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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

2020 MIDYEAR REPORT CARD

The seventh-annual Top Women in Convenience awards celebrate 52 honorees whose accomplishments may well inspire other women to shoot for the stars.

AUG 2020 CSNEWS.COM

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The future of our industry is about innovation, products with the potential to reduce harm and adult consumer choice. Through our companies and strategic partners, we’ve invested in the most compelling portfolio of non-combustible We strive to give adult consumers the with choices The future ofproducts. our industry is about innovation, products the potential they want today — and invest and develop products for tomorrow.

to reduce harm and adult consumer choice. Through our companies and strategic partners, we’ve invested in the most compelling portfolio of

non-combustible products. We strive to give adult consumers the choices they want today — and invest and develop products for tomorrow.

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Servicing: Philip Morris USA U.S. Smokeless Tobacco Company John Middleton Nu Mark Nat Sherman

Š2020 Altria Group Distribution Company | For Trade Purposes Only

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Servicing: Philip Morr U.S. Smok John Midd Nu Mark Nat Sherm

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VIEWPOINT

Top Women in Convenience Reveal Strength in Challenging Times Leadership shines amidst the pandemic and social justice concerns CONGRATULATIONS to this year’s class of Top Women in Convenience (TWIC) award winners (see profiles of the 52 honorees starting on page 28). At a time of such unprecedented disruption and crisis — in how we work, how we shop and how we live — it is very important to recognize the leaders who are helping their companies and the convenience store industry at large work toward recovery in the wake of COVID-19 and the social justice movement.

Last month, four women who have been heavily involved in Convenience Store News’ TWIC program for several years joined me for a webcast where they shared their thoughts on the role of leadership in these challenging times. We talked about how the pandemic has helped their companies identify and nurture future leaders. “It highlighted the people in our organization who would rise up and accept the challenge,” said Jayne M. Rice, managing director and director of Institutional Sales, Marketing and Investor Relations for Yesway, and a Woman of the Year in our 2019 TWIC program. Sarah Alter, CEO of the Network of Executive Women, pointed out: “I’ve heard people refer to the last five months or so as a time we’ve all experienced ‘the great realization.’ I think it really captures all of what has unfolded over the last several months.” Another 2019 Woman of the Year Deb Hall Lefevre, chief information officer for Alimentation Couche-Tard/ Circle K, cited some “silver linings of the pandemic,”

which she said can be found in her company’s improved teamwork, the necessity to be faster to market, and stronger communication. “The pandemic ratcheted up the impact of digital to a new level,” she noted. During the webcast, we also talked about calls for change amid rising social justice concerns. The women spoke about how the current movement can be a catalyst for leaders to put real action behind their words of support for inclusion and diversity. “To not understand those social justice issues that are deeply impacting our employees on a personal level, we miss something,” said Alicia West, vice president of Midwest Regional Sales for Altria Group Distribution Co., and a 2020 TWIC honoree in the Mentors category. “This is an opportunity to identify areas for systemic change that are needed for all employees to thrive and achieve their full potential.” The women also discussed the challenges of keeping their employees and customers safe, managing through the uncertainty and inconsistency of evershifting government and health regulations, and difficult-to-enforce face mask mandates. To listen to the full, one-hour “TWIC Talk” webcast, sponsored by Altria Group Distribution Co., go to csnews.com/webinars. For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2020)

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

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 2017 Eddie Awards, 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 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 2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015

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

2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

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

Rick Crawford Green Valley Grocery Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Jim Hachtel Eby-Brown Co. Chris Hartman Rutter’s Ray Johnson Speedee Mart

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014

Ruth Ann Lilly GPM Investments Danielle Mattiussi Maverik Inc. Vito Maurici McLane Co. Inc. Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Bill Stein Core-Mark Roy Strasburger StrasGlobal

Jack Lewis GPM Midwest

2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014 2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

Laura Aufleger OnCue Express

Joe Lewis ExtraMile Convenience Stores

2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

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

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“WHEN YOUR DRIVERS ARE NO-SHOWS, I GRAB MY KEYS.” RANDALL RHODES MARKET LEAD DRIVER

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CONTENTS AUG 20

VOLUME 56 N UMB ER 8

62 89 28 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

STORE SPOTLIGHT

4 Top Women in Convenience Reveal Strength in Challenging Times Leadership shines amidst the pandemic and social justice concerns.

89 A Testing Ground for Change Kum & Go’s first-ever walkup store focuses on making healthy convenient.

28 Out of this World The seventh-annual Top Women in Convenience awards celebrate 52 honorees whose accomplishments may well inspire other women to shoot for the stars.

INSIDE THE CONSUMER MIND

FEATURE

62 A Red-Ink First Half The Convenience Store News Midyear Report Card reveals the pandemic’s early effects.

20

10 CSNews Online

106 Making It a Meal C-store prepared food purchasers are a prime opportunity for increasing basket size.

20 New Products SMALL OPERATOR

24 Financial Management 101 Monitoring key metrics is an essential part of staying in business for small operators. TWIC TALK

86 Sarah Bibbs, Eby-Brown The 2019 TWIC Woman of the Year is an advocate for standing firm in your values.

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Please contact your Swisher Representative or call 800.874.9720

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CONTENTS AUG 20

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82

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

Associate Editor (201) 855-7619

INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

14 Speedway to Trade Hands in $21B Deal

FOODSERVICE

15 Business Combination to Position GPM for Growth 15 Fast Facts 16 Retailer Tidbits 16 Eye on Growth 18 Seen on Social 19 Supplier Tidbits

66 Seeking Stress Relief Consumers turn to CBD products to relax during these stressful times. FOODSERVICE

68 Planning for an Uncertain Foodservice Future The 2020 Convenience Store News Foodservice Study examines the obstacles and likely changes for convenience foodservice retailers in the post-COVID world.

Angela Hanson ahanson@ensembleiq.com

Associate 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 (508) 385-2524

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

TOBACCO

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74 The New Tussle Around Tobacco Dollar stores are not a formidable tobacco player yet, but they could very well be. PACKAGED BEVERAGES

78 Getting Back on Track Packaged beverages have not fared as well as alcoholic drinks in the pandemic.

List Rental (914) 309-3378 Subscriber Services/Customer Care TOLL-FREE: (877) 687-7321 FAX: (888) 520-3608

MeritDirect Marie Briganti contact@csnews.com

PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production (877) 687-7321 Creative Director (973) 607-1320 Advertising/Production Manager (773) 992-4418 Art Director (973) 607-1321

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com Ed Ward eward@ensembleiq.com Lauren DiMeo ldimeo@ensembleiq.com

CORPORATE OFFICERS

TECHNOLOGY 82 Real-Time Retailing Advanced intelligence tools let c-stores rapidly identify and respond to unprecedented conditions.

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

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2020 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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6 new ways to Grab & Go We’ve expanded our popular Grab & Go® line with six unique new options that now include Red and Black Licorice Scottie Dogs — a Jelly Belly first! With over 60 line-priced bags, it’s easy to create a candy store

©2020 Jelly Belly Candy Company

within your store. Contact your representative to explore the whole line.

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CSNEWS ONLINE

TOP VIEWED STORIES

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Circle K Fuel Brand Grows as CoucheTard Implements Forecourt Initiatives

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Couche-Tard Expands New Fresh Food Concept Across North America

3

TravelCenters of America Creates ‘Transformation Team’ to Aid Company Turnaround

ONLINE EXCLUSIVE

The Circle K Fuel brand is now available at more than 2,300 sites across North America, and Alimentation Couche-Tard Inc. is piloting some modified branding strategies with its fuel partners that place the brand more prominently on its canopies.

The new program, which the retailer calls “Fresh Food Fast,” presents a significant organic-growth opportunity, with expectations for both top-line and margin improvement, according to President and CEO Brian Hannasch.

TravelCenters of America took another step to increase operational efficiency with the hiring of Jeff Burrell as senior vice president of fuels. He is the fifth new senior leader to join the company since it unveiled a comprehensive reorganization and turnaround plan on May 1.

4

Nationwide Coin Shortage Impacts C-store Industry

The COVID-19 pandemic is to blame for another nationwide supply shortage: coins. “What’s happened is that, with the partial closure of the economy, the flow of coins through the economy has gotten all — it’s kind of stopped,” said Federal Reserve Chairman Jerome Powell.

5

7-Eleven Adds Fuel Loyalty Component to 7Rewards Program

Just in time for summer road trips, 7-Eleven is testing Fuel Loyalty at participating stores in Orlando, Fla., and Woodbridge, Va. The program provides contactless payment options to reduce touch and drives instantaneous savings at the pump.

EXPERT VIEWPOINT

Shaping the Future of Digital Signage Consumers are the major driver in the retail business, and as their expectations grow and shopping habits evolve, so too must digital signage. Traditional retailers are facing huge challenges, including increased pressure to exceed customer experience expectations, writes Chris Tulk, Advantech’s iRetail key account manager. Facing the need to innovate, digital signage provides a unique opportunity for retailers to bring focus back to the individual customer and provide a unique in-store journey for each shopper. In fact, 50 percent of consumers said that digital signage influenced their purchase. This means that not only are consumers interacting with this new technology, but it’s also working and delivering ROI.

Convenience Store News Industry Report 2020 Deep Dive: Tobacco Despite new regulations further challenging the business, tobacco remains a top moneymaker for the nation’s convenience stores. Combined, the cigarettes and other tobacco products (OTP) categories account for more than 35 percent of all in-store sales in the convenience channel. In this special “Tobacco Deep Dive” report, a bonus supplement to the Convenience Store News 2020 Industry Report, we present exclusive data and analysis of the cigarettes and OTP categories. For more exclusive stories, visit the Special Features section of csnews.com.

MOST VIEWED NEW PRODUCT

Tap-Kins Disposable Sleeves Tap-Kins are disposable sleeves that enable consumers to use self-serve food and beverage equipment without having to make direct contact. The sleeves are dispensed out of a custom dispenser, which can hold 300 sleeves at a time. Both the sleeves and the dispenser can be customized with a logo.

Tap-Kins McHenry, Ill. (815) 236-3213 tap-kins.com

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JUUL $2.35 Billion

Mtn Dew Amp Game Fuel $86 Million

G Zero $136 Million

Vuse Alto $225 Million

Red Bull Coconut $141 Million

Vuse Ciro

Marlboro Ice

$136 Million

$189 Million

Myblu $91 Million

White Claw $344 Million

Bang $723 Million

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Setting the pace. #1 New Product Pacesetter In c-stores, JUUL outperformed top CPG brands in 2019. JUUL outsold the top 9 pacesetter products in total added $ sales. Source: The IRI 2019 New Product Pacesetters report was compiled based on insights from IRI’s New Product Innovation Practice’s suite of analytical and decision-making tools, as well as the 2020 IRI New Product Survey.

To become a JUUL retail partner, send an email to retailers@juul.com.

The sale of tobacco products to minors is prohibited by law. This is an age-restricted product and age verification is required at sale. CALIFORNIA PROPOSITION 65 WARNING: This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm. TM and © 2020 JUUL Labs, Inc. All rights reserved.

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INDUSTRY ROUNDUP

Speedway to Trade Hands in $21B Deal The acquisition agreement with 7-Eleven Inc. includes a 15-year fuel supply pact THE QUESTION OF will Marathon Petroleum Corp. (MPC) sell its retail arm, Speedway LLC, has finally been answered. In early August, the Findlay, Ohio-based company reached an agreement to sell the convenience store chain to 7-Eleven Inc. for $21 billion.

Irving, Texas-based 7-Eleven — a wholly owned, indirect subsidiary of Seven & i Holdings Co. Ltd. — will acquire approximately 3,900 Speedway stores located in 35 states. “This transaction marks a milestone on the strategic priorities we outlined earlier this year,” said MPC President and CEO Michael J. Hennigan. “Our announcement crystalizes the significant value of the Speedway business, creates certainty around value realization, and delivers on our commitment to unlock the value of our assets. At the same time, the establishment of a long-term strategic relationship with 7-Eleven creates opportunities to improve our commercial performance.” The deal includes a 15-year fuel supply agreement for approximately 7.7 billion gallons per year associated with the Enon, Ohio-based Speedway business. MPC expects incremental opportunities over time to supply 7-Eleven’s remaining

business as existing arrangements mature and as 7-Eleven adds new locations in connection with its previously announced U.S. and Canada growth strategy. For 7-Eleven’s part, this purchase is expected to accelerate its growth trajectory and diversify its presence in the United States. The retailer currently has more than 9,800 stores across the U.S. and Canada. Speedway’s portfolio of approximately 3,900 stores will bring 7-Eleven’s total number of stores to approximately 14,000 in North America. Following the transaction, 7-Eleven will have a presence in 47 of the top 50 most populated metro areas in the U.S., positioning the company as a clear industry leader in a fragmented industry with favorable macroeconomic trends, according to the company. “This acquisition is the largest in our company’s history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast,” said 7-Eleven President and CEO Joseph DePinto. “By adding these quality locations to our portfolio, 7-Eleven will have the opportunity to bring convenience to more customers than ever before.” The all-cash acquisition is expected to close in the first quarter of 2021.

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Business Combination to Position GPM for Growth The retailer signed a letter of intent with a publicly traded special purpose acquisition company parent company Arko Holdings Ltd. inked a letter of intent (LOI) for a business combination with Haymaker Acquisition Corp. II, a publicly traded special purpose acquisition company.

GPM INVESTMENTS LLC’S

The business combination would result in 100 percent of both GPM and Arko Holdings combining with Haymaker with substantial rollover from existing equity holders. Currently, Arko owns 68 percent of GPM; the remaining 32 percent is held by Davidson Kempner Capital Management LP, funds managed by Ares Management Corp., and Harvest Partners SCF LP. Under the terms of the LOI, the enterprise value of the combined company would be approximately $1.5 billion. Haymaker and Arko said they will announce additional details when a definitive agreement is executed, which is expected to occur in the third quarter. The transaction is expected to close before the year’s end. Based in Richmond, Va., GPM was founded in 2003 with 169 convenience stores. Arko acquired control in 2011 and has grown the company through acquisitions to become a leading c-store operator with 1,400 locations in 23 states. GPM operates 1,272 stores and delivers fuel to an additional 128 sites.

“I am very excited about this combination. We have a demonstrated history of profitable growth and a track record of executing consolidation opportunities. Combining with Haymaker as a Nasdaq-listed, pure-play operator of convenience stores greatly enhances our ability to execute our growth strategy in a large, growing, recession-resistant industry, while driving value for our combined shareholders,” said Arie Kotler, CEO of Arko Holdings and GPM. The combined company will be led by GPM’s current management team. “We intend to continue growing the GPM platform and to pursue strategic initiatives jointly with [Kotler], a proven consolidator and operator. The structure of the proposed business combination is also appealing — we expect long-term institutional investors and management to roll over significant equity at an attractive valuation relative to U.S.-listed peers,” said Steven Heyer, CEO and executive chairman of Haymaker.

FAST FACTS

Only 15 percent of fuel retailers, fuel distributors/wholesalers and major oil firms have fully deployed EMVcompliant payment systems at their fuel pumps.

Eighty-one percent of convenience store retailers say COVID-19 elevated the role IT plays in the eyes of C-level decision makers.

Car trips will account for 97 percent of summer travel this year. — AAA Forecast

— Censuswide survey on behalf of Zynstra

— NACS Retailer Member Survey

— 2020 Conexxus EMV Survey

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Nine in 10 convenience stores have installed plexiglass barriers at checkout, and 87 percent provide hand sanitizer inside the store.

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INDUSTRY ROUNDUP 7-Eleven Inc. rolled out Mobile Checkout to participating stores in Utah. The contactless payment method is already available at participating 7-Eleven stores in Dallas, Manhattan and Long Island, N.Y.

Retailer Tidbits

Rutter’s introduced a spirits offering at one of its stores in Inwood, W. Va. Customers at this location can purchase a variety of bottled spirits, as well as readyto-drink cocktails.

According to the retailer’s proposed plan, up to 19 vehicles will be able to line up at the 88-square-foot drive-thru window.

Wawa Inc. plans to offer drive-thru service for the first time at a new Westampton, N.J., store. The site will also have three parking spaces reserved for curbside pickup.

MAPCO launched a new mobile app that offers a catalog of rewards, along with mobile payment. The new app allows MY Reward$ members to easily track their points and unlock products from the Reward$ Catalog.

More than 150 miles of California’s Central Valley are now supported by EV fast-charging stations at three Love’s Travel Stops & Country Stores sites. The new Love’s charging stations are in Ripon, Madera and Tulare.

Sheetz Inc. is extending its partnership with professional esports team the Pittsburgh Knights through 2023. Along with maintaining Champion Partner status, the retailer is becoming the official convenience store of the team.

TravelCenters of America Inc. is expanding the footprint of its TA Express brand to California and Arizona through new franchise agreements. Both sites will welcome customers before the end of this year.

Eye on Growth Tri Star agreed to divest assets in Whites Creek and Greenbrier, Tenn., to settle antitrust concerns.

Tri Star Energy LLC completed its acquisition of Hollingsworth Oil Co. Inc. and the Sudden Service retail banner. The deal included 53 c-stores in Kentucky and Tennessee. Wawa Inc. reached a milestone when it cut the ribbon on its 900th convenience store on June 18. The store is located in Springfield, N.J.

Nouria Energy Corp. acquired a branded fuel distributorship business from Roberts Energy. Also, its transport business, J&S Oil, will now become part of Roberts Energy’s sister company, Brown Bear Transportation. FriendShip Stores expanded into a new market with the opening of the Lewis Center FriendShip Kitchen in Columbus, Ohio. The move comes as the retailer celebrates 70 years in business. Enmarket opened the first fueling station to bring compressed natural gas to the Savannah-area public. Supplied by Atlanta Gas Light, the station is located at the retailer’s latest store in Port Wentworth, Ga.

Kum & Go put plans in place to expand its new urban store concept with locations in several cities, including Denver. Its first walkup store opened in Des Moines in May. The 7-Eleven network hit 71,100 global stores with the opening of a new location in Seoul, South Korea. The retailer plans for master franchisees to open new stores in India and Cambodia soon.

Love’s Travel Stops & Country Stores added three sites to its network in late May and early June, opening the doors to new travel stops in Kentucky, South Carolina and Texas.

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INDUSTRY ROUNDUP

Seen on Social

Speedway LLC, Enon, Ohio Every penny makes a difference! Thank you to everyone who continues to donate to the Children’s Miracle Network Hospitals at our registers, you truly are making a difference in these kids’ lives. #fuelingmiracles #CMNHospitals

Kum & Go LC, Des Moines, Iowa Seniors we didn’t forget about you! We made this extremely limited edition tote JUST for you class of 2020. Plus, we are throwing [in] a $50 dollar gift card to help start your summer adventure. To enter 1) must be graduating (will ask for proof), 2) follow us on Instagram, 3) like this photo, and 4) tag your graduating crew. Totes will be given at random until supplies last! The Market, Charlottesville, Va. Tomorrow is 24/7 Day! We’re delivering breakfast and lunch to over 200 first responders in our community. Thanks, Highway John at 97.5 3WV Iconic Rock for helping us spread the word!

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Supplier Tidbits Core-Mark Holding Co. Inc. added National Retail Solutions (NRS), a subsidiary of IDT Corp., to its Core Partners program for 2020. As a Core Partner, NRS will offer a POS system to Core-Mark’s 44,000-plus customers.

The decision includes the IQOS device, Marlboro Heatsticks, Marlboro Smooth Menthol Heatsticks, and Marlboro Fresh Menthol Heatsticks.

S. Abraham & Sons will hold a virtual version of its annual Foodservice Show in August. The event will feature 30 manufacturers presenting approximately 780 item selections.

The Food and Drug Administration approved Philip Morris International’s Modified Risk Tobacco Product application for IQOS. IQOS is the first electronic nicotine product granted marketing orders through the process. PDI acquired ZipLine in a move to strengthen its PDI Marketing Cloud Platform. ZipLine processes more than 6 million transactions a month for chains such as Circle K, Cumberland Farms and Spinx.

A new pact between Skupos and Fiserv Inc. will help independent retailers increase revenue, gain repeat customers, and streamline business operations. Skupos’ point-of-sale solutions will integrate with Fiserv’s Clover platform. ExtraHop is partnering with MAPCO to help the retailer enhance its technology platform as it continues to grow. The ExtraHop Reveal(x) solution will secure delivery of cloud applications as MAPCO lays the groundwork for expansion. CSN

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NEW PRODUCTS

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1. Social Club Seltzer Social Club Seltzer, a new premium hard seltzer brand, joins the AnheuserBusch portfolio of brands. With 150 calories per 12-ounce can, Social Club Seltzer combines three popular cocktail-inspired flavors — Old Fashioned, Sidecar and Citrus Gimlet — with the refreshment of seltzer. Each variety is designed to evoke the same sophisticated flavor profile as its cocktail counterpart, but with the format of a seltzer and with a 7 percent ABV. Social Club Seltzer is sold in individual flavor six-packs and a variety 12-pack. Anheuser-Busch New York socialclubseltzer.com

2. Dunkaroos Relaunch

3. E-Z Dispenser Gravity Feed Cigarette Cartons

4. Muffin Town Totality Bar

General Mills Convenience & Foodservice brings back the nostalgic cookie brand Dunkaroos. The brand has been gone from store shelves since 2012. The beloved cookie and icing combo of the 90’s relaunched in its most-requested flavor: vanilla cookies and vanilla frosting with rainbow sprinkles. The suggested retail price is $1.99 per 1.5-ounce tray. Each carton includes 12 individually packaged units. Dunkaroos originally hit the market in 1992.

Republic Tobacco unveils new patented technology for dispensing cigarette filter tubes. E-Z Dispenser gravity feed cartons for king and 100MM sizes allow cigarette filter tubes to be dispensed one at a time without damage. The E-Z Dispenser boxes can be opened the conventional way by pulling open the top lid, or they can be used in the new gravity feed mode. Gravity feed is easily engaged by pulling down the corner flap on the front of the carton. Filter tubes continue to drop down into the corner as each is taken out, and by removing them at the filter tip end from the dispenser, surrounding tubes aren’t crushed. This new technology is available in the Gambler, Tubecut, TOP and Premier brands.

With a long shelf life and high protein, the Muffin Town Totality Bar offers a safe, nutritious grab-and-go meal replacement for all consumers. Made in a peanut- and tree nut-free facility, the Totality Bar features a wonderful crunch, flavorful cranberries, real honey, natural oats, and delicious proteinpacked SunButter. Each 3.3-ounce bar delivers 9 grams of protein and 7 grams of fiber. Additionally, each bar provides one serving of meat/meat alternative, one serving of grain, and one serving of fruit.

General Mills Convenience & Foodservice Minneapolis (800) 243-5687 generalmillscf.com

5. PathSpot Hand Scanner

Republic Tobacco LP Glenview, Ill. (800) 288-8888 info@rpbtob.com

J.S.B. Industries Inc. Chelsea, Mass. (877) 683-3461 muffintown.com

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The PathSpot Hand Scanner is a data collection device that uses visible light fluorescence spectroscopy to instantly detect invisible signs of bacteria and viruses that cause foodborne illness, including Norovirus, E. coli, Listeria, Hepatitis A and Salmonella. The scanner measures the reflection of light off the hands to determine whether or not a set of proprietary markers are present. Along with providing real-time feedback, the PathSpot Hand Scanner collects data that businesses can use to measure and improve handwashing compliance. Avery Dennison Corp. Miamisburg, Ohio averydennison.com 20 Convenience Store News C S N E W S . c o m

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NEW PRODUCTS

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6. Calypso Light Lemonade

7. Juicy Drop Strawberry Kiwi

8. Amadis EMV Migration Solution

9. Marley Mellow Mood CBD-Infused Teas

Calypso introduces a line of light lemonades, Calypso Light, in four fanfavorite flavors: Original Lemonade, Ocean Blue Lemonade, Strawberry Lemonade, and Southern Peach Lemonade. Each Calypso Light flavor is inspired by the taste of the islands, and made with a focus on quality by using real lemon fruit bits and natural flavors. All four varieties contain zero grams of sugar and are only five calories per 16-ounce bottle. Calypso Light Lemonade retails for a national average price of $1.79.

Strawberry Kiwi is the newest flavor to join the Juicy Drop brand in both its Juicy Drop Pop and Juicy Drop Gummies product offerings. Juicy Drop Gummies come in a 2.01-ounce package with a suggested retail price of $1.85 to $2. Every pack comes with sweet, chewable gummies and a sour gel pen for consumers to create their own perfect mix of sweet and sour in every bite. The Juicy Drop Pop comes in a 0.92-ounce package with a suggested retail price of $1.85 to $2. To eat, consumers pull the yellow handle to release the lollipop and then squeeze the clear button to drop the sour gel on top.

Universal payment software solutions provider Amadis, together with Advanced Mobile Payment Inc. and Texas Engineer Consulting Systems and Services, introduces a simplified EMV migration solution for petroleum retailers and convenience stores. The pre-certified payment solution includes a proprietary Android contactless pay-at-thepump solution, which makes it easier for fuel merchants to EMV-enable their fuel dispensers in an unattended payment environment, while complying with the 2021 liability shift deadline. The solution decouples the fuel pump dispenser from the point-of-sale (POS), enabling payment authorizations to take place at each individual pump instead of being processed on a legacy POS system.

Marley Mellow Mood CBD-Infused Teas are decaffeinated, ready-to-drink teas made from a custom blend of herbs and infused with 25 milligrams of CBD, allowing drinkers to enjoy a more mellow state of mind, according to the maker. The teas are made with high-quality ingredients to promote well-being, such as decaffeinated black and green teas, chamomile, valerian root, and passionflower. The line includes three varieties: Herbal Honey, Peach Raspberry, and Lemon Raspberry. The product has a suggested retail price of $5.49 per 16-ounce can.

King Juice Co. Inc. Milwaukee, Wis. drinkcalypso.com

Bazooka Candy Brands New York candymania.com

Docklight Brands Seattle marleynatural.com/cbd

Amadis Montreal amadis.ca

10. Vollrath Hands-Free Door Pulls New from Vollrath Foodservice, hands-free door pulls ensure doorways stay clean and hygienic without actual hands touching them. Options include foot-operated or arm-operated. Both versions can be assembled at the bottom or at arm level of traffic doors, double acting doors, cooler doors, swinging doors, or latching doors with the latch disengaged. Users simply place their foot on the foot plate or place their forearm in the arm plate and pull toward them to open the door. The plates are made of stainless steel to ensure years of durable performance.

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Vollrath Foodservice Sheboygan, Wis. vollrathfoodservice.com 22 Convenience Store News C S N E W S . c o m

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FOR TRADE PURPOSES ONLY Winston® is a registered trademark of ITG Brands, LLC. ©2020 ITG Brands, LLC

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*THESE CIGARETTES DO NOT PRESENT A REDUCED RISK OF HARM COMPARED TO OTHER CIGARETTES.

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SMALL OPERATOR

Financial Management 101 Monitoring key metrics is an essential part of staying in business for small operators By Tammy Mastroberte WHEN IT COMES

to the financial bottom line in convenience stores, there are so many pieces of the puzzle that make up the profit coming in and the expenses going out — and each one could mean the difference between making money or losing money.

Gross margin, revenue, volume, labor and shrink are among the key metrics that should be reviewed and monitored closely to spot any changes or issues that might pop up — and any issues that do arise should be addressed right away.

With the c-store industry’s small operators often working with leaner budgets than the larger chains, staying on top of finances and key metrics is critically important. The good news is that with point-of-sale and back-office systems, all the needed data is readily available.

Even the pricing of products must be watched closely to get the best profit and volume numbers, says John Matthews, president and CEO of Gray Cat Enterprises, a firm based in Raleigh, N.C., that works as consultants and interim executive managers for a variety of industries.

“The back-office software today has all the data they need there. They just have to take the time to analyze it,” Terry McKenna, owner of Convenience Store Coaches Inc., based in Charleston, S.C., told Convenience Store News. “Study the numbers, look for patterns, check gross profit margins, and see what categories they can grow.” Despite the importance, many operators do not have formal metrics they use to manage their business. This is something that needs to be put in place, cautioned Steven Montgomery, president of b2b Solutions LLC, based in Lake Forest, Ill. If an operator has a system in place to gather the information, they should be measuring and documenting the metrics they set up.

“You can’t manage what you don’t measure, so set up key performance indicators (KPIs) for each area of the business,” Matthews explained. “For example, with labor, you can look at wage rates, amount of overtime and amount of turnover, and then you can drill into why you might be overspending on labor.” Operators should also expect more from their accountants than just tax preparation, McKenna noted. They should be paying for advice, insights and suggestions, and even consider joining study groups with other operators to benchmark against their peers.

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What to Watch

There are a number of key metrics c-store operators should be monitoring either daily, weekly or monthly to gauge their individual store and chain performance, and make sure they are not losing money unnecessarily in one or more areas of the business. These include labor, shrink, repair and maintenance, gross margin, revenue, volume, professional fees, and product pricing. “Sales and gallons are generally the first metrics all operators measure,” said Montgomery. “They should be measured both by day of the week and hour of the day. This information and the number of transactions for the same timeframes should be utilized to determine labor schedules.”

“Labor, shrink, fuel pricing, and repair and maintenance should be looked at daily, and inventory on a weekly basis.” — Doug Hecker, b2b Solutions LLC

Labor is a huge part of the c-store business. Operators should have set a budget for 2020 and should be closely monitoring how they are doing against budget, using a series of KPIs to help understand the breakdown of labor, rather than just one large number, Matthews said. For example, maybe they are overbudget because they thought they would pay $10 per hour and are now paying $11, or they thought the store would run 500 hours, but it’s now running 600. They could even be running too light and paying too much overtime. “Also, monitor turnover because if you are continually turning over employees, you are spending money to train them all instead of having a crew that has been around for years,” he added. Another crucial area to watch is the pricing of products to ensure each store and the overall chain is maintaining its gross margin percentage in each category. This means monitoring vendors and any price increases that may have slipped by, where the retailer may need to increase the price for customers, Matthews explained. Labor, shrink, fuel pricing, and repair and maintenance should be looked at daily, and inventory on a weekly basis, advises Doug Hecker, a consulting partner at b2b Solutions. “Don’t wait for a monthly profit and loss. Look at some income and expense lines at least weekly, and payroll hours daily by store.” Additionally, when it comes to wholesale suppliers, retailers should review the deals they signed. Many sign up with a wholesaler and then don’t go back for two to five years to review the agreement. As a result, McKenna said they may no longer be getting the best deal. “Put out a bid for other wholesalers. It’s sometimes shocking what another wholesaler will come back with, or what the current one will come back with once asked. That can be a big savings,” he said. “Don’t rest on your laurels when it comes to relationships with wholesalers — put the wholesaler to bid every couple of years.” The same is true with insurance and banking fees. Retailers should shop around and make sure they are getting the best deals. And when it comes to accessing advanced management tools, they should be asking their primary distributor for information on the current

top sellers in their market to make sure they are carrying them in their stores, Montgomery said.

Staying on Top of Shrink

Aside from labor, another huge expense many retailers face — where money is essentially being thrown away — is shrink. This includes internal shrink from employee theft and sweetheart deals, as well as external shrink, which could stem from shoppers or vendors. “A good shrink metric to go by is .005. This is when you take the total number of sales for the month and then divide it by the shrink dollars, backing out foodservice numbers. Getting .005 is a good number to be within. You don’t want to go higher than that,” McKenna said. “This is something they should be looking at every week. If you wait until the end of the month, it’s too late.” Retailers need to verify the number of boxes coming in from vendors and also that the boxes are full when they get delivered to the stores. Although this type of theft, as well as customer theft, are not usually the main cause of shrink, according to McKenna. Employees doing sweetheart deals with friends, charging for a soda but not a bag of chips, or eating a candy bar and not paying for it can often be an issue, and the dollars will add up. “Cash over short is another metric to look at and $200 for the month is a good benchmark number there,” said McKenna. “Sometimes mistakes are made. But pay attention if you come up with zero every month, because then you know employees are hiding it and you are paying for it. Start watching trends here and if it keeps going up, then something is going on.”

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SMALL OPERATOR

If the 24-month average of cash over short is $180 and all of the sudden, a store is at $300 or $400 a month, it’s important to look at what has changed. For instance, are there new employees? Also, question the employees so that they know a manager is on top of the business and looking at the numbers, McKenna added. When it comes to foodservice and shrink, product spoilage is the chief area to watch. What is being wasted or thrown away each week or month? For foodservice, it’s learning how to balance having enough food for sales, while not wasting. This has to be monitored and shouldn’t be more than 0.5 percent, he said. “Foodservice, including coffee and fountain, is also where retailers should be getting a 50-55 percent gross margin. Too many are getting only 25-30 percent,” he said. “This is the only area where you can get that margin, because you can’t jack up the price of salty snacks and other items.”

Areas for Extra Savings

In addition to the main areas of the business, there are other places c-store retailers can keep an eye on to find savings that can boost their bottom line. Matthews offered an example from a chain of 1,400 stores that Gray Cat Enterprises worked with. When they started looking into trash services, they were able to find savings. By getting the right size containers and training managers to break down boxes and crush cans so they could use less space, the chain was able to save more than $200,000 that it could use elsewhere in the organization. “If you have a dozen stores and you can save $50 per store, that is $7,200 over a year,” he pointed out. Every six months, operators should go line by line on their profit-and-loss statement and look at their expenses to see where they can extract savings, Matthews said. With the trash services example, he suggests looking at the number of cans at each store and the number of times they are picked up. Can pickup be reduced to once per week rather than twice? “Also, look at your telephone costs, utilities, rent, maintenance, insurance, bank charges, pest control, professional services, security and uniforms,” he said. “All of [these expenses] can run away from you if you don’t have someone

looking at them. Go through line by line to see if you can save a couple percentages here and there.” A couple other areas to consider are remembering to turn off the canopy and perimeter lights during the day, which can add up to savings over time, he said, and also paying close attention to inventory. For instance, is there a lot of inventory on hand and sitting in the back room? Ideally, stores should be turning inventory once a month, rather than stockpiling it. “Look at all of this daily and weekly, and at the end of the week, look at patterns and trends,” McKenna said. “Know what your shrink is, what your cash over short is, and start asking employees questions.”

Financials in Today’s Pandemic The global coronavirus pandemic is temporarily changing the way businesses operate, including convenience stores. Fuel volume, foot traffic and overall sales have been affected, and it has become more important than ever for operators to stay on top of their financials. “Stores should have a morning meeting with staff during these times to identify opportunities to increase sales and decrease expenses,” advised John Matthews, president and CEO of Gray Cat Enterprises Inc. “Monitor gross margin, revenue and volume, and minimize any discretionary spending.” Also, if volume and traffic are down at a location, retailers should minimize employee hours and make sure there are not too many people working in the store, he noted. Retailers should also reduce repair and maintenance items only to the “must-dos,” and pay attention to spoilage because of the decline in foot traffic, according to Steven Montgomery, president of b2b Solutions LLC. Additionally, in terms of inventory, with c-stores being deemed an essential business that can remain open throughout the pandemic, it’s important to realize that the items people are buying in c-stores have changed, Montgomery pointed out. For example, there are more c-store shoppers looking for grocery items now than there were in the past. “Retailers need to be sure they adjust the inventory levels of these items and allow their investment in slower-moving categories to decrease,” he said. On the forecourt, while fuel margins have been good in the current market, COVID-19 has driven fuel volume and pricing down. And while it’s often difficult for smaller chains and individual stores to offer the same fuel prices as the bigger chains, they should try to get as close as possible, according to Terry McKenna, owner of Convenience Store Coaches Inc. “Find out how close the regional brands will let you get to them on street price and see if you can get two to three cents above them,” he said. “They have critical mass and scale advantage, but find out how close you can get without undercutting them.” CSN

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COVER STORY

The seventh-annual Top Women in Convenience awards celebrate 52 honorees whose accomplishments may well inspire other women to shoot for the stars A CONVENIENCE STORE NEWS STAFF REPORT

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W

hen NASA astronaut Christina Koch returned from the International Space Station earlier this year after spending 328 days in space — a record for a woman — she said: “I have truly been inspired by the struggle and triumphs of so many women that dare to break new ground in all aspects of society.” Convenience Store News’ seventh-annual Top Women in Convenience (TWIC) awards celebrate and recognize convenience industry women not only for their accomplishments, but also for the way they inspire other women to shoot for the stars. As the first and only c-store industry program that recognizes women for outstanding contributions to their companies and the industry at large, TWIC each year honors a diverse array of women from leading c-store retailers, distributors and supplier companies. Their job titles run the gamut from the C-suite to category managers, from financial executives to marketers, from sales leaders to human resources managers. TWIC winners are recognized in four categories: Women of the Year: Retailer, supplier and wholesaler executives of any rank who have had an exceptional impact on the success or direction of their company, as well as a positive impact on the convenience store industry as a whole. These visionaries have steered their companies into new markets, new opportunities and strong measurable growth.

Senior-Level Leaders: Retailer, supplier and wholesaler executives at the level of director or vice president and above who have executed on a strategy and transformed their business in a positive manner. Rising Stars: Retailer, supplier and wholesaler professionals with job titles from store manager to just below vice president who are making their mark on the industry, even at early stages of their careers. Mentors: Retailer, supplier and wholesaler professionals of any rank who have made an extraordinary effort, and had an exceptional impact, on the careers of their colleagues. The winners are chosen by CSNews in collaboration with the Network of Executive Women and the 2020 Top Women in Convenience Advisory Board (which includes the 2019 Women of the Year honorees). From more than 150 submitted nominations, this year’s judges chose five Women of the Year, 21 SeniorLevel Leaders, 22 Rising Stars and four Mentors for recognition. This year’s TWIC winners will be publicly feted for their achievements. The seventh-annual TWIC Awards Gala will be held virtually in October.

2020 Top Women in Convenience Advisory Board • Sarah Alter, Network of Executive Women • Sarah Bibbs, Eby-Brown • Kimberli Carroll, Ruiz Foods • Pat Cordle, BIC USA Inc. • Matt Domingo, RAI Trade Marketing Services • Keri Hagan, Coca-Cola North America • Danielle Holloway, Altria Group Distribution Co.

•  Deb Hall Lefevre, Alimentation Couche-Tard Inc./Circle K •  Allison Moran, formerly of RaceTrac Petroleum Inc. (chairwoman) • Jayne Rice, Yesway •  JoAnne Saverino, Saverino & Associates • Rebecca Troutman, 7-Eleven Inc.

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COVER STORY

WOMAN OF THE YEAR: Anne Flint

Director of Category Management, Tobacco EG Group

category sales in EG’s now 1,700 stores by harmonizing our offerings and capitalizing on specific regional tastes and demographics in our national chain,” Flint explained. “I am particularly excited about the launch of our own control label cigarette brand, First Class, nationwide.”

degree in accounting from Bryant University in Smithfield, R.I., Anne Flint went to work for convenience store chain Cumberland Farms in its internal auditing department before moving to purchasing where her “quantitative skills came in handy.”

Having spent her entire career in the c-store industry, there are many aspects of the business she enjoys. For instance, Flint likes tackling the specific challenges of the tobacco category, such as outperforming in a category that is always under pressure from regulation, taxation and consumer behavior. She also enjoys working with and educating her team and consumers on regulatory matters; adjusting to innovation and new trends that are coming through; and mentoring her teammates in a “complicated” category.

WITH A BACHELOR OF SCIENCE

She remained at the company for more than 20 years and when EG Group acquired Cumberland Farms in late 2019, Flint became the director of category management for tobacco, reporting directly to the vice president of marketing for EG America. “In this position, I am responsible for managing the tobacco, OTP and CBD categories for the company. I am fortunate to lead a strong category management team that supports the strategic direction and execution of our business,” she said. Flint previously served as the director of category management for tobacco at Cumberland Farms as well. When EG acquired the company, her role expanded from working with eight states to 31. She now oversees a team of four full-time employees, including one senior category manager and one category manager. “EG America has completed multiple acquisitions over the past two years, most recently Cumberland Farms. With these changes, our team is working to maximize

“My job is always changing, challenging and interesting,” she said. “I find it rewarding that I am able to be innovative and creative, even in this highly regulated industry.” Active in the New England Convenience Store and Energy Marketers Association (NECSEMA) and the National Association of Tobacco Outlets (NATO), Flint sits on the board of directors for the latter, and she actively engages with NECSEMA to support legislative threats to tobacco at the local level. “I am most proud that I have grown to be respected as an industry expert by my company and peers in the industry, and am always proud to see the fruits of my overall understanding of the business and creativity at work at the store level,” she said. Having spent so many years in the convenience store industry, Flint has seen it change regarding the role of women — specifically, the increased focus by corporations on gender equality in the workplace and greater opportunities for advancement. She pointed to organizations that have been created across the industry to support and build networks for women in business, which she said can provide women with greater confidence and the skillsets needed to be successful in their careers. “My advice for women is to fight for what you believe in. Fight for what you deserve as a professional and as a person,” she urged. “While it’s unfortunate and unfair, [women] should know that to gain the respect they deserve, they will have to be better than their male counterparts. Be prepared, don’t be afraid to be aggressive, and be yourself.”

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We are inspired by your success in the convenience industry. Congratulations on receiving the Top Women In Convenience Award presented by Convenience Store News.

Servicing: Philip Morris USA U.S. Smokeless Tobacco Company John Middleton Nu Mark Nat Sherman

Š2020 Altria Group Distribution Company | For Trade Purposes Only

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COVER STORY

WOMAN OF THE YEAR: Ramona Giderof

Vice President, Convenience Channel Anheuser-Busch

will look like,” Giderof said. “We are working with retailers to drive traffic, understand buying habits, and take a customer-first approach to developing programs to help them drive sales.” In just the short time she’s been working in the c-store industry, her Anheuser-Busch 7-Eleven team received a Supplier of the Year award from 7-Eleven corporate, and Giderof not only became a member of NACS, but also joined the organization’s research committee.

ALTHOUGH SHE IS still relatively new to the convenience store industry — having served as vice president of the convenience channel for Anheuser-Busch since last year — Ramona Giderof spent the last 25 years of her career working in the adult beverage business.

After college, she worked for two large companies in the wine and spirits industries, but for the last 14 years, Giderof has worked for Anheuser-Busch in a variety of roles. Her first position was senior key account manager on the Walmart and Sam’s Club team. She was then promoted to a director role that included Costco and CVS, and eventually went on to lead the company’s Kroger team as a senior sales director, before being promoted to her current role. Now, she leads Anheuser-Busch’s convenience and military teams across the United States, handling everything from budgets and profit and loss, to team engagement and strategy with the sales and brand teams. She also works with the pricing team to ensure the right pricing strategies across the channel, and each senior director working with national chains reports to her. “With everything happening right now with COVID, my focus is on collaborating with retail partners to navigate what it means for them and what the new normal

“I’m excited about the opportunity to work beside industry leaders and help drive growth and shopper engagement in the channel,” she said. “Within the c-store channel, I want to help out where I can and provide a voice for the beer category, along with great insights and tools, and be there in a collaborative role.” During her 25 years of work in the adult beverage business, Giderof has seen positive change in the increasing number of women now bringing their diverse perspectives. Her advice for fellow women is to believe in themselves, challenge themselves, and “really lean in and be heard.”

“We are working with retailers to drive traffic, understand buying habits, and take a customer-first approach to developing programs to help them drive sales.” When it comes to her own career, her favorite aspects of her role are the product and the people. Anheuser-Busch has a vast portfolio that includes iconic brands, which Giderof is proud to be a part of. She also loves the people she has the opportunity to lead each day. “I lead a team of incredibly talented and passionate people who inspire me every day,” she noted. “Watching the men and women I’ve had the opportunity to coach, guide and mentor and seeing them succeed in their careers is something I am really proud of, looking back.”

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Congratulations! The bar just got higher.

Congratulations to one of our own,

Rachel Backfisch, for being named one of the Top Women in Convenience.

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COVER STORY

WOMAN OF THE YEAR: Julie Jackowski

Senior Vice President, Corporate General Counsel & Secretary Casey’s General Stores Inc.

company can continue to move forward with its initiatives, particularly in digital and enhanced offerings. Through her legal work, Jackowski has done a number of things she is proud of over the years, but she believes her greatest accomplishment as a leader is having a “fantastic, highly skilled staff.” She is proud of leading her team and providing the tools necessary for them to thrive and grow within the organization.

IT’S BEEN MORE than 25 years since Julie Jackowski left her job at a private litigation practice to join Casey’s General Stores as an employment lawyer. Since then, she moved into the role of vice president of human resources for a short time before returning back to the legal department. Today, she serves as senior vice president, corporate general counsel and secretary, leading Casey’s legal and risk management departments.

Jackowski oversees all legal and risk functions for the chain of 2,000-plus stores, including risk management, enterprise risk management, project management, food safety and quality assurance, and security. Her team comprises more than 75 employees, and she reports directly to the CEO. Additionally, she chairs Casey’s Contributions & Charities Committee, which contributes more than $2.5 million annually to community and national charities. In her current role, she enjoys the diversity of projects she gets to work on, noting that “it’s never a dull moment in the c-store industry,” especially working with legislation that is always changing. While she and her team have been focused on the safety of Casey’s guests and team members during the COVID-19 pandemic, they also have continued to support the company’s strategic plan published in January before the pandemic, so the

She also serves as a leader for the c-store industry overall, having been elected chair of NACS last fall — only the second woman ever to be voted into this role. When the pandemic hit, Jackowski worked with the NACS government relations team to make sure c-stores were deemed essential because they are important to their communities for groceries, fuel and more. “I’ve been involved with NACS for 10 years and served on the membership committee, was vice president of the legislative committee for a couple of years, and then became the board chairman last fall,” she explained. “Collectively, we have a bigger voice when we stand together from an advocacy and legislative standpoint, but NACS is also important for the networking opportunities.” During her 25 years in the industry, Jackowski has watched as the role of women evolves at Casey’s and throughout the industry as a whole. More women are rising to senior leadership positions at Casey’s, she said, and more women are attending trade association events as well. “Casey’s may be somewhat unique in that 65 percent of our workforce is women. As business becomes more complicated, we have added new specialties to our leadership team, and a lot of those are female,” she noted. Her advice to other women is to be confident in the skills they bring to the table, to recognize their opinions and viewpoints matter, and to not hesitate to actively use their voice to share this information. “As women, a lot of the time, we stand back and wait to be called upon when, in fact, we need to proactively make our voices heard and share the information to make sure our opinions are known,” said Jackowski.

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PERFECT FOR CANDLES AND MORE! EASY TO ADD TO YOUR CURRENT DISPLAY!

HELPS KEEP FINGERS AWAY FROM THE FLAME!

BIC® EZ REACH™ MEANS EZ PROFITS! The new BIC® EZ Reach™ Lighter is pocket-sized for convenience, and its 1.45-inch wand helps keep your customers’ fingers away from the flame when lighting tight spaces. A must-have for all lighting occasions! Visit ShopBIC.com/newinquiry

*Source: IRI C-MULO Vol Sales of Pocket for the 52 weeks ending 6/7/20 © 2020 BIC USA Inc., Shelton, CT 06484

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COVER STORY

WOMAN OF THE YEAR: Natalie Morhous President RaceTrac Petroleum Inc.

While working to make the shopping experience more frictionless for guests amid the COVID-19 pandemic, Morhous is also heavily involved in launching franchising under the RaceTrac brand for the first time. There is currently one franchise store operating, and another in training. “I’ve been really involved in the launching of RaceTrac franchising from the first idea of it to opening the first store, and I see a bright future in that for our organization,” she said.

Natalie Morhous’ grandfather started RaceTrac Petroleum, and her father served as CEO for more than 40 years. The c-store industry has always been a part of her life, but she didn’t start working in it until 2012 after getting her MBA at the University of Pennsylvania.

One of her favorite things about the work she does is how it can positively impact people.

