CSN-0521 by ensembleiq

Convenience Store News May 2021

W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

A Bumpy Road FOODSERVICE REMAINS AN IMPORTANT CATEGORY FOR C-STORES, BUT RECOVERING FROM THE COVID-19 PANDEMIC WILL TAKE TIME AND EFFORT.

Volume 57, Number 5

M AY 2 0 2 1 CSNEWS.COM

MASTERING ON-DEMAND DELIVERY

Local, State and Federal tobacco taxes and restrictions on the sale of tobacco products can hurt your business. Governments often pass new laws quickly, so you need to stay informed about what is happening in your area. You and your business matter and making your voice heard is crucial to our success in fighting for fair tobacco policies.

Take this survey to learn more about how you can get involved

TAKE SURVEY CLICK HERE

VIEWPOINT

The Summer of the Road Trip? Vaccine optimism and still-cautious consumers could lead to breakout year for summer car travel IT’S BEEN MORE than a year since consumers worldwide have been forced to change their shopping habits due to the COVID-19 pandemic. As we pass the oneyear anniversary of economic lockdowns caused by the pandemic, there’s no shortage of talk about how consumer shopping habits have changed, and how many of these changes will persist after the pandemic is over.

over what they buy, and 41 percent think in-store is easier and more convenient. One out of two consumers say their buying habits have been permanently changed by the pandemic, according to a new study by AlixPartners, an international consulting firm. The study also found that internationally, consumer concerns about health (both mental and physical) and finance are key drivers of these permanently changed purchasing habits.

Deloitte noted that pandemic-related anxiety levels in the U.S. have dropped by 10 percent and that worldwide anxiety is at its lowest level since April 2020. Despite the increase in safety perception, financial stress and employment continue to be the second and third leading drivers of anxiety in most countries.

The AlixPartners study points out that the pandemic accelerated existing trends — such as digitization and channel-shifting — but it also has led to new habits, such as more local travel by consumers. And the research notes that while some online purchasing habits developed during the pandemic will remain very strong, such as shopping for beauty products, clothing and footwear, some are likely to “snap back to store,” such as for grocery shopping.

Deloitte’s research also found that discretionary spending is on the rise, with three in four U.S. consumers planning to spend the same or more on apparel and restaurants in the coming weeks, while also expecting to avoid congregating with strangers and continuing to consume at home and shop online.

I sense there’s a lot of consumer optimism about the vaccines, and I think c-store retailers will enjoy a significant boost to store traffic and sales this summer, especially from summer family road trips. U.S. consumers are likely to eschew international travel for summer vacations closer to home.

A recent study by Toluna reports that two-thirds of respondents plan to return to their in-store shopping habits because half of them feel they have more control

For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

Let’s look at some of the post-pandemic trends being talked about at this time.

EDITORIAL EXCELLENCE AWARDS (2013-2021)

EDITORIAL ADVISORY BOARD Brett Atherton Bolla Management

2018 Jesse H. Neal National Business Journalism Award Finalist, Best Editorial Use of Data, June 2017

2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012

2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012

2020 Eddie Award, Folio: magazine Business to Business, Retail, Series of Articles, September 2019 2018 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Website Business to Business, Retail, Full Issue, October 2017 Business to Business, Editorial Use of Data, June 2017

Rick Crawford Green Valley Grocery

2017 Eddie Award, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016

Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired)

2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015 2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015 2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

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Jim Hachtel Eby-Brown Co.

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013

Chris Hartman Rutter’s

2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

Ray Johnson Speedee Mart

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014 2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014

Laura Aufleger OnCue Express

Jack Lewis GPM Midwest

2020 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Best Single Issue, September 2019 2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

Joe Lewis ExtraMile Convenience Stores Ruth Ann Lilly GPM Investments Danielle Mattiussi Maverik Inc. Vito Maurici McLane Co. Inc. Matt Paduano Lakeport Markets Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Bill Stein Core-Mark Roy Strasburger StrasGlobal

7 OUT OF 10 USERS SAY NICORETTE GUM TASTES BETTER THAN STORE BRAND* *Overall taste preference between coated gum ﬂavors based on initial taste (1 minute of use).

Now Available At The consumer profile of convenience stores continues to shift to a younger demographic (Millennials (22%) and Gen X (22%) now make 44% of C-store shoppers), and those consumers are increasingly seeking healthier options at convenience stores from food and beverage to products to improve their health and well being. As a convenience retailer that prides itself on having a variety of products for everyone, Wawa has been expanding options for customers, now including access to a full-line of smoking cessation products. Since early July, Wawa now stocks a robust lineup of Nicorette smoking cessation products in 900 stores, including Nicorette Gum (4mg) in Cinnamon Surge, Fruit Chill and White Ice Mint and Nicorette Coated Ice Mint Lozenges (2mg and 4mg). Wawa is the first convenience store to provide a full chain launch with five Nicorette SKUs. For more than 20 years, Nicorette has been a leader in helping smokers fight cravings so they can successfully quit. Studies show that nicotine replacement therapy (NRT) products combined with behavioral support can double one’s chances of quitting smoking and the availability of Nicorette products at Wawa may help consumers finally start on their quit journey.

CONTACT YOUR LOCAL NICORETTE SALES REPRESENTATIVE ON HOW TO ORDER OR EMAIL SCOTT.F.BREISINGER@GSK.COM

CONTENTS MAY 21

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COVER STORY PAGE 38

FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

38 A Bumpy Road Foodservice remains an important category for c-stores, but recovering from the COVID-19 pandemic will take time and effort. 46 Looking Back & Moving Forward Convenience foodservice leaders are using lessons from the past year to build a stronger post-pandemic future. FEATURE

70 Mastering On-Demand Delivery Third-party apps and in-house offerings for delivery continue to explode in the c-store market.

4 The Summer of the Road Trip? Vaccine optimism and still-cautious consumers could lead to breakout year for summer car travel.

84 Delivering the Royal Treatment Englefield Oil’s new flagship Duchess store emphasizes the customer experience.

14 CSNews Online

102 Putting Convenience in Context C-store customers want a shopping experience that eases their anxiety, not adds to it.

28 New Products SMALL OPERATOR

32 Past Experiences Ignite Future Endeavors Lakeport Markets’ Matt Paduano believes small, regional operators can succeed in today’s climate. NEW HORIZONS

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STORE SPOTLIGHT

82 Creating a Pipeline for Success Women need support at every level of their careers to reach the C-suite.

INSIDE THE CONSUMER MIND

102

DON'T WORRY GET HAPPY

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8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax: (773) 992-4455 www.csnews.com

BRAND MANAGEMENT Vice President/Group Brand Director Paula Lashinsky (917) 446-4117 plashinsky@ensembleiq.com EDITORIAL Editorial Director (201) 855-7606

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

Senior Editor (201) 855-7619

INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

16 VERC Enterprises Exits Convenience Channel in Three-Way Sale

FOODSERVICE

18 Summer Travel Season Triggers Hiring Sprees 23 Eye on Growth 23 Fast Facts 24 Retailer Tidbits 25 Supplier Tidbits TECHNOLOGY 76 The Taste of Technology As with all other areas of the store, technology is playing a bigger role in foodservice.

52 Knead-to-Know Pizza Trends Regional styles, unique flavors, premium proteins, and more make this an exciting segment. FOODSERVICE

54 The Dispensed Drink Evolution Hot, cold and frozen beverage offerings at c-stores are adapting to meet the times.

Angela Hanson ahanson@ensembleiq.com

Managing Editor (201) 855-7604

Danielle Romano dromano@ensembleiq.com

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

ADVERTISING SALES & BUSINESS Associate Brand Director & Northeast Sales Manager (774) 212-6455

Rachel McGaffigan rmcgaffigan@ensembleiq.com

Associate Brand Director & Western Sales Manager (330) 840-9557

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com

TOBACCO

EVENTS

60 Keeping Up the Momentum Cigars were a big hit at the height of the pandemic, but what now?

Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com

CANDY

66 Nonchocolate Candy Makes a Rebound The pandemic unwrapped new shopping trends, consumer behaviors and product attributes.

AUDIENCE List Rental (914) 309-3378

MeritDirect Marie Briganti

Subscriber Services/Customer Care TOLL-FREE: (877) 687-7321 FAX: (888) 520-3608

contact@csnews.com

PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production (877) 687-7321 Creative Director (973) 607-1320

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com

Advertising/Production Manager (773) 992-4418

Ed Ward eward@ensembleiq.com

Art Director (973) 607-1321

Lauren DiMeo ldimeo@ensembleiq.com

CORPORATE OFFICERS Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several Senior Vice President, Content Joe Territo

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

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Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Subscription rates: Subscription rate in the United States: $125 one year; $230 two year; $14 single issue copy; Canada and Mexico: $150 one year; $270 two year; $16 single issue copy; Foreign: $170 one year; $325 two year; $16 single issue copy; Digital One year, digital $87; two year, $161. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2021 by EnsembleIQ. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or information storage and retrieval system, without permission in writing from the publisher. Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295. POSTMASTER: send address changes to Convenience Store News, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631.

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www.hempbombs.com

Phone: 888-824-3256 | www.cbprices.com www.hempbombs.com | www.naturesscript.com

ADVERTORIAL

“Lead brands, and innovation from those lead brands, will continue to drive success…” LAUREN QUAGLIA, Boston Beer Company

Bubbling Over Riding the Hard Seltzer, ‘Beyond Beer’ Wave that Shows No Signs of Stopping It’s no secret the ‘beyond beer’ category has been on a tear, with an influx of new brands and innovations that continue to make it the most-watched and talked about space in beer. Just this past year, the category has grown to represent 15.5% of total beer dollars in convenience, with much of that coming from its star player, hard seltzer, which hit $4.1 billion in sales — up sharply from just $400,000 in 2018. Many stores have already managed to capitalize on

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this promising new category with smart but simple instore strategies that capture the attention of hard seltzer’s target audience. From stocking just the right leading brands to thoughtfully arranging the assortment on their shelves, how c-stores sell the category is having a major impact on how much they sell.

A BRIGHT OUTLOOK. Beyond beer is an exciting space. And not only because the category has come up so quickly, but also because

the outlook continues to be so bright. Hard seltzer alone is projected to jump to $30 billion in retail by 2025, according to a Goldman Sachs Equity Research report, with much of that expected to come from leading brands White Claw and Truly. And, all signs point to hard seltzer’s continued and significant growth. Though often lumped in with flavored malt beverages, hard seltzer has managed to carve out its own identity and, just by itself, represents

about 7.6% total beer share — enjoying a growth rate of 178% over the past year. “Lead brands, and innovation from those lead brands, will continue to drive success within these segments,” says Lauren Quaglia, national channel manager of c-stores for Boston Beer Company, maker of Truly.

DRIVING FORCES BEHIND HARD SELTZER. Part of the appeal of hard seltzer is that consumers see it as a healthier option — low calorie, low carb — which

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ADVERTORIAL

taps a larger wellness trend that’s been gaining momentum steadily for years. It also follows a pattern of premiumization that’s spanning all alcohol categories. Both wellness and premiumization are trends that accelerated during the pandemic. Hard seltzer also tends to be more approachable, with singles and mix-and-match packs encouraging trial and with enough innovations and flavor variety to not only bring consumers into the fold, but to keep them coming back. Quaglia says Truly is focusing on expanding its drinker base and increasing penetration—and is outperforming competitors on both fronts. “We’re outpacing the segment in household penetration, which is up 79% across all channels and 140% in c-stores,” she says. “And, looking at Nielsen Household Panel Data, we see that our innovation continues to bring new drinkers into the segment, with our L13 week growth of 182% outperforming the rest of the segment.” So, are c-store operators wholly on board then? Most are, but some still lag behind. With limited shelf space, decisions come hard. Some operators are reluctant to scale back from domestic premiums and mass domestics and, for fear of potentially losing those shoppers, they hesitate before making changes to accommodate growth and innovations.

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Others who have taken initiative to jump into the segment have, at times, slipped when it comes to the right space allocation or the correct flavor assortment. Or, rather than place their bets with leading brands, they’ve tried to appease every potential shopper and gone too broad.

HARD SELTZER CUTS INTO SPIRITS, NOT BEER. One factor to consider is that, while some hard seltzer shoppers are also beer drinkers, they’re not taking away from beer sales — they’re incremental. Many are also coming from outside categories like wine and spirits. So, a bet on hard seltzer is actually a new, incremental growth opportunity that adds strength to beer overall. In fact, c-stores who bet early on hard seltzer have seen the upside of getting these new shoppers. Right now, 11% of dollars sold in the grocery business are for hard seltzer, while in c-stores it’s 7%. But in many markets, that gap is narrowing, with hard seltzer now over 10% of their beer category dollars. In some markets, like Denver (14.7%), New York (14.3%), and San Diego (13.4%), c-stores have even reached parity with mass merchandisers and groceries in their hard seltzer sales, enjoying the same robust share. Todd Bollig, Boston Beer Company’s director of catego-

The Hard Seltzer SHOPPING TRIP So, what exactly do these shoppers have in mind when they walk into a c-store? In short, it’s a brand. Their trips are highly planned, with 87% knowing what they want before entering the store, and a full 71% having a specific brandin mind. They also tend to be quick trips, with shoppers spending very little time making a purchase decision. In fact, 70% of purchase decisions are made in less than 20 seconds.

ry management and shopper insights, says shelf allocation has played a key role. “These markets have experienced this kind of growth as a result of providing proper space to the two lead brands, Truly and White Claw,” he explains.

There’s a generational shift occurring–and beyond beer, and the hard seltzer segment in particular are key in capturing that new generation.

NEW GENERATION OF SHOPPERS. What those operators are finding is that by leveraging hard seltzer, they’re attracting a new and important shopper. Recent research suggests that this younger generation is more diverse and more likely to choose ‘beyond beer’ products than their older counterparts, who still lean toward traditional beer. There’s a generational shift occurring— and beyond beer, and the hard seltzer segment in particular are key in capturing that new generation. Though the category is just five years old, there were early concerns that

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ADVERTORIAL

hard seltzer may have been a seasonal play, and that operators might see demand fluctuate. But the segment has proven resilient and extended its runway well beyond that summertime consumption. “In our Shopper Decision Tree research, we’ve found that today’s 21-to-35-yearold shopper is looking for flavor and refreshment,” says Boston Beer Company’s Todd Bollig. “This is driving the growth of beyond beer and specifically hard seltzer sales.” We’re also seeing that it’s occasion-based, with c-store shoppers snapping up hard seltzer to relax or unwind at home, for a casual get-together, with a meal or for a BBQ or other outdoor gathering. › Brand leads the shopping trip. So, what exactly do these shoppers have in

mind when they walk into a c-store? In short, it’s a brand. Their trips are highly planned, with 87% knowing what they want before entering the store, and a full 71% having a specific brand in mind. They also tend to be quick trips, with shoppers spending very little time making a purchase decision. In fact, 70% of purchase decisions are made in less than 20 seconds. That speaks to the importance of leading with top brands (with the top two, White Claw and Truly, enjoying a whopping 75% share). Those insights also speak to why it’s so important to connect with shoppers before they step foot in a store and to perhaps even influence them to spend more when they do come. Not surprisingly, suc-

…A bet on hard seltzer is actually a new, incremental growth opportunity that adds strength to beer overall.

