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NACS Show 2016 - Booth 1931 - Hall B

VIEWPOINT By Don Longo, Editorial Director

Hallowed Halls QuikTrip’s Cadieux, Pinnacle’s Johnson and Cumberland Farms’ Haseotes to be honored at 30th annual CSNews Hall of Fame event

n 1987, Margaret Thatcher won a rare third term as British prime minister. The New York Giants defeated the Denver Broncos 39-20 in the Super Bowl. Indiana University beat Syracuse for the NCAA basketball championship. Also in 1987, Vietnam War movie “Platoon” won the Oscar for Best Picture. British businessman Richard Branson completed the first transatlantic hot-air balloon flight. Paul Simon’s “Graceland” won the Grammy for Album of the Year, while NBC’s “Golden Girls” snagged the Emmy for Best Comedy Series. And in 1987, the Convenience Store News Hall of Fame was launched to recognize convenience store industry pioneers and innovators from retailer and supplier firms of all sizes. The late Chester Cadieux, founder and chairman of Tulsa, Okla.-based For comments, please contact Don Longo, Editorial Director, QuikTrip, was our first inductee. at (201) 855-7606 or This year marks the 30th annual dlongo@stagnitomail.com. CSNews Hall of Fame event. Over the past three decades, it has become one of the most anticipated listings on the industry events calendar — from the moment the year’s inductees are announced in the spring to the actual event in the fall. The names of previous Hall of Fame honorees reads

like a Mount Rushmore of c-store industry luminaries — if Mount Rushmore included 30 faces and stretched across the United States and the Canadian Rockies. In addition to Cadieux, there’s a couple of Sheetzes and a couple of Thompsons (7-Eleven), along with Wood (Wawa), MacDougall (Nice N Easy), Bouchard (Alimentation Couche-Tard), and many other industry notables. The 2016 inductees are outstanding additions to these hallowed halls. Chet Cadieux, chairman, president and CEO of QuikTrip Corp., and Bob Johnson, founder and CEO of The Pinnacle Corp., along with 2016 CSNews Retailer Executive of the Year winner Ari Haseotes (see cover story on page 26), CEO of Cumberland Farms, will be honored at a gala banquet and induction ceremony on Nov. 14 in Tulsa, hometown of Cadieux’s 725-plus-unit convenience store chain. Cadieux is only the second offspring of a Hall of Famer to be inducted. Sonja Hubbard of E-Z Mart Stores Inc. was the first, succeeding her late father Jim Yates in 2010. Full coverage of the 30th annual CSNews Hall of Fame, including profiles of 2016 inductees Cadieux and Johnson, a retrospective on three decades of honoring convenience store industry pioneers and a special tribute to the first Hall of Famer Chester Cadieux, will be featured in our December issue.

CSNews has been recognized with more editorial awards, including the prestigious Jesse H. Neal Award for business journalism, in the past six years than any other industry publication. 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 2008 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2007 2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015 2010 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Front Cover Illustration, October 2009 2009 Trade Association Business Publications Intl. Tabbie Awards Gold, Front Cover Illustration, February 2008 Honorable Mention, Best Single Issue, October 2008

2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014 2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2013 2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012 2011 Silver Eddie Award, Folio: magazine Business to Business, Retail, Full Issue, October 2010 2011 Silver Eddie Award, Folio: magazine Business to Business, Retail, Best Single Article, October 2010 2009 Gold Ozzie Award, Folio: magazine Best Use of Illustration, October 2008 2009 Silver Eddie Award, Folio: magazine Business to Business, Retail, Full Issue, October 2008 2009 Bronze Eddie Award, Folio: magazine Business to Business, Retail, Website

4 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015 2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015 2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014 2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014 2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012 2010 American Society of Business Press Editors, Northeast Regional Azbee Awards Silver, Feature Article Design, November 2010

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CONTENTS SEPTEMBER 2016

VOLUME 52/NUMBER 9

26 | COVER STORY Rooted in Retail

Cumberland Farms CEO Ari Haseotes works hard to protect his family’s legacy.

FEATURES

INDUSTRY ROUNDUP

34 | A Day in the Life of Yesway CSNews goes inside this startup poised to become a 1,000-store operator in just a few years.

14 | An Opportunity Too Good to Pass Up

TOP WHOLESALERS

56 | Expansion & Enhancement Acquisition activity and increased sales mark the past year for convenience wholesalers.

TOP WHOLESALERS

TECHNOLOGY

94 | Bridging the Digital Capabilities Divide Many retailers are failing to connect objectives with outcomes. NACS SHOW PREVIEW

100 | Preparing for the Road Ahead Attendees will find this year’s NACS Show themed around the future. Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by Stagnito Business Information, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright © 2016 by Stagnito Business Information. All rights reserved. Subscriptions: One year, $93; two years, $152. One year, Canada, $110; two years, Canada, $175. One year, foreign, $150. Payable in advance with a bank draft drawn on a U.S. bank in U.S. funds. Single copies, $10, except foreign, where postage will be added. Printed in U.S.A. Periodicals postage paid at Deerfield, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.

6 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

Visit us at the 2016 NACS Show, Hall B booth #1913

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CONTENTS 570 Lake Cook Road, Ste. 310, Deerfield, IL. 60015 (224) 632-8200 Fax: (224) 632-8266 www.csnews.com Direct Mailing Address for Convenience Store News: 111 Town Square Place, Suite 400, Jersey City, N.J. 07310

CATEGORY MANAGEMENT

BRAND MANAGEMENT

FOODSERVICE

Group Brand Director (330) 840-9557

62 | Finding the Right Solution 7-Eleven’s Kelly Buckley tackles problem-solving with deep foodservice expertise. FOODSERVICE

64 | Standing Out From the Crowd Rich Green leads customers to expect the unexpected from Maverik’s c-stores. FOODSERVICE

68 | What Will Change as Millennials Age? They eat fresh now, but retailers want to know whether their appeal for “real” will continue.

Ron Lowy rlowy@stagnitomail.com

EDITORIAL Editorial Director (201) 855-7606 Editor-in-Chief (201) 855-7608 Managing Editor (201) 855-7614 Senior Editor (201) 855-7618 Associate Editor (201) 855-7619 Assistant Editor (201) 855-7604 Contributing Editor (303) 741-3377 Contributing Editor (201) 280-2614 Art Director (224) 632-8245

Don Longo dlongo@stagnitomail.com Linda Lisanti llisanti@stagnitomail.com Brian Berk bberk@stagnitomail.com Melissa Kress mkress@stagnitomail.com Angela Hanson ahanson@stagnitomail.com Danielle Romano dromano@stagnitomail.com Renée M. Covino reneek@aol.com Tammy Mastroberte tmastroberte@gmail.com Michael Escobedo mescobedo@stagnitomail.com

FOODSERVICE

72 | Small Changes Can Make a Big Difference Implement these tips to make a profitable impact on your prepared food program. TOBACCO

74 | Patchwork of Problems Varying tobacco legislation across Massachusetts is creating a hodgepodge of rules for retailers. COLD VAULT

82 | Rocking the Cold Vault Fifth-annual CSNews Beverage & Beer Retailing Summit showcases the variety in drinks.

Vice President/Custom Media Division Pierce Hollingsworth (224) 632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Strategic Marketing Director Bruce Hendrickson (224) 632-8214 bhendrickson@stagnitomail.com Director of Events Pat Benkar (973) 607-1330 pbenkar@edgellmail.com Director of Market Research Debra Chanil (201) 855-7605 dchanil@stagnitomail.com Audience Development Manager Shelly Patton (646) 217-1045 spatton@stagnitomail.com List Rental The Information Refinery (800) 529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media (877) 652-5295 sales@wrightsmedia.com Subscriber Services/Single-Copy Purchases (978) 671-0449 Stagnito@e-circ.net

CORPORATE OFFICERS Executive Chairman

DEPARTMENTS

Alan Glass aglass@stagnitomail.com Peter Hoyt phoyt@p2pi.org Chris Stark cstark@stagnitomail.com Ned Bardic nbardic@stagnitomail.com Korry Stagnito korrystagnito@stagnitomail.com Joel Hughes jhughes@stagnitomail.com

President & CEO

VIEWPOINT

4 | Hallowed Halls QuikTrip’s Cadieux, Pinnacle’s Johnson and Cumberland Farms’ Haseotes to be honored at 30th annual CSNews Hall of Fame event. 12 | CSNews Online

EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION

20 | New Products

Chief Financial Officer Chief Customer Officer Chief Operating Officer Chief Digital Officer

CONVENIENCE STORE NEWS AFFILIATIONS

Premier Trade Press Exhibitor

EXPERT’S VIEW

104 | Golden Goose or Black Swan? Why it’s important to ask yourself if you have a transferable family business. 122 | Getting to the Core

8 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

EDITORIAL ADVISORY BOARD Brett L. Atherton Bolla Management Rick Crawford Green Valley Grocery Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Ray Johnson Speedee Mart

Jack Lewis Village Pantry LLC

Jonathan Polonsky Plaid Pantries Inc.

Kyle McKeen Alon Brands Inc.

Roy Strasburger Convenience Management Services Inc.

Richard Mione GPM Southeast Matt Paduano Nice N Easy Grocery Shoppes

Jon Urbanik CST Brands Inc.

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.

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CSNEWS.COM ONLINE EXCLUSIVE

TOP 5 Daily News Headlines The most viewed articles online. 1 | PHOTO GALLERY: Inside QuikTrip’s First Store Sans Gas As a leading seller of motor fuels in all the markets in which it operates, QuikTrip customers in metro Atlanta may be surprised to find the convenience store chain’s newest site is missing one offering traditionally associated with the c-store operator: fuel. QuikTrip Corp., winner of the 2015 Convenience Store News Retailer Innovator of the Year award, is testing a non-fuel concept as part of the company’s long-term strategy to grow and serve non-traditional market segments.

2 | Dollar General Getting Into Fuel Business Dollar General Corp. is entering the fuel business following its purchase of 41 Walmart Express sites throughout 11 states. “Dollar General is excited to add these locations to our existing store base. We look forward to the opportunity to better serve our customers in these communities by continuing to provide the convenience and value they expect from Dollar General,” said CEO Todd Vasos.

How Should C-stores Get Going Around Pokémon Go?

Charmander, Squirtle, Kakuna and Pikachu. If you’re a mobile-gaming youth or a nostalgic adult, these names may mean something to you. And if you’re a convenience store retailer, they should mean something to you, too. “Convenience stores could promote that there are plenty of Pokémon to catch in the store to attract these gamers, which will drive additional foot traffic and result in more potential sales,” said Andrew Levi of Blue Calypso, a company that specializes in mobile shopper engagement. For more exclusive stories, visit the Special Features section of www.csnews.com.

3 | Sheetz’s New Sandbox: College Towns After identifying and moving into new geographies over the past few years — notably, North Carolina — Sheetz Inc. is making inroads with a new demographic: college students. The Altoona, Pa.-based convenience retailer opened its first college-campus location at West Virginia University in Morgantown, W.Va., and featured in the non-gas store is a Sheetz Café.

PRODUCT HIGHLIGHT The most viewed New Product online.

4 | Tobacco Analyst Breaks Down Possible Deeming Effects

Lindt Crunchy Cookie Bites

Most of the tobacco industry agreed with the Food and Drug Administration’s plan to regulate electronic cigarettes and vaping products. However, very few are happy with the final deeming rule and its provisions. Just what impact the new regulations have may depend on where you stand on the manufacturing scale, according to one industry analyst.

5 | Friendly Competitor Turns Into Acquisition for Wallis Cos. Wallis Cos. is adding 33 convenience stores to its portfolio. The company signed a definitive agreement to acquire the assets of U-Gas Holdings Inc., including 19 U-Gas and 14 Dirt Cheap branded convenience stores. The deal also includes a Gigi’s Commissary.

Lindt Crunchy Cookie Bites are milk chocolate-covered cookie pieces guaranteed not to crumble, according to the company. Available in a 5.3-ounce package, the bites have a suggested retail price of $4.39. Lindt Crunchy Cookie Bites are intended to be enjoyed by the handful as suggested by the product’s tagline, “Hello, I’m a handful.” Lindt & Sprüngli (USA) Inc. Stratham, N.H. (877) 695-4638 www.lindtusa.com

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12 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

n o i t a r t s i g Re

n e p O Now

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Nov. 13-15 • Chicago Register today. Visit www.plmaregistration.com Presented by the Private Label Manufacturers Association Telephone: (212) 972-3131

INDUSTRYROUNDUP FAST FACT

An Opportunity Too TOP Good to Pass Up WHOLESALERS

The 25 companies on this year’s Convenience Store News Top Wholesalers ranking staged something of a comeback over the past year. They achieved a combined sales increase of 4.1 percent, more than double the 1.7 percent posted in last year’s report. Source: Convenience Store News Market Research (page 56)

QUOTABLES “My time, the time of our board and the time of our senior leadership team is now spent solely and exclusively focused on making our retail business as good as it can be. That’s been the biggest and most profound change: our ability to gain a singular focus and make sure all elements of our strategy, our values, our culture, our mission and our vision are fully aligned around that singular retail focus.” — Ari Haseotes, Cumberland Farms Inc. (page 26)

Circle K parent Couche-Tard makes $4.4B deal to acquire CST Brands By Brian Berk

“T

oo good to pass up.” That’s how Alimentation Couche-Tard Inc. CEO Brian P. Hannasch describes the opportunity his company seized to acquire CST Brands Inc. for $4.4 billion in its biggest merger and acquisition deal ever, and thus add one of the few remaining North American convenience store chains that operates 1,000 stores or more. “We believe it creates significant value for our shareholders in terms of significant earnings-per-share accretion and strong free-cash generation, while giving us the capacity to continue to invest in the existing business,” Hannasch said. The transaction, upon completion, will make Circle K parent Couche-Tard the largest independent convenience store operator in the United States in terms of company-operated stores. As part of the deal, Couche-Tard will acquire 1,146 c-stores, primarily operating under the Corner Store, Nice N Easy and Flash Foods brand names. Couche-Tard will also control the general partner of Allentown, Pa.-based CrossAmerica Partners LP. Once the deal is approved by CST shareholders, as well as Canadian and U.S. authorities, Couche-Tard plans to sell CST Brands’

14 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

retail assets in Canada to Parkland Fuel. According to Hannasch, CST’s market presence in Georgia and Texas was especially desirable for Couche-Tard since the Laval, Quebec-based company currently has no presence in Georgia and only a limited presence in Texas. “It’s really a great fit,” he said. “We really had a gap in Georgia where CST has Flash Foods stores. And Texas is a fast-growing market.” In fact, once the transaction closes, Couche-Tard will have a strong presence in nearly all regions of North America, with the only exceptions being some pockets in the U.S. Mid-Atlantic region and the upper U.S. Midwest, consisting of the states of Idaho, Montana, North Dakota, South Dakota, Nebraska, Wyoming and Utah. CST CEO and President Kim Lubel praised the combination of these two companies, noting that Couche-Tard shares CST Brands’ passion for great customer service. “Joining this platform is helping us join a journey to be the world’s preferred stop for convenience and fuel,” Lubel remarked during a recent press conference. “I’m very happy to see this next chapter begin as our network joins with Couche-Tard.”

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INDUSTRYROUNDUP

CSNews Parent Company Debuts New Identity: Stagnito, Edgell and Path to Purchase Institute unite under one umbrella The recently merged companies of Stagnito Business Information, Edgell Communications and the Path to Purchase Institute revealed that going forward, the organizations will unite under one umbrella and operate under the name of EnsembleIQ. EnsembleIQ is a premier business intelligence resource that exists to help people and their organizations succeed. It is structured to serve the business-tobusiness needs of retailers, consumer goods manufacturers, technology vendors, marketing agencies and retail service providers by using its integrated network of media and information resources designed to inform, connect and provide actionable marketplace intelligence. “An ensemble of actors or musicians works in harmony for the benefit of its audience, and that is precisely how we’ve designed our new company,” President

and CEO Peter Hoyt said. “With the depth and breadth of our reach inside the retail marketplace, our ensemble of B-to-B brands, and our rich understanding of the causes and effects of the revolution that is taking place at retail, we’re poised to deliver on our primary mission — to help retail stakeholders succeed.” While all Stagnito Business Information, Edgell Communications and Path to Purchase programs, services, publications, websites and events will continue operation, the Stagnito and Edgell names will no longer be used. The Path to Purchase Institute will maintain its name, operating as a division of EnsembleIQ. EnsembleIQ is a portfolio company of RFE Investment Partners, a private-equity investor with more than 30 years of experience investing in growth companies in partnership with strong management teams.

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eye on growth n 7-Eleven Inc. opened its

60,000th global store in August. The convenience store chain has a presence in 17 countries, plus the first 7-Eleven store in Vietnam is expected to open next spring, extending its operations to 18 countries. n Sunoco LP purchased six convenience stores, along

with wholesale motor fuel distribution and commercial fuel distribution businesses, from Denny Oil Co. Inc. The assets are in eastern Texas and Louisiana.

n Sheetz Inc. continues to build college-campus stores.

New locations are planned for Indiana University of Pennsylvania, near Carnegie Mellon University, and the University of Pittsburgh. No timeline or exact locations have been announced for these sites. n TA Operating, a division of TravelCenters of America

LLC, will open 40 new Minit Mart c-stores that feature Godfather’s Pizza Express this year. This will bring the chain’s number of stores offering Godfather’s Pizza from 38 to 78. n Stewart’s Shops opened two

n Fastrac Markets LLC opened

its largest-ever Fastrac Cafe in Utica, N.Y. The 5,600-squarefoot store has 12 fueling positions and three high-speed diesel pumps. This upgraded store model will be implemented across the chain.

new stores on July 22, in Lake George and Halfmoon, N.Y. They are among 18 Stewart’s Shops expected to be built this year, either as a brandnew location or replacement of an existing location, along with nearly 40 remodels.

WWW.CSNEWS.COM | SEPTEMBER 2016 | Convenience Store News 17

INDUSTRYROUNDUP

retailer tidbits n Thorntons Inc. rolled out its new

foodservice program called “Real Kitchen. Real Food.” to 28 new concept stores in the Louisville, Ky., market. The fresh-food program progr has been initiated at select sites throughout th Kentucky, Illinois and Indiana. n 7-Eleven Inc. teamed up with

drone delivery service Flirtey to complete the first fully autonomous drone delivery to a customer’s residence in Reno, Nev. The companies plan to expand drone delivery tests.

ern Louisiana. Prior to this, the two companies most recently extended the joint program to portions of Florida in June. n Phillips 66 inked a multiyear agreement with

JPMorgan Chase & Co. to accept Chase Pay at Phillips 66-, Conoco- and 76-branded locations nationwide. Customers will be able to make purchases via the My Phillips 66, My Conoco and My 76 mobile apps. n The Parker Cos. and Keep Savannah Clean hosted an

event where attendees picked up trash at Savannah’s

n Speedway LLC expanded its pact

with Cardtronics Inc. to offer M&T Bank-branded ATMs at 120 stores in New Jersey and Long Island, N.Y., in addition to existing bank-branded ATMs at 48 Speedway stores in Pennsylvania. n Chevron Products Co.

and Albertsons Cos. LLC expanded their joint fuel rewards program to south-

Forsyth Park while playing Pokémon Go. The three participants with the most trash picked up by weight earned Parker’s cash cards. n Love’s Travel Stops & Country Stores

Inc.’s Gemini Motor Transport fuelhauling fleet recognized 135 drivers who remained accident-free for five years. More than $3.4 million in bonuses was paid to the inaugural class of Gemini Safe Driver Credits recipients.

competitive watch n Wal-Mart Stores Inc. is acquiring

Jet.com for approximately $300 million in cash. The deal, expected to close this year, positions the big-box retailer for faster ecommerce growth. n Ahold USA brought

its small-store concept, bfresh, to Brighton, Mass. The opening of a new 9,700-square-foot location here marked the bfresh banner’s second store in the greater Boston area.

18 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

n On-demand delivery startup com-

pany goPuff expanded its service to Portland, Ore. This makes the 11th metropolitan area to now offer goPuff. n A Missouri McDonald’s is

showcasing the restaurant of the future. It offers new features such as unlimited French fries and table service. The location also includes ordering kiosks and a separate counter for McCafé beverages.

supplier tidbits n Reynolds American Inc. completed the manufacturing

integration of the Newport brand in June. The tobacco company acquired Newport as part of its 2015 purchase of Lorillard Inc.

branded biscuit license from Burton’s Biscuit Co. The pact will allow Mondelez to manufacture, market and sell the biscuits internationally. n TBHC Delivers, the larg-

n M&M’S revealed Coffee

Nut as the winning flavor selected by consumers in its “Flavor Vote” campaign. More than one million votes were cast in the contest, which was held in honor of the candy brand’s 75th anniversary.

est single distributor of Hunt Brothers Pizza in the United States, debuted its Rolling Warehouse Guarantee. As part of the initiative, TBHC Delivers made upgrades to all of its delivery trucks, which collectively deliver to more than 3,000 convenience stores per week.

n MillerCoors LLC’s Tenth and Blake

Beer Co. craft and import division acquired a majority stake in Terrapin Beer Co. for an undisclosed sum. Tenth and Blake previously purchased a minority stake in Terrapin in 2012. n Mondelez International Inc. is buying the Cadbury-

n S&D Coffee Inc. accepted an

acquisition offer from Cott Corp. Upon completion of the transaction, S&D would exist as a subsidiary of Cott and continue to operate under the S&D Coffee & Tea name. Ron Hinson will remain president and CEO of S&D.

FDA’s Deeming Rule Goes Into Effect After more than five years of waiting, the Food and Drug Administration’s (FDA) deeming rule and its provisions for electronic cigarettes and cigars are now in effect. The rule also extends the FDA’s regulatory authority to hookah tobacco and pipe tobacco. The regulations for newly “deemed” tobacco products include: • Not allowing products to be sold to persons under the age of 18 (in person or online); • Requiring age verification by photo ID; • Not allowing the selling of covered tobacco products in vending machines (unless in an adult-only facility); and • Not allowing the distribution of free samples. The final rule also requires manufacturers of all newly deemed products to show the products meet the applicable public health standard set forth in the law and to receive marketing authorization from the FDA, unless the product was already on the market as of Feb. 15, 2007. That grandfather — or predicate — date has been a sticking point for many in the e-cigarette and vapor

industry. “The bad news is Aug. 8 of this year marks the beginning of a two-year countdown to FDA prohibition of 99.9 percent of vapor products on the market,” stated Gregory Conley, president of the American Vaping Association. “If we do not succeed in changing the FDA’s arbitrary predicate date of Feb. 15, 2007, the vapor industry will shrink to almost nothing beginning Aug. 8, 2018.” Industry advocates are working on both the legislative and legal fronts to change the grandfather date, according to Conley.

WWW.CSNEWS.COM | SEPTEMBER 2016 | Convenience Store News 19

NEWPRODUCTS Henry’s Hard Cherry Cola

Hoshizaki Overshelves

Building on last year’s launch of Henry’s Hard Soda, the brand introduces Henry’s Hard Cherry Cola to its family of flavors, which hich already includes Hard Ginger Ale and Hard Orange ange Soda. At a 4.2-percent alcohol by volume, me, Henry’s Hard Cherry Cola is made with real cane sugar and delivers a cherry-cola flavor with a hint of almond, giving it a distinctive twist from Henry’s other two flavor offerings, according to maker MillerCoors. Henry’s Hard Soda is available in a six-pack of 12-ounce bottles and in 16-ounce single cans.

Hoshizaki America’s newest accessory, Overshelves, fit commercial series undercounters, worktops, sandwich preps and mega-tops. The adjustable, pass-thru shelf kits are constructed of heavy-duty stainless steel. Overshelves can double the storage and efficiency of commercial kitchens, the company noted. The single or double overshelf kits can be installed on 27-inch, 48-inch, 60-inch or 72-inch door or drawer cabinets produced after March 2016.

MillerCoors Edison, N.J. (732) 548-1155 millercoors.com

RBG Premier Level Membership Program Building upon its 20-year history of providing support to independent convenience store retailers, Royal Buying Group (RBG) is expanding its offering to a select group of existing and new retailers through a new Premier level membership program. RBG Premier provides chain-buying benefits, enhanced category management expertise, and exclusive promotions and rewards. Premier vendor partners will have unparalleled access to these members, and have the opportunity to participate in and support exclusive promotions and targeted incentive programs created to increase brand awareness, according to the group. Royal Buying Group Inc. Lisle, Ill. (630) 353-7950 rbg2@royalbuying.com royalbuying.com

Hoshizaki America Peachtree City, Ga. (800) 438-6087 hoshizakiamerica.com

Cintas Photo Mat The Photo Mat by Cintas is the company’s latest addition to its High Performance Series, a line of mats designed to help businesses get “ready for the work day.” The Photo Mat is detailed with 50 percent more high-resolution to enhance brand image in high-visibility areas, such as entryways. It can be customized with a logo, message or photograph. The Photo Mat also captures water, dirt and debris to keep facility floors clean. Cintas Corp. Savannah, Ga. (888) 400-9315 cintas.com

Mistic 2.0 POD-MOD Mistic E-Cigs’ Mistic 2.0 POD-MOD is a closed-ended personal vaporizer that enables consumers to quickly and easily change flavor tanks using the company’s pre-filled pod technology. Available for $39.99, this new vape system starter kit comes in two color options: matte black and matte white. Each kit includes two pre-filled, 10-milliliter flavor pods — the matte black option comes with tobacco and strawberry flavors, while the matte white option includes menthol and cherry flavors. The Mistic 2.0 POD-MOD is a compact, ergonomically designed, rechargeable 30-watt unit with an automatic shut-off feature, as well as a standby mode to conserve power. Other Mistic 2.0 e-liquid flavors, made in the U.S. and available in four milligram nicotine strengths, are: coconut cream, creamy cantaloupe, fruit mix, java, mango and watermelon. Mistic E-Cigs Charlotte, N.C. (855) 282-3700 info@misticecigs.com misticecigs.com 20 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

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NEWPRODUCTS Dandy Celery Snackers Duda Farm Fresh Foods introduces its newest snack line, Dandy Celery Snackers, ackers, as part of the company’s 90th anniversary niversary celebration. The line includes es three celery snack varieties: Ready to Snack Celery Sticks feature a 1.6-ounce package of fresh-cut celery sticks portioned for an individual serving size; while Dandy Celery and Peanut Butter Packs are available in 2.3-ounce and 4.15-ounce 4.15 ounce packages. On-the-go Crunch Cups are also available in Ranch, Lite Ranch, Sriracha Ranch and smooth Peanut Butter varieties.

Nature Valley Biscuits With Creamy Nut Butter Nature Valley Biscuits are now available into two nut butter varieties: Almond Butter and Peanut Butter. The new biscuits feature a layer of creamy almond or peanut butter sandwiched between two 100-percent whole-grain oat biscuits. Nature Valley Biscuits with nut butter feature: 14 grams of whole grain; three grams of fiber; three to five grams of protein; and no high-fructose corn syrup or artificial colors, flavors or sweeteners. The biscuits come in 1.35-ounce packaging for a suggested retail price of $1.29.

Duda & Sons Inc. Oviedo, Fla. (407) 365-2111 dudafresh.com

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

Peak Energy Mints

Jimmy Dean Southern Style Chicken Biscuit

Peak Energy Mints feature a revolutionary energy blend that combines patented D-Ribose with caffeine and B vitamins to deliver a rejuvenating boost of energy that lasts for hours without the crash, according to the maker. Each single-serving pouch contains two mints and is specifically designed for impulse sales at the checkout counter. Peak Energy Mints come in two flavors: Fresh Mint and Orange Cream. Each package contains as much caffeine as the leading energy shot, the company noted.

To meet consumer demand for a hearty, on-the-go breakfast sandwich, Jimmy Dean introduces a new and improved Southern Style Chicken Biscuit. Now 58 percent larger to meet the size of leading quick-service restaurant breakfast sandwiches, the Southern Style Chicken Biscuit features juicy, tender, white-meat chicken. The sandwich’s proprietary packaging allows for a four-hour hot hold or seven-day refrigerated shelf life.

Zipp Foods LLC Cleveland (800) 251-8268 customerservice@zippfoods.com getpeakenergy.com

Tyson Convenience Springdale, Ark. (800) 248-9766 tysonconvenience.com

Dole Chef’s Choice Salad Kits Dole’s new line of Chef’s Choice Salad Kits contain two fresh-picked heads of mini Romaine lettuce, toppings and a signature Dole dressing. Available in two initial varieties, the Dole Chef’s Choice Caesar Salad Kit includes two heads of mini Romaine lettuce, croutons, black pepper, shredded Parmesan cheese and Dole’s signature Caesar Dressing; while the Dole Chef’s Choice Tuscan Salad Kit combines sun-dried tomatoes, Parmesan cheese and savory seasoning with two heads of mini Romaine lettuce and Dole’s signature Italian Herb Dressing. Each Chef’s Choice Salad Kit is available for a suggested retail price of $4.99. The package also includes step-by-step instructions to create grilled, seared or chopped salads. Dole Packaged Foods LLC Westlake Village, Calif. (800) 723-9868 dolefoodservice.com

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THE MOST

T∂ P 10

BRANDS “ON THE WAY UP” – Nielsen Harris Poll EquiTrend® Study

Only Salty Snack in Top 10

Top 10 with

Millennials & Boomers

Boomers

Top 10 with

Generation X & Boomers

In a study of 2,500 brands, The W∑nderful Company outshines every other CPG company. Across all generations, W∑nderful brands are recognized by more consumers as “on the way up.” According to Nielsen, brand momentum is related to positive sales trends. So naturally, we’re growing excited.

Source: Top 10 brands identiﬁed as heading “on the way up” by 97,120 U.S. consumers in Nielsen’s semi-annual syndicated brand equity study. © 2016 The Wonderful Company LLC. All Rights Reserved. THE WONDERFUL COMPANY, WONDERFUL, POM, HALOS, the accompanying logos, and all other intellectual property are owned by The Wonderful Company LLC or its afﬁliates. All other trademarks belong to their respective owners. MB15988

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Cover Story

Retailer Executive of the Year

ROOTED in

RETAIL

Cumberland Farms CEO Ari Haseotes works hard to protect his family’s legacy By Melissa Kress

wenty years ago, Ari Haseotes spent the better part of a year as a store manager for Cumberland Farms Inc. Today, he serves as CEO of the Framingham, Mass.-based convenience store chain; however, he certainly has not forgotten his storelevel roots. His connection to the retailer goes even farther back than two decades, though — to school breaks spent working as a stock boy in the company’s distribution center. As is the case in many family businesses, like Cumberland Farms, Haseotes essentially grew up in the business. His grandparents, Vasilios and Aphrodite Haseotes, bought a farm and their first cow in Cumberland, R.I., in 1939. Twenty-three years later, from those organic beginnings, the family welcomed customers to its inaugural convenience store — the first of its kind in the Northeast. “From the time I was a little boy, I always had a lot of pride in what the family had accomplished; those before me — my grandparents, my aunts and my uncles, the generation that preceded me. That was a draw for me as a child and a real source of pride,” he recalled.

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Cover Story

Formerly The Cumberland Gulf Group, Cumberland Farms recently sold off the Gulf Oil piece in order to focus all its attention on retail.

Beyond that, Haseotes also truly took a liking to the work. “I was always very intrigued by the business. It seemed to make good sense to me in terms of what value and role we were fulfilling to our guests every day in the stores,” he explained. “I looked at the opportunity to work in the business as something that would be really exciting and rewarding.” Now, as the third generation carrying on the legacy of Cumberland Farms and keeping it up-todate for today’s times, Haseotes still finds the work exciting and rewarding. And for his commitment to Cumberland Farms and to the convenience channel as a whole, he is being honored as the 2016 Convenience Store News Retailer Executive of the Year. The Retailer Executive of the Year award, now in its third year, recognizes a retailer executive who exemplifies leadership, business acumen, dedication to the industry, and commitment to community service. Winners are chosen by a blue-chip panel of industry leaders. MUCH AT STAKE

Leading the family business is not something Haseotes takes lightly as the job comes with its own unique challenges: There is more at stake than just the bottom line. “I think some of the particular challenges are positive in a way because when you run a family business,

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“From the time I was a little boy, I always had a lot of pride in what the family had accomplished; those before me — my grandparents, my aunts and my uncles, the generation that preceded me. That was a draw for me as a child and a real source of pride.” you’re concerned about the long term. That’s a wonderful gift and perspective to be able to have,” he said. At the same time, there is another side to that. If he was running a public company, his tenure could end before facing the consequences of poor decisions. With a family business — one that has been around for generations and one that you expect to remain in the family for many more years to come — decisions weigh more heavily on you, according to the chief executive. Questions he consistently finds himself asking include: Is this an investment that, over the long term, will be a good one for the family? Are we making the right decision now for our people? Or are we robbing the future to pay for something in the present? “It’s quite different here. The decisions we make we live with for many, many decades generally. There is

TO BUSINESS THAT’S ABOVE AND BEYOND. Congratulations to Ari Haseotes

RETAIlER ExEcUTIVE Of THE YEAR 2016 cONVENIENcE STORE NEwS Building relationships. Building growth.

Cover Story

New Cumberland Farms convenience stores make fresh foods and beverages a focal point.

a pressure that comes with really making sure we’ve done our homework; that we’ve been very diligent and vigilant with things we’ve looked at; that we’ve taken a long-term view on the investments and the decisions we make, all in the mindset that we’re most interested in building a business that is as strong as it could be over the long term,” said Haseotes. While industry changes and increasing business pressures concern all convenience retail executives, they seem to pack a little more punch for Haseotes. “Think about technology and electric vehicles, or the continued decline in tobacco usage. Those are things that weigh on you particularly heavy when you are making significant investments in a business that still has a significant portion of revenue derived from those products,” he pointed out. “How is that going to fit with this family business? What’s going to be the impact of those decisions on a business we intend to retain for generations to come?” SINGULAR RETAIL FOCUS

The long-term lens certainly came into play when Cumberland Farms recently decided to sell off Gulf Oil LP to Chelsea Petroleum Products Holdings LLC, an affiliate of ArcLight Capital Partners. The transaction was completed in December. The move was driven by Cumberland Farms’ desire to return to its legacy of

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pure-play retail. “It was simply a matter of where do we think we have the greatest opportunities and where do we think our strengths can be best leveraged. Where are our family values and cultures most consistent with?” Haseotes said. “All of that pointed to our retail business being the business we wanted to put as much focus and attention on [as possible] — not just capital, but management and overall corporate focus. Really, being the best we could be as a retail company.” When combined with the Gulf Oil organization, Cumberland Farms had been running a wholesale marketing business and a terminal business. As much as the company liked those businesses, “it wasn’t clear to us that we could take our retail business to the heights that we would like to take it to, with that much of a diversification of our own focus,” Haseotes explained. While Cumberland Farms’ separation from the Gulf Oil business is still relatively new, Haseotes already sees early signs indicating the decision is moving the retailer in the right direction. Notably, its muchsought-after focus on retail is becoming a reality. “My time, the time of our board and the time of our senior leadership team is now spent solely and exclusively focused on making our retail business as

CONGRATULATIONS!