IN 1934,

She then joined RaceTrac as executive director of strategy and solutions, leading the company’s special projects department and working with senior leaders to develop long-term strategies. This allowed her to leverage previous consulting experience, and her career evolved from there. “Over the last eight years at RaceTrac, I have had different roles, including our special projects department, which consisted of overseeing large strategic initiatives and managing new ideas from development through to implementation, and then leading our fuel transportation company called Energy Dispatch,” she said, noting that the private fuel hauling company is responsible for delivering two-thirds of all the fuel gallons sold at RaceTrac and RaceWay stores. In 2019, Morhous became president of RaceTrac Petroleum, which operates approximately 550 RaceTrac stores and has approximately 250 franchise locations under the RaceWay banner. She is responsible for overseeing all aspects of the company, but her primary focus is the retail side.

“I absolutely love that in convenience, we serve all walks of life, and you can walk in during the morning hours and serve a work crew getting gas or stocking up on food for their truck on the way to a job site, as well as a man or woman in a business suit on their way to a meeting or interview,” Morhous said. “C-stores impact the lives of so many different people in our society.” She also loves being able to positively impact RaceTrac’s more than 9,000 employees. In fact, one of her biggest accomplishments is being able to grow and develop employees around her. “What brings me a lot of joy is seeing people grow from entry level right out of college to an executive director level. Playing a piece in an employee going from being new in their career to someone that the company counts on to lead large teams and initiatives in the organization is what brings me the most joy,” she shared. Morhous is a founding member of RaceTrac’s LEAD initiative, a grassroots women’s initiative designed to create a space where all RaceTrac members, regardless of gender, can talk business, form networks, and share around the issues facing women at work. “Being a woman in the workplace is not as unique as it once was, but it’s not as common as it could be,” she said. “I’m pretty passionate about women in business, and one of the things I’ve learned, and advice I would give other women, is to be yourself and embrace your femininity. In leadership roles, especially in a male-dominated field like convenience or trucking, it could be really easy to doubt your femininity or cover it up. What I have experienced as a leader is when I let my feminine side and my heart show, I am embraced more.”

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COVER STORY

WOMAN OF THE YEAR: Ina Strand

Chief Human Resources Officer Alimentation Couche-Tard Inc./Circle K

her to relocate to North America, but her husband helped change her mind. “My husband, who lived oversees in his youth, was a great supporter and encouraged me to take the chance for myself and our children to have this experience,” she recalled. “Being a young woman, it was a nice bonus as the executive team was all men, white and middle-aged.”

STARTING HER CAREER as

an engineer and management consultant, Ina Strand didn’t plan on working in the convenience store industry. But after serving as a consultant for Statoil Fuel in Norway, she “instantly fell in love with the culture, action, speed in decision-making, and down-to-earth yet super-smart people.” Statoil offered her a permanent position and she accepted. Strand joined the company as a people development manager, training for the role of human resources director. She assumed that position in 2004, along with becoming deputy vice president of operations for Statoil Retail Norway AS. This move made her the first woman in the company to be on a business unit’s management team. “I have been fortunate to have managers who believed in me and gave me new challenges often,” Strand said. “My career covered a lot of ground in a short time — from HR to operations, customer offer, energy and retail, and B2B marketing. After returning from my first maternity leave, I was offered a role in the European executive team, which I continued after Statoil was acquired, leading the first major Circle K global rebrand project.” At Circle K parent company Alimentation Couche-Tard, she was offered the executive team human resources position because her background in both human resources and business was considered a perfect match, she explained. At first, Strand turned down the role because it required

Today, Strand is the organization’s chief human resources officer, reporting directly to the CEO. Last year, her role expanded to include sustainability, HSE (health, safety and the environment), communications and events on a global scale. During the COVID-19 pandemic, she has been in charge of the company’s emergency response. She and her team are also focused on training, hiring, digitizing, and success planning. She holds a global position within the company and has eight direct reports, including three vice presidents for human resources and talent development, and three global heads of communications, events and HSE. “My favorite thing about my job is developing the people with whom I work. I take great pride in being a leader that people want to work for — not because I’m nice, but because of the opportunities I provide to create and grow, while having their backs,” she said. “My team members are smart, fun people engaged in their communities. They are humble and easy to like.” In the past year, Strand has championed diversity and inclusion with Couche-Tard’s board of directors, and started a Women’s Council for the company. Europe is ahead of North America when it comes to gender parity, so it was a big change for her when she moved to the U.S. and realized her role as a female executive should not be taken for granted, she explained. “As the chief human resources officer, I took on a gender diversity challenge from the CEO and board, and we have since made progress by establishing our Women’s Council and improving our metrics on representation. However, there is much progress yet to be made,” she said. Her advice for women in business is to be themselves rather than trying to change to fit in. Based on many conversations with female colleagues, she’s learned women feel they need to adapt and change, but she believes they should instead focus on being who they are. “To me, the greatest value of diversity is appreciating our differences and coming together for better solutions,” Strand said. “That takes courage, but we can do it.”

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CONGRATULATIONS

TO OUR WINNERS! Each one of our winners brings passion, creativity, and talent to Circle K.

WOMAN OF THE YEAR

INA STRAND Chief Human Resources Officer

We are proud that they have been recognized among the Top Women in Convenience 2020. To them, and all the amazing winners, congratulations!

SENIOR-LEVEL LEADER

RISING STAR

MENTOR

SUZANNE HALL

JILL PETERSON

ROBIN DONOHO

Global Chief Information Security Officer & Vice President of Infrastructure

Director of Fuel Coastal Carolina Business Unit

Director of Marketing Southeast Business Unit

If you’re looking to grow within a global company, get to know us at workwithus.circlek.com

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COVER STORY

SENIOR-LEVEL LEADERS

MIRANDA ANDERSON Director of Operations, East Florida Region RaceTrac Petroleum Inc. • Anderson began her journey at RaceTrac by understanding the day-to-day in-store operations before navigating her way to human resources, obtaining her SHRM certification and venturing into field operations. She has worked in all three regions of Florida, and previously held the role of director of HR. • She is responsible for every store and team member in the East Florida Region, as well as short- and long-term budget planning, goal-setting and team development. Anderson’s nominator called her a “leader of leaders” who carries an enthusiasm for RaceTrac’s people, business and mission that is contagious to all. • Her accomplishments include taking LEAD, RaceTrac’s corporate women’s initiative designed to Link, Empower, Achieve and Develop future leaders, and spearheading a regional spinoff for the company’s Florida markets.

RACHEL BACKFISCH Area Vice President, Eastern Sales Area RAI Trade Marketing Services • A 13-year veteran of Reynolds American Inc., Backfisch began her career as a territory manager in Southeast Missouri and worked her way up through the RAI Trade Marketing Services organization, serving in multiple roles including account manager, division manager, key account manager, and senior director. • In her current role, she works with the field trade marketing teams to ensure the company’s brand and program strategies are brought to life, and its customer relationships continue to grow. Backfisch has received the RAI Leadership Team Award twice. • She is passionate about supporting the Juvenile Diabetes Foundation and sees this organization’s efforts as critical toward finding a cure.

ASHLEY BORDEN Senior Product Director, Center Store 7-Eleven Inc. • During her seven years with 7-Eleven, Borden has successfully managed a variety of food and nonfood categories

in roles that include senior product director, mergers and integrations; center of store product director; senior category manager of confectionery; and category manager for wireless. • As a member of the merchandising team, she has spearheaded multiple initiatives that focused on managing external relationships with vendors, improving internal collaboration between crossfunctional business units, and developing exclusive merchandising plans that emphasize customer segmentation and exclusive brand product launches. • Borden’s nominator called her “a visionary in the convenience channel” in managing the most strategic vendor partnerships to ensure she protects the interests of consumers, franchise owners and the 7-Eleven brand. In 2018, she was honored as a Top Woman in Convenience in the Rising Stars category.

STEPHANIE D’OLIVEIRA Vice President of Human Resources Sheetz Inc. • D’Oliveira is responsible for the strategic planning and execution of all employeerelated initiatives at Sheetz. This includes, but is not limited to, succession planning, talent management, benefits and compensation, and labor relations. She’s held this role for 12 years. • She has a large influence on the company’s business strategy and direction, ensuring that all decisions are made with Sheetz’s employees in mind. According to her nominator, since her first day at the company, she’s had a major impact on ensuring the retailer implements strategies that place the employees first. • D’Oliveira was the first female member of the Sheetz Strategic Planning Team, a cross-functional group that meets quarterly and is responsible for setting the strategic goals for the company and leading Sheetz’s corporate departments that support store operations.

JENNIFER FERMANO Senior Vice President of Finance Yesway • Fermano is responsible for directing all financial and accounting functions for Yesway. She works with a cross-functional team to formulate annual budgets and prepare ongoing budget-to-actual analysis, and

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20-711-019-WomenInConvenienceAd2020-F2.pdf

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Congratulations! The Women of 7-Eleven Do It Again! 2020 Top Women in Convenience Thanks to your talent and dedication, you have significantly contributed to making 7-Eleven one of the world’s top convenience retailers.

C

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SENIOR-LEVEL LEADER

RISING STAR

RISING STAR

Ashley Borden Senior Product Director

Erin King Senior Category Manager

Julie Trapp-Clark Senior Category Manager

CM

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COVER STORY

SENIOR-LEVEL LEADERS

is responsible for growing, training and supervising the accounting staff as it expands along with the size of Yesway’s portfolio. • She is devoted to continuing education and mentorship, and takes a particular interest in coaching and the continued education of other women within the company. • In a previous role as senior controller at Aramark, Fermano developed and maintained an annual budget of $85 million for Boston University Dining Services and Retail Operations, and managed a budget of $62 million for an 11-unit convenience store portfolio. She also previously served as chief financial officer for 660 Corp., where she supervised the financial reporting process and led the implementation of a new retail accounting system for the firm’s portfolio of convenience stores.

SHARON GUTMAN Customer Category Manager Mondelez International Inc. • Gutman has spent 10 of her 15 years with Mondelēz dedicated to the convenience channel, with experience managing Sheetz, Speedway and Sunoco. She currently leads Wawa, one of Mondelēz’s largest convenience retailers. • She builds successful partnerships with retailers and develops long-term strategic plans to drive growth. This includes cross-functional collaboration to develop comprehensive marketing plans using digital, social and in-store execution. • Gutman is known for being a coach, mentor and sounding board for many colleagues, as well as an advocate for her customers, continuously pushing the envelope for bigger and better. She is an active member in both Mondelēz International’s mentorship program and the Network of Executive Women.

JENNIFER HALE Assistant Vice President, Shopper Marketing The Coca-Cola Co. • Hale leads shopper marketing for the entire Coca-Cola portfolio of brands across all U.S. and global convenience retail customers. She oversees a multimillion-dollar budget that includes in-store marketing and media activities that drive traffic to stores.

• She is known for being a true leader and innovator whose accomplishments include creating, developing and leading the largest-ever global promotion in Coca-Cola history with 7-Eleven around the FIFA World Cup. • During her more than seven years with Coca-Cola, Hale has quickly risen through the organization to reach one of the top leadership positions and is part of its top talent pipeline.

SUZANNE HALL Global Chief Information Security Officer & Vice President of Infrastructure Alimentation Couche-Tard Inc./Circle K • Hall is responsible for building a cybersecurity program across all Couche-Tard brands, as well as leading infrastructure operations across its networks and platforms. She’s played a critical role in overseeing a global launch that allows teams to work from home during the COVID-19 pandemic. • Within the company, Hall is viewed as a natural leader whose powerful guidance and leadership in developing solutions have resulted in a genuine appreciation of the critical role technology plays in the growth of the organization. • In her free time, she serves on the board of advisors for the Executive Women’s Forum, whose mission is to engage, develop and advance all women in the information security, IT risk management and privacy industries.

KELLIE JANSSEN President Henry’s Foods • Janssen is known for having an extreme passion for the convenience store industry and for leading with a balance of heart and business logic, making Henry’s Foods an excellent place to work and grow, according to her nominator. • As president, she focuses her attention on business development, finance and culture, while maintaining the strategic growth strategies for the overall operation across the company’s five-state footprint. • Janssen serves on the Convenience Distribution Association’s executive committee and board, the International Foodservice Distributors Association’s board of directors, and works with many local nonprofits. Her nominator called her “the best committee lead ever” who displays a level of energy and passion to keep initiatives moving forward.

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CELEBRATING TOP WOMEN IN CONVENIENCE

Jennifer Hale AVP Shopper Marketing Coca-Cola North America

Sarah Sprayberry

Katherine Boidy Senior Director, Customer Management

Account Executive

Coca-Cola Consolidated

Coca-Cola North America

Cheers to all the 2020 Top Women in Convenience! And a special thank you to our Coca-Cola winners for refreshing the world and making a difference through your remarkable contributions. You are an indispensable ingredient in our secret formula. Congratulations!

Š2020 The Coca-Cola Company

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COVER STORY

SENIOR-LEVEL LEADERS

MICHELE KOCH Chief Marketing Officer GreenPrint • Koch leads all aspects of marketing, communications and client success for the global environmental technology company. Together with her teams, she ensures effective demand generation, lead generation and reputation management to drive a strong bottom line. • With 20-plus years of experience creating consumer demand, driving awareness and brand advocacy, she has worked with both best-in-class and emerging brands, including Hallmark, Scholastic, CAN Capital and The Tennis Channel. At GreenPrint, she is constantly iterating the company’s process to bring efficient, effective and profitable sustainability programs to clients. • In 2019, Koch completed the NACS Women’s Leadership Program at the Yale School of Management. She’s been recognized by Women in Technology, the American Marketing Association, broadcast media marketing awards, and was named a Rising Star for Emerging Leaders by WICT (Women in Cable & Telecommunications).

ALAINE MCMENAMY Vice President & Corporate Controller Core-Mark International • McMenamy oversees all accounting, compliance and financial reporting for the company and leads CoreMark’s centralization efforts for the accounting function, which has contributed significant cost savings and created process standardization. • In 2019, she led the successful completion of two transformative projects that enhanced and strengthened Core-Mark’s internal processes. Additionally, she championed the use of robotic process automation, which has already led to significant improvement and efficiencies. • McMenamy serves as an executive mentor to rising stars within Core-Mark, helping to develop talent inside and outside of finance. She is also a member of the Network of Executive Women and was selected to be the executive sponsor for Core-Mark’s AND! Council, which is focused on inclusion and diversity.

TARA PENLAND Region Vice President, Sales, Southeast JUUL Labs • Penland has held a variety of roles in the consumer packaged goods space, ranging from category manager to director of category leadership. In her current position at JUUL Labs, she leads a thriving team of sales professionals. • Since joining the company in 2018, she’s already been promoted twice based on her ability to get results and build a successful sales division that exceeds KPIs and stands as an example of retail excellence, according to her nominator. • Penland is involved with numerous retailer and partner events and education sessions. She’s currently working toward her MBA at the Duke University Fuqua School of Business.

STACEY REMINGTON Lead Franchise Business Consultant ExtraMile Convenience Stores LLC • Remington leads a team of 10 franchise business consultants in six western states. She is responsible for achieving key business and financial targets including sales, customer service, royalty revenue, and overall site growth. • Her extensive retail service organization background enables her to see opportunities in merchandising a store and to make solid recommendations to improve adjacencies and flow to grow sales. She is responsible for recruitment and development of her team, in addition to management of the company’s new intern program. • Remington’s nominator said she demonstrates leadership in all she does and exemplifies the ExtraMile one-team approach. She’s quickly built a team of strong performers and is leading the company’s efforts to improve processes for its key workflows.

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Congratulations to Core-Mark’s

2020 Top Women in Convenience

Alaine McMenamy Vice President & Corporate Controller, Core-Mark International

Caitlin McCormick Manager, General Sales (West-Los Angeles), Core-Mark International

We’re all very proud of you.

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SENIOR-LEVEL LEADERS

MICHELLE RIDDER Director of Category Management Lil’ Drug Store Products Inc. • Ridder leads the category management team and is responsible for: growing the breadth and depth of the types of services and products that Lil’ Drug Store Products (LDSP) offers to its partners; introducing LDSP category management services to non-participating accounts; expanding LDSP services outside the c-store class of trade; and growing HBC (health and beauty care) at key national accounts. • Under her leadership, LDSP has repeatedly been recognized as an industry leader in HBC category management. The company was recently honored as a Convenience Store News Category Captain in 2019. • Ridder is a Junior Achievement volunteer and teacher, and has previously worked with the Leukemia & Lymphoma Society of Eastern Iowa, and Big Brothers Big Sisters.

NANCY RUMPF Leader of Benefits & Recognition QuickChek Corp. • A QuickChek veteran since 1991, Rumpf manages benefits for the retailer’s 4,500 team members. She also manages the employee recognition line and, together with her team, executes Team Member of the Month awards, quarterly awards and other recognition. • Concentrating on the health and wellness of QuickChek’s team members has been her objective for several years. She believes that encouraging a healthier lifestyle and providing the necessary tools and resources that team members need to adopt that lifestyle is key to a successful program and a happier population. • Rumpf has received multiple internal awards at QuickChek, including the Caring Award, Team Member of the Quarter, and Support Center Team Member of the Year several times. She participates in the company’s volunteer programs and has a significant role on the QuickChek Safety Committee.

PATTI SAFFORD Director of Operations Impact 21 • Safford, who passed away unexpectedly in January 2020, led Impact 21 operations, including client project management, content and collaboration, while bringing people together in a way that engaged them and helped them embrace change. • During her 25 years in the convenience and fuel retailing industry, 12 of those with Impact 21, she was a highly respected and valued expert on retail and fuel automation. Safford was a driving force and avid supporter of Conexxus, making eB2B a reality for retailers, suppliers and solution providers She had a strong commitment to the industry and spoke frequently for NACS across many topics. • Safford is remembered as a warmhearted person and loving wife, mother and grandmother with a passion for the Make-A-Wish Foundation. She is immensely missed by her Impact 21 family, clients and the industry.

CHRISTINE SHRIVER Vice President of Marketing Skupos • Shriver joined Skupos late last year to build the framework for the marketing organization to scale and continue to drive rapid growth as a leading technology provider across the retail and CPG segments. She manages a more than $1 million annual budget. • Over the past decade, she has won marketing awards that include the grand prize for online marketing from the American Marketing Association, as well as a top internal performance reward at a Fortune 500 technology company. • Shriver actively mentors young industry professionals and recently became a member of the Network of Executive Women.

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The Convenience Distribution Association, representing convenience products distributors across the nation, congratulates all of the Top Women in Convenience honorees, with special congratulations to our CDA members: Rachel Backfisch, Reynolds American Inc. TMS Katlyn Becker, Eby-Brown Co. Casey Blackburn, BIC Corp. Beth Charpentier, The Hershey Co. Sharon Gutman, Mondelez International Nicki Heitzler, Altria Group Distribution Co. Kellie Janssen, Henry’s Foods Kim Lamberth, Mclane Co. Caitlin McCormick, Core-Mark International Alaine McMenamy, Core-Mark International Kristin Oehlke, Clif Bar & Co. Tara Penland, JUUL Labs Michelle Ridder, Lil’ Drug Store Products, Inc. Gina Simmons, Cheyenne International Lynn Swanson, Mclane Co. Alicia West, Altria Group Distribution Co.

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COVER STORY

SENIOR-LEVEL LEADERS

GINA SIMMONS Director, National Accounts Cheyenne International • A tobacco industry veteran for more than 23 years, Simmons leads Cheyenne’s efforts to maintain and expand business and relationships with large distributors and retail chains. She oversees all aspects of selling, distribution, branding and execution. • Her knowledge and passion have helped push Cheyenne to become the No. 1 filtered cigar, while constantly expanding the company’s distribution, according to her nomination. She has sold and executed large chain rollouts at such retailers as Love’s, Circle K, Dollar General and Family Dollar. • The director — whose expertise stems from various roles in the tobacco industry across cigarettes, vapor and OTP — consistently achieves high performance ratings from her superiors as well as her peer group, and recently received an internal leadership accolade for collaborating with the company’s marketing team.

KATE SMITH Chief of Staff Parker’s • Smith, a trial attorney-turnedc-store executive, is regarded as a master of multitasking. She manages high-level projects and maintains the efficient flow of information between executive leaders and team members across the company. She is also responsible for overseeing Parker’s community affairs and facilitates its philanthropic efforts. • Parker’s CEO Greg Parker said of Smith: “In my opinion, Kate has set a new standard for executive leaders in the c-store industry. She is a stellar example of talented women in the convenience store industry who are making a positive impact each and every day. Her perspective, experience and talents contribute to the success of my company and to the industry as a whole.” • Smith is a graduate of the Georgia Bar Association Leadership Academy, has served as president of the Savannah Bar Association’s Young Lawyer Division, and is past president of the board of directors for the Live Oak Public Library Foundation.

LYNN SWANSON Corporate Director of Sales, Mass Markets & Independent Convenience Stores McLane Co. • With nearly four decades of experience, Swanson is responsible for a $4 billion sales budget, with customer responsibility that covers every zip code across the U.S. A four-time winner of the McLane Sales Team Award, she’s led her team to a number of successful outcomes; namely, the redeployment of territories, recruitment of new teammates, and training on the implementation of a new customer relationship management tool. • She recently took over the independent c-store operator business for McLane and in just 18 months, has increased the company’s independent base by 26 percent and increased profitability by more than 300 percent. • During her tenure with McLane, Swanson has worked in many departments, which helps her work cross-functionally to ensure that everyone is onboard with the strategic direction and goals.

MINDY WEST Executive Vice President of Fuels, Chief Financial Officer & Treasurer Murphy USA • During her tenure at Murphy USA, West has overseen the fuels, finance, accounting, investor relations, asset development and procurement departments, while leading numerous cross-functional strategic initiatives. In 2013, she assisted in the spinoff of Murphy USA from its parent company, where she served as vice president and treasurer. • An active supporter of the state of Arkansas, West serves as a director on the boards of Simmons First National Corp., Simmons Bank, The United Way of Union County, and the Razorback Foundation. She is also an advisor to Southern Arkansas University’s Rankin College of Business through participation on its Business Advisory Council. • West, who earned a bachelor’s degree in finance from The University of Arkansas and a bachelor’s degree in accounting from Southern Arkansas University, is a certified public accountant and a certified treasury professional.

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RISING STARS

KAYTLYN BECKER Category Coordinator, OTP, HBC, Candy & Snacks Eby-Brown • In her four years at Eby-Brown, Becker has been promoted four times. In her current role, she works directly with the vice presidents of merchandising, managing categories including OTP, HBC, candy and snacks. She is responsible for leading product assortment and promotional strategies for these categories. • Becker is among a limited number of cross-functional team members in the merchandising department. In this unique position, she influences many internal stakeholders and delivers a seamless positive experience for vendors and customers. • Becker considers herself fortunate to work with other women who have served as mentors to her within the Eby-Brown organization. She credits them with providing valued leadership and advice that’s helped her achieve success.

CASEY BLACKBURN Western Regional Sales Manager Lil’ Drug Store Products Inc. • This past April, Blackburn transitioned to Lil’ Drug Store Products, where she is responsible for working with brokers to manage wholesalers and retailers in her region and support their business growth, meet consumer needs, and deliver company goals. • She previously served as national account manager for BIC Corp., managing some of the company’s largest customers in the convenience channel. During her tenure with BIC, she was honored as Sales Manager of the Year in 2017 and was recipient of the Sales Achievement Award for four consecutive years from 2015 to 2018. • Blackburn holds a master’s degree in industrial and organizational psychology from The Chicago School of Professional Psychology.

KATHERINE BOIDY Senior Director, Customer Management Coca-Cola Consolidated • Boidy joined Coca-Cola Consolidated in 2017 as the customer development director overseeing the drug channel. Based on her strong performance, previous experience leading teams and her strategic, analytical and relationship-building skills, she was elevated to senior director within the small store/ convenience channel last year. • She leads a team of six employees that call on a combined 37 convenience retail customers, selling more than 7 million cases of product annually. • According to her nomination, the company has identified Boidy as targeted top talent, and she has been tapped to participate in several cross-functional steering committees. Additionally, because of her leadership, CocaCola Consolidated received a Vendor of the Year award from one of her key customers.

JESSICA BOND District Manager Maverik Inc. • Bond became a part of the Maverik team in 2013 as a store director in the Reno, Nev., area. She turned her location around to become one of the most profitable in the company and was rewarded with a promotion to the role of new store director trainer, and then elevated to her current role as a district manager. • Bond currently oversees eight locations in the greater Denver market and is responsible for operational execution for auditing and loss prevention, human resources and team building, community relations, hiring and promoting employees, adhering to environmental policies, and the overall safety and presentation of her stores. • Outside of work, the two-time Maverik Elite award winner contributes to various organizations. She was the Diedrichsen Elementary PTO treasurer and president from 2009 to 2011, and Al-Anon Group Treasurer from 2017 to 2019.