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…How c-stores sell the category is having a major impact on how much they sell. cessful tactics tend to skew heavily on digital channels: C-store hard seltzer buyers are more likely than grocery hard seltzer buyers to use Snapchat and TikTok, play video games, and to learn about products and services or make new friends on social media. › Getting the mix right. So, what’s the right mix in-store to do just that? How do you strategically organize the store? While it’s true that one size does not fit all, there are some common threads that can help you make considered choices to confidently reduce assortment in other segments and capture hard seltzer’s continued growth prospects: › Group ‘beyond beer’ segments together. They share common shopper attributes and purchase drivers (brand awareness and product quality tend to be top purchase motivators, whereas price is less important). › Merchandise for high visibility. Offer multiple points of interaction, and give particular emphasis to hard seltzer to attract that younger, more diverse shopper and drive incremental purchases. While overall ‘beyond beer’ trips tend to be planned, impulsivity is still a big factor: 41% of hard seltzer purchases are impulse driven.

› Back leading brands. Brand is the top consideration in c-store shoppers’ planning and navigation. And while experimenting with some smaller brands may make sense for your market, you shouldn’t ignore the leading brands; too much assortment can confuse shoppers. › Manage space and assortment wisely. Dedicate enough shelf and cooler space for best-selling brands, and with the right packages and flavor options. Consider that just 19 packages represent a whopping 80% of hard seltzer dollars. Then, arrange them in a way that enhances shoppability and encourages impulse buys: C-store shoppers navigate beer by brand first, and then size and type. Set flow from hard seltzer to flavored malt beverages (including hard cider and RTD), and then on to craft, imports, super premium, premium, and finally sub premium. It’s true that shopping behavior and engagement in the beer category have changed, but ‘beyond beer’ offers a significant opening for convenience operators to keep pace. At the end of the day, the prospects are bright and there are a host of ways to take full advantage of this ever-growing opportunity.

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CSNEWS ONLINE

Sponsored by

Loyalty: The Heart of Guest Engagement YOUR BRAND’S opportunity

to build relationships with its customers extends across all points of engagement, whether that’s at the register, on a mobile device, through online ordering, or via a subscription program. Loyalty is the sophisticated tool that lies at the heart of that technology suite, By Kiera Blessing, Paytronix connecting each piece to create a consistent and personalized experience for the customer. Implemented with the right technology partner, loyalty can pay huge dividends. When customers identify themselves as loyalty members, they are giving your brand a wealth of information about their habits, routines and preferences. With that data and the help of artificial intelligence, your brand can create personalized experiences — across the digital platform and in-store — for every customer, building relationships and ultimately fostering greater brand loyalty. But it’s not enough to be personalized; the experience must also meet expectations. Customers may order online, use a mobile app, or come in through a third-party aggregator, but all of those experiences should be as consistent as your brand is. A good loyalty program will keep guests engaged across all channels. What does this look like, exactly? It could be an automated cross-sell pop-up, powered by a machine-learning algorithm that makes a personalized suggestion while a customer places an online order. Or it might be a mobile app’s push notification that targets a customer who’s within two miles of the store and suggests a stop for fuel or an afternoon caffeine fix — whichever is more personally relevant. Loyalty is also the foundation of today’s most cutting-edge marketing tactics. Monthly subscription programs for items like coffee and gas have grown in popularity among convenience stores because customers are allocating a portion of their monthly spending before

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Loyalty programs are capable of returning 10x multiples on a brand’s initial investment if you apply the right measurements and make loyalty integral to the customer experience.

Loyalty is the foundation of today’s most cutting-edge marketing tactics. even pulling into the parking lot. Without loyalty, these programs aren’t possible. Paytronix data shows that loyalty programs are capable of returning 10x multiples on a brand’s initial investment. But in order to see these results, you must apply the right measurements and make loyalty integral to the customer experience. Kiera Blessing is a marketing specialist for Paytronix, a single-platform guest experience tool for convenience stores and restaurants. Before joining Paytronix, she worked in the hospitality industry, and for an industryleading POS provider.

INDUSTRY ROUNDUP

Eye on Growth

Thorntons’ first nonprofit community store is open for business in Louisville, Ky. The store will operate as a sustainable venture with all profits from sales being reinvested by the Louisville Urban League to promote community equity and empowerment.

Rutter’s welcomed customers to its first new-build store of 2021 on March 16. Located in Gap, Pa., the location measures more than 10,200 square feet. It has 14 fueling positions and five highspeed diesel fueling lanes. Mountain Express Oil Co. acquired West Hill Ranch, a six-store chain based in central Florida. The company will rebrand all six locations to the Mountain Express banner.

The c-store is operated by OnCue, marking the Stillwater, Okla.-based retailer’s debut in Texas.

Phillips 66 debuted a new state-of-theart fuel site near its Houston headquarters. Along with 24 fueling positions, a 9,300-square-foot convenience store features indoor dining, a gourmet coffee bar, a wine selection tended to by an advanced-level sommelier, and a drive-thru window. MAPCO Express Inc. opened the doors to a new convenience store in Hoover, Ala. — the company’s first location in the Birmingham metro market. MAPCO owns a four-acre site in the market for a future location as well.

CEFCO Convenience Stores opened its first ground-up build of 2021 on March 18 in DeFuniak Springs, Fla. The 6,054-square-foot store sits on more than two acres. It features 10 fueling positions and 39 parking spaces. Foxtrot Market opened its second location in Washington, D.C., in the Mount Vernon Triangle neighborhood. The store features a café with beans from local roaster Vigilante Coffee, an outdoor patio, and a selection of more than 200 wines. Love’s Travel Stops & Country Stores opened new travel stops in Bath, N.Y.; Kansas City, Mo.; and Hillsboro, Tenn., during the month of March. Combined, these locations add more than 250 truck parking spaces to the Love’s network.

FAST FACTS

No.1 As of the April 17 outdoor EMV deadline, only 48 percent of major fuel and convenience merchants had fully implemented EMV across all of their gas stations. — ACI Worldwide

Consumers cite product availability as the No. 1 post-COVID shopping priority. — COVID Consumer Journey: Passive to Panic, Acosta

More than half of convenience retailers (52 percent) anticipate that summer travel and commuting patterns will be close to pre-pandemic levels this year.

Sales of E15 fuel in Iowa increased 24 percent and set a new record in 2020, with retailers in the state selling 60.59 million gallons, up from 48.96 million gallons in 2019.

— NACS Retailer Member Pulse Survey

— Renewable Fuels Association

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INDUSTRY ROUNDUP

Retailer Tidbits

To ensure the safety of customers’ personal information, the retailer installed Fiserv’s TransArmor data protection system.

Family Express Corp. is testing at-pump food ordering technology. Customers will be able to skip the line at locations with its Cravin’s made-to-order foodservice program.

United Dairy Farmers (UDF) teamed up with Paytronix Systems Inc. to relaunch its loyalty program, U-Drive. The new program provides UDF with the flexibility to tailor promotions for specific guests. Pilot Co. launched a revamped version of its mobile app and loyalty program, myRewards Plus. Specifically designed for drivers, the enhancements made simplify how professional drivers, motorists and RV travelers can earn more and save more.

High’s received Safe Shop Assured certification at each of its 54 c-stores for its commitment to essential store safety and cleanliness measures. The chain will showcase the certification with branded decals at high-visibility touchpoints.

AMBEST, a memberowned, nationwide network of independent truck stops and service centers, is partnering with RangeMe to scale its sourcing efforts and create greater product assortment. Members will have access to more than 175,000 suppliers.

Thorntons LLC hosted a vaccine clinic at its Store Support Center in Louisville, Ky., on April 9. The clinic, held in partnership with Norton Healthcare, was open to community members who were eligible for vaccination per the state’s guidelines.

President Joe Biden’s $2-trillion infrastructure plan includes a $174-billion investment in the electric vehicle (EV) market. The administration’s proposal calls for a national network of 500,000 EV chargers by 2030.

816.813.3337 www.forteproducts.com 24 Convenience Store News C S N E W S . c o m

Spill Kit Station *Supplies not included

INDUSTRY ROUNDUP

Supplier Tidbits Core-Mark International revamped its Core Partners program, which offers its customers access to suppliers within service-level categories. Highlights of the revamp include exclusive digital marketing content directly accessible by customers via Core-Mark’s ordering platform, social media promotion, and flat-fee pricing.

ROLL CALL!

A BAT subsidiary will acquire a 19.9-percent equity stake in Organigram.

British American Tobacco Group (BAT) entered into a collaboration agreement with Organigram Inc. focused on next-generation adult cannabis products. This follows BAT’s pilot launch of a Vuse CBD Zone in the United Kingdom earlier this year. Herr’s commemorated its landmark 75th anniversary by releasing limited-edition kettle cooked Homestyle Potato Chips with a vintage package design. The company also launched 75 days of celebrations giving back to Philadelphia communities.

Avery Dennison announced two new investments to accelerate its digital transformation capabilities for connected supply chains and connected products. The company acquired ZippyYum and launched atma.io, a new digital venture.

Mondeléz International Inc.’s SnackFutures innovation and venture hub joined the Upcycled Food Association. The first two brands by SnackFutures — CaPao and Dirt Kitchen Snacks — are made from produce that would otherwise be wasted. PepsiCo’s Frito-Lay division implemented zeroemission and near-zero-emission technologies at its Modesto, Calif., manufacturing site. Additionally, the site converted to 100 percent renewable electricity for direct operations.

ADVERTORIAL

PRODUCT OF THE YEAR 40,000 Shoppers Can’t Be Wrong March 2020. It’s the month retailing transformed almost instantaneously, as convenience stores pivoted to meet the unprecedented challenges brought by the COVID-19 pandemic. Supply chains were stretched, and CPG companies scrambled to keep up with demand. But the industry successfully tackled those challenges, thanks in part to manufacturers who introduced products to tap emerging trends, according to Mike Nolan, CEO of Product of the Year, the largest consumer-voted award for product innovation

“One of the great strengths

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small part to provide shop-

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pers with what they wanted,

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“What’s interesting is that

to CBD offerings and the

explains. “Research is at the

even in this awful pandemic,

tastiest snacks,” Nolan says.

heart of everything we do.

want and pay more for new and original products.” Forty-one of those new products that showed up on store shelves — many of them in c-stores — were 2021 Product of the Year Winners.

Products that demonstrate innovations in design, function, packaging, ingredients or marketing and launched after January 1, 2020 are eligible to be entered in the 2022 Product of the Year Awards; the entry deadline is September 30, 2021. For more information on how to enter, visit productoftheyearusa.com.

“Kantar independently

We see ourselves almost as an

70 percent of people still

Join the Product of the Year Family: Enter Now!

POY spreads_advertorial.indd 5-6

“This year’s winning

of Product of the Year is that

Research-based Recognition Product of the Year was established over 30 years ago to guide consumers to the best products in their market and reward manufacturers for quality and innovation. What makes the award unique — and so effective — is that winners are determined by the votes of 40,000 consumers in a nationally representative study conducted by Kantar,

America’s Got Talent for products sold in supermarkets.”

A Win-Win-Win The benefits of garnering a Product of the Year Award extend to consumers, retailers and CPG companies alike. “Product of the Year gives shoppers the confidence that each product with our iconic red logo is backed by 40,000 Americans,” Nolan explains. “It allows manufacturers,

ADVERTORIAL

retailers and, so importantly, the shoppers to trust us.” It also builds trust and brand loyalty for CPG com-

Claritin Cool Mint Chewables

for retailers who carry the

2021 PRODUCT OF THE YEAR WINNER

award-winning products.

Health & Wellness Category

panies, and by extension,

“Product of the Year Award positions CPG companies as

Convenience Store News

the innovative leader in their

reached out to Tim Stauber,

category,” Nolan says. “It is

Marketing Director for

a powerful merchandising

Claritin, to find out about

program for marketers proven

the company’s award-win-

to increase product sales, distri-

ning Claritin Cool Mint

bution and awareness.”

Chewables.

Winners get full inclusion in a robust national PR campaign,

Convenience Store News:

which generates over 1 billion

When did Bayer introduce

media impressions across

Claritin Cool Mint Chew-

broadcast, digital, print, influ-

ables? And what was unique

encer marketing, social media,

about the product?

and more! Winning products

Tim Stauber: Claritin® Cool

are announced in February

Mint Chewables launched

each year and companies can

in early 2020 and is the

use the Product of the Year

only allergy product with

logo in marketing communica-

24-hour, non-drowsy relief

highlight our latest inno-

our retail customers and

tions for two full years.

to address the worst in

vation. Cool Mint Chew-

consumers, knowing it was

allergy symptoms, that also

ables features proprietary

selected as one of the most

selves: Data shows that Prod-

provides an immediate

CoolFusion™ Technology,

innovative new items to hit

uct of the Year USA winners

blast of cooling flavor

a unique cooling flavor

convenience stores in the

outperform category sales performance by 38.1%1; that

sensation. The sensation,

blend including menthol,

past year. To date, we have

which has a cooling effect

while providing the same

done the following:

the Product of the Year logo

that allergy sufferers

Claritin® allergy symptom

• Consumer Promotions

is 25% more effective on a

can feel in their throat,

relief consumers rely on for

including FSI, Shelf Take

package than the word

lasts for 15 minutes after

their indoor and outdoor

One In-store, and Catalina

“New”2; and that coupon

swallowing.

allergies.

Coupons

increased 24% when the

CSN: Why did you decide

CSN: How did you use the

(www.claritin.com/

Product of the Year logo was

to enter the product in

award to help drive aware-

cool-mint-samples) that

featured in a Free Standing

the Product of the Year

ness about the chewables?

includes the Product of

Awards?

TS: The Product of the

the Year logo and offers

TS: We entered the Prod-

Year award helps build

the opportunity to order

uct of the Year Awards to

trust and buy-in with

free samples.

The results speak for them-

redemption consideration

Insert (FSI) . “There’s just nothing more meaningful than a recommen-

• A Sampling Microsite

dation from a fellow shopper to help you find the best, most innovative new products on the shelves,” Nolan concludes. 1

Winner’s sales data, 2Kantar, Google Survey

“The Product of the Year award helps build trust and buy-in with our retail customers and consumers, knowing it was selected as one of the most innovative new items to hit convenience stores in the past year.” –Tim Stauber, Marketing Director, Claritin

4/29/21 2:48 PM

NEW PRODUCTS

1. Thrive Zero Sugar Jerky

2. Seagram’s Hard Seltzer

3. Organic Reese’s Peanut Butter Cups

Targeting mindful snackers looking for low-carb, zerosugar snacks that don’t sacrifice great taste, Thrive Jerky introduces a line of premium-tasting jerky with no sugar. Thrive Zero Sugar Jerky comes in four varieties: Original Beef, Original Turkey, Sea Salt Beef, and Sweet & Spicy Pork. The jerky is made with a proprietary blend of spices and seasonings and Stevia extract for sweetening. It is the first jerky brand approved by the USDA to sweeten with Stevia rather than sugar, according to the maker.

Seagram’s Hard Seltzer is designed to deliver on taste and fruit-forward flavor, while sustaining the category’s 5 percent ABV and 100-calorie standard. Tapping a team of seasoned flavor experts, Seagram’s has crafted four hard seltzer varieties that feature two or more fruit-infused flavors: Tropical Pineapple, Mango Peach, Mixed Berry, and Watermelon Lime. The product’s malt base preserves the brightness of the flavors, resulting in a softer, smoother, more flavorful experience that’s delicious but not too sweet, the company noted. Each 12-ounce slim can contains just one gram of cane sugar and two grabs of carbs. Twelve-can variety packs began arriving in select national markets in February.

The Hershey Co. is making sure there’s a Reese’s cup for nearly everyone by introducing Organic Reese’s Peanut Butter Cups. The product launch makes Reese’s the first mass chocolate brand to offer an organic option. Available in dark and milk chocolate varieties, Organic Reese’s Peanut Butter Cups are certified USDA organic, Non-GMO Project verified and Rainforest Alliance certified. Each 1.4-ounce pack has a suggested retail price of $1.99.

Derby City Jerky Louisville, Ky. thrivejerky.com

The Hershey Co. Hershey, Pa. thehersheycompany.com

4. Pepsi Mango Pepsi Mango combines the bright citrus and rich caramel notes of Pepsi with the ripe, juicy flavors of a mango. It is the brand’s first new permanent flavored cola in five years, and Pepsi’s first permanent release of a regular and zero sugar variety at the same time. Pepsi Mango is available in 20-ounce bottles and 12-ounce 12-packs. To support the launch, Pepsi created a new national TV commercial, which will also run digitally, and is launching a campaign dedicated to helping real people find their perfect match. PepsiCo Beverages North America Purchase, N.Y. pepsi.com

Seagram’s Hard Seltzer Rochester, N.Y. seagramshardseltzer.com

5. Vuse Alto Four-Pod Packs Vapor brand Vuse announced the national expansion of its Vuse Alto Golden Tobacco 5 percent and Alto Menthol 5 percent four-pod packs. It is also nationally launching Vuse Alto Golden Tobacco 2.4 percent and Alto Menthol 2.4 percent four-pod packs. These packs provide adult vapor consumers with three Vuse Alto configuration options as they can now choose from single-pod, two-pod or four-pod packs. According to the brand, the national availability of its four-pod packs now gives Vuse the most expansive portfolio of choice for adult vapor consumers with three flavors available in three nicotine strengths across three configuration formats, and many options for device customization with a range of colors, wraps and engraving options. R.J. Reynolds Vapor Co. Winston-Salem, N.C. rjrvapor.com 28 Convenience Store News C S N E W S . c o m

NEW PRODUCTS

6 7

6. Alden’s Organic Single-Serve Novelties Alden’s Organic launched three of its top products as single-serve novelties for convenience stores and other retailers. Two of the three are dairy-based treats: the 100-calorie Classic Fudge Bar, featuring real organic cocoa and fresh organic cream; and the 170-calorie Old School Vanilla Ice Cream Sandwich, a combination of creamy organic vanilla ice cream and “stick-toyour-fingers” chocolate wafers. The third product is the 160-calorie, certified vegan Dairy Free Vanilla Bean Round Sammie, which features organic vanilla bean frozen dessert scooped between two chocolate cookie wafers. All three items have a suggested retail price of $1.99 each. Oregon Ice Cream Eugene, Ore. aldensicecream.com

7. Tecate Alta Slim Cans Tecate Alta is a full-flavored Mexican beer developed and brewed with the same quality and pride as Tecate, but with only 85 calories, 2.4 grams of carbs, and 4 percent ABV. The imported offering launched in March with 12-ounce slim can 12-packs and single-serve 16-ounce cans in southern California, Arizona, New Mexico, and south Texas. The brand will look to expand to additional core markets and bigger pack sizes by the fall. The launch is being supported with impactful in-store merchandising materials, including a tuck card, elliptical can, slim case stacker, cooler decal, and basewrap. Tecate USA White Plains, N.Y. tecatebeerusa.com

8. Flipz Stuff’D & Flipz Bites Pretzel Snacks Two new products join the Flipz brand of pretzel snacks. Flipz Stuff’d are bite-sized pretzel nuggets stuffed with creamy peanut butter and coated in sweet milk chocolate. They are available in 3.5-ounce peg bags with a suggested retail price (SRP) of $2.79, and 6-ounce stand-up pouches with a $3.49 SRP. Flipz Bites are gooey caramel and crunchy salted pretzel balls coated in sweet milk chocolate. Each 1.52-ounce Flipz Bites bar contains three snackable clusters, with a SRP of $1.09. Both products launched nationwide in March. Pladis Global New York pladisglobal.com

10. Rich’s Foodservice Cookie Portfolio Rich’s Foodservice has expanded its cookie portfolio to include more than 250 options for convenience store operators. The company offers both ready-to-bake cookie doughs and fully finished cookies. The pre-portioned, frozen cookie doughs are available for in-store baking in four price points. All doughs meet Rich’s baseline clean label guarantee with no artificial flavors, sweeteners or colors. Another option for baking in-store is Rich’s specialty dough portfolio, which includes such options as filled cookies, macaroons, vegan cookies and seasonal varieties. The company also offers a wide variety of ready-to-serve premium cookies following its acquisition of Christie Cookie Co. Handcrafted with high-quality ingredients, Rich’s ready-to-serve cookies are available in 11 premium flavors and a variety of formats. Rich Products Corp. Buffalo, N.Y. richsusa.com/cookies 30 Convenience Store News C S N E W S . c o m

9. Otis Spunkmeyer Chocolate Chip Frozen Cookie Dough Bites Otis Spunkmeyer’s Chocolate Chip Frozen Cookie Dough Bites are designed to be the perfect sweet to satisfy any craving. The bite-sized, frozen and egg-free treats are safe to eat and taste “just like the cookie dough your mom used to make,” according to the company. The cookie dough bites are available in a 20-ounce pouch, priced at $9.99 a unit. They can be eaten as a snack or used as a topping to make something extra indulgent. Otis Spunkmeyer San Leandro, Calif. otisspunkmeyer.com

With Swisher Sweets you are getting a true original that continuously innovates to bring you the freshest products, tastes, and packaging to keep your adult consumers coming back for more. Please contact your Swisher Representative, call 800.874.9720 or visit swisher.com

SMALL OPERATOR

Past Experiences Ignite Future Endeavors Lakeport Markets’ Matt Paduano believes small, regional operators can succeed in today’s climate By Danielle Romano the convenience store industry continues to see smaller, regional players being picked up by bigger chains, single-store owners and small operators (those with 20 stores or less) are being stripped of their identity and the uniqueness that made them successful in the communities where they operate. Matt Paduano looked to changed that.

AS CONSOLIDATION IN

The long-time Nice N Easy Grocery Shoppes executive, who spent the bulk of his 29-year career with the New York-based convenience store retailer, ventured out on his own after unfortunate circumstances and two acquisitions led him to explore new opportunities. He opened the first Lakeport Market on March 3, 2018. Located halfway between Syracuse and Utica, N.Y., the 4,800-square-foot convenience store is nestled across from the south shore of the 22-mile Oneida Lake. Because it’s situated in a rural area, the market caters to a mix of blue- and white-collar workers in the community. Paduano believes opportunities still exist for the convenience channel’s small operators to succeed in today’s mergerand-acquisition environment by filling a niche in those rural communities where 32 Convenience Store News C S N E W S . c o m

acquisitions have been made. “We called it Lakeport Market because we try to offer as many items as possible. Because we’re in a rural community, the closest grocery store is seven or eight miles away, and the closest Dollar General is four miles away,” Paduano told Convenience Store News. “We have an expanded frozen and expanded dairy section, a large walk-in beer cave, general merchandise to reach customers spending time at Oneida Lake, and more. We have a little bit for everybody.”

Keeping It Fresh Drawing on his past experience with regional c-store chains, Paduano made foodservice a focal point for Lakeport Market. Approximately 25 percent of the store is dedicated to food operations — whether it’s prep, storage or machinery. The model, he notes, resembles that of Nice N Easy. Lakeport Market’s foodservice menu goes beyond the typical convenience store fare. The program includes fresh pizza, subs and wraps, fried fish, chicken wings, quesadillas, melts, salads, fruit cups, and cookies. Most fare on the menu is based on trial and error. Roughly 80 percent are items that have withstood from the store’s inception three years ago. Many of the most popular items were inspired by the Paduano children, including quesadillas and “chow plates” — a play off of a local establishment’s “garbage plate,” which features loaded fries and proteins, cascaded by melted cheese. “When we develop new items, we look for ways to use

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SMALL OPERATOR

Approximately 25 percent of the 4,800-square-foot convenience store is dedicated to food operations.

ingredients that we already have in the store instead of having to create new costs,” Paduano notes. The foodservice program has been successful because of Lakeport Market’s dedication to freshness and quality. Deli meats are sliced per order, chicken wings are purchased fresh and not frozen like other competitors do, bread and rolls are baked on the premises daily, and fresh vegetables are cut each day. “These are labor-intensive tasks, but customers notice the difference,” Paduano said. “We don’t make their food behind a wall like a fast-food restaurant does. There’s interaction between us and our customers as they watch us bake bread, prepare their sandwiches and cut vegetables.” Because of Lakeport Market’s location in Chittenango, N.Y., which canvases four different zip codes, Paduano positions the store as a destination for foodservice by relying predominantly on social media, where the operator highlights its daily offers. These include: • Sunday — $1 off whole subs and $7.99 large cheese pizzas • Monday — $1 off quesadillas and $7.99 large cheese pizzas • Tuesday — Taco Tuesday, $1 off any whole sub, and $7.99 large

34 Convenience Store News C S N E W S . c o m

cheese pizzas • Wednesday — $1 off any wrap and $7.99 large cheese pizzas • Thursday — $1 off any whole sub • Friday — $1 off melts • Every Day — One-topping pizza and 12 wings for $19.99 plus tax About 27-28 percent of Lakeport Market’s overall sales come from foodservice, which is about the average that Nice N Easy had, Paduano noted, adding that his sales continue to trend up over the previous years.

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SMALL OPERATOR

“Everyone carries Coke, everyone carries Budweiser, Frito-Lay, and so on,” the industry veteran said. “Retailers are promoting items customers already know they have or can expect to find, but this isn’t going to pull customers off the street and into your store.”

Full Steam Ahead Aside from the sales and profit derived from the food business, Lakeport Market’s robust foodservice offering also benefits the convenience retailer in other ways.

Owner Matt Paduano believes being a good convenience store retailer means having a balance between three profit centers: fuel, food and retail.

“I always thought to be a good convenience store retailer, you have to have a balance between three profit centers: fuel, food and retail. It’s like a three-legged stool, where if you have three strong legs, the stool stands upright,” Paduano told CSNews. “Being in New York State with the business climate, it is tougher, but with the more products and services you can offer customers and generate traffic, the more reasons for customers to come and the more dollar spend per transaction.”

“...The more products and services you can offer customers and generate traffic, the more reasons for customers to come and the more dollar spend per transaction.” — Matt Paduano, Lakeport Markets

Despite the challenges that the COVID-19 pandemic brought upon communities, Paduano and his family-run business adapted to continue operating as an essential business. A scenario that the owner is particularly proud of is how when schools were shut down in mid-March 2020, his daughters Alyssa and Nicole — who comprise the management staff — approached him with an idea to offer lunches to elementary and middle school students who were expected to be out of school buildings until Easter.

36 Convenience Store News C S N E W S . c o m

“We posted our offer on social media and immediately were handing out 75-100 lunches per day. We had planned on funding this through our store, but right from the onset we had individuals and local businesses donate funds and products for our cause, which helped immensely because instead of ending this at Easter, we extended this program through the end of the school year, or the third week in June. We donated over 4,500 lunches during this program,” he shared. In the midst of COVID, Paduano also made the decision to forge ahead with opening a second Lakeport Market location. He picked up the 32-year-old site, which is also located in Chittenango, last summer from Clifford Oil, Lakeport Market’s fuel supplier. Paduano remodeled and modified the store to match his original design. The doors to the second Lakeport Market opened to the community on Aug. 1, 2020. “Everyone asked me what we were going to name the second store. We decided to keep the name Lakeport Market to avoid confusion and paperwork. If Wawa can do it, so can we,” Paduano chuckled. CSN

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COVER STORY

A Bumpy Road

Foodservice remains an important category for c-stores, but recovering from the COVID-19 pandemic will take time and effort BY A NG ELA H A NSO N

38 Convenience Store News C S N E W S . c o m

FOODSERVICE HAS LONG been touted as the biggest growth opportunity for the convenience store industry as the stigma of "gas station food" wanes and consumers show increasing interest in dropping in at a c-store for a bite to eat. This hasn't changed more than a year into the COVID-19 pandemic, but the category's journey has gone from smooth sailing to a bumpy road. Convenience store prepared food is still on the menu for many shoppers, but not nearly as many as one year ago, according to the findings of the 2021 Convenience Store News Realities of the Aisle Study, an annual benchmark study of U.S. c-store shoppers. Slightly more than half of c-store shoppers still make a practice of purchasing prepared food at c-stores — 52 percent say they have done so within the past month. However, this is an enormous 28-point drop from the 80 percent of c-store shoppers who said the same in 2020. Accordingly, the average number of prepared food purchases made at convenience stores within the past month fell from 5.0 times to 2.7 times, a decline of 2.3 purchases. This drop in prepared food purchases isn't uniform across all demographic groups. More than two-thirds of millennials (67 percent) report buying food in the past month, ahead of Generation X (53 percent) and Generation Z (47 percent). Millennials also make a higher number of monthly purchases on average (4.7), as do men (3.0 purchases vs. 2.3 purchases by women). Regionally, the Northeast — home to many convenience foodservice hard-hitters — fares better than other areas of the country with 62 percent reporting purchases in the past month, vs. 52 percent of shoppers in the Midwest, 51 percent in the West, and 48 percent in the South.

2021

Among shoppers who said they did not purchase prepared food from a c-store in the past month, the top three reasons cited were: they didn't plan to make a prepared food purchase when they went to the store; they prefer not to buy prepared food at c-stores; and they weren't hungry when they were there. Each of these reasons was cited by 31 percent of the shoppers. Additionally, 23 percent say the food was too expensive, and 22 percent didn't like the available selection. Year over year, these two answers jumped by 8 percentage points and 5 points, respectively, which could indicate increased price sensitivity and greater choosiness among shoppers on where they make away-from-home food purchases during the pandemic. Another red flag for convenience foodservice is a drop in satisfaction year over year: 64 percent of shoppers report feeling completely satisfied or very satisfied with their last c-store prepared food purchase, down 7 points from 2020. Gen Z (45 percent), in particular, feels less positive than millennials (66 percent), Gen X (67 percent) and baby boomers (63 percent). To make up this gap, retailers should consider how they can better satisfy the needs and desires of this up-and-coming cohort.

Shifting Habits Looking back at their prepared food purchases from the past month, c-store shoppers split their purchases relatively evenly between made-to-order/freshly made food (39 percent), grab-and-go/refrigerated (30 percent) or a combination of both (31 percent). However, when asked their preference for prepared

2021

52%

2.7

The percentage of shoppers who purchased prepared food at a c-store in the past month

2020

80%

The percentage of shoppers who purchased prepared food at a c-store in the past month

The average number of times prepared food was purchased at a c-store in the past month

2020

5.0

The average number of times prepared food was purchased at a c-store in the past month

MAY

20 21

Convenience Store News 39

COVER STORY

Reasons Why Shoppers Did Not Purchase Prepared Food at a Convenience Store I didn't plan to purchase when I went to the store

31%

Prefer not to purchase at convenience

31%

Wasn't hungry when I was in the store

31%

Didn't look appetizing

23%

Too expensive

23% 22%

Didn't like selection 17%

Fear of COVID-19 transmission No healthy food choices

food, the results show clear favor for made-toorder at 53 percent, with grab-and-go coming in a distant second at 28 percent. This could be due, in part, to limited freshly made menu options during the pandemic. Post-pandemic, made-to-order food could see a significant bounce back, as preference for graband-go is not just lower, but also has declined 5 points from 2020. In contrast, preference for made-to-order food and combination purchases have increased. One thing the pandemic hasn't changed is the popularity of the top c-store prepared foods, with more than a third of shoppers reporting they bought pizza (35 percent) and more than a quarter saying they bought deli/sandwiches (28 percent), a hot dog (27 percent) or a breakfast sandwich (26 percent) in the last month. The biggest year-over-year growth was seen in purchases of breakfast sandwiches (up 5 points), and fresh baked goods and Mexican items (both up 4 points). Whether it's due to shopper reluctance, serving restrictions or other factors, this year’s study participants say they are less likely to buy food items typically placed on the roller grill or in hot cases than they were a year ago. This includes pizza (down 3 points), hot dogs (down 2 points) and non-French fry hot snacks (down 5 points). Several other, less popular prepared food items

40 Convenience Store News C S N E W S . c o m

have also seen slight drops, likely due to an overall flattening of the category. The attributes that consumers say are most important when purchasing prepared food at a c-store are food quality and price/value. These attributes were cited by the most shoppers (43 percent and 41 percent, respectively), but saw a slight drop compared to last year when 45 percent cited both as important. Taste holds steady in importance, cited by 37 percent of shoppers. Despite the increased availability of contactless purchase options in the convenience channel, delivery, drive-thru and curbside pickup are not yet among the most important attributes when purchasing prepared food at a c-store.

The Foodservice Basket Foodservice customers are excellent candidates for building bigger basket sizes, as just 7 percent did not buy any additional item along with their most recent prepared food purchase. Unsurprisingly, beverages are the most popular add-ons, with bottled water and bottled/canned soda leading the way

21-VAN-7335-Convenience Store News Ad-8x10.75-PROD.indd 1

4/14/21 11:56 AM

COVER STORY

Time of Day When Last Prepared Food Purchase Was Made at Convenience Store

11% 7%

23%

22%

+3 PTS YOY

+5 PTS YOY

21% 10%

-1 PT YOY

+2 PTS YOY

-4 PTS YOY

2% -2 PTS YOY

* Year over year comparisons

6 a.m. to

9 a.m. to

11 a.m. to

2 p.m. to

4 p.m. to

7 p.m. to

10 p.m.

8:59 a.m.

10:59 a.m.

1:59 p.m.

3:59 p.m.

6:59 p.m.

9:59 p.m.

or later

(both at 31 percent), followed closely by coffee/ tea/other hot beverages (30 percent). Still, foodservice shoppers report buying a majority of add-on options at lower rates than they did in 2020. The biggest year-over-year drops occurred in beer/malt beverages (down 5 points), ice cream (down 4 points), and cold dispensed beverages and bottled water (both down 3 points).

Satisfaction With Most Recent Prepared Food Purchase at Convenience Store * Year over year comparisons

Gender, generation and region all affect what customers buy along with their choice of prepared food. Some examples include:

Completely/ very satisfied 64%

• Women are more likely than men to add bottled/ canned soda to their food purchase, as well as candy, cigarettes and cold dispensed beverages.

-7 PTS YOY

• Millennials and Gen X shoppers favor pairing their food purchases with bottled water, candy and bottled/canned soda, while the top add-ons for Gen Z shoppers are grocery items and ice cream. • Customers in the Northeast are more likely to add milk and coffee/tea/other hot beverages to their food purchases, while bottled water is more popular among those who reside in the West. Customers in the West and Midwest favor pairing their food purchases with cold dispensed beverages more than the other regions of the U.S.

42 Convenience Store News C S N E W S . c o m

Somewhat satisfied 33% Not very/not at all satisfied 3%

+8 PTS YOY

-1 PT YOY

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COVER STORY

Most Important Factors When Purchasing Prepared Food at a Convenience Store

Most Likely Alternative to Convenience Store for Purchasing Prepared Food

43%

Food quality

Fast food restaurant

-9 PTS YOY

57%

41%

Price/value

37%

Taste

Prepared and eaten food at home

+6 PTS YOY

18%

35%

Freshness

28%

Convenience/on-the-go Location

22%

Sanitation

22%

Speed of service

21%

Customer service

15%

Menu choices

Fast casual restaurant

Prepared food/takeout from grocery

Casual dining restaurant

+2 PTS YOY

11%

+1 PT YOY

-2 PTS YOY

15%

Portion size

10%

Delivery available

Selection of brands

Presentation

Drive-thru available

Availability of healthier options

Curbside pickup available

Lunchtime remains the peak period for foodservice purchases at c-stores, with 23 percent reporting they last bought prepared food between 11 a.m. and 1:59 p.m. Prepared food purchases dip only slightly as the afternoon goes on, with 22 percent reporting they last made a purchase between 2 p.m. and 3:59 p.m., and 21 percent reporting they did so between 4 p.m. and 6:59 p.m.

Digital home delivery

NO CHANGE

2% * Year over year comparisons

percent who cited fast-food outlets in 2020. Not surprisingly, given the increased amount of time Americans are spending at home these days, preparing and eating food at home jumped up 6 points from last year. Despite the pandemic-induced rise in digital food delivery services over the past year, interestingly just 2 percent of shoppers say they would have purchased prepared food from such a service had they not purchased from a c-store. This number was unchanged year over year.

Pandemic or no pandemic, there is no shortage of competitors for c-store foodservice programs.

When they compare their c-store prepared food purchases to items purchased at other foodservice outlets, more than half of customers consider casual dining items (57 percent) and fast casual items (52 percent) to be better. Sentiment regarding those channels has slipped, though, as the percentage reporting that casual-dining food is better dropped 4 points, while the percentage reporting that fast casual food is better dropped 2 points vs. a year ago.

Fast-food restaurants remain the primary competitor, as 57 percent of shoppers say they would have purchased prepared food at such locations if they did not do so at a c-store. However, this is down 9 points from the 66

More than half of c-store shoppers consider prepared food items from fast-food outlets and grocery/supermarkets to be similar or worse than c-store prepared food. CSN

Compared to one year ago, customers are less likely now to buy prepared food during the early morning daypart of 6 a.m. to 8:59 a.m., and as of 4 p.m. through the late evening.

The Competitive Landscape

44 Convenience Store News C S N E W S . c o m

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COVER STORY

Looking Back & Moving Forward

Convenience foodservice leaders are using lessons from the past year to build a stronger post-pandemic future By Angela Hanson LAST SPRING, convenience store operators were grappling with what seemed like a perpetual crisis. During the early weeks and months of the COVID-19 pandemic, the industry as a whole — and the foodservice category, in particular — faced many unknowns in terms of transmission risks, state- and local-level regulations, and changes in consumer behavior at a time when c-stores could not afford to take a wait-and-see approach.

"We were on our heels daily," Kevin Smartt, CEO of Spicewood, Texas-based Kwik Chek/TXB (Texas Born), told Convenience Store News. He recalled the everyday, early morning calls during which his team reviewed the number of coronavirus cases, guidelines at the local, state and federal levels, and more — working to interpret what it meant for the company. "[There was] nothing strategic, just reaction mode," he said. More than a year later, c-store retailers now have a better understanding of virtually every aspect of operating during a pandemic, and face a new turning point as multiple vaccines against the novel coronavirus have become widely available. Still, insiders acknowledge that the industry's recovery is both ongoing and not uniform. As seen in the 2021 Convenience Store News Realities of the Aisle Study (see page 38), the foodservice category has experienced an overall flattening, with some retailers faring better and others worse in different areas. "In general, the rate of buying prepared foods at c-stores decreased as the result of the pandemic and the rate has not returned to pre-pandemic levels," said Chad Dewberry, product director, foodservice at Temple, Texas-based convenience channel distributor McLane Co. Inc. Some retailers say their foodservice sales have held fairly steady from the onset of the pandemic to today, while others report having seen major dips for certain dayparts, which are now beginning to show signs of recovery. While industry insiders agree that both the specific challenges retailers face and the path back to normalcy will vary considerably, consumer

46 Convenience Store News C S N E W S . c o m

trust is the key to truly bouncing back from COVID-19. "It really comes down to guests feeling that the stores they are making a food purchase from are safe and secure in their handling of products," said Kirk Matthews, vice president of foodservice and marketing at Fremont, Ohio-based FriendShip Food Stores. Retailers express pride in the c-store industry's quick pivot to action during a time when guidelines and resources were not readily available, particularly for small operators. As c-stores were designated as an essential business, plexiglass barriers, personal protective equipment, and other safety and sanitation measures quickly became standard aspects of doing business, even before they were mandated in many areas of the country. "We were able to quickly add personal protection to our staff and pay-point areas to keep staff and guests safe," Matthews said. "We are dealing with a smaller footprint and more confined space, so we had to be diligent about sanitation and social distancing, which in some ways played to our advantage." While customer satisfaction with prepared foods has fallen over the last year, the category may see a rebound as serving restrictions ease and retailers choose to move back to their previous methods. Smartt acknowledged that while he doesn't believe c-stores took their eyes off customer service during the pandemic, with so much emphasis on other priorities, it may have suffered a bit. Dewberry points to a lack of customization as being another problem. "We surmise that some of the dissatisfaction likely stems from the removal of certain key programs within c-stores’ food programs. Customization of food and drink has been a large focus within c-stores for years," Dewberry explained. "Due to COVID-19, we saw many customers discontinue cold wells and condiment bars. This drastically impacted the consumer's ability to customize their food and drink options in-store."

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COVER STORY

Consistency has been another major challenge, according to Matthews, who noted that the pandemic "played havoc" on both staffing and product availability, resulting in extended uncertainty. In the long term, though, this could result in a beneficial boost in creativity.

Planning for Tomorrow

"Innovation has come more from a service standpoint than from a product standpoint and some of the offers might have become stale due to the supply chain. I think you will see in the next six to 12 months an explosion of new and innovative products from c-stores," he said, noting that FriendShip is working on five to seven new items. "Comfort food is great, but we need to jazz it up now as the country starts to open up."

"Focus on in-store execution and create an environment that establishes your location as a destination for quality items," said McLane’s Dewberry. "C-stores, like many businesses, have learned a great deal over the last year and they can use their learning to experiment with new merchandising options that have the potential of further improving their sales and margins."

As the pandemic recovery continues, succeeding in convenience foodservice these days requires more than getting back to the old ways of doing business. Digital services, such as ordering online or via app for curbside pickup or delivery, are here to stay. But "digital" is a broad concept that can present many hazards to operators that don't perform due diligence and rather just go with the first digital platform that comes along. "With the amount of product and services out there, you have to do your homework,” Matthews said. “The startup cost can be significant, and the creation of content can be daunting. My advice is to vet numerous companies and review what they have done with companies your size, and also what are the short-term plans with their software and go-tomarket strategy." Smartt, who admits to stepping "on a few land mines along the way" during Kwik Chek's digital journey, offered even more pointed advice to his fellow retailers. "Do a few things great," he said. For example, offering as many as 10 different options for Kwik Chek's fajita tacos added a great deal of customization, but took up a great deal of space in its mobile app, while slowing down both over-the-phone orders and production of the made-toorder items. By shrinking the menu to just a few customization options, the chain was able to make the process smoother for both customers and employees, while still offering a quality product. "Keep it simple for customers and simple for operations teams to execute."

48 Convenience Store News C S N E W S . c o m

As the United States moves into a new stage of the pandemic, and the light at the end of the tunnel grows brighter, convenience foodservice programs have an opportunity to leverage the advantages they have over prepared-food outlets that were forced to make more significant operating changes, and stake out a stronger competitive position.

Additionally, while the vast majority of consumers make at least occasional visits to c-stores, the pandemic may have attracted more regular customers. "The fact that we were able to pivot and turn and figure it out quicker than other food establishments made us gain popularity with many people who were not loyal c-store guests prior to the pandemic," Matthews said. "We became much more than just a gas station to many." Despite stronger consumer preference for made-to-order food, the pandemic prompted health and safety concerns that led to an increased focus on grab-and-go offerings. Moving forward, this could prompt new ideas in the COVID-19 aftermath. "As innovation from the typical grab-and-go improves, you will continue to see more of the grab-and-go purchases," Matthews predicted. The dispensed beverages segment is more likely to have a longer recovery time as customers continue to default to the cold vault for their beverage purchases. Retailers may be able to speed up the recovery by offering customers a sense of safety and enticing deals. Kwik Chek/TXB CEO Kevin Smartt believes in staying focused on doing a few things great.

