, La.

Robin Hunt, Sales Hunt Brothers Pizza • Nashville, Tenn.

Kyle May, Director External Relations

Reynolds Marketing Services Co. • Winston-Salem, N.C.

Steve Yawn, Director of Sales McLane Company Inc. • Temple, Texas

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD

Kalen Frese (Board Chairman), Director of Merchandising Warrenton Oil Inc. • Warrenton, Mo.

Jeff Carpenter, Director of Education and Training

Cliff’s Local Market • Marcy, N.Y.

Megan Chmura, Director of Center Store GetGo • Pittsburgh

Ryan Faville, Director of Purchasing

Stewart’s Shops Corp. • Saratoga Springs, N.Y.

Cole Fountain, Director of Merchandise

Gate Petroleum Co. • Jacksonville, Fla.

Alex Garoutte, Director of Marketing

The Kent Cos. Inc. • Midland, Texas

Editor’s Memo

For any questions about this issue or suggestions for future issues, please contact me at edelconte@wtwhmedia.com.

Leading Categories and Team Members in 2024

2024 might prove to be a better year for cstore sales than many had anticipated.

As this month’s Category Management Handbook points out, recession fears have quieted, and inflation appears to finally be on a downward trend. The economy and customer sentiment are looking up, and category dollar sales are flying high, thanks to a boost from price increases.

Still customers are feeling the continued effects of ongoing price hikes. While prices may be rising at a slower rate, they are still much higher than they were before the COVID-19 pandemic arrived. Retailers are leaning into category innovation as they look to grow unit sales in 2024.

At a glance, energy drinks are standing out in the beverage category for big gains in both dollar and unit sales, based on market research firm Circana’s Total U.S. Convenience data for the 52 weeks ending Dec. 31, 2023. Salty snack segments also saw consistent dollar and unit sales increases during the same period despite price jumps of around 10%. Overall, c-store retailers and experts alike pointed out that customers today are interested in novelty and innovation, whether it’s a trendy new flavor, functional attributes or interesting taste experiences.

CATEGORY LEADERSHIP AWARDS

C-store categories couldn’t drive sales without the careful planning of the category managers that run them. This month’s Category Management Leaders feature highlights two category managers — Brian Nuzum and Jesse Dix — who are standing out for the superior execution of their categories.

As the senior category manager for hot and cold foods at Casey’s, Nuzum, who is featured on our cover, works across departments to build collaborative teams, spearheads new launches, leads the hot and cold foods team and, most

importantly, brings innovative offerings to life for hungry customers. Dix, a category manager for Dandy Mini Marts, has keyed into emerging trends for the tobacco category and capitalized on the continuously expanding next-generation items in the segment. Learn more on p. 10.

YOUNG EXECUTIVE TALENT

In order to ensure ongoing success for years to come, c-store retailers need to prepare nextgeneration executives so they can be ready to step up to lead in the years ahead. NAG Convenience’s Young Executives Organization (YEO) is a group where young executives under 40 in the c-store industry can network with peers and gain crucial leadership training to prepare them for the tasks ahead. This year, YEO’s conference, “CStoreMomentum,” is set for Sept. 18-20 and is hosted in partnership with Yesway. Yesway will give an up-close look at its c-store operations and will host the conference sessions at the Texas Motor Speedway, where it has recently opened two Allsup’s locations.

CStoreMomentum is a member-only event. Attendees must be part of a company with a current NAG membership or be a 2023 40 Under 40 inductee. To learn more about how to register visit cstoremomentum.com.

And now, we hope you enjoy this year’s Category Management Handbook. On the pages that follow, we zero in on 29 core c-store categories, sharing key data, trends and firsthand accounts of convenience store retailers about what they’re seeing in their stores across categories to help you make decisions in the year ahead.

QUICKBITES

CONSUMER SNACKING CONTINUES

Whether it's for a sweet, salty or healthier treat, consumers are starting to take more trips down the snack aisle at c-stores to find their latest craving.

EXPANDED TASTE BUDS

More consumers are interested in trying new flavors when looking for snacks and food. According to Kerry's “2024 U.S Taste Charts":

Young consumers are craving bold and unusual flavor combinations, driven by social media's influence and a desire for novelty.

• Some very familiar flavors, such as orange, are getting a new look with varietal and floral twists. Health considerations spurred by the pandemic also provided this source of vitamin C with a renewed wave of consumer appreciation.

• Spice — literal and figurative — is being added to a wide range of more everyday foods, providing a dash of excitement and a new sensation.

Source:

CHOOSING CHOCOLATE

The U.S. ranks second in per capita chocolate consumption behind Switzerland, according to Kerry's "2024 U.S. Taste Charts.” In fact, as stated by the charts, in North America:

43% of consumers prefer milk chocolate.

40% of consumers prefer dark chocolate.

16% of consumers prefer white chocolate.

2% of consumers prefer ruby chocolate.

Source:

TRENDING MUNCHIES

Even though consumers are expanding their snack options, they continue to stick with tried-and-true favorites, including chips, chocolate and candy.

SAVING WHILE SNACKING

Consumers are trying to save money while still enjoying the snacks and food they love. Based on Euromonitor International's "Top Global Consumer Trends 2024" report:

53% of consumers cook at home instead of eating out.

33% of consumers switched to buying private-label products.

28% of consumers bought products in smaller quantities or packaging.

52% of consumers cut back on nonessential spending.

HEALTHY SNACKING IS IMPORTANT

When opting for snacks, more customers are reaching for options they perceive as healthy. The International Food Information Council's "Consumer Research" survey of 1,000 adults found that:

40% of participants said eating healthy snacks is very important.

44% of participants said eating healthy snacks is somewhat important.

11% of participants said eating healthy snacks is neither important nor unimportant.

4% of participants said eating healthy snacks is not important.

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Nuzum Drives Hot and Cold Foods at Casey’s

Brian Nuzum began his retail career in grocery at 14 years old, and today he’s developing new product rollouts and collaborative brand partnerships in the c-store space as he grows Casey’s hot and cold prepared food category.

Erin Del Conte • Editor-in-Chief

As the senior category manager for hot and cold foods at Casey’s, Brian Nuzum has the busy job of driving category performance for the hot and cold prepared food business (excluding pizza) and the refrigerated food business across the chain’s more than 2,600 stores in 17 states.

His responsibilities include managing assortment, price, cost negotiation, vendor relationships, promotion activation and the development of innovative food offerings.

In his role, Nuzum works across departments to build collaborative teams, spearheads new launches, leads the hot and cold foods team and, most importantly, brings innovative offerings to life for hungry customers. A born leader, Nuzum is known for stepping up to benefit his team and drive growth for the company.

For all this and more, CStore Decisions is recognizing Brian Nuzum as a Category Management Leader.

GETTING STARTED

Nuzum began his retail career at the age of 14 when he landed a job bagging groceries at the local grocery store after school and on weekends. Little did he know it would set his career in motion. Seven years later he moved into a purchasing and procurement position

in the grocery chain’s corporate office.

“After 14 years in the grocery industry, I was ready for my next challenge, and after hearing positive things about the culture and people at Casey’s, I eagerly pursued a category manager position,” Nuzum said.

Nuzum got the job and spent his first four years at

Casey’s working on the grocery and packaged food side of the business, focused on driving results in center store categories, before he transitioned into prepared food. For the past two years, Nuzum has been working with Casey’s culinary team to bring new and innovative food offerings to the convenience store chain’s customers.

BRINGING PRODUCTS TO LIFE

In his current role as senior category manager of hot and cold foods for Casey’s, Nuzum oversees breakfast sandwiches, cold sandwiches and wraps, and exciting additions like the newly launched Spicy Chicken Sandwich.

Nuzum and his team have been responsible for managing Casey’s recent breakfast relaunch that included the September 2023 rollout of the Maple Waffle Breakfast Sandwich, a popular limited-time offer. Nuzum also led the development of several Casey’s brand programs in the refrigerated food category.

“I couldn’t be prouder of the accomplishments our team has achieved in just two short years,” Nuzum said.

Nuzum was also instrumental in spearheading Casey’s co-branding partnership with King’s Hawaiian and the subsequent Casey’s limited-time offer: King’s Hawaiian BBQ Brisket Sandwich.

“Casey’s King’s Hawaiian BBQ Brisket Sandwich brought together two beloved brands with a cult-like following,” Nuzum said. “This innovation and partnership showed our guests that Casey’s is dedicated to bringing high-quality food offerings that they crave.”

For Nuzum, knowing that the food he and his team create each day is being met with a positive response from Casey’s customers is one of his favorite things about his current role.

“Our team works day in and day out to develop the innovative and convenient food our guests crave, and knowing that we’re winning with our guests brings me the most joy,” he said.

LOOKING AHEAD

In 2024, Nuzum said he is most excited for the opportunity to continue the forward momentum of the Casey’s food team and serve up more innovative offerings.

“Casey’s has a well-established process of ideation to stage gate, setting the team up for another big year,” he said.

As he looks ahead, Nuzum has his team and the goals of the company top of mind.

“Looking to the future, my immediate goal is to accelerate performance for the food business here at Casey’s and to support our stores and team members in the field so that they can execute and deliver at the highest level,” Nuzum said. “Over the long term, I’m focused on personal development and growing within Casey’s. I’m excited for the possibilities and strive to help lead Casey’s well into the future.” CSD

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Dix Drums Up Success at Dandy

Jesse Dix, category manager for Dandy Mini Marts, spearheads tobacco category evolution and overall growth for his respective categories.

Emily Boes • Senior Editor

The success of a convenience store relies on managing personnel recognizing the products that customers want and catering to the trends that arise in purchasing habits in a timely manner. Without the most appealing merchandise array, c-stores will lose potential opportunities and sales.

Category managers are essential for knowing the correct assortment for each store. And that assortment may be different depending on geographic location, generational demographics, nearby establishments and more.

As a category manager for Dandy Mini Marts, Jesse Dix has keyed into emerging trends for the tobacco category and capitalized on the continuously expanding next-generation items of the segment, making sure Dandy is always up to date with the latest customer asks.

CStore Decisions is recognizing Jesse Dix as a Category

Management Leader for his dedication to the industry and in-depth knowledge of his categories.

IN THE BEGINNING

Today, Dix’s responsibilities involve managing the tobacco category, including cigarettes, as well as beer and wine, health and beauty care, general merchandise, direct store delivery (DSD) chip vendors, and DSD packaged sweet vendors.

“I love how every day is never the same, and this business is constantly changing and evolving. I am forced to evolve my thinking in order to keep up with today’s consumer,” said Dix.

Prior to working at Dandy, Dix worked for US Smokeless Tobacco while attending Penn State University and for a brief period of time post graduation. He soon after accepted a full-time role as a territory manager at Swisher International, where he stayed for nearly 10 years.

Following his time at Swisher, he took on his current position with Dandy Mini Marts, which operates 63

convenience stores in Pennsylvania and New York.

“My father, Tom Dix, has been a category manager at Dandy for over 40 years, and I still remember running around the corporate office as a little kid wishing I could work for the company one day,” said Dix.

Dix is now starting his eighth year with Dandy.

AN EVOLVING INDUSTRY

As a category manager for tobacco, one of Dix’s primary focuses must be on the federal, state and local regulatory minefield that comes with the territory.

For example, at press time, a potential federal ban on menthol cigarettes and characterizing flavors in cigars loomed, and many vape products are consistently struck with marketing denial orders.

Tobacco category managers industrywide must regularly review the products they are allowed to keep on the backbar.

In fact, Dix believes legislative threats, including increasing taxes, are one of the biggest challenges facing category managers today.

Leaders

“To quote my general manager, ‘The government can change our business with the stroke of a pen,’” said Dix.

To address the issue, Dix noted Dandy is speaking with political representatives in the chain’s markets to inform them that their decisions have the potential to negatively impact Dandy’s business.

Aside from legislation, Dix noted another challenge is pressure from dollar store openings. A dollar store sits close to over 70% of Dandy’s sites.

To stand apart from dollar store competition, Dandy is emphasizing products it offers that dollar stores do not, including foodservice, beer caves, frozen drinks and more.

While working with Dandy to tackle these hurdles, however, Dix remains focused on what he can do day by day

To stand apart from dollar store companies, Dandy is emphasizing products that dollar stores don’t offer, including foodservice, beer caves, frozen drinks and more.

to improve the categories he manages.

During his years with Dandy Mini Marts, Dix has had the opportunity to not simply make certain his categories were performing at the status quo, but to improve upon them and recognize new prospects.

For example, he spearheaded the implementation and refining of the alternative nicotine sets.

“I worked closely with our R.J. Reynolds rep at the time to come up with a plan to create a permanent home in our existing tobacco space for all the alternative nicotine products. I visited every store over the course of roughly six months and reset the entire section,” said Dix.

A few products that Dix added and/or expanded the variety of included ZYN, On!, Rogue, Black Buffalo, Vuse, NJOY and JUUL.