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WELL-DESERVED RECOGNITION SENIOR LEVEL LEADER LYNN SWANSON DIRECTOR OF MASS MARKETS & INDEPENDENT SALES

RISING STAR KIM LAMBERTH SENIOR ACCOUNT MANAGER

Congratulations to McLane’s own Lynn Swanson and Kim Lamberth on being recognized by Top Women in Convenience 2020. Their determined work ethic, dedication to customers, and unwavering commitment to the industry make us proud. We are honored to celebrate this recognition with them.

© 2020 McLane Company, Inc. All rights reserved.

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RISING STARS

BETH CHARPENTIER Category Strategist for 7-Eleven The Hershey Co. • Charpentier has taken category advisorship to a new level for both Hershey and 7-Eleven over the last two years, according to her nominator. She is responsible for driving category growth at 7-Eleven by developing, implementing and tracking results of strategic initiatives that drive shopper engagement, sales and profitability for the confectionery category. • Her 14 years of experience at Hershey span retail leadership, direct sales and category management. She’s worn multiple hats, including retail sales representative, district sales supervisor, customer sales executive, and category consultant. • Charpentier is an integral part of the Hershey team that was recognized as Vendor of the Year at 7-Eleven in both 2018 and 2019. These awards included Digital Driver Vendor of the Year and Challenge the Status Quo Vendor of the Year.

MEGAN CHMURA Senior Category Manager, Beverage Giant Eagle/GetGo • Chmura began her career at GetGo six years ago on the center store team as an assistant buyer. She worked her way up the ranks, spending four years as category manager for packaged beverage, dairy, grocery and frozen. She currently leads a team of four across all center store categories, overseeing vendor relationships, pricing and promotional strategies, and product assortment. • She has created numerous programs for GetGo, partnering with vendors on opportunities to incentivize guests to shop the chain through exclusive sweepstakes, text-towin contests, and bundles with GetGo’s fresh food offerings. Her passion for the beverage category has led to a two-year stacked sales growth of 14.5 percent. • Last year, Chmura received one of the company’s highest honors, the Chairman’s Award for Entrepreneurship, and is currently involved in Giant Eagle’s Women’s Business Resource Group and the Young Professional Business Resource Group.

CHIARA CUBERO Merchandising Administration Manager ExtraMile Convenience Stores LLC • Cubero has been with ExtraMile since its inception. Starting as a franchise business consultant, she supported a diverse, mature market where she was able to increase sales and grow profitability. • Most recently, she took on the role of merchandising administration manager supervising the price book and rebates teams. • Prior to joining ExtraMile, Cubero wore many hats in sales, sales management and recruiting. Most recently, she worked for Chevron Stations Inc. in workforce management before having the opportunity to join the development program, which introduced her to the retail network and company-operated Chevron stations.

SANDRA DEAS Senior Director of Marketing, New Platform Innovation and Foodservice Ruiz Food Products Inc. • Deas joined Ruiz Foods in 2015. Today, as senior director of marketing, she leads new platform innovation for the United States and Canada and works directly with the sales team to bring innovation to the marketplace. Her recent c-store introductions include El Monterey Empanadas and Not Your Nonna’s Stuffed Pizza Wedges. • An accomplished marketer, Deas implemented a new process that incorporates convenience store consumers and operators into the product development process, as well as defines the innovation pipeline at Ruiz Foods. • The 20-year marketing veteran began her career at Ford Motor Co. and entered the food arena at General Mills. She holds an MBA from UCLA and is a member of the Women’s Foodservice Forum.

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Congratulations Megan Chmura! Senior Category Manager, Center Store Megan has demonstrated a commitment to building the GetGo business and brand through strong partnerships with the vendor community, leading with innovation, and building customer loyalty with winning products and promotions. We are proud of Megan’s accomplishments and to have her on our Team. Congratulations to Megan on being named a 2020 Rising Star!

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COVER STORY

RISING STARS

MADISON EVERETT Category Manager, Alcohol EG Group • Four years ago, Everett was the buying assistant for beer and went on to manage the candy category at EG Group. When the company acquired Cumberland Farms in 2019, she was chosen to spearhead national planning to execute a new strategy to lead growth in the beer category. • Coordinating cross-functionally with wholesalers and KAMs for pricing and promotional strategies across various markets, Everett makes strategic decisions for accepting new items and developing efficient cooler planning to maximize margins and assortment. • According to her nominator, she has “managed to bring together structure and uniformity in these challenging times. She is ahead of her time with understanding the flexibility needed to handle multiple markets and she has developed clear and defined processes that manufacture results.”

NICKI HEITZLER Senior National Account Manager Altria Group Distribution Co. • Among Heitzler’s primary responsibilities is to cultivate relationships with internal and external stakeholders, and to influence and develop solutions. As a people leader, she directs and empowers a high-performing team by establishing a strong culture of engagement, collaboration and inclusion, her nominator noted. • One of her primary accounts is QuikTrip Corp. (QT), where she developed cross-functional relationships, allowing her to take a collaborative approach in influencing her account on loyalty best practices and user experience. She also took ownership in strengthening alignment between QT and Altria’s Regulatory Affairs teams. • Heitzler, who started with Altria in 2002, has received a total of 27 public accolades for her contributions. She holds a position on Altria’s Women in Sales Employee Resource Group steering committee and an officer position in the North Texas Region of the Network of Executive Women.

ERIN KING Senior Category Manager 7-Eleven Inc. • King has been with 7-Eleven for 12 years, joining the c-store retailer after college in a data entry position. Today, as a senior category manager, she oversees the health and beauty care category, as well as packaged grocery. • A visionary, King saw the growing opportunity in CBD and worked tirelessly and professionally with 7-Eleven’s legal team to launch products that fit within the legal guidelines and are the highest quality possible. She assisted in educating the entire organization through the 7-Eleven Experience to help franchisees make the best decisions for their stores. King also pioneered introducing the Morning After Pill to 7-Eleven stores. • Outside of work, she loves photography and travel and has visited 23 countries and counting. She is also passionate about the rescue and advocacy of pit bulls.

KIM LAMBERTH Senior Account Manager McLane Co. • Lamberth joined McLane 23 years ago and currently leads account teams in multiple national channels, including the convenience industry. She is accountable for growing sales and profitability for McLane and its customers, developing strong team processes, maximizing efficiencies across the supply chain, and training and developing teammates. • With responsibility for $1.6 billion in annual sales, she develops and implements successful solutions that best serve her customers. She oversees the business activities and relationships with six McLane customers, including Albertson’s and Brookshire’s c-stores. • According to her nomination, Lamberth is “passionate about looking at the big picture, analyzing data and turning over every rock to meet objectives. She is committed and loyal to her customers and works each day to help them succeed in the ever-changing, challenging retail environment.”

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COVER STORY

RISING STARS

KAREN MALLOY Senior Grow People Business Partner Kum & Go LC • Malloy serves as the strategic business partner to Kum & Go’s senior leaders. She is responsible for Kum & Go’s corporate headquarters initiatives, including talent planning, organizational design, and associate engagement. • She was instrumental in the design and execution of the retailer’s move to a new human capital strategy for its store teams, which included set schedules for associates, captainships, and enhanced benefits. • According to her nominator, Malloy has “assisted our leaders in further prioritizing the needs of our associates over other considerations. She is influencing the path forward for Kum & Go.”

KIMBERLY MATHE-CUELLAR Category Manager, Beer & Wine OnCue Marketing LLC • Since Mathe-Cuellar joined OnCue in 2019, overall wine dollars at the c-store chain have increased by 38 percent and overall beer dollars have increased by 22 percent. • The category manager is a certified sommelier and holds numerous other beverage-specialist certifications. She received her Ph.D., Master of Business Administration degree, and bachelor’s degree from Oklahoma State University. • Mathe-Cuellar is the founder of the Craft Beer Forum of Oklahoma, the largest beer education event in the state, and was previously executive director of the Wine Forum of Oklahoma, the largest wine event in the state.

CAITLIN MCCORMICK Manager, General Sales Core-Mark International • McCormick joined Core-Mark in 2015 as marketing program manager and was promoted to director of marketing programs, before moving into her current role as general sales manager for the Los Angeles Division. • This is her second Top Women in Convenience award in the Rising Stars category. Her aspirations to build strong relationships and help grow the industry drive her each day and lead her to develop a strong team and

partnerships with customers. • According to her nominator, McCormick has “shown the ability to rise to the top of an industry that is in a constant state of change. She has led her team with tact and integrity while driving long-term, sustainable results.”

SARAH MONTGOMERY Sales Director Applied Data Corp. • Montgomery is responsible for educating and delivering value to the convenience store market surrounding foodservice management (prepared foods). A key part of her responsibility is to understand each brand’s areas of opportunity and growth by analyzing critical foodservice data and processes at the store level — waste, sales opportunities, process gaps/ opportunities, forecasting, and more. • She works with c-store brands that range from 10 locations all the way up to 2,000-plus locations. During her time with the company, she has helped more than 3,000 c-store locations understand and maximize their prepared foods strategy. • Her goal is to drive value-added services to the convenience foodservice industry. Her favorite part of her job is the opportunity to provide c-stores an advantage in the competitive foodservice space, and directly impact her customers’ sales and waste through purposely built c-store technology.

KRISTIN OEHLKE Senior Customer Manager Clif Bar and Co. • Oehlke is responsible for the Central Region Territory for Clif Bar, which extends from Arizona east to Texas and north to Illinois. She manages the broker relationship within that territory and is the prime contact for the largest customers in that market area. • Bringing 20 years of c-store experience to her sales role, she manages the business for several of Clif Bar’s largest customers, including 7-Eleven Inc., McLane Co., QuikTrip Corp., Love’s Travel Stops & Country Stores, Eby-Brown, and Circle K (Arizona and Texas). • According to her nominators, she is “a powerful and persuasive advocate for the c-store industry” inside Clif Bar and because of her many years in the industry and her personal relationships with her customers, she’s “able to bring a strong, clear point of view to the table.”

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COVER STORY

RISING STARS

JILLIAN PETERSON Director of Fuel, Coastal Carolina Alimentation Couche-Tard Inc./Circle K • Peterson played a significant role in a critical initiative project across the Global Fuels network to include artificial intelligence and machine learning, along with heading up a frictionless payment program and the Easy Paycard launch within her business unit. • She was recently chosen to take part in the company’s 18-month Global Leadership Forum, an internal program designed to help employees grow into the next steps of their careers by learning about leading at a higher level and understanding the global business. • Peterson is an active member of Couche-Tard’s Women’s Council, which has led to her mentoring individuals outside of her current team.

SARAH SPRAYBERRY Account Executive Coca-Cola North America • Under her leadership, the Coca-Cola team was chosen as the Beverage Category Captain for Segmentation at Circle K, where she established exclusive still beverage agreements and executed breakthrough beverage marketing programs. • Sprayberry has more than 20 years of experience with Coca-Cola Enterprises, Coca-Cola Refreshments and The Coca-Cola Co., working with customers spanning all retail channels, in addition to channel commercialization operations and category commercialization. • Her nominator describes her as a dedicated and determined worker, always looking for ways to grow her business and to provide value to her customers. In addition to being a top-notch professional, she is “a complete joy to work with, always building team engagement and creating a valued connection with her co-workers and customers.”

NICOLE THRASH Senior Chain Sales Executive Molson Coors Beverage Co. • Thrash is responsible for four divisions of QuikTrip Corp. and the 14 distributors that service those divisions. She is accountable for developing and

executing plans to deliver on topline growth and profit, as well as launching innovation. • She has grown total category revenue and profit for the QuikTrip divisions she is responsible for and has been recognized by the customer as best-in-class regarding category insights. She was named National Account Executive of the Year. • Thrash and her trained Goldendoodle, Scooby, give back to the community by visiting local nursing homes and children’s homes spreading joy and providing emotional support.

JULIE TRAPP-CLARK Senior Category Manager, Alcohol 7-Eleven Inc. • Trapp-Clark and her team take consumer insights and alcohol industry trends to build multi-year category strategies that include assortment, promotions, marketing and merchandising to execute at the store level. • During her time at 7-Eleven, she has brought a fresh perspective on how to be a market leader in the alcohol space and has championed the early adoption of emerging segments for beer, making 7-Eleven a destination for new items. • Trapp-Clark has helped the retailer expand 7Rewards membership by using beer rebates during peak periods of the year to drive traffic.

JENNIFER WEITKAMP Restaurant Manager Rutter’s • Weitkamp started at Rutter’s as a roving store manager before taking on her own store as the restaurant manager. She is currently restaurant manager for Rutter’s Store No. 11, a high-volume and topperforming location within the chain. • She is a member of the company’s select Manager Advisory Board, meeting with President and CEO Scott Hartman every quarter to discuss how to continue improving the organization. • In 2019, Weitkamp was a finalist for Rutter’s Restaurant Manager of the Year award. The previous year, she received Rutter’s Special Recognition Award, presented to a manager that has excelled and successfully taken on challenges.

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© 2020 ITG Cigars Inc.

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COVER STORY

MENTORS

ROBIN DONOHO Director of Marketing, Southeast Alimentation CoucheTard Inc./Circle K • As director of marketing for Couche-Tard’s Southeast Business Unit, Donoho is responsible for developing a team to engage in marketing and sales campaigns to drive traffic and sales. She handles all components of developing and executing the merchandise sales goals and budget. • Her 24-year career with Couche-Tard has spanned from roles in human resources to operations. She began as a store manager in Arizona after graduating from college. • Donoho has always considered herself a mentor. She recognizes and develops people’s strengths and helps build on areas they can improve to maximize their full potential. She leads with the mindset of people first, thus empowering her team to grow.

RACHEL BEAUCHAMP NESS Senior Category Manager, New Food Concepts RaceTrac Petroleum • Ness leads RaceTrac’s New Food Concepts team in ideating, developing and rolling out the newest and most innovative food concepts to store-level execution. In July 2019, she helped develop and execute RaceTrac’s first grab-and-go fried chicken offer and used that momentum to fuel RaceTrac’s Sizzlin’ Chicken made-to-order offer, which debuted two months later. • During her almost 10 years at RaceTrac, she’s served in a variety of roles on the merchandising team. She has worked on, or led, several product categories within RaceTrac’s Food Programs & Offers department. • With her two direct reports, Ness makes sure she dedicates time to their personal and professional development. She leads by example and is always looking for ways to make her team members’ and RaceTrac’s guests’ lives simpler and more enjoyable, as the company mission states, according to her nominator.

VICKI SPANGLER Pricebook Manager Rutter’s • Spangler started at Rutter’s in 1984 as a part-time team member and was quickly recognized for her outstanding performance. She moved to the corporate office, working in the accounting department as an accounts payable clerk. She was later promoted to Pricebook Coordinator, and then to her current role of Pricebook Manager. • After many years of running Pricebook on her own, she is now doing it as the manager of three coordinators. She has mentored all of them and brought them into the fold in a timely manner, further improving the marketing team’s capabilities. • Spangler has played a major role in the development of Pricebook at Rutter’s to allow for tracking inventory, as well as the communication of accurate product setup, price changes and promotional activity throughout the entire chain.

ALICIA WEST Vice President, Midwest Regional Sales Altria Distribution Group Co. • West leads the Midwest Region Field Sales organization for AGDC, spanning 13 states. In addition to 11 direct reports, her organization includes 500plus employees. • According to her nominator, West is a leader in diversity and inclusion, both in her community and in the workplace. She has made significant strides within AGDC to help foster females and help them succeed in the organization. • She is a leader in the company’s Women in Sales Employee Resource Group, and also serves on the boards of Communities in Schools of Chicago and the Altria Companies Employee Community Fund.

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FEATURE

A Red-Ink First Half The Convenience Store News Midyear Report Card reveals the pandemic’s early effects By Don Longo CONVENIENCE STORE retail sales plunged into the red as COVID-19 caused economic shutdowns across the country, which adversely affected store traffic and fuel volume. There was an initial sales boom driven by panic-buying of basic essentials when the pandemic first gained notoriety in early to mid-March. However, soon after that, nationwide shelter-in-place restrictions destroyed demand for fuel and depressed customer traffic inside the store. Foodservice, including prepared food, fresh baked goods, and hot and cold dispensed beverages, were particularly hard-hit.

The 2020 Convenience Store News Midyear Report Card shows that most in-store

CIGARETTES ARE SMOKIN’ AGAIN The headwinds against cigarettes reversed during the first half of 2020. Dollar sales bounced back from a 5 percent decline during the first half of 2019 to a slight gain in the first six months of 2020. Unit-volume decline also moderated, falling 5.6 percent, compared with a steeper 7.9 percent drop in the year-ago period. Subgeneric/private label brands showed the biggest increase during the first half of the year, rising 9 percent in dollars and 3.1 percent in units. Premium brands also made a comeback, rising almost 1 percent, after a 4 percent decline in the previous year’s first half.

product categories were negatively impacted by the pandemic during the first six months of this year. Of the major categories tracked by Nielsen, beer exhibited the greatest percentage dollar growth in the first half of 2020. Edible grocery and non-edible grocery also saw uncommon sales gains as sheltering consumers bought essential grocery items and cleaning supplies at c-stores. Cigarettes, cigars and smokeless tobacco also performed well in the first half. Most other categories, however — especially those reliant on impulse purchasing — were negatively impacted by the coronavirus pandemic, including gum and mints, packaged beverages, and salty snacks. Seasonal candy was also hurt as the Easter selling season fell right in the midst of the worst part of the health crisis.

Fourth tier brands and imports showed the biggest declines in the category, losing 16.1 percent and 14.4 percent in dollars, respectively. Branded discount brands were also down, about 5 percent in both dollars and units.

Total Cigarettes Branded discount Fourth tier Imports Premium Subgeneric/private label

DOLLAR SALES % CHANGE 2020 FIRST-HALF

0.2% -4.9% -16.1% -14.4% 0.8% 9.0%

DOLLAR SALES % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2020 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

-4.9% -11.4% -14.7% -14.3% -4.1% 7.6%

-5.6% -7.9% -10.3% -11.5% -25.6% -20.6% -11.2% -6.4% -5.1% -7.2% 3.1% 7.8%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2020

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PACKAGED BEVERAGES SENT PACKING Adversely affected by the c-store traffic declines, packaged beverage dollar sales were down a little more than 2 percent during the first six months of 2020, on a nearly 7 percent decline in unit volume. Every subcategory took a hit except sports drinks, which managed a 3.8 percent dollar gain, according to the CSNews Midyear Report Card. The biggest declines were seen in bottled water, down almost 11 percent in dollars as panicked consumers bought in bulk at grocery stores, and enhanced waters, down 9 percent in dollars. Carbonated soft drinks (CSDs) actually performed better than expected, falling 6 percent in volume on flat dollars during the first half of the year. A year ago, CSDs were down 8 percent in volume and 2 percent in dollars. BEER KEEPS FLOWING The beer category has been a silver lining in the current crisis. Total beer category dollar sales were up 12 percent in the first half of this year, while unit sales were up 3.8 percent. Last year at this time, both dollars and unit sales were relatively flat. Within the category, dollar sales gains on a percentage basis were strongest in flavored malt beverages, likely due to the growing popularity of hard seltzers. Non-alcoholic, super premium and import beers also made a strong showing. And microbrew/craft beer reversed its year-ago trend by increasing 8 percent in both dollars and units, after a disappointing flat performance in the first half of 2019. The only subcategory in the red for the first half of this year was malt liquor, which for the second consecutive year recorded the biggest decline in both dollars and units. OTP STALLS Other tobacco products (OTP), one of the fastestgrowing categories of the past several years, hit a roadblock during the first half of 2020. Dollar sales, which grew by double-digits a year ago, were up less than 2 percent for the period. The biggest culprit was e-cigarettes, which saw an 8.6 percent decline in dollar sales during the first half of the year, after exploding by 76.5 percent the year earlier. OTP bright spots for the first six months of 2020 were cigars and smokeless tobacco. After declining by more than 3 percent in dollar sales a year ago, cigars climbed back up by more than 7 percent; unit volume was up almost 4 percent. Smokeless tobacco saw a 7 percent dollar sales gain on flat unit volume. Both figures surpassed last year’s at the midway point.

DOLLAR SALES % CHANGE 2020 FIRST-HALF

Total Packaged Beverages -2.2% Energy drinks (i.e., alternative beverages) -0.7% Bottled water -10.9% Carbonated soft drinks -0.2% Enhanced water -9.3% Iced tea RTD -8.0% Juice/juice drinks -5.0% Other packaged beverages -2.5% Sports drinks 3.8%

UNIT VOLUME % CHANGE 2019 FIRST-HALF

-6.7%

-4.9%

8.4% -5.5% -2.0% 5.3% -6.5% -5.9% 1.5% 0.2%

-1.9% -17.4% -6.1% -12.8% -12.5% -9.8% -5.9% 0.0%

2.9% -8.5% -8.4% 2.3% -8.6% -8.3% -0.1% -8.0%

DOLLAR SALES % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2020 FIRST-HALF

DOLLAR SALES % CHANGE 2020 FIRST-HALF

Total Beer Budget Flavored malt Imports Malt liquor Microbrew/craft Non-alcoholic Popular Premium Super premium

12.0% 0.1% 0.7% 0.1% 59.8% 1.5% 16.7% 7.9% -6.0% -7.3% 8.0% -1.2% 41.4% 3.5% 2.1% -5.3% 1.9% -3.7% 20.4% 13.2%

UNIT VOLUME % CHANGE 2020 FIRST-HALF

1.0%

3.8% -1.5% -4.6% -5.5% 23.9% 1.0% 10.1% 6.4% -7.2% -9.4% 8.3% 0.0% 22.1% -0.1% -5.7% -5.5% -3.0% -3.5% 9.8% 10.4%

DOLLAR SALES % CHANGE 2020 FIRST-HALF

Total OTP Cigars E-cigs Other Papers Pipe/cigarette tobacco Smokeless tobacco

1.9% 15.3% 2.4% -1.3% 7.1% -3.4% 3.7% -3.8% -8.6% 76.5% 3.6% 58.7% 25.5% -7.1% 26.3% -14.8% 8.8% -7.7% 5.2% -8.2% -4.1% -11.0% -8.1% -13.6% 7.0% 0.2% -0.6% -5.5%

Total Edible Grocery Breakfast cereal Condiments Other edible grocery Packaged coffee/tea

DOLLAR SALES % CHANGE 2020 FIRST-HALF

DOLLAR SALES % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

DOLLAR SALES % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2020 FIRST-HALF

UNIT VOLUME % CHANGE 2020 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

7.3% 0.3% 2.6% -2.2% -7.5% -0.3% -12.4% -3.5% 13.1% -2.6% 10.4% -1.8% 11.1% -3.0% 8.0% -3.4% 3.6% 3.8% -2.1% 0.0%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2020

EDIBLE GROCERY GAINS Consumers turned to convenience stores for everyday grocery items at the beginning of the pandemic. Edible grocery sales improved in the first half of 2020, climbing a solid 7.3 percent in dollar sales on a 2.6 percent increase in unit volume. Condiments (up 13.1 percent) and other edible grocery (up 11.1 percent) were the best subcategory performers.