COVER STORY

"We believe fountain volume will return to pre-pandemic levels once consumers begin to feel safe again," Dewberry said. "If consumers begin to focus on value options, the fountain has long been the destination for consumers looking for low-cost refreshments." FriendShip saw an improvement in the hot dispensed beverage segment by switching to a local coffee company as its roaster, which helped push sales back toward pre-pandemic counts, although the chain is prepared for a slow roll back to normalcy. At the same time, Matthews noted there is some uncertainty over what the primary factor is behind softness in the segment. "With so many guests still working at home, it has been difficult to gauge the actual reluctance to using the to-go area vs. the actual drop in guest numbers coming through the doors in the a.m.," he said. Looking back at the early days of the pandemic may bring forth memories of great uncertainty mixed with the need for quick and decisive action, but doing so also highlights important lessons that allowed the industry to survive during the crisis and will help it thrive in the aftermath. "Being nimble, flexible and adaptable was essential to survival," Dewberry said, when asked of the most important foodservice-related lesson learned since the start of the pandemic. "The rules for foodservice delivery before the pandemic no longer applied, and the requirements for continuing to offer foodservice options changed and continue to change." One silver lining to the disruptions caused by the pandemic is a stronger sense of where c-store prepared food programs perform best. "We were surprised at the impact to our breakfast business throughout the year. I guess we knew the statistical number for our breakfast daypart, but when it was impacted like it was, it really was a key learning to us of how strong we have become for breakfast," Smartt said. "We wanted to focus on that to get it back to where it was and then become even stronger. So, we've had a huge emphasis on our breakfast daypart in terms of building back that foundation and also trying to expand upon

50 Convenience Store News C S N E W S . c o m

“Today, I take nothing for granted, and what we design now has to be flexible and able to be modified for quick action.” — Kirk Matthews, FriendShip Food Stores it as we move forward," he added. One thing is certain: While aspects of the post-pandemic future remain unknown, retailers will remember everything they've learned as they work to grow and improve their programs. "Today, I take nothing for granted, and what we design now has to be flexible and able to be modified for quick action," Matthews said. "This virus caught us off guard and really crippled segments of our business. I am just thrilled that we are seeing recovery from this and that our lives are getting somewhat normal again. I think it is important to learn from the past and to plan accordingly." CSN

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FOOD I NSIG HT P O W E R E D B Y DATA S S E N T I A L

Knead-to-Know Pizza Trends Regional styles, unique flavors, premium proteins, and more make this an exciting segment IT’S NO MYSTERY that Americans love pizza. From pan to deep dish to Chicago tavern, each region of the United States has its own style. And as classic Italian styles like margherita, Neapolitan and pizza al taglio move up the Menu Adoption Cycle, they are slowly growing in awareness and becoming seen as more American.

According to Datassential’s FLAVOR database, 70 percent of convenience store consumers love pizza — that’s high! Pizza is one of the most-loved dishes and can be customized for every consumer’s preference of crust, sauce, cheese and toppings. As the category unfolds, we can dive deeper into regional styles, unique flavors, premium proteins, and more.

Ubiquity With a Twist There are some toppings that people can’t agree on, like pineapple or anchovies, but pizza is a ubiquitous dish that has endless possibilities for personalization. Pizza has experienced some upgrades in the past few years, such as premium proteins appearing as toppings. According to Datassential’s MenuTrends, operators are incorporating meats like short ribs (up 46 percent in menu penetration in the past four years), brisket (up 26 percent), and Italian deli meats like soppressata (up 13 percent). Even adding a level of crunch or creamy texture with vegetables such as pickled onion, avocado and kale can elevate a pizza. Lastly, sauce isn’t just tomato-based. Beyond the addition of sauces such as pesto and alfredo, restaurants are using specialty sauces like hot honey and aioli.

Health Forward As shelter-in-place is extended — like our waistlines, unfortunately — consumers are looking for more healthful options for comfort food.

Pizza has experienced some upgrades in the past few years, such as premium proteins appearing as toppings.

Datassential, a Chicago-based food and beverage industry research and consulting firm, brings clients real-world insights on flavor trends, foodservice and consumer packaged goods, globally. Learn more at datassential.com.

52 Convenience Store News C S N E W S . c o m

With one in five consumers saying they’re tired of pizza and looking for some innovation, an easy swap is cauliflower crust in place of the traditional flour crust. Cauliflower crust has grown 37 percent on menus in the past four years. Of consumers who have tried cauliflower pizza crust, 22 percent of them love it. Cauliflower makes this universal dish approachable for gluten-free and lowcarb diets, such as keto, paleo and Fodmap.

Regional Trends We could run the gamut when it comes to all the different styles of pizza, but there isn’t one clear winner when it comes to regional varieties. Each style has its own unique twist, from Detroit with brick cheese and fluffy focaccia-inspired crust (15-percent growth on menus in the past four years, according to MenuTrends), to Quad Cities pizza with the addition of malt or molasses to the crust. Other varieties like grandma-style pizza were a staple for many Italian households that didn’t have pizza ovens. Eleven percent of c-store consumers love grandma-style pizza. The Sicilian-like variety is often baked in a pan and cut into squares, making it perfect to eat on the go. CSN

FOODSERVICE

The Dispensed Drink Evolution

Hot, cold and frozen beverage offerings at c-stores are adapting to meet the times By Renée M. Covino

HAVE YOU HUNG a “Welcome Back” sign above your coffee bar, fountain drink station, and frozen slushie machines? These areas may have been hard-hit for many convenience stores that suspended self-serve beverages to prevent the spread of the novel coronavirus last year, but the time is ripe for renewal.

“Dispensed beverages are a valued offering to our customers. It continues to represent a healthy portion of overall transactions,” said Jim Rastetter, category manager of hot and cold dispensed beverage at Richmond, Va.-based GPM Investments LLC. The wholly owned subsidiary of Arko Corp. has grown through acquisitions to roughly 2,950 locations comprised of approximately 1,350 company-operated stores and 1,600 dealer sites spread across 33 states and Washington, D.C. “We must adapt by staying engaged with customer expectations in this area,” he told Convenience Store News. “We expect 2021 to be an exciting year for dispensed beverages, and we are ready to welcome consumers back into the category.”

Clean Sweep One of the greatest customer expectations now is a sanitary beverage bar across the board, according to Rastetter. “Having a standard procedure in dispensed beverage program areas that is visible to customers is the greatest way to instill confidence,” he advised. “Routine monitoring and cleaning of the beverage bar is critical.” This includes wiping down surfaces, keeping equipment in good working order, and keeping areas clear of clutter — together, they are the best way to prevent contamination. “The presentation of the program and cleanliness of these stations will continue to be paramount past COVID,” echoed Emily Wood Bowron, vice president of strategic marketing for Moody, Ala.-based Red Diamond Coffee & Tea. Other ways she sees the category evolving are providing single-serve condiment options, such as single-shot creamers and individual sugar sticks or packets; and offering an even greater variety of choices.

54 Convenience Store News C S N E W S . c o m

FOODSERVICE

The Rules for Renewal “Variety and options are taking a frontseat more than ever,” Wood Bowron said. “Customers want to get exactly what they want, how they want it, when they want it, so capitalizing on customizable options is not only great for customer engagement, but it also will help promote repeat visits.” Customers expect diversification and choice at dispensed beverage stations and coffee bars, added Rastetter. Offering engaging limited-time offers and unique flavors is important, and so is the shift from cubed ice to nugget or chewy ice. “Consumers have begun to expect this popular ice when pouring a drink,” he relayed. When it comes to trending flavors, c-stores should look to partner with suppliers that have their finger on the pulse of what’s coming in and what’s going out. “Passionfruit may be on the rise right now as we head into summer, but that doesn’t mean it will be popular into the months of cooler weather,” Wood Bowron cautioned. Meeting customer demand for dispensed beverages these days may also mean having a choice of flavored iced teas at 10 a.m. and a fresh coffee option at 3 p.m. Making sure all dispensed beverages in the program are always fresh and of a high quality will engender trust and continued exploration outside of standard dayparts, according to Wood Bowron. “Breakfast, in particular, has become an all-day event, and consumers still look for healthier alternatives to soda,” she noted. Rastetter agrees that dispensed beverages should be treated as an all-day program by c-store operators. “Cold and frozen beverages continue to have strong sales during lunchtime and into the evening,” he reported, pointing out that offering fresh coffee all day is easier than ever with the introduction of bean to cup. “These programs are easy for c-stores to execute and complement many of the snack items we sell.”

Don’t Touch The fewer steps a customer must take to mix the perfect beverage, the better. “Instead of just offering a regular and a decaf coffee with multiple syrups, consider adding a flavored coffee like hazelnut and another limited offering to the lineup, so customers touch fewer surfaces and deal with fewer handles and levers to create a flavored beverage,” Wood Bowron offered.

56 Convenience Store News C S N E W S . c o m

Industry experts say these are key factors for the rebirth of dispensed beverages: • Standardized sanitary procedures; • Single-serve condiments; • A contactless drink selection experience through interface or phone; • Touchless technology in water, ice and lid dispensers; • Valve guards/shields that fit over existing machines; • All-day programs, including fresh coffee; • A wide flavor assortment, including limited-time offers; • Additional blends in place of syrups; • Sustainable coffee blends; • Offering nugget or chewy ice; • Frozen flavor mashup menu; • All plastic cups, eliminating foam; • Hologram displays above machines to generate excitement; and • A more premium experience overall.

In tandem with the demand for a high cleanliness level, touchless and contact-free technology is on the rise and more available from varying machine suppliers. For instance, Coca-Cola Freestyle launched a “pour by phone” contactless experience powered by Amazon Web Services. A series of signals and steps take place in the cloud, verifying that each phone is connected to the right machine, with only in-stock beverages shown as flavor options. Pours then start and stop with the touch of a button on the phone screen, resulting in a “magical experience for the user,” according to a company spokesperson. By the end of 2020, all U.S. Freestyle machines were equipped with this touchless technology. Follett Products LLC recently introduced the Touchless SensorSAFE Dispensing Kit for its ice and water dispensers. Available for both new and existing countertop and freestanding dispensers, the kit can be easily installed by connecting its wire harness to the control board and attaching the new lid, according to the company. Similarly, Lancer Worldwide introduced an accessory line called The L-Guard System, developed to ensure hygienic protection throughout the beverage dispensing experience. Valve Guard was unveiled as the first product in the line, designed to retrofit easily with existing Lancer Worldwide machines and intended to protect the valves, levers and dispensed beverages from contamination throughout frequent daily use. No tools are needed; the guard slips around the outside of the dispenser housing, and attaches to a foam adhesive backed tab.

FOODSERVICE

And to keep beverage container lids safe and sanitized while being stored, Lid Boss enables customers to wave their hand in front of the unit's motion sensor to dispense a single lid. This provides less opportunity for germ transmission and a greater sense of security, according to the company. Lid Boss also cuts down on discarded lid costs for operators, with a footprint that is just eight inches wide.

Unfreezing Potential In the frozen beverage arena, “connected” machine technology has proven useful during the pandemic. Salt Lake City-based category supplier Frazil/Freezing Point LLC launched a connected internet-ofthings machine that allows the company to remotely monitor/confirm that its frozen beverage machines at retail are on, working and full. “These questions were critical to answer during the pandemic. This technology really helped many of our chain accounts actively monitor their category in realtime and ensure that they were compliant with local demands,” CEO Kyle Freebairn told CSNews. Because some municipalities mandated that dispensed beverages should be paused temporarily, the connectedchain capability allowed retailers to see on their dashboard which machines were, in fact, on or off, helping them ensure local compliance. “And then once restrictions were lifted, the connected machine technology helped ensure that the stores brought all their machines back online, so as not to miss any sales,” Freebairn explained. “With so many other demands that were pushed onto category managers, Frazil’s connected machine technology helped push a lot of the category management responsibilities onto the Frazil team, so retailers could respond to other demands and have the confidence that their slush program was actively working.” The technology also makes certain that sales are maximized, and that a consistent experience is offered across all stores. “The program is helping to drive sales improvements during a time when every sales dollar is critical,” he said. Frazil is additionally using its technology platform “Fraznet” to generate automatic

58 Convenience Store News C S N E W S . c o m

“We expect 2021 to be an exciting year for dispensed beverages, and we are ready to welcome consumers back into the category.” — Jim Rastetter, GPM Investments LLC notifications around category improvements that are available — down to the specific store level around cup assortment options, flavor rotation options, and other operational considerations the store could implement to drive further sales improvements. Beyond technology enhancements, quality is what is driving frozen beverage segment growth, according to Freebairn. “The most important aspect for c-stores is to provide a slush product/program that is a premium experience; that draws people back into the store because they can’t get it anywhere else,” he said. “Now is the time to focus on quality and providing a frozen beverage experience that is second to none.” Frazil has started to add hologram displays above its machines to draw attention to this high-profit category. “We’ve seen significant sales improvements with this unique marketing approach, which consumers love and are instantly drawn to,” Freebairn relayed. Another customer draw is what he refers to as “flavor mashups,” such as Tangerango, which he describes as a tangerine flavor with a hint of mango. “The complex and nuanced flavor profiles delight consumers and give a much more satisfying and refreshing experience that keeps them coming back,” he noted. A Frazil mixing menu has been launched to increase the experiential aspect of this evolving category. “What we saw is that consumers like to mix their own custom flavors based on the Frazil flavors that are available in their local store,” Freebairn said. As a result, the company put some of those flavor combinations into its mixing menu, and also adjusted its store locator to help consumers find those stores that are carrying the flavors they want to try to mix. “This helps make the category even more fun and exciting,” said Freebairn. CSN

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Keeping Up the Momentum Cigars were a big hit at the height of the pandemic, but what now? By Renée M. Covino 2020 WAS MARKED by phenomenal cigar sales for many convenience stores.

due to the COVID-19 pandemic and the temporary closing of cigar factories.

“You could definitely say cigars are a highlight — they took off last year and have continually grown as a large share of our tobacco category,” reported Chris Dillard, category manager for tobacco at The Spinx Co., operating 82 c-stores and 45 car washes throughout South Carolina. “COVID encouraged customers to stock up, but even pre- and post-COVID, high cigar sales became the new normal. They continued with double-digit volume and show significant growth over prior years.”

Johnson said he “had to get creative,” scrambling for new suppliers and different brands to keep up the momentum. “It was a lot of work on my part, but it was effective,” he told Convenience Store News. And now that supply has resumed, “the category is still doing very well,” according to Johnson.