Dix is excited to see the evolution of the alternative nicotine category and to continue reviewing the sets to make certain Dandy is positioned for the category’s future. CSD

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The Impact of Freshly Fried Chicken on Sales

Understanding Chester’s Cult Following and Repeat Clientele.

The National Restaurant Association rightly predicted 2023 would be the year of the chicken sandwich, and the versatile handheld is keeping pace in 2024. Rising to the trend occasion with family-recipe sauces, marinades, sides, and innovative spinoffs, family-owned Chester’s Chicken has been creating fresh, double-breaded fried chicken for 70 years and counting.

Now operating roughly 1,100 franchised locations across the United States and Canada, Chester’s Chicken has found a permanent home at Landhope Farms convenience stores in southeastern Pennsylvania—coincidentally in Chester County—proving that the convenience store foodservice market is a boon for the fastfood industry. According to Chester’s Chicken website, C-store foodservice sales are projected to reach $54.7 billion by 2027, and the 2024 NACS/ NIQ cites a unit 1.5% increase from 2023, tallying 152,396 convenience stores operating in the United States.

Bringing chicken into the fold has undoubtedly paid off for Landhope Farm’s director of operations, Dennis McCartney, who in 2020 was looking to expand its existing food service programs. Its annual chicken sales before Covid were around a quarter of a million dollars, and just last year, with two Chester’s locations (a second opened in 2022), it hit $1.3 million. Switching from fully cooked frozen to fresh certainly paid off the capital investment of the equipment.

“We found that about 30 percent of our guests eat at Chester’s multiple times a week, which is a really high number. And another third will eat at Chester’s multiple times a month. Chester’s has this unique cult following with extremely loyal customers. We’re really fortunate for that,” says William Culpepper, vice president of marketing at Chester’s Chicken.

In addition to its unique product, Chester’s looks after its franchisees like family, with open communication, quarterly visits by regional reps, customized training programs, and sound marketing and social media initiatives that foster personal and professional relationships.

“Chester’s is a company that does not rest. They’re constantly looking for new things, and I’m not just talking about a new chicken sandwich or new promo. I’m talking about packaging cost savings across the board, monitoring chicken costs, and helping negotiate with distributors. They handle all that,” says McCartney.

“As the only C-store in the area

with a fresh fried chicken program, when people hear Chester’s, they automatically think Landhope Farms,” says McCartney, “Which is itself the best marketing---word of mouth. We probably won’t open another Landhope Farms without Chester’s Chicken as a partner.”

As a possible next step in the brand’s evolution, Chester’s Chicken looks to explore additional nontraditional spaces, like the college and university markets. It recently launched a Chester’s Club for swag galore and the portable snack Boneless Chicken Bites with either stingin’ honey garlic sauce or sweet chili sauce—all of which answer the trending Gen Z call for spicy flavors and snackification lifestyle.

“One of our core values as a company is that fried chicken is fun. We have a recipe that has stood the test of time, but we’re always refining and looking to make everything we sell be up to that same level of quality,” says Culpepper.

CHOOSE

The 2024 Category Management HANDBOOK

CStore Decisions outlines the data, trends and innovation impacting core c-store categories this year.

A CStore Decisions Report

“Cautious optimism” seems to best sum up the economic outlook for 2024 among consumers and retailers alike as recession fears fade and inflation looks to finally be winding down. Meanwhile, many industry and consumer trends that have been building for the last few years have reached a fever pitch.

Euromonitor International’s “Top Global Consumer Trends for 2024” report pointed to the rise of artificial intelligence, consumer demand for wellness, sustainability and social responsibility from brands — all of which we’ve been watching develop over the past few years — as top trends to watch for 2024. Also included on Euromonitor’s list is shoppers’ demand for value as customers continue to face cost-of-living challenges. Customers are also seeking an escape from daily stress with 29% of customers reporting they would be comfortable with brands tracking their emotions and personalizing experiences to their moods.

SHIFTING TIDES

While customer sentiment about the economy dipped from August through the end of December, as of midJanuary it had begun ticking upward again, rising above the February 2023 high of 36.9 to 37.7.

It’s not a surprise as the U.S. economy grew faster than expected in Q4 2023 due to strong

consumer spending. Inflation is on the decline and recession fears are reportedly retreating.

Real gross domestic product (GDP) increased at an annual rate of 3.3% in Q4 of 2023, according to the Bureau of Economic Analysis. The White House announced that for the full year (from Q4 2022 through Q4 2023) the economy grew 3.1%, which Reuters pointed out was much better than economists’ estimates of a 0.1% contraction. Still, headwinds for 2024 show a potentially slow year.

J.P Morgan predicted a “soft landing” in 2024, with GDP growth falling somewhere between a slight expansion and contraction for much of the year with a 0.7% pace of expansion predicted.

J.P. Morgan forecast that consumer growth will slow this year due to consumers’ diminished savings, plateauing wage gains, low savings rates, less pent-up demand and the restart of student loan payments, among other reasons. While J.P. Morgan agreed inflation is declining, it expects it to remain above the Fed’s target goal of 2% in 2024.

Despite a rosier picture than we were facing at this time last year, customers are still waiting to feel much needed cost-of-living relief. Deloitte’s “2024 Retail Outlook” found three in four consumers still feel concerned about rising prices, even as inflation moderates.

This year’s Category Management Handbook shows prices continue to rise across categories, with many segments facing double-digit increases. Total U.S. Convenience data from Chicago-based market research firm Circana showed dollar sales at c-stores are largely up across categories with help from price increases, while unit sales are more of a mixed bag for the 52 weeks ending Dec. 31, 2023.

WHAT’S COOKING?

Foodservice has soared to the top of many c-store retailers’ agendas for 2024. More chains are either upgrading their menus or making the initial leap into a food program.

Some 77% of consumers are excited about new food and beverage trends in 2024, according to Datassential’s “2024 Food Trends” report.

Functional beverages are continuing to trend in 2024, and in the alcoholic beverage segment spirits-based hard seltzers are a bright spot

showing rapid growth.

Snacking is up, as Americans report having less time than ever. Customers continue to seek bold flavors, new flavor combos, and proteinpowered and energy-boosting snacks.

“More consumers are integrating their favorite snack products into meals, up 35% over previous years,” according to the fifth annual U.S. Snack Index by Frito-Lay.

Some 29% of customers purchased a packaged food/snack item on their most recent c-store visit, according to FoodserviceResults’ “Understanding the Food-Focused Shopper” report, commissioned by NAG Convenience.

On the candy front, instant commerce platform Gopuff’s “INs and OUTs” report noted customers are gravitating toward sour candy in 2024 over classic fruit profiles as palates become more adventurous.

“Ice Cream” ranked as the No. 1 search term for Gopuff in 2023, with cookie dough and strawberry cheesecake among popular flavor choices, according to Gopuff’s “INs and OUTs” report.

Both dairy and plant-based milk saw declines in 2023. The 2022 star, oat milk, which saw 42% growth in dollar sales and 34.8% growth in unit sales in 2022, experienced a downward slide, down 21.2% in dollar sales and dropping 23.1% in unit sales for the 52 weeks ending Dec. 31, 2023, per Circana.

In the health and beauty segment, cosmetics were largely on the upswing at c-stores as internal analgesics dollar sales rolled in flat (up 0.1%), with a 6.3% drop in unit sales for the 52 weeks ending Dec. 31, 2023, per Circana.

TOBACCO & CBD

All eyes are on the tobacco category in 2024 as retailers await regulatory direction from the Food and Drug Administration (FDA).

Cannabidiol (CBD) is another category awaiting FDA input. Hemp became legal at the federal level after the passing of the 2018 Farm Bill, but the FDA has yet to take needed steps toward regulating hemp products like CBD, leading to challenges for the category, with commodity prices dropping by more than 90%, according to The U.S. Hemp Roundtable, the hemp industry’s national advocacy organization.

As your c-store chain navigates the year ahead, CStore Decisions’ 2024 Category Management Handbook is here as a reference on emerging trends, recent data and examples of how fellow retailers are raising the bar.

Doughnuts, Cookies Offer Opportunity for Bakery

2023 was a “mixed bag” for the bakery category, with dollar sales up 6.3% and unit sales down 2.1%, stated Jack Ince, education coordinator for the International Dairy Deli Bakery Association (IDDBA), quoting data from the company’s Integrated Fresh Data dashboard.

He attributed much of the unit sales drop to inflation.

“Bakery has often been viewed as an impulse buy, which can negatively affect the unit growth,” agreed Whitney Atkins, IDDBA’s vice president of marketing.

The good news, IDDBA reported, quoting a 2023 Circana “Omnibus” survey, is that 30% of shoppers said they continue to make impulse purchases to reward themselves, and 29% said they do it to treat someone else.

C-stores can capitalize on this mindset in 2024 to boost bakery sales.

The survey also pointed out that many of the smaller, handheld items are showing unit growth from last year.

“Doughnuts stand out as a top performer ranking highly for total dollar/unit sales growth percentages,” Ince elaborated.

He continued that cookies, specifically the more modern style of giant, chewy cookies with surprising flavors and over-the-top toppings, have been steadily gaining popularity in the quick-service restaurant dessert world.

“Retail bakeries can absolutely take advantage of this trend,” he said.

At Dysart’s Travel Stops’ nine locations in Maine, cookies baked in the company’s proprietary commissary are a main attraction.

“Pumpkin chocolate chip cookies are our biggest sellers year-round, probably because they’re so unusual,” noted Tim Dysart, vice president of the company. “Chocolate, pumpkin and other flavored whoopie pies are always in high demand, and we can never make enough of our nobake chocolate and peanut butter cookies.”

Because cookie sales are consistently high, Dysart’s stores offer between eight and nine varieties at any given time. Doughnuts and banana-chip and pumpkinchip sweet breads, whole or in two-slice packs, are other customer favorites, pointed out Megan Guenther, Dysart’s general manager.

THE HEALTH FACTOR

Another element with an impact on the bakery category is increasing consumer interest in “healthier” products, “although what that means to consumers varies drastically from one to another,” Ince said.

“Many consumers will be drawn to sourdough breads or a seeded loaf, seeing it as a functional food, while others will see an occasional treat like a doughnut as great for their mental health,” he remarked.

Ince stated that portion-controlled treats are attractive to a growing number of consumers. Cupcakes, for example, saw a strong increase both in dollar sales (41.7%) and units sold (8.7%) versus two years ago.

“People don’t bake at home anymore, so there’s always a place for a good bakery,” Dysart said.

Bakery’s Varied Sales Trends

Flavors Appeal to Young Coffee Consumers

Coffee sales have begun to slow after years of growth, with rising sales in 2023 stemming from price increases rather than organic growth, revealed Mintel in its “2023 Coffee and RTD Coffee — US” report.

The future of the category depends on positive factors, such as improved economic conditions and young consumers entering the market, as well as negative factors, including the impact of climate change and competition from energy drinks.

Therefore, as c-stores look to boost sales and rally customers around hot beverages in 2024, one focus can be on popular flavor trends.

In its report, Mintel discovered that indulgent flavors are trending, reflecting consumer, especially Gen Z, interest in treat-like coffee beverages. Recent top novel flavored roast launches include white chocolate, fudge, sea salt (fleur de sel), pumpkin pie and sugar. Top emerging flavored roast launches include chai (masala/spice), cocoa/cacao, nut, muffin and s’mores.

The report found that 63% of Gen Z and 54% of millennial consumers prefer their coffee with added flavors from flavored creamers, roasts and syrups. As a result, Mintel suggested that brands should “look beyond coffee itself to creamers and additions.”

CATERING TO CUSTOMERS

As far as equipment, many retailers are turning to bean-to-cup technology, but Ray McIntosh, president of McIntosh Energy, parent company of MacFood Mart’s four convenience stores in and around Ft. Wayne, Ind., believes that many customers still prefer drip coffee.

“Not all customers want to wait for the bean-to-cup equipment to brew, or they find the resulting coffee to be too heavy in flavor,” McIntosh explained.

However, to appeal to the largest number of customers, he has both technologies in each of his stores.

For its bean-to-cup brews, MacFood Mart partners with a well-known local roaster highly regarded for its quality products. In addition to its regular offerings, the roaster

Novel and Emerging Flavors

Top 15 Novel Flavors in Flavored Roast Launches

Top 15 Emerging Flavors in Flavored Roast Launches

Chocolate (White) Chai (Masala/Spice)

Fudge Cocoa/Cacao

Sea Salt/Fleur de Sel Nut

Pumpkin Pie Muffin

Sugar Honey

Brownie S’mores

Waffle Almond

Macadamia Gingerbread

Walnut Dulce de Leche

Orange/Sweet Orange Sugar (Brown)

Peanut Butter Mint

Cognac Raspberry

Bourbon (Biscuit) Churro

Candied/Glacé Whiskey (Bourbon)

Cheesecake/Cheese Cake Cream/Creme/Whipped Cream

Source: Mintel Flavorscape AI as seen in Mintel’s “2023 Coffee and RTD Coffee — US” report

introduces limited-offer seasonal specialties that McIntosh noted are very popular.

