7-Eleven’s Fresh Future

David Bennett
February 20, 2017
CSDecisions

AACS will visit 7-Eleven and other leading Convenience Stores as part of our 2017 Overseas Study Tour – watch for more details

The industry’s biggest player is expanding its selection of healthy and regional food offerings to meet shopper demand.

Many patrons quickly realize that this isn’t their father’s 7-Eleven as they enter into certain store locations in Florida.

Not unless their father prefers pandebono.

A Colombian cheese bread usually served for breakfast or a snack, pandebono is a cultural food offering that 7-Eleven has developed in some Florida regions. In other parts of the country, the c-store chain is tailoring food choices based on particular customer preferences: fresh fruit blends in southern California; gluten-free foods in New York; kolaches in parts of Texas.

Today, more 7-Eleven franchisees are being given the flexibility to broaden their product selections. It’s one more step in the convenience retailer’s effort to improve its core product quality as it relates to food platforms.

No U.S. c-store chains boast a legacy as steeped in expediency and innovation as 7-Eleven. The retail giant touts itself as the first c-store to advertise on television, provide fresh-brewed coffee in to-go cups, boast self-serve soda fountain drinks and offer roller grill food.

Over that time, however, the expansive chain has also earned a reputation for standardized store formats and stripped-down food options. The perception isn’t lost on 7-Eleven, which has been working the last few years to make it easier for patrons to grab a quick bite from balanced fresh-food offerings that are cost-efficient. These items are available in many stores, and include salads and sandwiches as well as snacks such as fresh cut fruit, veggie packs, boiled eggs and yogurt parfaits.

Anne Readhimer, 7-Eleven’s senior director of fresh food innovation in Irving, Texas, said the decisions behind such additions are based on consumer trends that have become prevalent in the U.S. marketplace that is punctuated by the growing presence and influence of grocery chains like Whole Foods and Wegmans that have whetted the nation’s appetite for fresher food options.

“What we are finding is that a lot of our consumers are becoming more demanding, more discerning,” Readhimer said. “They’re looking for higher quality items, freshness, differentiated products—not products you see everywhere else—as well as value. Value is very important. And we know within the 7-Eleven context, the products we offer need to be convenient as well as suitable for eating on the go.”

The company has engaged and responded to customers by adding new products and customizing stores via its “Retailer Initiative” program. As Millennials continue to influence snacking and dining tendencies, Readhimer said,the chain, which now operates about 8,900 7-Eleven stores in the U.S. and Canada, is responding in kind.

The FRONT LINES

Leveraging customer feedback, 7-Eleven set about distinguishing itself from most competing chains by jumping into the better-for-you (BFY) arena, devising new offerings including snacking and meal options. In 2015, the company launched its proprietary program with two premium lines—7-Select GO!Yum and 7-Select GO!Smart—part of its 7-Select brand.

7-Select GO!Smart was developed for consumers seeking BFY options while on the go and includes snacks such as gourmet light popcorn, sprouted tortilla chips in exotic flavors and yogurt bars. 7-Select GO!Smart products, which continue to add different offerings, are designed with nutritional balance as a priority, Readhimer said.

Currently, the 7-Select private brand lineup includes some 400 items cutting across all categories.

Other 7-Select GO!Smart options include breakfast sandwiches under 400 calories, including sausage biscuit and English muffin breakfast sandwiches and lunch varieties.

“One of our top-selling products is a turkey sandwich which has whole wheat bread with rolled oats in the crust, garlic, peppercorn turkey breast, with lettuce and tomatoes,” said Readhimer said. “So all the favors our customers are looking for along with all of the health benefits.”

Another healthy food group that continues to grow in popularity are salads, which include a high-selling Kale and Quinoa salad—part of the 7-Select GO!Smart line.

WHAT’S GOING ON

7-Eleven has been adapting its store layouts to accentuate its fresh food offerings, which is an ongoing process.

“At 7-Eleven, we’re growing our fresh food department to meet the changing needs of our customers and as we are seeing that higher demand as customers continue to crave these offerings, we’re going to expand the space needed to support those products,” Readhimer said.

“As we’re building and designing our new store layouts for the future, you’ll see the new builds will have more space and as we go back and retrofit other stores, you’ll also see that expansion in the fresh foods space allocated.”

Perhaps the biggest work ahead isn’t tied to more display space but the identity of the brand itself.

“Currently, I think one of the biggest challenges is just spreading the word to the consumer that 7-Eleven offers a wide variety of fresh food,” Readhimer said. “There’s still the perception that 7-Eleven only has Slurpees, Big Bites and taquitos.”

MORE FOOD OPTIONS

Through fresh innovations, competitive pricing, faster service and strong marketing, modern-day retailers are luring more U.S. consumers. 7-Eleven is using the same formula at its convenience stores to diversify its offerings well beyond Big Bite hot dogs.

7-Eleven recently launched a new program featuring a breakfast pizza loaded with smoked bacon, breakfast sausage, hickory-smoked ham, scrambled eggs, cheese and peppered cream gravy on top of a biscuit crust.

The retailer also teamed up with Jones Soda last year to launch a line of premium bottled soft drinks sold under its 7-Select private-brand label. The beverages are made with natural flavors and lightly sweetened with cane sugar.

Though the beverage imitative marks a new partnership for the c-store giant, it’s also reflective of the retailer’s plan to grab more market share through its private-brand offerings. Acting on the well-documented data that Millennials understand premium products come with a premium price, 7-Eleven is answering that bell, too.

The 7-Select GO!Yum and 7-Select GO!Smart products offer a host of BFY items or an indulgent assortment of savory and sweet snack foods such as premium ice cream.

FUTURE ENDEAVORS

In 2006, 50% of 7-Eleven locations were owned by franchisees, and today that number has jumped to 90%. Recently, this earned the company kudos as Entrepreneur magazine named 7-Eleven the No. 1 Franchise in the U.S.

The parent of the convenience retailer, Seven & I Holdings Co., Ltd—a Japanese diversified retail group headquartered in Tokyo—projects that the convenience chain will increase its U.S. store count to 10,000 by fiscal year 2019.

Just like it committed to roller grill technology in the past, the company is integrating modern platforms including its collaboration with Postmates, an on-demand logistics company that offers delivery from any participating store.

Readhimer said that as its fresh food initiative goes forward, food site delivery is a feasible vehicle to serve its customers.

7-ELEVEN At a Glance

• President and CEO: Joe DePinto

• 61,000 worldwide locations

• 8,900 total U.S. locations

• 7-Eleven expanded to Japan with Seven-Eleven Japan Co., which became the parent company in November 2005.

• The first 7-Eleven store in Vietnam is expected to open in Spring 2017, expanding the company’s operations to 18 countries.