Theo Foukkare, CEO of the Australian Association of Convenience Stores (AACS), has highlighted that a strong Foodservice offering is of crucial importance to convenience retailers, with the channel adding $142 million in value growth over the last 12 months.
According to the AACS State of the Industry Report 2023, the Foodservice channel saw a strong performance with total sales of $1.34 billion, up 12 per cent on the year prior, and marking six straight years of double-digit growth.
At the recent AACS Industry Awards 2023, the winner of the Food-on-the-Go category was Patties Food Group, which is a leading player within the P&C channel with its Four’N Twenty range.
Anand Surujpal, Chief Marketing and Growth Officer at Patties Food Group said P&C plays a key role in the Four’N Twenty broad distribution network.
“Our product range has something for everyone, from commuters needing a quick snack to travellers on a long road trip to anyone needing a mid-afternoon pick-me-up. P&C plays a vital role in helping us service our on-the-go customers,” he said.
“We constantly work with our P&C partners to connect with our customers, ensure we keep up with changing customer needs, and remain the on-the-go hot snack food of choice for Australians.”
Within the increasingly competitive convenience sector, Four’N Twenty is the market leader for hot, on-the-go, savoury options and outperforms its competitors across the channel. In fact, according to Circana data, Patties Food Group and Four’N Twenty manufacture six of the top seven selling SKUs in the hot, on-the-go, savoury category in P&C, with the classic Four’N Twenty King Size Sausage Roll 180g being the number one SKU*.
“We largely owe our success to our close working relationship with our retail partners, our development of innovative new flavours the public loves, and our use of engaging consumer promotions to drive sales,” says Surunjpal.
Michael Brick, General Manager at Meris Food Equipment, said the hot food on-the-go offer is a significant opportunity for P&C retailers, with sustained strong growth expected to continue for years to come.
“Sales of food-to-go continues to increase, it has been trending up for the last few years and continues to climb. In general, consumers are spending more on eating out of home, ready to eat foods. Factors of time poor, changing behaviours, more access, and options, changing demographics are all leading to increased spend on food. We are seeing the same impacts in P&C, with increasing sales in this category,” he said.
“We are also seeing more competition, so customers’ expectations and demands continue to increase with things like freshness, range etc. For us in P&C, we need to continually strive to provide increasingly good offers to keep up with these expectations.”
For almost 30 years, Meris Food Equipment has been helping retailers to power up their hot food offering and fuel business profits.
“We are fully aware of the demands and limitations business owners in the P&C sector experience. This is why we offer the most sophisticated food equipment that does all the work for you without the need for cooking skills or a commercial kitchen – just a countertop, power socket and a person to activate it,” said Brick.
“The P&C industry typically are wanting to maximise the exposure to food-to-go sales, but installing traditional kitchens and other impactful measures could challenge their existing business and infrastructure, so the ‘cooking outside of the kitchen’ solution is Meris Food Equipment’s ‘bread and butter’.”
Make your Hot Box Great
Kevin Azzopardi, Business Manager at UCB Stores, says that food is the shining light within the P&C channel with continued year-on-year growth. He highlights that fried foods have always been a staple within the channel, and as such, UCB Stores has launched a ‘Make your Hot Box Great Again’ campaign, to help lift quality and awareness across their network of stores.
“We want to bring focus back onto the Hot Box, improving awareness, display, and quality of product,” says Azzopardi.
“Fresh does not necessarily mean just healthy or salad. It’s more about good value and quality, presented and enjoyed like it has just been cooked. Snacking remains a strong food mission driver, so having delightful, hot snacks such as Wing Dings, Dim Sims and Potato Cake/Scallops is a mission solver and margin builder,” he explains.
Like in every retail environment, everyone’s disposable dollar is more important than ever. Shoppers are happy to spend but are demanding more in quality and value, so Azzopardi offers the following advice on how P&C retailers can improve their food strategy.
“Food is a hard category to win, it takes a lot of time, effort, and energy. We need to remove the mindset that food is just one more contributor to the bottom line, and instead treat it as its own profit centre,” he says. “We need to think that we are now café owners, and the food we sell is all we have to feed to our family.”
His advice is to keep your offer simple and uncomplicated, with high quality and fresh products tailored to your customer demographic.
“Give your customers the best food experience they can have, in a way that is operationally sensible for you. Look at your food display from your customers’ eyes and don’t be afraid to sample some of your food. Always ask yourself, if you wouldn’t eat it, what make you think anyone else would?”
Always innovating
Four’N Twenty might already be the market leader in hot, on-the-go snacks in the P&C channel, but there are still plenty of opportunities for growth and innovation.
“Last year, we released the Four’N Twenty Traveller Hi-Protein pie in response to the ‘better for you’ products desired by convenience sector customers. This protein-packed pie boasts a four-health-star rating and delivers 25 per cent more protein than the traditional Four’N Twenty Traveller Meat Pie. It has proven extremely popular with the more health-conscious customers still looking for a delicious snack in the P&C channel,” says Surunjpal.
In terms of scaling presence within the P&C channel, Patties says that the most important thing a brand can is to ensure its designated shelves are fully stocked with products that customers want at the time they want them.
“For Four’N Twenty, we work with retailers to ensure our pie warmers are continuously filled, and no shelf is left bare. We want customers to feel confident that they can walk in-store and consistently pick up the product they want.
“A major challenge across the industry is the cost-of-living pressure. Customers will increasingly be turning to the products they know and the brands, and retailers, they trust for affordable snack and meal options. We strive to ensure our products remain the same delicious, quality our customers expect at a price point that doesn’t break the bank.”
Brick agrees that the rising cost-of-living is having an impact on consumer behaviour, so he offers this advice to retailers.
“Food costs continue to increase, so the cost of food waste continues to be a concern for operators, better ways to manage this is important, without reducing what is on display because this will reduce your sales. Better display cases with proven technology for increasing shelf life, better packaging solutions, looking at how food is heated and cooked to increase shelf life, choice of food types themselves that lend to longer shelf life all will help build sales without compromising the offer to customers.
“Very often we think that expanded hot food is meeting customer demand for meals, but there will still be a large percentage of sales that are impulse generated. So, positioning the hot food next to the point of sale will go a long way to entice customers into purchasing a cheeky dim sim or chicken strip as a snack between meals.
“And finally, stack them high – a full hot food display goes a long way to building sales through setting increasing customer perception of the freshness and their confidence in your food. Manage your times, food types, planograms to minimise waste, but never compromise on the food on display.”
According to AACS’ Foukkare, providing a strong food and beverage offering needs to be front and centre of the minds of all P&C retailers.
“Convenience stores have been heavily focused on developing their food and beverage offers, providing a broader range of options beyond traditional snacks,” he says. “We are blessed in Australia with some exceptional retailers that continue to push the boundaries and deliver on their customers’ expectations.”
*Data sourced from Circana MarketEdge MAT 25/02/2024 based on data definitions provided by Patties Food Group.
This article was originally published in the April/May issue of Convenience & Impulse Retailing magazine.
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