NACS Magazine January 2025

Advancing Convenience & Fuel Retailing

JANUARY 2025 THROUGH THE SMOKE The future of the backbar BUBBLE BLAST The latest on car washes

The flavors, technologies and consumer preferences to watch this year

convenience.org

Join store owners across the country who are fighting for fair tobacco policies.

Get Involved at TobaccoIssues.com

©2025

ONTENTS

38 NACS / JANUARY 2025

FEATURES

Seeing Through the Smoke Nicotine opportunities, regulations and innovations that industry leaders are watching.

28 On the Retailer Radar in 2025

From flavors to ways to use AI, these are some of the trends to watch.

48 Surge Your Suds Car wash operators are lathering up business by focusing on sustainability, service and subscriptions.

56 Breaking Down On the cover: xorosho/Getty Images. This page: Adobe Firefly

Food Safety Risks Convenience retailers share their knowledge on the top food safety risks to your company.

STAY CONNECTED WITH NACS @nacsonline facebook.com/nacsonline instragram.com/nacs_online

Subscribe to NACS Daily—an indispensable “quick read” of industry headlines and legislative and regulatory news, along with knowledge and resources from NACS, delivered to your inbox every weekday. Subscribe at www.convenience.org/NACSdaily.

linkedin.com/company/nacs NACS JANUARY 2025 1

ONTENTS NACS / JANUARY 2025

DEPARTMENTS 6

From the Editor

8

Faces of the Industry

12 NACS News 20 Convenience Cares 22 Inside Washington

The NACS In Store program connects lawmakers and convenience retailers

26 Ideas 2 Go

Oak Barrel Café underwent a complete transformation and found a new customer base.

64 Gas Station Gourmet 66 Category Close-Up 72 By the Numbers

IT’S A FACT

$16,978

OTP average sales per store, per month in 2023.

CATEGORY CLOSE-UP PAGE 66

PLEASE RECYCLE THIS MAGAZINE 2 JANUARY 2025 convenience.org

The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view.

/ JANUARY 2025 EDITORIAL

NACS BOARD OF DIRECTORS

Jeff Lenard V.P. Strategic Industry Initiatives (703) 518-4272 jlenard@convenience.org

CHAIR: Brian Hannasch, Alimentation Couche-Tard Inc.

Ben Nussbaum Editor-in-Chief (703) 518-4248 bnussbaum@convenience.org Leah Ash Editor/Writer lash@convenience.org Noelle Riddle Editor/Writer nriddle@conveneince.org Lauren Shanesy Editor/Writer lshanesy@convenience.org CONTRIBUTING WRITERS Sarah Hamaker, Al Hebert, Emma Tainter, Melissa Vonder Haar

GENERAL COUNSEL: Doug Kantor, NACS MEMBERS: Lisa Blalock, BP North America Inc.; Tom Brennan, Casey’s; Andrew Clyde, Murphy USA; Terry Gallagher, Gasamat Oil Corp/ Smoker Friendly; Raymond Huff, HJB Convenience Corp. dba Russell’s

NACS SUPPLIER BOARD

ADVERTISING

SUPPLIER BOARD CHAIR: Vito Maurici, McLane Co. Inc.

Jennifer Nichols Leidich National Advertising Manager/Northeast (703) 518-4276 jleidich@convenience.org Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 tasprooth@convenience.org

PUBLISHING Stephanie Sikorski Vice President, Marketing (703) 518-4231 ssikorski@convenience.org Nancy Pappas Marketing Director (703) 518-4290 npappas@convenience.org

Join us at conveniencecares.org

OFFICERS: Varish Goyal, Loop Neighborhood Markets; Lonnie McQuirter, 36 Lyn Refuel Station; Charles McIlvaine, Coen Markets Inc.; Tony Miller, Retail Delek US; Chris Bambury, Bambury Inc.; Missy Matthews, Childers Oil Co.

DESIGN MX www.themxgroup.com

Stacey Dodge Advertising Director/ Southeast (703) 518-4211 sdodge@convenience.org

COME TOGETHER. DO MORE.

TREASURER: Annie Gauthier, CFO/Co-CEO, St. Romain Oil Co. LLC

Logan Dion Digital Media and Ad Trafficker (703) 864-3600 ldion@convenience.org

CHAIR-ELECT: Bryan Morrow, Chobani & La Colombe VICE CHAIRS: Kevin LeMoyne, The Coca-Cola Company; Mike Gilroy, Mars Wrigley; Jim Hughes, GALLO MEMBERS: Tony Battaglia, Tropicana Brands; David Charles, Cash Depot; Brent Cotten, The Hershey Company; Jerry Cutler, InComm Payments; Jack Dickinson, Dover Corporation; Matt Domingo, Reynolds; Mark Falcone, Greenridge Naturals; Kevin Farley, Impact 21; Danielle Holloway, Altria Group Distribution Co.; Kevin Kraft, Tropicana Brands; Sarah Vilim,

Convenience; Mark Jordan, Refuel Operating Co.; Brian McCarthy, Blarney Castle Oil Co.; Natalie Morhous, RaceTrac Inc.; JP Patel, FASTIME; Robert Razowsky, Rmarts LLC; Stanley Reynolds, 7-Eleven Inc.; Kristin Seabrook, Pilot Travel Centers LLC; Travis Sheetz, Sheetz Inc.; Babir Sultan, Fav Trip; Doug Yawberry, Weigel’s Stores Inc., Scott Zietlow, Kwik Trip Inc. PAST CHAIRS: Victor Paterno, president and CEO of Philippine Seven Corp.; Don Rhoads, president and CEO of The Convenience Group LLC. SUPPLIER BOARD REPRESENTATIVES: Vito Maurici, McLane; Brian Morrow, Chobani & La Colombe

Keurig Dr Pepper; Jay Nelson, Excel Tire Gauge; Nick Paich, GSTV; Ramona Giderof, Diageo Beer; Ryan Calong, Pabst; Jordan Nicgorski, Juul Labs GENERAL COUNSEL: Doug Kantor, NACS STAFF LIAISON: Bob Hughes, NACS RETAIL BOARD REPRESENTATIVES: Tom Brennan, Casey’s; Scott Hartman, Rutter’s; Kevin Smartt, TXB PAST CHAIRS: David Charles, Cash Depot; Brent Cotton, The Hershey Company; Kevin Farley, Impact 21

NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscriptions are included in the dues paid by NACS member companies.

Subscriptions are also available to qualified recipients. The publisher reserves the right to limit the number of free subscriptions and to set related qualifications criteria.

Subscription requests: nacsmagazine@convenience.org POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2023 by the National Association of Convenience Stores.

Periodicals postage paid at Alexandria VA and additional mailing offices.

1600 Duke Street, Alexandria, VA 22314-2792

UP FRONT FROM THE EDITOR

Predictions for 2025

T

PREDICTION 2 The pendulum of what consumers are looking for will swing toward nostalgia, warmth, safety and old standbys. I thought it was noteworthy that, amid all the maximalist flavors at the 2024 NACS Show, a representative from PREDICTION 1 Hershey shared that vanilla is a trending flavor.

You’ll hear more about AI, future-proofing, value and toThis pendulum swing has obvious implications tal guest experience. AI is obvious. Lauren Shanesy writes in terms of foodservice and what merchandise about it in this issue, and we have several more AI stories may sell well, but it’s larger than that—it gets to planned for the year. Future-proofing is both a great term the total guest experience (see, you’re already and a great concept. Look for a lot of dialogue about what hearing more about it). operators can do now to create a stable foundation for the years to come. The concept of value runs throughout this PREDICTION 2.5 issue of the magazine and will continue to be top of mind This one’s easy: NACS Media will publish until consumers (and their wallets) feel better. close to 100 magazine feature articles in 2025 Total guest experience, meanwhile, is the sum of all the and more than 1,000 digital articles. touchpoints a customer has with a store, from first seeing • Want more people in your organization to the sign to driving away with a full tank of gas and a few have a subscription to NACS Magazine? snacks. When these touchpoints are aligned and create a Email NACSmagazine@convenience.org. unified experience, operators benefit from a strong brand • Want to share your operation’s news, and are well on their way to becoming a destination of insights and happenings? Email news@ choice instead of a destination by chance. convenience.org.

Ben Nussbaum Editor-in-Chief

6 JANUARY 2025 convenience.org

xorosho/Getty Images

hroughout this issue you’ll find content previewing the big themes and trends for the year ahead. If I were more ambitious and had more space, I’d tack on a “25 predictions for 2025” list of my own, but instead I’ll move the decimal and share two and a half predictions.

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UP FRONT FACES OF THE INDUSTRY

Celebrating the people who make our industry great.

People, Perks and …

Puppies

T

he key to a successful store is good customer service, said Jackie Johns, manager at The Market

by Tiger Fuel Company’s flagship store in Charlottesville, Virginia. Jackie has worked with the 10-store operator for 14 years.

Jackie’s stores have broken many company records for the highest sales. “I’ve broken my own record,” she said with a laugh. “I love trying to break the company sales records.”

Relationships with customers leads to becoming their go-to stop, she said.

“Every store is a little bit different and has different clientele, but knowing your customers, talking to your customers, learning their preferences and making sure they get what they want is what will keep them coming back. Customer service is the key to any successful convenience store,” she said.

Jackie spoke with NACS about: WHY SHE LOVES WORKING IN A CONVENIENCE STORE I like working with the public. I’m a talker and so I like meeting and dealing with different people. As I manager, I also like watching the younger people become assistant managers and developing within the company. It’s nice to see somebody that you don’t think is going to make it, make it.

8 JANUARY 2025 convenience.org

ABOVE: Jackie with the University of Virginia’s mascot, Cavman, showing off an LTO sandwich she created as part of a partnership with the school’s athletic department. The university is based in Charlottesville, which is also where Jackie’s store is located. LEFT: Jackie’s beloved XL pit bull, Tucker, was a gift from a customer.

HER FAVORITE DAY AT WORK My favorite day ever was when one of my customers’ dogs had a litter of puppies and he brought me one. It was an XL pit bull, which some people pay up to $1,500 for. He gave it to me because he knew I loved dogs—I was always playing with his dogs and giving them food when he came in. I had the puppy for 10 years until he passed away recently. That was such an amazing gift, and so that day is definitely my favorite memory.

WHAT SHE WOULD TELL SOMEONE CONSIDERING A JOB IN CONVENIENCE I think a lot of people are under the impression that convenience stores don’t pay well or that you don’t get benefits. I’ve worked at jobs in other retail sectors where that is true, but at The Market, we have vacation time, health insurance, our own doctor’s office, a $10 meal credit per shift—we have these capabilities that you don’t get in other places.

People take those things for granted, but when you add all of those perks into your check, that’s a lot of money you’re saving. There is also a lot of opportunity to grow within a company and within your role to become a manager, shift leader, coach or other leadership position.

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UP FRONT NACS NEWS

The Technology Solutions Center at the SOI Summit features 15 technology businesses that have solutions specialized to the convenience industry. The Center will be available to SOI Summit attendees during all event networking breakfasts, lunch, session breaks and evening receptions.

If you are interested in exhibiting at the 2025 NACS SOI Summit Technology Solutions Center, please contact Chris Wise at cwise@ convenience.org.

12 JANUARY 2025 convenience.org

Dive Into Data The NACS State of the Industry (SOI) Summit will take place April 8-10, 2025, in Dallas, Texas—and registration is now open. The two-day event will dive into the latest industry data on financial, operational, categorical, regional market and consumer trends in convenience and brings you insights for how to use the data to your advantage.

Attendees will not only get a first look at the data before the annual SOI Report is released in June, but will also learn how to benchmark their business against others in the industry and in their region, hear about the latest industry-defining trends and how to get ahead of them, and identify the changes in shopper behavior that impact merchandising, dayparts and product discovery.

Industry experts will speak on topics ranging from overall economic outlooks, instore performance insights, fuel demand and trends, consumer behavior and evolving shopper attitudes, financial and operational insights, and more during sessions held over the two days.

The Summit delivers exceptional, precise and actionable insights that empower you to navigate the fuel and convenience industry with confidence and facilitate strategic decision making. Register now!

For more information and to register, visit convenience.org/events/SOI.

Register for the 2025 NACS HR Forum

Calendar of Events 2025

• Attracting top talent by crafting clear and compelling job descriptions • Implications and legislation for using AI in the workplace • Technology apps and AI in HR • Retention strategies from retailers • Insights for charting career growth and development pathways • How to build an enduring brand • CEOs Annie Gauthier of St. Romain Oil Company and Nate Brazier of Stinker Stores will discuss the expectations of HR from the CEO perspective • A workshop for persuasive communication and leadership • Tips and tricks for retailers by store size Jenna Collard, director of education engagement at NACS, will lead a Convenience Feud game-show style session, where attendees can play along and guess how 100 consumers responded to a variety of questions about the industry.

Plus, attendees can take advantage of speed networking sessions, breakout sessions to talk about key topic areas and evening receptions to connect with peers.

For more information and to register for the event, visit convenience.org/ events/HR-Forum.

FEBRUARY NACS Leadership Forum February 11-13 | The Ritz-Carlton Amelia Island, Florida NACS Convenience Summit Asia February 25-27 | Conrad Tokyo Tokyo, Japan MARCH NACS Day on the Hill March 10-12 Washington, D.C. NACS Human Resources Forum March 24-26 | Hutton Hotel Nashville, Tennessee APRIL NACS State of the Industry Summit April 08-10 | Hyatt Regency DFW International Airport Dallas, Texas

For a full listing of events and information, visit www.convenience.org/events.

