I'm not sure I've ever heard the phrase "functional foods and beverages" before, but they were the centerpiece of a recent press release from convenience-retail king 7-Eleven (NYSE:SE). It seems "functional" food and drink is enhanced with positive things like antioxidants, amino acids, and the usual duo of vitamins and minerals.
7-Eleven believes there's money to be made here, so it's releasing its "Formula 7" line of energy bars and beverages. It's apparently banking on the idea that consumers still want to at least try to eat healthier snacks, even though fads like the Atkins diet have recently run into trouble. (For a rundown of that particular nosedive, see this commentary by Alyce Lomax.)
This is all a bit ironic to me. I know convenience stores can offer healthy fare, but I've always associated them more with candy bars, tortilla chips, and high-calorie sodas. I wouldn't think of going to 7-Eleven for my daily dose of vitamin B.
That's just my limited perception, since I don't much go to convenience stores any more (sorry, 7-Eleven). The company believes that there are plenty of consumers on the lookout for quick fixes of energized healthy energy. Even though convenience stores don't exclusively cater to people in transit, it did occur to me that these products would appeal to busy patrons concerned about their lapsed eating habits during the week. I would imagine that 7-Eleven had the same idea.
Does the new "Formula 7" line have a healthy chance of success? Well, 7-Eleven is definitely good at keeping same-store sales busy by marketing appealing products. Take the SpongeBob Slurpee, for instance; as Timothy M. Otte pointed out, it aided the company's first-quarter results.
Some believe that 7-Eleven might be currently overvalued, so waiting for lower prices on the shares would be a convenient way -- pun intended, with apologies -- to ensure some upside potential. Nevertheless, 7-Eleven is an interesting company that has been doing well with comps and earnings, and it's worth further consideration on the part of the individual investor.
More convenient tales on 7-Eleven:
7-Eleven is just one of David Gardner's many picks for his market-trouncing Motley Fool Stock Advisor portfolio. To see all of his other selections, sign up today for a free 30-day trial subscription.
Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy
