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Gourmet Food and Drink Popping Up In Unexpected Retail Locales

By Jazmine Woodberry

Gourmet companies are broadening the retail locations at which their products are sold, moving from specialty retailer shelves to the shelves of convenience and drug stores. And consumers, retailers and specialty food purveyors themselves are moving fast to adapt to this changing gourmet marketplace.

Nearly one in four people today say they shop in convenience stores more or as frequently as they do grocery stores. Meanwhile, drug stores also boast a $230 billion revenue profile, bolstered by food and drink sales in-store. This is partly driven by the consumer push for more convenient shopping options. Shoppers may still flock to grocery stories when they are looking to discover new items. However, when looking to retrieve everyday staples, the convenience and drug store channels offer some distinct advantages.

Further broadening the appeal of convenience and drug stores to consumers shopping for everyday staples is the growing selection of private label products offered within this channel. “The convenience stores are a contingent. The drug stores are a contingent. All of them represent different aspects of the same solution,” said Private Label Association President Brian Sharoff.

According to research group IRI, 80 percent of shoppers see private label brands as equivalent to or better than the goliath brands on the shelves. This is true when it comes to both the contents on the inside and the way they are packaged on the outside. Thus, by offering more private label goods, convenience and drug stores are able to gain a greater share of those shoppers not committed to name brand labels.

According to Sharoff, the key to being a successful retailer is to set yourself apart from the competition with your own private label offerings. “How can I maximize profits if I’m a retailer? The answer is to have your own brands,” Sharoff said. “[This is] the thing that binds them all together and the product [that] will eventually be sold under that retailer’s own brand name. Whether that’s an upscale product that will be bought [at] Trader Joes or a downscale product that will be bought [at] 7-Eleven, it’s all about getting your own brand out there.”

It is not just the growth in private label options that is driving more and more consumers to convenience and drug stores today, however. As these stores offer an increasingly high end food and beverage selection, they are able to compete with grocery stores even when it comes to things like fresh and prepared foods.

Walgreens has been successfully running UpMarkets since January 2012, combining the usual drug store experience with higher end food options. Walgreens UpMarkets feature the chain’s private label brands Delish and Nice!, as well as freshly prepared in-house items ranging from pre-made Italian dinners to sushi options, green juices and smoothies.

According to Joe Magnacca, President of Daily Living Products and Solutions for Walgreens, these options are making the companies’ stores “the first choice for health and daily living throughout neighborhoods nationwide.” Magnacca added, “Our fresh food offerings provide customers with easier access to a greater selection of fresh foods and beverages.”

7-Eleven is another company working hard to carve itself a place in the gourmet and private label marketplace, offering an increasingly high end selection of healthy snacks. “Better-for-you is one of the fastest-growing segments of the snacking category,” said Rebecca Frechette, Vice President of Merchandising for 7-Eleven. “People are snacking throughout the day, and they’re looking for ways to improve what they eat without sacrificing taste.”

7-Eleven’s premium snack section features both the company’s own private label snacks such as trail mixes and veggie chips priced from $2.49 to $3.99, as well as high-quality, name-brand snacks more commonly found in gourmet and organic grocery stores, selling from $1.49 to $4.99.

One gourmet snack brand consumers are likely to find on the shelves of their local 7-Eleven is Sahale Snacks, maker snack and nut mixes, including Honey Almond, Pomegranate Pistachio, Maple Pecan and Cashew with Vanilla. Sahale Snacks’ Vice President of Marketing Erika Cottrell said that carving out a place in several different arenas helps the brand stay constant in both the marketplace and the minds and hands of consumers. The partnership with 7-Eleven was perfect timing, said Cottrell.

“This trend, of consumers seeking out good-for-you options and looking for them at quick-purchase locations, continues to grow and shows no sign of slowing down. It definitely helps Sahale Snacks as a brand to be available at the locations our customers visit most frequently,” Cottrell said. “People are going to convenience and drug stores more and more to make many of their home and pantry-filling snack purchases. It’s important for our brand and to our customers that they can find Sahale Snacks where those decisions are being made. When people want to snack, why shouldn’t they have great tasting, better-for-you options no matter where they shop?”

The team at Sahale sees great growth potential in convenience and drug stores. The company has not limited itself to marketing its products at 7-Eleven convenience stores alone. Sahale Snacks are now sold at QuickCheck, Wawa, Sunoco, Maverik, Plaid Pantry, Tedeschi, Hess and Royal Farms stores as well.

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