Boris Zhitkov/Getty Images

The NACS Human Resources Forum is taking place this March 24-26, 2025, in Nashville, Tennessee, and registration is open now. The three-day event brings together HR leaders from the industry to exchange ideas and insights about the top-of-mind issues for retailers, setting you up to stay on top of challenges throughout the year.

“As an HR leader in our industry, I attend the NACS HR Forum because it is a great place to network and meet new people who are facing and dealing with the same issues as I am—plus, all the legal updates keep me out of trouble and in compliance!” said Kurt Weigel, training and recruiting director of Weigel’s Stores Inc. “Lastly, it is great to hear from peers I have known for a long time, sharing insights near and dear to their hearts and the companies they represent.”

This year’s agenda features presentations and sessions on topics including: • An update on the key legal issues affecting the industry from former NACS Chair Julie Jackowski • Data on the state of labor in 2024 from NACS Research • How to design effective compensation plans

NACS JANUARY 2025 13

UP FRONT NACS NEWS

Five Insights From My First Year at NACS

BY APRIL VANAPELDORN, DIRECTOR OF RETAIL ENGAGEMENT—WEST

As 2024 closes and we kick off 2025, I couldn’t help but reflect on my first year as part of the NACS team.

Before joining NACS, I worked on the operations side of the industry for close to 20 years at companies including RaceTrac, Mapco Express and roam’nstop. Over the past year as Director of Retail Engagement—West, I have visited more than 30 retailers in their stores and engaged with 20 others either virtually or at events. I now see the industry from a whole new perspective.

Here are five reflections from year one: • Visiting NACS’ various members, small and large, was a rewarding and eye-opening experience. I thoroughly enjoyed learning about every company and the stories each had. Given my operations experience, I identified areas of opportunity for NACS to add focus to, as well as retailer needs or wants we may not have ever considered. I now was part of the industry change!

• All companies I have visited had similar issues regardless of size. In 2024, these often centered around theft, violence, labor, costs, food of14 JANUARY 2025 convenience.org

ferings, training and development of field staff. We hear you and want to help with your challenges. Feedback I shared from retailers helped establish our first Loss Prevention and Safety Symposium pop-up event in December. We are also now working internally on more training resources for members.

• As an operator, I only scratched the surface of what NACS is and what it has to offer. I was always impressed with NACS and viewed it as the industry champion that helped keep my business informed, current and connected. But there was so much I never knew. My job now is to ensure that other industry leaders are aware of the depth of resources available to them as members of NACS. NACS is a beacon for our industry, the driving force of knowledge, collaboration, inspiration and the voice of advocacy on issues that affect everyone in the business. NACS also has a ton of resources, training courses, webinars, an online store, advocacy information and much more.

• Community needs are a top focus for retailers. I saw this firsthand, particularly in Minnesota, where the desire to serve communities drives the stores’ expansive grocery offerings. But I know convenience retailers across the country put a big emphasis on serving their customers and communities and making a difference in their local area.

• I ate some great food. Jacksons’ revamped menu offerings and a proprietary burger I tried from MidWest really stood out.

I am truly grateful to be part of this industry and part of the team that works so hard to drive it forward.

If you have never done so, I urge you to visit the NACS website and see all the resources NACS offers, get involved, become more engaged and use your voice to help lead fuel and convenience forward. The difference it makes is truly remarkable. I look forward to bringing more value to each of you this year. Let’s make 2025 the year we all THRIVE! For more information, email me at avanapeldorn@convenience.org.

for your partnership.

We appreciate your business!

We are breaking records together!

In 2024 alone: 1. The NACS Show had record-breaking retail buyer attendance 2. NACS Magazine had a record-breaking yearr 3. NACS Magazine had the highest share of voice growth across all convenience industry publications.

Let’s work together to make 2025 even better for your business, NACS and the entire convenience store industry.

Every dollar invested in NACS goes back into making the Convenience Store Industry more successful.

NACS JANUARY 2025 15

UP FRONT NACS NEWS

New Members

NACS welcomes the following companies that joined the Association in October 2024. NACS membership is company-wide, so we encourage employees of member companies to create a username by visiting convenience.org/create-login. All members receive access to the NACS Online Membership directory and the latest industry news, information and resources. For more information about NACS membership, visit convenience.org/membership.

NACS GLOBAL SUPPLIER COUNCIL

GALLO Modesto, CA www.ejgallo.com HUNTER CLUB

Bronze IDT / Boss Revolution / National Retail Solutions Newark, NJ www.sellbossrev.com RETAILERS

Axcel Management dba Smoker’s Express Langhorne, PA Mohsen Oil Inc. Oceanside, CA Oak Creek Travel Center Independence, CA Pit Stop Convenience Centers Inc. Peachtree City, GA www.omnifuels.com Posto Texas João Pessoa, Brazil S&K Sidhu Inc. Dinuba, CA Sarabjit And Maneet LLC Phoenix, AZ Sevan Petroleum Inc. Farmington Hills, MI South Tyler Petroleum LLC Tyler, TX www.southtylerpetroleum.com SYZYGY LLC Harvey, LA thesyzygybrand.com SUPPLIERS

7asavvy.com Spokane, WA 7asavvy.com Air-Row Fortville, IN airrowfans.com 16 JANUARY 2025 convenience.org

Aisle AI Inc. Tempe, AZ AJM Packaging Bloomfield Hills, MI www.ajmpack.com

Contract Packaging Association Herndon, VA www.contractpackaging.org Craftwork Design Co. Huntington Beach, CA

Aphrodite Desserts Garland, TX

Delcato Toronto, Ontario, Canada

Asahi, USA Torrance, CA www.asahisuperdry.com/en-us/ home/

Ease Commerce Salt Lake City, UT

Axis Portable Air ww.axisair.com BD3 Inc. Austin, TX www.matadorenergy.com Big Cat Direct Corp Allen, TX Big Stick Products LLC Rockaway, NJ Blue Chip Beverage Fontana, CA Bomber Energy Drink Montgomery, TX Bum Energy Port Saint Lucie, FL CFX Products Peachtree City, GA Chalet Desserts LLC Sacramento, CA www.chaletdesserts.com Chyl Brands LLC getchyl.com Clean Simple Eats South Jordan, UT cleansimpleeats.com Comarco Products Inc. Palatka, FL www.comarco.net

Eastman Signs and Printing Santa Rosa, CA Electrify America LLC Reston, VA www.electrifyamerica.com Enmark Incorporated Aliso Viejo, CA Finish Line Sales Brokerage & Marketing Sunland, CA Firestone Walker Brewing Co. Tucson, AZ Freestyle Snacks Atlanta, GA freestylesnacking.com Fresh KDS Nashville, TN Freshkds.com Fuji Food Products Inc. Santa Fe Springs, CA fujifood.com G&S Wholesale Distribution Allentown, PA goHappy Glen Allen, VA www.gohappyhub.com Great Foods Alexandria, Al Qāhirah, Egypt www.greatfoods.com.eg Hestia Cigarettes Raleigh, NC

UP FRONT NACS NEWS

Hyundai AutoEver America Fountain Valley, CA www.haeaus.com Insurance Advocacy Group LLC insuranceadvocacy.com Integra Realty Resources Murray, UT www.irr.com

Marina Technology Los Angeles, CA McCowan Design & Manufacturing Limited Scarborough, Ontario, Canada www.mccowan.ca Mercaso Commerce, CA

It’s A Wrap Gardner, MA www.printedfoodwraps.com

Mexilink Houston, TX www.mexilink.com

Jones Lang LaSalle Chicago, IL www.joneslanglasalle.com

Momentum Management LLC Torrance, CA

Junior Davis & Associates Pelham, AL www.juniordavis.com

Morris + Associates Engineers LLC Cypress, TX www.morrisassoc.com

Kalan Lansdowne, PA www.kalanlp.com

Muddy Bites North Sioux City, SD www.muddybites.com

Klean Freak Sandy, UT www.kleanfreak.com

Munch King Snacks New York, NY www.munchkingsnacks.com

Lemonati / Mighty Swell Carlstadt, NJ

NOCA Beverages Greenacres, WA

Lola’s Fine Sauces West Des Moines, IA

Paynuity Orlando, FL www.paynuity.com

Lotus Lifestyle LLC South Jordan, UT www.lotusenergydrinks.com Lotus Sustainables Carlsbad, CA www.lotus-sustainables.com Louisiana Fish Fry Products Baton Rouge, LA louisianafishfry.com LUXX Light + Retail Technology (USA) Inc. Shelby, NC www.luxx.com Majestic Facility Services Seymour, IN Mammoth Construction Anderson, IN 18 JANUARY 2025 convenience.org

Prime Bites Sunrise, FL alphaprimesupps.com/pages/ prime-bites RDI-USA Inc. SC Spartanburg, SC Real American Beer therealamerican.com Recess Marina Del Rey, CA www.recess.is Rockbot Oakland, CA S.A. Piazza & Associates Inc. Clackamas, OR www.wildmikeultimatepizza.com

Share-ify Orlando, FL share-ify.com Shark Eyes Inc. Vernon, CA sharkeyes.com Soft Swirl Rehoboth Beach, DE www.softswirlicecream.com Stan’s Donuts Alsip, IL Stevens Point Stevens Point, WI www.pointbeer.com STIIIZY PLTC LLC Fort Myers, FL Sumitomo Corporation New York, NY Summit Hill Foods Inc. Rome, GA Taylor Company Rockton, IL www.taylor-company.com The Great American Gift Company Mount Prospect, IL tagcousa.com The Op Games Carlsbad, CA V. Formusa Company Des Plaines, IL www.marconi-foods.com VelaPOS Inc. Norwalk, CA Voss Water New York, NY www.vosswater.com Wild Republic Independence, OH Wildpack Beverage Salt Lake City, UT ZJ Events Garden City, NY zjevents.com

CONVENIENCE CARES

Little General Stores Donates $75,000 to Children’s Hospital

L

ittle General Stores Inc. presented $75,000 to WVU Medicine Children’s to help support the hospital in caring for patients and their families. To raise the funds, Little General locations throughout West Virginia sold football icons for $1 during a three-week campaign.

To date, Little General Stores has donated $350,000 through the Kickoff for Kids Campaign.

“Supporting our communities has always been a top priority for Little General Stores,” said Greg Darby, president and CEO. “By raising funds for WVU Medicine Children’s, we know this donation will go towards providing care and comfort to patients and their families. We are so grateful for the team at WVU Medicine Children’s and for everything they do.”.

“Little General’s philanthropic support of Children’s is both longstanding and unwavering,” said Amy L. Bush, chief administrative officer for WVU Medicine Children’s. “Throughout the years, their generosity through their Kickoff for Kids Campaign has enabled the hospital to make great strides in improving healthcare for children throughout the region, and for that we are forever grateful.”

20 JANUARY 2025 convenience.org

In The Community

Kitchen has given more than $2.5 million to area schools.

Every year, the convenience retail industry dedicates billions of dollars to advancing the futures of individuals and families in our communities. The NACS Foundation unifies and builds on NACS members’ charitable efforts to amplify their work in communities across America and to share these powerful stories.

WEIGEL’S SUPPORTS HURRICANE HELENE RELIEF

Learn more at www.conveniencecares.org.

PARKER’S KITCHEN GOLF TOURNAMENT RAISES RECORD FUNDS 1 Parker’s Kitchen raised $400,000 during its 12th annual Fueling the Community Charity Golf Tournament, which it said was a record amount “to support local schools in the communities the company serves throughout Georgia and South Carolina.”

“We’re absolutely thrilled to raise $400,000 to support local schools in communities throughout our corporate footprint,” said Brandon Hofmann, Parker’s Kitchen president. “We look forward to presenting Fueling the Community checks to various school systems in the coming months and making a positive impact throughout the region.”

Over the past 13 years, Parker’s

2 Weigel’s donated 8,200 gallons of fuel to assist in Hurricane Helene recovery efforts in communities across Eastern Tennessee and North Carolina.

Weigel’s said the fuel, including both diesel and unleaded, was provided to those affected by the hurricane to support emergency services, relief teams and local residents in need.

“Due to our wonderful partners, we were able to have Eagle Distributing and the Smoky Mountain Farmers Co-op bring out fuel tankers to help divide the fuel amongst multiple smaller tankers to help cater to as many communities as we can for those affected by the hurricane,” Weigel’s said.

WAWA SUPPORTS HURRICANE RELIEF 3 Wawa Inc. and The Wawa Foundation launched a chainwide, in-store crisis campaign designed to provide emergency relief assistance to communities most affected by Hurricane Milton.

The campaign was held in partnership with the American Red Cross and allowed customers to add $1, $3 or $5 to their Wawa purchase at checkout. The Wawa Foundation said it would match the first $100,000 in customer contributions to the campaign and

1

3

2

4 5

that all money would be donated to Hurricane Milton relief.

Wawa also donated $500,000 to the Florida Disaster Fund to “support the state of Florida’s private fund established to provide financial assistance to communities as they respond to and recover from times of emergency or disaster.”

PILOT AIDS COMMUNITIES AFTER HURRICANE 4 Pilot Flying J, Tennessee Athletics and the University of Tennessee (UT) supported relief efforts after Hurricane Helene by collecting donations for those affected by the storm. The donated supplies were sent to the Northeast Tennessee Disaster Relief Center.