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Cover Story

good as it can be,” he said. “That’s been the biggest and most profound change: our ability to gain a singular focus and make sure all elements of our strategy, our values, our culture, our mission and our vision are fully aligned around that singular retail focus.”

intensive efforts to enhance its fresh food and beverage offer roughly a decade ago. Now, thanks to the company’s singular focus on retail, foodservice has moved even more to the forefront. Part and parcel to this shift are other initiatives like the company’s store remodeling program and new-build plan. According to Haseotes, these FOOD FOR THOUGHT A significant piece of the retail focus is foodservice. investments are going well. Guests are responding Like many other retailers in the convenience channel, positively, and fresh food and beverage sales are perCumberland Farms has recognized the opportunities forming well. “…We invested many millions of dollars of our that fresh food and beverages present. The chain began resources into deploying that new format and we’ve iterated numerous times since then, making it increasingly more compelling for our guests in the stores and making it more efficient for us to For Ari Haseotes, CEO of Cumberland Farms, it’s all in the details. In fact, he operate,” the CEO said. admits, some of his team may say he gets too involved in the details. “It’s not for the faint of heart. “I have a particular penchant for the nuts and bolts of our operations and our busiJumping into [fresh] food and beverage ness, and the details that go into the execution of our day-to-day activities,” he said. is not immediately accretive to earn“And while some may also say I have a watchful eye on trends and think a lot about ings,” he acknowledged. “It takes years the future and what the next five, 10 or 20 years look like, there is a lot of focus on of blood, sweat and tears to get it to the making sure we are executing as flawlessly and effectively as we can today.” point where you can start to earn some When asked to describe his leadership style, the chief executive points to incremental profit.” Cumberland Farms’ four-part value statement — something he works to bring to life And that’s another benefit of being every day: a private company, he noted, as he and Own It: “We expect our people to be accountable and deliver on their commithis team are able to make the right ments. That’s something I take very seriously with myself and with my team.” decisions even if there is short-term Succeed Together: “Being a family business, I am focused on the financial pain or sacrifice that comes best result. I can become frustrated by what I see as politics within from those investments. the organization that doesn’t really advance our collective progress and “While the response from the conperformance. That is part of our second value and something that sumer has been great, there is a lot of we, like many large companies, are always looking to do better.” complexity, a lot of cost — whether it’s Never Settle: “I think the team may say I am somewhat investments in labor, investments in the uncompromising in my desire to see us continually store, investments in the supply chain,” improve, probably seldom satisfied in where we are Haseotes said. “I can’t tell you that it’s today. I try to work hard to recognize good perforthe root to higher profits in the short mance and accomplishment. I will admit to, at term. [But] I can tell you that we believe times, being more focused on how we can be it is what today’s consumer demands and better tomorrow than celebrating our sucwhat will lead to success over the long cess today.” haul in our business.” Tell It Like It Is: “I try — and I Case in point: Plans call for ask my team to be the same — Cumberland Farms to continue on this to be forthright. We want to make our path forward, building even more new business as strong as we can. That stores on an annual basis, as well as requires us to be always respectful, but continuing its investment in remodels very direct and clear when communicating and rebuilds of existing store locations. with one another about what’s going well [and] What the game plan going forward what’s not going well.” does not necessarily include is acquisition plays. According to Haseotes,

The Core Four

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the chain looks at many things, but only acts upon a few — mainly because most existing sites would not be able to accommodate Cumberland Farms’ latest store format. “We’re very discriminating in our view of what actually will be qualified to carry our brand,” he said. “We find things here and there, but most of our growth will be through organic development, new builds and rebuilds, primarily in the geographies we’re currently in — the Northeast being our strongest market. We have a significant presence in Florida and continue to grow there, and we expect to continue to do so over the coming years.” HUMAN TOUCH

All these initiatives help reinforce the Cumberland Farms brand, but the chief exec recognizes that the retailer’s investment in its team members is perhaps most important of all.

“It’s not for the faint of heart. Jumping into [fresh] food and beverage is not immediately accretive to earnings. It takes years of blood, sweat and tears to get it to the point where you can start to earn some incremental profit.” “It’s always been the heritage of the company to have a strong desire and belief in investing in and supporting our team members. That’s been the legacy of the family. The family’s roots are as farmers. My dad, my uncles, my aunts, my grandparents all worked on a family farm and they had such a strong work ethic as a family. In their early years, they worked with their hands and their backs. They have a belief in those who do that every day; those who do the heavy lifting for our company every single day,” Haseotes explained.

The shift to foodservice, dservice, and the complexities of executing cuting an effective and compelling foodservice dservice offer, has led the retailer to invest even more aggressively in its team members mbers — whether that is in training for food safety or training for guest service, vice, making sure Cumberland Farms is delivering the greatest experience it can in its stores. “We have this philosophy thatt in order for us to be the greatest place to shop, we have to first be the greatest place to work. We use that mantra quite repeatedly here,” here, said Haseotes. This philosophy in action has meant extending benefits to team members who work as few as 30 hours a week — a decision the company made years before the Affordable Care Act went into effect. And Cumberland Farms has always offered benefits to full-time team members. “We’ve made extensive investments in training and development; incentive compensation and benefits; [and] in communicating with our people — which is a huge undertaking and effort to keep our team informed — to ask them how we are doing, how we can improve and make our company a better place to work,” he added. Cumberland Farms’ efforts around its team members ranks at the top of Haseotes’ highlights during his time at the company thus far. He’s especially proud of the efforts to give all team members the opportunity to prosper along with the overall company; to create linkages between their performance, the company’s performance and their own prosperity. “These efforts have been absolutely and unequivocally the most rewarding part of my work here,” the Retailer Executive of the Year shared with CSNews. “I think I can speak for the family when I say we don’t only think it’s the right thing to do financially for our business over the long term, but it’s also just the right thing to do, period. Coming back to those humble beginnings and that mindset that came off the family farm, we believe in those who help us run our business every day and keep it operating every day. They are the moment of truth between our guests and our company every day.” CSN

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Day in the Life of

Yesway

CSNEWS GOES INSIDE THIS STARTUP POISED TO BECOME A 1,000-STORE OPERATOR IN JUST A FEW YEARS By Brian Berk & Angela Hanson

of Boston on a quaint street close to a state highway in Beverly, Mass. — and that’s just the way Trkla likes it. Atypical of traditional real estate private-equity firms, Brookwood, which is saying a big “yes” to the convenience store industry with its Yesway brand, has no intentions whatsoever of simply fixing up distressed assets only to sell them for a nice profit a few years down the road. “We like the convenience store business a great deal. We spent years studying its trends and economics. Our goal is to build a world-class company,” Trkla told CSNews, whose editors traveled to Brookwood’s Beverly headquarters, as well as Yesway’s base in West Des Moines, Iowa, to conduct this year’s CSNews “A Day in the Life” of a c-store retailer series. As of the day of CSNews’ visit, BW Gas & Convenience had 31 Iowa convenience stores, with five recently acquired locations being rebranded and reopened as Yesway stores that very week. The company was under contract to acquire an additional 14 stores in another state shortly following the visit. Still, that is just the tip of the iceberg. “Given our current pipeline, I feel confident that we can acquire 100 stores by the end this year,” said Trkla, a father of four who Members of the Yesway executive committee show off the new c-store brand. graduated from Princeton University

he moment Convenience Store News entered Brookwood’s headquarters one August morning, it was clear the parent of the BW Gas & Convenience Holdings LLC retail division and its Yesway brand is unlike many other real estate private-equity firms. The company, founded in 1993 by Thomas Nicholas Trkla, who serves as chairman and CEO, is not located in downtown Boston near Faneuil Hall, nor in the financial district, or along the waterfront. Instead, Brookwood’s home is a half-hour or so north

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and then received his master’s degree in marketing, finance and strategic planning from J.L. Kellogg Graduate School of Management at Northwestern University. “And I expect to own between 600 and 1,000 stores in three or four years, which will make us a strong player in the industry.” These goals are no pipe dream. On the day of CSNews’ visit, Brookwood held an acquisitions meeting to review its growth pipeline and discuss what retail locations it was considering acquiring. The meeting was led by Thomas Brown, Brookwood’s president and director of real estate acquisitions. On this day, the company was discussing acquiring c-stores in a state in which it does not already operate, with Brown highlighting the locations of these sites on an overhead projector in the company’s boardroom.

BUILT FROM THE GROUND UP

One theme evident among the senior management team of Brookwood and BW Gas & Convenience is they believe they have a rare opportunity to do what few others have done — build a c-store chain from the ground up. They all exude tremendous excitement about the future of Yesway. Brookwood’s decision to move into the c-store space was the result of years of research to determine in what new industries the firm should invest. Mark J. Daniels, managing director and chief strategic officer, was charged with unearthing operating businesses that would benefit from and be a direct extension of Brookwood’s years of real estate and operating experience. Over a roughly three-year period, Daniels, working closely with Trkla, investigated more than 300 operating businesses in numerous industries. Two and a half years ago, the firm decided it would go full steam ahead on c-stores, a “recession-resistant retail industry,” Daniels recalled. Once this decision was made, developing the Yesway name and brand took a long time and involved a great deal of thought and discussion, but Trkla is delighted with the end result. “We hired CBX to assist us in coming up with our brand name. CBX started with over 800 potential names, then narrowed it down to 20 and then to two, before agreeing on Yesway,” he said. “We wanted the name to connote a sense of community — a Norman Rockwell-type name. We also wanted to make certain the name would work in multiple geographic areas.” CBX originally told Trkla the Yesway name would “grow on him,” and they were right.

Brookwood Chairman and CEO Thomas Nicholas Trkla is confident the company can achieve its aggressive growth goals.

“It’s a terrific name that flows fluidly,” he said. “We are very pleased with the result.”

THE GAME PLAN

While Brookwood could have simply set out to acquire c-stores in close proximity to its New England head-quarters, the decision to acquire stores in the Midwest is deliberate. “Our decision to enter the c-store business is a direct and deliberate extension of our historical valueadd real estate investment strategy. We plan to utilize our real estate expertise to create value by renovating and repositioning the stores we acquire, improving the merchandising mix and streamlining operations. As such, we are not targeting higher priced c-stores in urban locations, but rather c-stores in more suburban and rural locations,” Trkla revealed. “We view each and every c-store acquisition through the lens of a real estate operator to determine how we can improve the physical real estate to provide a better, markedly improved product in the marketplaces we serve,” he continued. Regarding the Midwest stores the division has already acquired, Trkla acknowledged some of the locations need tender, loving care. He is excited to improve these stores and transform them into something members of the local communities will truly love. To make Yesway a household name known for great products, service and community outreach, Trkla has assembled what he refers to as an “All-Star Operating Team.” In addition to Brown and Daniels, Yesway’s senior management team consists of a host of industry veterans, including: Brian Trout, senior vice president and director of operations; Jayne M. Rice,

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managing director and director of marketing; Dennis Darveau, vice president of construction and maintenance; Darrin Samaha, vice president and brand manager; Douglas Wald, regional manager; Tony Sparks, vice president of merchandising; and Jennifer Fermano, controller. Trout comes to Yesway from The Pantry Inc. and prior to that, he managed a 680-store business unit for 7-Eleven Inc. in the Chicago metropolitan area. In addition, industry stalwart and former CEO

of The Cumberland Gulf Group, Joe Petrowski, just joined the company in June as senior advisor and a member of the firm’s executive committee. “In order to build the type of organization to which we aspire, you need highly talented, experienced people. I could not be more pleased with the quality of our senior management team and proud of their respective roles in building this company,” said Trkla.

Monday Morning Meetings When it comes to the senior management team at Brookwood and BW Gas & Convenience, a set schedule is non-existent. Travel is a huge part of the job that consumes at least 50 percent of their average week. However, there is one routine activity: the Yesway executive committee meeting held at 9:30 a.m. every Monday to discuss operations, get updates on acquisition due diligence, and plan for the coming week. Convenience Store News was given the unique opportunity to sit in on one of these meetings as part of its “A Day in the Life” visit.

The executive committee meets weekly to ensure everyone is on the same page.

On the agenda this particular Monday was the company’s conversion of five stores to the Yesway brand, four of which are located in Ottumwa, Iowa. Calling into the boardroom from an off-site location, Senior Vice President and Director of Operations Brian Trout reported to the group that he was pleased with the store takeover and excited about the continued growth of the portfolio. To further popularize the Yesway brand name, the senior staff discussed the possibility of sponsoring a NASCAR Sprint Cup race car. NASCAR is a widely watched sport in Iowa with races generally attracting crowds of 20,000 people. The team decided to conduct further due diligence on the matter, before committing a four-figure sum to the partnership. Considering

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time was of the essence, Chairman and CEO Thomas Nicholas Trkla agreed to make the decision soon. Mark J. Daniels, managing director and chief strategic officer, also discussed the importance of having the proper music at Yesway locations, something that costs approximately $300 per store per year. “Music is an important way to enrich our operations,” he remarked. When the baton was handed to Jayne Rice, managing director and director of marketing, she recommended hiring a dedicated social media editor to work with Darrin Samaha, vice president and brand manager. “I never thought I’d see the day in my career when I would have a full-time social media editor working for me,” joked Trkla. Rice stressed the company cannot simply hire just anyone who knows something about social media, though. “I was reading a Harvard Business Review story recently and it said traditional companies are not succeeding in social media, despite spending a lot of money,” she told her colleagues. “We need to be very clear about how social media is to be used to enhance and promote our brand and make certain we hire the right person with the right skillset.” Likewise in regards to marketing, Samaha shared that Yesway is investing heavily in a loyalty program. A vendor in the market that already counts one Midwest c-store chain as a client was coming in that afternoon to provide a “high-level demo” of what the Yesway loyalty program could look like. Samaha also relayed that the company recently hired Manchester-by-the-Sea, Mass.-based Warner Communications to be its public relations firm of record. Following Samaha, President and Director of Real Estate Acquisitions Thomas Brown closed out the meeting by discussing merger and acquisition activity. He revealed there are “reasonable-sized portfolios in play” comprising c-stores in the 2,500- to 3,500-square-foot range for sale that BW Gas & Convenience could acquire. Brown also noted the company is planning to hire a c-store industry veteran who has expertise in raze-and-rebuilds to further propel Yesway’s growth.

Traversing the Universe Astrophysicist-trained Mark Daniels pinpointed c-stores out of hundreds of industries

pproximately five years ago, Brookwood Chairman and CEO Tom Trkla tasked Mark J. Daniels, managing director and chief strategy officer, with what was perhaps one of the single most important decisions for the future of the company. While Brookwood had developed a tremendous reputation by investing in value-add commercial real estate throughout the United States, through multiple market cycles, the firm was looking for an industry to invest in that was true to Brookwood’s real estate background, but wasn’t tied to the same ups and downs of the commercial real estate cycles. Daniels obsessively researched 300 industries and eventually came to the conclusion that convenience stores and gas stations were an ideal fit for Brookwood. “The more I learned about the c-store space, the more I fell in love with it,” Daniels recounted. “It’s one of the only retail businesses that can’t be replaced by firms Mark Daniels visits every potential Yesway store before signing a letter of intent. like Amazon.” Since Brookwood entered the industry and created the Yesway brand, it’s safe to say Daniels, who trained at Princeton University to be an astrophysicist, has been on Cloud 9. “We want to transform the c-store into a more welcoming place,” he said. “We want our stores to be as warm and inviting as possible so our customers feel like they’re at home.” In his role, Daniels never has a typical week. He travels often, visiting stores that Yesway is looking to acquire, meeting with store owners, and working closely with new stores that are brought under the Yesway brand. “I visit every potential store before signing a letter of intent,” he said, “so I’m on the road almost every week.” Thus far, the results have been excellent.

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Yesway continues to add more stores, with a goal of having 100 or more by year’s end. “We aspire for Yesway to become a household brand,” he said. One way Yesway will do this is by taking acquired stores and sprucing them up with a fresh look. Daniels, who works out of the Beverly office, expressed great pride in showing before-and-after pictures to CSNews of a location they had recently remodeled to a Yesway store. ”Our Yesway stores are being designed to feel inviting, fresh and, above all, safe,” he said. “We want to create a place parents are comfortable bringing their young kids at night.” Relevant in-store merchandising is also of utmost importance. Daniels believes that, in order to be successful, Yesway needs to differentiate itself with offerings such as a proprietary foodservice program and private label products to be added in the next year or so. “I really like the idea of giving power to store managers,” he said. “We want our consumers to feel welcome when entering our stores, and part of this involves giving managers the power to tailor a merchandising strategy to fit the local community. In the end, our goal is to be in the heart of the community, always putting a smile on customers’ faces.” Out on the forecourt, Daniels was also heavily involved in Yesway’s decision to make Cenex its fuel brand partner. Pumps will be co-branded Cenex and Yesway. “Cenex is a tremendous partner for us. They’re an agricultural co-op that is very well-known and respected in Iowa and in our local communities,” he said. “We share similar values with Cenex. Their footprint matches well with ours and we both want to grow considerably. Our relationship is mutually beneficial.” Daniels has been a part of the Brookwood team since 2011 and already possessed upstream industry experience. His current responsibilities also include meeting with potential investors to promote the c-store industry as a prudent way to spend their funds. “I enjoy meeting with investors and selling them on our strategy,” he said. “They are always very excited to hear about Yesway.”

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Turning Over a Lot of Rocks Thomas Brown is tasked with finding the right locations to become Yesway stores

ne thing Thomas W. Brown’s job is not is mundane. As president and director of real estate acquisitions, he is always meeting different people and going different places. Brown’s job is to find convenience stores that BW Gas & Convenience can acquire and turn into Yesway stores. To do this, he needs to “turn over a lot of rocks” in terms of not only finding stores to purchase, but also doing due diligence on these properties. “Given the fragmentation that exists within the industry and no real conduit for bringing opportunities to market, initially it is more challenging to identify c-stores to acquire. But we have developed a database of all c-store owners in the country and our focus is to target owners of single stores and portfolios in the Midwest by utilizing the efforts of our acquisitions team,” he explained. Thomas Brown and his team work daily on acRecently, to help quisition deals to further the Yesway portfolio. make the search a little bit easier, Brown hired three new acquisitions employees for Yesway’s West Des Moines office, who join his existing staff of six based at the firm’s Beverly headquarters. Thus far, he and his team have been quite successful, acquiring 21 c-stores from Kum & Go LC in Iowa. He is also in active negotiations to acquire an additional 20 stores and is engaged in discussions with owners that represent another 100 stores. “The Kum & Go acquisition helped a lot. It was a sizable portfolio and fits well with our value-add strategy,” he said. “After that, people knew we were serious about building the Yesway brand.” The strategy calls for acquiring stores in rural and suburban locations and eschewing big cities. “Over the last five years, we have seen a fundamental shift in the c-store space and in our competitors moving away from

40 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

the smaller, rural and suburban stores to urban stores with a larger footprint,” he noted. “We recognized the shift and the opportunity it presented to provide an attractive, well-merchandised, greatly improved product to these smaller markets.” Brown is looking forward to the challenge of building Yesway from the ground up and is eager to see the results of the exterior store renovations, which include improving the facades, lighting, landscaping and signage. The Yesway makeover also includes interior renovations that will be augmented by a broader mix of merchandise and an enhanced foodservice offering. “In addition to the physical improvements and enhancements to the stores, we really want to be a pillar of the community and keep jobs in the community. We truly want to make it a community store,” he said. “In many of the smaller communities, there is a limited grocery presence. Working with our store associates and customers, we want to make sure that we provide a mix of merchandise and foodservice that will serve the needs of the community and generate additional traffic to the stores.”

