Friday, April 11, 2008

C-Store Chain 7-Eleven Features its New, Premium Fresh Prepared Foods Line; Innovations Like Fresh Fruit Merchandising at Colorado Roadshow Event

Convenience store giant 7-Eleven is going upscale in the prepared foods category as we first reported in this March 30 piece about the C-store retailer's new, extensive line of higher-quality specialty and ethnic ready-to-eat and ready-to-heat prepared foods which it plans to start rolling out nationally, beginning next month in Florida.

The U.S. arm of international C-store chain 7-Eleven has taken its upscale, specialty and ethnic prepared foods line on the road, doing shows for company retailers in various parts of the country.

This week, the new higher-quality creations were on display for retailers at the annual "University of 7-Eleven" educational, marketing and food show event at the Colorado Convention Center in Denver.

At the event, 7-Eleven corporate brass also announced a new twist to the new, upscale prepared foods line. That twist is that the C-store retailer is "localizing" a number of the products to the various regions of the U.S., based on the respective region's ethnic and demographic characteristics.

For example, on Wednesday in Colorado, the 7-Eleven road show featured a number of premium-quality prepared foods items geared specifically for the Western USA's extensive and fast-growing Hispanic population. Among those items include: Carnitas pita sandwiches using a high-quality pita bread, premium beef and green chili burritos, and sugar-cinnamon twist pastries.

While the new 7-Eleven higher-quality prepared foods line isn't nearly on par with say the quality of prepared foods offerings a Whole Foods Market, Inc. store or other upscale grocer sells, the quality is pretty high and the price reasonable, especially compared to what the C-store chain currently sells, and basic mid-level supermarket and C-store prepared foods items in general.

As we wrote in our March 30 piece, 7-Eleven's new, better-quality prepared foods line, which is named Signature 7, includes premium specialty sandwiches, Asian and Hispanic ethnic foods, salads, fresh fruit parfaits, desserts, beverages and lots of other ready-to eat and ready-to-heat prepared foods items.

Raj Singh, a merchandising manager for 7-Eleven, told us the C-store chain wants to offer more premium-quality prepared foods, similar to what supermarkets offer, in order to give consumers an additional option in its stores. That's one of the main reasons the upscale Signature 7 line was created, he said.

The roadshow also featured a mock 7-Eleven store for retailers to view. Included in the mock store were new merchandising ideas featuring increased grocery products in the stores, including some specialty grocery items.

Additionally, 7-Eleven is encouraging its retailers to merchandise and sell fresh fruits in its stores as an additional offering. The mock store features merchandising ideas for the fresh produce, such as merchandising fresh fruit items in attractive baskets on the store end-aisles.

The giant C-store chain isn't moving away from its positioning as a quick--the average customer spends about 90 seconds in a 7-Eleven store, according to company research--convenient, limited assortment shopping venue. Rather, the chain is trying to enhance its product offerings in the fresh foods categories because it believes it's customers want more premium foods offerings, items like fresh fruits and some other options.

In other words, the Slurpees, hot dogs in the plastic cases rolling around on heated rollers, glazed doughnuts and the 99-cent frozen microwave heat-and eat burritos aren't going away anytime in the near future. Rather, the premium prepared foods items and other offerings like the fresh fruits are being added to this existing basic mix.

Additionally, 7-Eleven would like to extend its customers average shopping trip time so that they pick up a few more items--especially the higher-end prepared foods products--and as a result spend more money which will increase the stores' average ring or market basket purchase.

Officials of 7-Eleven told us at the Colorado road show that tests of the new, upscale or premium prepared foods line have been rather successful. They also said retailers who are selling more fresh items like fresh fruits in their stores are telling them they are seeing more repeat customers, as well as getting lots of positive customer comments for adding the more healthy produce offerings.

The key is adding a quality line of premium prepared foods that's still convenient and priced reasonably, said John Vaughan, a fresh foods manager for the chain. He added the food "has to portable and it has to be easy to eat" since "I'm not sure anybody sits down and eats three meals a day anymore."

We also asked a couple 7-Eleven executives at the Colorado roadshow about the "localization" strategy with the Signature 7 prepared foods line. They said the C-store chain realizes that tailoring as many of its offerings to regions and areas based on the unique demographics of that respective region is the future of food retailing, especially they said in 7-Eleven's case with its ready-to-eat and ready-to-heat prepared foods across the board.

The retailer has even come up with different types of sandwiches and other prepared foods items in the Hispanic category for Florida (where there are many Cuban American's and Puerto Rican's) and the Western U.S. (where most of the Hispanics are from Mexico or Central). America.) This is savvy of 7-Eleven because although there are similarities in the native cuisines of those three Latin countries, there also are numerous differences.

The 7-Eleven roadshow, which is showcasing the Signature 7 premium prepared foods line, as well as featuring the mock store with its new ideas like selling fresh produce in the convenience stores, is continuing its travels throughout the U.S. In less than a month, the new prepared foods items will start hitting 7-Eleven stores.

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