The emergence of on-the-go food in Australian convenience is continuing apace as the channel responds to changing customer habits and expectations.
According to the most recent report from the Australasian Association of Convenience Stores (AACS), dollar growth in the category exceeded 12% for eight successive quarters, and that’s despite intensifying competition from quick service restaurants and online food delivery platforms such as UberEats.
IRI’s MarketEdge said the three key product segments – sandwiches, fresh cakes, and hot pastries – collectively accounted for over 85% of on the go food dollar sales, and all sustained an upward growth trajectory.
Hot pastries enjoyed 10.3% unit growth and dollar growth of 8.1%, indicating a bright future for that segment but there is still work to be done.
AACS chief executive officer, Jeff Rogut said: “The category’s performance is ongoing evidence that the petrol and convenience industry has successfully adapted and focused on providing a stronger on-the-go food offer and food services”.
“To have continued credibility as a sought after food ‘destination,’ petrol and convenience operators must invest in the quality, variety, health and freshness of the offer,” Mr Rogut said.
According to Convenience Measures Australia, pastries represent one in four of total food-on-the-go basket penetration, and the pastry shopper averages 19% more in basket value versus the average shopper.
The segment then represents a significant opportunity for convenience store operators. The AACS State of the Industry Report said that on-the go food’s continued growth momentum is a story of retailer investment as supply chains bring ‘new news’, making it a key destination mission outside of fuel.
Understanding the customer is critical. The convenience channel is a perfect fit with breakfast and snacking products as people commonly pop into a store to refuel first thing in the morning, or on their way home after a busy day. Convenience Measures Australia said pastry shoppers significantly over index to male shoppers, with 73% versus the average of 62%.
Market leaders such as Patties Foods which is responsible for the Four’N Twenty and Herbert Adams brands said its products cater to the needs of seven distinct shopper groups: tradies; office workers; students; caretakers; shift workers; sales reps/truck drivers; and millennials.
The company said the majority of its sales come between 6am and 10pm, with tradies commonly seeking to buy their breakfast pie or morning tea at convenience outlets.
For its part, Simplot Australia which sells the iconic, retro Chiko Roll as well as range of products in its Chiko snacking range said its typical consumer is aged over 30.
Simplot Australia Senior Product Manager Sharon Reid said: “They buy across all day parts, with key consumption times mid-morning, afternoon snacking and lunch times, consumed on the go or when on a break”.
“They love the unique flavour and taste and they buy because it’s ‘Aussie’, fun and nostalgic…Chiko Roll takes them back and reminds them of childhood,” Ms Reid said.
Balfours Bakery, which boasts such products as Balfours Square Pie and the Kransky Banger, says retailers need to understand their market to ensure whatever is on offer matches the tastes and requirements of their consumers.
Balfours Brand Manager James Askham-Levy said: “Brand trust, more than ever, plays an important role in the impulse purchase decision and ensuring brand recognition at store level enables retailers to ensure product appeals to their consumers”.
“While some stores are diversifying their in-store experience to include branded, stand-alone offers within store, some are putting more focus towards fresh savouries and sweets to cater for seasonal demand,” Mr Askham-Levy said.
Mrs Mac’s Pies is also well aware of a trend towards ‘fresh is best’, and says a better presentation for the category brings in more customers.
Mrs Mac’s head of fuel and convenience Daniel King said: “It creates trust that the items are fresh and also that each store is behind the category”.
“If you create a strong hot food zone in store, you should be able to stack them high and watch them fly,” Mr King said.
Mrs Mac’s said the secret to maximising the sales opportunity is to offer customers a full pie warmer, clear price architecture that drives value every day, and meal bundle deals and regular consumer promotions.
“It is very important to have enough stock on shelf, that you have a variety of SKU’s, and are able to provide a customer a price they can trust to be value all day every day on core products,” said Mr King. “By doing this you will create a category that is attractive to core users, but also become more attractive to light users, therefore increasing basket size and customer foot traffic.”
Simplot Australia agreed that having well merchandised product, hot and ready to grab and go is only going to increase revenue and profit.
“Consumers buy with their eyes, therefore presentation and merchandising of the hot food display is critical to driving both sales and repeat purchase during key peak selling periods throughout the day,” said Ms Reid.