INSTILLING TRUST

Brown, married for 38 years with two sons and a daughter, has known Brookwood Chairman and CEO Tom Trkla for 38 years. He joined Brookwood in 1994, shortly after Trkla founded the company, and has been in charge of commercial real estate transactions ever since. Much of his job today revolves around telling the Yesway story. Even if a c-store operator agrees to sell their store and agrees to a purchase price in principle, Brown still has to fully convince him or her why the store should end up being a Yesway as opposed to a competitor. “There is a lot of pride in ownership in the c-store space. Many of the sellers, whether they have a single store or multiple stores, have worked hard to establish a strong presence in their communities and want to know they are selling to someone who will represent them well. They want to know they are selling to a good owner,” he said. To convince potential sellers that Yesway will be a good steward of their stores, BW Gas & Convenience

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believes in having “a lot of boots on the ground” with the opening of its West Des Moines office. “I, along with our acquisitions team, spend a lot of time talking to owners and brokers. You never deal with the same people, which creates the opportunity to make new friends and customers every day,” according to the executive. Because the industry is fragmented with approximately 63 percent of c-store retailers being independent operators, Brown has a large pool of prospective sellers. He works on deals on a daily basis, mainly with these independent store operators, and expects to strike enough transactions to have at least 100 Yesway stores up and running by the end of 2016 — on the

way to being a chain of 600 to 1,000 stores within three to four years. One thing he wants to work on improving is the closing time of c-store sales transactions. It often takes 60 to 90 days to close a c-store transaction, but Brown would really like to bring that timeframe down to 30 to 60 days, which is more typical of a real estate transaction. He acknowledges that building a retail business is a 180-degree turn compared to commercial real estate transactions because “now we are not only the landlord, but the tenant.” “It’s a new and exciting opportunity to create and build another new company,” he said.

The Man Behind the Makeovers

Dennis Darveau helps build Yesway’s future one store renovation at a time

or a company entering the convenience retail channel as a chain of more than 31 stores, all of which needed interior and exterior renovation work, Dennis Darveau was an obvious choice to be vice president of construction and maintenance. After operating his own successful real estate development and construction business, he spent seven years as Gulf Oil’s director of construction and became a c-store industry expert before joining Yesway. “I’ve constructed just about anything and everything,” Darveau told CSNews during its visit to West Des Moines. (Each Dennis Darveau’s job is to add value to the propweek, the Rhode Island erties Yesway acquires, without overspending. resident flies to Iowa on Monday and then heads home on Friday.) During his time at Gulf, he was exposed to all aspects of the gas and c-store business, from new site development to

42 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

remodels to maintenance and beyond. “There hasn’t really been anything I haven’t touched in my career. This ended up being a perfect fit.” These days, Darveau is responsible for remodeling all of Yesway’s acquired stores. During the due diligence phase, he assesses each property and comes up with a capital budget for the improvements needed at that property. “It’s a great task to have under my belt. I enjoy refurbishing without overspending, adding value to the properties we acquire,” he said. “Maybe they’ve had some neglect and now it’s time to give them a facelift and reinvigorate them. I think the communities deserve that.” When CSNews visited, Darveau was interviewing candidates for a construction manager position and he currently has plans to grow the maintenance department, but for now, his role includes both big and small store-improvement matters. “If the soda machine breaks, they call me. If the coffee’s not percolating, they call me. If the toilet breaks, they call me.” One of his biggest challenges is “being in multiple places at the same time,” he said. “As we grow, the staff will grow, but at the beginning stages, it’s a lot of running around; it’s a lot of traveling; it’s a lot of meetings. Just a lot of organization to try to find the

right people for the right jobs, the right contractors. This is new territory for us.” Despite this, his job is less about performing specific tasks and more about increasing the value of a Yesway store. This doesn’t have to mean spending big money; he noted a fresh coat of paint goes a long way, particularly for stores that have not been updated in a long time. “In order to add value, you need to really focus on the important things. What’s important to the customer?” he asked. “What would make them want to come to this store as opposed to going somewhere else? Can that stuff be improved to make their experience more favorable?” On a day-to-day basis, Darveau says he has no set routine. His scheduled work is simply whatever area the company is working on at that time. During Yesway’s first weeks of operation, he and his team made it a point to immediately repaint the exterior of stores once they were officially acquired in order to show the community that Yesway is here and it means business. And it isn’t only the signage that is changing, Darveau stresses. The company is making major, noticeable improvements right away, with further remodeling to come in time. “One of my biggest pet peeves in a c-store is having nice, clean bathrooms. To me, that’s a must. I look

at it as, would my wife use this bathroom? Would I bring my child to this bathroom? If the answer is no, it needs a lot of help. They’re the ones who are going to use it more than anybody,” he said. Other planned changes for newly acquired stores as they transition to the Yesway brand are improvements to the parking lot, including restriping and fixing potholes; and adding a green wall to the interior of every store to signify where the foodservice area is. The buildings may be old, but Yesway wants them to have a fresh look, according to Darveau. Looking to the future, just as his job includes both small and large duties, he has small and large goals for Yesway as the chain continues to grow. “My goal is to always come in under budget and to keep up with the acquisitions and everything in the pipeline,” he said. “If I can keep up with those, then as we grow, we’re gonna grow consistently. If I start falling behind as they keep acquiring, I’m always playing catch-up.” Additionally, Darveau hopes to see Yesway transcend its status as a small c-store startup. “I would love to see this company grow to 1,000 stores in the next three to four years,” he said. “It’s very doable. I would love to see that happen because I don’t think anybody’s ever done it before.”

A Local Focus

Brian Trout goes to great lengths to ensure each Yesway store serves its community

esway’s new West Des Moines office may be Brian Trout’s base of operations, but that doesn’t mean he spends a great deal of time there. A major part of the senior vice president of operations’ daily routine is traveling around the chain’s footprint to provide the right oversight, tools and support to the stores spread out across western Iowa in largely rural communities. “There’s a little windshield time, and cell phones don’t work all that well out here,” Trout said with a chuckle. “So, I have a lot of time to think and reflect.” Just a few months into Yesway’s operating life, there’s a lot for Trout to think about. In his role, he “wears lots of different hats.” He’s in charge of everything to do with store operations,

44 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

including merchandising, vendor and fuel contract negotiations, store design and layout, instore promoBrian Trout is in charge of everything having to tions and, most do with store operations, from employee training to vendor contracts. importantly, building and training his team of pricebook, category management and merchandising professionals, and store, district and regional managers. On the day of CSNews’ visit, Trout’s schedule

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included interviewing candidates for office administration positions, meeting with various department heads, and a review session with a potential fuel pricing management software provider. Later in the week, he planned to visit Yesway stores alongside Mark Daniels, the company’s chief strategic officer, and Joe Petrowski, senior advisor, to discuss portfolio capital improvement plans. “We’re trying to cover a tremendous amount of ground with just a handful of people at the moment,” Trout said. “My biggest challenge is balancing the growth of the portfolio with the growth of personnel, while always being cognizant of the firm’s cost structure and operating budget.”

“

My biggest challenge is balancing

the growth of the portfolio with the growth of personnel, while always being cognizant of the firm’s cost

”

structure and operating budget.

His lengthy background in the c-store industry has prepared him well for the hustle and bustle of the c-store startup. After finishing a college internship with Amoco in the early 1990s, he joined its management training program full-time upon graduating from Memphis State University and stayed on through the BP/Amoco merger. He then spent three years with Thorntons Inc. as a regional manager and director of operations, before returning to BP to oversee the growth of BP Connect and the Wild Bean Café concept in the Midwest. After BP, Trout led 7-Eleven Inc.’s Midwest Business Unit with almost 700 stores, and spent time at The Pantry Inc. as vice president of operations before joining Yesway in June 2015. Yesway’s fuel, store operations and merchandising teams all report to Trout. The construction/maintenance team reports to him and Yesway President Thomas Brown. “We’re building a really good squad. I think the dynamic is pretty robust with a great ‘work hard/ play hard’ kind of attitude. Everybody knows what to expect because they all possess a tremendous amount

46 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

of hands-on, industry experience,” Trout said. “But we challenge each other as well, which makes for better, more thought-out decisions and also gives us the opportunity to do things a little bit differently. The whole focus is about creating value through buying stores that can be greatly improved with an investment of targeted capital dollars.” For all of Yesway’s stores, this “value” means an external facelift in the form of a paint job, new signage and image, while the interior improvements can include replacement of cabinetry and counters, bathroom upgrades, new lighting, and upgrading the foodservice offering and equipment based on market demand. The company is also creating a greatly improved foodservice offering, while working with third-party vendors to ameliorate the supply opportunities that exist in rural areas. “We’re small-market minded,” Trout said, noting that while many of Yesway’s stores have average marketplace sizes of 10,000 to 20,000 people, some are even smaller. “The people who work in these stores have been engaged in the community for a long time and they’re excited to have a company that wants to invest in their community and these stores. They take pride in them and we’re excited to work with these folks and continue to serve the customers in a great way.” Although Yesway leaders have an overall vision, individual store layouts can vary substantially. During a site’s rebranding process, resetting the center of the store and stocking a new assortment in the cold vault happens in relatively short order, but foodservice takes a little longer depending on the store’s distribution, preparation methodology, and available space. “My in-store operational motto for my team is: be nice, have fun, sell stuff,” said Trout, who is the father of four girls ranging in age from eight to 20. Although Trout maintains a big-picture view of Yesway’s plans for the future, he and other company officials stress the importance of focusing on the small things by paying attention to the perceptions and needs of consumers, and getting involved with the local community. “One of our brand tenets is to be engaged in the community. We want our general managers and store personnel to be part of the chambers of commerce, the rotary clubs, sponsoring little league and Girl Scout cookie sales,” he said. “We think it’s the right thing to do. Communities, particularly in small rural areas, are a very tightknit fabric and we want to be active and visible in that community.”

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Driving the Brand Strategy Jayne Rice relishes the opportunity to create the Yesway story from the start

ayne M. Rice has seen a lot in her career. Brookwood’s managing director of institutional sales, marketing and investor relations was the director of marketing and client service for a global emerging markets hedge fund prior to taking on her current role eight years ago, just prior to the Lehman Bros. crash, often considered the nadir of the Great Recession. Today, she attracts investments for Brookwood from bigger clients, including college endowments, and it’s something she truly enjoys. Yet, it is also easy to see the Jayne Rice works to ensure Yesway’s values enthusiasm she has and goals drive the brand strategy. for her other role in the firm: head of marketing and brand development for Yesway. “It’s an exciting time,” the Yale University graduate told CSNews from her Beverly office. “The company has grown tremendously and we will continue to expand rapidly in the coming months.” She is certain of one thing: Yesway stores will be vibrant. “You will see many things that may seem simple, such as each store having clean bathrooms; team members saying hello to customers when they walk in; and employees wearing new, comfortable uniforms,” she noted. “The details will make a big difference.” Rice is constantly considering what messaging she wants customers to receive when thinking of Yesway. She is also making sure this messaging is in concert with Brookwood. “We are doing this with caution and deliberateness,” she said. “We need to be very thoughtful to ensure that our values and goals are driving our brand strategy.” A big component of the message Yesway portrays

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will come from a soon-to-be-hired social media manager. On the day CSNews sat down to chat with Rice, she spoke of how this was the next position she wants to fill and was actively reviewing resumes. “Traditional household campaigns are not working, despite big spends,” the mother of three relayed. “We need to engage and develop relationships with our customers online and are in the process of developing a robust social media campaign.” Rice is definitely not taking this new hire lightly. She knows Facebook, Twitter and their competitors can be a boon for any c-store retailer. But there are many pitfalls as well, such as negative feedback from customers — whether warranted or not. Being able to respond to complaints or inquiries quickly is crucial for these situations, she said.

“

We need to engage and develop

relationships with our customers online and are in the process of developing a robust social media campaign.

”

The Yesway brand and its retail locations will be customer-centric and a way for consumers to have their daily needs met across all aspects of the business, according to Rice. “We want to be ingrained in the local communities we serve. We realize we have a tremendous opportunity to be a great, reliable retailer and neighbor,” she added. She also sees unique opportunity in Brookwood’s private-equity and real estate expertise, and believes this perspective can mean unique benefits for Yesway in the marketplace. “We don’t want to approach Yesway just from a retail perspective,” she explained. “People with disparate backgrounds can provide a great advantage; they can think of things that would not have been otherwise thought of.”

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Bringing Customers Into the Stores

Darrin Samaha aims to make Yesway fun, friendly and inviting

arrin Samaha, vice president and brand manager for Yesway, loves to have his Mac laptop at the ready. A glint in his eye is evident as he plays a radio advertisement for Yesway that sports a military theme. “I really love this ad,” he says with a smile. Radio ads and other traditional advertising mediums are only some of the ways Samaha plans to bring customers into Yesway stores. The Tufts University graduate knows the stores as they transition will seem a significant change for customers, and he is ready to meet that head-on. “Hello neighbor! Welcome to Yesway. Please pardon the inconvenience while Darrin Samaha worked for a digital marketing we upgrade our and design agency before joining Yesway. stores,” reads the first page of a customer flyer that Samaha shared with CSNews. Accompanying the text is a photo of a new, spiffy-looking Yesway location. “We want the Yesway brand voice to come through across all of our marketing and give our customers a big welcome,” said Samaha. “We want to make sure we are fun, friendly and inviting.” Thus far, customer feedback has been overwhelmingly positive, but Samaha knows he can’t rest on his laurels. And even if he could, there are too many things to focus on, including grand-opening planning and development of a Yesway website, which will go live this month. “Our digital strategy will be key to engage our customers. We will launch many exciting, new features on

50 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

“

We want the Yesway brand voice to come through across all of our marketing and give our customers a big welcome.

”

the site, including mobile-friendly capability, real-time gas pricing, and the ability to apply for jobs online through a user-friendly HR portal,” he said, adding that online ordering is currently not a website function, but could be down the road. Samaha is also busy planning the monikers for Yesway’s lottery offering and its loyalty program. “We really like Yes Play as the name for the lottery program and Yes Pay for our loyalty program,” he said. “We see an integrated loyalty app as an important piece of our customer engagement.” Like many of his colleagues, Samaha is not a c-store industry veteran. Prior to joining Yesway, he was chief creative officer and founder of Cambridge, Mass.-based Blue Coda, a digital marketing and design agency helping clients realize returns on their marketing investments. Samaha was hired for his current role by sheer coincidence. He visited Brookwood headquarters in Beverly to seek advice from Chairman and CEO Tom Trkla about how to expand his own agency’s operations. Realizing the company needed someone with Samaha’s unique branding talents, Brookwood quickly offered him a job. Samaha joined Yesway in March of this year. Helping the company grow into a great brand is a “fantastic opportunity,” he told CSNews. “There is a lot to learn with retail operations. My head is spinning,” he admitted. “But I am working with a great team.”

For the Love of the Industry

Joe Petrowski has laundry list of reasons why he said “yes” to joining Yesway

obody would have blamed Joe Petrowski had he never returned to the convenience store industry. After all, his distinguished 45-year career — including a long stint as CEO of The Cumberland Gulf Group that ended in 2013 — is the envy of many. Petrowski has since kept busy appearing on a host of television shows, including several CNBC programs, as well as writing trade articles and being an active speaker at events like the SIGMA Annual Convention and Convenience Store News Fuels & Tech Summit. Petrowski certainly could have continued on this path. So, why did he instead agree this June to become senior advisor to Brookwood’s BW Gas & Convenience, where he will be a major cog in the growth of Yesway? The simple answer is: He loves the c-store industry. “Why did I want to come here? Well, I got a call from a friend Joe Petrowski is helping Yesway set forth instore and fuel sales goals for each store. who had money invested with Brookwood. After learning more about the company, I learned I was kindred spirits with President and Director of Real Estate Acquisitions Tom Brown and the rest of Brookwood’s executive team,” Petrowski explained to CSNews. The Boston resident was especially impressed when he learned BW Gas & Convenience planned to open Yesway stores throughout the Midwest. “I really liked the idea of opening stores in suburbs and rural areas, as opposed to cities,” Petrowski said. “And, more importantly, you have to like the people you work with — I really like and respect these people.” As a senior advisor and member of the Yesway executive committee, Petrowski will have many roles,

52 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

including helping determine a brand image and setting forth goals for each individual store in terms of instore and forecourt sales per month. At a minimum, Petrowski expects each Yesway store to maintain 25,000 fuel gallons sold per week per store, and $25,000 in in-store sales per week per store. But his real goal is for each store to be part of the “30-30-30 Club,” a term he borrows from his favorite sport of baseball. “Baseball is a great metaphor for the business,” he relayed. “I look for $30,000 in in-store sales, 30,000 gallons of fuel sold at the pump, and a 30-percent margin.” To guide Yesway in reaching these numbers, Petrowski will draw upon the lessons he learned from his past to make sure Yesway is a top-notch retailer. “Retail is detail,” he said. “We will start with coffee and what type of foodservice we will offer.” Of the five senses, the former chief executive believes foremost in attacking the customer’s sense of smell with fresh foods. “People are really influenced by sense of smell,” he stated. “I am all for baking at 4 p.m., and making the smell of popcorn readily available to appeal to people’s senses.” As for specific fresh-food menu items, Petrowski is a fan of soups and BLTs, as well as any healthy graband-go items that can appeal to two-income families. “We need quality breakfast, lunch, and dinner items for these families that don’t have time to cook,” he added. “These products also need to be something Yesway staff members can easily make.” Above all else, though, Petrowski says Yesway stores must be pillars of their local communities. Staffing and training will be a big focus, he asserted, pointing out that members of the corporate staff will be encouraged to work in Yesway stores as associates. “The store will support the community. That means making sure we are open past 6 p.m. And if there is a snowstorm, flood or other natural disaster, we want to be known as the place that will be open so customers can pick up batteries and any other items they may need,” he concluded.