Pilot also mobilized its extensive network of travel centers to support communities affected by Hurricane Helene through an instore round-up campaign for the American Red Cross. From October 4 to October 18, 2024, guests could visit any U.S. owned and operated Pilot, Flying J and One9 travel center location to round up their purchase to the nearest dollar and provide aid to those affected by the hurricane. One hundred percent of funds raised supported Red Cross response efforts in impacted communities across the Southeast.

YESWAY DONATES $100,000 IN NEW MEXICO 5 Yesway pledged to support the Roswell, New Mexico, community after devastating floods in the area caused extensive damage to homes, businesses and other property.

Roswell is where the Allsup’s brand began and five Allsup’s stores are currently located in the community.

The retailer committed to donating $100,000 to the Community Foundation of Southern New Mexico (CFSNM) to aid in recovery and invited its customers and supplier partners to join the effort and donate as well.

NACS JANUARY 2025 21

INSIDE WASHINGTON

Small Actions Can Yield Huge Results An independent operator shares advice on advocacy.

BY LONNIE MCQUIRTER

C

Lonnie McQuirter is director of operations for 36 Lyn Refuel Station in Minneapolis, Minnesota, and a NACS board member.

22 JANUARY 2025 convenience.org

onvenience stores are the heart of Minnesota communities.

People visit us for snacks, fuel, restroom stops and sometimes a safe place to rest. Our staff members are the friendly faces you find behind the counters who often remember you by name and work late nights to support travelers on their way to their destination. Beyond serving our neighbors, we have another vital role: engaging in the political conversation.

Now, don’t worry, I’m not asking for anything fancy here. I am from the Midwest after all. Political engagement doesn’t have to mean being on TV or giving speeches … although, if you’re up for it, more power to you! It is really about the small, impactful steps to make your voice heard: writing a quick letter on the impacts of swipe fees on you and your business, sending an email about retail crime or even a two-minute phone call with a legislative aid. It could also mean hosting elected officials in your store. These small actions can make a huge difference, and here’s why they are important.

CONVENIENCE STORES ARE COMMUNITY PILLARS Convenience stores are much more than simply a place where “Cokes and smokes” are sold. Convenience stores are often a community gathering spot and are frequently the only place open late at night, early morning or on holidays. As a result, many convenience stores and their employees know firsthand the local issues impacting our neighborhoods most. We see the

Lonnie McQuirter (far right), joined by other advocates, visited the offices of Majority Whip Tom Emmer during NACS Day on the Hill in 2023.

challenges our customers and suppliers face, whether they are related to the economy, roads and infrastructure, or public safety. That gives us a unique perspective and insight that few other professions or industries can match.

By sharing your experiences, you are not only speaking for yourself, but also for your neighbors, customers and key partners. You are a true advocate of the community. Helping our lawmak-

ers understand what’s happening in your small corner of the world can help them make decisions that better reflect the needs of your community.

SMALL ACTIONS CAN YIELD HUGE RESULTS After an election, some may wonder if their voice actually matters. It absolutely does. I’ve seen firsthand how decisions made by local, state and federal officials directly and

frequently affect my business and my team. Product regulations, licensing fees and labor laws impact our bottom line, the opportunities we can provide our staff, and our ability to serve customers. When convenience store operators and staff speak up, it is extremely valuable to elected officials. It helps them understand the realities of operating a convenience store and the challenges faced by Main Street businesses.

NACS JANUARY 2025 23

INSIDE WASHINGTON

YOUR KNOWLEDGE CAN HELP SHAPE POLICIES THAT AFFECT YOU Elected officials rely on information from a variety of sources to make decisions, but one of the most impactful is hearing directly from constituents—those who live and work in their districts. As convenience store operators, we have a unique advantage, with locations in virtually every community in the United States. We have the opportunity to share with our representative what’s working, what needs fixing and what concerns us most.

If you’re unsure of what to say, don’t sweat it. Just be honest and speak from your experiences. It can be as simple as expressing appreciation for an official attending a ribbon cutting for your new location, describing challenges faced in staffing your store, or even explaining how certain regulations are impacting your business. The most important thing to remember is to share your own personal story.

DIG YOUR WELL BEFORE YOU GET THIRSTY A prudent person prepares for the future and plants trees and digs wells before they need shade or become thirsty.

The same approach needs to be taken when building relationships.

When you reach out, even with just a quick note or call, you’re building a connection and opening a door that may lead to a lasting bond between you and your representatives. Over time, this connection can grow and become incredibly valuable. Politicians are more likely to pay attention to your concerns if they’ve heard from you before. By engaging now, you’re laying the groundwork for a positive relationship with your elected officials both now and in the future.

We Minnesotans are proud of our civic engagement. We’re known for our 24 JANUARY 2025 convenience.org

friendliness and willingness to step up when needed. You may have heard of “Minnesota nice.” For me, it is also about honoring a tradition that reflects our American values—doing the right thing and working hard to keep our communities connected and strong.

POLITICAL ENGAGEMENT IS EASIER THAN YOU THINK Organizations like NACS make political engagement accessible. If the thought of contacting an elected official seems intimidating, don’t worry. You don’t need to throw on a suit and fly out to D.C. You don’t even need to drive to your state capitol. Here are a couple simple ways to participate at home: • Write a letter or email: Keep your eye out for emails from NACS urging you to reach out to your representatives on an important issue— members of Congress need to hear directly from us (their constituents).

• Make a phone call: A quick call can make a big impact. NACS can help facilitate the call or provide the relevant contact information.

• Host a NACS In Store event: NACS can help you host an elected official at your store so that the official can learn about your business and the communities you serve.

And if you’re ready to jump right in, consider attending NACS Day on the Hill (DOH) in D.C. DOH is an incredible opportunity to share your story directly with our federal lawmakers and have conversations about the issues that matter to our industry. I’ve attended many times, and it’s helped me build lasting relationships and make my voice heard.

This year, DOH takes place on March 1112. I hope to see you there!

At the end of the day, participating in the political process is about supporting your community, keeping it vibrant and strong and protecting your livelihood. We are often the last stop on the way home from work or school and the first stop as people head out for the day, serving everyone from first responders and essential workers to people on their way to that important job interview or rushing to see loved ones. We play a big role in our communities.

And we don’t have to do anything grand to make a difference. With the combined numbers of the over 152,000 retail locations in this industry, we have the numbers to create a powerful impact.

If you have any questions about any of our grassroots efforts, please reach out to NACS Political Engagement Director Katie Bohny at kbohny@convenience.org.

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IDEAS 2 GO

Name of company: Oak Barrel Café Year founded: 2011 # of stores: 1 Website: www.oakbarrelcafe.com

26 JANUARY 2025 convenience.org

From Biker Bar to Beloved C-Store Bakery and Café Oak Barrel Café underwent a complete transformation and found a new customer base.

BY SARAH HAMAKER You might not know it from its reputation for homemade cheesecakes, but Oak Barrel Café in Little Orleans, Maryland, has what some might consider an unconventional past for a c-store. “It [used to be] a biker bar,” said owner Dushant Sharma.

“Essentially, it was a bar with a small convenience store.”

Sharma brought on Betty Forman as general manager a few years after he bought the store in 2011, and she catalyzed the transformation from bar to full-service c-store. “I had three kids and didn’t want them hanging out in a bar,” she said. “I’d rather them hang out in café with ice cream and a courtyard so they could play outside rather than having them see people getting drunk and into mischief.”

She began to talk to Sharma about turning the store into a more family-oriented business. In 2013, he got rid of the bar and began the slow and steady transition to a café. “We did not move quickly but as more and more customers expressed how

happy they were with the changes we were making, we were encouraged to do more and more until it became the store it is today,” he said.

Forman also retooled the interior from a biker bar feel to a rustic design aesthetic. “The rustic atmosphere in the store is relaxing and fun, which helped us become more accepted by the community,” Sharma said.

A FOOD REBIRTH Foodservice was a major element of the store’s transformation from bar to café. “Betty suggested we add an onsite bakery and we’ve had huge success with that,” Sharma said. The store has become very well-known for made-fromscratch cheesecakes and other baked goods, such as rolls, pies, brownies and cakes. “We’ve been so successful, we currently have four bakers on staff and many people make a special trip for our bakery items,” he said.

While Oak Barrel Café started with baked goods, the store now serves other items such as burgers and chicken. Customers can sit at one of the 40 indoor seats to enjoy the food or grab a table outside when the weather is nice.

Coffee is of course a staple. Oak Barrel also serves organic and no-sugar-added fruit juices and sugar-free green tea in dispensers. “We didn’t want a soda fountain but instead went with all organic and natural drinks,” he said.

The store sought to differentiate itself by offering unique products unavail-

able elsewhere, such as moonshine.

“We began carrying a variety of flavors from a renowned Tennessee distillery, unexpectedly becoming the top-selling moonshine retailer in the entire state of Maryland. Building on this success, we partnered with a local distillery to create our own branded Oak Barrel moonshine,” Sharma said. Today the store sells a full line of its own moonshine, including one variety, Fire Chief 43 Butterscotch Moonshine, that honors a local fire department chief.

A COMMUNITY TRANSFORMATION To further strengthen ties with the community, the store organizes annual fundraising events in collaboration with the local fire department. For example, Oak Barrel Café dedicates a specific fuel dispenser to donate a portion of every gallon sold to the fire department. “This initiative runs for approximately three to four months each year, demonstrating our commitment to supporting the community that has supported us,” Sharma said.

He also lends a hand to new local business ventures. “When a local brewery opened, we held our staff Christmas party there for several years to help boost their sales—that helped them out a lot,” he said.

The store heavily depends on Facebook for online connections. “We get good results and interactions with our customers on Facebook, while TikTok and Instagram don’t give us as much,” he said.

Sharma credits being different and creative as the key to his success with Oak Barrel Café. “You have to make a stage for yourself to be different because we can’t compete on the same things,” he said. Instead, he recommends offering unique items as well as figuring out what kind of food will set you apart.

“For us, it was more healthful options because we feel people are looking for something good and healthy at the same time,” he said.

BRIGHT IDEAS For Dushant Sharma, owner of Oak Barrel Café in Little Orleans, Maryland, the search for distinctive products to stock never ends. “Our market carries very different items than other c-stores because I want to give my customers an exceptional experience,” he said.

The store started with private label Amish-made jams and jellies, which were an instant hit with customers.

He expanded to include private label pickles and popcorn, as well as a selection of old-fashioned candies grouped by decade, such as 1910-20, to help customers enjoy new finds among the unique candies. “We also have novelty items you can’t get anywhere else, such as Grenade Hot Sauce and Moonshine Hot Sauce,” he said.

While Sharma is in the process of planning a second location about 20 miles away, he hopes his store will continue to wow customers. “My favorite review comments are ‘I never expected this,’ and ‘this is a hidden gem.’ Our customers expect a typical convenience store and are taken aback by how modern and friendly our store is,” he said.

Sarah Hamaker is a freelance writer, NACS Magazine contributor and award-winning romantic suspense author based in Fairfax, Virginia. Visit her online at sarahhamakerfiction.com.

Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow.

To see videos of the c-stores we profiled in 2023 and earlier, go to www.convenience.org/Ideas2Go. NACS JANUARY 2025 27

On the Retailer

RADAR in

28 JANUARY 2025 convenience.org

From flavors to ways to use AI, here are some of the trends to watch.

BY LAUREN SHANESY

xorosho/Getty Images

2024 was a mixed year for convenience retail.

The first half of the year saw declines in the average fuel price (-7.8%), inside sales (-1%), total transactions (-3.4%) and total store gross profit (-1.8%), according to data from NACS Research.

And in the third quarter of 2024, consumer research data firm Circana stated that dollar sales at retail were down about 2.4% year over year, foodservice dollars were flat, underlying customer traffic was down 4%, customer trips were down a little more than 6% and fuel gallons were down 3.5%.

NACS JANUARY 2025 29

AI HAS ARRIVED AI is the fastest-growing technology humans have ever seen—faster in its growth than the Internet, computers, iPhones or tablets ever were, said Brian Gray, managing director of Accenture, during an Education Session at the 2024 NACS Show. According to a study he cited, 39% of U.S. adults are now using generative AI, 24% of workers are now starting to use it weekly, and about one in 10 people are now using it daily.

THE PUMP IS A DISPENSER FOR MORE THAN FUEL There have been a handful of new innovations in the latest media-enabled dispensers, adding more functionality and ease to the ability to message at the pump.

Invenco by GVR launched Engage Media Full-Service, a retail media tool aimed at servicing large and mid-sized fuel retailers, with content managed by GSTV. Dover Fueling Solutions (DFS) launched DX Rewards, a rewards and loyalty offering available through the DFS Anthem UX platform-based dispensers, offering an app-like experience at the pump. Members can access personalized offers, redeem rewards or even play games to earn additional points on the screen.

30 JANUARY 2025 convenience.org

“But we are still just scratching the surface of AI,” said Gray, noting that “a lot of retailers are dragging their feet when it comes to taking advantage of AI, but there are real use cases now that could immediately start driving value.”

With all the buzz, speculation and debate about what AI is—and what it isn’t—it’s imperative that retailers understand how to leverage AI for their business, said Sanjeev Satturu, chief information officer for Casey’s General Stores, during the presentation. By finding practical use cases for the technology, retailers can reduce labor burdens, increase efficiency, save time and enhance their business model.