Ray Johnson, operations manager at Speedee Mart, which operates convenience stores in Nevada, confirmed a cigars category that was “up in the double digits,” although he noted that his business experienced out-of-stocks of many popular brands

60 Convenience Store News C S N E W S . c o m

The numbers support the anecdotal evidence. During 2020, the large cigars category realized “significant volume gains” — up 16 percent — and reached an all-time industry high of 9 billion cigars sold, according to the MSAi Swisher Database. Growth trends of this magnitude have continued into 2021 with the large cigars category increasing by 25.1 percent for the year to date ending Feb. 27, 2021. “Large cigars’ increase in popularity has largely been impacted by adult consumers’ ability to work from home; there are fewer restrictions and greater opportunity to

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enjoy one’s favorite cigar in the privacy of their own home,” said Karen Saber, vice president, business analyst and strategic sales innovation for cigar manufacturer Swisher. “It is widely understood that these growth trends will normalize at some point in time as purchase patterns more readily resemble prior years. However, volume levels are still expected to increase, at minimum, until the end of 2021.” Similarly, Joe Teller, director of category management at nicotine product maker Swedish Match, told CSNews that while cigar growth post-COVID may not be as dramatic as what was seen last year, he projects the category will grow by at least 2.5 percent in units in the convenience channel for the next year. “We don’t envision the category declining, even considering last year’s big growth hurdle to overcome,” Teller said. But that’s not to say such magic will continue to happen without any effort. Suppliers offer up the following ways c-store retailers can keep the momentum going:

Diversify With a Nod to Premium The tobacco space needs diversification, both within the cigars category and within the overall other tobacco products (OTP) space. To compete effectively within the cigars category, the entire c-store portfolio should be included in the planogram — that includes large, little, filtered and premium cigars, according to the experts. “Smoke shops carry all of these products, which offer excellent margins and satisfy unique niches within the category,” said Swisher’s Saber. In particular, she cited that the premium cigars segment grew 10 percent in the latest 52-week period, and

“You could definitely say cigars are a highlight — they took off last year and have continually grown as a large share of our tobacco

Swisher’s premium division Drew Estate grew 40 percent over the same period. C-stores are catching on to the premium trend, especially now that more premium customers have found their way into the channel during COVID. Now is not the time to lose them, she said.

Roll With Rolled Leaf As demand spiked during the initial phase of the pandemic, there were issues supplying the category’s typical growth segments, especially natural leaf cigars, according to Teller. This meant that low-priced HTL (homogenized tobacco leaf) regular cigars rebounded as shoppers bought what was available, rather than what they typically would buy. “Now that manufacturing is coming around again, we expect the main, long-term consumer trend to accelerate with high growth for rolled leaf cigars and natural leaf cigars — but especially higher-priced rolled-leaf fivepacks,” he said. “The growth in rolled leaf is so torrid, it just makes sense to cater to this consumer demand.” He also suggests that c-stores increase their variety of rolled leaf and natural leaf cigars at the expense of lowperforming and inexpensive HTL regular cigars.

Reconfigure Merchandising to a More Logical, Profitable Flow Do you merchandise cigars by manufacturer? Do you put the lowest-priced sticks on top, with high-growth and high-profit segments on the bottom? If so, Swedish Match recommends reversing that. “Put the highest-priced and highest-margin products at the top — rolled leaf and natural leaf cigars — and the lowestpriced products below that,” Teller advises, explaining that this will raise the “strike zone.” He also believes c-stores should stop the common practice of merchandising cigar products by manufacturer, as this approach makes little sense for the shopper who is looking for a certain type of cigar. “We recommend remerchandising by segment, where all products of a certain type, such as rolled leaf cigars, are merchandised together so the shopper can see the full breadth of item selection in the segment,” he said. “If anything can keep the cigar growth coming, it’s merchandising cigars for the benefit of the consumer and shopper.”

Realize Category Management Is Key

category.” — Chris Dillard, The Spinx Co.

C-store retailers should support the demand levels to the best of their ability by maximizing the capacity and potential of their planograms. “As the large cigar category continues to increase and out-of-stocks may be realized, it may be time to double- and even triple-face where necessary,” stated Saber. “This is where category management and factbased selling becomes an integral part of defining the marketing mix, adult consumer demand, and margin growth potential.”

62 Convenience Store News C S N E W S . c o m

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She added that now is the perfect time for retailers to lean on and partner with cigar manufacturers to ensure viability and long-term success. “It may seem tempting to flood the market in times of crises but, in the end, it only disrupts the supply chain further and does not allow for a consistent delivery mechanism,” she said. “We expect to continue to grow and learn from the experiences realized in 2020, leveraging our knowledge to serve and support our customers.”

Promote In-Person Events to Generate Excitement Swisher’s Drew Estate division recently announced that its Barn Smoker events will return in-person this year with a few changes. The events were cancelled last year due to the pandemic. This year’s events in Connecticut and Florida (the most well-attended) will be spread over two days to reduce the number of people on the tobacco farm each day. There will be no events held in Louisiana or Pennsylvania this year. These events are aimed at bringing the cigar smoker to

the barn level and teaching them about the ins and outs of tobacco growing, processing and finishing. “This year’s Barn Smokers will have a bit more special meaning than before because we’re finally going be together again in #fellowship after a long period of isolation,” said Drew Estate co-founder Jonathan Drew. “I’m excited to bond with everyone and raise money for our Cigars for Warriors peeps.”

Expect a Change in the Pre-Priced Segment Historically, pre-priced units within the large cigars category have been a challenge for retailers and manufacturers alike for more than a decade, according to Saber. “Manufacturing and selling costs across the board continue to increase, and the pre-priced nature of the category tends to limit revenue streams and margins for all involved,” she told CSNews. Saber expects that in the near future, more and more organizations will move away from the pre-priced model and migrate toward a non-priced model. CSN

21_0790_Conv_Store_News_MAY Mod: April 14, 2021 11:19 AM Print: 04/15/21 4:27:24 PM page 1 v7

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Nonchocolate Candy Makes a Rebound The pandemic unwrapped new shopping trends, consumer behaviors and product attributes By Danielle Romano DESPITE PANDEMIC-DRIVEN changes in shopping, working and social routines, there’s been at least one meaningful constant: confectionery remains a strong and important category.

Chocolate accounted for the largest share and highest growth percentage in 2020, with its strong performance rooted in continued high household penetration. Although nonchocolate saw less engagement early on in the pandemic, the segment strongly rebounded late in the year. The National Confectioners Association’s (NCA) second-annual Sweet Insights: State of Treating 2021 report revealed that confectionery overall rang up $36.7 billion in sales in 2020. Nonchocolate accounted for 30 percent of sales, or $11.5 billion, representing 2.9 percent growth over 2019. Chocolate accounted for 58 percent of sales, or $21.9 billion, representing 4.2 percent growth year over year. The nonchocolate consumer sought moments of comfort and nostalgia during an unprecedented time, noted Jim Dodge, vice president of convenience for Mars Wrigley. “People were increasingly drawn to confectionery for at-home consumption, as well as for on-the-go occasions like road trips or local getaways, and they turned to trusted brands they love and grew up

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with to satisfy this need,” Dodge told Convenience Store News. “That said, we know consumers are still looking to indulge and they want to do it in new and adventurous ways. The nonchocolate consumer, in particular, is still looking to use confections during moments that matter, seeking trusted brands and products that are ingrained in family traditions. They look to fruity confections as more than just a treat for themselves, but as a way to treat others through affordable gifting.” Lance Smith, vice president of industry affairs and customer strategy for The Promotion In Motion Cos. Inc., which is known for such brands as Welch’s Fruit Snacks, Original Gummi FunMix and Sour Jacks Mouth Puckering Candy, says there are several characteristics of nonchocolate consumers that helped bolster the segment’s growth in 2020. One trait in particular is that these consumers are variety seekers who love exploring new products or brands, and who look to snacks as a source of fun. “Those purchasing chocolate tend to be looking for an individual, premium treat or reward, and [are] now more focused than ever on healthier benefits that chocolate provides — especially dark chocolate. Conversely, purchasers of nonchocolate candy, especially chewy, are looking for a fun experience that will challenge their taste buds with new and interesting flavors and textures,” Smith explained.

Behavioral Changes & Trends According to the State of Treating 2021 report, 61 percent of shoppers changed up their confectionery purchases during the COVID-19 pandemic in one or more

CANDY

ways. The top four behavioral changes that emerged were buying different pack sizes, buying different brands, buying different items, and shopping at different stores. NCA found that shoppers had a myriad of reasons for modifying their confectionery purchases last year. Among them were: • Looking for a better value (cited by 37 percent); • Experimenting with different types more now (37 percent); • Looking for a little luxury treat (30 percent); • Want to buy individually wrapped candies now (22 percent); • Working from home (21 percent); • Buying for different members of the household (20 percent); and • Don’t currently visit my usual candy/chocolate place of purchase (16 percent). As consumers adopted new shopping behaviors, new trends surrounding the nonchocolate segment emerged. One of the largest growing trends that Promotion In Motion has observed is heightened consumer demand for take-home and larger pack sizes for at-home and on-the-go consumption due to the increased levels of in-home entertaining, working and schooling.

and less impulse buying. With shoppers rushing to get in and out of the store — and without contact — it has become increasingly important for c-store retailers to make time spent in the checkout zone and in the confectionery aisle seamless and effective experiences. According to Dodge of Mars Wrigley, whose nonchocolate brands include Lifesavers, Skittles and Starburst, a few ways in which c-store operators can drive impulse buying are: • Merchandising power fruity confectionery brands together in vertical blocks in-aisle to help shoppers easily navigate the shelf, and ultimately drive impulse. • Shelve larger-pack types, like share or family, over singles to offer consumers easy opportunities to trade up to a larger size and stock up. • Remodel the merchandising flow in the store based on time of day and the reasons shoppers need fruity confections. • Repeat placements of power categories, including fruity confections, throughout the checkout queue, merchandising them with other “must-have” highimpulse items.

Chocolate

Non-Chocolate

Gum+Mints

$21.9B

$11.5B

$3.9B

58% of $ sales +4.2% growth

$23.4B projected 2025

30% of $ sales +2.9% growth

$12.1B projected 2025

12% of $ sales -22.7% growth

$4.1B projected 2025

Source: IRI, MULO + C, 52 weeks ending 12/27/20; Euromonitor & NCA Projections (rounded)

“We are seeing larger pack sizes proliferate across channels, even becoming the No. 1 item in the category for some brands,” said Smith. Meanwhile, product attributes that are resonating currently with nonchocolate consumers are inn-ovation in flavor profiles, preferred textures and forms, chewing preferences, and variety in the same package. “Many brands are bringing new product innovation to the market that represent mashups of different forms, flavors and textures, as well as combinations of flavors,” he said.

Promotional Best Practices During the COVID-19 pandemic, convenience store industry performance fluctuated because of reduced mobility, but nonchocolate candy continued to show positive growth aided by the shift in c-store dayparts that moved purchases away from the morning to more indulgent occasions in the afternoon and evening. The channel, as a result, saw nonchocolate dollar sales increase by 4.4 percent, the State of Treating 2021 report uncovered. At the same time, nonchocolate candy suffered at the frontend due to socially distant checkout procedures

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“Lastly, nonchocolate offerings like fruity confections are often purchased for gifting. Retailers can drive sales of fruity confections year-round by leveraging everyday gifting opportunities online and in stores to remind shoppers that fruity confections are a vital part of celebrating,” Dodge added. “By introducing occasion-focused items and merchandising by occasion — either by celebration or gifting — consumers will be reminded to purchase, build baskets, and drive sales.” Promotion In Motion’s Smith additionally advises c-store retailers to implement programs that incorporate “solution bundles” that make it quick and easy for shoppers to make decisions. He also suggests they leverage digital marketing programs to make promotions more impactful. “In terms of best practices for merchandising the nonchocolate category in c-stores, we must first understand certain value propositions that are core for convenience retailers during this unprecedented time of COVID,” Smith told CSNews. “One in particular is adopting to new technologies that can tie in mobile ordering, delivery and pickup. Another is leveraging loyalty programs. Lastly, ensuring the right assortment is in the right stores.” CSN

FEATURE

MASTERING ON-DEMAND DELIVERY Third-party apps and in-house offerings for delivery continue to explode in the c-store market By Tammy Mastroberte CONVENIENCE STORES started dabbling in delivery, especially for foodservice items, prior to the COVID-19 pandemic. However, once mandatory lockdowns stopped customers from driving — cutting down on their need to stop for gas, or commute to work and stop for breakfast — everything changed. Delivery options started exploding in all industries, including the c-store market, at an accelerated pace.

“We actually started in-house delivery with Vroom at one location back in March 2019, one full year before COVID 70 Convenience Store News C S N E W S . c o m

hit, and didn’t expand until after COVID started,” said Krystal Rademacher, retail accounting supervisor at Quality Dairy Co., based in Lansing, Mich. The company operates 20 c-stores in the greater Lansing area. Quality Dairy’s entry into delivery started off slower than anticipated in 2019, Rademacher recalled, because it took time for the retailer to understand its place in the market and the relevance of delivery. But after COVID hit, things picked up. “COVID proved there is relevance for delivery in c-stores, and we did very well and have been doing very well during COVID,” she explained. “What has been amazing is it has given us a ton of data and we had the

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“The potential reasons to go with a third-party include [that] there is a user base already there; it’s ease of start-up because the technology already exists; and they handle the driver management, The rise in delivery is evident in the soaring which decreases a c-store’s risks,” said Kay Segal, revenue of third-party delivery services, including DoorDash, Uber Eats, Grubhub and founding partner of Business Accelerator Team, a convenience retailing consultant company based Postmates. Combined, the four companies brought in revenue of $5.5 billion from April in Phoenix. 2020 to September 2020 — more than twice their combined revenue of $2.5 billion during In April 2020, one month after lockdowns started the same time period in 2019, according to a in the U.S., Altoona, Pa.-based Sheetz Inc. announced a partnership with Grubhub to provide delireport by MarketWatch. very from 390 of its c-stores, offering a variety of its MTO made-to-order menu items and Sheetz While some wonder if this trend will last, Bros. Coffee. In August 2020, both MAPCO, a or slow down in a post-COVID world, it c-store chain with 348 locations based in Franklin, certainly has not slowed down yet. In fact, 53 percent of adults say purchasing takeout Tenn., and QuickChek Corp., the Whitehouse or delivery is “essential to the way they live,” Station, N.J.-based operator of more than 150 c-stores, announced partnerships with DoorDash. and 68 percent say they are more likely to purchase takeout or delivery food now than QuickChek began offering its entire foodservice menu through the app. prior to the pandemic, according to data from the National Restaurant Association’s State of the Industry report released in January 2021. opportunity to understand our market much faster.”

The growth in e-commerce and delivery accelerated by the pandemic will continue post-pandemic, according to a survey of more than 1,000 U.S. consumers released in March 2021 by LaserShip, the largest e-commerce parcel carrier in the United States. The survey found that 80 percent of consumers still prefer home delivery of goods purchased online. “I do think the trend is here, and it accelerated like crazy because of COVID-19, probably five years earlier than it would have, as it was a much more convenient option, especially with the work-from-home life where people are less likely to drive past the store on the way home,” said David Taylor, product manager at Paytronix, which offers an Order & Delivery platform for c-stores and restaurants. “Delivery is more prevalent in those situations and will likely continue to be, even with COVID behind us, because of how many people working from home will not go back.”

Outsourcing Delivery C-store operators have a few delivery options available to them depending on the amount of money, time and resources they have available or are willing to dedicate to delivery. The first option, and what many operators gravitated toward in the beginning of the pandemic, is partnering with third-party services such as Postmates, DoorDash, Uber Eats, Grubhub or Instacart. 72 Convenience Store News C S N E W S . c o m

“COVID proved there is relevance for delivery in c-stores, and we did very well and have been doing very well during COVID.” — Krystal Rademacher, Quality Dairy Co.