The stores also feature seasonal versions of machinemade cappuccinos such as peppermint and pumpkin spice. For the drip coffees, a variety of flavored creamers give customers opportunities to create their own perfect cup.

SPECIAL OFFERS

McIntosh appeals to economy-minded customers with numerous special offers. Enrolled loyalty members can get a free cup of coffee every Friday, a promotion that he described as “incredibly popular.” Also well received is the chain’s Coffee/Cappuccino Club, offering loyalty members who purchase 10 cups their next cup free, said Jessica Carroll, the company’s marketing manager.

“Overall, 86% of our loyalty users have taken advantage of this club program at least once,” she stated.

The stores also bundle coffee with breakfast foodservice items, offering either the coffee or the food item for free or the coffee for 99 cents.

Tenders Top Chicken Trends

While overall per capita chicken consumption was essentially flat over the last year, according to a forecast from the National Chicken Council, cstore operators are still experiencing growth in the category and expect to continue that trend.

At Kwik Stop convenience stores, with 27 (soon to be 28) locations in Nebraska and Colorado, tenders are the top sellers in the chicken category all day long, with Crunch Box offers consisting of three, four or six tenders with a small side among the most popular configurations. Truck driver customers often choose to buy two- to eight-piece meals of chicken legs and thighs.

“Legs are easiest to eat while they’re driving,” M. David May, director of food services for Kwik Stop, pointed out.

May also noted sales of its Krispy Krunchy Chicken continue to grow by 10-20% every single year.

Breakfast sales, particularly, are “growing like gangbusters,” with the

No. 1 item during that daypart being the chicken and cheese crispito, a stuffed tortilla that the stores sell under the company’s proprietary deli program, he reported. Also increasing during breakfast are sales of chicken tender sandwiches on buttermilk biscuits.

To mitigate waste, unsold chicken parts are cooled down and sold from the cold case where customers with electronic benefit transfer cards can purchase them. Tenders may be put into tortillas with cheese, lettuce and sauce to be sold from the grab-andgo case.

CHICKEN MEAL DEALS

Ashland, Ky.-based Clark’s Pump ‘n Shop also does a robust chicken business in the 26 stores that offer it, stated Jessica Russell, the chain’s food service director. She added she expects sales to remain brisk as consumers continue to look for tasty, reasonably priced meal alternatives.

Clark’s has a total of 68 locations in

Kentucky, West Virginia and Ohio. It partners with Krispy Krunchy Chicken in 15 stores, Cooper’s Express in seven and Champs Chicken in four.

Tenders are the hottest sellers and lunch the primary daypart. The goal this year, Russell said, is to introduce “some strong promotions to entice our customers to let us prepare their evening dinner.”

“We hope to create some bundle deals with our pop vendors,” revealed Russell.

May, too, predicted that chicken will remain attractive as a dinner option, as even two-income families are cost conscious these days.

Kwik Stop sells family deals consisting of either 12 bone-in pieces or 12 tenders, a large side, and six biscuits for $25.99.

“It’s a quick, easy and competitively priced way to feed a family of four,” he explained.

For larger families, Kwik Stop sells a 12 bone-in piece plus six tender meal deal for $35.99.

Hispanic Foods Expand at C-Stores

Many convenience stores are finding menu success with Hispanic foods, and the trend is expected to continue to grow in 2024.

Especially if Hispanic foods are a staple for a chain, offering variety and customization is key to attracting customer attention.

“Everyone loves tacos,” whether they’re filled with beef, chicken or even pepperoni and cheese, said Sara Wilson, foodservice category manager for Gate Petroleum Co.

And, according to findings in several research reports by Datassential, customers also love burritos, empanadas, quesadillas and other Hispanic/Latin foods.

“Many of the classic hallmarks of Mexican cuisine lend

Broadest-Appeal Toppings

themselves well to ready-to-eat or handheld formats and are already ubiquitous both among consumers and within commercial menus,” elaborated Huy Do, research and insights manager for Datassential.

As consumers today are increasingly exposed to unique global dishes, they’re also growing more attuned to bright and bold flavors, including spicy and complex flavor profiles that combine sweet and spicy or sour and heat, he said. These are flavors inherent in most Latin American cuisines.

Sixty-two of Gate’s 69 locations in Florida, Georgia, North Carolina and South Carolina feature a wide array of Mexican items, including empanadas, mini tacos, tamales, burritos and roller grill tornados. Breakfast burritos are the stores’ No. 1 selling items in the morning. In the afternoon, chicken-and-cheese and beef-and-cheese burritos rule, Wilson stated.

The chain’s mini tacos and empanadas have also proven to be popular incremental items for customers who are buying pizza.

“Customers will pick up three or four of these items at a time,” Wilson added.

CUSTOMERS WANT CUSTOMIZATION

Combining customizable burritos or tacos assembled to order with trending Latin-American flavors is a great strategy to drive interest, Do advised.

Also, different generations like their Hispanic foods to deliver different heat levels, Wilson pointed out.

“Jalapeño is more popular among younger consumers,” she noted. “Others prefer more spice than heat, and we can deliver that with chorizo or chipotle.”

For Gate’s Mexican items, the stores offer a condiment bar to invite customization. Available condiments include cheese, pico de gallo and jalapeños.

Gate has experienced year-over-year growth in this category. To expand it even further, the company will be exploring doing regular-sized tacos and Hispanic-style bowls with items they already have in inventory.

“For the foreseeable future, we expect Hispanic/LatinAmerican foods to remain a staple trend, gradually gaining new fans and further penetrating mainstream consumer tastes,” Do predicted.

“By nature, many classic Latin-American dishes are quick to prepare, handheld, portable and easy to eat, all the while carrying flavor profiles that are complex and craveable, making them ideal choices, especially for younger consumers who are more likely to value convenience.”

Pizza sales dropped a little last year, with total servings from commercial foodservice decreasing 2.8%, stated David Portalatin, senior vice president and food industry advisor at Circana. However, in convenience stores, he pointed out, serving sales increased 1.5% during that same time period.

“Before the pandemic, more than half of all food deliveries would have been from quick-service restaurants (QSR); now it’s only about one-third,” Portalatin explained. “It’s not that we have lost our love for pizza, but now there is a whole lot of variety and a whole other world of different cuisines available through third-party platforms such as DoorDash, Uber Eats and Grubhub.”

Today, 85% of pizza servings are still served at QSRs and 4.5% from convenience stores, Portalatin added. He attributed the adoption of digital ordering technologies as one of the major reasons why QSRs are still so far ahead.

“C-store retailers have the opportunity to close that gap by developing apps to make ordering easier for customers,” Portalatin said.

Variety is also a draw because, he noted, “American consumers love to try new things in familiar territory like pizza.”

According to Circana, the fastest-growing topping is jalapeño peppers. Portalatin added that over the past decade, a growing number of consumers have been seeking gluten-free crusts.

“The demand is not increasing as rapidly as a few years

New Tech, Variety Propels Pizza Demand Tracking

ago, but gluten-free has carved out its space and will always be relevant,” he said.

Instead of just appealing to consumers on restricted diets, these products have a broader health benefit halo that make them more universally attractive, he stated.

LTOS DRIVE SALES

Dandy Mini Marts, which has 63 locations in Pennsylvania and New York, offers at least 10 to 12 topping options on its pizzas, including a build-your-own, according to James Fry, Dandy’s foodservice director. The menu also features some interesting creations, such as pickle pizza and the multitoppings Bomber.

“Limited-time offers (LTO) are really important for the most frequent buyers because they deliver something new, fresh and different,” Portalatin pointed out.

At Dandy, different LTOs, such as a recent taco-inspired Mexican pizza, appear on the menu every two months.

“We hear from our regular customers that they want to try something different,” Fry said. “We used to offer new LTOs quarterly, but, again at customer request, we lengthened the time they are available.”

Fry expects to see the stores’ grab-and-go pizza slice business continue to grow and breakfast pizza sales to at least continue to hold steady. Dandy is also looking at promotions to run throughout the year to drive dinner whole pie purchases.

Refreshing the Roller Grill

As roller grills beef up offerings with innovative flavors and trendy toppings, they have the opportunity to be an integral part of c-store foodservice programs in 2024.

York, Pa.-based Rutter’s has a roller grill in every one of its 85 stores in Pennsylvania, Maryland and West Virginia, featuring a wide array of products, said Philip Santini, senior director of advertising and food service for Rutter’s.

Among the stores’ roller grill items are hot dogs, egg rolls, sausages, chicken roller bites and tornados. Santini pointed out that the company is “always looking at new options with different flavors, seasonings and combinations as they are introduced.”

Looking at the year going forward, Santini stated, “I believe there is a chance to broaden the range of flavors available, and we see an opportunity in allowing our guests to customize their items.”

He anticipates that the category will at least maintain its current level, but with the introduction of new products and flavors, he believes that Rutter’s “can observe an increase” in sales over the coming months.

The appeal, he said, is that roller grill items are “versatile, quick, convenient and affordable.” For the retailers, the grills provide consistent cooking that helps maintain the quality of and expectations for the products.

While lunch is the peak daypart for roller grill sales, the category is popular in all dayparts, Santini pointed out.

Top Hot Dog Consumption Cities

New York

Los Angeles

Dallas

Chicago

Baton Rouge, La.

New Orleans

Dallas

Mobile, Ala.

Houston Little Rock, Ark.

Philadelphia Houston

Boston Buffalo, N.Y.

Phoenix Raleigh, N.C.

Washington, D.C. Birmingham, Ala.

Atlanta Norfolk, Va.

HOT DOGS AND SAUSAGES

Hot dogs and sausages are two of the roller grill’s most popular items. Total hot dog sales rang in at $2.99 billion and 896 million pounds, reflecting slight decreases (0.1% and 1.2% respectively) in 2023 over 2022. Total dinner sausage sales increased a bit (0.2%) to $5.3 billion and decreased 0.2% in pounds to 1.2 billion, according to the National Hot Dog and Sausage Council.

“Americans love hot dogs and sausages as delicious staples that offer affordable protein and many other nutrients in their diet,” said Eric Mittenthal, president of the Council. “Even with more products of all types offering protein available on the market, hot dog and sausage sales remain strong as families continue enjoying the products they’ve loved for generations.”

New products, Mittenthal reported, are mostly brand favorites reformulated with a reduced fat content or increased protein content. In the last few years, new products in flavors such as honey and brown sugar, barbecue, Cajun, spicy, and teriyaki have been introduced. A consumer survey last year revealed that 60% of consumers (mostly older) preferred all-beef hot dogs, while younger consumers preferred hot dogs made from other proteins such as pork and chicken.

Novelty and Innovation Boost Sandwich Sales

In 2024, new toppings, specialty subs and bold flavors look to be the focus for the sandwich category.

Retailers report that sandwiches continue to grow in their stores, driven by innovation and, in the case of Englefield Oil Co.’s Duchess Convenience Stores, seasonality.

“At the beginning of the year, customers are looking for wraps and other items that they believe are more healthful in terms of calories and carbs,” explained Nathan Arnold, director of marketing for Duchess, which operates 119 locations in Ohio and West Virginia. “That trails off fairly quickly, and they go back to the classic and spicy Italian subs that are our core items and accounted for 12% of our deli sales during last year’s fourth quarter.”

Seasonal specialties such as a fish sandwich during Lent and barbecue pulled pork in the summer also help to boost sandwich sales, he said.

Duchess recently began offering toasted sandwiches, giving a new twist on some of the core favorites, such as the Italian subs.

“Our toasted sandwiches are doing well, and our plan is to grow that

Sandwiches Strengthen

subset this year,” Arnold stated. The company is even taking a closer look at different breads and other carriers such as biscuits that have traditionally been associated with breakfast, considering expanding their application to lunch and dinner. This, he noted, can help the back of the house by creating new items without bringing in new inventory.

TRENDY TASTES

Arnold pointed out that customers like to see trendy and unique flavors in the form of special sauces, textures or limited-offer ingredient pairings. They also like to have the option of putting

Sandwich sales rose across the board, both in December 2023 and over the full year 2023. Dollar sales in 2023 jumped up 7.1%, hitting $3.3 billion, while unit sales grew by 1.6%. Dollar sales in December 2023 reached $315 million, a slight 0.8% increase from December 2022, and unit sales for the month upped 2.4%.

their own spin on their sandwiches from the condiment bars that are in some of the stores.

Derek Thurston, director of foodservice operations for Clifford Fuel Co.’s 21 (soon to be 22) Cliff’s Local Markets in New York, echoed Arnold’s observations about creating new sandwich taste and texture experiences for customers.

“Our customers like to try new bold and interesting flavors, trending flavors, that they’ve never tried before,” he stated. “They like different sandwich dressings and other toppings, so we give them new ones such as jalapeño ranch with crispy jalapeños on a sub or a sauce of locally made Utica beer cheese on a Philly cheesesteak every quarter.”

Hispanic flavors tend to perform well at Cliff’s. Even a familiar protein such as turkey, which is so popular it comprises 30% of the menu yearround, gets a fresh take when seasoned with chipotle and paired with bacon and sundried tomatos. Other recent forays into global specialties have included roast beef topped with pesto and a selection of grab-and-go sandwiches on ciabatta.

Does Your Store Need More Sizzle?

Let Mike’s Hot Honey Drizzle on the heat.

MIKE’S HOT HONEY has been setting the food world ablaze with its distinctive blend of sweet and spicy flavors. What’s the secret? The honey is infused with chili peppers, resulting in a delicious balance of heat and sweetness that’s easy to add with a simple drizzle. The versatile product is showing up on menus across the country, enhancing everything from breakfast to dinner, beverages, desserts, and everything in between. In fact, the term “hot honey” on menus has grown 122 percent over the last four years and is predicted to outpace 99 percent of menu items over the next four years.

This year, the National Restaurant Association named hot honey breakfast sandwiches one of their top trends. Mike’s Hot Honey’s partnership with First Watch, the casual breakfast chain, had already been going strong with an LTO breakfast sandwich in 2021 and another LTO in 2023 featuring Mike’s Hot Honey on a sweet potato hash. The sweet heat combo has been featured on bagels, bacon egg and cheese sandwiches, avocado toast, chicken & waffles and even lattes and beverages. For operators, Mike’s Hot Honey couldn’t be easier to integrate; it’s shelf stable and is typically drizzled as a last step.

Mike’s Hot Honey was born in a kitchen so it’s no wonder it has become a staple on many different kinds of menus throughout the country. Mike Kurtz is to thank for the trend, which began in Brooklyn when he was working at Paulie Gee’s pizzeria and experimenting with his homemade hot honey recipe. From the first drizzle on the Hellboy pizza, it was clear he was onto something special. The result was a deliciously addictive combination that quickly became a hit with customers. Word about the hot honey spread quickly, and before long, Kurtz was bottling and selling it. Fast forward 10-plus years and Mike’s Hot Honey is now on thousands of retailers’ shelves and in food service kitchens nationwide, including recent LTO’s with Marco’s Pizza, Cold Stone Creamery, First Watch, and Lee’s Chicken, to name a few.

“It’s the flavor and the brand that keep customers coming back for more,

which is why restaurants typically list not just “hot honey” but the brand name “Mike’s Hot Honey” on the menu,” Kurtz says. “Customers can also be assured that our product is always made with pure, high-quality honey.”

While its uses are endless, the pizza pairing is still what most people associate with Mike’s Hot Honey. The mouth-watering combo of pepperoni drizzled with hot honey has been successfully replicated by all types of pizzerias and is hard to miss if you’re browsing pizzeria social media accounts. From sit-down Neapolitan pizzerias to slice shops, convenience stores, and frozen pizzas, it seems any pizza can be elevated with a drizzle of Mike’s Hot Honey and consumers can’t seem to get enough.

Mike’s Hot Honey is available through DOT Foods and Foodservice Distributors nationwide. It offers pack sizes for all applications, from bulk jugs to single-serving packets and dip cups.

For more information or to request a sample, visit mikeshothoney.com

Branded Content by Mike’s Hot Honey

Photo provided by First Watch

Shaking Up Alcoholic Beverages

Gen Z preferences are influencing alcoholic beverage trends in 2024.

Gen Z is gravitating toward the flavored alternative “beyond beer” category, and subsequently, hard teas and convergence brands — i.e. Monster Beast Unleashed, Arizona Hard, etc. — are seeing growth, noted Michelle Abdollah, category manager of alcoholic beverages for Extra Mile convenience stores, which operates 1,070-plus stores in 10 states.

Meanwhile, the beer category is showing soft numbers year-over-year, Abdollah noted. Indeed, beer case sales rolled in flat (down 0.5%) for the 52 weeks ending Dec. 31, per Circana.

“There continues to be a decline in beer drinkers as new drinkers are gravitating more towards flavored alternative beverages or non-alcs,” she said.

Gen Z and millennial generations are driving the non-alcoholic beer trend.

“Today’s customer is opting for healthier and functional beverage alternatives, and brands are reacting with product innovations across the 0% ABV (alcohol by volume) beer category,” noted Lorraine Mackiewicz, manager at Clarkston Consulting.

“Specifically, Gen Z customers are considered the ‘least alcohol-consuming generation in history’ as they prioritize better-for-you beverages to complement their healthier lifestyle aspirations,” Mackiewicz said.

Still, non-alcoholic beer is a small fraction of the beer market. Mackiewicz advised that retailers considering adding non-alcoholic beer start with a few small brand features to gauge the interest of their shopper base.

When it comes to regular beer, Abdollah expects continued growth in imports in 2024.

“There is a large crossover with Hispanic consumers and flavored alternatives, and we are continuing to see new brands emerge targeting this audience specifically,” she said.

Abdollah also sees higher ABV craft beer trending.

WINE & RTD

On the wine front, Abdollah sees wine-based cocktails dominating the category, and a premiumization of wine. “Canned wines are becoming a thing of the past, however there’s continued growth of tetra due to (the

Spirits-Based Hard Seltzer Stands Out

packs) being resealable, convenient for travel and lightweight,” she said.

Spirits-based hard seltzers had a 104.6% rise in dollar sales and a 99.1% climb in case sales for the 52 weeks ending Dec. 31, 2023, per Circana. Premixed cocktails also trended upward, increasing 57.1% in dollar sales and 56.5% in case sales.

Abdollah sees the hard seltzer segment leveling off as ready-to-drink (RTD) cocktails climb.

“High Noon is dominating the RTD cocktail space, and we have others now entering to mimic this category leader,” Abdollah said. “Craft cocktails are becoming more premium and elevated than before, and this segment is skyrocketing as customers are noticing they can purchase an RTD cocktail for a third of the price you pay for out at the bars.”

Functional alcoholic beverages are also on the rise, like hard kombucha and fortified seltzer, as they offer a more health-forward option, Mackiewicz said, adding, “Fortified seltzer is a great example of how lines are blurring across beverage types in areas such as hydration, vitamins and alcohol.”

Spirits seltzer centric, flavored malt beverages and premixed cocktails saw increases in both case sales and dollar sales in 2023, with spirits seltzer centric seeing the biggest year-over-year increases.

Water & Sports Drinks Battle Inflation

Two of convenience store operators’ biggest beverage categories, bottled water and sports drinks, are expected to continue strong dollar sales performances in 2024.

The convenience store channel saw bottled water sales of $5.86 billion, a gain of 6.6%, for the 52 weeks ending Dec. 31, 2023, according to Circana, while unit volume dipped 2.4% to 2.37 billion. Sports drink sales rang in at $4.89 billion, up 9.4%, for the same period, even as unit volume dipped 0.5% to 1.78 billion. Sports drink price per unit rose 10%, while bottled water price per unit rose 9.1%.

“After years of solid volume growth, sports drink performance softened in 2023 as the category was primarily impacted by inflation,” said Gary Hemphill, managing director of research for Beverage Marketing Corp. (BMC). “Dollar growth was healthy, though. We believe the outlook for sports drinks is very good as the category’s positioning is in keeping with what consumers want today.”

Hemphill noted that the sports drink category is led by strong brands like Gatorade and Powerade that resonate with consumers and have done a

great job with innovation.

7-Eleven has seen good results with its private-label sports drink 7-Select Replenish, which is one of the chain’s most popular bottled drinks, explained Sarah Pingree, associate product development manager — private brands, 7-Eleven.

Launched in 2019, 7-Select Replenish is an electrolyte-hydration beverage with 100% of the daily values per serving of vitamins E, B3, B5 and B6, with only 60 calories or less per serving. It’s also free from artificial sweeteners and high-fructose corn syrup.

Top-selling flavors include Zero Orange Mango, Zero Fruit Punch, Orange Mango, Zero Blue Raspberry and Blue Raspberry.

“Our private brands help us provide our customers with high-quality products at a great value,” Pingree explained. “We created our 7-Select line with one goal in mind: to provide customers with the best products at the best prices.”

BOTTLED WATER

“The behemoth bottled water category experienced slow volume growth for the second consecutive

Sports Drink and Bottled Water Dollar Sales Flourish

Sports

6.6% for that same period.

year in 2023,” Hemphill reported. “Volume inched up by 0.5% to nearly 16 billion gallons, based on preliminary full-year data from the BMC DrinkTell Database.”

Despite the soft performance, the firm found, bottled water widened its gap over carbonated soft drinks in 2023 as the largest volume beverage category in the U.S.

“Category volume growth has been relatively healthy in recent years with the exception of 2008 and 2009, when volume declined due to the recession,” Hemphill said. “Since then, growth had ranged between 3% and 8% until softer performance the last two years.”

Higher prices due to inflation and the sheer size of the category are contributing factors in that soft performance, Hemphill noted.

“Economic trends and pressures show us that (customers) are increasingly focused on value,” Pingree said. “Helping customers, particularly Gen Z and younger millennials, understand what we sell gives them more options as they seek out high-quality, affordable … beverage options on the go.”

Variety Is Vital for Dispensed

Cold and frozen dispensed beverages are oftentimes viewed synonymously with c-stores, and in 2024, retailers are looking to drive sales with a focus on frozen and flavor variety.

“We have increased (in sales) over the previous year; shockingly, our frozen is trending really well for this time of the year,” said Jessica Russell, food service director for Clark’s Pump N Shop, which has 68 locations in Kentucky, Ohio and West Virginia.

Especially as the seasons change into the warmer months, customers will be flocking toward colder and more refreshing beverages.

Clark’s installed six- to 10-foot islands in most locations for its cold dispensed setup, with frozen products facing the kitchens. Russell noted Clark’s is known for its fountain ice, and fountain units dispense a range of flavored drink options.

“The unit holds about 20 flavors in a box that can be combined to create numerous varieties. In our slush line we offer up to nine different flavors on our counters,” Russell said.

Looking ahead, Russell hopes to launch aggressive bundle deals with Clark’s food program, such as fountain drinks with lunch or dinner items.

Young Oil’s Grub Mart, with 11 stores in Alabama, has different dispensed setups depending on the

store, but in general offers traditional fountain beverages, milkshakes, slush drinks and more. A few locations offer frozen coffee, iced lattes, iced cappuccinos, etc.

Heading into the future, Brian Young, vice president of Young Oil, believes c-stores will end up focusing more on immediate consumption.

“We’ve had to move into more of the impulse drinks. Anything that you can have at this time, I think it’s going to be a continuing trend,” he said.

For Grub Mart, Coke, Diet Coke, Mtn Dew and Dr Pepper are top performers for fountain drinks, and Mtn Dew and Coke are also popular among frozen carbonated beverages.

As for milkshakes, Grub Mart sticks with the best-selling flavors. “Most people rave, but for whatever reason, we can’t seem to surpass Sonic and McDonald’s or Dairy Queen, and most of our stores are fairly close to all those,” said Young.

FROZEN ALCOHOLIC BEVERAGES

Aspects of Grub Mart’s dispensed segment have not been growing as much as the chain would like, but what is selling well is the company’s frozen alcoholic drinks.

Popular flavors include Blue Hawai-

ian, Bushwacker and Peach, among others, but “of course, it always varies (based on) who your customer is,” said Young.

In some areas, Mudslides will sell better, perhaps occasionally topped by the Hurricane flavor or similar, while in others, different flavor profiles are the top choices.

Flavor Preferences by State

Flavor preferences vary across the country. Insights from Coca-Cola Freestyle dispensers in U.S. c-stores for 2023 show the following flavor preferences based on volume per dispenser.

(New!) Pineapple (Minnesota)

Cherry (New Mexico)

Vanilla (Oklahoma)

Cherry + Vanilla (Missouri)

Strawberry, Peach (Mississippi)

Grape (North Carolina)

Orange (New Mexico)

Raspberry, Lime (Colorado)

Lemon (New Jersey)

Lemonade (Washington)

Ginger Lemon, Ginger Lime (Utah)

Carbonated Beverages Face Shifting Trends

Changes in customer preferences are stirring up the carbonated soft drink (CSD) category as shoppers increasingly seek health-conscious beverages, increased innovation and influencer-driven brands.

In convenience stores, carbonated beverage dollar sales grew 7.4% to $10.7 billion, with help from price per unit increases (up 6.4%), even as unit sales fell flat (up 0.9%) for the 52 weeks ending Dec. 31, 2023, per Circana.

At S&S Petroleum, which operates 90 convenience stores in Washington, Idaho, Oregon and California, 12-ounce slim cans are “making some noise,” noted Mike Jones, director of marketing for S&S Petroleum. “Smaller package sizes seem to be the latest trend,” he said, adding that he’s seeing the trend not only in CSDs but also across the energy and hydration segments.

Customers are demanding more flavors and innovation from the carbonated beverage category, Jones noted. “The new Coke Spice is one that has a lot of interest,” he added.

EVOLVING TASTES

Meanwhile, customers’ continued focus on health-forward choices is disrupting the CSD category. More

shoppers are evaluating how to make better choices for their health and the environment when selecting beverage options, explained Lorraine Mackiewicz, manager at Clarkston Consulting.