“We’re seeing AI-powered inventory management solutions that provide real-time insights into stock levels, product placement and inventory trends, enhancing operational efficiency and reducing waste,” said Satturu, also noting that there is a lot of opportunity to use AI for fuel pricing. “And AI video analytics can enhance security by analyzing video feeds to detect unusual behavior, unauthorized access or potential theft incidents.”

In addition to using AI security camera analysis to increase safety, Jacksons Food Stores has implemented AI to track metrics that would have previously been difficult to measure.

The company works with a supplier to track activity in the forecourt, including the number of cars that came through, time spent at the pump and active time the fuel dispenser was in use. That data can be leveraged for things like fraud detection and strategies to increase customer conversion rates, said Robert Hampton, VP of technology services and innovation at Jacksons Food Stores, during the session “Use Cases for AI Inside of the Store” at the NACS Show.

“Say you have 1,000 vehicles one day and observe 300 people walking inside—you know you have a 30% conversion rate. You could increase that by doing A/B testing, where you put two different types of promos on the pump and watch to see which one gets more people into the store,” said Hampton.

He said Jacksons has also used camera analysis inside the store at food prep areas, roller grills, and hot boxes to track how much food is present, how long food has been out, and if

Westend61/Getty Images

“There are just some macro headwinds that retailers are facing,” said David Portalatin, senior vice president and industry advisor, food and foodservice, at Circana.

The good news is there are plenty of opportunities for retailers in the year ahead.

Portalatin shared an insight about foodservice, but it can apply more broadly: “There are a lot of ways you can differentiate the assortment to lean into where consumers are going, and that’s the pathway to overcome these macro headwinds that otherwise are weighing things down right now.”

From leveraging AI to catering to the price-conscious consumer and more, these are trends that are front and center heading into what is sure to be a dynamic 2025.

FOUR ‘SLAM DUNKS’ FOR AI When it comes to AI, the most important thing is start with value, said Brian Gray, managing director of Accenture. “Where does the most value exist and what problems are you trying to solve? Then work your way backwards for how you do that.”

There are four areas where Gray sees the most traction with AI for retailers.

1

adventtr/Getty Images

Administrative Tasks “How much time do we spend crafting the perfect email?” he asked. AI can help save time doing research, processing communications, writing summaries and more he said.

2

Pricing In an industry that prices its most important product in a fraction of a penny, even small changes in margin add up.

there is theft or food waste. AI can then send alerts to staff to add more items or turn over food products after a certain time.

Jacksons also has a fleet of a few hundred truck drivers and uses AI cameras installed in trucks to increase safety. For example, the cameras can identify street signs and speed limit signs and alert a driver to slow down.

They can also score drivers based on their driving safety and adherence to traffic laws.

Voice analytics have also helped Cubby’s Inc., which operates 42 retail locations in Nebraska, Iowa and South Dakota, increase its operational efficiency across stores. The retailer works with a supplier that places microphones at the register and records conversations between customers and employees.

AI then analyzes those conversations.

3

Marketing Whether its creative development or design, AI can be used to generate marketing materials quickly.

4

Customer Service AI agents can answer calls, for example, and quickly find the right information.

“The dashboard breaks conversations down by keywords and can show us that there are 10 mentions of a problem with a fuel pump at a specific store, for example, or that the card reader is down,” said De Lone Wilson, president of Cubby’s, while presenting with Hampton. “Our maintenance techs can see that and open work orders to address it.”

Jerome Rose, GM of U.S. retail and consumer goods at Microsoft, said that one of the most underrated elements of AI is the ability to save someone even just 15-20 minutes per day on menial tasks.

“Think about what that gain looks like across your whole employee base. People can then put time and energy into the things they want—in this case, spending time with customers,” he said.

NACS JANUARY 2025 31

NOSTALGIC NODS

A FRENZY OF FLAVOR TRENDS AND FOODSERVICE OPPORTUNITIES A walk through the NACS Show Expo in October left no attendee hungry and no question about some of the trends CPG manufacturers are zeroing in on for the year ahead, including multipurpose items that pack a punch, betterfor-you products and functional beverages, and a handful of emerging flavor profiles.

John Fieldly, CEO of energy drink manufacturer Celsius Holdings, said the energy drink category is seeing a significant shift toward zero-sugar drinks. “It’s been a major growth driver—90% of the category growth is coming from within sugar free. Consumers want better for you, but they don’t want to sacrifice flavor or taste. That’s a trend that’s going to continue to grow as health and wellness trends continue to scale,” Fieldly said.

And consumers are looking for those better-for-you products to have beneficial and functional attributes—energy drinks with

HOT SPOT Emerging flavors across foodservice and CPG items in 2025 include: • An abundance of tropical flavors, including pineapple, mango and guava • Spicier items that bring even more heat • Food, drinks and candy that are continuing to get more sour • Maximalist snack flavors, such as chips in loaded taco, everything bagel or “all dressed” seasonings • Pickle-flavored everything 32 JANUARY 2025 convenience.org

vitamins and clean ingredients, high-protein snacks and drinks such as protein water, and water packed with extra electrolytes for hydration, for example.

“Beverage consumption—both in home and away from home—is up year over year, and part of that is because we are approaching beverages for a variety of needs,” said Portalatin.

And that concept applies to snack foods as well, with consumers seeking snacks that give them energy and help them stay alert throughout the day, he added.

“Protein is another big platform consumers are looking for right now and they want snack foods that are a good source of protein.

Generation X, in particular, will look for meat snacks when they want to add protein to their diet,” said Portalatin. “Meat snacks are already an important category at convenience retail, so are we looking at the overall snack assortment and at various value tiers of what we’re offering the consumer in that category? For example, when consumers want to add protein, they’re oftentimes looking for yogurt—a convenient, portable, handheld item. Are you including those kinds of options across the store?” he asked.

“We know that 71% of consumers are focused on protein consumption in their diet, ranking it as the No. 1 nutritional element consumers are looking to increase,” said John Frost, Chobani chief customer officer. “They are turning to fresh, portable, nutrient-dense snack products like yogurt and milk because

AndreyTTL/Getty Images

Rose cautioned that in order to effectively use AI, your data has to be ready—it has to be clean, organized and well structured. “When you’re leveraging generative AI, you’ve got to be able to point it to the right information.”

And of course, privacy is paramount. This means you need to protect both your organization’s data and the personal information of your customers.

“AI is a wide-open thing, and as soon as you’re connected to the Internet, you put yourself at risk of being under a cyberattack,” said Satturu.

“Responsible AI incorporates all of these elements: It needs to be secure, it needs to be unbiased and it needs to be built based on data that has some integrity to it, and be the right data,” said Rose.

Nostalgic items and flavors that harken back to consumers’ past or evoke an emotional response from childhood are abundant in recent product releases.

Manufacturers across many categories have played into the pull of nostalgia, from candies like Mars’ Peanut Butter & Jelly M&M’s and Hawaiian Punch candy chews to beverages such as C4 Performance Energy x Jolly Rancher energy drink line made through a licensing agreement with The Hershey Company, SunnyD’s vodka seltzers and Coca-Cola’s Orange Cream soda, just to name a few.

“Tapping into nostalgic flavors introduces us to new audiences, drives brand awareness and is an additional way for us to continuously be innovating,” said Kyle Thomas, chief commercial officer at Nutrabolt, manufacturer of C4.

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SERVING THE VALUE CUSTOMER Heading into 2025, a majority of consumers are concerned about their financial outlook.

According to Michael Headly, director at Alix Partners LLP, the amount of people who are very or extremely concerned about their financial health increased nearly 10% year over year, from 28% of consumers in September 2023 to 37% of consumers in August 2024.

And the future sentiment is even worse, he noted during his NACS Show Education Session “How Inflation Is Changing Consumer Shopping Habits.” The number of people who think the financial outlook for their household will get better in the remainder of the year dropped 10% from March 2024 (48%) to August 2024 (38%).

Some tried-and-true consumer response to financial challenges is changing, Headly stated. “We’re not seeing the usual trade down from restaurants to fast food, fast food to convenience or take away more.” Instead, “consumers are planning to reduce their occasions.”

And when they do make purchases, they’re looking to get the most bang for their buck.

“Price and value are very important, but it’s no longer about opening price point. It’s 34 JANUARY 2025 convenience.org

CAFFEINE CRAZE Energy continues to be a large driver to the c-store. Energy drinks were the largest contributor to packaged beverage sales in 2023. Year over year, energy drink sales increased per store, per month by 18.9%, from $10,217 in June 2023 to $12,150 in June 2024. But energy is popping up in more forms than ever, with manufacturers releasing caffeine chocolates, caffeine pouches that resemble nicotine pouches, caffeine fruit bars, small-sized energy drink shots, and caffeine mints and gum, among other vehicles for energy boosts.

other elements of the value equation,” said Portalatin. “It’s about getting those craveable items that I can’t make for myself and treat-type of rewards that I can get at an affordable price point. Therefore, it doesn’t have to be the least expensive option—it has to be the option that best satisfies my needs without breaking the bank.”

And with that, there is opportunity to differentiate yourself as an operator, Headly said.

“This is an opportunity to be better than your competitor, and secure that customer for their potentially reduced occasions, but demand the price for the services that you are consistently delivering and that they value you for.”

It also creates an opportunity to lean into premiumization, Portalatin added.

Elisanth/Getty Images

they are affordable sources of protein with lower cost per gram compared to traditional alternatives.”

Providing the right assortment of snack foods that meet these demands can also help retailers pick up lost sales from the lunch daypart, as consumers blur eating occasion boundaries, times and the types of foods they’re buying to satisfy their hunger in the afternoon, Portalatin added. Retailers should focus on providing flexibility around what Portalatin calls the three P’s: “portability, portion sizes and price points.”

“As we have more fluid lifestyles and rhythms of the day, there’s an opportunity to rethink how people are composing eating occasions and what kinds of flexibility across the assortment retailers can give consumers that empower them to meet those needs,” he said. “Convenience stores have a unique opportunity to provide flexible, more fluid solutions that could include packaged goods, prepared foods and sometimes the two in combination with one another.”

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by Cash Depot

Non-chocolate candy has outperformed chocolate candy in recent years, and gummy candies are a fast-growing choice among consumers. According to the most recent State of Treating report from the National Confectioners Association (NCA), 88.6% of households bought non-chocolate candy over the last year.

As with most trends shaping 2025, the value-conscious shopper is making their mark here—non-chocolate candy is less expensive, both per pound and per package, according to data from NCA. Younger consumers, including Gen Z and Millennials, are also likely influencing the uptick, as they tend to be more open to exploring all things sour, flavor mashups, different textures and new flavor experiences, said Elise Fennig, chief of staff and senior vice president of operations for NCA, during the “Sweet Success: Maximizing Candy Sales for C-Store Shoppers” Education Session at the NACS Show.

The better-for-you trend is also creeping into the candy category. “Consumers are looking for alternatives that they think are somewhat better—in other words, they’re not going to stop eating candy, but want a candy that has a cleaner ingredient label, slightly less sugar or comes packaged in portion sizes that help them manage their intake in better ways,” said David Portalatin, senior vice president and industry advisor, food and foodservice, at Circana.

According to NCA, nine out of 10 shoppers can be persuaded to spend a little more on confections than planned, meaning it’s important to capitalize on the impulse buys of customers of all ages.

“By understanding the impact of the external environment on confectionery purchasing, holiday versus everyday need states, balancing proven favorites with new and innovative items, and the impact of health and emotional well-being, convenience store operators will be able to adapt assortment, marketing, social media outreach and more,” Fennig said.

“When consumers are under pressure financially, the entire value equation comes more into focus and they sort of pick and choose [what to buy]. They say, ‘We’re not going [out] as often, so when we do, we might want to get what’s slightly better,’” he said. “So there’s an opportunity to differentiate, or have items in the assortment that are differentiated around some more premium attributes.”

Lorelai Bergin, vice president of North American retail at NIQ, noted similar behavior in consumers, stating that customers 36 JANUARY 2025 convenience.org

ONE TREND ABOVE THEM ALL …

“The innovation in the industry is starting to coalesce into a larger message to consumers and brands,” said Sean McCaffrey, CEO of GSTV, as c-stores become destinations in their own right and not just a place to get a soda or coffee while filling up. People in the industry are already there—as are many consumers—but the rest of the c-store customer base is catching on.

That ties into another trend—an industry that is already forward-leaning will accelerate even more into the future. Expect to hear the phrase “future-proofing” a lot in 2025, across a range of c-store touchpoints including loyalty, foodservice and customer experience.

Lauren Shanesy is a writer and editor at NACS and has worked in business journalism for a decade. She can be reached at lshanesy@ convenience.org.

EasyBuy4u/Getty Images

THE SWEET SPOT

are shifting from cautious to intentional spending. “[Customers] are going to focus primarily on what gives them a sense of prosperity and well-being,” she said during the NACS Show Education Session “Effective Strategies for Understanding the Value Sensitive Shopper.”

As consumer shopping habits continue to evolve in 2025, Headly recommended operators focus on improving customer engagement and driving loyalty. Consumers are more focused on customer experience to make sure the price tag is worth it, so invest in strategies that improve the experience. Some examples he mentioned include tailoring promotions and discounts to the value-conscious consumer, optimizing loyalty programs to strengthen retention and working to improve the in-store experience.