Also in August 2020, ExxonMobil connected its branded wholesalers to DoorDash, Grubhub, Instacart and Uber Eats to enable household deliveries starting that month; and 7-Eleven Inc., which has been offering delivery through its proprietary 7NOW delivery app (launched more than two years prior), expanded its delivery options by partnering with Postmates, DoorDash and Google Food Ordering. Stripes Convenience Stores, owned by 7-Eleven, also added its Laredo Taco Co. foodservice concept for delivery through Favor Delivery in Texas. “Having other people drive your product takes a lot of the management and short-term risk out because you don’t have to worry about insurance, staff or who owns the vehicles, but the retailers have to pay for being on the service. The service takes a portion of the sale, and then the customer pays extra, too,” Segal noted.

Some third-party delivery companies, such as DoorDash, are now offering white-label fulfillment-only solutions to retailers and restaurants.

In fact, being part of the third-party apps can get “pretty expensive,” especially when participating in more than one, according to Paytronix’s Taylor. Therefore, it is important for retailers to do research and figure out which apps are the most popular in their region. “Make sure there is a good regional presence and usage of the brand and, in some cases, it might be better to choose a local provider rather than a big name,” he said. “What is the point of having your brand on Uber Eats if only 1 percent of your surrounding area uses it?” A big benefit of using third-party apps is the opportunity to tap into a new customer base that a c-store chain may not already have. In many cases, these apps have loyal users and with COVID, there has been a huge spike in their usage. However, the challenge for a c-store operator becomes turning these new customers into loyal customers who come back for more.

or coupon for the location, he said. One of the downsides of not taking on e-commerce for delivery in-house is that the customer and the data are owned by the third-party provider, as Matthew Carinio, vice president of strategy and consulting at digital growth agency Hathaway, pointed out. “The challenge with third-party is the loyalty between the c-store and their customers goes away and that loyalty relationship is now controlled by the third-party service,” he said. “Strategically, the biggest value of digital is data, but if a thirdparty is acting as the intermediary, that data never gets to you, so you are losing the long-term value of that digital channel.”

Outsourcing Drivers Only There is another option that allows c-stores to take the e-commerce piece in-house and only outsource the actual delivery piece, as many thirdparty companies are now offering white label delivery, including DoorDash’s Drive.

“Think about these programs as customer acquisition tools — it’s a new set of eyeballs that wouldn’t normally see your brand, and since retailers are paying a decent amount of money to be on these platforms, there needs to be a plan in place to convert them to come to your website or store directly,” Taylor advised.

“Several third parties actually have white label fulfillment-only solutions where you use your own e-commerce platform to source the customer and payment, and they are just picking it up and delivering it,” said John Nelson, CEO and founder of Vroom Delivery, which offers e-commerce solutions for c-stores and other small markets. “They do this for [a] fixed rate, and this has been rolling out in the last year.”

For example, if a chain is using DoorDash for delivery, employees should add a flyer to every bag that either directs the customer to the chain’s own website for ordering if that’s available, or offers a discount code

DoorDash Drive allows chains to keep their branding front and center, and advertises that 75 percent of orders through Drive are delivered within 30 minutes, with an average customer rating of 4.5. This service enables c-stores to not only MAY

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own the customer and make more money on their delivery orders compared to running them through the DoorDash app, but also allows them to own all the data and remarket to those customers for repeat visits. “At least with a solution like DoorDash Drive, you still own the customer,” Taylor said.

In-House Delivery Instead of outsourcing — or in addition to — some c-store chains have decided to take the entire delivery process in-house, which is what Quality Dairy did, using Vroom Delivery technology for the e-commerce piece. For those already offering online ordering and pickup, the only other piece to be added is the driving and delivery. However, it is possible to start from scratch and still get up and running fairly quickly with the right technology. Quality Dairy chose Vroom Delivery for the e-commerce side, which is automated and offers the technology infrastructure from the customer-facing menu to the tools in-store to the back-end management to maintain pricebook, transactional history and more, according to Nelson, who said c-stores can be up and running “in a matter of weeks.” Foodservice selections are only available at two Quality Dairy locations — one has a pizzeria and the other has a deli kitchen, as well as pizza. While the chain started delivery at just a single location, it not only expanded the service to all locations once the pandemic hit, but also started offering all products in the store for delivery. “Vroom has a suggested selling feature and we gave them groups of items for it. So, if someone is buying milk, the system will suggest cereal or bread, and if they are buying bacon, it will ask if they need eggs,” Rademacher shared. The retailer offers tobacco and alcohol products, too, which top delivery sales. Customers start at the Quality Dairy app and then are taken to the Vroom app to place their order. If they are ordering tobacco or alcohol, they are told at the time of purchase that delivery will require an ID. “When the items are delivered, the driver takes a photo of the ID and it’s attached to the receipt,” Rademacher noted. One of the biggest challenges the chain faced was staffing drivers, as most drivers 74 Convenience Store News C S N E W S . c o m

Marketing Homegrown Delivery Convenience stores that launch in-house delivery initiatives for foodservice, c-store products or a combination of both need to get the word out to their customers that these options are available. Unlike working with third-party apps, which offer a built-in customer base, c-stores need to rely on their existing customers and potential new customers to use their e-commerce systems. When Quality Dairy Co., a chain of 20 c-stores based in Lansing, Mich., launched its delivery program, the first line of attack was flyers and training the staff to talk to customers about it, starting two weeks before the launch. Next up was social media, according to Krystal Rademacher, retail accounting supervisor for Quality Dairy. “We already had an ordering solution for our large selection of baked goods, so we also started placing links on our website about this. It was in a visible place where people were used to placing orders with us,” she explained. Quality Dairy works with Vroom Delivery for its program, and also has an internal loyalty program and a company app. Vroom collects data on Quality Dairy’s customers when they log in or sign up, so the retailer is able to align that data to send direct marketing through its company app, as well as direct email marketing to customers. “We find email marketing less successful than the app push notification,” Rademacher noted. The chain is also considering offering coupons and discounts, and this would be one of its first plans of action if the customer base starts to decrease postCOVID. One option would be to send a direct push notification to a customer who has stopped ordering and offer them $5 off delivery or a coupon for an item they’ve purchased in the past. Another way to get the word out is through social media. Instagram and TikTok are both “food-oriented apps,” according to Kay Segal, founding partner of Business Accelerator Team, a convenience retailing consultant company based in Phoenix. Segal also recommends geofence Google ads around store locations to raise awareness. “Make sure you are also marketing and giving unique benefits to customers who use your online ordering platform,” advises David Taylor, product manager at Paytronix, a provider of customer engagement solutions and loyalty programs to c-stores. “Have suggestions that pop up based on behavior or what is in their current basket to add more items to their cart.”

make their money through tips. When just starting out, if there are not enough orders for delivery, there can be a high turnover with drivers. “We had a hard time maintaining drivers, but now we have employees [who deliver] when we need to fill in gaps,” she said. Another option for c-stores looking to add the driver piece to an in-house system is a starter product by Paytronix that offers drivers a portal to manage things and upload photos for age-restricted products. Taylor describes the offering as “a starter kit to help people test if a homegrown delivery force would be right for them.” “It lets drivers log in, so they can see a list of outstanding orders, look at their bag in front of them, click into it to see the details, a map app, and a place where an image can be saved for the order if there are agerestricted products,” he explained.

Menu & Pricing Best Practices When offering delivery, some c-store chains are sticking to foodservice items, even focusing on a slimmed-down menu for delivery, while others are making their entire foodservice menu and all the products in the store available for delivery. Hathaway’s Carinio believes a limited menu could be the better option, especially for foodservice. “We are starting to see that in the foodservice space, it’s more effective to be tailored toward a limited menu for delivery,” he said. “Traditionally, brands would offer the entire menu, but now we are seeing them start to streamline it specific to delivery.” Things to consider with delivery are what food travels well, the operational cost to maintain the digital inventory for specific locations, and packaging, Carinio explained, noting that retailers can then decide what products in the store they might also want to offer. In many cases, people who are ordering online and opting for delivery are different than those who come into the store, so not only will their needs be different, but they are also often willing to pay more for the convenience of delivery, which Quality Dairy discovered. “We assumed we needed to offer the same pricing and promotions on our website as

we do in the store, so we tried to align everything perfectly in the beginning,” Rademacher said. “But we discovered when people go to the website, they are already willing to pay the fee for delivery and pay more for the convenience. They are not as concerned about what they are paying, so operators should keep that in mind, even if they start offering the same and then change it later. They don’t want to cost themselves profit they could be making.” In general, most industry experts agree, and research continues to show, that online shopping and delivery — of both foodservice and grocery items — is not slowing down any time soon and in many cases, the pandemic may result in permanent changes. “I look at c-store e-commerce as a subset of the grocery space and all the data is showing [that] changes coming from the pandemic are pretty permanent,” said Nelson. “People buying groceries online for curbside pickup or delivery went from 1.2 billion a month to over 7 billion per month, and consumer buying habits have permanently shifted.” In fact, the ability to sell anything from inside the store and work that into a delivery model will help c-stores stay more competitive, according to Segal. “Delivery may tail down for a while and then settle into a ‘new normal,’ but I think it’s most important to continue to home in on consumer behaviors in your market area,” she said. “C-stores can provide meal kits, and I think curbside will continue to be strong, as well as drive-thru because of its ease of acquisition.” CSN MAY

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The Taste of Technology As with all other areas of the store, technology is playing a bigger role in foodservice By Melissa Kress OVER THE PAST DECADE, the convenience channel has been hard at work redefining consumers' perception of its food offerings. What was known as "gas station food" was often the butt of jokes in movies and on television and, in real life, many consumers could not imagine choosing to go to their local convenience store to pick up a pizza instead of their local pizzeria.

and failure," said Kay Segal, founding partner of Phoenix-based consulting firm Business Accelerator Team (BATeam).

That has changed. Through organizations like Partnership for a Healthier America, which counts many c-store retailers among its membership, and a concentrated shift toward fresh, healthy and on-trend offerings, many convenience players have stepped up their game.

"These tasks can be handled without the newer technology, but consistency of execution is the issue," Segal explained. "With technology involved, there is more likely consistency of process and there are trackable metrics to ensure exceptions are flagged quickly and corrective action can be obtained."

For operations, the appropriate use of technology can assist with everything from labor scheduling to production planning to recipe management.

But it takes more than just selling fresh food to have a profitable foodservice program. As with all other areas of the store, technology is playing a bigger role in foodservice.

Technology can also help a retailer be competitive from a customer engagement and marketing standpoint.

"To state it bluntly, technology today within foodservice is the difference between success

"From being found — via things like Yelp or Google — to engaging with consumers from

76 Convenience Store News C S N E W S . c o m

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platforms like Instagram, to the use of geofencing software which can alert retailers when to cook remotely placed orders, there are myriad uses for technology with consumers," she pointed out. Operators in the convenience channel need only take cues from quick-service restaurants (QSRs) to see how far foodservice technology can go. "Our industry must benchmark to the best-in-class QSR chains and work to elevate our consumer experience to be on par," Segal said.

Times Are Changing Foodservice-technology needs have developed rapidly over the past few years — a trend that will continue as retailers expand their menus, and online or in-store kiosk ordering become best practices for those chains expanding in the category, according to Bill Nolan, a partner at BATeam. "Technology will continue to define how orders are made by the consumer, making it easier, more friendly and quicker, I'm sure," he said, noting that technology will also streamline how orders are received, prepared and delivered to consumers. "Frankly, if retailers do not expand their foodservice technology, they will be left behind. Whether it be website advertising, online ordering, kiosk-to-kitchen ordering or contactless checkout, all of these innovations are not only expected, but are becoming the norm — not only for the 20- to 35-year-old demographic, but [it] is reaching into the more mature audience also," Nolan said. "Why? Because of cultural progress." Retailers can reap several benefits from tapping into foodservice technology. Wynne Barrett, founder/partner of Jera Concepts LLC and vice president of business development for the company’s Supplyit fresh food management platform, pointed to such benefits as: • Improving merchandising to facilitate sales growth; • Controlling waste to improve profitability; and • Directing labor more efficiently. "Interest in foodservice management technology is growing among foodservice-mature groups,” Barrett said. “We have had a lot of conversations with retailers who are just not there yet. Many still use Excel which, while powerful,

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The COVID19 Impact on Foodservice Technology As with so many aspects of a convenience store's operation, the COVID-19 pandemic has highlighted the need for technology solutions when it comes to food safety. "Consumers want to see safety measures in action. Technology can assist with safety processes and the capture of pertinent data," said Kay Segal, founding partner of consulting firm Business Accelerator Team (BATeam). "Retailers can share, in the appropriate manner, some roll-up metrics from their data capture. Transparency with consumers builds trust." Technology that alerts store personnel — similar to timers on coffee brewers — as well as tech that provides badges or stars on an app can all be used to create ongoing trust with consumers. BATeam partner Bill Nolan agrees that the health crisis has impacted, and will continue to impact, the reliance on technology in c-store food programs, but the extent is unclear. "Today, I believe the consumer has been forced to become more used to ordering electronically. QSR [quick-service restaurant] drive-thrus or online ordering for restaurant pickup has become a way of life over the last year. This will continue to drive reliance on technology," he predicts. However, as more Americans get vaccinated, shutdowns ease and travel restarts, it remains to be seen if consumers will migrate back to past norms over time. "I believe the greater part of the population will, mainly because we are a very mobile and social society. So, yes, reliance on technology will continue, but I'm not so sure it will be primarily due to COVID-19," Nolan said. "Think of it this way: online or kiosk ordering has become normalized to the point where operators would prefer eliminating wasted labor hours taking orders. At several McDonald’s drive-thrus, you're talking to an electronic attendant. All this started in the last six months."

doesn't necessarily facilitate simple transparency into operation execution." Borrowing insights from the restaurant industry, Supplyit help groups manage all things foodservice, specifically around production management and what to make when. "We take retailers' sales data by time, or time stamp, to give them an appropriate forecast. We factor in things like shelf life. So, for example, employees will know that at 5 a.m., they need to make X amount of breakfast sandwiches," he explained. The cloud-based solution also provides a simple interface to report waste. "Tablet interfaces have simplified the way data is collected,” he said. “Typically, waste is scanned out or recorded on a piece of paper. Tablet interfaces allow for in-the-moment and on-the-spot recording. It reduces input errors as well.”