Of course, when dealing with food items staff training is critical and stores should always comply with the appropriate food and handling regulations. Hot food displays should be filled and checked frequently to ensure food is served at its peak, optimising product quality and appeal for the consumer.
“Cross selling and upselling at the point of purchase are great ways to lift sales,” said Ms Reid. “Stores should be looking at opportunities to pair the iconic hot Chiko Roll and a core selling beverage during key day parts.”
Patties Foods says that ensuring constant availability of products is another vital element in maximising the sales opportunity.
Patties general manager out of home Matt Dodson said: “No one wants to buy the last lonely pie…having fully stocked shelves increases sales”.
“A lot of consumers aren’t aware that the pies are baked in the stores and they sometimes think products have been sitting there for days when it’s only been there for hours at the most,” Mr Dodson said.
The development of new products is also very important in creating excitement around the category.
Patties said it has moved towards a more bakery-style kind of gourmet pie range that’s hand finished and made in small batches with chef-inspired recipes. It has also recognised a growing demand for more premium products, which is why it has relaunched its Herbert Adams Chef’s Collection range.
“Consumers are expecting a more elevated offer within petrol and convenience when it comes to food,” said Mr Dodson. “Ultimately though, we’re talking about comfort food here …even when people are eating healthily or changing their habits, they always still want comfort food.”
While innovation is important, so too is stocking the established best sellers that customers expect to be able to find and enjoy at their local convenience store.
The Chiko Roll fits perfectly into this category. Simplot Australia said what while customers associate Chiko with good times and their childhood, the range is also satisfying, filling and easy to eat…it’s the perfect ‘on-the-go, no mess, one-handed eat’.
This sense of being ‘easy to eat’ on the go is particularly important for sales of pies and pastries in the convenience channel. Patties Foods’ number one selling product is the Four’N Twenty King Size Sausage Roll.
“It is successful because not only because of its great Australian taste, but the format is also quite convenient for eating on the go,” said Mr Dodson. “In line with on-the-go eating, our second highest selling product is our Four’N Twenty Traveller Pie…it has a unique shape designed for convenient consumption, and it only requires one hand to eat.”
Mr King from Mrs Mac’s said snack size offers are an emerging category showing strong growth and ‘one-hand-eat’ products such as its Cruizer pies and sausage rolls are doing very well.
“However, the trusted products continue to work within fuel and convenience,” said Mr King. “The famous beef pie, the beef, cheese and bacon pie and the giant sausage roll are strong performers and continue to sell.”
Mrs Mac’s has also recently sought to broaden the profile of products in the hot pastry category and to bring in new users by launching products such as the Louisiana chicken pie and Mac‘N Cheese & Bacon.
Balfours Bakery says its iconic square pie – which was first introduced in South Australia 1958 – is another product which offers busy convenience customers the perfect ease-of –eating experience.
“A high quality product with puff pastry enables a cleaner and more easily managed ‘dining’ experience in-car,” said Mr Askham-Levy.
“We do recognise that while sales are strong through our convenience partners, most consumers will purchase product in multiples which enables them to either share their purchases with colleagues or save savoury products for a later period of the day.”
Balfours says that there are some other distinct trends within the category that are worth keeping an eye on. It says there may be more organic and natural flavour innovations in fresh savouries, and that there will continue to be greater flavour diversity with more exotic flavours being introduced. The company, which has recently introduced a vegetarian spiced pumpkin savoury roll, believes non-meat options will also increasingly feature in the pie warmer.
“There is plenty of growth opportunity in vegetarian options and uniquely vegan options both in South Australia and nationwide,” said Mr Askham-Levy. “Over 10% of Australia’s classify themselves as vegan and many more flexitarians who often decline meat for days or weeks at a time.”
It’s a trend that Patties Foods has also noticed.
“Some 25% of the Australian population is trying to reduce the amount of meat in their diet,” said Mr Dodson. “We’ve seen a big rise of vegetarian products and in response to this trend we’ve launched a Herbert Adams vegetable korma roll and a Herbert Adams Moroccan vegetable and chickpea pie, which we think will be hits.”
While traditional pies, pasties and pastries have long been a staple of the Australian convenience scene, the category has shown itself willing to keep innovating to accommodate growing international palates and dietary needs. Forward-thinking convenience operators who see the way on-the-go food category is evolving are increasingly seeking to ensure their stores evolve with it and those that do are reaping the rewards.