“Product benefits that are top of mind include low or no sugar; no additives or artificial ingredients; health claims including mental clarity, digestive health and hydration; along with natural ingredients,” Mackiewicz said. “The health-conscious mindset is important in the soft drink category as consumers are less interested in traditional full-sugar formulas.”

Changing customer preferences have led to changes in the cooler

Carbonated Beverage Dollar Sales Rise

case at S&S Petroleum.

“We have reduced CSD space in exchange for more energy as consumer preferences and margin dollar demands have shifted,” Jones said. “Energy also dictates more innovation, and these consumers want more trial.”

Given customer demand and preference shifts, Jones expects that CSD and sparkling segments will be down 2-5% in 2024.

“Brand loyalty is not what it once was, and we are seeing lots of trial and influencer-driven products and fads hitting the market,” Jones said. “The challenge is how do we manage space and still offer the amount of assortment that the customer expects.”

Mackiewicz pointed out that some notable brands that are making a splash on social channels and through influencer partnerships include Poppi, Olipop, Culture Pop and United Sodas of America, which all offer healthier alternatives with added nutritional value compared to traditional soft drinks.

“While c-stores should continue to be cautious about managing shelf space with canned soft drink options … it is worthwhile to watch whether these functional soft drink brands expand into featured fountain drink options,” Mackiewicz added.

Juices, Teas Are Thirsty For Innovation

Innovation is the name of the game for juices and teas heading into 2024.

In recent years, juices and teas have experienced soft performance, noted Gary Hemphill, managing director of research for Beverage Marketing Corp.

In general, juice and tea dollar sales are up for the 52 weeks ending Dec. 31, 2023, according to Chicago-based market research firm Circana. However, unit sales for many subcategories are dipping, likely due to increasing prices per unit, among other factors.

“We’re projecting soft performance for both categories once again in 2024,” said Hemphill. “Fruit beverages have struggled due to the high sugar content of many of the products, limited innovation and high relative prices. While ready-to-drink teas are positioned well from a health and wellness perspective, they have also lacked breakthrough innovation in recent years.”

Pete’s Convenient Stores, too, has found juices to be trending downward recently.

“We took that into consideration when resetting the coolers for 2024,” said Brenda Elsworth, chief operating officer for Pete’s. Pete’s operates 53 convenience stores in Missouri, Oklahoma and Kansas.

This is why, heading into 2024 and beyond, retailers need to look for the innovation that has boosted so many other categories and find creative ways to market these products. Additionally, new promotions, bundling opportunities and stocking lowersugar juices could help pave the way for a brighter 2024.

Though juices have not hit their mark in 2023 for Pete’s, teas have been holding steady, noted Elsworth.

Stocking a wider variety of tea products may just move sales forward in the future and bring about more avid tea drinkers.

SALES BREAKDOWN

Bottled juices currently hold the largest share of juice and tea dollar sales, per Circana, while canned and bottled tea maintain the top spot for unit sales.

Juices and Teas Show Mixed Picture

However, canned juices experienced the largest unit sales increase for the last calendar year at 15.5% to reach 254 million. Dollar sales for the segment jumped 21.9% to hit $424 million.

Aseptic juices also underwent a significant growth spurt, increasing by 14.1% in dollar sales and 8.2% in unit sales.

To keep high numbers rising and turn low numbers around, Hemphill noted new flavors are a chief opportunity for convenience stores in 2024.

At Pete’s, the juice flavors that perform well are orange juice, apple juice and lemonade. Popular package sizes are 12 ounces. For teas, Gold Peak Sweet Black, Gold Peak Extra Sweet, Peace Tea Razzleberry and Peace Tea Georgia Peach are the top sellers.

Pete’s customers prefer 18.5- and 23-ounce sized teas.

“Consumers like to try new products. Be open to innovation. Merchandise well; beverages are often impulse purchases that respond well if merchandised cold at different store locations,” Hemphill said.

Sales were mixed for juices and teas in 2023. Canned juices and aseptic juices showed the largest unit sales increases (15.5% and 8.2% respectively), and kombucha garnered the largest unit sales decrease (-20.7%).

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Energy Drinks Enjoy Strong Sales

The energy drink category finished 2023 off with a bang in terms of sales and is expected to continue thriving in 2024.

Dollar sales for energy drinks reached $14.1 billion, a 14.6% increase for the 52 weeks ending Dec. 31, 2023, according to Circana. Energy drink unit sales reached 4.67 billion, up 8.8% for the same period.

“Energy drinks have been one of the shining stars in refreshment beverages in recent years,” said Gary Hemphill, managing director of research for the Beverage Marketing Corp. “We expect solid volume growth of about 5% this year based on our preliminary projections. Dollar growth is likely to be even stronger.”

Red Bull, with $5.34 billion in dollar sales, up 9.3%, led the category, followed by Monster, with $3.85 billion, a 12.1% increase.

“I have observed a consistent growth trajectory in the energy drink market, with capacity expanding by approximately 9-10% annually,” noted Nicole Masullo, director of

Energy Drink Sales Soar

operations for Nittany Oil, which operates over 85 Minit Mart locations throughout six states.

INNOVATION IS ESSENTIAL

Energy drinks are mainly known and used to provide consumers with an energy boost to help them through the day. However, now, consumers are buying energy drinks for other reasons, including flavor, social media trends and health benefits.

Now that consumers want more from energy drinks, retailers need to start thinking outside the box when rearranging their offerings.

Hemphill mentioned that he has noticed innovation as one of the category’s key growth drivers and expects to see that continue through new flavors and various energy drink line extensions.

“Some trends in the energy drink category include a growing demand for healthier and natural ingredients and innovative flavors, such as the newest, hottest trend on TikTok or other social media outlets,” said

Masullo. “We have had several requests for new innovative products such as Rat Bastard and Prime.”

Aside from innovation, consumers are constantly seeking ways to reduce their spending costs when purchasing energy drinks since inflation is still causing price increases in some areas.

“Customers are seeking advantageous two-for-four deals,” noted Masullo. “Rather than making separate stops before and after work to purchase energy drinks, they now prefer consolidating both stops into a single trip.”

As 2024 continues, retailers need to home in more on innovation, whether it’s adding a new brand of energy drink or offering more flavor options to continue driving energy drink sales.

“My energy drink offerings typically consist of a two- to three-year set that embodies the latest trends from industry leaders such as Red Bull,” said Masullo. “We have plans to add more new items into our warm sets and work them into our cooler areas.”

2023 was a great year for energy drinks as dollar sales were up 14.6% and unit sales grew 8.8% for the 52 weeks ending Dec. 31, 2023.

Energy Shots Face Competition From Drinks

Energy shots will continue to serve as a c-store staple in 2024 and beyond because they offer so many positives for consumers: a quick, convenient and inexpensive impulse item offering an energy boost that won’t fill them up like a full drink will.

“Energy shots are a big category led by 5-hour Energy, which dominates the category,” said Gary Hemphill, managing director of research for Beverage Marketing Corp. “In recent years, sales have slowed as energy drinks have gained most of the growth in the energy space. Still, shots are well positioned because the energy need state is massive.”

Energy shot sales in the c-store channel totaled $592 million, down 2.8%, while unit sales dipped 3.3% to 180 million, for the 52 weeks ending Dec. 31, 2023, according to Circana.

“The market on energy shots is slightly down, and I think will decline further,” said Ryan Fasel, director of marketing at Valparaiso, Ind.-based Family Express, which operates more than 80 locations across Indiana. “It’s

Energy Shot Sales Dip

been cannibalized by the energy drink category. There has been so much innovation in energy drinks the last few years in flavors, functionality, natural caffeine and sizes that have eaten into the energy shot market.”

Fasel noted 12 ounces is now a prominent size in energy drinks, driving more women to the category.

“Many brands are now featuring an assortment of vitamins and natural caffeine, which used to be exclusive to energy shots. Right now, you can find a 12-ounce functional energy drink with vitamins being promoted as a healthier alternative for a lower retail than a 5-hour Energy shot, and those brands are winning consumers away from the shots,” he said.

VALUE & IMPULSE BUYS

Sam Odeh, president of Power Energy Corp. based in Elmhurst, Ill., said that energy shots represent a strong category in his stores but feels that c-store consumers expect discounts — and he provides them.

“We have a multioffer: three for $10,”

Odeh said. Power Energy has 1,359 sites in nine states, 96 of which are corporately owned under the Power Mart, Power Market and Powmaro’s banners.

Consumers love the energy jolt, Odeh added, and appreciate the savings. He likes merchandising products on the front counter, since impulse items can build the average ring.

Nanette Bernard, buyer, sports nutrition and vitamins for the Army & Air Force Exchange Service (AAFES), expects energy shots to remain strong in 2024 at AAFES’ more than 580 Express c-stores because she thinks consumers will continue to look for quick energy in a convenient package.

“The leading energy shot brand for the AAFES is 5-hour Energy, and the top-selling variety is 20-ounce 5-hour Energy Berry,” she said.

The products are merchandised inaisle in AAFES Express stores and as impulse items located near the registers. This impulse merchandising has historically proven to be gold for the category and isn’t about to change in the coming year or beyond.

Energy shot dollar sales declined slightly (-2.8%) while unit sales dropped (-3.3%) for the 52 weeks ending Dec. 31, 2023, per Circana. Zen Power saw large year-over-year increases in dollar sales (up 228.1%) and unit sales (up 214.8%).

Snack Sales Climb

Despite higher prices, customers are still snacking, and they’re seeking flavor innovation, protein, energy and taste from their snack options.

The convenience store salty snack category saw dollar sales of $8.08 billion, a gain of 14%, for the calendar year ending Dec. 31, 2023, according to Circana. Units sold topped 2.87 billion, a rise of 3.2%.

Today’s customers want flavor adventures from the snack aisle. Mintel reported that 23% of chip consumers in the U.S. want more limited-edition seasonal flavors. Demand is also up for health-boosting snacks. Mintel reported that one-third of U.S. customers say snacks with functional benefits are worth the price.

Some 74% of customers refuse to sacrifice taste when buying snacks. Meanwhile, 55% of customers cite protein as the most important nutritional attribute, and 60% want snack products to provide energy, per the fifth annual U.S. Snack Index by Frito Lay.

Pack size trends are also evolving.

“The consumer has moved from the take-home packages to the immediate consumable bags,” said

Tom Tucker, director of marketing for Maryville, Tenn.-based EZ Stop, which operates 25 c-stores.

“Frito items continue to provide most of our dollar sales and profit dollars,” Tucker said. “We finished 2023 with an 18% increase over prior years with Frito, while the salty snack peg section had a 26% decline in sales. Our top 20 selling Frito items accounted for 47% of the total sales and 53% of the total profit.”

There were only four large bags in the top 20, Tucker added. The remaining bags were $2.49 items.

“Flavors as a percent of the total were evenly divided with the exception of Doritos, which had 35%. Lay’s were at 20%. Cheetos, Funyuns and Ruffles were at 15% each,” he said.

EZ Stop has found that the standard two-fer promotion has become ineffective in delivering enough lift to offset the margin reduction.

“We moved to a product bundle program that has proved itself in building increased take rates and profit,” Tucker said.

The bundles include buying a bottled soda and getting money

Chip and Salty Snack Sales See Growth

off a bag of chips, buying chips and getting a bottled soda for a reduced amount, or purchasing a bag of chips and a bottled soda and getting a roller-grill item free.

“Bundling the chips with an item that the consumer would naturally pick up has paid off for us,” he said.

MASTERING THE BASICS

Increasing sales isn’t too complicated, Tucker noted. “These basics have not changed. Employ and train the best people. Have clean, wellorganized stores. Price products with the market. Offer a loyalty platform for your customers.”

Bob Phibbs, principal, Retail Doctor Consultancy, said mastering the basics fuels sales and what’s good for the salty snack aisle is good for all other aisles: intelligent store layout. One of the most basic changes that can jumpstart salty snack sales is improved lighting. “Inside the store, you can enhance any merchandise’s visibility and store ambiance with better lighting,” Phibbs said, noting LED lights can reduce electricity costs while highlighting the salty snacks.

In 2023, salty snack dollar sales increased 14% while potato chips grew 13.6%. Also, out of all the varieties, corn snacks saw the most dollar sales growth (up 20.2%).

Customers Seeking Value in Meat Snacks

High food costs are impacting meat snack sales and pushing c-store retailers to figure out new ways to lift the category in 2024.

Dried meat snacks totaled $2.15 billion in dollar sales, showing a 0.4% decrease, while its unit sales dropped 7%. Jerky dollar sales also dipped 1.8%, with unit sales falling 4.4%, for the 52 weeks ending Dec. 31, 2023, according to Chicago-based market research firm Circana.

High’s, which has 59 locations throughout Maryland, Delaware and Pennsylvania, has also noticed a decline in meat snack sales.

“We expect to continue seeing the meat snack category decline. I think we will see a unit decline of approximately 15-20% in 2024,” said Mike Jackson, category manager for High’s. “I think we are going to have to see manufacturers come up with some new smaller sizes of jerky in order to keep even current sales.”