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DOLLAR SALES % CHANGE 2019 FIRST-HALF

2020

Convenience Store News

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FEATURE

TAKING A SHINE TO GENERAL MERCHANDISE Batteries and seasonal products were two outstanding subcategories that drove sales in the general merchandise category in c-stores during the first half of the year. While seasonal products were up 13.1 percent in dollars and 2.9 percent in units, batteries gained 12.7 percent in dollars and 7.3 percent in units. Still, total general merchandise category dollar sales declined 4.4 percent and units fell 8.1 percent in the first half. Hardware/housewares, school/office supplies, telecom hardware and wearables/apparel all experienced sales declines compared to the first half of 2019. GUM, MINTS & DROPS DROP Lighter customer traffic means fewer opportunities for impulse sales and this greatly impacted the candy category in the first six months of the year. Confectionery sales were down 2.8 percent in dollars and 11.5 percent in units. Rolls, mints and drops were down a whopping 20.5 percent in dollars and 23.7 percent in units, while gum was down 21.5 percent and 27.8 percent, respectively. It’s likely that the lower level of social activity during the pandemic depressed gum and mint sales. Seasonal candy also took a hit as the Easter holiday was all but forgotten amidst the pandemic. Chocolate bars and packs, up 3.6 percent in dollars, and bagged/repacked/pegged candy, up 3.2 percent in dollars, were the best performers in this category during the first half. SALTY SNACKS GO STALE Not a single subcategory within salty snacks had a dollar or volume increase during the first half of 2020 — a testament to the devastating impact of the economic shutdowns caused by the pandemic. The total category was down 7.6 percent in dollars and 13.1 percent in units. The most adversely affected subcategories were nuts/ seeds (down 15.8 percent in dollars), mixed snacks (down 8.4 percent in dollars), crackers and potato chips (both down 7.8 percent). Puffed cheese (down just 2 percent) experienced the lowest percentage decline in sales dollars. STOCKING UP ON NON-EDIBLE GROCERY Non-edible grocery products saw solid sales gains at convenience stores in the first half of 2020 as Americans hunkered down in their homes, but needed essential household items, especially cleaning supplies. The category grew 3.3 percent in dollar sales on a slight unit gain. Certain subcategories, though, far exceeded that growth rate. Dish care was up 15.3 percent in dollars and 12.1 percent in units. Household care, laundry care, paper/plastic/foil and other non-edible grocery also saw big dollar sales gains, according to the Midyear Report Card. CSN

DOLLAR SALES % CHANGE 2020 FIRST-HALF

DOLLAR SALES % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2020 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

Total General Merchandise -4.4% -11.5% -8.1% -14.4% Batteries 12.7% -8.5% 7.3% -9.9% Hardware/housewares -23.3% -20.4% -15.8% -28.1% School/office supplies -18.6% -17.4% -18.7% -16.2% Seasonal 13.1% 12.8% 2.9% 8.9% Smoking accessories -3.5% -10.2% -7.6% -12.7% Telecom hardware -15.1% -22.6% -17.3% -31.5% Video/audio tapes 4.0% -45.0% 153.4% -67.0% Wearables/apparel -11.1% 2.9% -8.7% 5.5%

DOLLAR SALES % CHANGE 2020 FIRST-HALF

DOLLAR SALES % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2020 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

Total Candy -2.8% -1.4% -11.5% -6.1% Chocolate bars/packs 3.6% -2.8% -6.6% -5.6% Non-chocolate bars/packs -1.7% -6.0% -12.1% -7.9% Rolls/mints/drops -20.5% -3.6% -23.7% -9.0% Gum -21.5% -2.3% -27.8% -11.5% Bagged/repacked/pegged 3.2% -0.5% -5.6% -4.5% Novelties/seasonal -25.9% 12.0% -29.5% 3.8%

Total Salty Snacks Crackers Mixed Nuts/seeds Other salty snacks Packaged RTE popcorn Potato chips Pretzels Puffed cheese Tortilla corn chips

Total Non-Edible Grocery Dish care Household care Laundry care Other non-edible grocery Paper/plastic/foil Pet care

DOLLAR SALES % CHANGE 2020 FIRST-HALF

DOLLAR SALES % CHANGE 2019 FIRST-HALF

UNIT VOLUME % CHANGE 2020 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

-7.6% 4.1% -13.1% -3.4% -7.8% 3.2% -15.1% -3.0% -8.4% -2.9% -13.4% -6.5% -15.8% -0.1% -22.0% -4.7% -4.1% 4.8% -7.6% -1.7% -7.3% 0.6% -11.4% -6.1% -7.8% 3.0% -12.4% -5.7% -6.6% 1.8% -14.7% -3.8% -2.0% 9.7% -6.6% 0.5% -6.5% 8.1% -11.3% -0.6%

DOLLAR SALES % CHANGE 2020 FIRST-HALF

DOLLAR SALES % CHANGE 2019 FIRST-HALF

3.3% -4.0% 15.3% -7.4% 3.1% -9.7% 1.3% -1.0% 11.9% -8.4% 8.4% -4.6% -3.8% 2.6%

UNIT VOLUME % CHANGE 2020 FIRST-HALF

UNIT VOLUME % CHANGE 2019 FIRST-HALF

0.4% -5.5% 12.1% -8.4% 4.3% -10.6% -3.8% -6.4% 9.6% -11.6% 6.4% -8.0% -8.9% -0.9%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2020

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FOODSERVICE

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

Seeking Stress Relief Consumers turn to CBD products to relax during these stressful times consumers (48 percent) are interested in trying products or dishes that contain CBD, according to Datassential research. So, while this is still an early-stage trend in the Inception stage, it has plenty of room to grow. And we know that consumers are more stressed than ever in 2020, so there likely will be increased demand for products that help them relax.

NEARLY HALF OF

Cannabidiol (CBD) and tetrahydrocannabinol (THC) are natural compounds found in the cannabis plant. According to Food and Drug Administration legal requirements, CBD is a single compound of hemp, while marijuana is a specific type of cannabis plant that

includes both THC and CBD. Studies have shown that CBD can improve inflammation, anxiety, seizures and pain management based on the impact from the endocannabinoid system. Because CBD has no psychoactive properties, but still a euphoric effect, it is legal in most states. Nearly two-thirds of consumers are aware of CBD, and 21 percent of consumers have tried it. Among those who have tried it, two-thirds like it or love it. This points to a huge growth opportunity once more trial is achieved. Millennials are driving the trend as they have a significantly higher affinity for CBD than the average consumer.

CBD Beverages Take the Stage

While CBD currently has low penetration on foodservice menus, it has had more success in the retail world thus far, likely due to regulatory hurdles. Ready-to-drink CBD-infused beverages are predicted to be the largest CBD category in the food and beverage world, as these products are already taking off in the space. CBD beverages fit into existing beverage trends such as functional ingredients, sparkling drinks, and playful flavors like tropical fruits, botanicals and savory notes that add interest to these refreshing drinks. For example, Recess sparkling waters incorporate other adaptogens — ingredients like ashwagandha that are believed to improve the body’s reaction to stress — as well as trendy flavor combinations like peach ginger, blackberry chai, and pomegranate hibiscus. CBD beverages also play into the sober curious movement, offering an alternative, spirit-free way to relax that is perceived to be healthier than drinking alcohol. And perhaps most importantly, CBD beverages command a premium price point and can elevate convenience store beverage offerings. Capitalize on this trend today! CSN

Datassential’s coronavirus research takes an exhaustive look at industry topics impacted by the COVID-19 crisis. For free access to all of its coronavirus reports and resources, visit Datassential’s COVID-19 page at datassential.com/coronavirus.

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Planning for an Uncertain Foodservice Future The 2020 Convenience Store News Foodservice Study examines the obstacles and likely changes for convenience foodservice retailers in the post-COVID world By Angela Hanson

a major chain or a small operator, focused on made-to-order food or grab-and-go, a category veteran or building a new program, convenience stores that offer foodservice all have something in common this year: the novel coronavirus pandemic is having a significant impact on both their current operations and their plans for the future.

WHETHER PART OF

COVID-19 was a constant echo throughout retailers' responses in the 2020 Convenience Store News Foodservice Study. The spread of the disease has affected business operations, safety measures and consumer mindsets, and it’s prompted widespread changes to foodservice programs. Some of these changes will end when the danger does, but others are expected to become permanent. Operators are also making plans for numerous program improvements that will help them stand out from the crowd once normal operations resume. However, there is a certain level of uncertainty whether their plans will even be feasible once the smoke clears. "[It] depends how everything fares out with COVID-19," acknowledged one retailer.

A Shifting Competitive Landscape

It’s not only c-stores that are having to navigate the significant impact of the coronavirus pandemic; all foodservice purveyors are in flux, responding as best they can to these unprecedented times. As such, competition within the category grows fiercer. According to CSNews’ exclusive research, c-store operators still view other c-stores as their foremost competition. Outside the channel, operators consider chain sandwich stops such as Subway and Quiznos, McDonald's, and other national/regional quick-service restaurants (QSRs) as their biggest competitive threats. But c-store retailers also see themselves

Biggest Obstacles to Foodservice Success

Total

Small Large Operators Operators

COVID-19 restrictions on self-service food and beverage

69%

65%

76%

Changes in store traffic and trips due to COVID-19

62%

57%

71%

Lower foot traffic in stores

49%

53%

42%

Difficulty in hiring & retaining employees

35%

39%

27%

Supply chain

28%

29%

27%

Negative consumer perceptions around c-store foodservice

23%

21%

27%

Lack of alternative shopping options (i.e., mobile ordering, curbside pickup, delivery)

17%

10%

29%

Operational inefficiencies at store level (i.e., quality control, consistency issues)

15%

13%

20%

Increasing competition for foodservice business

13%

10%

17%

Finding the right products/programs

12%

10%

15%

Note: Shading indicates a statistically significant difference at 95% confidence level

as competing against everything from coffee shops to grocery stores, food trucks and drugstores. The lines between foodservice industry segments are getting increasingly blurrier; more than they’ve ever been. Restrictions on dine-in operations due to the pandemic likely exacerbated this, as virtually all foodservice outlets could only offer takeout or delivery for a period of time. C-store operators seeking to make a name for their foodservice programs have always faced a variety of obstacles to their success, but issues such as hiring and retaining good employees are no longer the most critical. The spread of the COVID-19 pandemic both created new obstacles and increased the challenges posed by existing ones.

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FOODSERVICE

Nearly seven in 10 retailers taking part in this yearâ&#x20AC;&#x2122;s Foodservice Study cite COVID-19 restrictions on self-service food and beverage as a top obstacle. Changes in store traffic and trips due to COVID-19 (cited by 62 percent of respondents), lower in-store foot traffic (49 percent) and supply chain issues (28 percent) also landed high on the list. And 35 percent of retailers still consider difficulty in hiring and retaining employees to be a major obstacle. With no consistent federal response to the pandemic, variances in local restrictions and area competition seem to be making a difference in the challenges that individual c-stores face. While some operators report slower business, others have experienced the opposite. "Since we are an essential business and bars and restaurants were closed, we gained traffic in-store," one retailer commented.

COVID-19 Operational Changes: Made Change Total

Some of the new food and beverage options retailers plan to add include improved coffee bars, espresso beverages, and bean-to-cup equipment for its single-use capability; more ethnic foods and healthy options; and more hot breakfast and grab-and-go offerings. Larger takeout package sizes and a heatand-eat business are also under consideration by some, likely due to increased demand for takeout and delivery meals during the pandemic. "[We'll] introduce new items and try to understand what the (hopefully) post-COVID customer is craving," noted one retailer. Many c-store operators report that theyâ&#x20AC;&#x2122;re considering or definitely adding online ordering, delivery and contactless payment options in the near future, and other technology enhancements are also in the mix. "We will be installing production/waste software to better track our sales/waste," said one operator.

Large Operators 89% 87% 93%

Implemented more rigorous cleaning

84% 81% 90% 78% 78% 78% 73% 70% 78%

Installed social distancing markers Installed plexiglass at checkout Employees required to wear face coverings 59% 52%

Implemented protective measures at self-service food

66% 56% 52% 63%

Implemented protective measures at self-service beverage 41% 36%

Customers required to wear face coverings

49% 39% 35% 46%

Shifted self-serve food to full-service

36% 36% 37%

Added contactless payment in-store Added curbside pickup Added buy online pickup in-store Added delivery services Added pumpside pickup

73%*

57% 52%

Reduced capacity in-store

Newer, Better & Safer

Looking ahead, retailers have a wide variety of plans in mind to change and/or enhance their foodservice programs in the post-COVID world. Adding new food and beverage options, increasing efficiencies and investing in targeted advertising and promotions are the top-ranked means of improvement, along with pandemic-driven changes that emphasize cleaning and sanitary protocols and the expansion of digital and contactless purchasing options.

Small Operators

27% 26% 29% 19% 14% 27% 16% 16% 17% 11% 13% 7%

Note: * indicates a statistically significant difference at 95% confidence level

COVID-19 Operational Changes: Expect to Keep Change Total

Small Operators

Large Operators 58% 56% 61%

Implemented more rigorous cleaning 37% 38% 37%

Installed plexiglass at checkout 31% 29%

Installed social distancing markers

32%* 26% 25% 29% 23% 23% 22%

Implemented protective measures at self-service beverage Employees required to wear face coverings Added contactless payment in-store Customers required to wear face coverings Added curbside pickup Reduced capacity in-store Shifted self-serve food to full-service

37%

26% 23%

Implemented protective measures at self-service food

20% 21% 17% 14% 12% 17% 14% 13% 15% 13% 13% 12% 13% 12% 15%

10% 8% 15% 6% Added delivery services 7% 5% 4% Added pumpside pickup 7% 0%

Added buy online pickup in-store

Note: * indicates a statistically significant difference at 95% confidence level

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FOODSERVICE

Main Competitors for Foodservice Program

• Implementation of more rigorous cleaning (instituted by 89 percent), • Installation of social distancing markers (84 percent), • Installation of plexiglass barriers at checkout (78 percent), • Requiring employees to wear face coverings (73 percent), • Implementing protective measures at self-service food (59 percent), • Implementing protective measures at self-service beverage (56 percent), and • Reducing in-store capacity (57 percent). While both small and large operators in the industry are enacting safety measures, the research shows that such moves are more commonplace among large operators, particularly when it comes to adapting self-service food and beverage stations. Interestingly, as common as measures to prevent the spread of COVID-19 are currently, more rigorous cleaning is the only change that more than half (58 percent) cite as likely to remain long term. This is followed by plexiglass barriers at checkout (37 percent), social distancing markers (31 percent), and protective measures at self-service food and beverage (both 26 percent). As c-stores try to get customers back in the door, they're most likely to lean on digital promotions. About a third say they’ve increased foodservice promotions in the past year, while more than half (54 percent) said they’ve kept their level of promotions steady. Large operators were more likely to amp up their level of promotions in the past year, as 46 percent reported an increase compared to just 23 percent of small operators. Social media is the top channel for foodservice promotion (cited by 58 percent). Other leading channels for promotion are loyalty programs (47 percent), e-mail (29 percent), proprietary mobile coupons/apps (23 percent) and text messages (23 percent). CSN Look in the September issue of Convenience Store News for part two of this research.

Total

Operational enhancements aimed at protecting customers and employees from contracting the virus and limiting its spread are now widespread across the industry, particularly:

Small Large Operators Operators

Other c-stores

57%

47%

76%

Chain sandwich shops (Subway, Quiznos, etc.)

37%

31%

49%

McDonald’s

32%

29%

39%

Other national/regional QSRs

28%

20%

44%

Fast casual chains (Panera Bread, Chipotle, etc.)

26%

21%

37%

Grocery stores

24%

29%

15%

Coffee shops

22%

17%

32%

Food trucks

11%

10%

12%

Drugstores

2%

3%

0%

Other

5%

7%

2%

None

3%

4%

0%

Don't know

4%

5%

2%

Note: Shading indicates a statistically significant difference at 95% confidence level

Past-Year Shift in Foodservice Promotions Total

Small Operators

Large Operators

54%

9%

58% 46%

31%

13%

46%* 23%

2%

Decreased

Stayed the Same

Increased

Note: * indicates a statistically significant difference at 95% confidence level

Channels for Promotions Total

Small Operators

Large Operators

Social media

51%

Loyalty program 21%

Proprietary mobile coupons/mobile apps

16%

Radio Paper coupons

8% 5%

TV

4%

22% 24%*

12% 20%

11% 22%*

9% 20%*

8% 7% 10%

Other None

34%*

14%

8%

Geofencing push notifications

34%* 22%

39%* 17% 14%

Third-party mobile coupons/mobile apps

23%

18%

7%

Direct mail

44%* 39%*

17%

Billboards

66%*

29%

23%

14%

Text message

71%*

47%

36%

Email

58%

13% 0%

20%*

Note: * indicates a statistically significant difference at 95% confidence level

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

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TOBACCO

The New Tussle Around Tobacco Dollar stores are not a formidable tobacco player yet, but they could very well be By Renée M. Covino AS MORE AND MORE grocery, drug and mass retailers renounce their role as tobacco merchants, convenience stores have happily stepped in to fill the void. They’ve benefitted from the fact that tobacco was not seen by these retailers as a good match for the health-and-wellness and familyoriented positioning they now want to own.

“C-store share of tobacco sales ballooned over the past three decades, primarily for this reason,” said Don Stuart, managing partner at Wilton, Conn.based Cadent Consulting Group. But don’t plan the celebration just yet. There’s a new emerging tobacco player in town: dollar stores. And this channel is growing rapidly across the United States. The growth of tobacco in dollar stores can mostly be attributed to distribution builds — new stores adding to the category, according to Don Burke, senior vice president of Management Science Associates (MSA), based in Pittsburgh. Dollar General has added 1,000 stores per year, and the “Dollar Tree/Family Dollar combination is a powerful one,” he told Convenience Store News. Currently, dollar stores represent about 2 percent of all tobacco sales in the U.S. and account for about 8 percent of all retail stores in the nation, according to MSA, which tracks shipment data to stores in various retail channels. Meanwhile, the convenience channel represents 71 percent of all tobacco sales in the U.S. and accounts for approximately 57 percent of all retail stores in the nation. “So, the dollar channel has a ways to go,” Burke noted.

The Demographic Fit Nevertheless, dollar stores make a good fit for the tobacco category. “They are more often than not located in rural areas where their convenience and access are heightened,” said John Orr, senior vice president of retail at human capital management software company Ceridian. “The demographic targeted at their location choices also have higher tobacco use.” Stuart agrees, pointing out that the dollar store customer skews toward lower income — a demographic group with higher incidence of tobacco use. “Budgetminded brands should fare particularly well, although dollar store shoppers also relate to leading brands,” he noted. The way MSA’s Burke sees it, dollar stores can be a good fit for tobacco because the items are purchased quite frequently, and dollar stores can capture this business from tobacco consumers when they are already in their stores. However, Burke does not believe dollar stores will become a destination for tobacco as convenience stores are. “Their locations are not nearly as convenient as c-stores and their product selection would have to grow considerably,” he said. Currently, dollar stores are doing well in lower-priced cigarettes, cigars, moist tobacco and pipe tobacco, according to MSA data. The channel tends to do best with those tobacco items that appeal to “the shopper looking for value,” Burke told CSNews. “Items such as little cigars — cigars that are sold in a pack of 20 with a filter, similar to cigarettes, but in some areas can be sold at a lower price than cigarettes, due to a lower tax amount.”

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Any tobacco sold in dollar stores is coming from another channel, as the category has not been growing overall, cautioned Burke. “As convenience stores represent over 70 percent of all tobacco sales, you can infer that the great majority of tobacco sales in the dollar channel is coming from the c-store channel,” he said. Put another way: Although the convenience channel still dominates the tobacco business, c-stores have seen their tobacco sales fall, while dollar stores have experienced increases, albeit off a lower base, Stuart explained. He pointed out that c-stores offer better variety in the tobacco category, but not always the best price points. “There is good opportunity for dollar stores to offer targeted brands at the best possible prices,” he observed. Of course, there are weak points with dollar stores and tobacco sales — namely, decreasing overall tobacco usage and the need to enforce federal laws regarding tobacco sales. Additionally, “minimum pricing laws by state may limit dollar stores’ ability to differentiate, while pilferage concerns create a need for a more controlled service environment,” Stuart added.

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TOBACCO

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“The dollar channel is figuring out the right product mix and once this is achieved, will tend to have even stronger tobacco category sales.” — Don Burke, Management Science Associates just how much of a long-term threat do they pose to c-stores? Burke believes the dollar channel’s tobacco business has staying power. “The dollar channel is figuring out the right product mix and once this is achieved, will tend to have even stronger tobacco category sales,” he predicts. “In addition, the growth in the number of stores, greater than any other trade class, will also have an impact on the amount of tobacco business it captures.” Part of the dollar channel’s tobacco future will be the growing non-combustible product market, just as it is with any tobacco retailer looking to keep pace. Non-combustible products, such as different types of smokeless items, should prove “a reasonable fit” for dollar stores, although not as ideal as cigarettes, according to Stuart. “The younger, slightly more affluent profile of non-combustible items is still a shopper of convenience stores. But the ring of these items is highly appealing,” he said. Orr agrees that non-combustible smoking options will need to increase in the future for the dollar channel, just as it will in all channels. “More discreet options are here to stay,” he said, observing that dollar stores are aware of this as some are already beefing up the alternative forms of tobacco they offer. Dollar stores are positioned to do well with non-combustibles as evidenced by their success with moist tobacco products, and the fact that non-combustible items are doing well almost everywhere, stated Burke. The new “modern oral” category, particularly flavored pouches that contain nicotine but no tobacco leaf, are experiencing the strongest level of growth of any tobacco segment right now, he cited. “Notably, these products can be consumed while wearing a mask, so it will be interesting to see the impact on their growth rate once the prevalence of mask-wearing levels off.” CSN

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PACKAGED BEVERAGES

Getting Back on Track Packaged beverages have not fared as well as alcoholic drinks in the pandemic By Renée M. Covino

people of an unprecedented pandemic are drinking up, but mostly alcoholic beverages at the expense of non-alcoholic packaged beverages.

THE SOCIALLY DISTANT

“Consumers are reaching for products that give them comfort during the COVID-19 pandemic, one of which is alcohol,” said Julie Terrazzino, senior category manager at KeHE Distributors, where she is responsible for the soda, water, ready-to-drink coffee/tea and juice categories. “For many consumers, alcohol has become a stress-reliever and has brought feelings of well-being. Additionally, with bar and restaurant closures, alcohol consumption moved to at-home usage, with consumers purchasing more at off-premise retail such as c-stores.” John Orr, senior vice president of retail for human capital management (HCM) software company Ceridian, describes this as a “micro-shift in buying behavior from hospitality — casual and fine dining — to DIY [do-it-yourself] at home with your own happy hour.” New category terminology is even cropping up. “Alcohol has experienced a clear high from ‘quarantinis’— virtual happy hours — and a somewhat depressed/recessionary environment,” Ben Schulman, business analyst at Cadent Consulting Group, told Convenience Store News. “When people are down, they look to spirits to lift them up, which we have seen in past recessions.” Citing syndicated data, Schulman relayed that alcohol sales at convenience stores were up 23 percent as of press time for the 12 weeks ending in June, vs. the same period last year.

Meanwhile, non-alcoholic packaged beverages have been hurt a bit by limited on-the-go consumption and the inefficiencies of shipping high-weight/low-value items via e-commerce, according to Schulman, citing syndicated data that showed a 6 percent decline across c-stores in packaged beverages for the 12 weeks ending in June, driven largely by water, which was down 20 percent, and by a decline in on-the-go traffic. Terrazzino agrees that the demand for grab-and-go packaged beverages — generally considered an impulse buy at convenience stores and typically purchased for consumption at events, activities and while driving — has decreased considerably thanks to the effects of the coronavirus. “Beverage sales had to move into at-home packaging to accommodate for the event cancelations and closures,” she noted. The increase in alcohol/decrease in non-alcohol purchasing trend at c-stores is not just an American phenomenon, either. “In the current climate, with the stress of a global pandemic and a few months in lockdown behind us, it is unsurprising that consumers want a release, and alcoholic drinks can provide that,” Esther Ward, senior research executive at Harris Interactive in the U.K., told CSNews. “However, a lot of non-alcoholic beverages may be suffering due to pack sizes and portability issues.”

Ready for a Revival

So, what’s a c-store operator to do for category revival? Industry insiders say step one is paying attention to the latest packaged beverage trends, for starters. Terrazzino observes that consumers are leaning into

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AND OUR PIPE, TUBES, CIGARS better-for-you beverages more than ever, specifically drinks with additional functionality, sparkling waters, clean products, and larger at-home sizes. “Beverages with additional functionality, specifically immunity and gut health, are top of mind for consumers as they focus on overall wellbeing,” she said. “Sparkling water continues to grow double-digit percentages, with more than 21 percent of consumers stating they have swapped soda for sparkling water.”