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Before & After

Customers in Harlan, Iowa, are among the first to get a Yesway store

he town of Harlan, Iowa, has a population of only approximately 6,000 people, but soon after a Yesway convenience store started operating there, new faces began showing up. Since Yesway acquired the older c-store, it has seen a sprucing-up in the form of a new paint job, bathroom renovation, and repositioning of cigarettes and lottery tickets that enables the store to sell them without taking up much counter space, thus creating a more open feel. A green bar running along the store’s exterior lights up at night, making it a beacon for travelers on the road. “The store manager and employee were saying they’ve seen people [coming into this newly rebranded Yesway store] they’ve never seen before,” said Vice President of Construction and Maintenance Dennis Darveau. “That says a lot for a small town because usually everybody knows everybody. If you’re seeing new faces, that means you’re reaching people.”

BEFORE

AFTER

54 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

An updated foodservice and hot beverage section now provides Harlan customers with more options, while indoor and outdoor picnic tables give them somewhere to eat besides their cars. “The reason I put them there is for a sense of community,” said Darveau, who envisioned a family coming to the store to buy ice cream after dinner and enjoying it at a table outside. “It gives them a nice place to relax and gather with people they know, or make new friends.” A tech-savvy bonus function is a solar-powered umbrella that’s connected to a charger mounted on the pole, which lets customers recharge their mobile devices while they eat. CSN

TOP WHOLESALERS

Expansi & Expansion Enhancement Enhanc Acquisition activity and increased sales mark the past year for convenience wholesalers By Debra Chanil

Top Wholesalers Summary TOTAL SALES (Percent change vs. year ago): Top 25 wholesalers $68.0 billion (+4.1%) Top 10 wholesalers $60.9 billion (+4.5%) AVERAGE SALES PER: Company Retail location served Warehouse Full-time employee

$2.719 billion $381,628 $519 million $2.318 million

PERCENT OF SALES: Chains Single stores

50.7% 49.3%

Source: Convenience Store News Market Research, 2016

Sales per Retail Location Served McLane Co. Inc. Topicz Chambers & Owen Inc. Team Sledd Imperial Super Regional Distributors S. Abraham & Sons Inc. Cooper-Booth Wholesale Co. Southco Distributing Co. Core-Mark Holding Co. Inc. Charles C. Parks Co. Source: Convenience Store News Market Research, 2016

56 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

$709,467 $611,667 $500,000 $482,727 $440,000 $366,797 $348,485 $332,500 $304,110 $300,000

fter a period of challenges, companies in the Convenience Store News Top Wholesalers ranking staged something of a comeback over the past year. These 25 companies achieved a combined sales increase of 4.1 percent, more than double the 1.7 percent posted in last year’s report. Sales reached $68 billion, with the top 10 companies driving 90 percent of this total. While the top 10 players remain virtually intact, three companies on last year’s list were acquired by some of those in the top 10. Eby-Brown Co. LLC (No. 3) acquired Liberty USA, West Mifflin, Pa. (No. 14 in last year’s report); Core-Mark Holding Co. Inc. (No. 2) picked up Pine State Trading Co., Augusta, Maine (previously No. 20); and H.T. Hackney Co. (No. 4) now owns Thomas & Howard Co., Columbia, S.C. (previously No. 26). Positions for eight of the top 10 have not changed from last year. McLane Co. Inc. continues to top the ranking, posting $32.3 billion in sales — a 2.1-percent increase following last year’s decline of 0.6 percent. Core-Mark reached sales of $11.1 billion with a 7.8-percent jump to secure the second spot, while EbyBrown hit $6 billion, a 13.2-percent increase (the largest among the top 10). The only change in the top 10 in this year’s report came as Consumer Product Distributors Inc. overtook Imperial Super Regional Distributors for ninth place. Overall, among the 25 companies, Harbor Wholesale Foods achieved the largest increase at 19.4

Dear Valued Customers, Many of our wholesale and retail partners have raised questions regarding the recently issued FDA Final Deeming Rule. Below you will find information regarding how these regulations may impact your business. What do you need to know about the FDA Final Rule and August 8, 2016? •

Products sold anywhere in the US market prior to August 8th, 2016 may remain for sale while manufacturers prepare and submit required documentation to FDA by August 18, 2018. The FDA has indicated it intends to make determinations as to whether such products may remain on the market within twelve months after receiving applications (PMTAs).

•

Sales may not be made to customers younger than 18 years old. (State-specific restrictions may also apply.)

•

Photo identification must be checked for customers appearing younger than 27 years old.

•

Free samples of electronic cigarettes and related products are prohibited.

•

FDA comments indicate an expectation that, by August 8th, 2016, retailers will have educated employees of the FDA Final Rule to ensure compliance.

blu will continue to show Category Leadership, is committed to STAND BEHIND ITS PRODUCTS NOW, and WILL CONTINUE TO DEVELOP COMPLIANT PRODUCTS IN THE FUTURE.

SEE YOU AT NACS! BOOTH 1003

TOP WHOLESALERS

ESTIMATED SALES

RANKING

2016

Company/Headquarters

Chief Executive

RETAIL SERVICE

Latest FY1 (millions)

Previous FY (millions)

% change

$32,346 11,100

$31,669 10,300

2.1% 7.8

50 states 50 states

45,592 36,500

67,060 16,000

6,000

5,300

13.2

22,000

4,000

0.0

MN, IA, WI, IL, MO, KY, IN, MI, GA, TN, NC, SC, 22,000 MS, AL, ND, SD, PA, WV, VA, OH, NY, MD, DE AL, AR, FL, GA, MS, NC, SC, TN, LA, TX, KY, OH, 20,000 PA, VA, WV, MD, IN, MO, IA, MI, MO AR, CO, IL, IA, KS, MN, MS, MT, NE, ND, n/a OK, SD, WI, WY

Trading Area

McLane Co. Inc., Temple, Texas2 Core-Mark Holding Co. Inc., South San Francisco, Calif. Eby-Brown Co. LLC, Naperville, Ill.

H.T. Hackney Co., Knoxville, Tenn.

Thomas & Richard Wake William Sansom

Farner-Bocken Co., Carroll, Iowa

Dean Onken

1,390

1,300

6.9

Harold Levinson Associates Inc., Farmingdale, N.Y. AMCON Distributing Co., Omaha, Neb.

Edward Berro

1,330

1,298

2.5

50 states

Christopher H. Atayan

1,282

1,237

3.6

S. Abraham & Sons Inc., Grand Rapids, Mich.3 Consumer Product Distributors Inc., Chicopee, Mass.4 Imperial Super Regional Distributors, Elmwood, La.5 GSC Enterprises Inc., Sulphur Springs, Texas Garber Bros. Inc., Stoughton, Mass. Chambers & Owen Inc., Janesville, Wis. Cooper-Booth Wholesale Co., Mountville, Pa. Southco Distributing Co., Goldsboro, N.C. Team Sledd, Wheeling, W.Va. Atlantic Dominion Distributors, Virginia Beach, Va. Harbor Wholesale Foods, Lacey, Wash. Tripifoods Inc., Buffalo, N.Y. Stephenson Wholesale Co. Inc., Durant, Okla.6 Topicz, Cincinnati7 Resnick Distributors, New Brunswick, N.J.8 Richmond-Master Distributors Inc., South Bend, Ind. Charles C. Parks Co., Gallatin, Tenn. Allen Brothers Wholesale Distribution Inc., Philadelphia

Alan Abraham

1,224

1,103

Jeffrey Polep

1,129

John D. Georges

1 2

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Grady Rosier Thomas B. Perkins

Locations Deliveries Served per Week

n/a n/a

10,000

8,000

4,500

5,000

11.0

AR, CO, GA, IA, ID, IL, IN, KS, KY, MN, MO, MT, NC, ND, NE, OK, SD, TN, UT, VA, WI, WV, WY WI, IL, MI, IN, OH, KY, PA, WV

3,337

2,789

1,026

10.0

MA, CT, RI, VT, NH, ME, NY, NJ, PA

4,200

4,646

1,100

0.0

2,500

2,700

Michael J. Bain

798

0.0

2,800

2,500

Harold Garber John K. Owen Barry Margolis Sherwin Herring Robert M. Sincavich Robin D. Ray

695 650 575 532 531 486

695 655 554 532 531 486

0.0 -0.8 3.8 0.0 0.0 0.0

LA, MS, AL, FL, GA, SC, TN, AR, TX, OK, KS, MO AL, AR, FL, GA, EL, KS, LA, MD, MS, MO, NM, NC, OK, NE, SC, TN, TX, VA, WV, DC ME, NH, VT, MA, RI, CT, NY, NJ, MD, PA WI, MI, MN, IA, IL PA, MD, DE, VA, WV, NJ, NY NC, SC, VA, TN, GA OH, PA, WV, VA, MD, KY VA, MD, DC, DE, NC

2,400 1,300 1,650 1,600 1,100 2,100

3,100 1,315 1,334 1,900 1,300 1,600

Justin Erickson Gregory G. Tripi Tammy Cross

473 458 395

396 458 395

19.4 0.0 0.0

WA, OR, ID, CA, AK NY, PA, OH, IL, IN, WV OK, TX

2,700 2,750 1,800

1,350 2,970 2,165

Marvin H. Schwartz Steven Resnick

367 302

365 301

0.5 0.3

OH, KY, IN, IL, TN, WV NJ, PA, NY, CT, MD, DE, DC, VA, NC

600 1,200

975 1,000

Patrick A. Carrico

300

0.0

IL, IN, KY, MI, OH

1,400

810

Charles C. Parks III Jeff. B. Allen

270 250

246 245

9.8 2.0

TN, KY, NC, VA, SC, GA, AL, MS, AR, MO PA, DE, NJ, MD, NY, DC

900 1,568

1,300 910

Footnotes:

1 FY = fiscal year

2 McLane corporate parent is Berkshire Hathaway, Omaha, Neb.

3 S. Abraham & Sons corporate parent is GRAD, Grand Rapids, Mich. 4 Consumer Product Distributors dba J. Polep Distribution Services

6 Stephenson Wholesale dba Indian Nation Wholesale

7 Topicz corporate parent is Novelart Manufacturing Co., Cincinnati

8 Resnick Distributors corporate parent is Plainfield Tobacco and Candy Co.

5 Imperial Super Regional corporate parent is Georges Enterprises LLC, Elmwood, La. Source: Convenience Store News Market Research, 2016

58 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

PERCENT OF SALES

WAREHOUSES

EMPLOYEES Full-time Part-time

PRODUCTIVITY RATIOS: SALES PER

Chain

Indep.

# of Warehouses

Sq. Feet (thousands)

Sales

Sq. Foot

Employee (thousands)

Location (thousands)

Delivery (thousands)

97% 50

3% 50

21 31

11,764 4,000

12,134 5,933

36 0

263 1374

$2,750 2,775

$2,666 1,871

$709 304

$482 694

n/a

2,000

2,400

100

200

3,000

2,500

273

n/a

200

n/a

505

1,021

150

2,752

1,361

n/a

460

530

2,891

2,509

133

166

641

547

108

2,000

2,344

285

256

440

486

2,782

2,519

367

439

387

732

2,917

1,542

269

243

329

463

3,343

2,376

440

407

400

459

1,995

1,739

285

319

60 45 55 50 70 65

40 55 45 50 30 35

1 1 1 1 1 2

200 252 110 240 195 180

246 260 217 225 270 120

2 10 2 15 0 2

50 33 23 43 30 21

3,475 2,579 5,227 2,217 2,723 2,700

2,825 2,500 2,650 2,364 1,967 4,050

290 500 348 333 483 231

224 494 431 280 408 304

30 92 1

70 8 99

2 1 3

300 250 205

368 210 293

11 48 24

66 12 59

1,577 1,832 1,927

1,285 2,181 1,348

175 167 219

350 154 182

5 30

95 70

1 1

120 100

160 125

3 0

15 15

3,058 3,020

2,294 2,416

612 252

376 302

210

184

1,429

1,630

214

370

70 44

30 56

1 1

180 65

141 78

2 6

14 13

1,500 3,846

1,915 3,205

300 159

208 275

WWW.CSNEWS.COM | SEPTEMBER 2016 | Convenience Store News 59

TOP WHOLESALERS

percent. In addition to Harbor and Eby-Brown, other double-digit winners included S. Abraham & Sons Inc. (up 11 percent) and Consumer Product Distributors (10 percent). Expansion into new convenience categories is responsible for some of this growth, as about one-third

Sales per Delivery per Week Core-Mark Holding Co. Inc. Chambers & Owen Inc. McLane Co. Inc. S. Abraham & Sons Inc. Cooper-Booth Wholesale Co. Team Sledd Imperial Super Regional Distributors Topicz Richmond-Master Distributors Inc. Harbor Wholesale Foods

$693,750 $494,297 $482,344 $438,867 $431,034 $408,462 $407,407 $376,410 $370,370 $350,370

Source: Convenience Store News Market Research, 2016

Single Biggest Trend Impacting Business Today

4.8% 9.5% 14.3% 19.0%

Decreasing customer profitability

28.6% 23.8%

Increased government regulation Short supply of qualified truck drivers Competition from other full-line wholesalers Pressure on tobacco margins Increased retailer consolidation

Source: Convenience Store News Market Research, 2016

Percent of Sales by Category Cigarettes Other tobacco products Candy/gum/packaged sweet snacks Foodservice Grocery Packaged beverages Salty snacks General merchandise/HBC Fresh produce Gourmet/natural/specialty food Other Source: Convenience Store News Market Research, 2016

60 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

67.5% 8.9 6.2 5.3 2.8 2.7 2.5 2.1 1.2 0.5 0.3

of respondents this year report several category additions over the past 12 months. Such categories include fresh produce, dairy, deli and snacks. Cold and frozen beverages have also contributed, including this summer’s big trend: cold brew coffee. Several wholesalers noted that while they had not expanded into new categories, they had enhanced existing lines, including fresh produce and better-foryou products. New technology initiatives are also a priority for the top wholesalers. With goals of improved accuracy, instant access to information for both their sales representatives and customers, streamlined systems, improved security and mobility, these are some of the new technology programs implemented in the past year: • App-based ordering systems • Business management software upgrades • CRM for outside sales force • Customer ordering devices • Expanded website • In-house mobile technology • Truck technology improvements • Voice-activated selecting systems When asked about the single biggest trend impacting business today, 28.6 percent of the top wholesalers indicated decreasing customer profitability, followed by 23.8 percent citing increased government regulation. Short supply of qualified truck drivers was cited by 19 percent, with one respondent adding: “Not just truck drivers — all labor.” In terms of sales, the cigarettes category continues its slow but steady decline, dropping to 67.5 percent of the top wholesalers’ sales (down from 69 percent last year). Other tobacco products maintains its pattern of adding about a point each year, increasing from 8 percent to 8.9 percent this year. Candy/sweet snacks and foodservice each accounted for more than 5 percent. METHODOLOGY

Rankings for the Convenience Store News Top Wholesalers report are based on sales from the last full fiscal year for each company. Data for this report was gathered through a survey conducted among the largest wholesalers primarily servicing c-stores that derive a majority of their annual sales from tobacco and candy products. Additional data was obtained through company reports and other public sources of financial data. In some cases, estimates have been made by CSNews based on historical data and current industry trends. CSN

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CONVENIENCE FOODSERVICE EXECUTIVE OF THE YEAR WINNERS

FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

Finding the Right Solution 7-Eleven’s Kelly Buckley tackles problem-solving with deep foodservice expertise By Angela Hanson

ome convenience foodservice executives focus on convenience retailing first and then come to foodservice later in their careers. Kelly Buckley, inaugural Convenience Foodservice Executive of the Year (500-plus stores), however, focused on food long before she brought her expertise to the 7-Eleven Inc. team. Now as the retailer’s vice president of fresh food innovation, Buckley combines two of her favorite things. “I have a passion for food and I’ve got a passion for creative problem-solving,” she said. “I get a lot of satisfaction out of seeing everything line up, and we hit the ball right Kelly Buckley out of the ballpark.” After graduating from the University of Guelph in Ontario, Canada, with a bachelor’s degree in biology and microbiology, Buckley held a variety of roles at foodservice companies such as Burger King Restaurants of Canada, the Yum! Brands Pizza Hut division, and Applebee’s International Inc.

62 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

These days, at 7-Eleven, Buckley is responsible for the development of the company’s overall fresh-food strategy and for leading the innovation of relevant and differentiated new food products and platforms. To achieve this, she oversees a team of approximately 30 people in four different groups: a quality assurance team that is responsible for end-to-end quality assurance, food safety and regulatory compliance; a product development team made up of trained food scientists who deal with technically challenging quality improvements or innovations; the innovation team that combines food science degrees with culinary training; and a production management team that is responsible for overseeing 7-Eleven’s partner businesses, such as bakeries and commissaries across the country. Buckley acknowledges it’s a challenge to manage all of these different aspects of the foodservice category, but for her, that’s actually a selling point and not a drawback. “It’s complex,” she said. “I like the broad scope of it, the ability to touch and impact the business from upfront to when [food] is served to a customer.” This makes Buckley a frequent presence in 7-Eleven’s test kitchen doing everything from tasting

food, to participating in supplier presentations, to holding weekly tastings with the executive committee, to looking in on the company’s regular sensory panels. Equipment validation and simplification is also a constant process she keeps track of for the c-store chain. Along with the actual product de development and improvement process, 7-Eleven 7-E keeps a sharp eye on up-to-date consumer insights and standards within the food marketpla marketplace.

“Going out and seeing what goes on in the marketplace is key, but you have to marry that with what the consumers want and will buy from you as an operator, because it may not always be what you see in the marketplace.” “We are constantly benchmarking throughout all of foodservice, whether it’s c-stores or QSRs or casual dining and even fine dining. So we’re very engaged in what’s going on out there,” Buckley said. “We also spend a lot of time in our stores. It’s as many touchpoints as we can hit to be aware of what it is and looking ahead to how we continue to get better or grow faster.” PREPARING FOR THE FUTURE

This focus on the details of today’s offering in tandem with where the program is going is vital in a foodservice market that is transitioning from convenience stores just selling food to actually preparing and serving food, according to the executive. “There’s a big shift from simply selling food to actually preparing and serving food,” Buckley said. “It’s not a set-it-and-forget-it expectation from the consumer right now because the channels are blurring and consumers, when they’re going out to eat, have certain high expectations of the quality of the product, the freshness of the product, and the experience.” At the same time, 7-Eleven has to create a balance between the quality, experience and freshness that customers are looking for and the rest of the c-store chain’s business, which is where Buckley believes her background comes in particularly handy.