Randy Adams, category manager for Carmi, Ill.-based Huck’s, with over 125 locations in five states, said he thinks meat snack dollar sales will be flat while unit sales will likely decline 5-10% in 2024.

SNACKING ON A BUDGET

Since the price of meat snacks has increased, consumers are rethinking the way they shop for meat snacks at convenience stores.

“I believe we are going to see a shift from larger packages to smaller packages due to the increased costs and retail of meat snacks,” said Jackson. “The larger packages are just getting too expensive, and with consumers tightening their belts, I think they will move to lower-priced items and perhaps even shift to the meat stick category for their protein snacking needs.”

These price increases are even leading some consumers to look outside of the grocery aisle for alternative options. Almost seven in 10 food and beverage executives (86%) expect increased competition from fast food and quick-service restaurants, per Deloitte’s “2024 Consumer Products Outlook.”

“I think consumers still want quality and variety, but due to price hikes, they are looking for lower-priced alternatives now,” said Adams.

Nonetheless, even though consumers are trying to save money when

Meat Snack Unit Sales Drop

purchasing these snacks, they still want them to taste as good.

“Consumers want a good product but do not want to break the bank when purchasing them,” noted Jackson. “They do not want to sacrifice quality; they want something good for their hard-earned money, but they want less of it.”

To hopefully improve meat snack sales, retailers should consider adding more alternatives to provide customers with meat snacks they like but for a price they can afford.

“We’ll continue to offer value through our loyalty program, and we’ll look for ways to cut retails when possible,” said Adams.

Seeds and Nuts Succeed With Heat

Heat is trending with seeds and nuts, and c-stores that showcase this flavor profile are likely to give the category a boon this year.

Cameron Baer, center store category manager for The Rutter’s Cos., and Mike Jones, category manager for S&S Petroleum, have both recognized the popularity of this flavor in their stores.

“It’s all about flavor. We are seeing huge trends in heat when it comes to salty/savory,” said Jones.

S&S Petroleum operates 90 locations in Washington, Oregon, Idaho and California.

Baer agreed, noting that he predicts spicy and hot flavors to continue to trend into 2024.

At Rutter’s, with 85 stores in Pennsylvania, Maryland and West Virginia, innovative items are bringing new flavors to the set, such as Dill Pickle and Jalapeño Lime.

Overall, seeds and nuts are performing well in the c-store space in terms of dollar sales, showing a 5.2% increase, per Chicago-based market research firm Circana. Likely, the 9.4% jump in price per unit has helped to offset the 3.8% shrink in unit sales, even as it contributes to the unit

sales decrease.

Despite unit sales dipping nationally, Rutter’s and S&S Petroleum are both seeing different results.

“Nuts and seeds continue to be on an upward trend in our stores. 2023 finished very strong, and we continue to see strong increases in both units and dollars,” said Baer.

He expects the category to have another big year this year, especially since the chain has promotions planned to draw even more attention to the segment.

Seeds and nuts are also up at S&S Petroleum, noted Jones, as is the rest of the salty snack category.

Over the following year, Jones

Price Increases Sway Seeds and Nuts

expects seeds and nuts to have more flavor extensions and cross branding like it has done with Taco Bell, Takis and Frank’s, for example.

DRAWING CUSTOMERS IN

Seeds and nuts, like many c-store items, could benefit from strategic marketing and promotions in 2024.

At S&S Petroleum, for instance, seeds and nuts are typically impulse buys and are purchased along with cold dispensed beverages or coldvault, non-alcoholic items like water bottles, carbonated soft drinks and energy drinks.

Males aged 15-35 are the target customers for the seed and nut category, Jones relayed.

Enticing this demographic with marketing geared toward them and offering promotions pairing seeds and nuts with any of these other items may tip the scales even further in a positive direction for the category.

At Rutter’s, where many times seed and nut customers are looking for these items specifically, Baer noted others are drawn to the category by favorable pricing and the familiarity of big brands, especially if they are unsure of which snack to choose.

Product and Package Innovation Fuel Sweet Snacks

The counterpart to salty snacks — sweet snacks and bars — is an essential c-store category driven in part by impulse purchases and innovation.

Dollar and unit sales of snack bars, granola bars and clusters have increased (13.3% for dollar sales and 0.6% for unit sales). Within the segment, nutritional/intrinsic health value bars have grown over breakfast/ snack bars and granola bars.

This shows that even within a typically indulgent category, some customers are still looking for healthy options, and nutritional bars are a popular avenue to take.

“Increasingly there is an emphasis on products that can find the balance between indulgence and health. Examples include plant-based products, gluten-free products, protein cookies and pastries, non-GMO products, zero-sugar cookies, etc.,” revealed John Benson, a partner in the restaurants, hospitality and leisure practice at AlixPartners.

Finding popular healthier options is not the only method c-stores should take in 2024, however.

According to Benson, those who choose to buy a sweet snack from a cstore are likely eating it within the hour.

To boost these impulse buys, showcasing products with bright and compelling packaging to draw the customer’s eye is an ideal strategy for retailers to take in 2024, as well as offering products with fun flavor combinations or new twists.

“In 2024, we expect there to continue to be efforts to differentiate packaged sweet snacks with c-stores focusing on premiumized, local and specialized brands and continued product and packaging innovation,” said Libby Angst, a senior vice president in the restaurants, hospitality and leisure practice at AlixPartners.

Natalie Goldsmith, category manager for Beck Suppliers, which operates 31 FriendShip Store locations in Ohio, noted the importance of packaging, as well.

“Items promoting different characters on their product will be attractive to kids and adults alike,” she said.

Additionally, Angst is increasingly seeing innovative packaging that

Snack Bars See Dollar Sales Gains

provides added functionality — for example stand-up pouches with a resealable top.

Impulse purchasing can also be achieved through product innovation, “but convenience stores can continue to win in the category by offering and promoting seasonal flavors and holiday items,” said Angst.

PROMOTIONAL OPPORTUNITIES

Benson recommended that c-store retailers combine value and impulse.

“Product bundling and promotions … and private-label products can be effective in driving category sales,” he said.

Goldsmith, too, believes promotions are necessary for success this year, and FriendShip Stores has already been running promotions on sweet snacks. “We run everyday promotions on our bars and do rotating two-month promotions on different sizes of other sweet snacks,” she said.

Due to this and the chain’s variety of sweet snack and bar options, sales have been up, and Goldsmith hopes the trend will continue.

Snack bars have increased in sales in 2023, with dollar sales jumping 13.3% to reach $929 million and unit sales bumping up a slight 0.6%. Although breakfast bars and granola bars decreased in unit sales, nutritional bars boosted sales by 4.8% and the all other snack bars segment saw a whopping 71.1% increase.

Chocolate Succeeds Despite Setbacks

Chocolate remains a popular pickme-up for customers, but recent price hikes have more customers looking for value, while new launches and a variety of options buoy impulse buys. Overall, category sales are expected to grow in 2024.

Chocolate candy dollar sales reached $3.67 billion, a 7.9% increase for the 52 weeks ending Dec. 31, 2023, per Circana. Out of all the chocolate segments, novelty chocolate candy saw the highest dollar sales increase (23.2%) for the period.

“My sources in the industry expect dollar sales for chocolate to grow between 2-4% this year,” said April Gelber, center store category manager for Cubby’s, which owns c-stores and supermarkets in Nebraska, Iowa and South Dakota. “Most recent (Circana) data also shows that in the Midwest specifically, chocolate accounts for a larger percentage of total candy, mints and gum sales as compared to the rest of the U.S.”

However, although chocolate sales

are rising, unit sales for the category are trending downward.

Chocolate unit sales dropped 3.8%, with sugar-free chocolate declining the most at 27.1% for the 52 weeks ending Dec. 31, 2023, per Circana. Price per unit increases likely contributed to the decline, with chocolate prices up 12.1% for the period.

“Chocolate candy has been hit hard with double-digit price increases leading to monthly volume losses over the last year. Over the last 52 weeks ending Jan. 28, 2024, pounds of chocolate posted a 4.5% decline,” said Dan Sadler, principal, client insights for Circana. “The price for chocolate heavily relies on the cost of cocoa, which is at an all-time high and is not expected to soften until later in 2024. This will likely lead to dollar growth, but pound sales will remain soft.”

CHOCOLATE TRENDS

But despite rising prices, the chocolate category at c-stores is expected

Chocolate Candy Sales See Mixed Results

Even

to see sales gains in the new year.

One trend driving chocolate sales is consumers wanting larger amounts of it for consumption.

Bags and boxes of chocolate that are greater than 3.50 ounces saw a 9.5% increase in dollar sales, according to Circana.

“Additionally, in our market and across the U.S., customers are trading up for the larger take-home packs at a higher rate vs. the instant consumable packs because of the perceived value in those larger pack sizes,” said Gelber.

Sadler even stated that more consumers are gravitating toward private-label chocolate items due to price increases.

Going forward in 2024, consumers will continue to base their chocolate cravings on price, value and trends.

“We are keeping our chocolate sets current with a balance of old favorites and fresh new items,” said Gelber. “You never want to not have a new item that is backed by loads of marketing.”

Customers Seek Novelty from Non-Chocolate Segment

Non-chocolate candy, gum and mints are expected to continue to see strong sales in 2024, powered by old favorites, novelty candy and seasonal items.

Non-chocolate candy saw dollar sales of $3.34 billion, up 13.4%, for the 52 weeks ending Dec. 31, 2023, per Circana. Unit volume dipped 3.1% to 1.41 billion. Novelty candy stood out with a 67.6% rise in dollar sales and a 32.6% rise in unit sales, despite a 26.4% price jump, which shows customers are gravitating toward fun, new and adventurous options.

Gum dollar sales hit $1.18 billion, up 20.5%. Unit volume rang in at 470 million, a gain of 6.5%, despite a 13.1% price-per-unit increase. Sugarless gum saw big gains, up 23% in dollar sales and 15.6% in unit sales.

HUNGRY FOR INNOVATION

“Sales on non-chocolate candy, gum and mints have been very

consistent year over year,” said Ryan Fasel, director of marketing for Valparaiso, Ind.-based Family Express, which operates more than 80 convenience stores. “It is basically flat in units and slightly up in revenue. There has not been a lot of innovation in terms of flavors compared to chocolate candy items. There has also been a shift from smaller to larger packages as consumers look to get more bang for their buck.”

Increased flavor innovation from manufacturers would help drive sales, Fasel suggested.

“Any time there is an influx of new flavors it draws interest to a category,” he said. “For gum and mints, purchasing is trending towards ‘bottle packs’ or ‘car cups,’ so focusing on proper merchandising and assortment of those package sizes helps grow revenue and profits.”

Nissan Koroghli, a 7-Eleven franchi-

Novelty Non-Chocolate Candy Takes the Lead

see in Las Vegas, agreed with Fasel about the category’s lack of innovation, but considers it a strength. Established, familiar brands like SweeTarts, Starburst, Mentos, Ice Breakers, Ice Breakers Sugar Free Mints, TicTacs, Polar Ice, Breath Savers, Mamba Fruit Chews and others continue to be his top sellers.

“We just redid our categories for the year, so this is what it will be for 2024,” Koroghli said.

Seasonal candy could offer some novelty and impulse buys for c-stores.

Lottie Watts, senior manager, media relations for the National Retail Federation (NRF), said NRF’s latest consumer survey found candy sales explode during the lead-up to Valentine’s Day. Total spending on significant others for the holiday expected to reach a record $14.2 billion this year. Within that total, candy remains the single most popular gift.

Flavors Trend in Dairy Products

At this time last year, dairy milk unit sales were falling, but plantbased milk appeared to be a bright spot for the category, offering large sales gains. Now, however, both plant-based and dairy milk sales are struggling at convenience stores.

Dairy milk dollar sales totaled $1.31 billion, a 6.9% decrease, while unit sales dropped 9.6% for the 52 weeks ending Dec. 31, 2023, per Circana.

Mike Jackson, category manager for Baltimore-based High’s, confirmed seeing a decrease in dairy dollar sales and expects the decline to continue through 2024. He anticipates an 8-10% drop in unit sales this year across the chain’s 59 stores.

When it comes to plant-based milk, oat and soy milk saw the largest decreases in dollar and unit sales for calendar year 2023. Oat milk dropped 21.2% in dollar sales and 23.1% in unit sales, while soy milk dollar sales decreased 40.7%, and unit sales fell 43.4% for the same period, according to Circana. That’s in sharp contrast to calendar year

2022 when oat milk was up 34.8% in unit sales.

“Customers are no longer looking for low-fat and better-for-you items in this category; they are looking for indulgence, which is why they shop at c-stores,” said Kevin Platt, senior category manager for Nouria, which operates 175 locations throughout Maine, New Hampshire, Massachusetts, Connecticut and Rhode Island. “Starbucks coffee milk products continue to drive the bulk of the sales in the coffee segment, but it is the same consumer looking at all options there, including Nesquik, Hershey products and even Yoo-Hoo, which is still a strong item.”