Portalatin said many purchasing decisions will also be driven by consumers’ desire to treat themselves, especially as consumers become more price sensitive and choosy about what they’re willing to spend money on.

“Convenience stores are right in that sweet spot for being able to offer consumers those affordable treats and rewards, and they have the opportunity to be the go-to spot for that by playing into that idea.”

Portalatin noted that consumers are using specialty coffee drinks, dirty sodas, frozen treats and certain candies as ways to treat themselves.

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BY MELISSA VONDER HAAR

hen it comes to tobacco, it’s oft been said “the more things change, the more they stay the same.” Cigarette sales decline, prices go up and regulations wreak havoc at every level of government.

Yet the nicotine category as a whole has changed, especially in the past year. Data from Management Science Associates (MSA) paints the picture of a meaningful shift: Between 2023 and 2024, non-tobacco products (vapor and modern oral) grew from 12.7% to 17.6% of all nicotine sales.

“A certain percentage of consumers who want nicotine are looking for alternative products that don’t contain tobacco,” said MSA Senior Vice President Don Burke. “Meaning there will likely continue to be a market for nicotine, regardless of what may happen with tobacco.”

It’s a shift that even the most seasoned of tobacco vets didn’t predict.

“Who thought 10 years ago that modern oral would be taking off like it has,” said Rick Staley, merchandising manager for Tri Star Energy. “I think there are going to be new products coming that will help offset the cigarette sales. … I just don’t know what they are.”

We may not know what the game-changing products available 10 years from now will be, but when it comes to 2025, there are plenty of products, trends and regulations that leaders like Burke, Staley and more are anticipating. Here’s a look at six of the most-pressing issues facing the nicotine category this year.

NACS JANUARY 2025 39

The question facing retailers in 2025 isn’t if modern oral will continue to grow … but by how much?

40 JANUARY 2025 convenience.org

THE BRIGHTEST OF THE BRIGHT: MODERN ORAL No surprise here: When asked what they were most excited about for nicotine in the new year, virtually everyone listed the continued, seemingly unstoppable growth of modern oral nicotine.

Staley noted that cigarettes, MST and vapor are all down … but that the leading nicotine pouch has now overtaken longstanding OTP leaders in terms of sales in his stores.

“The only bright spot is really the new modern oral category,” he said.

“From a product standpoint, we’re very, very excited about the customer migration to new modern oral,” echoed Robert Wade, category and supply chain manager at ExtraMile Convenience Stores.

The data supports such enthusiasm.

“Modern oral is now the third-best selling item in OTP,” Burke said, adding that sales were up 55% year over year. “It is far stronger than vapor, tubes, pipes or little filtered cigars—and is catching up to moist.”

And it’s not the typical smokeless consumer driving the growth. Staley and Wade both cited expanding demographics as a major plus of modern oral: There are more female, higher income, and urban customers.

“In the past, you wouldn’t see high MST sales in Los Angeles,” said Wade. “But you do see large participation in the pouch business in major cities. It’s something that really bridges the gap between gender and income disparities.”

WILL A NEW ADMINISTRATION MEAN BETTER NICOTINE POLICIES? With the White House changing hands, a massive federal policy change remains up in the air: the FDA bans on menthol cigarettes and flavored cigars nationwide. These bans were finalized and set to be signed into law until the Biden Administration put them on hold in April 2024.

Westend61/Getty Images

You see large participation in the pouch business in major cities— it’s something that really bridges the gap between gender and income disparities.”

AS INFLATION HAS EASED, ARE CONSUMERS STILL DOWNTRADING? Another reason modern oral has seen such a boost is because it’s perhaps the only segment not suffering from the downtrading phenomenon.

“Premium cigarettes are what’s really killing us, but the fourth tier is growing— it’s really taken off,” said Staley, adding that lower-tier options have also seen sales growth in his stores. “There is a lot of trading down to a lower tier, that’s for sure.”

MSA data shows downtrading is happening across the country: As of Q3 2024, fourth-tier cigarettes were up 0.6% vs. Q4 2023, while premium cigarettes were down 12.2%. Similarly, while deep discount MST was down 1.7% year over year, that’s a much smaller decline than premium MST (-7.6%) or branded discount (-10.8%).

That downtrading continued despite inflationary pressures easing. According to Trading Economics, the United States’ annual inflation rate hit 2.4% in September 2024— the sixth consecutive month of declines and the lowest inflation rate since February 2021.

“While inflation may be coming down a little bit, it’s likely that consumers are still realizing [price] increases in the tobacco category,” Burke said. “So we will continue to see strong movement to the deep discount categories across almost all tobacco categories.”

This may signal that while those in the industry are monitoring the downtrading trends, few believe relief is in sight.

“Will it continue?” Staley said. “Yeah, I think so.”

We will continue to see strong movement to the deep discount categories across almost all tobacco categories.”

42 JANUARY 2025 convenience.org

WILL ANYTHING EVER BE DONE ABOUT ILLEGAL VAPES? Among retailers, analysts and legal experts, the increasingly infuriating problem of the illegal vapor market is a top concern going into 2025.

“A lot of our competition carries them,” Staley said of flavored disposable vapor products, most of which are considered illegal by the FDA but are still very much on the market.

“We don’t and it hurts our sales.”

Cavan Images/Cavan Images

While it’s highly unlikely that President-elect Trump would encourage the FDA to move forward with these bans, NACS Director of Government Relations Anna Ready Blom warned at the time of this article writing: “I think there is a possibility that President Biden could finalize the menthol rule before he leaves office on January 20th.”

A federal menthol and flavor ban is of great concern to retailers in every state.

“There’s not much really happening [in terms of bans] at the state and local level in Tennessee, Kentucky and Alabama,” said Staley, who operates in these states. “But a national flavor ban on menthol and cigars?

That would really kill the industry.”

David Spross, executive director of the National Association of Tobacco Outlets (NATO), said moving forward with such drastic action in a lame duck session is not common when there’s a change in party.

“Even if something happens before former President Trump takes office, I could see scenarios where the new Administration takes steps to delay implementation of the rules, declines to enforce them or initiates rulemaking to rescind them,” he said.

While the FDA was close to finalizing the menthol and flavor ban—making it a possibility to finalize in the lame duck session—it’s much further off on the other major nicotine initiative under the Biden Administration: lowering the level of nicotine in cigarettes.

The plans to do so were announced in the summer of 2022 but the agency has yet to announce its proposed rule on nicotine levels, much less review comments on said rule or issue a final rule.

“That’s something that has been on their radar that they have been working on, but we just haven’t seen a formal proposal,” Ready Blom said.

As for what the FDA will look like under a second Trump Administration, there’s even more uncertainty due to the nomination of a cabinet head who has been very outspoken on taking on food production and Big Pharma … but is something of a mystery when it comes to tobacco.

“The Trump administration has nominated Robert F. Kennedy Jr. for Secretary of HHS,” Ready Blom said. “He’ll have authority over FDA and these types of issues. It’s unclear what his position on them will be.”

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If you look at this loophole where all of these illicit vapor products started flooding the market, this problem has been created by FDA’s process.”

44 JANUARY 2025 convenience.org

THREE THINGS TO WATCH AT THE STATE AND LOCAL LEVEL Though federal regulations have the potential to impact the largest number of retailers, the state and local level is often where the most troubling regulations are first passed.

“I call it the legislative laboratory for tobacco control,” Spross said, pointing to the fact that the tobacco flavor ban started in cities and municipalities primarily in California and Massachusetts, then those states followed by enacting them into statewide laws.

There are three main issues Spross and others are watching at the state and local level in 2025: 1. Taxes—especially for pouches: “Depending on the economy, there will be some states that will try to increase taxes,” Spross said, adding that there are around 20 states that don’t currently tax vapor products and another 35 that don’t tax modern oral nicotine pouches. “Pouches are starting to get attention from lawmakers. I think there will be some states that attempt to capture additional revenue from these emerging categories.”

2. Continued flavor bans: “When California passed its flavor ban in 2020, I thought that it was going to be an inflection point in the industry—however, other states haven’t followed California’s lead, perhaps due to the unintended consequences of California’s flavor ban, such as an increase in black market sales,” said Spross. He further noted that there have been several proposals in other states. “Those proposals will be reintroduced and considered again on the state and local levels.”

3. “Nicotine-free generation” laws: In 2021, Brookline, Massachusetts became the first city to enact a generational tobacco ban (banning the sale of tobacco products to anyone born after Jan. 1, 2000). Since then, a number of other cities and localities have followed suit. “Right now, we are primarily dealing with it in Massachusetts, and we are actively engaged to prevent it from going to other cities,” Spross said.

Vladyslav Horoshevych/Getty Images

“This problem of a loophole that allowed all of these illicit products to flood the market has been created by FDA’s process,” Ready Blom said, adding that the FDA has not provided a list of products that have had a premarket tobacco product application (PMTA) accepted for review and are therefore allowable to sell.

“You have bad players taking advantage of the lack of clarity in this system.”

Though the FDA has made some strides— issuing warning letters, fines and confiscating product coming into the United States illegally—NACS is working on legislation that would require FDA to provide that list of compliant and non-compliant products.

Admittedly it’s just a first step in solving the problem.

“NACS has been trying to get lawmakers to focus on FDA’s responsibility of providing clarity and transparency to retailers, and from there enforcing,” said Ready Blom. “Specifically, FDA having to produce an enforcement plan and then take action.”

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WHAT INNOVATIONS ARE COMING? With the success of modern oral nicotine, retailers are eager for more innovations in the nicotine category.

While many manufacturers are coming out with new and improved products, one long-promised innovation is heat-not-burn products, which create a smokeless experience by heating tobacco instead of burning it. Philip Morris International is poised to release the first major heat-not-burn option in the United States: Its IQOS device, which has gained popularity in Europe and Asia.

The question is when.

IQOS started a pilot program in Austin, Texas, in October of 2023, with the attention on research and focus groups as opposed to a full launch. Philip Morris had stated it won’t do an at-scale launch of IQOS until the FDA approves its latest model (IQOS Iluma)—expected in the second half of 2025.

Retailers are still not clear when or how IQOS will be made available at their stores.

In other countries, Philip Morris has created IQOS Stores to sell the IQOS device (though other retail outlets sell HEETS—the tobacco sticks heated in the device).

“It’s really more of a wait and see approach,” Wade said of IQOS, expressing concerns about a potential high price point of the IQOS device when compared to vapor products on the market.

Staley said Tri Star was initially in talks to be a test market for IQOS. Whether that comes to fruition or not, Staley said innovations like IQOS, along with all of the other new and exciting products in development from suppliers, are what will keep the backbar strong in 2025 and beyond.

“I think it’s very important,” he explained.

“With the decline in cigarettes and moist snuff, you have to have something to pick up those extra sales. Innovation is what really drives all the categories, tobacco included.”

Melissa Vonder Haar is the marketing director for iSEE Store Innovations. Follow her on X at @iSeeMelissaV.

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Car wash operators are lathering up business by focusing on sustainability, service and subscriptions.

48 JANUARY 2025 convenience.org

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BY LAUREN SHANESY

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NACS JANUARY 2025 49

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Splash In’s soft-touch automatic car wash in Chantilly, Virginia, uses ceiling tracks and sonar technology to gently guide the wash equipment around the vehicle.

50 JANUARY 2025 convenience.org

Mammoth puts an emphasis on customer experience by offering amenities. “We do free vacuums and have carts with towels and bottles for other cleaning, but also took it a step further and offer free air for tires,” said Janae Warner, operations training manager at Mammoth Holdings.

But the car wash landscape is ever evolving, said Janae Warner, operations training manager at Mammoth Holdings, an operator of 150 car washes nationwide. “Every time you turn around there is a new piece of equipment, a better chemical or a new unique thing you could be doing. We are definitely trying to make sure we are staying on the cutting edge of the business.”

Standout car wash operators need to do more than wash, rinse, repeat. From monthly subscriptions to sustainable features to generating a stellar customer experience, here are three major ways car wash operators are setting themselves apart.

CUSTOMER SERVICE STANDS OUT Automatic doesn’t mean passive. While many car wash operators have unmanned or self-service automatic car wash offerings, that is still balanced with an emphasis on customer service and the customer experience.

J. Thomas Photography

hen building new Dash In convenience stores, The Wills Group always looks at whether it can add a car wash to the site.

“It’s actually quite profitable for us,” said Mike Mulhern, director of operations at Splash In, a car wash subsidiary of The Wills Group. The company has over 50 Splash In Car Washes in its portfolio.

At some of its sites, the car washes had such high demand that “we needed to be able to do more,” Mulhern added. At many of its locations and new builds, the company is transitioning to tunnel car washes with conveyors that allow the site to handle a higher volume of customers. “The smallest building is 85 feet, compared to 48 feet for an in-bay automatic car wash (we have a few of those), so it’s twice the size but can wash almost four times the vehicles.”

For many retailers, car washes offer the opportunity for a high-margin revenue generator that does not add a lot of labor cost.

According to data from NACS, car washes are the most profitable revenue line in “other store operating income” for convenience stores and bring in an average gross profit of $4,129 per month.

Tommy’s Express offers mat cleaning with its proprietary Molded Mat Washer, which “handles mats up to 34 inches wide with no length limit. In approximately 20 seconds, mats are sprayed with detergent, scrubbed, rinsed and dried using an air-knife technology,” Michael Van Wieren, sales specialist at Tommy Car Wash Systems said.