FILTERED CIGARS

Terrazzino also points out that consumers are paying more attention to labels and ingredients, particularly looking for natural, organic, non-GMO and clean products. “Lastly, larger at-home sizes like multipacks and gallons are driving growth given the current state,” she added. Broader beverage trends run the gamut from “purity with a twist” to “functional performance,” according to Schulman. While water and carbonated soft drinks are still mainstays in the packaged beverage space at c-stores, “the twist is being provided by subtle, natural flavor hints and the addition of sparkling in water,” he said.

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He also points to functional performance in the growth of ready-to-drink coffee, and the continued strength of energy drinks. “We also anticipate stronger growth from natural and organic, which has not been fully translated to beverage yet,” he added. Orr sees eco-friendly beverages as part of the revival equation, too, as sourcing and packaging trends take on a more discerning role. “More and more people are now concerned or interested in where the products come from, how long they were in transit, and what the handling specifics are,” he said. “Environmentally conscious buyers also want to see more biodegradable packaging.”

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WILDHORSE

TUBES

Liquid Ideas

The industry experts offer the following ideas for how these broader beverage trends can be used to revive the category and help c-stores maximize their profit potential: Watch the Bouncing Ball: Category trends are changing weekly as COVID-19 surges and ebbs. For example, sugar-sweetened sodas and juices rose during the initial lockdown weeks, while energy drinks and sports beverages declined due to consumer activity decreasing, Terrazzino explained. She suggests keeping the categories that are increasing in sales front and center to help consumers get in and out quickly, reducing their time and exposure in-store, which is more crucial than ever. Key placement near the checkout in coolers and twofer specials have proven to be highly successful, Schulman added.

1839

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PACKAGED BEVERAGES

Cater to the Youth: The younger demographic groups hold the most promise for packaged beverages because they feel they are less at risk of contracting the coronavirus and thus will be on the move sooner than the older demographic groups, according to Terrazzino. “Millennials and Gen Xers are adventurous consumers who love to try new beverages and who drink different types throughout the day,” she said, advising that there’s a huge opportunity to capture sales with a “Treasure Hunt” type of display and assortment. Be Label-Conscious: Align with today’s label-reading consumers by stocking “clean products.” This means beverages without HFCS (high-fructose corn syrup), sodium benzoate, potassium sorbate, and sucralose. Offer At-Home Package Sizes: The idea is for c-store shoppers to realize they can now zip into a convenience store and purchase beverages on their way home. “Think 6-12 soda packs, 8-12 sparkling water packs, or water gallons, Terrazzino suggested. Upsizing can be successful among all packaged beverage segments if the value proposition is present, added Schulman. Bundle, Bundle, Bundle: The more c-stores can promote and bundle packaged beverages with foodservice and snacks, the higher the ring and profitability that can be generated. Especially in these times, c-stores that KinterCSN_PrintAdFINAL.pdf

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leverage their loyalty programs can better understand which types of promotions generate higher cross-category rings and replicate these promotions with higher incidence, advised Schulman. CSN

Current Category Trends

Here are some of the top packaged beverage trends that convenience store operators should consider making room for, according to category experts: • Flavored seltzer/sparkling water • Added functionality, specifically immunity and gut health (kombucha) • Purity with a twist (subtle, natural flavor hints) • Herb and botanical infusions • Natural, organic, non-GMO and clean labels • Larger at-home sizes and multipacks • Collagen-infused teas and other drinks • Biodegradable packaging • Locally sourced/short-transit items • Natural energy drinks • Milk alternatives, such as oat milk

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TECHNOLOGY

Casey's uses advanced business intelligence tools to quickly identify shifts in consumption, as well as to target promotions to shoppers.

Real-Time Retailing Advanced intelligence tools let c-stores rapidly identify and respond to unprecedented conditions By Debby Garbato TRADITIONALLY, retailers have relied on past shopping patterns to implement new strategies. But in the case of the COVID-19 pandemic, there was no past to look at; just an unprecedented, ever-changing present. Suddenly, convenience stores that served meaty sandwiches to construction workers were supplying local families with ice cream and soda. Simultaneously, fuel sales plummeted, curbside pickup spiked, and everybody was demanding toilet paper.

Almost overnight, the nation’s c-stores had to adjust their product mix, promotions and many other business areas. Some lacked a clear roadmap, but those employing advanced business intelligence (BI) tools did not. These tools rapidly access and compile real-time data and marketing and merchandising insights, and then recommend actions. Retailers can turn on a dime, maximizing their performance and competitive position in a challenging market. “COVID-19 changed traffic patterns, dayparts, product and consumer mixes, which considerably changed business,” said Michael Headly, a director in the restaurants, hospitality and leisure practice at New Yorkbased consulting firm AlixPartners. “The construction crowd was hit hard, but the neighborhood perspective became stronger. Retailers had to quickly identify changes

and margin shifts in categories and adjust offerings, promotions and pricing. This is daunting without intelligence tools.” Ankeny, Iowa-based convenience store chain Casey’s General Stores Inc. was not daunted. Having used advanced BI tools for some time, the company was able to quickly identify a big shift toward home consumption. Instead of single-serve beverages, shoppers were opting for 12-, 18- and 24-packs of beer and soda to take home. To respond, Casey’s used a marketing automation tool to tailor its store assortments and displays, emphasizing multipacks. And it gave customers deals such as $5 off on a pizza and an 18-pack (or larger) of beer. COVID-19 also has increased digital shopping, with more people ordering foodservice and groceries for pickup or delivery. With Google Analytics, Casey’s tracks and measures the activities of its new and existing website and mobile app users. “It helps us make decisions on how to merchandise the site, what content to use, and where to put it,” said Art Sebastian, vice president of digital for Casey’s, which operates more than 2,000 c-stores in 16 Midwest states. Changes in shopping habits have impacted marketing, too. Casey’s pinpoints email and text promotions with Einstein AI, part of the Salesforce Marketing Cloud platform. Einstein AI indicates which promos to send to specific customers based on their recent purchases. It tracks open, clickthrough and conversion rates, and whether individuals respond better to texts or emails, both of which can be scheduled weeks in advance.

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“We send emails to millions of customers and need sophisticated technology,” Sebastian said. “We used to send them to everyone, but you don’t want to inundate people.” Now, through a partnership with customer engagement specialist Punchh, Casey’s can create “relevant audience segments” within its Casey’s Rewards loyalty program, enabling it to be more relevant and targeted with vendor-funded promos and stretch promotional dollars, he noted.

Today, almost half of c-stores are conducting these types of surveys, compared to a handful five years ago, according to Ken White, chief operating officer at Kansas City, Mo.-based Service Management Group (SMG). Response rates are better and the information collected is more meaningful. “Surveys can be tied to loyalty programs and delivered through apps, making them more targeted and generating higher response rates. Apps enrich engagement,” he said. “They can offer fuel discounts or other rewards for taking surveys.”

Irving, Texas-based 7-Eleven Inc. also wants to maximize the impact of vendor promotions. Utilizing Alteryx’s Designer tool, it amasses all vendor data in real time in one output, accruing deep insights into hundreds of digital promotions. Another Alteryx tool, Server, lets 7-Eleven send daily snapshots of reports, running on automated schedules, to management.

SMG also collects unsolicited feedback through social media, pulling star ratings and using AI to decipher comments. The results are then pulled into a reporting platform.

“Rather than using Excel to learn what happened, we focus on business outcomes at a quicker pace,” Raghav Nargota, 7-Eleven’s manager of digital analytics, stated in an article on Alteryx’s website. 7-Eleven implemented the technology last year.

POS data, for example, has historically been difficult to handle. It came off the accounting system, was processed, and then made available for analytics. “Moving data required heavy lifting, often resulting in delays and data loss,” said Brett Stewart, chief technology officer at Acumera, an Austinbased provider of managed network and security services.

Convenience retailers are also using advanced BI tools these days to watch for signs that things are returning to “normal.” For instance, using Google Mobility, Casey’s tracks the number of cars on roads and how many fuel customers make in-store purchases. “We’ve seen an uptick the past few weeks as more people hit the road and return to some sort of routine,” said Sebastian.

Driving Change

For many retailers, adoption of advanced intelligence tools — along with apps, digital loyalty programs, mobile ordering/delivery and contactless payment — is being driven by an overall digital transformation, now accelerated by COVID-19. These functions require more sophisticated pointof-sale (POS) systems, as does EMV compliance, prompting upgrades.

User-Friendly Tools

BI tools have become faster and more user-friendly, making them accessible to smaller chains.

Acumera’s AcuLink service pulls data from POS systems and exports it into an analytics engine via a secure, PCIcompliant remote app. (AcuLink also interfaces with legacy devices like DVRs and ATGs.) In addition to guarding privacy, AcuLink helps protect network devices, increase operational efficiencies, reduce tech visits, and resolve problems faster. Some tools do not require an IT person to produce reports; they can be run by any Excel user. Advanced Digital Data Inc. (ADD Systems) in Flanders, N.J., offers Atlas BI, which collects POS data from all business segments and organizes it by desired criteria, like market

“Older POS systems were functional but didn’t have much AI capability. Now, they have additional functions, including the ability to interface with apps, frictionless payments and EMV compliance,” said Suketu Gandhi, partner and leader, digital supply chain, at consulting firm Kearney in Chicago. Amazon’s cashierless stores and use of artificial intelligence (AI) is also driving convenience channel interest in advanced intelligence. “The only way Amazon beats you is with data and insights,” noted Gandhi. “They decipher purchasing intentions.” To better compete, savvy c-stores have implemented upgraded customer relationship management (CRM) systems. Some even incorporate AI-powered voice or visual recognition. Alongside the growth of retail apps, these CRM systems enable retailers to conduct app- or email-based customer surveys using locationlevel feedback.

Using Google Analytics, Casey's tracks and measures the activities of its new and existing website and mobile app users. AUG

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TECHNOLOGY

basket composition or fuel grade. Outside data, such as weather, can be layered on. Using recent history and AI, Atlas produces reports suggesting actions. It also creates exception reports that flag areas of concern. “Five years ago, you needed a code writer,” noted John Coyle, vice president of sales at ADD. Brecksville, Ohio-based True North Energy, which operates truenorth branded convenience stores, uses Atlas BI to monitor foodservice costs at its 109 locations. At self-serve coffee bars, the solution tracks how much sweetener, milk, etc., shoppers use. It also indicates measurements for specific ingredients in prepared food recipes and makes price-change recommendations based on the changing cost of ingredients.

Cleaning Up

Facility management is another area of convenience retailing where BI tools are increasingly coming into play. Along with affecting merchandising and marketing, the COVID-19 pandemic has created greater demand — and accountability — for cleaning services. From May to June of this year, c-stores increased cleaning frequency by 67 percent, according to ServiceChannel, a New York-based facilities management solutions provider. Year over year, June 2020 vs. June 2019, frequency cleaning increased by 24 percent. Atlanta-based convenience store chain RaceTrac Petroleum uses ServiceChannel’s cloud-based software to digitally source cleaning and maintenance contractors, while tracking jobs and costs across its stores. An analytics function tracks costs by multiple criteria. The tool’s on-site mobile/GPS check-in monitors when contractors arrive and depart, and consolidates and stores invoices and payments. A Site Audit app lets management conduct immediate, comprehensive on-site audits or generate new work orders. Plus, the app lets c-stores track COVID-19 related expenses for legal, tax and insurance purposes. Since implementing the software, RaceTrac’s number of help tickets requiring direct manual intervention declined by 50 percent, according to ServiceChannel. Tom Buiocchi, CEO of ServiceChannel, said the company’s software works like an Uber app. “The c-store manager and contractors have the app. The contractor says when he will arrive and gets paid through the app,” he explained. “We have all the data. Headquarters can track spending, how frequently contractors come, how long they took, etc.” Due to the more frequent cleaning happening

RaceTrac Petroleum uses ServiceChannel's cloud-based software to digitally source cleaning and maintenance contractors.

amid COVID-19, Buiocchi estimates the number of c-store locations using the app has increased 20-30 percent since March.

Maximizing the Impact

Traditionally, c-stores have had disparate technologies for each business area. However in recent years, larger chains have integrated systems, allowing consumer behavior to be tracked across categories and enhancing loyalty programs and promotions. “The more you bring together, the better you understand the business,” said Gary Saarenbirta, CEO of Torontobased Daisy Intelligence, a SaaS company whose AI-powered solutions optimize pricing and product mix in real time. “You need software that deciphers that. Once you integrate data, you can layer on intelligence tools.” For retailers with incongruent sytems, there are solutions such as PDI’s Insights Cloud. The AI-driven tool quickly accesses transaction, pricebook and shopper data, organizing it by daypart, promotion, price or other criteria to determine patterns. It can also stitch together data from loyalty and credit-card transactions across disparate business segments. “We can match transactions down to one customer for a 360-degree view if you pay at the pump and buy something inside,” said Brandon Logsdon, president/ general manager, Marketing Cloud, for Atlanta-based PDI. While advanced intelligence tools are, no doubt, gaining more traction in the convenience channel, their use is not yet commonplace. Retailers are at different stages, noted Headly of AlixPartners. Some lack the right POS system to get started down the BI road. “The industry isn’t moving in tandem. Much depends on your system and your business’ pain points,” he said. “But the fact that data is valuable and decisions can be made from it has become widely accepted.” Consequently, the adoption of advanced BI tools is likely to keep growing. “Data keeps getting bigger. Making BI tool investments is the next logical step,” Headly said. CSN AUG

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TWIC TALK

Sarah Bibbs, Eby-Brown The 2019 TWIC Woman of the Year is an advocate for standing firm in your values By Linda Lisanti

seventh year, the Convenience Store News Top Women in Convenience (TWIC) awards program has recognized nearly 300 of the best and brightest women making a positive impact on not only the companies they work for, but also the entire convenience retail channel.

NOW IN ITS

TWIC is the only program that recognizes exceptional female leaders, rising stars and mentors among retailer, supplier and distributor firms in the convenience store industry, from the C-suite to the store level to the independent entrepreneur. In TWIC Talk, our quarterly Q&A series, we interview a past TWIC winner about what it’s like to be a female leader in the convenience store industry today — the opportunities, the challenges — and get their words of wisdom for up-and-comers seeking to blaze their own trail. This month’s TWIC Talk subject is Sarah Bibbs, vice president of merchandising for Eby-Brown, where she focuses on developing strong, long-term partnerships with the vendor community and delivering new and innovative solutions to the market so that Eby-Brown’s customers can grow their businesses. In 2019, Bibbs was one of the five women celebrated by TWIC as Women of the Year.

CSNews: How would you describe the current state of affairs for gender equality in the convenience store industry? How does this compare to 10 years ago? In my 11-year tenure in the convenience industry, there has been an evolutionary movement toward gender equality where women are noticeably attaining higher-level positions. This is an encouraging contrast to my early years in the industry when there were rarely women in decision-making capacities. It is programs like TWIC that have forged awareness and a path that will lead to greater gender equality. CSNews: What is the most positive change you have personally witnessed? One of the responsibilities of my role is to work with vendors and brokers to develop strategic plans for growth. The dynamics of these meetings have evolved from male-dominated to a balance of professionals, comprised of both men and women, bringing diversity of gender and mindset to the planning process. I’m excited to be part of that progress! CSNews: Along your career path, did you personally experience gender bias or inequality? If so, how did you overcome? I am a strong believer in a work ethic that is based on accomplishing anything I put my mind, heart and soul into. That dedication has delivered professional and personal growth and reward. With that as a driving principle, I don’t recall experiencing inequality in the workplace but, based on my values, I have always stayed focused on accomplishing my goals and overcoming any challenges. CSNews: Do you see any barriers to advancement still existing in the c-store industry? Although there is a positive evolution, the industry continues to be dominated by white males. This makes recruiting and retaining diversity to lead the industry forward quite challenging. Developing recruiting strategies and education on inclusion, for all, would be strong, positive steps toward advancement. CSNews: What is your advice for other industry women looking to rise to higher ranks? First and foremost, be true to yourself and your values. Have faith, confidence and stand firm on your beliefs and goals for professional and personal growth. I would also recommend identifying a mentor who is: an accomplished woman who has a voice and has earned a seat at the table in the organization; shares your values; and is willing to help you navigate your career growth. These women are out there and are willing and eager to help. CSN

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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. Fifty-two female managers, executives and directors who work in the convenience store industry will be honored in our 2020 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. 2020 SPONSORS Gold Sponsors:

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STORE SPOTLIGHT

A Testing Ground for Change

Kum & Go’s first-ever walk-up store focuses on making healthy convenient By Danielle Romano

KUM & GO LC is

At a Glance Kum & Go Location: 319 7th St., Des Moines, Iowa Size: 3,000 square feet Special features: The chain’s first-ever nofuel, no-parking, walk-up store; located at a landmark site in Iowa’s civil rights history; product offering focuses on healthy convenience options; sustainability efforts include reusable cloth bags, and compostable silverware and straws

no stranger to innovation when it comes to introducing new convenience store concepts. It’s been less than five years since the retailer debuted its Marketplace prototype, which combines a contemporary design style with function to provide customers with an experience unlike any other. Now, Kum & Go is taking another step in its journey to meet customers where they are by introducing its first-ever urban concept store. Clocking in at 3,000 square feet — about half the size of the Marketplace concept — Kum & Go’s pilot urban store in Des Moines is a no-fuel, no-parking, walk-up retail location that focuses on health and sustainability in a new shopping environment. “Kum & Go is a brand built on convenience,” said President Tanner Krause. “How do we make it easier and easier for customers to interact with us? With more and more customers living and working downtown, putting a store in the heart of Des Moines allows Kum & Go to be even more convenient for our community.”

With Kum & Go’s culture evolving to more of a test-and-learn environment, the idea for this new store concept came from an “Innovation Team” that the Des Moinesbased operator put together in early 2019 to bring new business models to life. “We loved the potential of this idea from our associates and put it into action. We are proud that this new prototype came from a grassroots team of internal associates,” Ariel Rubin, communications director for Kum & Go, told Convenience Store News. “We’re thrilled to test and learn from this store, and excited to see where it goes.”

Making Healthy Convenient

Located in the heart of downtown Des Moines and just down the street from Kum & Go’s headquarters, the urban store is situated in the newly renovated Edna Griffin Building, a landmark site in Iowa’s civil rights history.

The store features a powerful art installation by local artist and activist Jordan Weber, whose work focuses on inner-city communities nationwide.

According to a Kum & Go thread on Twitter, the 135-year-old building was once the home of Katz Drug Store. On July 9, 1948, Edna Griffin, her one-year-old daughter and two friends went into Katz to get something to drink. Griffin ordered an ice cream soda and was refused service because she was Black. She organized a boycott, led sit-ins, and filed both criminal AUG

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STORE SPOTLIGHT

charges and a civil lawsuit against Katz. The litigation made it all the way to the Iowa Supreme Court, which ruled it illegal to deny service based on race in the state. As a tribute to Griffin, the store features a powerful art installation by Jordan Weber, a Des Moines-based artist and activist whose work focuses on inner-city communities nationwide. “We’re especially happy to have this store in the Edna Griffin Building, the site of a pivotal moment in our country’s civil rights struggle,” Krause said. “In 1948, the store in this space became notorious as a symbol of exclusion and prejudice. I’m honored that Kum & Go is in this same space, 70 years later, our doors proudly open to everyone.” The walk-up store boasts a sleek and open design that respects the history of the 135-year-old building. It features the same upscale finishes, well-lit and uncluttered aisles, and friendly staff as traditional Kum & Go locations, according to Rubin. With a focus on health, the downtown c-store offers a litany of better-for-you options across product categories, including freshly prepared foods, beverages and snacks. Unlike Kum & Go’s Marketplace concept, this store does not offer roller-grill hot dogs, a nacho cheese bar, or craft beer growlers. It does offer pizza, sandwiches, salads, and select high-end wine, liquor and packaged craft beer.

With the goal of “making healthy convenient,” the downtown Des Moines store offers a variety of better-for-you options across product categories.

“Kum & Go is excited about making healthy convenient; we think this concept and this audience will be a great testing ground for that change,” Rubin explained.

Expansion Plans

Something else customers won’t find at this Kum & Go site is gasoline. The nonfuel store is open 5 a.m. to 9 p.m. Monday through Friday, and 7 a.m. to 5 p.m. Saturday and Sunday.

The Denver location will be one of five “urban walkup” stores that Kum & Go opens this year, according to Niki DePhillips, senior vice president of store development. All five will be in high foot-traffic areas and will be without parking or fuel.

Along with healthy convenience, the store makes sustainability a focal point, too. For example, purchases are put in reusable cloth bags, as opposed to plastic grocery bags. And, as part of a nationwide move across all of its stores, the retailer provides compostable silverware and straws, recyclable cups and lids, and post-consumer recycled food packaging. These changes will reduce the amount of flood plastic used in the retailer’s food operations by more than 90 percent, according to the company.

Roughly six weeks after opening its first urban c-store, Kum & Go revealed plans to expand this store concept with locations in other cities, including downtown Denver.

Similar to the Des Moines urban store, the additional walkup locations will stock many items traditionally found at Kum & Go, but will highlight healthier food items and offer compostable silverware and food containers made from recycled materials. “It’s definitely a new concept for us. … We’re looking at how do we flex our prototype to meet our customers in different ways,” DePhillips said. Established in Hampton, Iowa, in 1959, the family-owned Kum & Go chain currently operates 400 stores in 11 states, including Iowa, Arkansas, Colorado, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota and Wyoming. CSN AUG

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Check Guarantee Services

ADINDEX 7-Eleven Inc.................................41

ITG Brands...................................23, 59

ADD Systems..............................17

J&J Snack Foods Corp............81

Altria Group Distribution........2, 3, 31

Janey Lou’s .................................69

Anchor Packaging....................65

Jelly Belly.....................................9

BIC USA Inc.................................35

JUUL Labs....................................12–13

Calico Brands..............................18

Kinter.............................................80

Chester’s International............67

Krispy Krunchy Chicken.........71

Cheyenne International...........49

Mars Wrigley Confectionery.37

Circle K..........................................39

McLane..........................................51

CLIF Bar Inc.................................57

Oncue............................................61

Coca Cola NA.............................43

Premier Manufacturing...........75, 77, 79

Convenience Distribution

Red House Manufacturing.....21

Association..................................47

Reynolds American Trade Marketing Services...................33

CoreMark International...........45 Del Monte Fresh Produce N.A................................5 Forte Products...........................19 Giant Eagle Inc...........................53 Hunt Brothers Pizza.................73 Imageworks Display & Marketing Group........................27

Ruiz Foods Products, Inc.......55 Swedish Match North America LLC...............................11 Swisher International Inc........7 Uline...............................................87 Universal Merchants.................Outsert

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INSIDE THE CONSUMER MIND

Making It a Meal C-store prepared food purchasers are a prime opportunity for increasing basket size “Would you like fries with that?” While now a part of pop culture, this wellknown McDonald’s phrase is representative of the abundant basket-building opportunities that exist around the foodservice category. According to the 2020 Convenience Store News Realities of the Aisle Study, which surveyed 1,500-plus consumers who shop a c-store at least once a month, 97 percent of prepared food buyers add at least one other item to their purchase — that’s up from 94 percent in the 2019 study. Digging deeper, the research reveals:

Items Most Frequently Purchased With Prepared Food

1

2

3

Bottled water 34%

Bottled/ canned soda 32%

Candy/ gum 31%

6

7

8

9

10

Milk 28%

Ice cream 26%

Packaged salty snack 24%

Grocery item 22%

Cigarettes 28%

4

5

Coffee/tea/other Fountain/ hot beverage dispensed 30% soda or drink 29%

Source: Convenience Store News 2020 Realities of the Aisle Study Base: 1,213 U.S. shoppers aged 18+ who purchased prepared food from a c-store in the past month

CAN’T FORGET DESSERT! Younger c-store shoppers are more likely than older shoppers to pair a packaged sweet snack with their prepared food purchase

26%

Generation Z

24%

Female shoppers are more likely than males to add on a fountain/dispensed drink.