FLAVOR MATTERS

Even though flavored milk dropped 4.2% in dollar sales and 8.4% in unit sales for the 52 weeks ending Dec. 31, 2023, per Circana, retailers reported that consumers are still demanding these products.

“Consumers continue to look for a sweet indulgence item in the milk door, which includes flavored milk,

Plant-Based Milks Fall Behind

milkshakes and shelf-stable products with longer shelf life,” said Platt. “Eggnog saw a huge sales increase as consumers liked treating themselves to a sweet snack, and this was it.”

The flavor trend also extends to the ice cream segment, where flavor variety is spurring sales.

Based on Gopuff’s “INs and OUTs” report, ice cream was the No. 1 search term on Gopuff in 2023.

Ice cream and sherbet also experienced a 5.1% increase in dollar sales, per Circana.

“Ice cream is doing OK as it reverts to customers wanting indulgence when they shop at a c-store,” said Platt. “They mostly gravitate towards Ben & Jerry’s, as you can’t get any more indulgent than that.”

High’s is hopping on the flavor train by looking for additional single-serve flavored plant-based products to improve its current dairy offering.

“We are looking at expanding shelfstable products to help decrease waste while offering new options for our customers,” said Jackson.

Refrigerated (RFG) oat milk saw a sizable decrease in dollar sales (-21.2%) and unit sales (-23.1%), while soy milk experienced an even bigger fall, with dollar sales down 40.7% and unit sales dropping 43.4% for the 52 weeks ending Dec. 31.

Investing in HBA Diversity

The health and beauty aids (HBA) category offers something for everyone. Of course, there’s the convenience of picking up emergency pain relievers, first aid items or cold medicine. People also grab makeup products for last-minute touchups or buy haircare products on the way home after a busy day. That breadth of the HBA product selection enables convenience stores to meet an array of needs for a variety of customers. What’s more, it’s a category that can absorb a mix of new items and new promotional opportunities.

“I see changes every year. (When) a new item comes out, you must try to give it a chance, to have it in your store for three months,” said Faiz Simon, president of Island Lane Capital, which owns Simon Xpress in Warren, Mich., and 14 other sites under a different banner name. “The items I see growing are energy items as well as supplemental to alcohol or tobacco relief.”

“Dermatology-influenced skincare products, such as CeraVe, as well as

vitamins, supplements and haircare with Olaplex have driven the largest year-over-year growth at the Army & Air Force Exchange Service (AAFES). Aluminum-free natural deodorants and men’s grooming and personal care, such as Duke Cannon and Manscaped, were the top-performing brands in 2023,” said Kye Corn, division merchandise manager for AAFES. AAFES exclusively serves U.S. military personnel and their families on bases around the world.

Although Simon sees the potential that new products or diversifying selections offer, he noted space limitations dictate how varied a store’s HBA inventory can be. At AAFES, Corn takes advantage of generous shelf real estate. This year, he hopes to address the needs of the customers more holistically.

EXPANDING ASSORTMENT

“In 2024, the Exchange’s focus will be on embracing diversity and celebrating every individual’s unique

Demand Soars for Health and Beauty Aids

beauty and wellness. The strategy for 2024 is to expand the assortment on skincare supplements, men’s skincare, pro-age, mature skin, professional haircare and natural, clean products,” he said.

That’s not to say he’ll overlook the category’s staples, some of which registered notable bumps last year. Circana market analysis of c-stores confirmed vitamins remain a hot HBA product, with approximately 23% growth in both sales and units. Weight-control offerings posted double-digit gains, 36.6% in sales and 24.2% in units. Cosmetics were a big beauty mover for c-stores in 2023, especially eyeshadows, which boasted a jump of more than 274% in dollar sales and nearly 292% in units.

While HBA transactions may not add up to the levels of tobacco, fuel, beverages and snacks, the category does offer c-stores the opportunity to serve customers’ needs, not just impulse buys, and that reinforces the convenience factor with each purchase.

When it comes to health aids, weight control products saw a sizable uptick in dollar sales (36.6%) and unit sales (24.2%) in 2023. Meanwhile for beauty products, eye cosmetics experienced the largest increase in dollar sales (216.5%) and unit sales (165.8%).

Cigarette Sales Ring in at $53 Billion

For quite some time now, c-store retailers have been watching a downward trend in cigarette sales due in part to inflation, as well as customers shifting to other tobacco segments, including vape and smokeless, and in some cases tobacco-free or nicotinefree options.

Cigarette unit sales dropped by 6% during 2023, and the price per unit saw a 4.3% increase, according to Chicago-based market research firm Circana. Still, the category remains a $53 billion industry within convenience stores.

At Coen Markets, which operates 56 locations in Pennsylvania, Ohio and West Virginia, “cigarettes continue to be 50% of sales in some of our locations, which indicates that even though the category is declining, there is still a need for combustibles,” said Cindy Gross, tobacco category manager for Coen Markets.

And recent inflation has given way to growth in the fourth-tier segment.

David Spross, executive director of the National Association of Tobacco Outlets, has also noticed widening price gaps resulting in downtrading from premium to lower-priced brands at c-store chains overall.

Convenience store retailers looking to reel in more cigarette customers

Cigarettes Slow

may consider stocking a wider variety of fourth-tier brands this year.

This being said, at Coen, while baby boomers and Gen X are its top cigarette customers, younger generations “tend to go to the super premium brands” when they purchase cigarettes, noted Gross.

Another trend that is currently influencing the cigarette market involves rewards programs.

“Basically, (for) any retailer boasting a rewards program, manufacturers are allowing additional discounts/buydowns through a rewards program,” stated Lance Klatt, executive director of the Minnesota Service Station & Convenience Store Association.

Loyalty programs are a great way to tap into the cigarette market in 2024, as customers are more likely to purchase cigarettes if they feel they are getting a deal, especially since inflation has impacted the category so heavily.

REGULATION OUTLOOK

In December 2023, a final rule regarding a federal ban on menthol cigarettes was pushed until March 2024, which was still the case at the time of publication. Additionally, a proposed rule that would reduce nicotine levels in cigarettes is intended

for publication in April, noted Spross.

However, retailers may not have to worry about how this may affect their sales in 2024.

“Most of (these) proposed regulations would not take effect until at least 2025, so the immediate impact in 2024 would be minimal. …” said Spross. He added that once in effect, however, the regulations will have a substantial negative impact on regulated businesses, and supply will then shift to “an already flourishing illicit market.”

Therefore, although these are not immediate concerns, retailers would do well to follow along with updates and construct future tobacco backbar plans in preparation.

Cigarette dollar sales decreased by 2%, and unit sales dropped by 6%, while price per unit increased by 4.3%.

Cigars React to Market Conditions

Cigars are feeling the lingering heat of inflation. According to Circana, the price of large mass cigars in U.S. convenience stores last year rose by 5.5%, and the price tag of little cigars, such as cigarillos, also climbed by 5%. The cost of premium cigars was on par with a jump of 4.3%.

Prices, however, were basically the only statistics for cigars to go up in the 52 weeks ending Dec. 31, 2023. Circana reported unit sales in c-stores dropped for each subcategory, but little cigars fell by more than 18%. Dollar sales for little cigars also declined by 14.3%.

“The typical tobacco consumer is still being impacted by a reduction in disposable income and has become ever more attuned to obtaining their nicotine at the lowest possible price,” said Don Burke, senior vice president for Management Science Associates (MSA). “The growth in the disposable vape product category, particularly those offering value benefits, such as imported items offering thousands of puffs, are likely very enticing to the cash-strapped tobacco user that used to purchase from other tobacco categories.”

In addition to economic impact, Burke said weaker marketing support from manufacturers has had an effect.

“For the cigarillo category, this is a change from a few years ago when it was growing quite considerably. MSA has attributed this decline to a reduction in the amount of promotion (typically pre-priced packages) in the cigarillo category,” he explained.

REGULATION WATCH

Of course, cigars also have the impending flavor ban hanging over them. The Food and Drug Administration (FDA) is set to announce its decision on new rules this

Cigar Units Fall

month. Many in the c-store industry already expect a ban to have a substantial impact on the category’s profitability.

“If this plan would go into effect, it would drastically reduce the number of products we would be able to sell. The domestic cigar sets in our stores would probably need to be reduced by at least 50%, if not more,” said Jeremy Weiner, category director of cigars and premium products for Smoker Friendly. The Boulder, Colo.-based company also operates Payless Cigars & Pipes and Rocky Mountain Cigar Festival.

“Currently, I see most manufacturers focusing on cigars that do not contain flavors. In-store sales promotions and releases revolve around these types of products and have the names of Silver, Gold, Platinum, Diamond and Blue. I believe this is a plan to get consumers introduced early to the products in case flavored products are removed from the shelves in the future,” he added.

Cigar unit sales dropped by 3.9% over calendar year 2023, reaching 2.26 billion, but dollar sales ticked up 1.2%, helped by a 5.3% jump in price per unit. Little cigar sales fell the most, with a 14.3% decrease in dollar sales and 18.4% drop in unit sales.

Sizing Up Smokeless

Smokeless continues to shine in the tobacco category, outpacing other segments in dollar sales growth and unit sales increases.

Nearly two-thirds of the 67,000 retailers, including convenience stores, responding to the Goldman Sachs 2023 Q4 “Nicotine Nuggets” survey noticed an uptick in promotional efforts from nicotine pouch manufacturers late last year.

That marketing investment plus a recent history of double-digit sales gains has the industry optimistic for the smokeless category. In fact, respondents expect an estimated 12% growth this year, with the authors noting many businesses plan to commit more of their backbars to pouches.

Sean Bumgarner, vice president for Scrivener Oil Co., already has made extra room for ZYN and On! in all 12 Signal Food Store sites located in Missouri. He is prepared to make additional shifts if necessary.

“There will continue to be new flavors, brands and packages that we will have to incorporate into our space somehow,” he said.

The entire smokeless segment posted impressive numbers last

year. According to Circana data from the U.S. convenience store channel, smokeless cashed in on nearly $10 billion for the 52 weeks ending Dec. 31, 2023. Snuff and chewing tobacco, however, lost ground in both dollar and unit sales, while spitless and chewing tobacco alternatives pushed up the segment. Spitless registered a 53.2% increase in dollar sales and 40% in unit sales. Alternatives grew in dollar sales by more than 35% and boosted unit sales by more than 24%.

Goldman Sachs, using NielsenIQ data from all retail channels, showed ZYN remains No. 1 among pouches by earning $1.8 billion last year. The brand enjoyed a 66% year-overyear gain in dollar sales for the 52 weeks ending Jan. 27. Copenhagen chewing tobacco holds top-earning

Spitless Rules Smokeless Segment

Smokeless

honors for producer Altria Group Inc., but On! pouches surpass it in sales gains: 95.6% for dollar sales and 49% in units. Rogue also had a good year with an increase of 46% in units for the same time period.

ON THE REGULATION FRONT

Of course, lawmakers have expressed interest in passing additional regulations on nicotine products, which could dampen the success pouches and other modern nicotine items are currently experiencing.

“So far the legislation is limited to just vapor products, but we see an uptick in attention paid to nicotine pouches,” said Alex Clark, CEO, Consumer Advocates for Smoke-free Alternatives Association. “The popularity of ZYN among adult consumers and celebrities, for example, seems to have caught the eye of New York’s Senator Schumer. In reality, use of nicotine pouches (or white pouches) is extremely low among youth. If anything, the low popularity of white pouches among young people pokes holes in assertions that ‘flavors are a driver of youth experimentation and use of nicotine products.’”

Vape Fights for Footing

The regulatory saga for vape and e-cigarettes just keeps rolling along, leaving convenience stores waiting to operate under clear, concise and consistent rules once and for all.

The Food and Drug Administration (FDA) has approved fewer than 25 tobacco-flavored e-cigarettes and vaping devices for legal retail sales. By the end of 2023, FDA still hadn’t issued decisions on major brands, including JUUL and some Vuse and Alto products. However, by the end of January, the FDA confirmed that it has issued more than 440 letters warning brick-and-mortar stores along with online retailers to pull unauthorized products, including Esco Bars. The agency also levied civil money penalties to nearly 90 businesses, per a statement on its website. What’s more, it has ramped up enforcement activities on imports. Late last year, the AP reported that the FDA seized multiple shipments of unauthorized e-cigarettes.

“NACS has urged the FDA to provide needed clarity around the premarket tobacco application process by publishing a list of which vapor products can legally be on the market and which should be removed.

Only when retailers have that list and know what they are authorized to sell should FDA begin enforcement of cracking down on illicit vapes,” proclaimed Anna Ready Blom, director of government relations for the National Association of Convenience Stores (NACS).

BATTLING HEADWINDS

On the backbar, retailers still feel the effects from flavor bans and the limited FDA approvals. Vaping products earned $7.09 billion for the 52 weeks ending Dec. 31, 2023, according to Circana Total U.S. Convenience data. However, unit sales were depressed by 8.7%. An 11.6% price

Price Increases Boost Vape Sales

hike helped dollar sales post a 1.8% growth. Interestingly, vaping accessories enjoyed a positive year, with dollar sales jumping 19% and units gaining 10.9%.

