The clock is ticking with HFSS Legislation due to be implemented in just one year from now. Wholesalers will be very aware that volume promotions such as multibuys on food and drinks high in fat, salt or sugar (HFSS) in retailers will be restricted from October 2022. Larger managed convenience stores will also be limited as to where HFSS products can be located in store, preventing display of these products around the checkout, the store entrance and on end-aisles.
Our own TWC Trends’ data highlights the generally poor perception of convenience stores when it comes to health. 38% of consumers currently think that “C-Stores sell mostly unhealthy products” and certainly many stores are still heavily reliant on traditional impulse categories. Around half of the nation has heard of the forthcoming HFSS legislation, with Millennials slightly more likely to be aware, at 55%.
Interestingly, 61% of us approve of the idea of legislation that restricts purchasing of high fat, sugar and salt foods – only 16% put their head above the parapet to say they think it’s a bad idea. The same study tells us that more than half of consumers want convenience stores to give more space to healthy products, suggesting demand is there.
What makes a retailer stock a new product? Fundamentally it comes down to margin – how much money will it deliver back to the retailer? He or she also needs to be convinced that it will sell well, hence evidence of consumer demand and predicted rate of sale will encourage retailers to list lines. TV advertising is of course a bonus to drive demand and ultimately sales!
So, if C-stores can improve their offer in healthy products, they could be looking at a very exciting future. Nearly half of us think that the legislation will result in us buying fewer HFSS products and that of course, means opportunity and growth for those retailers that back the healthy trend.
But let’s back up a bit. For convenience stores to deliver on this demand for more healthy products, wholesale channel engagement is fundamental. It’s therefore been great to hear about the Bestway Good Food Project from Kenton Burchell at this week’s FWD Conference, which begins to prove the ‘art of the possible’ ahead of the HFSS legislation implementation.
Through incentivising and motivating retailers to stock healthier products – driven by the wholesaler – Bestway has proved that upsell, higher margins and growth can be delivered. This is an important point to prove given that many retailers remain unconvinced that they can make enough margin from selling healthier products compared to those affected by the HFSS restrictions.
The Good Food Project also shows us that there is a real opportunity for C-stores that are looking to innovate and that are open to changing their range to meet the healthier eating needs of their customers. 52% of consumers want convenience retailers to broaden their appeal and HFSS could well be the springboard for this change, building on the reformulation success seen for the Sugar Levy on soft drinks in 2018.
A recent study with 150 independent retailers revealed that the forthcoming legislation will encourage them to stock a wider range of healthier products in their store. And naturally the majority (75%) are looking for their main wholesaler to sell more healthy products.
There is certainly a tiger to be caught by its tail – will we see convenience stores reaching out? Well, that will rely on engagement across the whole supply chain.