Millennials

14%

34% VS. 23%

Baby Boomers

Male shoppers are more likely than females to add on: A beer/malt beverage

26% VS. 15%

A grocery item

Milk

28% VS. 17% 32% VS. 23%

By a wide margin, daily

convenience store shoppers

are more likely than weekly or monthly shoppers to buy cigarettes alongside their prepared food purchase. 106 Convenience Store News C S N E W S . c o m

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34th ANNUAL

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For more information please contact Paula Lashinsky, VP/Publisher, plashinsky@ensembleiq.com

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AND FEATURING OUR EXCLUSIVE

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TO

TRIPLE THREAT Legislative and regulatory changes, combined with COVID-19, create the perfect storm.

THE LATEST PERFORMANCE DATA FOR ALL KEY TOBACCO SEGMENTS AUGUST 2020 CSNEWS.COM

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EDITOR’S NOTE

A Long & Windy Road Change is the only constant in the tobacco category THIS NOVEMBER WILL mark my 10-year anniversary with Convenience Store News. I was originally hired as an associate editor, covering alcoholic beverages and tobacco.

It seemed a good pairing: both are age-restricted products and are leading categories in the convenience channel. Both have also seen notable innovation as new products aim to disrupt the marketplace. For the cold vault, it was the rise of craft beer, then hard cider, and now hard seltzer. For the backbar, it began with the introduction of electronic cigarettes — from disposables, to razor/razor blade models, to open systems. These days, tobacco is continuing to see innovation as companies introduce new products to help adult consumers move along the continuum of risk, with heat-not-burn tobacco and oral nicotine pouches the latest to capture the attention of evolving consumers. But that’s where the similarities end. While not much has changed on the legislative front for alcoholic beverages, tobacco finds itself under attack from all levels of government. Tobacco 21 rules and flavor bans have mostly remained in the state and local arenas, but within six weeks of each other in late 2019 and early 2020, the White House and the Food and Drug Administration stepped up their efforts to keep tobacco products out of the hands of underage users. No one will argue with that intent. However, these efforts are poised to have an adverse effect on the tobacco category as they also have the ability to stifle innovation. Now as senior news editor, I am still the lead for tobacco. While other things have changed here, that has remained the same. I wish the same could be said about tobacco. For comments, please contact Melissa Kress, Senior News Editor, at (201) 855-7618 or mkress@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2020)

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

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 2017 Eddie Awards, 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 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 2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015

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

2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

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

Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Jim Hachtel Eby-Brown Co. Chris Hartman Rutter’s

Jack Lewis GPM Midwest

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

Danielle Mattiussi Maverik Inc. Vito Maurici McLane Co. Inc. Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Bill Stein Core-Mark Roy Strasburger StrasGlobal

2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

AUG

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Ruth Ann Lilly GPM Investments

Rick Crawford Green Valley Grocery

Ray Johnson Speedee Mart

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014

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

Laura Aufleger OnCue Express

Joe Lewis ExtraMile Convenience Stores

2020

Guide to Tobacco

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CONTENTS AUG 20

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

Associate Editor (201) 855-7619

Angela Hanson ahanson@ensembleiq.com

Associate 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 (508) 385-2524

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 EVENTS

EDITOR’S NOTE

3 A Long & Windy Road Change is the only constant in the tobacco category.

Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com AUDIENCE List Rental (914) 309-3378 Subscriber Services/Customer Care TOLL-FREE: (877) 687-7321 FAX: (888) 520-3608

MeritDirect Marie Briganti contact@csnews.com

COVER STORY

PROJECT MANAGEMENT/PRODUCTION/ART

6 Triple Threat

Vice President, Production (877) 687-7321

Legislative and regulatory changes, combined with COVID-19, create the perfect storm. EXPERT’S VIEW

Creative Director (973) 607-1320 Advertising/Production Manager (773) 992-4418 Art Director (973) 607-1321

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com Ed Ward eward@ensembleiq.com Lauren DiMeo ldimeo@ensembleiq.com

14 PMTA & the Future of Tobacco’s New Categories The FDA-mandated process is expected to bring a lot of change to the industry and retail. CATEGORY INSIGHTS

17 18 19 20 21 22 23 24 25 26

Cigarettes Total OTP Smokeless Moist Tobacco Modern Oral Cigars Vaping E-Cigarettes Pipe & Cigarette Tobacco Papers

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

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

W fin fre W w

80 to Tobacco S N E WCSS.N co 4 Guide Convenience Store C News Em WS.com

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COVER STORY

TRIPLE THREAT Legislative and regulatory changes, combined with COVID-19, create the perfect storm By Melissa Kress

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N

O ONE EVER said the tobacco category was boring.

For the past few years, managing the category has been like putting together a jigsaw puzzle — sometimes blindfolded — thanks to the patchwork of local and state legislation. From increasing the legal minimum age to buy tobacco products to prohibiting the sale of flavors, the different rules drew some calls for uniformity. Officials at the federal level heard those calls and answered them. In late December, President Trump signed a federal Tobacco 21 law (T21) as part of a yearend bill package. With the stroke of his pen, all states were put on the clock to bring their minimum purchase age in line with the new federal mandate. That move was followed within days by the Food and Drug Administration’s (FDA) announcement that manufacturers of unauthorized flavored cartridge-based vapor products — other than tobacco or menthol — had 30 days to remove them from the market. “The United States has never seen an epidemic of substance use arise as quickly as our current epidemic of youth use of e-cigarettes,” Department of Health and Human Services (HHS) Secretary Alex Azar said in advance of the Feb. 6 deadline for manufacturers. “HHS is taking a comprehensive, aggressive approach to enforcing the law passed by Congress, under which no e-cigarettes are currently on the market legally.” FDA Commissioner Stephen M. Hahn added that the flavor ban, coupled with the federal Tobacco 21 law, “balances the urgency with which we must address the public health threat of youth use of e-cigarette products with the potential role that e-cigarettes may play in helping adult smokers transition completely away from combustible tobacco to a potentially less risky form of nicotine delivery.”

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Guide to Tobacco

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COVER STORY

The cigarettes and other tobacco products categories combined account for more than 35 percent of all in-store sales in the channel. Legislative & Regulatory Impact

So, what impact did these two events have on the tobacco business at convenience stores, where the cigarettes and other tobacco products (OTP) categories combined account for more than 35 percent of all in-store sales in the channel? According to Don Burke, senior vice president of Management Science Associates Inc. (MSA), the impact depends on the segment. He pointed to a 2019 MSA study on states that had already implemented a Tobacco 21 rule. Illinois and Washington, D.C. were

eliminated from the study because they also took excise tax increases during the year, leaving 15 states in the research. The findings showed that the increased buying age had very little impact on cigarette volumes — between 0 percent and -0.5 percent. Moist tobacco volumes showed a similar result. The biggest impact occurred in vapor: the segment was down between 3 percent and 8 percent because of the loss in sales due to the age restriction. “That was the most significant result, which makes sense because typically vapor tended to be purchased by a younger adult consumer,” Burke explained, noting however that the vapor segment is down significantly this year compared to the prior year for several reasons. “One [reason] is the banning of flavors; two is the age restriction; and three is the illegal THC vaping crisis that occurred in the fourth quarter of 2019,” he said. “That has thrown consumers off against vapor and we have not, as yet, seen it recover, although the most recent few weeks have been better.” Although the EVALI crisis, as the Centers for Disease Control and Prevention named it, had nothing to do with legal vapor products, consumers certainly perceived the

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COVER STORY

situation as vapor being possibly dangerous for them to use. MSA numbers show the vaping category is declining in the 4-percent to 5-percent range this year, though there has been an uptick in volumes the past few weeks.

The Compound Effect

Those actions would have been enough to cause some shifts on the backbar, but then the novel coronavirus hit the United States and all bets were off with the ensuing pandemic.

MSA numbers show the vaping category is declining in the 4-percent to 5-percent range this year, though there has been an uptick in volumes the past few weeks.

“It’s kind of the perfect storm,” said Jacopo D’Alessandris, president and CEO of E-Alternative Solutions (EAS), whose brands include Leap Vapor and Forth CBD. “COVID, as you know, has also resulted in many vapor and tobacco outlets and big smoke shops shutting down in some states. You had the compound effect. Yes, the category has trended down starting in April. The big question is: What caused it?” Ahead of the federal actions, EAS did see where things were trending, in particular with the phenomenon related to Juul and the exposure of those products and their advertising to youth. “There was a buildup here,” said Chris Howard, EAS vice president, general counsel and chief compliance officer. “We are very active with the Vapor Technology Association and, as a result, we knew a year and a half ago that T21 was starting to get some traction.” The company was “not really” worried about it, according to Howard, nothing that EAS puts a lot of emphasis on compliance, and in particular, ensuring youth are not exposed to its products. “We already took significant steps with our marketing and advertising to focus on adults. So, when the day finally came, T21 in isolation didn’t really cause EAS a lot of heartburn,” he recalled.

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COVER STORY

In fact, according to D’Alessandris, most retailers had already factored in the effects of the higher purchasing age. However, when coupled with the federal flavor ban, a new problem did arise: a proliferation of illegal vapor products on the market. “It has given a lot of momentum to a lot of illegal companies and products, like Puff Bar, to flood the market with flavored disposable devices, which are actually illegal,” he said. As a result, it’s hard to say how much the legal flavor category has been affected and replaced by these illegal products, according to D’Alessandris. In mid-July, the FDA cracked down on these unauthorized products, issuing warning letters to 10 companies, including Puff Bar, HQD Tech USA LLC and Myle Vape Inc., to stop marketing their products without the agency’s premarket authorization.

The FDA’s review of these companies’ websites found that each firm is selling or distributing unauthorized tobacco products that were first introduced or modified after Aug. 8, 2016, the effective date of the deeming rule that extended the FDA’s authority to all tobacco products, including vapor. “Post-September, we should have a better idea. Now, it’s still kind of in flux,” D’Alessandris said of gauging the impact. “MSA does not really track most of the stores that sell Puff Bar. Large retailers and wholesalers do not want to carry Puff Bar because they know it is illegal. It is below the radar in some ways, but we have anecdotal evidence that it has taken a lot of market share in a short amount of time.” September will bring with it the deadline to submit Premarket Tobacco Product Applications (PMTAs) for vapor products to the FDA. The cutoff to submit is fast approaching on Sept. 9. While flavored vapor products, for the most part, have been off the backbar for several months now, manufacturers in the space are still hoping for the agency to approve PMTAs for flavors. EAS continues to support flavors to provide adult smokers more choices.

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“Adults are overwhelmingly looking for non-tobacco flavors to continue to use vapor as an alternative to cigarettes and combustible products,” D’Alessandris said. “If this COVID crisis has taught us something, it is that unfortunately we have seen a resurgence in cigarette smoking. That’s really what we don’t want to see and what FDA doesn’t want to see either.”

category is tending to do well given the [COVID-19] situation because with many consumers at home and working from home, they are able to use whatever tobacco product they want at almost any time. They are not facing workplace restrictions as they have been in the past,” he pointed out.

Flavors are important, but flavors in a controlled way, that have been vetted by the FDA, he added, sharing that EAS’s PMTA application for its Leap and Leap Go vapor products with flavors has been accepted by the FDA and moved into the scientific review part of the process.

“That is really contributing to the success for cigarettes and other tobacco items this year, so there is really not quite the push to use a vapor item, if that was allowed, vs. a combustible item. That has also somewhat hurt the vapor category,” Burke added.

“If FDA wants to make sure the future of vaping is a controlled environment where people can get access to tobacco-flavored vapor and non-tobacco flavored vapor and make sure youth cannot get access to it, they need to move quickly with the PMTA process,” he urged.

The segment, he believes, may not rebound until 2021.

Bumps in the Road

With all these changes, vapor appears to be facing the biggest uphill battle of all the tobacco segments, with Burke labeling 2020 a “tough year” for vapor products. “Keep in mind, what we are seeing is that the tobacco

“Due to the PMTA requirements in September, which will remove some of the items from smaller manufacturers, there will be more reliance on vapor items provided by the larger manufacturers that could afford to file the PMTAs,” he said. “They will be filling the gaps of the smaller manufacturers, but that will likely take some time as well. The return to significant growth for vapor will likely be pushed into 2021.” CSN

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Guide to Tobacco

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EXPERT’S VIEW

PMTA & the Future of Tobacco’s New Categories The FDA-mandated process is expected to bring a lot of change to the industry and retail By Dr. James “Jim” Figlar, R.J. Reynolds Tobacco Co. BY SEPT. 9, 2020,

the U.S. Food and Drug Administration (FDA) is requiring that all manufacturers of new category tobacco products submit applications for market authorization or risk having their products removed from shelves. This is known as the deadline for Premarket Tobacco Product Applications (PMTAs). So, what does this mean for retail? PMTA applies to vapor, heat-not-burn, modern oral nicotine products, and almost anything introduced to the market after Feb. 15, 2007. Any new products like these must go through PMTA as part of the FDA’s mandate to protect public health. (There is a separate market authorization process called the Substantial Equivalence (SE) pathway, which is reserved for products that have a highly similar comparison product that was on the market prior to Feb. 15, 2007. This largely applies to things like cigar and pipe tobacco, among others.)

As we approach the deadline, industry leaders are submitting applications that detail each product format, strength and flavor options. In Reynolds’ case, we plan to have all relevant applications submitted by the deadline, which means retailers can expect no changes to deliveries of Vuse and VELO products. Importantly, some brands may elect not to submit PMTAs, and the FDA may refuse to grant marketing orders to some who do submit. This may cause the number of vapor and modern oral products on the market to decrease in the short term. However, there are upsides to this for the industry as a whole: • The PMTA process will level-set the U.S. industry for new category products and should enable adult nicotine consumers to feel a renewed confidence in the products they buy from reputable retailers. • It will also ensure consumers have continued access to a wide array of product formats, flavors and strengths from a number of brands that have successfully received PMTA marketing orders. • As products that do not meet the FDA’s requirements are removed from shelves, we also expect retailers to benefit from more streamlined supply chains and supplier relationships as the FDA enables higher standards of care industrywide. While this will bring a lot of change to our industry, one thing that will not change is our firm stance that minors should never use tobacco in any form. We remain committed to implementing programs that limit youth access and will continue to work with our retail partners to ensure that the locations selling Vuse and VELO products are held to high standards. Dr. James “Jim” Figlar is executive vice president — Research and Development of R.J. Reynolds Tobacco Co. and executive vice president of RAI Services Co., managing scientific and regulatory affairs for RAI’s subsidiaries. For more information, go to RJRVapor.com or contact your usual Reynolds representative. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.

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EXPERT’S VIEW

1

DETERMINING WHAT TO SUBMIT

2

COMPILING AN APPLICATION

3

FDA ADMINISTRATIVE REVIEW

4

FDA SUBSTANTIVE REVIEW

5

PMTA MARKETING ORDERS

The PMTA process applies to any new tobacco products introduced after Feb. 15, 2007 that are not addressed by the Substantial Equivalence pathway — in other words, most new category products. Substantial Equivalence is reserved for products with a grandfathered version to which they can be compared, such as cigars, cigarettes or moist tobacco with flavor profiles modified from a pre-2007 version.

Applicants must carefully compile documents and information, including detailed items on product chemistry, toxicology and behavioral studies to demonstrate the product is “appropriate for the protection of the public health.”

The FDA will first examine an application to ensure it can be officially “accepted.” This means they are checking to ensure the manufacturer has provided adequate information for the agency to evaluate the product and its potential impact on the protection of public health. Once the FDA has received a filing, if the product is already on the market, the manufacturer can continue to sell it for up to one year.

This is when the FDA goes through the science a manufacturer has provided and considers a variety of variables, including: risks and benefits to the population; if current tobacco consumers would be more or less likely to stop using current tobacco products if the applicant product were available, and conversely if non-consumers would be likely to begin; how the product is manufactured, processed and packed; and site inspections to verify the information provided is accurate. The FDA aims to do this within 180 days of submission, though the “clock” stops when it asks follow-up questions. There is no exact announcement timeline.

Successful applicants receive a “marketing order” from the FDA. A marketing order allows the manufacturer to market and sell the product for a designated period of time (currently up to five years) before a PMTA needs to be renewed. Manufacturers are required to closely monitor the product’s impact through “post-market surveillance,” which can impact the FDA’s decision to amend or revoke a marketing order renewal. Importantly, a marketing order also does not authorize the company to communicate about relative risks to the public. To do so, a manufacturer would need to obtain separate authorization through a Modified Risk Tobacco Product Application.

CONTINUED PRODUCT EXCELLENCE & MARKET ACCESS New category products, if done responsibly, present a major opportunity for adult nicotine consumers seeking alternative options. Industry leaders strive to develop a reputation that is built on trust and transparency, and believe operating the right way and innovating at pace is possible.

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

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CIGARETTES

CATEGORY INSIGHTS: Cigarettes In the 52 weeks ended June 13, cigarette dollar sales took a slight downturn vs. a year ago, and consumer unit sales were down more than 6 percent, in part due to the effects of the COVID-19 pandemic. The subgeneric/private label segment fared best, with a more than 17 percent increase in both dollars and consumer units. DOLLARS

TOTAL CIGARETTES PREMIUM BRANDED DISCOUNT SUBGENERIC/PRIVATE LABEL FOURTH TIER IMPORTS

% CHANGE

$53,842,241,677 $43,410,706,817 $6,665,577,322 $2,140,498,787 $1,503,643,280 $121,922,177

CONSUMER UNITS

-2.3% -2.3% -7.2% 17.2% -3.2% 2.1%

% CHANGE

7,265,583,481 5,556,900,789 976,476,390 433,690,945 268,752,165 29,941,199

-6.4% -6.9% -11.1% 17.5% -8.4% -5.9%

Cigarette Segment Share The premium segment continues to account for the majority of cigarettes sold, even with dollar sales declining 2.3 percent vs. a year ago and consumer units down 6.9 percent â&#x20AC;&#x201D; more than the overall category decline. Premium

Branded Discount

Fourth Tier

Imports

CONSUMER UNIT SHARE

DOLLAR SHARE

2.8%

4%

Subgeneric/Private Label

4%

0.2%

0% 6%

12.4%

13% 76%

80.6%

Cigarette Share by Region

Top 10 Cigarette Items

Not much has changed in the past year in regard to cigarette share across the five major regions of the U.S. The Southeast still holds one-third of all consumer units sold, with the Midwest at a close second.

The top 10 cigarette items comprise roughly 35 percent of all cigarette consumer units sold in U.S. convenience stores. Premium cigarettes continue to be king of the road, holding all of the top 10 spots. TOP 10 CIGARETTE ITEMS

Midwest

Northeast

DOLLAR SHARE

15%

25%

12% 27%

Southeast

Southwest

West

CONSUMER UNIT SHARE

15%

24%

13% 21%

31%

17%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020 C-Metrics is a projected convenience channel database for warehouse delivered products.

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CONSUMER UNITS

CONSUMER UNIT SHARE

Marlboro Gold KG BX 10CT 607,842,788 Marlboro Red KG BX 10CT 422,446,230 Newport MTH Green 100 BX 10CT 409,625,548 Newport MTH Green KG BX 10CT 311,584,751 Marlboro Gold 100 BX 10CT 160,147,336 Marlboro Special Blend Gold KG BX 10CT 147,781,874 Marlboro 100 BX 10 CT 144,899,501 Camel Blue KG BX 10CT 124,136,553 Marlboro Silver KG BX 10CT 115,446,346 Marlboro Special Blend Gold 100 BX 10 CT 93,848,541 AUG

2020

% CHANGE

8.4% -0.06% 5.8% 0.15% 5.6%

0.23%

4.3% 0.06% 2.2% 0.05% 2.0% -0.36% 2.0% 0.07% 1.7% 0.01% 1.6% 0.01% 1.3% -0.24% Guide to Tobacco

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TOTAL OTP

CATEGORY INSIGHTS: Total OTP

In the 52 weeks ended June 13, dollar sales of other tobacco products (OTP) were up 5.1 percent in c-stores. Of the seven segments of OTP, vaping came on strong with a 23.9 percent increase. DOLLARS

TOTAL OTP SMOKELESS CIGARS VAPING E-CIGARETTES PIPE/CIGARETTE TOBACCO PAPERS MISCELLANEOUS OTP PIPES

OTP Segment Share

Smokeless accounts for 62 percent of the whole OTP market. Cigars, at 19-percent share, is the second-largest segment. Vaping sits in third place, but this segment experienced significant share growth year over year.

DOLLAR SHARE

2%

3%

% CHANGE

$13,583,803,080 $8,380,545,891 $2,547,562,414 $1,695,237,901 $453,217,828 $276,348,587 $227,201,010 $3,914,474 $215,813

5.1% 7.2% 3.2% 23.9% -41.4% 0.7% 4.3% 279.8% -26.6%

1.8% 2.4% 0.8% 25.6% -34.7% -2.6% 6.2% 221.4% -23.4%

OTP Share by Region

DOLLAR SHARE

Midwest

Cigars

Northeast

Vaping

16%

E-Cigarettes Pipe/Cigarette Tobacco

12%

% CHANGE

3,625,658,682 1,578,204,244 1,707,788,017 110,998,950 33,330,287 29,724,497 165,040,605 558,171 35,203

Across the U.S., the Southeast holds the most OTP share at 24 percent, just one point higher than the West. Meanwhile, the Northeast and Southwest tie for the lowest OTP share.

Smokeless

2%

CONSUMER UNITS

Southeast

24%

Southwest West

16%

Papers

62%

19%

23% 21%

OTP Retail Dollar Sales Trend (past two years) The table below shows OTP retail dollar sales over a 24-month period starting from June 2018. According to the trend line, OTP dollar sales are showing a slight increase. $1,600,000,000.00 $1,400,000,000.00 $1,200,000,000.00 $1,000,000,000.00 $800,000,000.00 $600,000,000.00 $400,000,000.00 $200,000,000.00 $0.00 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020 C-Metrics is a projected convenience channel database for warehouse delivered products.

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SMOKELESS

CATEGORY INSIGHTS: Smokeless

Smokeless continues to be the largest segment of the OTP category, growing by more than 7 percent for the second consecutive year. Altria and Reynolds American comprise about 87 percent of the segment’s dollar sales. DOLLARS

TOTAL SMOKELESS ALTRIA GROUP REYNOLDS AMERICAN INC. SWEDISH MATCH NATIONAL TOBACCO CO. SWISHER INTERNATIONAL SMOKEY MOUNTAIN CHEW INC. ALL OTHER

% CHANGE

DOLLAR SHARE

$8,380,545,891 7.2% $4,521,527,215 4.1% $2,753,808,745 4.0% $888,363,526 37.2% $114,413,683 24.9% $74,788,927 9.8% $9,018,666 -8.3% $18,625,130 169.7%

% CHANGE

100.0% 0.0% 54.0% -0.7% 32.9% -2.4% 10.6% 2.7% 1.4% 0.2% 0.9% 0.1% 0.1% 0.0% 0.2% 0.1%

Smokeless Dollars & Market Share vs. Year Ago With two mega players holding almost 90 percent of all smokeless dollar sales, that leaves only 10 percent for the remaining manufacturers. Swedish Match made strides in the 52 weeks ended June 13, increasing its market share by 2.7 percent. DOLLAR CHANGE VS. YEAR AGO

Total Smokeless

Altria Group

-0.7%

Reynolds American Inc.

-2.4%

7.2%

Altria Group

4.1%

Reynolds American Inc.

4.0% 37.2%

National Tobacco Co.

24.9% 9.8%

Swisher International

Swedish Match

Swedish Match

Smokey Mountain Chew Inc.

DOLLAR SHARE CHANGE VS. YEAR AGO

2.7%

National Tobacco Co.

0.2%

Swisher International

0.1% 0.0%

Smokey Mountain Chew Inc.

-8.3%

0.1%

All Other 169.7%

All Other

Smokeless Share by Region

Smokeless Share by Brand

The Southeast and West regions account for more than half of all smokeless consumer unit share and almost half of the segment’s dollar share in the United States.

The top brands in this segment have not changed much in the past year, except for Swedish Match brand Zyn, which moved from the ninth spot up to the fourth spot on the list. Still, the top three brands capture 75 percent of the segment’s dollar sales.

Midwest

Northeast

DOLLAR SHARE

Southeast

Southwest

CONSUMER UNIT SHARE

11%

11% 26%

19% 21%

West

24%

17% 23%

21%

27%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020

s UP

t DOWN

— FLAT

RANK

BRAND FAMILY

MANUFACTURER

TREND

SHARE OF SEGMENT

1

COPENHAGEN

Altria Group

-

36%

2

GRIZZLY

Reynolds American Inc.

