While shop-’til-you-drop remains a favorite American pastime, many people today consider it a luxury or just don’t have time for it anymore. That’s because brick-and-mortar can’t consistently and comfortably compete with the flick of the finger and click on an app that’s defining the digital age. In fact, nearly as many consumers today would rather wash dishes — or so they say — than hop in their cars to browse in-store, according a recent global survey by the Capgemini Digital Transformation Institute.

Despite the developing digital divide, convenience stores continue to fill the gap that just cannot be done on-line, especially when it comes to consumers fueling their cars with gas and their bodies with grab-and-go snacks.

Granted, cigarettes, beer, lottery tickets and Big Gulps still account for the vast majority of inside c-store sales, but as the price of petro has fallen and the pack of smokes rises, an accelerating number of chains are seeking new ways to offset the slumping sales of their core revenue generators.

They’re doing that by further venturing into the breakfast, lunch and inter-meal snacking occasions with more enhanced alternatives for consumers.

“Food service options have been remarkable,” observed Bob Swanson, director of research for the National Association of Convenience Stores (NACS). “There has been a concerted effort to increase the quality of food offered at convenience stores, and the reason for that effort is quite clear. Foods and beverages are high-margin products for some of the top-performing chains. Gas sales declined; cigarette sales slipped because of regulations and high taxes. C-stores are looking at other categories for growth, particularly in food service.”

Today, bakers and snack producers cite c-store chains such as Cumberland Farms, WaWa and Sheetz, Inc. in the mid-Atlantic and QuikTrip in the Midwest as setting the standard when it comes to offering freshly prepared food or more upscale options made on-premise.


The movement includes premium coffee service that can rival Dunkin’ Donuts and Starbucks or even McCafes. The kiosk or station often includes microwaveable — or to a lesser extent, freshly prepared — breakfast and luncheon sandwiches, chicken and pizza that attempt to rival quick-service restaurants (Q.S.R.s) and even some of the more upscale soup and sub sandwich shops.

“We partner with some pretty large c-store operators, and they specifically target Q.S.R.s when working on their store layouts and what they have to offer so that they can provide a newer, higher level of service,” noted Jerry Law, senior vice-president, J&J Snack Foods, Pennsauken, N.J.

Just about a decade ago, the only “fresh” offerings were hot dogs and Mexican taquitos perpetually turning on the roller grills next to the cash register.

“Today, you have restaurant-style products that you can sit down and enjoy,” noted Jack Anderson, president and chief executive officer, JSB Industries, the Chelsea, Mass.-based producer of muffins, bagels and other baked goods and a longtime supplier to the c-store industry. “We’re seeing products trending toward popular items such as a quick sandwich or a bagel and cream cheese.”

The number of top-line c-store chains that are committed to selling fresh products is “eye-opening,” according to Mr. Law. In addition to the daily delivery of baked goods from wholesale bakers or commissaries, some chains serve breakfast donuts and pastries from behind a display case or even prepare made-to-order sandwiches via an in-store deli.

“When you think about the offerings behind the counter, they now include soup and sandwiches that are fresh,” Mr. Law pointed out. “They’re trying to have their offerings perceived as more wholesome. Traditional stand-alone sandwich shops should be shaking in their boots by what some c-stores are offering.”

That said, the majority of c-stores haven’t made the leap to the fresh food concept, but it’s gradually changing. Many in the top quartile of chains are now making inroads toward competing against Q.S.R.s for that share of stomach. As a result, it may not be too surprising that food service sales in convenience stores rose 11.4% in 2015, according to the latest industry data by NACS.

“Channel lines are blurring,” Mr. Swanson said. “Everybody is trying to offer convenient foods. People want a quick-in-and-out, and c-stores provide a pretty fast option.”

Fueling a phenomenon

The proliferation of snacking from three squares to five, six or seven mini-meals daily continues to turbo-drive food sales at c-stores. One of the food industry’s longtime leading providers of take-away treats and convenience foods, J&J has been supplying c-stores with warm soft pretzels, churros, funnel cakes, pastries, cookies, frozen iced novelties and much more for decades.