7-Eleven’s Melts line of sandwiches balances quality and freshness with speed of service, according to Buckley.

“We’re emulating elements that consumers consider important, but we’re also bringing convenience to the game differently than a QSR would do,” she said. “I think that’s a competitive advantage for us.” Buckley lists 7-Eleven’s part in building overall consumer awareness of c-store foodservice and trust in its quality and freshness as one of its achievements in recent years, along with the company’s ability to balance quality and freshness with speed of service and meeting customer expectations through its own program. The debut of 7-Eleven’s toasted sandwich line, Melts, in particular was a success in this area. As a competitor, 7-Eleven’s large footprint and deep resources give it a major advantage, but for any c-store just starting out with a foodservice program, Buckley is a big proponent of understanding one’s customers first. “You always have to start with the customer,” she said. “Going out and seeing what goes on in the marketplace is key, but you have to marry that with what the consumers want and will buy from you as an operator, because it may not always be what you see in the marketplace.” For example, just imitating a product that’s popular at Subway or Panera Bread may not be successful because a c-store’s customers want and expect something else. “The upfront work is critical. It either sets you up for success or you miss the mark,” Buckley said. “That’s a good opportunity and that’s something I brought with me from foodservice because it’s very much standard operating procedure in foodservice.” Making the right moves in convenience foodservice isn’t always easy. Still, it’s a challenge Buckley plans to continue tackling. “I have a passion for food and I like connecting the dots,” she said.

WWW.CSNEWS.COM | SEPTEMBER 2016 | Convenience Store News 63

FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

Standing Out From the Crowd Rich Green leads customers to expect the unexpected from Maverik’s c-stores By Angela Hanson

averik Inc.’s Director of Foodservice Rich Green never set out to get involved with the convenience store industry. After graduating from Brigham Young University in 2003 with a degree in philosophy, he planned to go to law school. Instead, in a sense, he went sailing. “Adrift on the sea of indecision” is how Green describes his journey. Moving on from a job as a legislative assistant for a local municipality, he considered culinar culinary school h l before deciding decid it wasn’t the right fit for his family. H He Rich Green took a job aas a Maverik store manager while he considered con his options. “Eleven years and five positions later la and I’m directing Salt Lake City-based Maverik’s M foodservice program and loving every minute of it,” said Green, inaugural Convenience Foodservice Executive of o the Year (less than 500 stores). Today, Green leads a team of six — a corporate chef, two category managmana ers, a quality assurance manager and an administrative assistant — that is responsible for the full lifecycle of Maverik’s foodservice program. This includes everything from idea inception and menu planning to research and development/recipe cre creation, to procurement and distribution, distributi to

64 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

merchandising and category management, and even input on store layout and design. “The customers’ sense and understanding for good food has heightened across the board. You can get great food from a food truck and bad food from a food truck; likewise for fine dining and every other restaurant type,” Green said. “This is an opportunity for us. Sure, we have to up our game, but the historic stigma of food from a convenience store isn’t as big of a hurdle as it used to be.” During an average work week, Green has “a lot of irons in the fire” as he focuses on strategy and planning, i ass well as on innovating ways to simplify the program for operations. “There There is no end to innovation on in this regard,” he said. Looking back on his journey to Maverik, Green cites his interest in and passion for food as a major factor that drew him to his current role. Although he opted not to pursue a career as a chef, he still enjoys cooking a variety of cuisines and considers food to be both fun and an opportunity to express creativity and distinguish oneself. Guiding the c-store chain’s foodservice program gives him the chance to do this on a grander scale. “I see food as Maverik’s ’s opportunity to be known for something high quality that is unlike anything you can get anywhere else but Maverik,” he said. “Thatt is how we approach the business.”

FOODSERVICE

Prepared Food + Hot, Cold, Frozen Dispensed Beverages

ON THE CUTTING EDGE

Developing Maverik’s foodservice program involves a balancing act of innovation and meeting existing consumer expectations in a foodservice market that is constantly changing. Along with improving food quality through clean-label and better-tasting ingredients, Green says there is one particular factor that makes Maverik stand out from its competition. “I think it’s our willingness to be edgy, but not so edgy that it cuts us out of the mainstream. We sort of take the foods we really like and dial them back into something reasonably appealing across multiple customer segments,” he said.

“I see food as Maverik’s opportunity to be known for something high quality that is unlike anything you can get anywhere else but Maverik.” From time to time, the feedback he receives includes complaints that Maverik’s food is too spicy — which he actually enjoys. “I kind of like this. Sometimes, convenience store food can be dumbed down so much, in an effort to be inoffensive and universally appealing, that it ends up appealing to no one,” he explained. This willingness to push the envelope has extended to products that are less spicy but seen as just as unlikely to be a hit with c-store customers. Despite hearing that biscuits and gravy couldn’t sell at Maverik stores because they aren’t convenient to eat, Green jumped on

The Bonfire Grill program is a centerpiece in Maverik’s new stores.

66 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

Operations and employee training are a current focus for Green.

the chance to add them. Today, the chain sells “tons” of biscuits and gravy, along with other items that sell well despite not being seen as especially portable. “I think we’ve learned that while portability is very important, high quality and product distinction are just as important,” he said. Taking these chances is paying off for the company. Maverik’s same-store sales increases over the past three years have reached nearly double digits, according to Green, and the foodservice team continues to make a point of generating creative ideas and turning them into reality. Still, this doesn’t mean his job has always been easy. Particular challenges include operations and training. While Green commends the company’s ability to train employees who start at Maverik’s new stores, it is more of a struggle to properly train new hires in existing stores. This can lead to dissatisfaction for the employees and inconsistent food for the customers. “This isn’t anyone’s fault,” Green said. “We’re just working through our growing pains.” At the same time, Green has a vision of what he would like the foodservice program to be. Like most U.S. c-store chains, Maverik started out selling primarily fuel. “I want Maverik to be a destination for food,” he said. “I want us to have a product or set of offerings that is so compelling and so unique to Maverik that the average customer will know us and choose us for those items — not just when it’s convenient, but anytime they are hungry.” CSN

FOODSERVICE Category Trends + Insights from

TRENDSIGHTS

What Will Change as Millennials Age? They eat fresh now, but retailers want to know whether their appeal for “real” will continue

19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15

to effectively and efficiently target marketing resources. illennials rightly deserve the attention they Specifically, they want to know what will change as milget from marketers because they are not lennials form households, raise children and go through only the largest of the six key generational other life stages. Will their consumption behaviors be groups, but are also entering their peak earning years. similar or different than their parents or other generaThey overtook boomers in populations? Since The NPD Group has been continually tion in 2015 and currently number 80 (daily) tracking actual U.S. eating patterns for well over million, and will grow more than any 30 years, we can address these questions by looking at other age group over the next decade. individuals by year of age at time of consumption and Much of this growth will be multito which cohort they belong, covering all life stages and cultural since more than one in five milthen forecasting future eating behaviors. lennials is Hispanic — a larger percentage than any other generational group Annual Eatings of Fresh Food* per Capita — although Gen Zs By Bonnie Riggs 500 Restaurant Industry Analyst, will be more diverse The last decade signaled a The NPD Group than any generation shift in fresh-food consump450 www.npd.com that preceded them. tion after decades of decline. Although diverse, all millennials share 400 the fact that they have never known 350 life without cell phones or the internet, and this connectivity plays out 300 in the formation of values and beliefs that influence their food and beverage 250 consumption behaviors. 200 The makeup of U.S. millennials is as varied as any other large demo*Fresh food defined as fresh fruit, vegetables, refrigerated meats and eggs. graphic group, and their attitudes, Source: The NPD Group/National Eating Trends behaviors and values are shaped not For example, millennials are the main drivers of only by the years during which they were born, but also by age, environment, ethnicity, life stage and other the shift to fresh foods and beverages. Over the past decade, millennials have increased their consumpinfluences. Retailers and food manufacturers will need tion of fresh food the most out of all age groups. to go beyond the typical generalizations about millennials to truly understand the current and future impact The element of surprise with this consumption trend is that millennials are in a life stage when people of these marketplace disrupters. typically consume lower quantities of fresh items in Convenience stores, other retailers and manufacfavor of more time-saving and convenient options. turers want to know which of the millennial eating Their interest in fresh food is influenced by their behaviors will continue in the future in order for them

68 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

FOODSERVICE Category Trends + Insights from

attitudes about and belief in simplicity, creativity in the kitchen, and authenticity. Based on our recently published “A Generational Study: The

Evolution of Eating,” fresh-food consumption is forecasted to grow nearly 5 percent by 2020 and will continue to increase through 2025. In the case of millennials with

How Much Does Clean Eating Improve the Overall Quality of Life?

The shift to fresh, natural and authentic eating is being led by younger adults, under the age of 35.

Source: The NPD Group/Clean Eating Custom Survey, June 2015 Base = Primary grocery shoppers (n=3,844); Clean eater households (n=191); 18-24 (n=220); 25-34 (n=575); 35-54 (n=1,536); 55+ (n=1,514)

children, they will continue to eat more fresh foods than young parents did 10, 20 or even 30 years ago. However, other generations declining their fresh-food consumption will keep the growth from reaching the peak observed back in 1984. Millennials’ fresh-food consumption is only one aspect of their disruption on the food and beverage industry. They will have significant influence over all aspects of the marketplace as they continue to move through their life stages — just as the boomers did before them. Understanding how millennials’ eating behaviors will evolve as they age will be critical to the future success of retailers and manufacturers. CSN

70 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

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EXPERT’S VIEW

Prepared Food + Hot, Cold, Frozen Dispensed Beverages

Small Changes Can Make a Big Difference Implement these tips to make a profitable impact on your prepared food program

onvenience stores are in a unique position in that they offer retail/grocery items and, increasingly, prepared foods. While prepared foods are not a new option for pioneers like Sheetz and Wawa, few concepts are as experienced at executing and sustaining these programs. Q1 has developed five ideas for retailers, suppliers and stakeholders to consider as prepared foods continue to grow and become essential to satisfying patron demand. Patrons buy with their eyes. Whether a convenience store is offering a prepared sandwich in a cold case, or if they are making the sandwich for the customer, some solid basics come into play. For a prepared food, make sure the expiration dates (or must use by dates) are clearly written on By Paul Clarke, the item. Regularly rotate items so that a Q1 Consulting consumer returning at 2 p.m. doesn’t see the same ham sandwich in the same place that he saw at 6 a.m. High-quality, firm, clear, plastic packaging rates very high with patrons. Delight the regulars. The segment intelligentsia preaches we must look for new users: the affluent, females, professionals. However, the majority of regular users are males making less than $30,000 per year and working in a blue-collar profession. Staff must know the names of these regulars and also be familiar with the items they regularly purchase. It is the “Starbucks” phenomena — which is really just Marketing 101 — of having the favorite item ready when the patron enters the store. Merchandise prepared foods with retail items. There are a set of patrons who never purchase prepared foods at a convenience store. The reasons for this vary and include limited knowledge (“never noticed cold case”) or flat-out rejection (“I got sick at a c-store once”). The point is, there are a number of non-foodservice users in convenience stores today that are prime candidates to

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convert. Enhance in-store marketing, provide samples and use store employees to announce specials or deals on coffee and prepared foods. Maximize in-store promotions. Our recent field work showed that many consumers, even while looking at an in-store placard, were not aware of that “Two for Two Subs” deal in front of them. Many stores are cluttered with several messages — whether it be for retail/grocery products or foodservice products. As mentioned above, cut through the clutter by looking to staff members to help with a message. Perhaps it’s before they pay or after, but at least it captures a consumer’s attention. Restrooms must be spotless. This means the floors are shiny, the grout is white, the toilets are stainfree, the soap is refilled, the plunger is nowhere in sight and there are no flying insects. Does this take time and resources? Yes. But patrons judge the kitchen based on the cleanliness of the bathroom. Also, a large portion of non-users of c-stores just use the bathroom. One bad experience perpetuates the gas-station image. There are a number of other tips that readers are likely aware of, but these provide some of the general elements that Q1 believes can make a profitable difference if implemented. CSN

Paul Clarke is business development director for Q1 Consulting. He brings more than 20 years of foodservice experience, including 12 years delivering consumer insights to chain restaurants and foodservice suppliers. He can be reached at pclarke@q1consulting.com. Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.

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Patchwork of Problems Varying tobacco legislation across Massachusetts is creating a hodgepodge of rules for retailers By Melissa Kress

he Don Quijote Market in the South End neighborhood of Boston has been in business for 36 years. It is, according to owner Luis Blanco, the oldest existing Latino bodega in the city with the same ownership, same name, same location, and same family running it. Almost four decades of being in a business that counts tobacco sales among its top categories, however, is becoming more and more difficult as the Massachusetts capital and scores of other cities and towns across the state take measures to restrict the sale of tobacco products. “It seems like this year not only are there more regulations, but they are occurring at the same time in multiple places,” Blanco said. This ramp-up in regulations has led Thomas Briant,

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executive director of the National Association of Tobacco Outlets (NATO), to label Massachusetts “a hotbed” of tobacco legislation. At the 2016 NATO Show earlier this year, Briant noted that 117 municipalities in Massachusetts alone have adopted the minimum purchasing age push to 21. The New England state also leads the way in flavor bans at 43 municipalities — and that was back in April. Many more changes have been approved since then. As Blanco describes it, his tobacco business is a pie and the pieces of the pie are the different demographics that make up the tobacco consumer. Increasing the minimum legal age to purchase tobacco removes one piece of that pie, flavor restrictions another — decreasing its overall size. “What you are left with makes it more difficult for us to do business,” he explained. “It’s hard to be successful when there are restrictions that don’t allow you to do your job — something we have done effectively for many years.” In March, Blanco joined with other convenience store owners to form the Boston Convenience Store Owners Association (BCSOA) and voice their opposition to the myriad of changes confronting the channel. According to Blanco, BCSOA believes the state and local municipalities should wait until the Food and Drug Administration (FDA) enacts federal regulations regarding flavors. As of now, flavors are only banned for cigarettes federally. In addition, the association questions why state

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Source: tobacco21.org g

and local officials argue that flavor bans are needed to keep tobacco products out of the hands of youth, yet at the same time, they are increasing the legal age to buy tobacco products to 21. “The flavor legislation only impacts adults. Anyone under 21 is already banned from buying these products,” Blanco said. “If the reasoning is that youth can go into these stores and see the products, then wouldn’t it be the same with flavored alcohol?” Wondering why tobacco is being singled out, he said: “We don’t feel there is equity with other products.” And restrictions on tobacco sales not only affects the backbar ring, but it also affects the overall

basket, Blanco pointed out. “Tobacco is what brings in some customers to the store. When they are there, they will also buy drinks, chips, etc. But now I am not selling as many of these impulse items because they are not coming into the store,” he said. “It’s not just one category; it moves into other categories as well.” In a city of almost 1,000 c-stores, the Boston convenience channel has a more than 97-percent compliance rate on tobacco sales, he added. “We’re doing a great job. Our compliance rate says so. But we are being told to do something completely different.” APPEALING TO THE LEGISLATURE

At a Glance

• 123 Massachusetts municipalities have legislation setting minimum pricing for cigars. • 50.4 percent of the state’s population lives in those municipalities. • 29.3 percent of the state’s population lives in municipalities restricting flavored other tobacco products (OTP) sales to adult-only retailers.

Source: Municipal Tobacco Control Technical Assistance Program

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Framingham, Mass.-based Cumberland Farms Inc., which has more than 200 stores in the Bay State, is also speaking out against the patchwork of tobacco legislative activity. In a letter to the state House of Representatives, the convenience store chain outlined its support for uniformity in the state’s tobacco policy. The letter was signed by more than 2,300 Cumberland Farms store managers and retail operations team members. “We have heard their concerns raised with

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disturbing frequency over the past several years as they labor under an increasingly chaotic patchwork of municipal regulations,” company leaders wrote in the letter. “Cumberland Farms is working overtime to support this group of dedicated employees as we struggle together to navigate the variety and complexity of those fragmented local rules. “Now, we implore you to join us in supporting them, too, by restoring some much-needed order to this important area of public health policy. It is past time for the state to occupy the field of tobacco control with its own consistent and comprehensive rules, which should apply evenly to all competing businesses across the Commonwealth,” the letter continued. The letter came as lawmakers considered increasing the state minimum age to buy tobacco to 21, banning tobacco sales at pharmacies, and implementing electronic cigarette regulations. The Cumberland Farms executives also said the proposed tobacco bill (S.2269/H.4361) would create another layer of state rules in addition to — not instead of — the hundreds of inconsistent local rules already in place; shoulder local regulators with even more enforcement burdens; and remove the modest

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78 Convenience Store News | SEPTEMBER 2016 | WWW.CSNEWS.COM

preemptive language found in the current statute. Cumberland Farms noted as well that the proposed measure does not address tax and revenue issues related to increasing the legal buying age to 21, nor tackle the issue of social sources. EVOLUTION OF TOBACCO POLICIES

Joanne Mendes, executive director of the New England Convenience Store & Energy Marketers Association (NECSEMA), has only been in her role since May, but she has a history in government affairs for Richmond, Va.-based Altria Group Inc. and knows tobacco policy well. “In the 1990s and 2000s, it was environmental tobacco smoke and [advocates] pursued smoking bans in restaurants,” she recalled. “Now, we are here in 2016 and tobacco control groups decided to pursue Tobacco 21 and take on issues like flavors. Now, you have a whole new area with e-cigarettes with flavored liquids. They decided that kids are getting these products out of convenience stores.” Similar to Blanco’s points, NECSEMA argues that convenience stores are used to handling age-restricted products. “We handle them all the time. When you look at compliance rates for tobacco sales in convenience stores and retail outlets that sell tobacco in Massachusetts, we have 90-something-percent compliance rates in most cities and towns,” Mendes noted. While the association is not really fighting the push to o 21, she foresees these efforts eventually driving a move toward banning tobacco products in convenience stores tores and placing the products in tobacco-only outlets. “We don’t really fight the push for 21, but our argument is these products are regulated just like regular ar tobacco products. We know how to handle them. We have a high compliance rate. You shouldn’t favor one channel over another in terms of sales,” she said. LOCAL OBSTACLES