-

26%

3

SKOAL

Altria Group

-

13%

4

ZYN

Swedish Match

s 5%

5

RED SEAL

Altria Group

t 4%

6

CAMEL SNUS

Reynolds American Inc.

t 3%

7

KODIAK

Reynolds American Inc.

t 2%

8

LONGHORN

Swedish Match

t 2%

9

RED MAN

Swedish Match

t 2%

Turning Point Brands

s 1%

10 STOKERS

C-Metrics is a projected convenience channel database for warehouse delivered products. AUG

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MOIST TOBACCO

CATEGORY INSIGHTS: Moist Tobacco

Moist tobacco products showed an increase in market dollars for the 52 weeks ended June 13. The top two manufacturers, Altria Group and Reynolds American, account for more than 92 percent of the category. DOLLARS

TOTAL MOIST TOBACCO ALTRIA GROUP REYNOLDS AMERICAN INC. SWEDISH MATCH NATIONAL TOBACCO CO. SWISHER INTERNATIONAL SMOKEY MOUNTAIN CHEW INC. CHEYENNE INTERNATIONAL GRAND RIVER ENTERPRISES

% CHANGE

DOLLAR SHARE

CONSUMER UNIT SHARE

$7,705,428,592 5.5% 100.0% 100.0% $4,585,179,006 5.5% 59.51% 55.76% $2,517,815,397 5.1% 32.68% 33.10% $436,682,987 2.3% 5.67% 7.56% $101,127,284 35.2% 1.31% 1.42% $53,614,184 17.8% 0.70% 1.92% $9,230,345 -6.1% 0.12% 0.14% $1,775,858 30.4% 0.02% 0.09% $3,528 361.7% 0.00% 0.00%

Moist Tobacco Dollar Change vs. Year Ago The market for moist tobacco did well in the past 52 weeks, with nearly all of the top manufacturers in the segment seeing an increase in dollars. Grand Rivers Enterprises saw an extreme increase of nearly 362 percent, most likely due to first entering the market. DOLLAR CHANGE VS. YEAR AGO

Total Moist Tobacco

5.5% 5.5%

Altria Group

5.1%

Reynolds American Inc. Swedish Match

2.3%

National Tobacco Co.

35.2% 17.8%

Swisher International -6.1%

Smokey Mountain Chew Inc.

30.4%

Cheyenne International Grand River Enterprises

361.7%

Moist Tobacco Share by Region

Moist Tobacco Share by Brand

Moist tobacco share is evenly spread out amongst the regions of the U.S., except for the Northeast, which trails behind every other region by close to 10 percent.

The top four brands of moist tobacco make up more than 88 percent of the segment. Copenhagen and Grizzly lead the pack, accounting for nearly 70 percent combined.

Midwest

Northeast

DOLLAR SHARE

11%

Southeast

Southwest

CONSUMER UNIT SHARE

11%

24%

20%

West

21%

19% 24%

21%

28% 21%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020 C-Metrics is a projected convenience channel database for warehouse delivered products.

RANK BRAND FAMILY

MANUFACTURER

1 COPENHAGEN Altria Group

DOLLARS

SHARE OF SEGMENT

$3,097,553,375 40.2%

2 GRIZZLY

Reynolds American Inc. $2,240,626,078

29.1%

3 SKOAL

Altria Group

$1,107,646,635

14.4%

4 RED SEAL

Altria Group

$346,728,865

4.5%

5 KODIAK

Reynolds American Inc.

$206,192,393

2.7%

6 LONGHORN

Swedish Match

$196,052,634

2.5%

7 RED MAN

Swedish Match

$142,119,443

1.8%

8 STOKERS

Turning Point Brands

$101,127,284

1.3%

$97,687,804

1.3%

$169,694,081

2.2%

9 TIMBERWOLF Swedish Match 10 ALL OTHER

N/A

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MODERN ORAL

CATEGORY INSIGHTS: Modern Oral

The modern oral segment showed a dramatic increase of 178 percent in dollars during the 52 weeks ended June 13. Swedish Match accounts for nearly 90 percent of the overall dollar share due to an increase in sales of its ZYN nicotine pouches. DOLLARS

% CHANGE

DOLLAR SHARE

CONSUMER UNIT SHARE

TOTAL MODERN ORAL

$508,383,514

178.1%

100.00%

100.00%

SWEDISH MATCH

$456,891,358

152.2%

89.87%

89.52%

$43,834,576

164,030.3%

8.62%

8.79%

HELIX INNOVATIONS LLC

$5,559,299

317.7%

1.09%

1.25%

KRETEK INTERNATIONAL

$2,098,280

731.5%

0.41%

0.45%

REYNOLDS AMERICAN INC.

Modern Oral Dollar Change vs. Year Ago The modern oral market has seen an incredible increase as companies move away from tobacco-based nicotine products, opting to provide consumers with strictly nicotine products. DOLLAR CHANGE VS. YEAR AGO

178.1%

Total Modern Oral Reynolds American Inc. Kretex International Helix Innovations LLC

164,030%

731.5%

317.7%

Swedish Match

152.2%

Modern Oral Share by Region

Modern Oral Share by Brand

The West is dominating the modern oral segment, capturing 68 percent of both dollars and consumer units, while the other roughly 30 percent is spread across the other regions.

The modern oral market is heavily dominated by ZYN, a Swedish Match brand. ZYN accounts for nearly 90 percent of the segment. Velo, a Reynolds American brand, is second in line with just shy of 9 percent share.

Midwest

Northeast

DOLLAR SHARE

Southwest

West

CONSUMER UNIT SHARE

4% 8%

6% 8% 9% 9%

Southeast

10% 68%

10%

68%

RANK BRAND FAMILY

MANUFACTURER

1

ZYN

Swedish Match

2

VELO

Reynolds American Inc. $43,767,529

8.61%

3

ON!

Helix Innovations LLC

$5,559,299

1.09%

4

DRYFT

Kretek International

$2,098,280

0.41%

5

REVEL

Reynolds American Inc.

$67,046

0.01%

DOLLARS

$456,891,358

SHARE OF SEGMENT

89.87%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020 C-Metrics is a projected convenience channel database for warehouse delivered products. AUG

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CIGARS

CATEGORY INSIGHTS: Cigars

Cigars showed growth in the 52 weeks ended June 13 with a 3.2 percent increase in dollar sales. There are four major players in the segment and combined they hold 91 percent market share. DOLLARS

% CHANGE

DOLLAR SHARE

% CHANGE

TOTAL CIGARS

$2,547,562,415

3.2%

100.0%

0.0%

ALTRIA GROUP

$812,511,698

4.9%

31.9%

0.5%

SWISHER INTERNATIONAL

$648,833,280

3.1%

25.5%

-1.1%

ITG BRANDS LLC

$433,509,976

0.1%

17.0%

-0.5%

SWEDISH MATCH

$420,932,656

3.0%

16.5%

0.0%

GOOD TIMES TOBACCO

$39,996,237

29.6%

1.6%

0.3%

CHEYENNE INTERNATIONAL

$35,381,365

-1.4%

1.4%

0.3%

KRETEK INTERNATIONAL

$33,655,312

1.2%

1.3%

0.4%

JTI-JAPAN TOBACCO INTERNATIONAL

$22,966,074

-3.2%

0.9%

0.1%

NATIONAL HONEY ALMOND INC.

$20,065,191

15.7%

0.8%

0.1%

INTERCONTINENTAL CIGAR CO.

$15,705,109

0.7%

0.6%

0.0%

Cigar Dollars & Market Share vs. Year Ago Six of the top 10 cigar companies saw a rise in dollar sales in the past year. Among them, Good Times Tobacco posted the largest gain, at nearly 30 percent. DOLLAR CHANGE VS. YEAR AGO

DOLLAR SHARE CHANGE VS. YEAR AGO

3.2% 4.9% 3.1% 0.1% 3.0%

Total Cigars Altria Group Swisher International ITG Brands LLC Swedish Match Good Times Tobacco Cheyenne International Kretek International JTI-Japan Tobacco International National Honey Almond Inc. Intercontinental Cigar Co.

29.6% -1.4% 1.2% -3.2% 15.7%

Altria Group Swisher International ITG Brands LLC Swedish Match Good Times Tobacco Cheyenne International Kretek International JTI-Japan Tobacco International National Honey Almond Inc. Intercontinental Cigar Co.

0.5% -1.1% -0.5% 0.0% 0.3% 0.3% 0.4% 0.0% 0.0% 0.0%

-0.7%

Cigar Share by Region

Cigar Share by Brand

Continuing last year’s trend, the Southeast holds the largest share of cigars (31 percent in dollars and 34 percent in consumer units) among the five major regions of the U.S. The West, on the other hand, has the lowest share of the segment.

The top 10 cigar brands hold 88 percent of the total market share. Jackpot, a Swedish Match brand, and Pom Pom, a Swisher International brand, are trending upwards.

Midwest

Northeast

DOLLAR SHARE

Southeast

Southwest

8%

13% 31% 17% 19%

West

CONSUMER UNIT SHARE

21%

20% 19%

34%

19%

s UP

RANK BRAND FAMILY

1

t DOWN

MANUFACTURER

BLACK & MILD Altria Group

2 SWISHER SWEETS

Swisher International

— FLAT DOLLARS

$808,666,968

SHARE OF TREND SEGMENT

-

32%

$558,367,368

-

22%

3

BACKWOODS ITG Brands LLC

$290,593,687

-

11%

4

GAME

Swedish Match

$ 227,524,667

-

9%

5

WHITE OWL

Swedish Match

$ 131,852,724

-

5%

6 DUTCH MASTERS

ITG Brands LLC

$109,860,015

-

4%

7

Swedish Match

$ 42,572,048

s 2%

JACKPOT

8 POM POM

Swisher International

$ 35,972,153

s 1%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020

9 CHEYENNE

Cheyenne International

$34,794,230

t

C-Metrics is a projected convenience channel database for warehouse delivered products.

10 OPTIMO

Swisher International

$ 32,908,073

t 1%

1%

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VAPING

CATEGORY INSIGHTS: Vaping

The vaping segment showed strong growth in the 52 weeks ended June 13, with dollars increasing nearly 30 percent to reach a total of $1.7 billion. 2020 2019 2020 2019 DOLLARS DOLLARS DOLLAR SHARE DOLLAR SHARE

% CHANGE

TOTAL VAPING

$1,734,422,704

$1,336,052,092

100.0%

100.0%

0.0%

JUUL LABS INC.

$1,128,604,834

$1,033,503,758

65.1%

82.9%

-17.8%

REYNOLDS AMERICAN INC.

$422,130,795

$150,282,6680

24.3%

8.1%

16.3%

FONTEM US INC.

$104,723,834

$88,795,705

6.0%

4.5%

1.6%

$32,134,175

$5,813,087

1.9%

0.8%

1.1%

$15,958,832

$29,035,676

0.9%

1.2%

-0.3%

$5,873,364

$11,959,669

0.3%

0.5%

-0.2%

$24,996,869

$22,058,203

1.4%

1.7%

-0.2%

SOTTERA INC. EONSMOKE LLC E-ALTERNATIVE SOLUTIONS ALL OTHER

Vaping Dollar & Unit Share vs. Year Ago Among the major vaping manufacturers, Reynolds American outpaced the pack with a more than 16 percent increase in dollars and a more than 13 percent increase in consumer units.

CONSUMER UNIT SHARE VS. YEAR AGO

DOLLAR SHARE VS. YEAR AGO

Juul Labs Inc.

Juul Labs Inc.

-17.8%

Reynolds American Inc.

Fontem US Inc.

-10.0%

Reynolds American Inc.

16.3%

13.2%

Fontem US Inc.

Sottera Inc.

1.6% 1.1%

Eonsmoke LLC

-0.3%

Eonsmoke LLC

-1.4%

E-Alternative Solutions

-0.2%

E-Alternative Solutions

-0.2%

All Other

-0.2%

All Other

-1.6%

-1.6% 1.6%

Sottera Inc.

Vaping Share by Region

Vaping Share by Brand

Vaping share is pretty evenly split among the Northeast, West, Midwest and Southeast regions of the U.S. The Southwest shows the least amount of vaping consumption, at under 10 percent for both dollars and consumer units.

Capturing 63 percent of the total market share, Juul currently dominates the vaping segment. Combined with Reynolds American’s VUSE, the two brands hold 87 percent share.

Midwest

Northeast

DOLLAR SHARE

Southeast

Southwest

CONSUMER UNIT SHARE

7% 21%

22%

West

8% 26%

24%

22%

23%

26%

21%

s UP

RANK BRAND FAMILY

1

JUUL

t DOWN

MANUFACTURER

— FLAT

DOLLARS

TREND

SHARE OF SEGMENT

Juul Labs Inc.

$1,098,803,646

-

63%

2 VUSE

Reynolds American Inc.

$418,442,605

-

24%

3

BLU

Fontem US Inc.

$102,398,379

-

6%

4

NJOY

Sottera Inc.

5

ALL OTHER N/A

$31,709,042

s 2%

$13,443,614

t 1%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020 C-Metrics is a projected convenience channel database for warehouse delivered products. AUG

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E-CIGARETTES

CATEGORY INSIGHTS: E-Cigarettes

After posting slight growth last year of 1.3 percent, e-cigarette dollar sales showed dramatic change this year, dropping 41.4 percent in the 52 weeks ended June 13. 2020 2019 % CHANGE DOLLAR SHARE DOLLAR SHARE

DOLLARS

% CHANGE

TOTAL E-CIGARETTES

$453,217,828

-41.4%

100.0%

100.0%

0.0%

JUUL LABS INC.

$190,724,878

2.7%

42.0%

24.0%

18.1%

REYNOLDS AMERICAN INC.

$163,182,815

-56.4%

36.0%

48.0%

-12.4%

FONTEM US INC.

$40,050,199

-60.4%

9.0%

13.0%

-4.2%

JTI-JAPAN TOBACCO INTERNATIONAL $35,515,904 SOTTERA INC. ALL OTHER

-18.2%

8.0%

6.0%

2.2%

$11,124,62

4.6%

2.0%

1.0%

1.1%

$12,619,411

-158.3%

3.0%

1.9%

0.8%

E-Cigarette Dollars & Market Share vs. Year Ago Among the major e-cigarette manufacturers, Reynolds American and Fontem have been hardest hit. Reynolds saw a 56 percent decline in dollars, while Fontem declined 60 percent. DOLLAR SHARE CHANGE VS. YEAR AGO

DOLLAR CHANGE VS. YEAR AGO

Total E-Cigarettes

Juul Labs Inc.

-41.4%

Juul Labs Inc.

Reynolds American Inc.

2.7%

Reynolds American Inc.

Fontem US Inc.

-56.4% -60.4%

Fontem US Inc. JTI-Japan Tobacco International

4.6%

All Other

-158.3%

-12.4% -4.2%

JTI-Japan Tobacco International

2.2%

Sottera Inc

-18.2%

Sottera Inc

18.1%

All Other

1.1% 0.8%

E-Cigarette Share by Region

E-Cigarette Share by Brand

The Northeast, West and Midwest are all pretty evenly divided in share of the e-cigarettes segment. As is the case with vaping, the Southwest lags behind the other regions, capturing less than 10 percent share of both dollars and consumer units.

The top three e-cigarette brand families — Juul, Vuse and blu — maintain a tight hold at the top, even with significant drops by both Vuse and blu in the 52-week period analyzed.

Midwest

Northeast

DOLLAR SHARE

Southeast

West

CONSUMER UNIT SHARE

7% 16%

Southwest

8% 31%

21% 25%

19% 21%

34%

18%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020

s UP

RANK BRAND FAMILY

1

JUUL

t DOWN

MANUFACTURER

— FLAT DOLLARS

TREND

SHARE OF SEGMENT

Juul Labs Inc.

$190,668,342

s

42%

2 VUSE

Reynolds American Inc.

$163,182,815

t

36%

3

Fontem US Inc.

$40,050,199

t

9%

4 LOGIC

JTI-Japan Tobacco International $35,515,904

t

8%

5

NJOY

Sottera Inc.

$11,124,621

s

2%

6

ALL OTHER N/A

$4,408,475

t

1%

$1,507,731

t

0%

BLU

7 LEAP

Swisher International

C-Metrics is a projected convenience channel database for warehouse delivered products.

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PIPE/CIGARETTE TOBACCO

CATEGORY INSIGHTS: Pipe/Cigarette Tobacco

Dollar sales in the pipe/cigarette tobacco segment saw a slight rise overall in the 52 weeks ended June 13. Sales in the segment increased by just 0.7 percent at c-stores.

TOTAL PIPE/CIGARETTE TOBACCO REPUBLIC TOBACCO REYNOLDS AMERICAN INC. SCANDINAVIAN TOBACCO GROUP RSB TOBACCO SX BRANDS ROUSECO INC. INTER CONTINENTAL TRADING USA INC. FARMERS TOBACCO CO. XCALIBER INTERNATIONAL LTD ALL OTHER

2020 2019 % CHANGE DOLLAR SHARE DOLLAR SHARE

DOLLARS

$276,348,587 $84,698,904 $62,778,901 $31,777,229 $26,096,683 $15,737,124 $14,256,541 $9,087,930 $5,450,525 $4,788,572 $21,676,179

0.7% 0.3% 4.1% -3.7% 7.2% 7.3% 7.5% -9.9% 5.3% -29.4% 0.0%

100.0% 30.6% 22.7% 11.5% 9.4% 5.7% 5.2% 3.3% 2.0% 1.7% 7.8%

% CHANGE

100.0% 31.6% 10.9% 13.6% 13.4% 7.2% 4.6% 3.7% 2.0% 2.0% 11.0%

0.0% -0.9% 11.8% -2.1% -4.0% -1.5% 0.6% -0.4% 0.0% -0.3% -3.2%

Pipe/Cigarette Tobacco Dollars & Market Share vs. Year Ago Dollar share among the top pipe/cigarette tobacco companies either declined or saw limited growth in the 52 weeks analyzed, with the exception of Reynolds American. DOLLAR CHANGE VS. YEAR AGO

DOLLAR SHARE CHANGE VS. YEAR AGO

Total Pipe/Cigarette Tobacco

0.7%

Republic Tobacco

Republic Tobacco

0.3%

Reynolds American Inc.

4.1%

Reynolds American Inc.

7.2%

SX Brands

SX Brands

7.3%

Rouseco Inc.

0.6%

Inter Continental Trading USA Inc.

-0.4%

7.5%

Rouseco Inc. -9.9%

5.3%

Farmers Tobacco Co.

Pipe/Cigarette Tobacco Share by Region

4% 10%

32%

Southeast

Southwest

West

CONSUMER UNIT SHARE

4% 10% 37%

0.0% -0.3%

All Other

-3.2%

Pipe/Cigarette Tobacco Share by Brand

It is clear from the regional charts that pipe/cigarette tobacco is most popular in the Northeast and West. Together, these two regions account for nearly 70 percent of the segment’s total dollar sales and consumer units. DOLLAR SHARE

Farmers Tobacco Co.

0.0%

All Other

Northeast

36%

18% 32%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020 C-Metrics is a projected convenience channel database for warehouse delivered products.

The top 10 brand families capture about 77 percent of the segment’s total dollar sales. Republic Tobacco owns the most brands in the top 10, holding four of the spots. s UP RANK BRAND FAMILY

t DOWN

MANUFACTURER

— FLAT DOLLARS

SHARE OF TREND SEGMENT

1 NATURAL AM SPIRITS 2 GAMBLER 3 GOOD STUFF 4 BUGLER 5 LARGO 6 CRISS CROSS 7 GOLDEN HARVEST 8 4 ACES 9 OHM

Sante Fe Tobacco $62,778,901 Republic Tobacco $29,940,374 RSB Tobacco $26,061,076 Scandinavian Tobacco Group $24,510,708 Republic Tobacco $18,513,392 SX Brands $13,882,953

Rouseco Inc. $11,349,492 - Republic Tobacco $9,360,732 s Inter Continental Trading USA Inc. $7,981,044 t

4% 3%

10 TOP

Republic Tobacco $7,366,234 t

3%

AUG

17-26 Cat insights_TOB.indd 25

-1.5%

Xcaliber International LTD

-29.4%

Xcaliber International LTD

17%

-4.0%

RSB Tobacco

RSB Tobacco

Inter Continental Trading USA Inc.

Midwest

11.8% -2.1%

Scandinavian Tobacco Group

-3.7%

Scandinavian Tobacco Group

-0.9%

2020

s

- t

- s t

23% 11% 9% 9% 7% 5%

3%

Guide to Tobacco

25

8/4/20 1:27 PM


PAPERS

CATEGORY INSIGHTS: Papers

The market for papers was strong during the 52 weeks ended June 13, with all but two of the major players increasing dollar sales. Overall, the segment grew by 4.3 percent. 2020 2019 % CHANGE DOLLAR SHARE DOLLAR SHARE

DOLLARS

% CHANGE

TOTAL PAPERS

$227,201,011

4.3%

100.0%

100.0%

0.0%

NATIONAL TOBACCO CO.

$94,795,443

8.96%

42.0%

40.0%

1.8%

REPUBLIC TOBACCO

$93,230,682

1.1%

41.0%

42.0%

-1.3%

HBI INTERNATIONAL

$7,783,859

24.8%

3.0%

3.0%

0.6%

$7,471,551

10.5%

3.0%

3.0%

0.2%

NEW IMAGE GLOBAL INC.

$5,330,355

-7.52%

2.0%

3.0%

-0.3%

SCANDINAVIAN TOBACCO

$3,740,553

-11.7%

2.0%

2.0%

-0.3%

$14,848,569

-0.05%

7.0%

7.0%

-0.6%

ROUSECO INC.

ALL OTHER

Paper Dollars & Unit Share vs. Year Ago While all but two of the top manufacturers experienced growth in both dollars and units, HBI International posted the greatest increases of 24.8 percent in dollars and 28 percent in units. CONSUMER UNIT CHANGE VS. YEAR AGO

DOLLAR CHANGE VS. YEAR AGO

Total Papers

6.2%

National Tobacco Co.

9.0%

Republic Tobacco

Total Papers

4.3%

National Tobacco Co.

10.0%

Republic Tobacco

1.1%

HBI International

24.8%

Rouseco Inc.

7.7%

HBI International

28.0%

Rouseco Inc.

10.5%

9.5%

New Image Global Inc.

-7.5%

New Image Global Inc.

-13.9%

Scandinavian Tobacco

-11.7%

Scandinavian Tobacco

-16.9%

All Other

-.05%

All Other

0.1%

Paper Share by Region

Paper Share by Brand

Following the trend of pipe/cigarette tobacco, the papers segment also shows significant differences among the different regions. Papers are most popular in the Northeast and least popular in the Southwest.

The top 10 brands hold nearly 90 percent share of the segment. While the top four brands are holding steady, five of the bottom six brands are experiencing forward momentum.

Midwest

Northeast

DOLLAR SHARE

Southeast

West

CONSUMER UNIT SHARE

8%

9% 19%

Southwest

22%

30% 34%

22%

19% 23%

14%

SOURCE: C-Metrics Projected Data Service, Management Science Associates, 52 weeks ending 6/13/2020 C-Metrics is a projected convenience channel database for warehouse delivered products.

s UP

RANK BRAND FAMILY

t DOWN

â&#x20AC;&#x201D; FLAT

MANUFACTURER

TREND

SHARE OF SEGMENT

1

ZIG-ZAG

National Tobacco Co.

-

41.6%

2

JOB

Republic Tobacco

-

14.4%

3

GAMBLER

Republic Tobacco

-

12.3%

4

TOP

Republic Tobacco

-

6.7%

5 GOLDEN HARVEST

Rouseco Inc.

s 3.3%

6

ALL OTHER

N/A

s 2.9%

7

PREMIER

Republic Tobacco

t 2.5%

8

BUGLER

Scandinavian Tobacco

s 2.3%

9 OCB

Odet-Cascadec-Bollore

s 1.8%

10 RAW

RAW Rolling Papers

s 1.7%

26 Guide to Tobacco C S N E W S . c o m

17-26 Cat insights_TOB.indd 26

8/4/20 1:27 PM


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