To improve its customer experience, Mammoth Holdings staffs attendants at its car wash entrances.

“We want to make sure our car wash experience is as seamless and as frictionless as possible,” said Mulhern. “Is it inviting for somebody who doesn’t understand it?

Can my mother, who is 85 years old, pull into an automatic bay, read our signs and feel safe and good about the experience she will have? We try to look at the experience through the lens of different audiences and make sure it’s as simple as possible for people to do it themselves.”

Splash In also does as much as it can to avoid downtime. “You can’t sell something you don’t have. Having the car wash open and operating is the number one source of optimization,” Mulhern said. “To ensure up time, we work with vendors who can fix our equipment quickly and be accountable for response times.”

Key to customer experience is excellent service, and so both Mammoth and Splash In staff attendants at their car wash entrances.

Splash In’s greeters, who are chosen for their extroverted personalities, are there to “help guests along in their experience,” Mulhern said, by answering any questions and telling customers about the wash options. And, importantly, they sell subscription packages.

“If someone isn’t ready for a membership, that’s no problem. But we’ll explain the subscription to them and tell them how they can save money based on the cost average,” Mulhern said. “We don’t want [Splash In employees] overselling or being pushy, but want them to help guide the customer to understand the options and make the right decision for them.”

Selling memberships directly at the pay window is the most effective approach, said Michael Van Wieren, sales specialist at Tommy Car Wash Systems, a car wash equipment manufacturer and car wash franchiser with 215 franchise sites (Tommy’s Express) in the United States and locations under development in Canada and Europe. The company staffs team members at the window to help customers set up their mobile app, which integrates with the company’s POS and license plate recognition (LPR) technology. The app lets customers pay for individual washes and bill pay-per-wash or monthly subscription options.

NACS JANUARY 2025 51

Tommy’s Express uses cameras with license plate recognition technology to identify vehicles, link cars to the company’s loyalty app and make the customer experience more seamless.

Car Wash Cameras

Car washes, like all businesses, are grappling with how to leverage AI. Many operators are already using license plate recognition (LPR) technology to recognize cars, tie license plates to memberships and subscriptions, and make the process of getting a car wash more seamless for both parties.

“The addition of LPR technology enhances the user experience, automatically scanning member plates upon arrival and raising the gate arm for seamless entry, making every visit faster and more efficient for guests,” said Michael Van Wieren, sales specialist at Tommy Car Wash Systems.

Mammoth Holdings recently started using license plate readers that are integrated with its wash club membership. “There is no more waiting or scanning a barcode or anything. It is huge with our customers,” said Michelle Geertsema, marketing and business development coordinator at Mammoth Holdings.

For Splash In, LPR technology is on its radar. “We are looking at artificial intelligence and asking, ‘How do we grab hold of this and utilize it to grow sales and grow our business,’” said Mike Mulhern, director of operations at Splash In. “The reality is, it’s really necessary.”

AI camera technology can also help with customer segmentation, marketing strategies and building loyalty. “Artificial intelligence through camera systems is the new wave of marketing,” said Mulhern. “We can harness that to communicate with a customer and say ‘We noticed you’ve been here four times this month. If you had a membership, you would have saved X dollars.’ Or we can see how many fuel customers are filling up and leaving without getting a car wash. So that’s a huge opportunity for us going forward.”

52 JANUARY 2025 convenience.org

Mammoth also puts an emphasis on customer experience by offering amenities. “We do free vacuums and have carts with towels and bottles for other cleaning, but also took it a step further and offer free air for tires,” said Warner. One of her favorite perks is Mammoth’s free windshield washer fluid.

Tommy’s offers mat cleaning with its proprietary Molded Mat Washer, which “handles mats up to 34 inches wide with no length limit. In approximately 20 seconds, mats are sprayed with detergent, scrubbed, rinsed and dried using an air-knife technology,” Van Wieren said. “[Amenities are] the extra things that really show we care about our customers and go the extra mile. There is a car wash on every corner, and you need to do something to stand out. For us, it’s that our customer service goes above and beyond,” said Mammoth’s Warner.

SUSTAINABILITY SAVES RESOURCES Some sustainably-minded consumers are wary of car washes, assuming that they might be wasting resources—especially water—or using chemicals that have a negative impact on the environment. Traditional car washes can use up to 100 gallons of water per vehicle. But many operators are implementing eco-friendly practices and techniques into their systems.

“Having a sustainable car wash is important to promote, because lot of people are unaware [that they exist],” said Warner.

Mammoth uses biodegradable cleaning chemicals and recycles “a huge portion of our water,” she explained. “This is really important during droughts because consumers don’t want to wash their cars, but we use less water than you would at home.”

Wills Group has five Splash In Eco Car Washes, which recycle 60% of the water to reduce consumption and use biodegradable, non-corrosive cleaning agents that aren’t harmful to plant or animal life. “The water goes through a rigorous reclamation process to remove sediment, and then we reuse our recycled water … to wash things like the undercarriages and wheels,” said Mulhern.

The buildings also have energy-reduction features such as LED lights, an energy saving HVAC system and insulation that helps regulate the building from the elements.

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Splash In has over 50 locations across Delaware, Maryland and Virginia that offer soft touch automatic car washes and express tunnel car washes.

STAY STEADY WITH SUBSCRIPTIONS As retail becomes more defined by customer loyalty, offering wash clubs, monthly subscriptions and loyalty programs can be a boon.

Mammoth customers can design a package based on their needs, and the membership is valid at any of the company’s 150 sites across the United States. Splash In offers three monthly membership levels for its tunnel car washes. The level options range from $29-$39 per month depending on the features selected and all membership levels allow customers to visit the car wash once per day.

“We know customers nowadays are looking for [more] value, as well as something convenient and fast,” said Warner. “Our unlimited wash pass hits all three of those. If you come even twice per month, it will save you money.”

LPR technology automatically raises the gates when it registers a car linked to a wash package. “You just go right through and don’t even have to worry about bringing your wallet because it’s already charging you every month,” said Michelle Geertsema, 54 JANUARY 2025 convenience.org

Splash In uses eco-friendly car wash technology and water reclamation systems with biodegradable, non-corrosive cleaning agents.

marketing and business development coordinator at Mammoth Holdings. “It is the easiest way to take care of the second biggest investment you have.”

Tommy’s membership is integrated with the company’s Wash Club user app, which “provides a convenient way for car wash guests to manage account information, vehicles, payments and coupons all within a streamlined interface,” Van Wieren described, noting that users can also manage wash frequency and select wash packages in the app for a more convenient customer experience.

Subscription programs also help businesses weather the storm—literally. In areas where seasons and weather can impact car wash frequency and a rainy day could mean no one is washing their car, subscriptions keep revenue steady. “Weather is one of our biggest challenges,” said Mulhern. “A lot of people won’t get their car washed if it’s raining, but the great thing about memberships is that they minimize the impact of weather.”

J. Thomas Photography

Making car washes more sustainable is “just the right thing to do,” said Mulhern. “If we can recycle water and reduce our energy footprint, we certainly want to do so.” But in addition to being beneficial for environmental reasons, it also saves the retailer money on operating costs and utilities.

“Because we’re able to reduce our water usage, we’ve never had to close in times of drought,” he explained.

While Mulhern acknowledges that customers might not be willing to pay more for an eco-friendly car wash, “the fact that we do it without asking them for more makes people appreciate us.”

H&S Energy (dba Power Market) has a network of over 70 car washes. It offers a monthly subscription that’s integrated with its convenience loyalty app for its retail locations, said Fidaa Mohrez, senior director of operational systems at H&S Energy Group, during a booth presentation at the 2024 NACS Show. The loyalty program is serviced through Liquid Barcodes.

“It’s really about [generating] consistent revenue coming from the car wash. Car washes are always based on the weather—if it’s sunny, you have business, but if it’s cloudy or rainy, then you’re down,” he said. “The subscription created consistent revenue because members pay the [flat] membership … and it ensures the car wash is always running even if the weather is not helping.”

“We operate in snowy states, and it doesn’t matter how many times it snows, the customer can come back and wash their car after every single snowstorm to get the salt off. It’s not going to cost them any more. Subscriptions are a win-win for the company and for the customer,” said Warner.

Memberships also do well because “people feel good when they get their car washed—it really just makes them feel better when they have a clean car. And that feeling is addictive,” said Mulhern.

He also noted that memberships can help build loyalty, which is key in a saturated market if you’re trying to differentiate your business from your competition. “If you have a membership with Splash In, you’re not going to need a membership or car wash from somebody else. It all ties back to the importance of user experience and customer experience.”

To drive customers to the car wash, The Wills Group pairs deals and promotions with other parts of the business. “We offer a fuel discount of 20 cents off per gallon if you purchase a wash at the pump. The strategy is part of our overall value proposition,” said Mulhern.

Tommy’s Express locations use the company’s patented circular arch design, which it said offers customers a more spacious experience and better surface cleaning.

Lauren Shanesy is a writer and editor at NACS and has worked in business journalism for a decade. She can be reached at lshanesy@ convenience.org.

NACS JANUARY 2025 55

Breaking Down Food Safety

Risks 56 JANUARY 2025 convenience.org

Convenience retailers

share their knowledge on the top food safety risks to your company.

BY CHRISSY BLASINSKY

Adobe Firefly

A

bout 10 years ago I heard a comment that I wholeheartedly disagreed with: Food safety isn’t measurable.

It was a curious statement, considering CDC data reports that 48 million people get sick, 128,000 are hospitalized and 3,000 die from foodborne diseases each year in the United States.

Perhaps this person wasn’t aware of how a company integrates its food safety plans and processes—the investments, training, resources and controls that are

NACS JANUARY 2025 57

Dr. Jay Ellingson, chief science officer at Kwik Trip Inc., talked about the link between company growth and risk at the recent NACS Food Safety Forum, and cautioned against one outpacing the other—especially as c-stores continue to evolve their foodservice programs.

“If your company outgrows the pace of your food protection systems, you create areas where there are risks. We see examples in the news where the risk can become so great that the systems in place cannot protect consumers or an organization,” he said.

Convenience retail leaders must understand what’s at stake if a foodborne illness is linked to their brand, which may be why one Food Safety Forum attendee asked during a round of Q&A why more company leaders weren’t participating in the event.

At the 2024 NACS Food Safety Forum, Dr. Jay Ellingson, chief science officer at Kwik Trip Inc., discussed the link between company growth and risk.

put into place. And on top of all that, how a company measures its risk in relation to its robust food protection programs.

Convenience stores are one of the fastest growing food retail channels. NACS State of the Industry data shows that foodservice sales—which encompass prepared food, commissary, and hot, cold and frozen dispensed beverages—at the top performing c-store companies average 35% of their inside sales; the overall industry average is 27%.

Growth/Risk

Company and Food Protection Growth with Respect to Risk Over Time

Food Protection Programs Company Growth

Present

Time 58 JANUARY 2025 convenience.org

TOP FOOD SAFETY RISK FACTORS Each convenience retailer who presented at this year’s Food Safety Forum, as well as a related NACS Show Education Session, touched on how their companies are hyperfocused on safe food handling and delivering exceptional foodservice offers.

Although there are many food safety risks that cause foodborne illness, the following five are the most frequent culprits of a foodborne illness. They’re also the factors that result in the most health inspection violations: • Poor personal hygiene (handwashing is still No. 1) • Purchasing food from unsafe sources • Failing to cook food adequately • Using contaminated equipment • Holding food at improper temperatures “Focusing on these five will position your organization as best as possible for mitigating foodborne illness risk,” said Evan Powell, retail food protection manager at Kwik Trip Inc., during the NACS Show Education Session “Protecting Consumers and Your Brand With Food Safety Basics.”

These five risk factors also result in the most common health inspection violations.

“A violation means that there is an opportunity for a foodborne illness to occur in your establishment,” said Wade Robinson, senior foodservice manager at Mirabito Convenience Stores.

Thank you to Testo for its third consecutive year supporting the NACS Food Safety Forum.

Learn more about Testo at testo.com.

See You at the 2025 Food Safety Forum

These conversations will continue on April 8, 2025, in Dallas, Texas, at the NACS Food Safety Forum. The event will be co-located at the NACS State of the Industry Summit, which is a shift from being co-located at the NACS Show.

Top of mind will be the FSMA Traceability Rule and how the industry is preparing for 2026 implementation.

Registration is open at convenience.org/FSF.

Wade Robinson, senior foodservice manager at Mirabito Convenience Stores.

Chris Rapanick, managing director of NACS research, shared the most recent data on foodservice from the NACS CSX convenience benchmarking database and the NACS Convenience Voices survey.

SAFE SOURCES Sarah Friedrich of Kwik Trip Inc. and Beth Hoffer of Weigel’s Stores Inc. shared how their teams determine which food suppliers/ vendors their respective companies will purchase from.

“Our Food Protection Administration team conducts food supply chain assessments, combining risk evaluations with on-site visits to our vendors’ production facilities. These assessments are guided by a scorecard that helps determine the risk level of each location before the visit takes place,” said Friedrich, a food protection analyst at La Crosse, Wisconsin-based Kwik Trip.

Kwik Trip teams visit and tour a vendor’s facility, which is also part of building a relationship that’s based on shared values and goals. “We’re looking to build that relationship before an incident happens. And if something were to happen, we know who to talk to,” Friedrich said.

