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Innovation Spurring a New Era in Convenience Store Foodservice

Joe Mellenbruch | May 7, 2024

Food | The Originate Initiative

Hormel Foods expanding presence in convenience-store industry as consumer demand for foodservice proficiency grows

The convenience-store industry and Hormel Foods have something in common.

The latter was founded in 1891 as an industry-leading meat packer. More than a century later, it has blossomed into a global branded food company with a wide-ranging, multi-category portfolio of products sold in more than 80 countries.

Convenience stores are similarly undergoing a decades-long transformation.

“There’s a quote, and I can’t quite remember who said it, but the sentiment was, 10 to 15 years ago we had gas stations selling food,” said Eric Steinbach, director of marketing for the Foodservice division at Hormel Foods. “Now, it’s morphing into restaurants selling gas.”

…10 to 15 years ago we had gas stations selling food, now, it’s morphing into restaurants selling gas.

Eric Steinbach, director of marketing for the Foodservice division at Hormel Foods

That evolving reality is ever-more visible today, as convenience store are optimizing their foodservice portfolios. Exciting and at-times exclusive products are now offered on shelves. Hot-and-ready, sometimes even made-to-order snacks and entrees are prepared on site. Once considered optional or even a luxury in the convenience-store industry, maintaining a viable foodservice operation is now an imperative for long-term success.

“In 2022, for the first time, prepared foods were the No. 1 margin contributor and the No. 1 sales contributor in store within the convenience-store industry,” Steinbach said. “It is the most profitable, and it’s the largest volume based on sales dollars. So having a good portfolio of food offerings for consumers is incredibly important to those retailers.”

It’s how consumers are drawn into the store these days. Fifty years ago, when more than 40% of the adult population of the United States smoked cigarettes, the demand for tobacco products provided foundational revenue for convenience stores. Now, with tobacco-usage rates at record lows and pay-at-the-pump available at just about every fueling station in the country, it’s no guarantee that every visitor will venture inside. More than half don’t, in fact.

It’s a challenge, and foodservice is the solution, as traditional quick-stop establishments aspire to become foodie destinations.

Hormel Foods is built to aid convenience stores in this endeavor. A handful of the company’s brands have long been fixtures on convenience-store shelves, but the company’s presence in the convenience-store industry expanded dramatically following the acquisition of the Planters® and Corn Nuts® brands in 2021. Those acquisitions have since yielded several product innovations, all of which are currently available in convenience stores or will soon be, including a handful of enticing limited-time offerings (LTOs).

Hormel Foods also innovates to support convenience stores in their hot-and-ready food pursuits, starting, of course, with pizza toppings. Additionally, the invention of products like Hormel® Bacon 1™ Perfectly Cooked Bacon has been a revelation for convenience-store foodservice kitchens, providing a perfectly cooked product, ready in under 60 seconds; no pans, no mess, no worries.

Hormel<sup>®</sup> Bacon 1™ Perfectly Cooked Bacon sandwich

That’s what it’s all about: easily prepared products that deliver on taste. As convenience-store foodservice needs evolve, Hormel Foods and its team of experts prioritize innovation to keep pace with that evolution. Convenience stores are working to provide quick and satisfying food products to their consumers, and Hormel Foods is on a parallel path, dedicated to exceptional delivery and execution of those products.

“When convenience-store retailers think of Hormel Foods,” Steinbach said, “I want them to believe, with conviction, that our company is a reliable solution provider with a product portfolio that transcends the entire store format, from foodservice ingredients, salty snacks and indulgent snacks to refrigerated snacks and pantry items. We are leveraging our category leadership, thought leadership and commitment to innovation to forge indispensable relationships with our convenience-store partners.”

Flavor-Forward Approach

The insights team at Hormel Foods works year round to keep its collective finger on the pulse of what’s happening in the consumer marketplace. In assembling its 2024 market trends forecast — which provides structure to a wide-ranging plethora of consumer motives and behaviors — it was obvious that large numbers of consumers pursue enticing edible experiences while shopping for food. A plurality of consumers, particularly Gen-Z consumers, regularly desire these experiences, with 60% of them indicating a moderate and/or strong need for new food experiences.

Simply put, consumers are looking for new flavors, new ideas. As Hormel Foods innovates to meet this demand, convenience stores have become the perfect place to test out new concepts.

“When consumers are headed to work, running errands or on road trips, convenience stores are a quick and hassle-free way to fuel their day,” Steinbach said. “Food within convenience stores often serves as entertainment while driving, and can act as a reward for a hard-fought day. Consumers are constantly looking for new flavors, new forms, exciting new things. And the great thing about that is there’s low risk for the consumer to try new things because the pack sizes are so small, and so they’re willing to be a little more adventurous when it comes to new products.”

Two of the newest retail products to emerge from the Hormel Foods innovation pipeline — Planters® Flavored Cashews and Skippy® P.B. Bites, respectively available in enticing flavors like Dill Pickle and Girl Scout Cookie® — are now widely offered in smaller portions on convenience-store shelves, allowing for heightened grab-and-go availability of products already drawing broad consumer interest in grocery retailers.

A man enjoying some Skippy<sup>®</sup> P.B. Bites Girl Scout Cookie<sup>®</sup> in his car

The Hormel Foods team behind the Corn Nuts® brand just added Loaded Taco Flavor corn kernels to its full-time flavor lineup earlier this year, encouraging consumers to sample a familiar and beloved flavor in a new and exciting way. The brand’s Mango Habanero flavor arrived in summer 2023 as an exclusive LTO in select convenience-store retailers. The Corn Nuts® brand team plans to lean into this LTO approach, Steinbach said, using it as a means to test new flavors and provide unique value for the stores stocking them. That strategy will continue with another flavor iteration in summer 2024.

“The emphasis on flavor and having those exciting new products available for consumers are revolutionizing the convenience-store channel,” Steinbach said. “It’s becoming more important in terms of a differentiator for convenience stores, and as a company that emphasizes innovation like we do, Hormel Foods is well positioned to expand our presence in convenience stores as we continuously introduce new flavors and new products to the market.”

Hot and Ready

“Gas station food” is no longer a pejorative term.

Consumers are demanding fresh and healthy food options, and convenience stores in recent years have become a reliable source of those options. Convenience-store entrées are no longer exclusively found on roller grills and in warming stations, but rather prepared fresh the same day or perhaps made to order. Convenience stores are becoming destinations, with the notion of a quick lunch from the corner shop no longer a lackluster idea, but rather an appetizing proposition.

That is good for consumers, and good for business.

“When you talk to some of the major players in the convenience-store industry,” Steinbach said, “they view their competitive set as the QSR (the quick-service restaurant) and the major fast-food chains. Convenience stores are really tailoring their offerings to be much more upscale, competing directly with fast food, and even at times going a notch or two beyond that.”

Convenience stores are stepping up their game, and reliable foodservice products allow the stores themselves to innovate within their own menus. Certain retailers in the recent past have utilized the Austin Blues® brand to begin offering chopped beef brisket tacos and sandwiches to its consumers, an upscale option worthy of any traditional barbeque joint.

Austin Blues<sup>®</sup> chopped beef brisket tacos

Hormel® Bacon 1™ Perfectly Cooked Bacon, perhaps the most impactful product innovation from Hormel Foods in the last 10 years, has also been a gamechanger for convenience-store foodservice operators. The product delivers a high-quality, fully cooked bacon option that is truly indistinguishable from bacon cooked from raw. With a single innovation, the world of bacon was suddenly at the fingertips of convenience-store operations inclined to include bacon in its selection of food offerings. Hormel Foods even created a Hormel® Bacon 1™ Half Slice iteration specifically for convenience-store applications such as breakfast sandwiches. Products like these are particularly helpful to convenience-store kitchens, many of which are not fully equipped to regularly grapple with the common pain points of raw protein preparation, particularly with bacon.

And then there’s pizza. One of consumers’ favorite quick meals, pizza brings the potential for notoriety and acclaim among convenience stores, as certain retailers can attest. Establishments like these aren’t just fueling stations and sellers of convenient grocery items; they’re places that consumers seek out on family pizza nights. A leader in the pizza industry, Hormel Foods takes pride in supporting these businesses, continuously innovating its product line to provide new and exciting options — like Hormel® Ribbon Pepperoni and Fontanini® Cup & Char Sausage — to make convenience-store pizza options more intriguing for consumers considering a stroll inside.

A man picking a pizza out of a cooler in a c-store

At the end of the day, that’s the goal.

“Convenience stores are taking a much more food-forward approach, and I believe that will lead to more upscale offerings to attract new consumers,” said Taylor Birkenstock, the Hormel Foods national chain account manager for the Convenience channel. “Not only does Hormel Foods have an attractive array of foodservice product options, but we also have a direct salesforce that partners with convenience-store customers, which assists stores in identification and ideation of menu trends and flavors.”

Whether it’s an eye-popping selection of innovative snacks on retail shelves, the facilitation of freshly made entrée options with industry-leading foodservice products, or the availability of expert culinary consultation, Hormel Foods is there to support convenience stores as the demand for foodservice proficiency grows.

“It’s an exciting category with all kinds of potential for growth,” Birkenstock said. “Hormel Foods is a trusted name that convenience stores can count on to optimize their foodservice selections and set themselves up for long-term success.”