Optimizing Operations & Labor As the 2021 Convenience Store News Forecast Study found, 72 percent of retailers expect their average sales per store to increase this year, and 55 percent expect their average profits per store to increase as well. But sales and profits are dependent on optimizing operations. According to Nolan, technology can have a greater impact on helping to control costs by creating better forecasting tools for the foodservice director — tools like cleaner inventory sheets of what's selling, where the waste is, and sales and product movement by daypart. "Technology has become as important as marketing. Foodservice profitability does not come easy; there are a lot of moving parts: product costs, labor, quality consistency, waste, equipment/maintenance costs, and constant menu development," he explained. "The future of technology will be forced to help manage all of these functions as the best-in-class c-stores compete for their share of the food business." Although foodservice is not new for most convenience stores, for many it is still a work in progress, acknowledged Shamus Hines, CEO of Applied Data Corp. (ADC), a Tampa, Fla.-based provider of fresh item management software. "Senior executives are going to the directors and VPs and telling them the com-

“Foodservice technology will benefit the organizations that choose to adopt it — their quality will go up, their margins will improve, and their customers will be enabled to buy more of the food they want.” — Shamus Hines, Applied Data Corp.

pany is going to do foodservice and make the economics work. The challenge is fresh food is finicky and outright complex — that is where technology plays the biggest role," Hines said. Technology helps address the labor, waste and profitability challenges that go along with foodservice. Every single step matters so much when you are talking about doing foodservice at scale, he pointed out. "Technology has been a great communication device for getting the expectations from home office down to the store. There is often a disconnect, and you are removing barriers by using technology to communicate to the store what they want to produce and when," Hines said. "All this technology is like an amplifier at the end of the day. If you had bad processes before, you would quickly find out where the disconnects in your processes are." Foodservice generally encompasses two different types: made-to-order or made-to-inventory. Made-to-order includes more traditional, restaurant-style food. For example, ordering a customized pizza or sandwich either at the counter or through a kiosk. Made-to-inventory includes grab-and-go items that can be easily procured, like breakfast sandwiches, cut fruit, and salads.

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Convenience store operators can look to quick-service restaurants to see how far foodservice technology can go.

"There are different technologies involved for each of these fresh foodservice offerings,” said Hines. “Each has its elements of replenishment in ordering, each has a recipe of sorts, and each certainly has a forecasting component related to replenishment and production.” The way Jera Concepts’ Barrett sees it, the single biggest benefit of foodservice technology is that it provides retailers with transparency in store execution. “It is knowing how people are executing the program at the store level. A retailer can then make the decision if the program is the right fit for the store and it is not an execution issue," he said. Sophisticated c-store chains are looking at this right now, he shared. "Retailers need actionable data to teach at the store level. It helps district managers talk with the store managers about what is happening at the store level," he added.

More Advancements Coming Where is foodservice technology headed next? According to ADC's Hines, there are certainly advancements coming in artificial intelligence, which will enhance forecasting, decisions on food offerings, and labor scheduling. "Prescriptive analytic advancements will come in terms of suggesting a more profitable category mix. With all this data, it should be possible to swap items out and adjust menus toward profitability," he explained.

Another area ripe for advancement is labor reduction. “Retailers need to do more with less people, and technology is the way to accomplish this," Hines said. He is bullish on how continued advancements in technology can help meet the needs of c-store retailers, along with helping operators meet the needs of their customers. "This is what we are focused on. It is all coming to a head now and it's a good time for technology and retail," he said. "Foodservice technology will benefit the organizations that choose to adopt it — their quality will go up, their margins will improve, and their customers will be enabled to buy more of the food they want.” From Segal’s view, the technology stacks and roadmap for success are expanding weekly. "It is amazing how quickly what seemed to be future tech is standard fare — table stakes," the BATeam executive explained, advising that retailers should find key external resources to help them map and maintain their systems architecture, and the systems should be developed from the consumer back to operations and accounting. "We know for certain that food tech will evolve to assist retailers with labor usage, consumer interface and purchases, and food operations management. Tech will be more integrated with every aspect of ordering, production and delivery to the consumer," Segal said. CSN

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20 21

Convenience Store News

NEW HORIZONS

Creating a Pipeline for Success Women need support at every level of their careers to reach the C-suite IN 2020, just 37 executives of Fortune 500 companies were women — a record high, but still far too low. While many vocal advocates have called for more women to advance into the C-suite, one thing is certain: no one makes it to the C-suite in a day.

By Sarah Alter President & CEO Network of Executive Women

Women need support at every level of their careers to reach the heights of business leadership, and that means fixing a pipeline which, at the moment, has leaks and cracks all along the way.

Where Are the Cracks? The cracks where women “leak” out of the leadership pipeline come in many forms. A massive hole was created, for example, by the COVID-19 pandemic. This loss of women from our workforce — 100 percent of net job losses in December 2020 — will affect the number of women in leadership positions for years to come. If anything “good” can be said to have come from this, the pandemic exposed just how vulnerable women still are to the pressures of caring for children and other dependents in comparison to men, who

simply did not fall out of the workforce in numbers anywhere near that of women. Talented leadership candidates also fall out of the pipeline due to workplaces inhospitable to them. That might be represented by a lack of support for up-and-coming female leaders, of course; but more insidiously, that may be due to unconscious bias, microaggressions, and an environment that makes especially women of color feel unwelcome.

How Do We Patch the Pipeline? Patching the pipeline for female leaders must start from the bottom up. At NEW, we’re committed to “Advancing All Women.” Companies must commit to doing the same. A recent study by Pinsight found that men were three times more likely to be identified as candidates with leadership potential. Demolishing bias in promotions takes work, and for the companies willing to do so, NEW is here to help. We’re piloting a program, “Beyond Allies,” designed to create male allies in workplaces to ensure women have support at every level of their career journeys. Male allies are critical in supporting women as sponsors, as mentors, and by helping clear the path to success of the insidious barriers of bias.

Support for Women of Color That support needs to be all the stronger for women of color. NEW’s own research study, Advancing All Women 2018, found that women of color could hold one in four manager, senior manager and executive roles by 2027 if companies implement strategies that address hiring, promotion and turnover challenges that affect their workplace experiences. We know that many companies simply lack the cultural and infrastructure support to ensure women of color get a fair shake. Creating architectures of understanding and eliminating unconscious bias is the path forward. Only systemic action, and education to create understanding of the unique challenges women of color face, will help.

82 Convenience Store News C S N E W S . c o m

NEW recently launched our DEI Workshop Series for this precise reason; to help our partners ensure women of color in their workplaces can bring their whole selves to work. With greater understanding, businesses will not just be more welcoming to women of color — they’ll be poised to take advantage of the unique strengths and experiences they bring to the table.

Creating Strong Leadership Education and training for management are one key step, but helping women upskill and gain confidence in their leadership potential is also of critical importance.

Convenience Store News is pleased to continue this series of educational columns by the Network of Executive Women (NEW), coinciding with the annual CSNews Top Women in Convenience awards given out each fall. Seventy-four female managers, executives and directors who work in the convenience store industry are being honored in our 2021 program. In addition to being a presentation sponsor for the Top Women in Convenience program, NEW and CSNews have partnered to develop this series of columns directed at helping corporate leaders drive more inclusive company cultures. 2021 SPONSORS Founding & Presenting Sponsor:

At NEW, we offer numerous opportunities for women to self-assess their strengths and weaknesses, and to bolster the critical skills they need to shine as leadership candidates. When women are confident in their ability to lead, and the barriers in their way have been removed, a brighter future awaits us. Companies that create welcoming environments for women and provide them with career support will find themselves with more women in leadership positions, and will be helping to patch the pipeline from the ground up. By building male allies to sponsor women’s careers, supporting women of color, and providing women with the leadership development support they need, we’ll create a path to success that will serve women long into the future. CSN

Sarah Alter is president and CEO of the Network of Executive Women, a nonprofit learning, leadership and gender equality advocacy organization of 13,500 members (representing nearly 900 organizations), 300-plus national and regional corporate partners, and 22 regional groups in the United States and Canada. NEW advances gender equality and diversity in the retail, consumer goods, financial services and technology industries.

Platinum Sponsor:

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Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.

MAY

20 21

Convenience Store News 83

STORE SPOTLIGHT

Delivering the Royal Treatment Englefield Oil’s new flagship Duchess store emphasizes the customer experience By Danielle Romano IN 1961, FW

At a Glance Duchess Convenience Stores Location: 9550 Johnstown Road, New Albany, Ohio Size: 5,500 square feet Unique features: The retailer’s largest site to date; a modern, fresh, urban look and feel; emphasis on fresh food, including breakfast sandwiches, roller grill items, salads, sandwiches and decadent sweet treats; curbside pickup accessible via mobile app or online

Englefield III founded Englefield Oil Co. with three service stations and an office operating out of his basement. Over the course of the next decade, his idea for a full line of convenience stores to better serve customers began taking shape. Then, in a leap of faith, Englefield Oil opened its first Duchess c-store in Lancaster, Ohio, in 1975. Dubbed “A royal tradition since 1961,” Duchess operates 119 stores today throughout Ohio and West Virginia. Staying true to its roots as well as a commitment to evolve to better fit customers’ demands, the convenience retailer debuted a new flagship location on Dec. 16, 2020. The design process began about a year prior to any construction starting. The company wanted the design of this new location to also be ready for any additional builds that followed, Englefield Oil Director of Marketing Nathan Arnold told Convenience Store News. Coincidentally, the unveiling of the new flagship Duchess convenience store in New Albany, Ohio, occurred as Englefield Oil celebrated 60 years in business. “We didn’t plan our unveiling of our new flagship location to coincide with our 60th anniversary,” Arnold said. “However, as

84 Convenience Store News C S N E W S . c o m

timelines merged, it’s the perfect way for us to celebrate. It pays homage to our history, but sets the stage for the future of our brand.”

Unique & Upscale Offers Measuring 5,500 square feet, the flagship store is Duchess’ largest site to date and is located in New Albany, where Engle-field Oil previously operated a Duchess location for many years. When a site became available, the company knew it would be the perfect fit for the flagship. “[New Albany] is a fast-growing suburb of Columbus [Ohio] and is the perfect blend of demographics, [which] made it a great location to open our new store,” Arnold explained. Designed with the consumer in mind, the store is a bright and welcoming space that features new brand elements, merchandising fixtures, and product selections for those on the go. Elevating Duchess’ legacy store design, the New Albany flagship location pays homage to the company’s history and is also a nod to its future. While injecting the company’s family culture into the model, the newest Duchess store is modern, fresh and urban. It incorporates plants and photos to create a welcoming experience for customers.

The retailer partnered with local firms on the build. The design was created by Sketch Blue and Nicole Faccinto Design, with J. Carter Bean Architect as the architect, and Robertson Construction as the general contractor. “Our customers have loved our new flagship location. When someone walks into the store for the first time, they feel an immediate connection to the brand. We often hear that they feel like they’re not in a typical convenience store,” Arnold said. “From showcasing locally made products and breweries, to the family atmosphere, they are in a welcoming environment. We pride ourselves on being the friendly, convenient stop that helps to fuel the many communities we’re a part of.” Along with its new look comes a new effort to follow consumer trends and support local companies. The flagship store showcases a wide selection of unique and upscale offers, such as charcuterie boards, olives, chilled wine, and healthy snack options. It also showcases local brands, including dozens of Ohio-made products like popcorn, chips, jerky, honey, jams and more. “Creating these new relationships with local companies may provide opportunities to expand the selection in additional stores in the future,” said Arnold.

“We pride ourselves on being the friendly, convenient stop that helps to fuel the many communities we’re a part of.” — Nathan Arnold, Englefield Oil Co.

The flagship location also emphasizes Duchess’ take on fresh food by offering: • Breakfast sandwiches — like the new Eggwich that features sausage or bacon sandwiched between two egg patties — which can be complemented by an order of hash brown sticks and fresh-brewed hot coffee. • Hot sandwiches and grill items, ranging from burgers and hot dogs to pulled pork and chicken sandwiches. • House-made sandwiches available via The Deli at Duchess. • Stuffers, which are warm, flaky biscuits stuffed with classic flavors like sausage gravy or cheeseburger. They can be enjoyed for breakfast, lunch or anytime of the day. • Pizza, salads, and snacks such as chicken tenders, egg rolls, fries and pickled eggs. • Gooey and decadent cookies, doughnuts, cake pops and muffins. Other amenities available at the Duchess flagship store are curbside pickup, accessible via the My Duchess mobile app or online at MyDuchess.com; and Crown

Card Rewards, a non-payment-based rewards program that allows customers to earn and redeem points for qualifying in-store and fuel purchases. According to Arnold, all of Duchess’ future rebuilds and new-construction sites will mimic this flagship model. While the size and shape may change, the interior finishes, branding and merchandising elements will translate into the rest of its new stores. CSN MAY

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INSIDE THE CONSUMER MIND

Putting Convenience in Context C-store customers want a shopping experience that eases their anxiety, not adds to it More than a year since the COVID-19 pandemic took hold, disrupting almost every aspect of the daily lives of Americans, it’s not surprising that U.S. convenience store shoppers define “convenience” right now foremost as “fast, quick, in-and-out” and “easy, simple, no hassle or stress.” C-store customers want a shopping experience that eases their anxiety over virus concerns, not adds to it, according to the findings of the 2021 Convenience Store News Realities of the Aisle Study, which surveyed 1,500-plus consumers who shop a c-store at least once a month. Other interesting findings from the study include:

Convenience Store Shopper Definitions of ‘Convenience’ 37%

Fast/quick/in-and-out Easy/simple/no hassle or stress

27%

Nearby/close to house/on my way

16%

Essential items/everything need/one stop

15% 7%

Good organization/easy to find

of c-store shoppers say

Items available/in-stock

they typically visit the

Good value/low prices Accessible/easy access

Quick checkout/no lines

Helpful/friendly customer service

Gas available

Expensive/higher prices

Good variety

Convenience — general

Snacks available

Beverages available

Comfortable

24 hours/extended hours of operation

same store every time. Among c-store shoppers, the word “convenience” means speed most of all. Ease of shopping, a store location in close proximity, and availability of essential items also top their list.

Performance Ratings for Convenience Store Shopped Most Often When asked to rate their Excellent/very good Good Fair/poor usual c-store on a variety General convenience 69% 26% 4% of attributes, shoppers give Speed of shopping 65% 28% 7% the highest marks to their Employee friendliness 62% 27% 10% store’s general convenience, Store cleanliness 60% 31% 9% speed of shopping, and Products needed are in-stock employee friendliness. 58% 31% 11% Employee helpfulness

58%

Store organization

55%

35%

19%

Loyalty program

54%

29%

Prepared food quality

53%

33%

15%

Variety of products

52%

34%

14%

Store look/feel

51%

Contactless shopping options

46%

37% 33%

9% 18%

11%

Areas that shoppers feel could use improvement are: • Embracing cutting-edge technology • Price of products

20%

• Being fun to shop

20%

• Availability of contactless shopping options

Fun to shop

44%

Price of products

42%

31%

27%

Embraces cutting-edge tech

41%

35%

24%

102 Convenience Store News CSNEWS.com

36%

13%

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