Retailers should also ask for their distributors’ audits and certifications, information that will show whether the company is in compliance with the necessary food safety regulations.

Hoffer, the vice president of food and beverage at Knoxville, Tennessee-based Weigel’s, shared that her team also conducts audits on what it considers high-risk ingredients.

“For our raw chicken, we go to that plant every year and do an audit. We put our eyes on that,” she said, adding that for lower-risk items, “try to use someone who can help you with that, like your distributors.”

NACS JANUARY 2025 59

Evan Powell, retail food protection manager at Kwik Trip Inc.

ServSafe training cites the following method for recalibrating a thermometer: 1. Fill a large container with ice. Add clean tap water until the container is full and stir well.

2. Put the thermometer stem or probe into the ice water.

Make sure the sensing area is under water and not touching the sides of the container. Wait 30 seconds or until the reading stays steady.

3. Adjust the analog thermometer so it reads 32°F (0°C).

Hold the calibration nut securely with a wrench or other tool and rotate the head of the analog thermometer until it reads 32°F (0°C).

HOLDING TEMPS Hot-holding foods must be kept above 135°F (57°C)—although a few states may stipulate 140°F if they’re still using an older food code. Cold-holding foods must be kept below 41°F (5°C).

David McIntyre, senior health and safety specialist at EG America, used a pot of chili to test Food Safety Forum participants’ acumen on how to properly cool down the product.

Most nailed the answer: According to the Food Safety and Inspection Service, foods like chili should be cooled from 135°F (57°C) to 70°F (21°C) within two hours to eliminate risk of pathogen growth, and then to 41°F (5°C) in the next four hours for a total of six hours.

60 JANUARY 2025 convenience.org

Vector Tradition/Shutterstock

Thermometer Recalibration

COOKING TO TEMP Not properly maintaining safe temperatures for raw and cooked products is a huge food safety risk.

According to the Food and Drug Administration, using a food thermometer is the only way to ensure the safety of meat, poultry, seafood and egg products for all cooking methods to ensure these foods are cooked to a safe minimum internal temperature that destroys any harmful bacteria.

To make it easier for store teams to check food temps, “Have many thermometers available, and verify multiple temperatures from each batch produced,” suggested Powell, like taking the temperature of the thicker parts of a chicken tender, pieces from different corners of the fryer, and the thickest part of the meat on larger pieces.

Additionally, Friedrich said that when thermometers need to be recalibrated, the instructions should be clear and easy for employees to follow. For example, at Kwik Trip, store teams “don’t have to search for a piece of paper on how to calibrate the thermometers. … They have a picture with step-by-step instructions on the calibration mug itself and it works well for them,” she said.

Video training also works, said Powell, which is preferred by visual learners. Posters and documents work, but “If you can show them [what to do] with a training video that is accessible right in the store or kitchen, that would be even better,” he said.

PeopleImages.com - Yuri A/Shutterstock

Roller grill items like hot dogs have an unfair history of being publicly perceived as food safety hazards—as in stale hot dogs aimlessly rolling around for hours or days basking in harmful bacteria with every turn.

“Let’s break this one down a little bit. The word ‘cook’ is a misnomer. We’re not really cooking. Anything on that roller grill is fully cooked and commercially packed. What we’re doing is reheating it,” said McIntyre, noting that TCS foods like hot dogs—the acronym for time/temperature control for safety—should be kept at 135°F or higher to mitigate foodborne pathogen growth.

“Ultimately, you can’t have TCS food sitting at the temperature danger zone between 41°F and 135°F for an extended period of time—otherwise harmful bacteria will quickly multiply,” said Powell.

If a TCS food falls into that danger zone for four hours or more, harmful bacteria will double every 20 minutes.

Maintaining temperature logs to monitor hot and cold food holding is a tried-and-true method for mitigating this risk factor. Keep in mind that the Food Safety Modernization Act (FSMA) stipulates that all food safety records should be kept for at least six months, with accessibility within 24 hours.

“We have a continuous temperature monitoring system that alerts our operation support team when temperatures go above 41°F in our fresh case, our meat case and all of our coolers,” said Friedrich, adding that every four hours product is temperature logged.

Powell noted that in the unlikely event your stores are being investigated as part of a foodborne illness outbreak, you want to have documentation on hand that shows your food protection systems are in place. In other words: say what you do, do what you say and prove it.

CROSS CONTAMINATION This is the risk factor where harmful pathogens and allergens cross paths, but the two are different—like interchanging cleaning and sanitizing.

Cross contamination, explained Robinson, is when disease-causing microorganisms found in one food item are transferred to

Clean Hands, Please

The ServSafe exam tests for proper handwashing techniques.

Here are the steps: 1. Wet your hands and arms with running water.

2. Apply soap.

3. Vigorously scrub hands and arms for at least 10 to 15 seconds.

4. Rinse your hands and arms thoroughly under running water.

5. Dry hands and arms with a single-use paper towel or hand dryer.

Sounds easy enough, yet improper handwashing—or a lack of handwashing—carries a huge risk for the spread of many diseases and conditions that can cause a foodborne illness, as well as some respiratory infections like adenovirus and hand-foot-mouth disease, according to the CDC.

another food item, like using the same cutting board for preparing raw chicken and lettuce during food prep.

“This is dangerous,” Robinson cautioned.

Although the disease-causing microorganisms found in raw chicken will be killed when the product is cooked to 165°F, that harmful bacteria has been transferred to the lettuce— which is not being cooked—and creates a foodborne illness risk.

Cross contact is more in line with allergens, said Robinson. The “big nine” allergens, according to the FDA (as of 2022), are milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, soybean and sesame.

For example, cross contact can occur when peanut cookies and sugar cookies are prepared on the same surface. “We’ve now created a cross contact situation where a person with a peanut allergy eats a sugar cookie and has an allergic reaction to the peanuts,” Robinson explained.

NACS JANUARY 2025 61

BUILDING RELATIONSHIPS Both Ellingson and Powell shared another way that Kwik Trip manages its risk, and that’s through its relationships with state and local health officials and regulators.

During the Food Safety Forum, Melanie Harris, food safety manager, retail, at Casey’s General Stores, and Corrin Howard, senior regulatory compliance supervisor at Wawa, shared their experiences as former regulators, giving a unique perspective on the value of relationships with local regulators.

Harris, who was a health department inspector with the Iowa Department of Inspections, Appeals and Licensing prior to joining Casey’s, shared that convenience retailers need to be the ones who open the door to their regulators and establish a relationship.

“I cannot stress enough how you want to do that prior to the emergency, which is not the time to introduce yourself,” said Harris.

“Give them an opportunity to know you ahead of time, showcase what you’re doing and set up your brand and your program and allow them to comment on it. They are a resource for you to use,” Harris added.

Howard agreed that when a problem arises, that is not the time to get to know your health inspectors. She was a health inspector for 15 years prior to joining Wawa. “In my experience, regulators are very interested in getting to know the industry,” she said.

In terms of how the c-store industry can help drive the relationship between their companies and regulators, both Harris and Howard stressed that retailers need to be the ones behind the wheel.

“They’re not coming to you other than to inspect [your stores],” said Harris.

Both also find value in joining local food safety groups and task forces offered through health departments, attending regional health department meetings and joining national associations like NACS and others that have local affiliates, like the Association of Food and Drug Officials (AFDO) and the National Environmental Health Association (NEHA).

62 JANUARY 2025 convenience.org

Jeremy Zenlea, vice president, health and safety, EG America, moderated a panel with Melanie Harris (center), food safety manager, retail, at Casey’s General Stores, and Corrin Howard (right), senior regulatory compliance supervisor at Wawa.

The two shared their experiences as former regulators.

PREVENTATIVE ACTIONS Powell outlined five “SMART” ways to organize a corrective action plan prior to a health inspection.

1. Specific: Is the corrective action plan detailed and understandable?

2. Measurable: Can it be easily evaluated?

3. Action based: Does it include a desired end result?

4. Realistic: Is the expected outcome reasonable?

5. Timely: Is the deadline attainable?

“If you don’t put a corrective action plan together, you could have repeat violations, especially the top five critical ones,” he said, noting that Kwik Trip uses a digital system to collect and store this information so that co-workers have immediate access.

“Get buy-in from the store employees and store management teams,” said Robinson, so they understand not just what that the company is trying to accomplish with food safety, but the why.

“There’s no secrets regarding food safety and it’s not a competitive advantage,” said Powell.

“We don’t withhold anything—we want everyone to be successful with food safety.”

He also shared that if you “can control those top five risk factors, you will mitigate close to 95% of your foodborne illness risk.”

And that, my friends, is measurable.

Chrissy Blasinsky is the digital and content strategist at NACS.

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GAS STATION GOURMET

A Tennessee Destination

The Tennessean Travel Stop draws in customers through food, music, dancing and more.

BY AL HEBERT

H Traditional homestyle foods, such as meatloaf, are a hit at the Tennessean.

64 JANUARY 2025 convenience.org

ow do you draw customers to your business? The Tennessean Travel Stop in Cornersville, Tennessee, had great food and decided that an element of fun might get travelers and locals to extend their visit. The travel stop has become a destination, complete with music, dancing and trivia night.

“If you think of travel stops, it’s a quick in and out. We want to be a place that people want to come and stay,” said Tara Polk, general manager.

The Tennessean’s been around since 1972. Gregory Sachs bought it in 2017 and hired Polk. “He saw potential. He loved the food and the atmosphere,” she said.

BUFFET FAVORITES “I think we have the best meatloaf in the world.”

Polk makes a bold claim, but according to customers, she’s right.

“We’re known for our meatloaf. I’ve had meatloaf in other places and ours is the best. I love it so much that I make the same meatloaf at home,” she said, adding, “It’s not just my opinion. Customers love it. It’s the one thing we keep on our buffet every day. We swapped it out once and the customers were mad.”

People love the Southern, homecooked food offered by the Tennessean, which has its own propriety barbe-

Trivia nights draw crowds, too.

“Trivia Thursday is very popular. We give first-, second- and third-place cash prizes. We come up with a theme. A few weeks ago it was Stranger Things and we had a Disney Name That Tune. It’s mostly local teams. This past week we had five teams. We have a lot of spectators as well,” said Polk.

In addition, there’s a sports lounge with a big TV. “This appeals to travelers and locals. There’s not a lot to do in small town. … We are the spot.”

Adding live music was part of changing the travel stop from a pit stop to a destination.

que sauce in original, sweet heat and chipotle. “We smoke everything here,” said Polk. “We have pulled pork, brisket, chicken, smoked bologna and ribs.”

Smoked bologna?

Bologna is rising in popularity. If you move in the world of food, you’ll find everything from basic deli style to gourmet offerings—and that’s no bologna.

Polk and her team have jumped on the bologna train and are taking the venerable standby to a new level by smoking it.

“We start with a chub of bologna and rub it with our proprietary rub. We put it on our rotisserie smoker and smoke it with cherry and hickory wood. Once it’s cooled down, we slice it thick and place it in the cooler. When a customer orders it, we heat it on the griddle. It has that smoked flavor and it’s delicious.”

It is served for breakfast or as a sandwich on Texas toast with fries. “You can

get an omelet with smoked bologna,” said Polk, adding that truckers ask for bologna to take on the road.

MUSIC AND TRIVIA Cornersville is about an hour’s drive from Nashville. Music is huge in this part of the country.

“The whole goal was to bring Nashville to Cornersville,” Polk said.

“Here, a traffic jam is when you get stuck behind a tractor. So, music gives people an opportunity to experience live music and entertainment that you’d have to go to Nashville to see. It gives locals a chance to see this and truckers a chance to see entertainers that they would not have the opportunity to experience.” Polk said. “We move the furniture around so people can dance.

Our next thing coming is line dancing.

I suspect it’s going to be pretty popular.

People around here love to dance.”

COMMUNITY CONNECTIONS Polk shared that the “biggest challenge in this business is staffing. We currently employ 85 employees. You have turnover. I try to listen to staff with the intent of understanding, not necessarily with the intent to respond. I try to make them feel like they’re with me and not beneath me.”

Getting involved in the local community has been a win-win for the Tennessean. It’s an opportunity to touch a lot of local lives.

“Every Friday we feed the high school football team. We give them a pregame meal for free. The owner is generous. He likes to give back,” she said, adding, “We have a lot of events. We had a big Fourth of July event. Everyone had cancelled fireworks. So, we were the only fireworks show. We had over 1,000 people come out. We had a live band. We had a portable bar. It was like a big cookout. It was a hit. It’s expensive to put on a fireworks show, but it was a way to give back.”

“We want to perfect this and have more Tennessean Travel Stops,” Polk said. “It’s like the Ritz-Carlton of travel centers. … Customers get a nice environment that’s down to earth and welcoming.”

Al Hebert is the Gas Station Gourmet, showcasing America’s hidden culinary treasures. Find him at www.GasStationGourmet.com.

NACS JANUARY 2025 65

Bright Spots on the Backbar

OTP strikes the highest growth rate of top in-store categories.

BY MELISSA VONDER HAAR 66 JANUARY 2025 convenience.org

Irina Piskova/Getty Images

CATEGORY CLOSE-UP OTHER TOBACCO PRODUCTS

$5,007 Average gross profit $ per store, per month from other tobacco products Source: NACS State of the Industry Report ® of 2023 Data

T

hough not yet the size of the cigarette category, OTP has continually managed to do something many categories (backbar or not) struggle to do: Post continued growth in sales with steady margins.