“The category experienced some headwinds in 2023, but we were able to manage through them and outperform our trading area,” said Adam Long, senior category manager for Rutter’s, which owns and operates 85 sites in three states.

Long added that regulations also have dampened product innovation.

“There are particularly high barriers to entry in the category. As such, we don’t expect to see much innovation from non-established market participants. We do expect to see new offerings from established players, but that will be dependent on how they navigate the regulatory process for new products,” he stated.

All that said, Long will keep a watchful eye on the segment, including gauging how nicotine customers may alternate between products, including vape and smokeless.

“We’ll continue to look at tweaking our merchandising strategy in 2024 to maximize return on space,” concluded Long.

Electronic smoking devices saw an 8.2% drop in unit sales during 2023, but an 11.3% jump in price per unit pushed dollar sales in a positive 2.1% direction. Vaping accessory sales remained strong at a 10.9% increase in unit sales and 7.3% bump in price per unit leading to a large 19% uptick in dollar sales.

Rolling With a Changing Environment

There is an interesting dynamic affecting the roll-your-own (RYO) tobacco segment for convenience stores. On the one hand, the smoking population continues to shrink, so the customer base that likes to roll their own cigarettes, which is already a niche group, keeps dwindling, too. At the same time, an expanding market for legalized cannabis offers convenience stores access to new RYO customers who are not interested in tobacco.

Another influential development is regulatory attention. While most of the tobacco category has been impacted by increasing restrictions, loose tobacco has been left out of that fray for the most part. In fact, over the past several years, flavored RYO papers offered smokers a chance to enjoy flavors other than tobacco or menthol while flavored nicotine products were pulled off backbars. Now, some local authorities have turned their attention toward the smallest tobacco segment.

“We have been battling a flavor ban within the city of Columbus, Ohio, that went into effect at the start of 2024. The flavored wraps and tubes

RYO Sales Dip

are included in this ban and are not permitted for sale. This has begun to impact the RYO category, (but it’s) too early to determine the overall effect,” said Nathan Arnold, director of marketing for Englefield Inc. The company operates 119 Duchess convenience stores and BP fuel sites throughout The Buckeye State and one store in West Virginia.

At least for the time being, Arnold does not plan on making significant changes to the impacted stores. Nor does he anticipate altering how he markets the segment.

“RYO is a category that has minimal space in our tobacco sets and stores. Due to it not being planogrammed into permanent tobacco space, the RYO items are at a disadvantage (and) we see the sales of this category to be minimal,” Arnold said.

SALES CONSIDERATIONS

Circana reported that, in U.S. convenience stores, RYO tobacco dropped in dollar sales by 3.4% for the 52 weeks ending Dec. 31, 2023, and unit sales fell by 6.6%. Although pipe tobacco brought in more than twice as much in total dollars, it

experienced even greater losses in year-over-year comparisons.

While RYO sales were down across the convenience store channel as a whole in 2023, the segment’s popularity can vary greatly based on location.

On the West Coast, Jon Manuyag, director of marketing for Beaverton, Ore.-based Plaid Pantry, intends to pump up the segment at the chain’s 107 stores after posting gains of 7% in dollar sales last year and 5% in units.

“With the price of cigarettes continuing to climb each year at a fast rate, consumers are looking for options to maximize their tobacco spend,” he noted. “For this year’s planning, I will be looking at additional options on RYO and papers to ensure our mix is enhanced.”

Variety Adds Promise to Tobacco Accessories

Globally speaking, the tobacco accessories market is poised for expansion, with a projected compound annual growth rate of 6.5% for the current decade, according to an analysis by Allied Market Research.

The projection accounts for large smoking populations worldwide, like Southeast Asia. Research recently published in JAMA, however, shows the American smoking public is contracting at an expedited pace: from 19.2% of adults aged 18-24 in 2011 to less than 5% in 2022. A smaller demographic buying cigarettes correlates to fewer people buying tobacco accessories in c-stores.

For decades, lighters dominated the category. Smokers often grabbed lighters as an add-on with cigarette purchases. But as cigarette sales have declined, and with it some of those impulse sales, other accessories, including those for vape, have arrived to help lift the category.

Still, lighters brought in $627 million

in 2023, outpacing other tobacco accessories, which hit $528 million for the 52 weeks ending Dec, 31, 2023, per Circana. Lighters lost ground in unit sales, with a falloff of 4.5%, but given a price bump of 3.3%, dollar sales only dipped by 1.3%.

“We have seen a slow decline in lighters for a number of years due in part to less people using combustibles, and theft has started to factor in,” said Bill Laraby, purchasing manager for Clifford Fuel Co., which operates 21 Cliff’s Local Market stores in New York. “This has led us to have to put them out of reach of the customers in these locations. That leads to less impulse sales as customers cannot easily see the latest designs.”

However, other tobacco accessories had a particularly strong year. Per Circana, vape accessories, which include pods, wires and batteries, jumped 19% in dollar sales and more than 10% in units. AO accessories for hookahs enjoyed a boost of more

Tobacco Accessories Prosper

Tobacco

accessories are the breakout segment of the category,

than 56% in dollar sales in 2023, and cigar accessories climbed nearly 20%.

PAPERS & CONES

When it comes to papers and cones, location can influence demand.

At John Archer’s Shell Food Mart in Hinsdale, Ill., roll-your-own papers and cones were big movers not that long ago, but he has noticed a shift recently.

“Those seem to be slowing down, and we have way more than we need,” said Archer.

Meanwhile, Laraby is seeing the opposite trend. He noted papers and cones are a bright spot in his stores.

“Cones are up 28% in units and dollar sales. This increase, I believe, is due to New York state legalizing marijuana and opening up dispensaries,” he said. “I think we are capturing a different clientele than those who utilize the cigarillos and blunts for that purpose. Due to this we are including a couple more cones to this year’s planograms.”

CBD Awaits Clear Regulations

Almost immediately after the 2018 Farm Bill was enacted, legalizing retail sales of cannabis-derived products, there was a deluge of cannabidiol (CBD) products. Today, CBD-curious consumers have plenty of options, as do c-stores looking to add the category.

In fact, IBIS World stated CBD manufacturing in the U.S. grew an annual average of more than 27% for each of the past five years. That said, CBD production remains unregulated.

“Retailers face an ambiguous legal landscape where they are left to decipher product quality and safety without clear federal guidelines in place,” said Jonathan Miller, general counsel for U.S. Hemp Roundtable, a coalition of companies and organizations representing the hemp industry.

That uncertainty could be one reason for mixed results in the c-store channel last year. The biggest winner,

per Circana, was CBD canned juices with a gain of more than 250% in dollar sales and more than 323% in units for the 52 weeks ending Dec. 31, 2023. Pet medicines and electronic smoking devices shined as well.

AWAITING A REGULATORY FRAMEWORK

However, proposed federal legislation could help define the category. The Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2023 (HR 1629) includes language that would grant the Food and Drug Administration (FDA) oversight.

“The FDA has dragged its feet in properly regulating CBD and hempderived products on the market, creating confusion about its legal uses. Americans need better guidance. I introduced this bill to provide certainty for hemp farmers so that

Canned Juices Shine in CBD

their crop may find legal uses, specifically in dietary supplements,” said U.S. Representative Morgan Griffith, the bill’s sponsor.

“The National Cannabis Industry Association (NCIA) supports HR 1629 and feels it’s a critical bill that would empower the FDA to regulate hempderived CBD as a dietary supplement. CBD products have become increasingly popular in recent years, offering a range of potential health benefits and therapeutic uses. However, the lack of clear regulation has created confusion and uncertainty in the market, leaving consumers vulnerable to unsafe products and hindering the growth of the industry,” said Michelle Rutter Friberg, director of government relations for NCIA.

“With a regulatory framework in place from the FDA, we expect consumer confidence to increase,” added Miller.

Total CBD sales at c-stores saw a 13.7% unit sales decline for the past year, with only a slight 2.6% dollar sales increase, but certain categories stand out, including canned juices, pet medicine and electronic smoking devices.

PRODUCT Showcase

Blue Raspberry LemonadeFlavored Energy Drink

Brioche Buns for Retailers

Gonnella Baking Co. has introduced its new brioche buns for c-store and retail foodservice. The new brioche buns deliver soft, rich, buttery flavor and texture of authentic brioche bread. The brioche is versatile for all dayparts throughout breakfast, lunch, snacking and dinner occasions. Gonnella uniquely developed the soft brioche to maintain quality standards and support everything from chicken sandwiches to juicy burgers and even the sauciest barbecue sandwiches. The new brioche buns are pre-sliced and available in slider and four-inch split-top buns.

Gonnella Baking Co. www.gonnella.com

CELSIUS has launched its new Fizz-Free Blue Razz Lemonade. This drink is a uniquely refreshing combination of delicately sweet blue raspberry notes with a crisp, zesty, citrus finish. Refreshing and flavorful, juicy, fruity and tangy lemon with the right amount of Blue Razz sweetness creates an exciting flavor to be enjoyed without all the bubbles. The new FizzFree Blue Razz Lemonade is now available nationwide.

CELSIUS

www.celsius.com

Multipurpose Lighter

Calico Brands has unveiled its new Scripto Aim n’ Flame MAX Lighter. Featuring the largest fuel supply of any disposable utility lighter, a one-step EZ light ignition and adjustable flame, the Scripto Aim n’ Flame MAX stands out as an exceptional new multipurpose lighter, and for good reason. The Scripto Aim n’ Flame MAX also comes in Turbo Flame, flexible and extra-large models. Along with its new features, the MAX family of lighters comes in new trend-setting barrel colors and eye-catching new packaging to accelerate consumer sales.

Calico Brands

www.calicobrands.com

Chocolate MilkFilled Candy Bar

Hershey has introduced its new Milklicious Bars. Made with creamy chocolate milk filling in fun cow shapes, Hershey’s Milklicious is now in standard bar packaging. This candy bar gives consumers more on-thego snacking options. These bars are a fun, shareable treat loved by kids and parents.

The Hershey Co. www.thehersheycompany.com

How to Meet or Exceed Customers’ Food Expectations

Follow these six tips to ensure you’re satisfying customers’ wishes with your menu offerings and the overall foodservice experience your stores provide.

Bruce Reinstein • Kinetic12 Consulting

When it comes to foodservice, what is the consumer looking for?

The answer is not a simple one. It will vary from market to market and location to location. Regardless of the market or location, consumer expectations have dramatically increased mainly due to cost inflation in all aspects of their lives.

Where c-store foodservice used to be about convenience alone with limited expectations, it is now about convenience with “over the top” expectations. This involves quality of product, great service, excellent value and an environment that is clean, easy to navigate and has clear differentiation from others.

Here are six strategies for meeting or exceeding customers’ foodservice expectations in 2024.

1.) Consistent execution: Keep it simple. Regardless of what consumers are purchasing, they want it the same way every time. Customers are well educated and know when portions and quality have been reduced. They no longer have patience for labor shortages or other excuses. Operators must keep their menu simple with as few steps as possible for their staff. Taking the potential for problems out of the equation will ultimately lead to guest satisfaction.

2.) Well-trained staff focused on the guest experience: A great team starts with great leadership. It is very apparent to customers when team

members are enjoying their time at work. Management must provide a solid team engagement platform to allow team members to voice their thoughts on all aspects of what can drive an outstanding, consistent guest experience. Engagement areas include menu options and standards, packaging, technology integration and loyalty. There must be a clear focus on training with incentives for employees to gain training on multiple stations.

Employees want a quality work-life balance. A happy team member will perform at a higher level, and the guests will reap the benefits.

3.) Technology integration: There are many technology options, but some come at a significant cost. The best choice is one that enhances the customer experience. If you can make it easier for customers, it becomes that much easier for the staff to execute the orders. Improved online ordering, mobile apps and digital/touchless payment options can have a positive impact on guests. It can also potentially raise the average check by putting orders in the hands of the consumers.

4.) Continuous menu innovation: Adapt to trends. Today’s consumers want new options. It’s true people are creatures of habit, but habits are changeable. Differentiation continues to be a crucial factor in what drives consumers into a foodservice

operation. Quality, consistent products remain the top desire of customers. Consumers are also more educated about food and beverages. They expect to see their favorites available, but also exciting, new options.

5.) Provide great value: Understand your customers. Value is defined in many ways. It is not just about the price. A c-store foodservice operator must understand their customers’ preferences, needs and expectations to decide the type of menu, service levels and environment they will have. Value may be defined by the least expensive price alone, but many consumers look for a balance between price and value. It may be about portion size, quality, how the product holds up from purchase to home, ability to consume the product while traveling, time it takes to get the product after ordering, ability to customize and so much more. Customers will pay different prices for that perceived value.

6.) Consumer engagement: Be flexible and adaptive. Never assume you fully understand your customers. Loyalty is based on great execution, but also providing customers with a voice. They know what they want, and their feedback provides the operator with the ability to adapt.