What’s particularly concerning is that NECSEMA is finding inding a lot of Massachusetts cities and towns do not even know what they are passing sometimes. The Massachusetts Municipal Association’s website includes ncludes a template for tobacco legislation. “In many cases, we are going to meetings and the tobacco obacco control groups are sitting with the boards of health and telling them what to do. It’s very frustrating,” ng,” she said. NECSEMA has a group in the retail community that hat works together to keep each other informed

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about such hearings. NATO is one of the association’s partners. However, sometimes the group is not aware of a hearing until the day it is being held. “Unless you have a lot of feet on the ground — we have 351 cities and towns — it gets to be a little bit daunting,” Mendes acknowledged. Massachusetts is unique because the boards of health have autonomy and they are charged with taking care of the public health. The boards “can take any issue and decide that now we have a public health crisis,” according to Mendes. Massachusetts was also the first state to have a public health board; Paul Revere was the first public health commissioner. “Public health is public health, and we understand that environmental tobacco smoke is an issue,” she added. “But when you get into the commerce, what

you can sell and where, that is not only a health issue. And who’s next? It’s a slippery slope.” NECSEMA has seen some success when the association has a presence at meetings and its members reach out to local retailers to point out the details of pending measures. For example, in July, the association successfully fought Plymouth, Mass.’ three-pronged proposal to raise the minimum age to purchase tobacco products and electronic cigarettes, ban the sale of flavored tobacco products to all individuals regardless of age, and ban the sale of cigars priced under $2.50. “It’s an interesting dynamic, and it’s frustrating. Our members are being responsible and we are responsible,” Mendes said. “If we are going to be regulated, let’s do it uniformly on the state level. Let’s have a level playing field.” CSN

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COLD VAULT Beer + Wine + CSDs + Energy + Water + Sports + Juice + Dairy

Rocking the Cold Vault Fifth-annual CSNews Beverage & Beer Retailing Summit showcases the variety in drinks By Melissa Kress & Danielle Romano

hen it comes to the top 10 in-store categories for the convenience channel, packaged beverages and alcoholic beverages take the third and fourth spots, respectively. These two categories alone captured roughly 22 percent of all in-store sales in 2015, according to the latest Convenience Store News Industry Report. From carbonated soft drinks (CSDs) to energy drinks to bottled water to beer, the sheer variety and volume of these two categories combine to prove there is never a dull moment in the cold vault. Just ask the attendees of the fifth-annual CSNews Beverage & Beer Retailing Summit, which took place June 22-23 at the Hard Rock Hotel in Chicago. But as many convenience store retailers know all too well, nothing worth doing comes easy. COLD VAULT CHALLENGES

The numbers coming out of the cold vault paint a clear picture of the importance of beverages to the convenience channel and all its players — retailers, distributors and manufacturers. “Beverages are not just important for us [distribu-

tors], but also for the industry. In excess of 50 percent of the trips to a convenience store are beverage driven,” said Jon Bratta, vice president of marketing for convenience distributor Core-Mark International Inc. Along with Bratta, John Roach, vice president of merchandising for Eby-Brown Co. LLC, and Lance Smith, senior account manager at McLane Co. Inc., echoed this sentiment as the three sat down for a “Distributor’s Super Panel” session during the summit. While the cold vault is a key component within a c-store, it does come with challenges — notably, the proliferation of SKUs and changing consumer preferences. “I think there are a lot of products, a lot of information, and a lot of innovation being thrown at retailers all the time,” Roach said. “Getting through all the information is a tough thing.” SKU proliferation is a challenge on both sides of the supply equation, Bratta added. Distributors are faced with several questions: What are the right products? What is the purpose of these new SKUs coming to market? What is the marketing plan? Having a marketing plan is a must, Roach agreed.

Presentations delivered fresh ideas, proven strategies, and best-in-class merchandising and marketing tactics.

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COLD VAULT Beer + Wine + CSDs + Energy + Water + Sports + Juice + Dairy

“You can have a really great product, but without a marketing plan behind it, you can put it in your store and it will sit there.” Increased regulations — such as Philadelphia’s new soda tax — are also becoming barriers to doing business. The regulatory environment was prevalent with cigarettes and other tobacco for years, and now it is encroaching on beverages and food, Smith pointed out. SUPPLYING BEST PRACTICES

The good news for retailers is they do not have to go it

Convenience Store News Contributing Editor Renée Covino moderated one of the event’s roundtable discussions.

Diving Into Demographics While consumers in general will make their beverage purchase decisions based on some common factors, just how important those factors are differs among demographics. In her presentation, “Using Big Data Analytics to Identify CrossCultural Insights in the Beverage Category,” Lili Gil, co-founder and president of XL Alliance, noted that by listening and understanding the digital dialogue, convenience store retailers, manufacturers and suppliers can better meet their diverse customers’ base needs. “It’s a $1-billion question. What really matters to these people?” she posed. According to Gil, there are three key elements to “human mining,” going beyond what people say to understand why they say it. They are: moment (what are the occasions that matter); mindset (what need does the product fill); and product (what drives preference). An analysis of digital discussions around beer over a 12-month period ending June 20 showed that “personal staple” is the most important motivator behind a beer moment at 31 percent of all consumers, 33 percent of Hispanic consumers and 38 percent of African-American consumers, Gil cited. And while “personal staple” pulled a similar number among millennials at 31 percent, millennials are more motivated by “hosting” at 32 percent. Moving to mindset, millennials gravitate toward exploration (29 percent), while relaxation and socializing are tied at the top for Hispanic consumers (39 percent). Relaxation (33 percent) and enhancement (28 percent) score high among African-Americans. As for what is driving beer preference, promotions rank first across all three groups of consumers analyzed, the research uncovered. “Deep cross-cultural insights around the category/brand moment, mindset and preference can better inform targeted growth strategies,” Gil explained. “There is a sea of unbiased data out there and it’s happening digitally.”

MOVE OVER MILLENNIALS Of course, you can’t have a demographic discussion today without

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covering millennials. Yet, although millennials have garnered the title of the “It” consumer in recent years, the convenience channel should not overlook generations X and Z, urged fellow summit presenter Darren Seifer, food and beverage analyst for The NPD Group. To quench the thirst of all generations, he believes c-store retailers should shift their focus to three macro trends affecting food and beverage consumption: authenticity, influence of ethnic culture, and generational attitudes. “Purity is the new mantra,” Seifer explained. One way consumers seek purity is through clean eating, which eschews chemicals or processing, and embraces “all natural,” “whole” or “real.” Some consumers opt to eat organic foods for purity, while others look for their labels to lack certain substances. Oftentimes, millennials wish to use organics but the price tag might be too steep for them, so they seek purity by ensuring their ingredients are clean. When asked how clean eating improves their overall quality of life, more than half of consumers aged 18-24 (55 percent) indicted “very much,” as well as 42 percent of those aged 25-34; 36 percent of those aged 35-54; and 26 percent of those aged 55 and older. The food cultures of each ethnic group also directly influence consumers’ eating patterns. For example, 65 percent of total Hispanics said they follow traditions when planning and serving meals. The Asian culture is also a big influencer, Seifer noted. Also, generation Z and millennials are embracing the shift toward fresher, healthier food choices, while baby boomers are embracing convenience to meet their busy lifestyles, and gen Xers are teetering in the middle of these consumption shifts. “Food and beverage consumption is habitual and it’s cultural,” Seifer observed. “Consumption patterns move like plate tectonics.”

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Energizing Sales

Laura-Lynn Freck of Red Bull presented exclusive energy drink research.

alone, the distribution executives emphasized. Suppliers can play an important role in managing the cold vault. “At the end of the day, retailers should drive it, but use their suppliers,” Bratta advised. “What do [the suppliers] see? What is coming down the pike? What is selling?” Also from a supply perspective, Roach added there is a lot of information out there and suppliers and wholesalers can be a conduit of that information to retailers. In the end, however, retailers should be the ones calling the shots. “Retailers are the final decision makers but you have multiple lens,” Smith said. “That’s where we see the most success.” Other best practices offered by the panelists included: • Never be out of stock; • Partner with your distributor on promotional planning; • Merchandise the category’s offerings in the right spot inside the store; • Be on-trend; and • Be fast. “If a customer cannot find that destination product, you will short-circuit that shopping trip,” Bratta concluded. TAKE YOUR PICK

A quick peek into the beer cave will show the hottest trends in alcoholic beverages. Hard sodas (including hard root beers) are taking off, but not to be outdone are hard ciders. Upscale offerings like craft beers and imports — Mexican brews particularly — are also doing very well. These were just some of the insights offered by retailers as the summit explored the alcohol,

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If attendees of the 2016 CSNews Beverage & Beer Retailing Summit thought energy drinks were a one-dimensional category, they thought wrong. Customers are increasingly viewing energy drinks as a c-store “main staple,” creating an area of opportunity for retailers, explained Laura-Lynn Freck, shopper insights manager for Red Bull North America. A two-pronged research study of consumer and c-store retailer insights conducted in conjunction with Carbonview Research, a sister company of CSNews, found energy drinks are a “destination category” for c-stores, with 28 percent of consumers purchasing the beverage. According to the study, consumers purchasing energy drinks are also buying salty snacks (53 percent), sweet snacks (50 percent), prepared foods (30 percent), meat snacks (17 percent) and fresh foods (9 percent) alongside their energy drink purchase, giving c-store retailers the chance to capitalize on increasing their basket size, according to Freck. One way to do so is with bundling. Heavy energy drinkers will bundle their energy drink purchase with either a salty or sweet snack, or a soda. Light energy drinkers will bundle their energy drink purchase with a sweet snack, soda or prepared food item. Heavy buyers are defined as frequenting a c-store for these products several times a week or once a week. Energy drink buyers are more likely to purchase “energy bundles” and equally likely to purchase “beverage bundles” with a snack (76 percent) or prepared food item (57 percent). Freck left summit attendees with these six key energy drink takeaways: • Foundation. Foundational attributes are a key area retailers need to perfect, in order to build loyalty with shoppers. • Function. Energy still holds a functional niche, leading it to be more of an occasion-based beverage. • Trip Driver. Energy drives bigger baskets in the store. Heavy energy buyers are far more likely to also be heavy buyers of snacks and other beverages. • Mission. Forty-two percent of energy purchases only have energy in the basket, the highest ratio out of beverages and snacks in the c-store environment. • Merchandising. Merchandising snacks and beverages together can lead to more purchases, specifically at the counter, the foodservice area or up front. • Bundles. New opportunities are with prepared food and light energy buyers. A key time for energy bundles is between 10 a.m. and 2 p.m.

COLD VAULT Beer + Wine + CSDs + Energy + Water + Sports + Juice + Dairy

beer and wine categories in a roundtable discussion led by CSNews Editorial Director Don Longo. Aside from the product offerings themselves, retailers are finding success with how they market and package — or more to the point, don’t package — them. One Midwest retailer shared how her c-store chain has begun letting customers create their own six-packs of craft beer, enabling them to try different brews. The response has been positive; it saves space in an already tight beer cooler; and sets this chain apart from competitors not in the mix-and-match space. The move also allows customers to save money — a plus for any generation or demographic base — because the six-packs have one price point, regardless of the brews selected. The idea of a pick-six program is gaining popularity among c-store operators. Another c-store chain, which focuses on breaking up 12-unit sampler packs at smaller stores, has even created its own carrier as opposed to reusing existing six-pack holders. This concept also works well for stores located in

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Twice Daily’s Terry Messmer took part in a roundtable discussion.

markets with numerous local breweries, one participant noted. It gets new products in front of the consumers and gives them a chance to sample different offerings. Getting into the growler business is another option, but it’s a bit more challenging to execute. The investment and labor costs are high, and a retailer needs a minimum

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of 10 taps, according to the roundtable attendees. “You can’t do two taps and say you are in the growler business,” one West Coast retailer remarked. PACKING A PUNCH

Switching gears to non-alcoholic packaged beverages, this is an area of the c-store where retailers are most proud of their achievements in the past year. During the “Exploring Innovation & Category Insights” breakout session led by CSNews Contributing Editor Renée Covino, retailers cited creativity and innovation as two key drivers of their success. One retailer commented that innovation in bottled water, coupled with the American consumer’s drive toward healthier options, has allowed the chain to be more creative in how it merchandises the segment. By adding one more shelf dedicated to bottled water and sparkling water varieties, the retailer was able to increase its segment sales substantially. Packaged beverages can also help retailers stay on top of the latest trends, equipping them with the right

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James Oh (left) and Joshua Wheeler of Red Bull shared insights.

marketing and merchandising tools to compete against quick-service restaurants (QSRs). One retailer discussed “going to the extreme with a promotion” by testing different meal deals best-suited for its customers. One promotion included a bundle of a hot dog, salty snack and packaged beverage for under $3, vs. a QSR’s $5 deal.

COLD VAULT Beer + Wine + CSDs + Energy + Water + Sports + Juice + Dairy

Convenience Store News 2016 Beverage & Beer Retailing Summit The 2016 Convenience Store News Beverage & Beer Retailing Summit, held June 22-23 at Chicago’s Hard Rock Hotel, provided a forum for the exchange of insights, innovative beverage concepts, fresh ideas, proven strategies, and best-in-class marketing and merchandising tactics. Country Fair’s Jaime Pukylo was among the retailers in attendance.

To market the bundle, the retailer packaged everything together and showcased it at checkout. There’s also opportunity to leverage packaged beverages at the fuel pump, according to another retailer. At her chain, when customers buy “3-for” soft drinks, they receive a promo code at the time of purchase that can be used immediately at the pump for a fuel discount. She explained that this incentive not only “bundles hydration,” but also gives customers the incentive to fuel up at her store whether gas prices are low or high. Despite the past year being filled with optimism over their packaged beverage prospects, retailers did name some key challenges affecting the business. One is the high cost of CSDs. One attendee lamented that CSDs are at a too-high price point, driving consumers to purchase other products. This creates competition between a CSD for $1.69 vs. a 99-cent can. Another area of concern is penetration of new products. One franchisee expressed frustration in trying to get the right product assortment. “The schematics are different for franchisees. The franchise recommends products, but ultimately the franchisee has to choose,” he said. The No. 1 challenge, though, that resonated with the group is the retailer-supplier dynamic. Half of them expressed that their suppliers fail to explain how new products will benefit their stores and what the year-over-year changes are. “[You’re] almost forced to bring in [a product] because the initiative is big and it’s competitive, and then the product flops,” according to one retailer. Another said suppliers sometimes look to the retailer for a solution to sell their product better. This is especially true of small suppliers who often ask retailers: Who else is selling this product? How is this product doing? How do the regions compare in selling this product? CSN

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RETAILER ATTENDEES Mike Adams, BP/ampm Chris Borota, GPM Investments LLC Ben Chastain, BP/ampm Madalena Ferreira Morgan, Bobby & Steve’s Auto World Carolynn Hieb, SuperAmerica Ed Hobson, BP/ampm Jack Lewis, GPM Investments LLC Kirk Matthews, TravelCenters of America LLC Christina Maurer, BP/ampm Terry Messmer, Twice Daily/Tri Star Energy LLC David Moll, Wawa Inc. Chuck Moyer, Rutter’s Farm Stores Jaime Pukylo, Country Fair Inc. Heidi Rembecki, NOCO Express Ryan Riggs, Sheetz Inc. Jerry Simrell, Wawa Inc. Melinda Smith, Murphy USA Inc. Dalane VanDenBerg, Merle Boes Inc. Derric Watson, E-Z Mart Stores Inc. Frank White, Family Express Corp. Robin Wright-Broughton, Chevron Products Co. North America Mike Zielinski, MEZ Enterprises Inc. PRESENTERS Jon Bratta, Core-Mark Holding Co. Inc. Laura-Lynn Freck, Red Bull North America Lili Gil, XL Alliance John Roach, Eby-Brown Co. LLC Darren Seifer, The NPD Group Lance Smith, McLane Co. Inc. SPONSORS

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Bridging the Digital Capabilities Divide Many retailers are failing to connect objectives with outcomes By David Bishop, Balvor LLC

he impact that digital innovations are having on communication and commerce between companies and consumers is becoming clearer every day. Most executives have likely sensed this shift was occurring for some time and envisioned a larger, more integrated role for digital within their companies. In spite of this, many retailers are struggling to develop their digital marketing capabilities. According to research conducted by Convenience Store News, Balvor and Brick Meets Click, less than one in three retailers indicate that digital marketing — at least the way they’re leveraging it — is working well to support marketing strategies. Regardless of the number of digital media channels that each uses, this highlights a divide that many retailers need to bridge in order to connect objectives with outcomes.