The NACS State of the Industry (SOI) Report® of 2023 Data showed the OTP category averaged sales of $16,978 per store, per month and monthly gross profit dollars of $5,007 per-store. That represents a 6.5% increase in sales and a 7.3% increase in gross profit dollars versus 2022, making OTP the third-largest driver of in-store sales (7.5% of total in-store sales) outside of the foodservice categories and the fourth-largest driver of in-store gross margins (5.9% of total in-store margins) excluding foodservice.

The numbers for 2024 are shaping up to be even more impressive: Data presented for the first half of the year from the NACS CSX Benchmarking Database had OTP sales up compared to the first half of 2023.

“Smokeless (including modern oral) and e-cigarettes are likely to continue to dominate the category,” said Emma Tainter, a research analyst for NACS. “OTP sales are highly influenced by those two subcategories, and they are the ones driving the growth.”

Industry Sales SMOKELESS: POUCH GROWTH STILL IN DOUBLE DIGITS Smokeless remains the largest segment of the OTP category, contributing 37.0% of OTP sales in 2023. It had modest declines last year, with monthly per store sales of $6,297 (down 2.7% year over year) and monthly per store gross profits of $1,490 (down 0.67%). Average margins were 23.66%, slightly below the category average of 29.49%.

But those SOI figures do not include the biggest driver of backbar growth: modern oral nicotine (also known as nicotine pouches). Those fall into the “other tobacco” segment of OTP. In 2023, “other tobacco” saw monthly per store sales grow 63.37% ($2,083) and gross profit per store, per month contribution grow 93.01% (from $318 to $614) with an average gross margin of 29.45%.

The growth bumped up the “other” subcategory to 12.3% of OTP sales— meaning the smokeless and “other” subcategories drew nearly half (49.3%) of all OTP sales in 2023.

It’s no surprise that retailers and suppliers alike remain enthusiastic about the potential of pouches.

“We’ve definitely seen the pouch business grow and in a really big way,” said Robert Wade, the category and supply chain manager for ExtraMile Stores.

Wade noted that the recent shortages of a leading modern oral product evidenced just how strong the demand for these products have become.

“Modern oral is continuing to grow at a significant rate for a variety of reasons, including flavor and convenience,” said Cory McDade, Reynolds American Inc.’s senior director of trade marketing development. “We expect

% of In-Store Sales

7.3% 7.5% 2022

2023

Avg. Sales/Store

$15,942 $16,978 2022

2023

Gross Margin %:

5.91% 5.89% 2022

2023

Source: NACS State of the Industry Report ® of 2023 Data NACS JANUARY 2025 67

CATEGORY CLOSE-UP OTHER TOBACCO PRODUCTS

NACS CSX Benchmarking Database, Per Store, Per Month Sales

n 2021

n 2022

n 2023

n 2024

OCT

NOV

DEC

$20,000 $18,000 $16,000 $14,000 $12,000 $10,000 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

Source: NACS CSX Convenience Benchmarking Database

CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database.

Contact Chris Rapanick at (703) 518–4253 or crapanick@convenience. org for a complimentary executive walkthrough.

68 JANUARY 2025 convenience.org

We expect the modern oral segment will continue to grow, eventually reaching the same size as all other smokeless products.” the segment will continue to grow, eventually reaching the same size as all other smokeless products.”

That’s already come to fruition in parts of the country: The modern oral segment launched primarily in the West Coast, with test markets happening in Denver and other West Coast cities in 2015. Since then, the availability and popularity of products has expanded east. But the West Coast’s pouch market remains more mature: Wade reported that pouches now outsell MST products in his West Coast stores.

“In the East Coast, we still see that traditional MST outsells nicotine pouches,” he said. “The East Coast is still a relatively new market and is developing modern oral.”

Which means, despite double digit growth in 2023, there’s room for modern oral to grow even more in 2024 and beyond.

E-CIGS: ILLICIT DISPOSABLES CRAMP THE LEGAL MARKET Electronic cigarettes overtook cigars as the second-highest selling OTP segment several years ago and remained the second-most-sold subcategory in 2023— but its percentage of OTP sales continues to decline. SOI data had e-cigarettes at 31.6% of OTP sales in 2022, dropping to 28.1% in 2023. Sales and margins were also down last year: The segment averaged monthly per store sales of $4,764 (down 5.44%) and monthly per store profits of $1,581 (down 9.24%).

Gross profit margins remained higher than the OTP average, at 33.18% in 2023.

Retailers don’t think the numbers reflect an actual decline in vaping—but something more harmful.

“One of the biggest things that we’ve seen in recent years is poly-usage,” said Wade, noting that pouches and vapor products benefit most from poly-usage.

“The problem is that we don’t capture

Irina Piskova/Getty Images

The Power of CSX Data

Other Tobacco Products Subcategory Data Same-Firm Sample, Per Store, Per Month Other Tobacco Products

Percent of Sales

Avg. Sales/Store

Avg. GP$/Store

Gross Margin %

2022

2023

2022

2023

2022

2023

2022

2023

Smokeless

40.6%

37.0%

$6,470

$6,297

$1,500

$1,490

23.18%

23.66%

E-Cigarettes

31.6%

28.1%

$5,038

$4,764

$1,742

$1,581

34.58%

33.18%

Cigars

15.5%

13.9%

$2,463

$2,365

$838

$796

34.04%

33.64%

Other Tobacco

8.0%

12.3%

$1,275

$2,083

$318

$614

24.93%

29.45%

Pipes

3.2%

7.7%

$517

$1,302

$199

$460

38.55%

35.35%

Papers

0.7%

0.7%

$116

$112

$51

$50

44.01%

45.20%

Pipe/Cigarette Tobacco

0.4%

0.3%

$63

$56

$19

$17

29.87%

29.80%

Total

100.0%

100.0%

$15,942

$16,978

$4,667

$5,007

29.28%

29.49%

Source: NACS State of the Industry Report ® of 2023 Data

the full benefit of all the sales because of all the vaping products out there that are technically not legally allowable … but being sold at other retailers.”

Wade is referring to the increasing problem of illicit, flavored, disposable vapor products. Technically, the FDA has banned the sale of any flavored vaping product—including pod/rechargeables, disposables and synthetic nicotine—unless said product has submitted a premarket tobacco product application (PMTA) that’s currently under review by the FDA. Yet the market remains flooded with flavored options, often ordered directly from manufacturers in China.

Sales of these illicit products are not reflected in NACS State of the Industry or CSX data. “Retailers in this channel work hard to be in compliance with the FDA,” Tainter said.

To date, the FDA has only approved four menthol flavored vaping products.

Every other e-cigarette product its approved has been tobacco flavored. Chris Howard, executive vice president of external affairs and new product compliance at Swisher, said the growing gray market of flavored disposables has been

created by the lack of granted orders for flavored products.

“Consumer choice is obviously limited, but it appears to be made up for by illicit products,” he said.

The situation is not only penalizing manufacturers who have submitted the costly PMTAs, but also retailers who are trying to follow the law.

“We see bleeding in the vapor category because we don’t participate,” Wade said of these illicit flavored products. “Some competitors don’t necessarily view it that way. Because the fines are so small and there’s such little enforcement, the opportunity costs offset the risks.”

Both Howard and McDade noted that the FDA’s efforts to date—which include warning letters, fines, customs seizures and the launch of a multiagency joint task force with the Justice Department—have done little to stop the proliferation of illegal flavored e-cigarettes.

“While the FDA has taken steps, the real issue lies in the lack of robust enforcement,” McDade said. “Reynolds continues to call on regulators to exercise their full authority to intercept and seize these illicit products.”

While the FDA has taken steps, the real issue lies in the lack of robust enforcement.”

NACS JANUARY 2025 69

CATEGORY CLOSE-UP OTHER TOBACCO PRODUCTS

CIGARS: STRUGGLING WITH LOCAL BANS Cigars account for 13.9% of OTP category sales. In 2023, same-store sales decreased by 3.98% to $2,365 per month and gross profits were down 5.01% to $796 per month. Cigars, however, had the highest average profit margin of the top three OTP segments: 33.64%.

Though the FDA’s rule to ban characterizing flavors in cigars was put on hold in April of 2024, the segment has still been pressured by state and local actions.

“State and local flavor bans have had significant effects on the cigar industry,” said Howard, noting that while some consumers will switch to a non-flavored option

in the wake of a ban, many will instead seek flavored products from nearby areas without bans or through online purchases.

“Brick-and-mortar retailers have been disproportionately affected by flavor bans.”

Wade has experienced this in California, where flavored cigars were banned in 2022.

“In one county or city, you’ll see that ‘sweet’ is not allowed because they consider it a flavor where other areas will allow sweet cigars,” he said. “We’re just trying to figure out what’s okay to sell and what’s not—it really varies by city and county in a lot of cases. As of today, California still has not produced a list of items allowable for sale and that causes local governments to use their

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Brick and mortar retailers have been disproportionately affected by cigar flavor bans.”

own standards that are not consistent or contain any actual evaluation or empirical evidence.”

As with vapor products, a black market for flavored cigars has started to emerge.

“Some geographies have seen increased illicit flavored cigar sales as consumers

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Cheyenne International, Inc.............................................................. 41 (704) 937-7200 www.cheyenneintl.com Chyl Brand LLC................................................................................10-11 (404) 642-4967 www.getchyl.com Conexxus........................................................................................... 70 www.conexxus.org Epiq Global........................................................................................ 46 (800) 625-6440 www.paymentcardsettlement.com/en

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turn to unregulated channels to obtain banned products,” Howard said. “Overall, flavor bans have disrupted traditional sales channels and led to industry adaptation, but they also highlight the need for a balanced regulatory approach that considers public health goals while addressing economic impacts.”

For now, retailers in non-flavor-ban areas are left in limbo as to whether the FDA will move forward with its nationwide ban on flavored cigars. With upwards of 60% of the segment having some form of characterizing flavors, a ban has the possibility to upend the third-largest OTP segment.

Melissa Vonder Haar is the marketing director for iSEE Store Innovations. Follow her on X at @iSeeMelissaV.

Thank you to these advertisers who have demonstrated their support of the convenience and fuel retailing industry by investing in NACS Magazine.

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International Dairy Deli Bakery Association....................................47 (608) 310-5000 www.iddba.org

Premier Manufacturing...................................................... Back Cover (636) 537-6800 www.gopremier.com

Liggett Vector Brands LLC............................Inside Back Cover (919) 990-3500 www.liggettvectorbrands.com

Sesh Products US, Inc........................................................................37 www.seshproducts.com

Mike’s Hot Honey............................................................................... 63 info@mikeshothoney.com wholesale@mikeshothoney.com www.mikeshothoney.com Monster Energy Company..................................................... 17 www.monsterenergy.com

Swedish Match North America LLC (Game Leaf)..................25 (800) 367-3677 www.smna.com Swedish Match North America LLC (White Owl)...................33 (800) 367-3677 www.smna.com

NACS Day on the Hill 2025..................................................................53 www.convenience.org/events/Day-On-the-Hill

Swedish Match North America LLC (ZYN).............................. 9 (800) 367-3677 www.smna.com

NACS Media 2024 Thank-you............................................................. 15 www.nacsmediakit.convenience.org

Swisher International Inc......................................................45 www.swisher.com

NACS State of the Industry Summit 2025.........................................43 www.convenience.org/events/SOI

Trion Industries....................................................................................7 (800) 444-4665 www.triononline.com

Polar King International Inc................................................................3 (866) 576-7645 www.polarking.com www.polarleasing.com

Xcaliber International............................................................ 19 (888) 4-XCALIBER www.xcaliberinternational.com NACS JANUARY 2025 71

BY THE NUMBERS

2023 Fuel in Review The NACS State of the Indemic levels, caused overall fuel sales to go down by dustry Report® of 2023 double digits.

Data reported industry The drop in the year-over-year average selling fuel sales topping $532.2 billion—the second-highprice of fuel from $3.98 to $3.53 led to an 11.0% est figure recorded to date. While this number is decrease in dollar sales. Fuel gross profits fared impressive, it marked a sharp decline from the better and saw a 1.8% decrease, from $61,143 to $603.2 billion sales recorded in 2022. $60,066 per store, per month.

This decline in fuel sales impacted the Fuel performance varied across the six Get a total store revenue line in 2023, which NACS regions. The West region, which preliminary look decreased by 6.4% year over year. has historically seen the highest averat 2024 data at the Fuel gallons increased from 141,254 age gas prices, saw the largest drop NACS State of the gallons sold per store, per month in the price of fuel and Central saw Industry Summit, taking to 141,813 gallons in 2023—a slight the least. In terms of fuel gallons, place April 8-10 in Dallas, increase of 0.4%. However, falling five out of six regions saw the rate Texas. Register today at gasoline prices, combined with fuel stay flat or slightly up—Central was www.convenience.org/ events/SOI. demand that has yet to reach pre-panthe only region with a decline.

WEST

-13.4%

The average selling price of fuel is down ...

NORTHEAST

CENTRAL

MIDWEST

-9.9%

-11.4%

-11.8%

SOUTHEAST

SOUTH CENTRAL

-11.0%

72 JANUARY 2025 convenience.org

Source: NACS State of the Industry Report® of 2023 Data

RLT Images/Getty Images

-11.3%

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