What has impressed Mr. Law, however, is the steady growth of c-stores, especially as the economy and workforce expands, resulting in a greater number of commuters stopping by to gas up and grab a bite to eat on their way to work.

“It’s all about traffic, over and over again. Traffic, traffic, traffic,” Mr. Law emphasized. “We have seen 44% of consumers are visiting c-stores more often than they were two years ago, and we’re seeing that convert into the consumption of more prepared food as c-stores become more of a food service destination.”

Two years ago, Hill Country Bakery, an established supplier to cafes and a host of food service establishments, plunged into the c-store market with its Coffee House Cafe brand that includes its signature sliced pound cake and other pre-portioned loaf cakes. Distributed through D.S.D. partners and frozen warehouse distributors, those top-selling items are supplemented by single-serve coffee cakes, muffins and Danishes, specifically a cinnamon roll that it introduced last year.

“This channel is turning out to be everything we thought it would be,” said Steve O’Donnell, managing partner for the San Antonio bakery. “We’re targeting a very specific niche for people who want coffeehouse-style products in a c-store format. Our products pair very well with coffee, and that’s what we’ve being doing since the outset of our company, hence, we came up with the name Coffee House Cafe. When someone buys our products, they’re buying a snack and their coffee to go.”

To help merchandise its products, Hill Country often provides free display racks to reinforce the branded partnership with the store. “The trend to higher quality products is definitely there. People who see our products get them right away and are onboard,” Mr. O’Donnell said. “At the same time, we’re even hearing from a lot of long-distance truck drivers who like our products a lot.”

Several bakers like Hill Country and JSB Industries, which also goes by the name of Muffintown, supplement their product portfolios with bulk frozen food service products that are slacked out at the c-store.

“The clerk bags them behind the counter just like you were at a Dunkin’ Donuts,” Mr. Anderson said.

For the breakfast eating occasion, J&J has responded by rolling out less savory stuffed pretzels in such morning-friendly flavors as salted caramel and sweet cream cheese, according to Mr. Law.

For lunch, J&J promotes its premium buns and rolls for deli and sandwich counters.

“We’ve always been there for the snacking occasion,” he said. “As far as jumping onto the protein trend, our pretzel rolls and pretzel buns help us make it behind the line, so to speak, with sandwich offerings in delis. As our roll capacity has expanded over the years, we’re targeting more c-stores and Q.S.R.s with hamburger rolls, hot dog rolls and other specialty products. We’re not a commodity provider of buns and rolls. We want to be an upscale provider that allows an operator to offer a more premium, not just a run-of-the-mill product.”

At the same time, JSB Industries has complemented its morning line of muffins and bagels with more savory options to branch beyond breakfast.



“Our Corn Bread caddy can be placed next to the soup section where consumers can take one to accompany their chili,” Mr. Anderson said. “Convenience stores are changing dramatically, and it’s just a question of staying ahead of the trends.”

For J&J, which operates frozen, par-baked and fully baked bakeries, the transformation of c-stores is not unlike what happened with in-store bakery/delis more than a decade ago. The need for labor-friendly but creative meal solutions provides a challenge for bakers venturing into this market.

“The customization piece has forced us to step up our R.&D.,” Mr. Law explained. “Our changes at our plants have been more on the culinary side. We have corporate chefs that we haven’t had in the past and R.&D. centers in all of our major plants. We found the turnaround time for new products has become shorter and shorter. Our customers want higher quality products that can be in production within six or eight weeks. The products’ menuing is so quick.”

The emphasis, he added, is on making sure the company’s manufacturing process is efficient and flexible.

“Operations usually want to run one product a day and run it well, but we’re finding our customers want something different every couple of weeks. It’s really a challenge for large manufacturers,” Mr. Law said. “We’re now seeing smaller players come in, and they can’t serve the larger chains, but the chains like their creativity so we’re trying to make ourselves into a bigger, smaller company.”