ADVISORY BLOG—
Health in C-Stores
From Subject Matter Expert, Donna Hood Crecca, Senior Principal
Can better-for-you foodservice be better for business in the convenience channel? Convenience stores have long been the go-to locations for indulgent foodservice fare, ranging from decadent doughnuts to indulgent frozen beverages. As consumers embraced healthful eating patterns in prior years, many c-store operators incorporated better-for-you items into their offerings, only to experience lackluster sales and high waste. Today’s c-store consumers are bringing their more current approaches to wellness to c-stores, driving an elevated expectation of healthy offerings. Meanwhile, rising GLP-1 usage is a new and evolving market dynamic. Is better-for-you foodservice a viable growth opportunity in c-stores, or will convenience operators and their supplier partners be burned again?
The Healthful Eating Conundrum
Today’s consumer is embracing healthful eating that is less about denial and more about nourishment. More than half confirm they actively seek out nutritious foods that are good for them (53%), and nearly half report frequently looking at nutritional information when ordering or purchasing prepared foods and beverages (45%).* Consumers who frequent convenience stores for foodservice align with this trend, with 52% confirming increased interest in healthy eating in the past year**, and a growing share expect healthy foodservice items to be available at c-stores (See Exhibit 1). Convenience retailers recognize this evolving demand, with three-quarters now agreeing better-for-you foodservice offerings increase their ability to compete with other c-stores and quick-service restaurants (74%). Nearly seven in 10 are increasing healthy prepared beverages (69%), and three-quarters are expanding prepared food selections (74%) to meet consumer expectations.***
The Healthful Eating Conundrum
However, many of these convenience operators are enhancing healthful offerings with a sense of trepidation due to prior experiences. C-store operators jumping in on varied health trends over the years often found themselves tossing unsold green salads and dealing with slow sales of handhelds featuring meat substitutes. In addition to low demand, retailers have historically struggled with higher costs of health-forward items and ingredients, as well as how to effectively price these items to the consumer. These challenges remain top of mind for today’s retailers, along with lingering concern about low demand (See Exhibit 2).
Evolving Occasions
Satisfying today’s consumer demand for better-for-you while ensuring sales velocity and profitability requires that convenience operators and their supplier partners understand key dynamics of healthful eating occasions in the convenience channel.
C-store consumer approaches to eating healthy shift throughout the day. Breakfast is now prime time, with 44% likely to choose more healthful items to start their morning, up 16 points from 2022. Bookending the day, dinner ranks second, with 37% confirming tendency to opt for better-for-you options for the evening meal. Meanwhile, more consumers are looking for indulgent items at lunch, 22%, up 4 points from 2022, while afternoon snack sees lowest tendency to seek healthy options, likely as consumer look to treat themselves.**
Expectations vary by format. Consumers see the cold grab-and-go case and made-to-order station as most likely to offer better-for-you options, and perception of the cold case as a source of healthful items is up 5 percentage points from 2022.**
Consumers seek specificity in health attributes. Technomic data surfaces a disconnect between consumer and operator perspectives on healthy attributes in convenience foodservice items (See Exhibit 3). Low sugar and high protein are top of mind for consumers, while operators are leaning in on more general attributes, such as organic and all-natural. This data suggests c-store operators are lagging consumer priorities in healthful eating.
Cost is a barrier to better-for-you purchases. Consumers recognize healthy foods and beverages often carry higher prices. More than half of consumers say healthful prepared foods and beverages are worth the extra money (53%), however, that metric is down 4 points from 2022. Meanwhile, the share indicating they don’t buy better-for-you foodservice items increased 8 points to 40%.** In the current environment, consumer price sensitivity may hinder engagement with better-for-you offerings in the c-store channel.
An Increasing Imperative
Despite cost concerns, two-thirds of c-store foodservice consumers agree that they’re more likely to visit a c-store if they know healthy foodservice options are available (63%), indicating opportunity to win more occasions. What’s more, three in 10 enter the store actively looking for these offerings, and that intentionality is likely to grow due to two new factors.
More high-income consumers are visiting convenience stores for foodservice. The share of consumers with household income upwards of $100,000 visiting for foodservice once a month or more often rose 4 percentage points since 2022, and those in the $50,000-$99,000 range also increased 4 points. Meanwhile, consumers with household income of $50,000 or below contracted by 8 points.**** Higher earners are more likely to enter the store actively looking for better-for-you prepared food and beverages.**
Increasing GLP-1 usage will accelerate demand. It is estimated that nearly 20% of the adult population is currently using or recently used GLP-1 medications for chronic health conditions and/or weight management. As the insurance and regulatory environment shifts and availability of these medications at mass merchants, including Costco and Sam’s Club, increase access and affordability, usage is expected to rise rapidly. GLP-1 users are more likely to enter a convenience store actively looking for better-for-you prepared food and beverages.**
Finding Balance
Consumers may be eager to see more healthful foodservice offerings at c-stores, but that’s not necessarily to the exclusion of indulgent items. In fact, cravings and better-for-you are two need states consumers are increasingly looking to satisfy in c-stores. In fact, the healthy need state is growing among younger consumers, indicating it will accelerate (See Exhibit 4).
Additional research finds nearly half of consumers expect healthy and indulgent items to be equally available at c-stores(48%), and three in 10 want to see both but expect the selection to lean toward indulgent (31%).**
Strategies for Success
For c-store foodservice pros and their supplier partners, the imperative to again venture into better-for-you food and beverages is clear. Ensuring the offerings satisfy consumer and business goals requires a strategic approach.
- Get credit for existing better-for-you features. Assess offerings to identify healthful attributes that are top of mind for consumers and can be called out across menus, marketing and packaging.
- Showcase value in healthful items by highlighting taste and flavor, as well as other attributes, such as portion and brand. Consumers will not sacrifice taste and flavor for health.
- Take a “stealth health” approach. Boost nutritional value in subtle ways, such as ingredient substitutions and item modifications that don’t alter the taste or enjoyment but enhance the better-for-you positioning, ideally with minimal operational impact. Immunity- boosting ingredients, such as turmeric added to a latte or using a beef/mushroom blended burger patty, can efficiently provide satisfying but health-forward options.
- Identify foodservice formats where better-for-you options will differentiate and drive traffic, sales and margin. For example, calling out protein content of roller grill and hot case items can heighten the consumer appeal of these formats and may enable premium pricing.
- Operators and suppliers should collaborate to develop limited-time offers incorporating healthful food and beverages to pique interest, showcase better-for-you availability and ensure price accessibility
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