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Some may believe the problem is due to the complexity of the topic, confusion about the technology, or the constantly expanding array of choices. However, these are not the cause, as the research reveals that the absence of strategy and internal processes are the primary culprits. The implication is that retailers will continue to face challenges in developing effective capabilities until these areas are addressed. Our May issue article, “Why Strategy Must Come First in Digital Marketing,” highlighted that only one in five convenience retailers have a sound, strategic framework guiding their digital journey. The presence of an effective corporate strategy helps to align resources vital for building capabilities, which is why retailers who have one are three times more likely to report that digital is working well to support their marketing strategies (see Fig. 1). Strategy facilitates the allocation of money and people that are essential to creating processes such as planning, budgeting and managing, which collectively accomplish the objective. Having access to these resources is a key reason why retailers who possess a sound strategy are even more likely to have well-developed internal processes (Fig. 2). So, how can retailers bridge the digital capabilities divide? To examine this question, here are insights from our research and conversations with two retailers who possess strong digital marketing capabilities: Mike Templeton, marketing manager with Kum & Go LC in West Des Moines, Iowa; and Eric Rush, digital

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marketing manager at QuickChek Corp., based in Whitehouse Station, N.J. PEOPLE

Digital marketing requires new skills that most marketing teams didn’t possess before, and this will continue to evolve. Establishing and reassessing these roles and responsibilities is essential for identifying the skills Fig. 1

Digital Marketing Working Well* Percent of retailers indicating

50% 17% Possesses Sound Strategy

Lacks Sound Strategy

* Relates to channels (e.g., email, mobile, SMS, social) currently in use Source: Convenience Store News/Balvor/Brick Meets Click, 2016

Fig. 2

Development of Internal Processes Percent of retailers indicating

36%

Well Developed Extremely Developed

17%

27% Possesses Sound Strategy

Lacks Sound Strategy

Source: Convenience Store News/Balvor/Brick Meets Click, 2016

Fig. 3 People & Planning Percent of retailers indicating extremely/well developed Possesses Sound Strategy

73%

Lacks Sound Strategy

68% 32%

Roles & Responsibilities

21% Planning & Budgeting

Source: Convenience Store News/Balvor/Brick Meets Click, 2016

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gap, coordinating efforts and assigning accountability. Our research uncovered that more than half of convenience retailers are using digital without welldeveloped roles and responsibilities, and more than two-thirds of those lacking a sound strategy fall into this camp (Fig. 3). When Templeton joined Kum & Go as social media manager in 2010, the company was experimenting with social media. Senior leadership envisioned moving further in this direction and “wanted someone to own this area,” as he recalls. His coding skills, digital marketing background and experience with the retailer as a client while at a startup social media agency helped prepare him for this opportunity. At the time QuickChek’s Rush became its digital marketing manager and advertising coordinator at the start of 2015, the chain was already leveraging many different digital channels and preparing to launch its mobile app. Since joining the company around 2000, his experience in operations, customer service and information technology as well as his background in graphic design positioned him well for this new role. Both of their respective roles have evolved, reflecting digital’s increasing role within marketing. Templeton’s title is marketing manager, reflecting how Kum & Go is realigning resources and building more integrated marketing capabilities that now include a loyalty program. On the other hand, Rush is focused mainly on digital today as these tasks have quickly become a full-time job as QuickChek wanted to create a fully functioning digital team. PLANNING

Creating roles makes clear who is most accountable for digital’s performance, and planning is an important function this individual should also own as it is a key part of connecting objectives with outcomes. In other words, it is beneficial for planning purposes to first have the roles and people in place. This may explain why our research found more retailers (two-thirds) lack a well-developed planning approach for digital as compared to clear roles and responsibilities. Budgeting is an important aspect of planning as it ensures resources are allocated to support the plan. So, the finding that retailers with a sound strategy are more than three times as likely to have a well-developed approach to planning illustrates why these retailers also report better performance. In terms of budgeting, this means creating a new line item under marketing for digital, which is what

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Fig. 4

Average Effectiveness Score 100% = Extremely Effective

Possesses Sound Strategy

Lacks Sound Strategy

Source: Convenience Store News/Balvor/Brick Meets Click, 2016

Kum & Go and QuickChek have done in recent years. As a result, each has a better understanding of how much and where to invest resources, and both report that digital’s share of the marketing budget has grown dramatically since this has become its own line item. This has, in turn, motivated a closer look at the role of “analog” as Templeton likes to describe the traditional media channels and involves strengthening integration across media channels and improving utilization of marketing budgets. PROGRESS

The desired outcomes retailers hope to achieve will likely differ, which makes strategy all that more important as companies need to make choices and know when it makes sense to move forward. The retailers with strong capabilities are often not the first to move on the next big thing, as QuickChek for instance didn’t have a mobile app until early 2015. They tend to study it, learn how it may impact the customer experience, and how it aligns with their overall strategy. As a result, if they do elect to move forward, they tend to have essential building blocks in place. Although every retailer has an opportunity to improve, having a sound strategy is clearly a critical catalyst for making positive progress. Looking at how companies compare related to key stages of developing digital marketing, retailers with a sound framework report scores, on average, that are more than 50 percent higher than the others (Fig. 4).

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The largest difference in performance exists with identifying opportunities to consider pursuing, while the next biggest gap rests with measuring the effectiveness of digital activities. Issues in these two stages are symptoms related to strategy and most of the others link to internal processes, reinforcing why strategy must come first in digital marketing. IN SUMMARY

The integration of digital into marketing is a challenging journey that can be complex, costly and changes relatively rapidly. Our research reveals these are more environmental factors that all retailers are facing and that sound strategy helps build the internal processes that will allow companies to bridge the digital capabilities divide and arrive at the desired outcomes. CSN David Bishop is managing partner of sales and marketing firm Balvor LLC and segment leader at industry consulting firm Brick Meets Click. For more information, he can be contacted at davidbishop@balvor.com.

About the Digital Marketing Initiative

The Digital Marketing Initiative is a multipart research collaboration between Convenience Store News, sales and marketing firm Balvor LLC and industry consulting firm Brick Meets Click. Part 1, summarizing the research findings, appeared in the February 2016 issue of CSNews. Part 2, discussing the importance of a sound strategy, appeared in the May 2016 issue.

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Preparing for the

Road Ahead

Attendees will find this year’s NACS Show themed around the future By Danielle Romano

he theme of this year’s NACS Show is “Meet Your Future,” which is fitting for an event that brings together convenience and fuel retailing professionals from every corner of the industry, from national chains to regional players to single-store operators. Now in its 43rd year, the 2016 NACS Show will make its way to the Georgia World Congress Center in Atlanta Oct. 18-21 — “where all roads lead to profits,” according to NACS, the Association for Convenience & Fuel Retailing. For four days, attendees will come together to learn, network, buy and sell, and find the best and newest products and services, as well as new ideas through workshops and educational sessions.

Attendees of the 2016 NACS Show will have more than 60 educational sessions to choose from.

Last year’s NACS Show broke records when more than 23,000 attendees and 1,000-plus exhibitors were expected, but the number of registered attendees actually came in at 24,392 and there were 1,264 exhibiting companies. This year, the association expects even greater attendance figures considering the expo floor is extended to 410,000-plus net square feet, where more than 1,200 exhibiting companies will showcase thousands of products geared toward convenience store and fuel retailers. And, of course, the expo floor is not all that’s on this year’s docket. The 2016 NACS Show will offer more than 60 educational sessions for attendees to choose

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from — 12 more educational sessions than last year. Showgoers can also sit in on four days of general sessions — something that was started in 2015 and is continuing. OPPORTUNITIES APLENTY

Whether this is a retailer’s first time attending the event or their 20th time, organizers boast that there’s an educational session, exhibitor booth or new idea for everyone. Here’s some highlights to look forward to at this year’s event: Small Operator Training Sessions: New to this year’s NACS Show is Small Operator Training Sessions, specially designed for attendees from companies with fewer than five stores. The sessions will only be open to them. Mark Wells, president of LJT Management Services Inc., will lead the four sessions entitled: Financial Ghostbusters; Essential Inventory Management and Loss Prevention; Positive Upselling — No Questions Asked; and Growing Your Customer Base — Gasoline, Store and Car Wash Strategies. Four Days of General Sessions: NACS Show veterans are used to the traditional three days of general sessions. However, NACS last year introduced a fourth day of general sessions and that feature is returning this year, spearheaded by dynamic and highprofile speakers. Closing out the expo on the fourth day will be legendary quarterback Peyton Manning, the National Football League’s only five-time Most Valuable Player and a 14-time Pro Bowl selection. Technology Edge: Now in its third year, Technology Edge is exclusively designed for technology professionals, in conjunction with NACS technology partner Conexxus. For two-and-a-half days, Technology Edge attendees will participate in educational sessions centered on data security, EMV and customer engagement; group discussions on technology topics affecting the industry; and networking opportunities with other technology professionals. They can also take advantage of the Technology Edge Solutions Center, a meeting place to connect with the day’s speakers and fellow participants.

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New Exhibitor Area: The New Exhibitor Area is back after making its debut at the NACS Show last year. This area aims to make it easier for retailers to discover new products and services from 200 newto-the-NACS-Show exhibitors. This time, the area will be organized into five categories that mirror the full expo: facility development and store operations; foodservice equipment and foodservice programs; merchandise, candy and snacks; fuel equipment and services; and technology. Cool New Products Preview Room: Located in the main lobby, the Cool New Products Preview Room allows showgoers to scan and print out a list of the latest products and services they’re interested in. This year’s room will hold hundreds of new products segmented into seven categories: green (eco-friendly); health and wellness; new design; new flavors; new to the industry; new services; and new technology.

“Make a list of the goals you want to achieve at the NACS Show. Research the exhibiting companies, explore the educational sessions, and determine ahead of time what you would want to see and learn onsite,” the association encouraged. One way to plan ahead is with the MyShow Planner. Introduced before last year’s event and back again, MyShow Planner gives attendees access to a plethora of opportunities at their fingertips. Using their NACS login username and password via the NACS Show mobile app, showgoers can utilize MyShow Planner to: • Access the 60-plus educational sessions and schedule the ones they’d like to attend; • Browse exhibitor listings, new companies and save time by adding them to the list of exhibitors they’d like to visit; • View an interactive floor plan that enables them to view the complete schedule, review their personalized agenda and keep up-to-date on show alerts. The NACS Show mobile app is available for free download for iPhone, Android, iPod Touch, iPad and other web-enabled devices. CSN

STRATEGY & EXECUTION

With so many educational sessions, exhibitors and new products to navigate through, NACS has one solid piece of advice for attendees: plan ahead.

Dynamic Leaders Take the Stage A peek at this year’s NACS Show general session lineup TUESDAY, OCT. 18 | 12:30-1:45 P.M.

THURSDAY, OCT. 20 | 10:15-11:30 A.M.

Merit Gest has more than two decades of experience working with companies to grow revenue, increase profitability and reduce turnover. Previously, Gest was the senior vice president of sales for a nationwide sales training organization, as well as the youngest general sales manager for a startup radio station in the country’s third largest market. She has held various positions as business owner, trainer, coach, consultant and keynote speaker who has worked with CEOs, business owners, entrepreneurs, sales management teams and professionals across industries including financial services, manufacturing, engineering, professional services, technology and pest control.

“Ideas 2 Go,” since its inception in 1994, has featured hun-dreds of interviews with retailers from 38 states and five countries, showcasing the industry’s best practices. Each year, a new Ideas 2 Go program makes its debut at the NACS Show and attracts thousands of attendees looking for new ideas to implement in their own stores.

WEDNESDAY, OCT. 19 | 10:15-11:30 A.M. Steve Gross, who has a master’s degree in social work, is the founder and “chief playmaker” of the Life is Good Playmakers, a 501(c)(3) public charity. Life is Good Playmakers partners with professionals such as teachers, social workers and child life specialists and uses the power of play to build healing and lifechanging relationships with children in their care. Gross devotes himself to helping others access their own playfulness so they can build resilience and bring greater joy, connection, courage and creativity to their work and their personal lives.

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FRIDAY, OCT. 21 | 8-9 A.M. Peyton Manning, legendary quarterback, the National Football League’s (NFL) only five-time Most Valuable Player and a 14-time Pro Bowl selection, has been awarded accolades on and off the field. For his actions off the field, Manning was honored as the recipient of the Bryon “Whizzer” White Humanitarian Award and the NFL’s Walter Payton Man of the Year in 2005, as well as the Bart Starr Award in 2015. Manning serves as a member of the American Red Cross National Celebrity Cabinet and The Pat Summit Foundation Advisory Board. He and his wife, Ashley, established the PeyBack Foundation in 1999 to promote the future success of disadvantaged youth by assisting programs that provide leadership and growth opportunities for children at risk.

s u n i Jo ! r o s n o p s a as

Presenting Sponsor

Now in its 3rd year, the Convenience SStore News Top Women in Convenience honors women in the c-store industry who have been influential leaders to their companies and peers. This year we are honoring 62 winners in six categories: • Women of the Year • Senior-Level Executives • Rising Stars

• Mentors • Store Managers • Single Store Owners

We will present the Top Women in Convenience awards at an elegant cocktail reception on Wednesday, October 19th immediately following the close of the NACS Show® Expo Floor.

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Make sure your company is there to network at this important Convenience Store News and c-store industry event.

As a sponsor the benefits you receive are: • Positions your brand as a strong proponent of women as employees and business partners • Elevates the profile of your company as a positive place for high caliber female candidates to apply • Improves employee morale and satisfaction by investing in employees, acknowledging their accomplishments, and giving them the opportunity to meet and be recognized by other award winners and attendees at the event. • Aids in professional development and encourages female employees to become more actively involved in the industry by attending both the show and the awards event. • Creates a positive impression of your brand among existing and prospective business partners • Strengthens your brands leadership role by demonstrating your commitment to the industry

Contact your sales representative today to join us in celebrating these outstanding women and all they accomplished! Group Brand Director/SOUTHEAST, Ron Lowy, 330-840-9557, rlowy@stagnitomail.com WEST, Dian Melius, 949-387-1451, dmelius@stagnitomail.com NORTHEAST, Rachel McGaffigan, 508-385-2524, rmcgaffigan@stagnitomail.com MIDWEST, Michael Hatherill, 201-855-7610, mhatherill@stagnitomail.com CLASSIFIED, Terry Kanganis, 201-855-7615, tkanganis@stagnitomail.com

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EXPERT’SVIEW

Golden Goose or Black Swan? Why it’s important to ask yourself if you have a transferable family business

re you making decisions today that will increase the probability of having success in transferring your business and protecting your wealth? Why is this question important? It’s because a majority of your wealth and largest asset is tied to an illiquid family business that is a source income and By James J. Kirlin, a means for accumulating generational Private Capital wealth. In the next 10 years, to optimize Solutions Group value for their families and continue the business for the next generation or new owners, millions of baby boomer-owned businesses are expected to change hands. Sadly, many of these owners are not as prepared for transferring their illiquid wealth as the surveys tell us they believe they are. NO PLAN IS A PLAN

Why are there family businesses that grow and thrive, while others risk continuing to the next generation or fail? In the book, “The Final Test of Greatness,” the authors argue that “in a world of economic complexity, the failure to plan and manage succession is the greatest threat to the survival of the family business.” Despite years of family business research, grappling with succession continues to be an ongoing challenge for many owners. The studies paint a picture of contradictions between the owner’s wish to keep the business and the reality that they are not prepared for the challenge. Consider that: • 70 percent of businesses fail or are sold before they are passed to the next generation. • 84 percent want to keep the business and have a low mental readiness to exit. • 73 percent of owners do not have a formal succession plan to deal with the most important

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financial decision of their life-preserving wealth. There are many reasons why formal succession planning is so important, including: Ensuring the Business Is Transferable Don’t assume the future will be a continuation of the past. A transferable business is a business that has preserved its value; can be owned and operated by someone else today or in the future; and is treated as an investment, not a job. Are you exploring the different scenarios and trends that are impacting your business and industry? Are you confident your business

EXPERT’SVIEW will be transferable today or in the future? Lowering the Risk of Transfer Do you want to hold on to your business and risk the unexpected crisis of poor health, agin aging or the next recession? The longer you wait to implement a succession p plan, the greater the risk. Businesses of any size can be b disrupted by a voluntary event, or worse, involuntary invo event such as death, divorce or lawsuits. lawsuit These incidents could impact the value and economic viability of the company. Financial, Mental & Business Readiness Succession must address ownership, ownersh management, leadership, financial and culture matters. Along with assessing the strength g and weaknesses of the company, it is important to quantify your emotional and financial dependence on the business. Can the business operate without you? Are you dependent on the business for income, financial or emotional needs? Ask yourself: Is my business OK? Is my family OK? Am I OK? Protecting the Value Do you know what your business is really worth? The need to get money out of the business for retirement or preserving family wealth may conflict with the financial structure and ability of the company to continue. Acceptable transfer value scenarios for lifetime and death, lending, retirement, gifting, estate tax and shareholder agreements must be evaluated.

Leadership Development A critical value driver for every business and succession plan is the leadership team. Do you have a plan to develop leaders? The key is to retain key executive talent and align their goals and compensation with the value drivers of your company. Emotional

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and financial issues that can an create clashes among active and inactive ve owners or successors, or those who are re not equipped or capable of operating the he business, also need to be addressed. Improve Business, ness, Financial & Estate Planning ng Strategies and documents uments may be outdated, with different nt plans created over many years, resulting ng in fragmented estate, shareholder er and ownership planning. This can be costly in missed opportunities. tunities. Is your planning coordinated rdinated with the estate, financial ial plan, shareholder agreements and nd overall family wealth plan? Legislative ive Risk Legislation g ion may change both federal and state estate and other tax rules. Valuable business transfer and estate planning tools and techniques available today may be weakened or no longer available.

SUCCESSION IS A PROCESS

The risks and consequences of not preparing for the eventual transition of your company can be severe. However, a successful continuation plan depends greatly on your mental perspective and being proactive to lead the process. Think about it as playing to win the game. It is a process and entry point for creating a new direction for the future of the company; not an end, but a beginning. This one decision to get started will give you, and every stakeholder, the time to prepare for contingencies, identify successors and explore alternatives for growth, acquisitions, transfer within the family, management or selling. Most importantly, getting started on succession planning will reward you and everyone who depends on you with a sense of security. In the October issue, I’ll discuss how to plan for creating a transferable business. CSN James J. Kirlin is a financial advisor for family and privately held businesses. He has more than 25 years of experience in executing business transition and legacy planning strategies that focus on optimizing family wealth and reducing the risks associated with the ownership of a middle-market business. He advises business owners on a wide range of topics including exit strategies, succession, legacy and wealth management planning. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.

Why Leading Retailers Are Adopting

THE NEW FUEL

View It In the Archive Now! While the introduction of E15, a fuel blend that contains 15% ethanol and approved for use with 2001 and newer vehicles, has been controversial at times, retail adoption of the fuel blend has been accelerating. Leading retailers like Minnoco, RaceTrac, Sheetz, Kum & Go, Thorntons, MAPCO, Protec and Family Express are updating more than 700 locations with E15. Consumer adoption has been strong for E15 with it now representing more than 7% of total gasoline sales. Consumers have driven more than 150 million miles with E15 and have reported zero incidents.

SPEAKERS: Lance Klatt Executive Director Minnesota Service Station & Convenience Store Association (MSSA) Randi Etzkin Research Director Carbonview

Join us as we report the latest on the growing market demand for E15. Minnoco’s Lance Klatt, Carbonview’s Randi Etzkin and Growth Energy’s Mike O’Brien will examine:

Mike O’Brien VP of Market Development Growth Energy

• Why leading retailers are adding E15 • Consumer attitudes towards ethanol blended fuels • Purchase behavior for E15 • Future growth for the new fuel Presenting by: