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Getting the tobacco categories to the next level is about understanding consumer insights, identifying trends and applying them to your store. At AGDC, our passion to succeed is what keeps us focused on analyzing business opportunities to beneďŹ t our customers. Stop by our booth at the NACS Show and letâ€™s talk about how to prepare your store for the next level.
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NACS Show Booth 1931 - Hall B
VIEWPOINT By Don Longo, Editorial Director
Happy Days Still Here for C-stores First-half results reveal 2016 is shaping up as another good year
fter a stellar financial performance in 2015, it’s understandable that convenience store industry sales growth would soften a bit in 2016. Nevertheless, the c-store industry appears headed for another year of strong growth, especially in in-store sales. Based on mid-year data from Nielsen, government sources and Convenience Store News’ own research analysis, total merchandise and foodservice sales were up 3.1 percent for the first six months of this year vs. the first six months of 2015. That’s just slightly less than the 3.5-percent sales increase achieved a year ago. For comments, please contact Don Longo, Editorial Director, It’s still a solid increase, especially at (201) 855-7606 or coming off last year’s record-high dlongo@ensembleIQ.com. in-store sales numbers. Other key stats from our 2016 Mid-Year Report Card, which will be released exclusively as an online series at CSNews.com, include: • Motor fuel volume in gallons sold was up 3.2 percent (although dollar sales were down nearly 12 percent due to lower fuel prices); • Cigarette sales were up 2.4 percent; • Foodservice sales were up 5.6 percent, led by a 7.3-percent increase in prepared food; • Packaged beverage sales were up 3.5 percent; • Beer/malt beverage sales were up 3.1 percent; • Other tobacco product sales were up 5.1 percent,
driven by a resurgence in cigars and moist smokeless tobacco; • Salty snack sales were up 3.9 percent; and • Wine and liquor sales were up 11.1 percent, trending ahead of last year. This year’s CSNews Mid-Year Report Card also takes a deep look at subcategory performance, revealing strong half-year sales for such segments as: moist smokeless tobacco (up 6.4 percent), cigars (up 6.6 percent), enhanced water (up 11.5 percent), imported beer (up 16.4 percent), super premium beer (up 15.4 percent), microbrew/craft beer (up 22.9 percent), crackers (up 5 percent), novelties/seasonal candy (up 7.3 percent), and granola/yogurt bars (up 14.1 percent). It appears that low fuel prices are continuing to drive strong in-store sales for convenience stores. But will these tailwinds last all year? I think we are going to see some negative impacts from the economic uncertainty that usually accompanies a national presidential election. Also, retailers are likely going to see increased labor and store operating expenses this year as they raise minimum wages (either because they are legally forced to or because they must hire more qualified workers to handle increasingly demanding in-store tasks). On the other hand, a relaxation of anti-alcoholic beverage sales regulations in the state of Pennsylvania will result in a windfall of beer sales for c-stores in that state. Overall, I’d say it is still a very good time to be a convenience store retailer.
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 | OCTOBER 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 OCTOBER 2016
VOLUME 52/NUMBER 10
24 | COVER STORY Maverik’s Magic Number
The Western U.S. convenience store retailer is closing in on 300 locations.
34 | Wage Warriors C-store retailers see opportunity in the hotly debated minimum wage issue.
HR & LABOR STUDY
46 | Building a Team Today’s c-store operators struggle to find and keep the best talent. TECHNOLOGY
102 | Mobile Maven From apps to mobile ordering, Maria Fidelibus keeps QuickChek on the leading edge. 106 | EMV: One Year Later For the c-store industry, the migration continues and still has its challenges. 112 | Profiting From Your Mobile App C-stores must focus on engaging customers via games, promotions, coupons and more. OPERATIONS
118 | Skimming in the Spotlight Criminals have become more effective at perpetrating pump fraud, but there are solutions. 120 | Convenience Down Under Australia’s convenience stores are growing through innovation.
4 | Happy Days Still Here for C-stores First-half results reveal 2016 is shaping up as another very good year. 12 | CSNews Online 20 | New Products STORE SPOTLIGHT
126 | An Extra Dose of Convenience QuickChek debuts its first store offering both pharmacy and fuel. OUT & ABOUT
130 | A Playbook for Profit McLane National Trade Show highlights new foodservice and technology offerings. EXPERT’S VIEW
132 | No Signs of Cooling Off The waning days of summer were hot for convenience and gas station industry M&A.
140 | Nothing Less Than 50/50 Better is not good enough. It’s time for gender parity in our leadership. 144 | How to Create a Transferable Family Business These seven concepts will put you on the right path to protecting your value. 148 | Clinton vs. Trump What each of their presidencies could mean for your P&L statement. 170 | Getting to the Core
INDUSTRY ROUNDUP 14 | Delek US Sells MAPCO Express to Chile’s COPEC 16 | The Guess Corp.’s C-store Plans Begin to Take Shape 18 | Eye on Growth 18 | Retailer Tidbits 19 | Marketing Moves 19 | Supplier Tidbits
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 | OCTOBER 2016 | WWW.CSNEWS.COM
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CONTENTS 570 Lake Cook Road, Ste. 310, Deerfield, IL. 60015 (224) 632-8200 Fax: (224) 632-8266 www.csnews.com
CATEGORY MANAGEMENT FOODSERVICE INNOVATORS AWARDS
60 | Convenience Cuisine at Its Finest QuickChek heads lineup of 2016 Foodservice Innovators Awards winners. FOODSERVICE
70 | Do Dayparts Exist in Retail Prepared Food Sales? The answer is: probably not anymore. TOBACCO
72 | Age Restricted The push is on to increase the minimum age to buy tobacco to 21 across the country.
Direct Mailing Address for Convenience Store News: 111 Town Square Place, Suite 400, Jersey City, N.J. 07310
BRAND MANAGEMENT Group Brand Director (330) 840-9557
Ron Lowy firstname.lastname@example.org
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 email@example.com Linda Lisanti firstname.lastname@example.org Brian Berk email@example.com Melissa Kress firstname.lastname@example.org Angela Hanson email@example.com Danielle Romano firstname.lastname@example.org Renée M. Covino email@example.com Tammy Mastroberte firstname.lastname@example.org Michael Escobedo email@example.com
78 | In the Mood Improve sales strategies by studying how consumers’ emotions affect their beverage choices. CANDY & SNACKS
82 | Early Evening Eats The opportunity is there for c-stores to take a bigger bite of p.m. snacking. SERVICES
86 | Car Wash Contemplations Consider these five new and improved reasons to hook up to a car wash. MOTOR FUELS
90 | Doubling Down on E15 Renewable fuel offering has risen from 129 store locations to 275 in just 12 months.
EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION Vice President/Custom Media Division Pierce Hollingsworth (224) 632-8229 firstname.lastname@example.org Production Manager Anngail Norris Strategic Marketing Director Bruce Hendrickson (224) 632-8214 email@example.com Director of Events Pat Benkar (973) 607-1330 firstname.lastname@example.org Director of Market Research Debra Chanil (201) 855-7605 email@example.com Audience Development Manager Shelly Patton (646) 217-1045 firstname.lastname@example.org List Rental The Information Refinery (800) 529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media (877) 652-5295 email@example.com Subscriber Services/Single-Copy Purchases (978) 671-0449 Stagnito@e-circ.net
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President & CEO Chief Financial Officer
98 | Pump, Then Plant Alon’s Strive fuel program reduces emissions while giving back to the community.
Chief Customer Officer
HOW TO DO WORLD-CLASS FOODSERVICE
CONVENIENCE STORE NEWS AFFILIATIONS
52 | How to Recruit & Retain Exceptional Foodservice Employees 52 | Call to Action: Foodservice 101 54 | Call to Action: Foodservice 201 56 | Call to Action: Foodservice 301
8 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
Chief Operating Officer Chief Digital Officer
Premier Trade Press Exhibitor EDITORIAL ADVISORY BOARD Brett Atherton Bolla Management Corp. Rick Crawford Green Valley Grocery Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Ray Johnson Speedee Mart
Jack Lewis GPM Midwest
Jonathan Polonsky Plaid Pantries Inc.
Danielle Mattiussi Maverik Inc.
Greg Scriver Kwik Trip Inc.
Kyle McKeen Alon Brands Inc.
Roy Strasburger Convenience Management Services Inc.
Richard Mione GPM Southeast
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 | Cracker Barrel Exiting Business With Sale to Couche-Tard Cracker Barrel is leaving the convenience store scene with the sale of its 53 sites to Circle K Stores Inc., a wholly owned, indirect subsidiary of Alimentation Couche-Tard Inc. These sites were held by American General Investments LLC and North American Financial Group LLC, and are located primarily in the Baton Rouge, La., market. 2 | Couche-Tard Deal Could Add Up for Executives at CST Brands CST Brands Inc. executives could stand to benefit financially once the company is officially acquired by Couche-Tard in early 2017. CST Brands CEO Kim Lubel could receive nearly $20 million in compensation, including $5.5 million in separation payments, with the rest coming from benefits, incentive plans and stock options. 3 | Walgreens to Divest Up to 1,000 Stores for Rite Aid Merger With its acquisition of Rite Aid Corp. on track to close later this year, Walgreens Boots Alliance Inc. expects to sell off between 500 and 1,000 stores. The divesture will ease antitrust concerns surrounding the multibillion-dollar acquisition of its competitor. According to Walgreens, the company is “actively engaged” with Federal Trade Commission regulators. 4 | Circle K Chooses McLane for East & Midwest Business Circle K awarded convenience distributor McLane Co. Inc. its East and Midwest business in a multi-year agreement. McLane will begin servicing 1,161 Circle K convenience stores starting this January and an additional 982 locations in January 2018, for a total of 2,143 stores.
5 | Casey’s Sees Consumer-Spending Weakness Casey’s General Stores Inc. suffered a drop in consumer spending in its 2017 fiscal first quarter, which ended July 31, Chief Financial Officer Bill Walljasper reported during the company’s Q1 earnings call. “Consumer spending decelerated throughout the quarter,” he said. “It was partly due to lower farm income in the Midwest [where Casey’s mainly operates]. … According to the USDA [U.S. Department of Agriculture], farm income is at the lowest level since 2009.”
Transforming the Retailer Ordering Experience Convenience stores provide a fast shopping experience for on-the-go customers, who can easily find what they’re looking for, discover a new product or two along the way, and quickly checkout to get back to the rest of their day. A c-store retailer’s own buying experience, however, is often quite different. Given the fast-moving, high-volume nature of the c-store business, distributors have realized they, too, can differentiate by transforming the ordering experience. To provide better support and service, distributors have begun to implement business-to-business commerce software that puts the latest technology in the hands of their sales reps and retailers to increase reorder speed and ensure the timely delivery of information. For more exclusive stories, visit the Special Features section of www.csnews.com.
PRODUCT HIGHLIGHT The most viewed New Product online.
Posiflex HS3510 POS Touchscreen
Model HS3510 from Posiflex is a compact, all-in-one point of sale (POS) touch terminal. With a 6-inch by 6-inch footprint, the HS3510 takes up less than half the counter space of a conventional POS terminal and printer, the company noted. Other features of this model include: a 10-inch touchscreen; a processor that runs virtually any Windows application; encryption-capable magnetic stripe reader; full complement of I/O ports; and a modular, 3-inch printer engineered for ease of serviceability. Posiflex Technology Inc. Hayward, Calif. (888) 968-1668 posiflexusa.com
The Guess Corp. recently announced plans to open member-only convenience stores catering to the ultra-affluent. Do you think this is a viable concept?
12 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
10% I’m on the fence about it
ÂŠ2016 Goya Foods, Inc.
* Nielsen Strategic Planner, Total U.S. (unit and dollar sales), 52 weeks ending 12/19/15
INDUSTRYROUNDUP FAST FACT
Delek US Sells MAPCO Express to Chile’s COPEC The average annual rate of turnover for store associates in 2015 was 54 percent. That figure compares to 23.8 percent for assistant store managers and 14.9 percent for store managers. Source: Convenience Store News 2016 HR & Labor Study (page 46)
“We’re a food store. There are no gas pumps here. Nothing to confuse the customer about our purpose. Everything here reinforces the quality of our food.” — Maverik Inc. President Tom Welch (page 24)
The $535M transaction marks the company’s entry into the U.S. market
elek US Holdings Inc. signed a definitive agreement to sell its MAPCO Express Inc. retail network to Compañía de Petróleos de Chile COPEC S.A. (COPEC). The $535-million transaction covers a 100-percent interest in MAPCO and certain affiliated companies. MAPCO has 348 corporate convenience stores operating primarily in Tennessee, Alabama and Georgia, with additional presence in Arkansas, Virginia, Kentucky and Mississippi. MAPCO operates stores under the banners MAPCO Express, MAPCO Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express, and Discount Food Mart. In addition, MAPCO provides fuel to 142 dealer locations (as of July 31), and provides logistical fuel transportation to MAPCO and third parties via approximately 50 tractors and trailers. “The sale of MAPCO to COPEC allows Delek to simultaneously unlock the value of these assets and gain a continuing competitive partner in retail fuel sales,” said Uzi Yemin, chairman, president and CEO of Delek. “We believe this transaction will provide Delek with increased financial flexibility as we explore future opportunities, and creates an exciting opportunity for the MAPCO brand and its employees as it becomes part of COPEC’s growth strategy.”
14 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
COPEC is one of the largest companies in Chile, doing business in fuels and lubricants distribution and convenience retailing. COPEC operates the largest convenience store network in Chile and captures approximately 53 percent of the country’s gasoline market share through its 626 company- and dealer-operated service stations, 82 Prontobranded convenience stores, and 220 Puntobranded convenience stores. COPEC also has a majority ownership stake (58.9 percent) in Organizacion Terpel S.A., which is based in Bogota, Colombia, and accounts for approximately 45 percent of that country’s fuel market share. Terpel has 1,949 Terpel-branded gas stations in Colombia and 233 stores in Panama, Ecuador, Peru and Mexico under store brands Altoque and Deuna selling Terpel-branded fuel. In general, COPEC said it intends to retain MAPCO’s current retail team to provide for a seamless entrance into the U.S. convenience channel.
Visit us at the 2016 NACS Show, Hall B booth #1913
The Power of sparkling is highly expandable
most frequently purchased beverage category1
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1 Nielsen Homescan Panel, Total U.S. 52 weeks ending 3.29.14; 2 Kantar Retail Shopper Genetics, April 2012; 3 B-cubed Consumer Survey, Total U.S. Population Ages 13–64, 12 MMT Mar. 2014; 4 Nielsen Databank Total US CR Latest 52 wks WE Q1 2016; 5 Coca-Cola iSHOP Study 2014, Total U.S. Population Ages 16–75, Monthly+ Grocery Shoppers, 12 ME Sep. 2014
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The Guess Corp.’s C-store Plans Begin to Take Shape Channel newcomer unveils store layout, plus a members-only concept
he U.S. convenience retail channel has made great strides in turning around its former image of a “gas and smokes” industry. Now, The Guess Corp. is kicking it up a notch. The market newcomer recently released detailed plans for its new GP Express portfolio of convenience stores, which will include a restaurant brand as well as a members-only component. The “upscale” portfolio will feature an open layout similar to small grocery stores. Each store will feature
Through multiple concepts, the company wants to bring “boutique style” to the convenience store/gas station industry.
16 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
a seating area, along with a dining area, for an in-store deli/restaurant. An upper level of each store will overlook the lower level, according to plans by architect Scott+Cormia. GP Express employees will be assigned to sections of the store and equipped with mobile payment devices so that customers do not have to visit the main register to checkout. Employees will also wear uniforms with aprons, and be required to carry bags to customers’ vehicles. Full-service fueling will be offered at GP Express stores, as well. Attendants will be available to pump gas for customers without them having to get out of their vehicle. In addition to GP Express, The Guess Corp. intends to launch a chain of “ultra-luxury” gas/convenience stores as country clubs with memberships required. This chain will be known as GP Club and will fall under the corporation’s petroleum unit, Guess Petroleum Ltd. According to the company, GP Club will be the ultra-luxury brand for the ultra-affluent, while GP Express will be the luxury brand for affluent consumers. GP Club will feature mansion-style buildings with a separate area for fueling. The four-level GP Club buildings will include a steakhouse restaurant, business center, video-conferencing center, meeting rooms, suites for sleeping and resting, a medical clinic, a boutique selling select designer merchandise, and a hair salon. The main level will house a convenience store with “premium quality merchandise, fresh goods and a dining room,” the plans show. The Guess Corp. is aiming to build 250 GP Club units globally over the next 36 months through “a modest rollout.” In the U.S., there will be approximately two GP Club units per state. A hospitality venture is also on tap for the organization. The Guess Bread Co. will be an upscale dining experience featuring an open kitchen and 20 tables per restaurant, with two chairs per table to allow couplesonly dining. The menu will feature sandwiches, soups, salads, desserts, breads, cheesecakes and wine for dinein or takeout. Bread will be baked fresh on-site.
A FOODSERVICE PROGRAM
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eye on growth n GPM Investments LLC acquired 20 Jiffi
Stop convenience stores from Smith Oil Co. In addition to the Illinois locations, GPM acquired the Jiffi Stop name.
Couche-Tard agreed to divest two retail sites, one in Ontario and the other in Quebec. The transaction is expected to be completed in October. n Sunoco LP closed on its $167.7-million purchase of
n Casey’s General Stores Inc.
will soon open its first store in Ohio, marking its entry into a 15th state. The move follows the opening of a second Casey’s distribution center in Terre Haute, Ind., which makes new territories possible.
Emerge Energy Services LP’s fuel business. The acquisition comprised Arlington, Texas-based Direct Fuels LLC and Birmingham, Ala.-based Allied Energy Co. LLC. n Global Partners LP completed the sale of 30 non-
strategic gasoline stations and convenience stores to Mirabito Holdings Inc. The $40-million deal included sites in New York and Pennsylvania.
n The Canadian Competition Bureau approved
Alimentation Couche-Tard Inc.’s acquisition of certain assets from Imperial Oil. Couche-Tard agreed to acquire 279 Esso-branded fuel and convenience sites, 229 of which are located in Ontario in the greater Toronto area. The remaining 50 sites are located in Quebec in the greater Montreal area, or on the south shore of Montreal. Following the Bureau’s review,
n Love’s Travel Stops & Country
Stores will open its first travel stop in Montana in early 2017. The 10,000-square-foot site will have 68 parking spaces for trucks, 12 gas pumps for motorists, and five pumps for professional truck drivers.
retailer tidbits n Western Convenience Stores Inc. is set
to emerge from Chapter 11 bankruptcy proceedings. All creditors were paid in full as a result of its reorganization plan.
n Swiss Farms has begun offering well-
balanced kid’s meals in customizable lunchboxes. The lunchbox meals include a half sandwich, a side and a drink. Adult meal versions are also available.
n TravelCenters of America LLC
expanded its relationship with U.S. Bank. With a new Voyager Fleet Card, all fleet classes can now be managed through one platform. n Sheetz Inc. earned a spot on the Best
Workplaces for Women 2016 list. This is the second time the retailer has received this honor. This year, Sheetz ranks No. 12. n Rutter’s Farm Stores is adding the NCR
OPTIC Solution at the pump to its 65 convenience stores. The open-source platform will allow the retailer to integrate its Rutter’s VIP Club rewards program.
18 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
n Love’s Travel Stops & Country
Stores is adding 64 Godfather’s Pizza Express locations across 16 states through early 2017. The grab-and-go program will be made available at 46 existing locations within six states, as well as new travel stops. n Quik Mart Stores flipped
the switch on an upgrade from a fluorescent and HID interior/exterior lighting system to a solid-state LED lighting system at 25 locations. The chain expects to save $200,000 per year.
marketing moves n Pilot Flying J launched its
first major integrated marketing campaign, including its first national TV commercial. The spot, titled “The Troops,” promotes amenities like the chain’s restrooms and Wi-Fi.
n The Parker Cos. marked the
conclusion of its 40th anniversary at its Parker’s convenience stores by giving away a Jeep Renegade. The general public and more than 130,000 Parker’s PumpPal Club members entered the contest. n Football fans wearing Green
n Daily’s convenience stores
gave a free sandwich to any uniformed first responder who visited one of its stores Sept. 11-12. First responders in uniform will also receive discounts on popular items from the Daily’s Dash menu through the rest of this year. n Thorntons Inc. held its first-ever Race Week, fea-
turing a Thorntons race car that was available for viewing at six Chicagoland Thorntons locations. Customers also had the chance to win NASCAR Xfinity Series race tickets.
Bay Packers apparel on Fridays can visit participating Wisconsin CITGO locations during the football season and receive a free small coffee or fountain beverage. No purchase is necessary. n In a fall “SweepSTEAKS” pro-
motion, TA Restaurant Group’s TA Country Pride restaurants and Petro Iron Skillet restaurants will offer customers a chance to win $5,000, or one of more than 100,000 prizes. The contest runs through Nov. 21.
supplier tidbits n Mondelez International Inc.
dropped its bid to acquire The Hershey Co. Mondelez had reportedly upped its preliminary non-binding offer of $107 per share, or $22.3 billion, to $115 a share in late August before withdrawing. n McLane Co. Inc. rebranded its private label line to CVP
(Consumer Value Products). Along with the rebranding, the company will debut five new private label brands and provide a mix spanning 240-plus products. n Dos Equis gave a
glimpse of its new Most Interesting Man in the World through a featurefilm-style trailer called “Cataina.” On Oct. 19, the brand will showcase the
full reveal with a commercial synced with its College Football Playoff sponsorship. n Lil’ Drug Store Products was named Kum & Go LC’s
2016 Category Manager of the Year. The retailer lauded the supplier’s above-category growth rate in the past year. n PDI completed an acquisition of
Intellifuel Systems Inc., which provides solutions across the fuel supply chain market. Terms of the deal were not disclosed. n The Convenience Distribution Association inducted
Dick Dunham into its Hall of Fame and presented Dave Riser with the Dean of the Industry Award. Dunham is vice president of operations at Stephenson Wholesale Co. Riser is vice president of external relations-trade marketing at R.J. Reynolds Tobacco Co.
WWW.CSNEWS.COM | OCTOBER 2016 | Convenience Store News 19
NEWPRODUCTS Pearson Ranch Meat Snacks
Plan Zero by Concordia Coffee
Pearson Ranch introduced to the market jerky, snack sticks and summer sausages that do not contain nitrites or MSG, and are gluten-free. Varieties include All Natural Elk, Buffalo, Venison, and Wild Boar. To naturally preserve the meat, Pearson Ranch meat snacks contain celery powder and sea salt, making them a healthy-alternative meat snack, according to the company.
Plan Zero by Concordia Coffee is an all-inclusive program that covers a foodservice operator’s lineup of coffee machines, including installation, preventative maintenance and repairs, for a low fixed monthly payment. Plan Zero features an exclusive 90-day profit guarantee and is designed to pay for itself by selling only six to 10 drinks per day, the company stated.
Pearson Ranch Elk and Bison Jerky LLC Rio Rancho, N.M. (505) 994-2544 firstname.lastname@example.org pearsonranchjerky.com
Concordia Coffee Co. Redmond, Wash. (425) 732-3566 email@example.com concordiacoffee.com
Rhino Relax Relaxation Shot Rhino Rush, maker of energy shots, introduced a new shot line formulated to relax consumers’ bodies. The Rhino Relax relaxation shot is made with premium ingredients and extracts that support relief during stress and restlessness, and works within minutes with lasting effects, the company said. Each Rhino Relax shot has a suggested retail price of $5.99. Rhino Rush LLC Meridian, Idaho (877) 673-7181 rhinorush.com
Cheyenne Tropical Cigars Cheyenne Tropical Cigars, previously a limited-edition product, is being permanently added to the Cheyenne Cigars lineup. The tangy, citrus-infused cigar becomes the 11th permanent Cheyenne Cigars offering. The Tropical 100’s was the brand’s first-ever limited-edition style selected exclusively by its adult consumers through the 2015 “Save Your Fave” contest conducted on the company’s website. Cheyenne International LLC Grover, N.C. (866) 254-6975 cheyenneintl.com
Wayne E25 Retail Fuel Dispensers All Wayne North American retail fuel dispensers will be supplied as compatible and UL-listed to E25 fuel (25 percent ethanol and 75 percent petroleum) as a standard feature, according to Wayne Fueling Systems. The shift from the standard Underwriters Laboratory listing of E10 is effective immediately for Wayne Ovation fuel dispensers, and will take effect by year-end for the Wayne Helix family of dispensers. The company noted that at this time, 90 percent of dispensers in the industry are only certified to dispense E10 fuel. This move reflects the growing interest from customers to prepare for any and all necessary changes to the fueling infrastructure in the future, the supplier stated. Wayne Fueling Systems Austin, Texas (512) 388-8311 wayne.com
20 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
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The Lime-A-Rita line introduced a new limited-edition fall and winter seasonal flavor: Cherry-Ahh-Rita. This latest edition combines the sweet, juicy taste of dark cherries with a fresh margarita twist, according to its maker. Cherry-Ahh-Rita is available nationwide now through March 6, 2017 in 12-packs of 8-ounce cans, four-packs of 16-ounce cans, and single 25-ounce cans. The limited-edition variety joins the Lime-A-Rita portfolio of permanent flavors, including: Lime-A-Rita, Straw-Ber-Rita, Mang-O-Rita, Water-Melon-Rita, Lemon-Ade-Rita, Raz-Ber-Rita, Lime-ARita Splash, and Straw-Ber-Rita Splash.
Carmex Comfort Care lip balm is formulated with natural colloidal oatmeal and natural, cold-pressed fruit oil to deliver soothing, long-lasting moisture and hydration, according to Carma Laboratories. The lip balm comes in multiple flavors, including Mixed Berry, Sugar Plum and Watermelon Blast. Featuring an easy-touse wide applicator, the lightweight lip balms are made for year-round use. Carmex Comfort Care has a suggested retail price of $1.99.
Anheuser-Busch InBev New York (212) 573-8800 ab-inbev.com
Keebler Chocolate Sugar Wafers Responding to consumer demand for on-the-go snacking that satisfies sweet cravings, Keebler Sugar Wafers added a chocolate variety to its wafer line. Keebler Sugar Wafers now features simple and bold packaging, and 10 wafers per pack. The new chocolate addition joins existing strawberry and vanilla varieties. Kellogg Co. Battle Creek, Mich. (800) 962-1413 kelloggcompany.com
Carma Laboratories Inc. Franklin, Wis. (414) 421-7707 mycarmex.com
Hershey’s Chocolate Syrup Pouch Hershey’s Chocolate Syrup Pouch is the newest product stemming from the company’s commitment to sustainability through responsible packaging. The BPA-free pouch weighs 85 percent less than the #10 can and cuts the total amount of packaging materials in half. The pouch takes up less room in the back of the house, and can be snipped and poured or pumped for easy use. Convenience store operators can save 6 percent per fluid ounce of the cost of Hershey’s syrup by converting from the can to the pouch, the company reported. The Hershey Co. Hershey, Pa. (800) 468-1714 thehersheycompany.com
SToK Single-Serve Cold-Brew Coffee WhiteWave Away From Home introduced SToK Cold-Brew Iced Coffee to its coffee bar portfolio. Meeting consumer demand for “third wave coffee,” SToK is brewed low and slow at a cool temperature for a minimum of 10 hours to bring out a smooth, bold and one-of-a-kind flavor, according to the company. Packaged single-serve in 13.7-ounce bottles, the cold-brew coffee is available in Mocha, Vanilla and Not Too Sweet Black varieties and made with simple ingredients like coffee, milk and cane sugar. Using a proprietary Arabica-based blend and a higher ratio of coffee beans to water than typical hot brewing, the cold-brew process removes bitterness for a smoother taste, the maker noted. SToK is currently available in four markets: Boston, New York, Denver and San Diego. WhiteWave Away From Home Broomfield, Colo. (888) 620-9910 whitewavefoodservice.com
22 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
30 3 00 300 cover story
MAVERIK’S Magic ic Number b The Western U.S. convenience store retailer is closing in on 300 locations By Don Longo
wo-hundred and eighty-two down; 18 to go. That’s the countdown for Maverik Inc., the Salt Lake City-based chain of adventure-themed convenience stores, to open its 300th store by the end of this year. Nearly four years since FJ Management Inc. announced it was acquiring a majority interest in the retailer, Maverik is now in the midst of its most aggressive store opening program, having opened 13 new stores so far this year with the goal of reaching 300 by year’s end. Earlier this year, Maverik also debuted a new headquarters in the heart of downtown Salt Lake City (see page 26) and in June, opened its first nongas store on the ground floor of the new headquarters building. The 13-floor building, which the company calls “Base Camp,” also houses the offices of FJ Management, a private holding company that manages a diverse portfolio of oil and travel-related assets
24 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
including a refinery, an independent hotel chain, and a minority stake in the Pilot Flying J chain of travel centers (see page 28). Convenience Store News visited fast-growing Maverik to view the new offices, its first non-fuel store, and two newly rebuilt stores in southern Utah.
“A FOOD STORE”
Maverik’s first experiment with a non-gas store features all the latest programs and products — and some new ones exclusive to this urban site — of this innovative retailer that operates convenience stores throughout 10 western states. The store features Maverik’s now-familiar outdoor graphics, customized for each store but always including scenes of mountains, rivers and lakes, along with life-size hanging mannequins of kayakers and snowboarders. As soon as shoppers walk into the 5,886-squarefoot downtown Salt Lake City store, they are greeted
Maverik recently opened its first non-gas store in downtown Salt Lake City. Fresh food and beverages, prepared on-site, are the focal point of this 5,886-square-foot location.
Base Camp Supports Maverik’s Climb to New Heights After several years of being housed in low-slung, warehouse-looking buildings in North Salt Lake City, Maverik Inc. has moved its headquarters — which it calls “Base Camp” — to a 13-story building smack in the middle of downtown Salt Lake City. It’s an exciting time for the convenience store retailer whose new home, with its bold-red painted top floor and “Maverik Base Camp” logo, can be seen from blocks around. “Adventure’s First Stop” is the tagline the company currently uses to communicate its goal of being a destination for its active, adventure-oriented core customers. And the adventure theme is consistent throughout the four floors housing Maverik’s headquarters personnel. Some of Base Camp’s adventurous elements include: • Elevator doors that look like entrances to mine shafts; • Wall-map murals with employees’ names playfully hidden among real geographic features; • A rock-climbing wall; • A state-of-the-art test kitchen to create new products for the stores; • Liberal use of natural-looking materials that mimic natural stone and wood formations; and • Sweeping, panoramic views of Salt Lake City against a breathtaking mountain backdrop, visible from almost anywhere on the four floors occupied by Maverik. Base Camp also features lots of inspirational messages, such as Maverik’s “Live Legendary, Never Ordinary” mantra, which is meant to impress upon all employees that they are empowered to use their discretion to make customers happy.
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with the sweet smell of fresh-baked Cinnabon treats. Maverik currently has franchised Cinnabon kiosks in 20 of its stores — a figure that is expected to double by the end of this year, according to Maverik President Tom Welch. The Cinnabon kiosk is manned behind a central fresh-food section that also includes the company’s first and only barista-serviced dispensed hot and cold beverages counter and Maverik’s proprietary Bonfire Grill, an open kitchen where customers can view workers preparing the retailer’s wide selection of grab-andgo prepared foods — from humongous burritos to tasty-looking salads. All new stores feature Bonfire Grill, where the retailer also bakes its new personal pizzas, which are being rolled out chainwide. “We’re a food store,” Welch said during the store tour he gave CSNews. “There are no gas pumps here. Nothing to confuse the customer about our purpose. Everything here reinforces the quality of our food.” The store has indoor seating, too. During the tour, Welch also pointed out the store’s low-profile tobacco backbar, located behind the checkout counter. The lower racks allow exterior sunlight into the store, while also providing customers with an unimpeded view of the interior. “Our cigarette sales are about 40 percent of what most retailers do back East,” explained Welch. “It’s still an important category, but it’s another reason why we have to be innovative with our offerings. We can’t be dependent on cigarette and [other] tobacco sales.” Innovative thinking requires a higher caliber of employee, and Welch is happy to report that in the nongas store and chainwide, Maverik is attracting these kinds of people. “For example, the store director here had been a department manager at Nordstrom [the department store chain noted for its superior customer service],” he said. “We also have a
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The Story Behind Maverik’s Owners “Our goal with all the companies we invest in is to build value to last,” said Crystal Call Maggelet, chairman and CEO of FJ Management Inc., a diversified family business whose wholly owned subsidies include Maverik and Big West Oil petroleum refinery. FJ Management Chuck Maggelet and wife, Crystal Call Maggelet, are active participants in also has a minority stake in Pilot the management of Maverik. Flying J, the largest travel center operator in the United States. Maggelet, who gave Convenience Store News a tour of FJ’s museum on the top floor of the Maverik Base Camp building, is the daughter of Maverik founder Jay Call. The museum includes artifacts from the company’s past — including flight suits and model airplanes (Jay Call was an avid pilot), framed newspaper articles, and an interactive map of Pilot, Flying J and Maverik stores. The museum also provides highlights of the company’s history, such as: • Jay Call grew up in the gas station business, working for both his father and his uncle. In 1965, he built his first gas station and small store in Ontario, Ore., followed by another in Lewiston, Idaho. In the spring of 1968, he incorporated Flying J for the purpose of building and operating live-in, self-service gasoline stations. • Between 1968 and 1973, Call built 23 stations in California, Washington, Oregon and Nevada. In addition, from 1975 to 1977, he invested in other ventures to support the business: land development, restaurants and hotels in Utah, Washington and Oregon. • In 1979, Call opened the first interstate Flying J Travel Plaza along with its Tamarack Restaurant. He also acquired Husky Oil and Thunderbird, two risky ventures that turned into valuable assets. By the late 1980s, he was less involved in the daily operations but maintained a strong advisory role at Flying J. He also supported new business ideas, including a waterpark, hotels and, later, the Crystal Inn hotel chain that he ran with his daughter, Crystal. • In 2003, Call’s life was tragically cut short in a plane accident. Following his untimely death and an unfortunate set of business circumstances, FJ Management sought Chapter 11 bankruptcy protection in 2008. This led to the reorganization of the company, with Crystal taking the position of president and CEO. • In 2010, the company sold assets, merged with Pilot Travel Centers, and was able to make 100-percent repayment to all creditors. The company has flourished ever since, with the establishment of an investment portfolio and the acquisition of Maverik, which at the time was being run by other members of the Call family, headed by Mike Call. “When Mike called me and said he was considering selling, I told him we [FJ Management] were definitely interested,” Crystal explained to CSNews. She and her husband, Chuck, who serves as president and chief operating officer, are active participants in the management of Maverik and their other companies. They seek to foster a culture aligned with their principles of “integrity, excellence and respect,” she said.
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Maverik is successfully recruiting a higher caliber of employee.
continuing education program for employees. We have district supervisors and regionals who are studying for their MBAs. I think that as this industry evolves into new categories and businesses, you have to have better-prepared people. The c-store business today is so much more complicated than it was when I joined the Maverik board of directors 27 years ago.” Welch was one of the early top executives at innovative food retailer, Smith’s Food & Drug, one of the first grocery retailers to combine food with general merchandise. He helped grow the chain from five stores to 300 stores, doing $3 billion in sales and listed on the New York Stock Exchange, leaving in 1989 when he was asked by Salt Lake City officials to help the city attract the 2002 Winter Olympics. He was also asked to join the Maverik board in 1989 and served on the board for 24 years until FJ Management — a management firm with longtime family ties to both Maverik and Flying J Travel Centers — purchased the retailer from the Call family in December 2012. “A couple of months later, I’m out to dinner with my wife and I get a phone call from Crystal [Call Maggelet, FJ Management’s Chairman and CEO, and daughter of Flying J founder Jay Call]. She told me that the Calls were leaving Maverik and asked me to be president and help
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her put a strong management team in place at the c-store retailer,” recounted Welch. Testament to that strong team: Maverik Foodservice Director Rich Green was honored in September as the 2016 Convenience Foodservice Executive of the Year (for retailers with less than 500 stores) at CSNews’ inaugural Convenience Foodservice Exchange event in Chicago. In addition, this month, Maverik’s Vice President of Operations for Retail Adventures Danielle Mattiussi will be recognized as one of five Women of the Year during CSNews’ 2016 Top Women in Convenience awards reception at the NACS Show in Atlanta. Welch wants his legacy to be the people he’s brought to Maverik. “I’m so proud of my team,” he said. By the stroke of midnight on Jan. 1, Maverik expects to have opened 26 new stores in 2016, along with 25 remodels of smaller stores. “Maverik’s growth will be determined by opportunities the market- Grand opening rope-cuttings, instead of ribbon-cuttings, reflect Maverik’s adventure brand. place provides,” said Welch. “We currently have an aggressive organic growth program, averaging 26 new stores with an FLYING HIGH additional eight to 10 rebuilds and 25 flash remodels. After touring the non-gas store and the Base Camp In addition, we are open to acquisition opportunities, offices, CSNews accompanied Welch, Mattiussi, either in our current footprint or elsewhere.” Maggelet and her husband and business partner Chuck on Maverik’s six-passenger corporate jet to visit two newly rebuilt stores in southern Utah. In rural Fillmore, a town of about 2,500 people, workers were getting the new 5,046-square-foot store ready for the next day’s grand opening. Despite the town’s low population density, this replacement store is expected to do a tremendous amount of business Convenience Store News due to its freeway location approximately halfway Editorial Director Don between Las Vegas and Salt Lake City on Interstate 15. Longo hopped aboard The newer, larger store, like all new Maverik units, Maverik’s corporate jet to tour stores with top features the Bonfire Grill open-kitchen concept, as well company execs. as some additional twists: ethanol-free gasoline for the large number of recreational vehicles that utilize the facility; super-deluxe modern restrooms; an outdoor
30 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
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seating area with break-resistant, rubberized light bulbs for evening; a children’s playground; and a fence-enclosed dog-relief area for traveling pet owners.
Mattiussi is also excited to be testing out uniforms for the chain’s first restroom attendants. The busy freeway location guarantees the restrooms here will receive
Private label products, like Bonfire Chips, help position Maverik as a destination among consumers.
heavy use, especially on weekends, so the retailer wants to make a statement about the importance of clean and sanitary facilities. From Fillmore, another short flight took the group slightly north and east to another raze-andrebuild site in the small town of Ephraim. A different type of location with a large college student population due to nearby Snow College, the Ephraim store held its grand opening on June 29 with live music, raffles, a rock-climbing wall and a rope-cutting ceremony. (After all, a ribbon-cutting seems too tame for Maverik’s adventure theme.) Speaking to the store team just prior to the rope-cutting, Welch commented on the exciting times ahead for the c-store operator. “The growth opportunities for someone who comes to Maverik today are greater than they ever were,” he said. CSN
32 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
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Warriors C-store retailers see opportunity in the hotly debated minimum wage issue By Renée M. Covino o raise the minimum wage or not to raise the minimum wage, that is the question. It’s also a longstanding national political debate and a hot-button issue at the local level — and therefore, the convenience store level — with many minimum wage “warriors” rising to the occasion. The issue begins at the national level where proponents, typically Democrats, argue that raising the minimum wage will boost the economy and help reduce the number of people living in poverty. Those against it, typically Republicans, maintain that a higher minimum wage could hurt the economy by lessening jobs for those at the bottom of the pay scale, as employers will cut jobs and hours to make up for the higher wage cost, and they tend to cut from the bottom. Meanwhile, at the state and local levels, the minimum wage issue really cuts into small and mediumsized businesses, including convenience stores. In 2012, the minimum wage movement known as the “Fight for $15” heated up at the local level when fast-food workers went on strike in New York City. Since then, other cities like Seattle, Los Angeles and San Francisco have
34 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
agreed to increase their minimum wages to $15 this year; Portland, Ore., agreed to $14.75. New York and California will have the highest state minimum wages when they reach $15 per hour over the next few years. A measure was signed in California that will take the state’s minimum wage from its current $10 to $15 by 2022. In New York, legislators have agreed to gradually increase the minimum wage from $9 to $15 by the end of 2021 in New York City; it will increase to $12.50 by 2020 in upstate New York, with further increases to $15 based on inflation and other economic indicators. Where does all this leave the convenience retail channel? PROACTIVE MEASURES
Some c-store retailers are proactively boosting their pay scale and using it as an opportunity to stand out as an employer, despite the cost and competitive challenges. Altoona, Pa.-based Sheetz Inc. took the wage issue by the horns when it went on record early in the year to say it would invest more than $15 million to raise the wages of store employees across the company, without cutting back on hours for full-time employees.
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On the heels of this news, in January, Wawa, Pa.based Wawa Inc. made a move to increase its starting pay to $10 an hour, plus initiating a 5-percent increase for all associates. Then this spring, Savannah, Ga.-based Enmarket Inc. came out with a $500,000-per-year plan to increase the starting salaries of its storelevel employees to well above the federal minimum wage in a strate strategy designed to attract new talent. The convenience store chain also raised its senior general manager earnings potential to a minimum of $55,000, with a profit-sharing bonus. Enmarket believes that to offer the freshest experience to customers, it must set itself up “to develop, retain and attract the best people.” This summer likewise saw Thorntons Inc., based in Louisville, Louisville Ky.,
36 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
embark on a hiring push to find more than 100 new employees and start them at a new minimum rate of $10.25 per hour in the Louisville area — up 12 percent vs. its previous starting pay rate. Other c-store operators are tweaking their wages on a store-by-store basis, rather than chainwide. Case in point: oint: Convenience Management Services es Inc. (CMSI), based in Temple, Texas, xas, has made some store-bystore ore competitive wage decisions. According to Terresa Burdick, director of operations, the company has an unique business model in that “anywhere in the country, we will step in and manage a site with very short notice, so we have to o monitor state as well as city minimum inimum wage laws to be competitive and compliant.” CMSI MSI has one store location inside the Seattlee city limits and several sites in
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the Seattle area, two of them very close to the city’s boundaries. Based on the number of employees CMSI has, the minimum wage for its Seattle store is $13 per hour plus mandatory paid sick leave. The rest of Washington State carries a $9.47 minimum wage and does not require employers to pay sick leave benefits. In order to be competitive at the two sites nearest Seattle, CMSI has raised its starting wage here to $10.50; more depending on experience, Burdick explained. “Even at that wage, submitted applications are low, so we stress to the applicant that we have paid vacation time, company-provided term life insurance, and regularly scheduled performance reviews that can result in a pay raise,” she added. As Seattle’s minimum wage continues to increase on its yearly timetable, CMSI intends to follow suit at its peripheral sites. “Conversely, we have a site in Oakland, Calif., where the city minimum wage is $12.55 per hour vs. the California state minimum wage of $10. Our site is right on the city boundary, so we are flooded with
applications,” Burdick told Convenience Store News. The bottom line for convenience stores is they must deliver on convenience, in spite of wage challenges, according to Don Stuart, managing director at Cadent Consulting Group in Wilton, Conn. “C-stores are built on convenience, and if you don’t do a good job attracting a certain degree of talent, you will not deliver on
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convenience and the proposition is undermined completely,” he reasoned. “So, you have to face that important reality in the short term: C-stores C-stores stores must deliver convenience and without sufficient and good
staff, you can’t do it.” Stuart encourages retailers to “test the middle ground,” much the way CMSI is doing. That is, for those who are near high minimum wage areas, they should consider
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raising their wages a bit, while also exploring what other benefits can be offered. It’s time to “become creative,” as Stuart puts it, in regards to exploring more tangible benefits such as time off, health benefits, vacation benefits, and even the possibility of hiring some individuals as independent contractors with more flexibility.
“There may eventually be a lack of c-stores in inner cities because this is where it will be too tough to compete. There will be parts of cities with high minimum wage laws that won’t be convenienceserved because it will be too costly to operate.” — Don Stuart, Cadent Consulting Group
“I’m not sure I’ve heard of anyone doing it, but when you put new mandates in place, it will result in new energy and new innovation,” Stuart concluded. TECHNOLOGY TIPPING POINT
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Also on the topic of innovation, technology could soon play a role in the minimum wage debate. Futurist Michael Rogers calls a minimum wage of $15 per hour the “tipping point” whereby automation could begin to replace employees in the retail workforce as early as next decade. “Employee cost is a big thing we will face due to the ability to automate jobs in the next 10 years,” he said during a presentation at a recent industry conference. “I’ve already seen a hamburger-making
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robot that makes a good hamburger. [The robot] is expensive, but could be worth it when we reach $15 per hour.” The airport retail channel is one that has already jumped on the automation bandwagon. “When When I go to a nice airport, in the Delta waiting area, I have the option to order my meal from a computer screen,” Stuart relayed. “Thinking about it out loud, do we really need people at a drive-thru taking your order? Why not have an automated voice?” Stuart believes there will soon be a “surge of innovation” in the foodfo service channel (convenience stores sto included) as there becomes a lot more money at stake payroll-wise. payroll-wis “It could potentially lead to an increase in unemployment, and we could see certain convenience stores awaken,” he continued. “There may eventually be a lack of c-stores in inner cities because this is where it will be too tough to compete. There will be parts of cities with high minimum wage laws that won’t be convenience-served because it will be too costly to operate.” Rogers, the futurist, agrees that automation could become a very big threat to today’s retail workers — so big, that the U.S. government may need to hit companies with an “automation tax” to prevent the nation’s unemployment rate from rising. Even so, companies that emphasize their people skills will always be in vogue. “I’m sure there will be increased introduction of automation as time goes on, but the human factor in well-done customer service cannot be replaced,” said CSMI’s Burdick. “Customers will go out of their way to patronize a store with a great team member who greets them with a warm smile and thanks them by name.” Ultimately, the minimum wage issue is bringing to light a changing c-store proposition. “It used to be that working at a convenience store was a temporary or supplemental income position, but more and more, I see new employees wanting the ability to be promoted within the company,” relayed Burdick. “As convenience store employers, we have to cultivate and nurture that enthusiasm. If an employee who starts today at minimum wage can see the promise of a future that holds a higher position and compensation, [it] makes us stronger.” CSN
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Convenience Store News
Building a Team Today’s c-store operators struggle to find and keep the best talent By Angela Hanson
perating a convenience store involves juggling many duties, from keeping the store clean and functioning, to setting up and breaking down displays, to planning promotions. Perhaps the most important duty, however, is managing the workforce — and building the right team is one of the biggest challenges, according to the findings of the 2016 Convenience Store News HR & Labor Study.
Of the retailers that participated in this year’s study, single-store operators made up the largest demographic group at 31.4 percent, followed by 27.5 percent who operate two to 10 c-stores and 21.6 percent who operate 11 to 50 stores. Geographically, 35.3 percent of participants operate in the Midwest; 25.5 percent in the South; 23.5 percent in the Northeast; and 15.7 percent in the West. When including both chains and single stores, the average convenience store employs 10.7 store associates, one store manager and one assistant manager. Employees’ tenure re seems to correspond with the level of their position on the hierarchy: store associates stay in the role 2.2 years ears on average, assistant store managers stay 3.2 years, s, and store managers stay 6.4 years. Only field managers gers for chain c-stores spend more time in the role, at an average of 6.5 years. As c-store operations erations evolve, being a top employee involves mastering ng many skills, yet the most common problem operators ors face regarding their workforce cannot be taught: reliability. eliability. This averaged a 3.11 rating on a scale of 1-6, 6, where 6 is a serious problem. Basic skills/competencee ranked second at a rating of 3.02. Together, these issues ssues indicate the most important part of building a high-quality gh-quality workforce may be investing in the right people ple from the start, rather than relying on training to transform a mediocre hire. TURNOVER & RETENTION
Technologyy for the c-store market has developed rapidly in recent years, with more helpful apps and computer ter programs available than ever before. Still,, a minority of c-store operators have automated any ny human resources processes using either proprietary tary or third-party software (such as PeopleMatter or UltiPro). Only 19.1 percent of the study’s participants ants reported doing so. Corresponding ng with employees’ average time spent in a role, turnover er is a bigger issue for entry-level
46 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
Number of Employees/Length of Stay employees than it is for those who have moved up the job ranks. The average annual rate of turnover for store associates in 2015 was 54 percent. That figure dropped to 23.8 percent for assistant store managers and 14.9 percent for store managers. Field managers for c-store chains saw very little turnover, at just 4 percent annually. Additionally, some respondents reported zero turnover for the year, a rate that was more likely to occur at higher job levels. The turnover problem is growing for store associates. While a majority of c-store operators reported that their turnover rate stayed the same over the last two years for store managers, assistant managers and field managers, only 37.5 percent said the same about store associates, and 43.8 percent reported their turnover rate for the entry-level position has risen. Top factors impacting turnover include competition from other businesses for employees, wages, dismissal for cause, and benefits, all of which ranked higher than a 3.0 on a 1-6 scale. Retailers also expressed concern about the work ethic among the available pool of employees. WAGES & BENEFITS
For virtually all c-store operators, the hiring process is straightforward: 97.4 percent use an interview as a screening tool, and 94.9 percent use an application. Reference checks and background checks are also used by a majority of retailers. On the other hand, credit checks, alcohol testing, and education checks are among the least-used screening tools. Lately, one of the most talked-about issues in the retail world has been the minimum wage. In addition to the discussion that’s been happening on Capitol Hill regarding increasing the federal minimum wage, which stands at $7.25 per hour, action is being taken at the state and local levels. Findings from this year’s HR & Labor Study reveal that new minimum wage requirements are having a number of impacts: 65.7 percent of retailers report they were forced to increase wages across the board; 22.9 percent report hiring fewer new workers; and 20 percent have increased pricing, lowered labor hours or made plans to end bonus programs. Other retailers stated that because they were already paying more than minimum wage, new requirements have not had any impact, but healthcare and paperwork have done more to restrict hiring. The average starting hourly wage for c-store associates is still relatively low, though a majority of c-store operators offer more than the minimum. Just over 37
NO. OF EMPLOYEES
Store associates Assistant store managers Store managers Field managers*
AVG. LENGTH OF STAY (IN YEARS)
10.7 1.0 1.1 0.2
2.2 3.2 6.4 6.5
*Includes results from chain respondents only Source: Convenience Store News Market Research, 2016
Turnover Rates Store associates Assistant store managers Store managers Field managers
54.0% 23.8% 14.9% 4.0%
Source: Convenience Store News Market Research, 2016
Change in Turnover Rates in Past Two Years INCREASED
43.8% 17.2% 12.9% 7.1%
18.8% 13.8% 22.6% 10.7%
Store associates Assistant store managers Store managers Field managers
STAYED THE SAME
37.5% 69.0% 64.5% 82.2%
Source: Convenience Store News Market Research, 2016
Factors Impacting Turnover Rates Competition for employees from other businesses Wages Dismissal for cause Benefits Lack of career enhancement Insufficient training during orientation Unpopular shifts (e.g., overnight) Workplace safety
3.49 3.46 3.24 3.08 2.94 2.86 2.24 1.62
Rated on a scale of 1-6, where 1=no impact, 6=strong impact Source: Convenience Store News Market Research, 2016
Benefits Offered STORE ASSOCIATES
Cash bonus for meeting goals 401K plan Medical insurance Dental insurance “Employee of the month” type recognition Vision insurance Tuition reimbursement Sweepstakes/bonus gift program Profit sharing Employee stock ownership plan
52.8% 47.2% 44.4% 41.7%
69.4% 55.6% 69.4% 52.8%
30.6% 30.6% 25.0% 25.0% 22.2% 8.3%
22.2% 38.9% 25.0% 16.7% 36.1% 8.3%
Source: Convenience Store News Market Research, 2016
WWW.CSNEWS.COM | OCTOBER 2016 | Convenience Store News 47
Convenience Store News
Starting Hourly Wage for Store Associates $7.25*-$7.99 $8-$8.99 $9-$9.99 $10 or more AVERAGE
17.1% 37.1 22.9 22.9 $8.89
*$7.25 is the current federal minimum wage Source: Convenience Store News Market Research, 2016
When Do You Give Store Associates Their First Incremental Increase? After 1 month After 2 months After 3 months After 6-9 months After 12 months Other
11.1% 2.8 38.9 11.1 19.4 16.7
Source: Convenience Store News Market Research, 2016
On Average, How Much Is This First Pay Increase? (per hour) 25 cents or less 26-50 cents 75 cents-$1 More than $1 AVERAGE
41.2% 38.2 17.6 2.9 $0.51
Source: Convenience Store News Market Research, 2016
How Does Your Pay Scale for Store Associates Compare in Your Market? We pay more We pay less We pay the same
35.1% 54.1% 10.8%
Source: Convenience Store News Market Research, 2016
48 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
percent of operators pay new hires $8 to $8.99 per hour, while 22.9 percent pay $9 to $9.99, and another 22.9 percent pay $10 or more. Just 11.4 percent pay the current federal minimum wage. The largest amount of these new hires (38.9 percent) will see their first incremental pay increase after three months, while 19.4 percent will get a raise after 12 months. Numerous retailers reported that, rather than base a pay increase on length of time worked, raises are based on good performance, demonstration of exceptional skills, and movement into a management role, among other factors. More than three-quarters (76.9 percent) conduct formalized performance reviews, and the majority who do tie wage increases to the results. Overall, 41.2 percent of store associates will receive a first-time pay increase of 25 cents or less per hour; 38.2 percent will receive 25 to 60 cents more per hour; and 17.6 percent will receive 75 cents to $1 more per hour. The average first pay raise is 51 cents per hour. Wages tend to go hand-in-hand with benefits. In the area of benefits, c-store operators are the most likely to offer cash bonuses for meeting certain goals (available to 69.4 percent of store managers and 52.8 percent to store associates). The other most common benefits are: medical insurance (available to 69.4 percent of managers, 47.2 percent of associates); a 401K plan (available to 55.6 percent of managers, 47.2 percent of associates); and dental insurance (available to 52.8 percent of managers, 41.7 percent of associates). Of the companies that do offer a 401K plan, 51.3 percent match employee contributions vs. 48.7 percent that do not. Non-monetary benefits operators also mentioned include flexible or rotating schedules. Of the c-store operators that offer insurance programs to employees, the largest number (40 percent) made no changes to their program of choice in the past year, while 22.9 percent increased employee contribution and 11.4 percent increased coverage.
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Convenience Store News
HR&LABORStudy What Impact Has New Minimum Wage Requirements Had at Your Company? We have been forced to increase wages across the board We have hired fewer new workers We have replaced workers with technology (self-checkout, self-ordering kiosks, etc.) Other
65.7% 22.9% 2.9% 20.0%
Multiple responses accepted Source: Convenience Store News Market Research, 2016
In Assessing the Quality & Integrity of Your Workforce, How Would You Rate the Following? RATING
Reliability Basic skills/competence Attitude/customer service skills Employee shrink/theft Vendor shrink/theft Drug or alcohol use on the job
3.11 3.02 2.74 2.49 1.94 1.72
Rated on a scale of 1-6, where 1=not a problem, 6=serious problem Source: Convenience Store News Market Research, 2016
Does Your Company Have a Program to Measure Employee Satisfaction? Yes
25% 75% Source: Convenience Store News Market Research, 2016
Do You Have Any of the Following in Place to Solicit Employee Feedback? Have program to solicit feedback (net) Employee hotline Electronic forum (e.g., Intranet or website for comments) District/HQ meetings for all employees Other We do not have any y programs to solicit feedback Multiple responses accepted Source: Convenience Store News Market Research, 2016
50 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
62.2% 5.4% 8.1% 18.9% 32.4% 37.8%
“We offered more plan options,” remarked one retailer who took part in the study. “Company contribution stayed the same from 2015 to 2016.” TRAINING & PERFORMANCE
The vast majority of new hires at a c-store can expect to learn by doing, as 97.4 percent of operators employ on-the-job training. There is a steep drop to the second most common method of training, computer-based/ Internet, which is used by just 38.5 percent. A majority of companies (78.4 percent) also have a policy/procedures manual, and of those who do, 87.9 percent require their new hires to sign a form acknowledging they have read it. Once they’re on the job, dealing with poorly performing employees is an integral part of maintaining an effective workforce. Most c-store operators are prepared to handle such circumstances: 83.3 percent have a process in place to handle employee dismissals, and this generally involves a series of escalating steps including coaching, verbal warnings, written warnings, and documentation. “[We issue] two to three written warnings first, unless the level of misconduct is significant enough to require immediate dismissal,” said one study participant. “In those situations, a formal investigation would be completed by corporate first. Terminations are generally done in person, and the employee signs the form informing them of the reason.” Interestingly, although 75 percent of c-store operators do not have a program in place to measure employee satisfaction (such as an annual survey), the majority are concerned with their employees’ opinions and 62.2 percent have some type of means to solicit feedback. This can take the form of district/headquarters meetings for all employees (18.9 percent), an electronic forum (8.1 percent), an employee hotline (5.4 percent), or other methods such as an open-door policy and regular contact with supervisors and store owners (32.4 percent). CSN
FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages
How to Recruit & Retain Exceptional Foodservice Employees By Bob Phillips
CALL TO ACTION: Foodservice 101
• Be prepared to take ownership of your foodservice program from top to bottom — marketing, execution, appearance, value, etc. • To find good talent, stay connected to the academic institutions where hotel, restaurant and tourism students are trained. • Visit restaurants considered “best-inclass” and take notes on what they do well.
n an industry that has a higher turnover rate than a pickup team scrimmaging the NBA champion Cleveland Cavaliers, finding, hiring and retaining good personnel is one of the most important factors in winning vs. losing the convenience foodservice game. The turnover rate in c-stores is insanely high — 86.6 percent, up 12.1 percent vs. the previous year, according to NACS industry figures released earlier this year. And make no mistake: The cost of turnover can be daunting. The Coca-Cola Retailing Research Council puts the estimated cost of turning over a single hourly clerk position at $3,900. This makes hiring — and retaining — quality help central to a c-store’s profitability. The hiring agent must be able to quickly assess a candidate’s background and capabilities. Often, the new employee will be required to wear several hats: chef, director of foodservice operations, director of foodservice marketing, human resources for foodservice, director of foodservice training, foodservice safety director, director of foodservice purchasing, director of category insights, director of consumer insights, etc. Convenience Store News How To Crew expert Mathew Mandeltort, vice
52 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages
CALL TO ACTION: Foodservice 201
• Counter the “job hopping” trend by engaging your employees. Make them feel appreciated, challenged and that they are keys to your overall success. • Utilize social media sites to promote your foodservice operation. This strategy can be particularly useful in courting and communicating with millennials and women. • Word-of-mouth is still the best marketing tool available. Sponsor popular local events such as beer fests, sports teams, school and church activities, etc.
president of foodservice strategy for convenience distributor Eby-Brown Co. LLC, says you must be confident that the person you are hiring is prepared to take on and turn around a retail fuel culture that is often at odds with the basic principles of successful foodservice. “In the world of retail [fuel], you don’t have to worry about items having a shelf life of 30 minutes, or whether people think the condition of the bathroom reflects poorly on your ability to sell cigarettes,” explained Mandeltort. “Fuel retailers are also fawned over by every DSD [direct-store delivery] provider in the world, relinquishing, in whole or in part, merchandising and execution of categories to those suppliers.” However, no one will be coming into your store every 30 minutes to replace the coffee or roller grill items that have been sitting there. Most of the items offered in c-stores are, in effect, commodities available almost anywhere. “No one is going to differentiate themselves claiming their major-brand candy bars are actually better than the major-brand candy bars available across the street,” Mandeltort continued. “Or if I am ‘jonesing’ for a cigarette, am I really going to drive across town to get my favorite brand [at a c-store] when it is likely available across the street?” But food is different. “If your food or dining experience is, in fact, better, people will drive across town,” he said. “That is on the retailer. They have to make the effort and take ownership of their foodservice program from top to bottom — marketing, execution, appearance, value, etc. No one is going to do it for them. They can certainly partner with suppliers and distributors, but ultimately it’s up to the retailers themselves.”
54 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
THE POWER OF PERSONALITY
One of the most important things to consider in the recruitment process is whether you are looking for someone with experience in retailing, or someone who may have less retail experience but offers a shining personality. “Though experience in some form — food or retail — is always a plus, both of those skill sets can be taught,” said How To Crew retailer Ryan Krebs, director of foodservice at York, Pa.-based Rutter’s Farm Stores. “Personality, on the other hand, cannot be taught.” Indeed, you are looking for a person with the right personality to fit with your company’s culture. “Finding someone with a personality that aligns with your organizational model is key,” Krebs continued. “Some applicants may possess less of a skill set, but if they are customer-centric and passionate, the details of the job can be taught.” Mandeltort recommends going with personality. “You can teach people how to make a sandwich, but you can’t teach nice,” he said. “Foodservice is not part of the hospitality business by accident. Friendly, warm, welcoming staff is an essential element of a best-practices foodservice experience.” This is predicated on the requisite that you possess the time, resources and commitment required to train the new employee, of course. If you are hiring a person for a leadership/management position, finding someone with a strong skill set at a higher pay rate could be beneficial in the long term, assuming the hire has the necessary management skills, along with inventory control and foodservice quality-control experience. “If hiring for team member positions, I believe that the personality and presence outweigh the skill set,” noted Krebs. “By the same token, competitive pay remains key.” Compensating a person below market value virtually assures that he or she will leave as soon as a higher-paying job presents itself. “That’s why Rutter’s made aggressive pay increases for all store-level employees the end of last year,” Krebs pointed out. “We believe that competitive pay will result in longer-term employees.” WHAT TO LOOK FOR
While hiring a long-term employee — that rare diamond in the rough — may be a longshot, one thing a hiring agent
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FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages
can do to increase his/her chances during the interview process is determine whether the candidate considers the job opening the first step in a path toward a career in retail, or simply a job that offers some fast cash. “Positions in store operations for both retail and foodservice are widely viewed as entry-level positions,” explained fellow How To Crew expert Holly Veale, foodservice product director at national convenience distributor McLane Co. Inc. “While training an endless cycle of new employees can be a daunting proposition, the exciting thing is that while many folks taking an entry-level position might think they are just there for a quick buck, often an individual can be motivated, enticed and encouraged to make a successful career in retail if their skill set lends itself to the industry, and a manager or owner can identify the talent.” For those employees who don’t fall into this group — those who continue the position simply for the paycheck — Veale stresses the importance of communicating clear and consistent expectations. “This will go a long way to maximizing productivity and consistency in an operation,” she said. In order to retain key personnel, it
“Continue offering training and chances to move up to higher-level roles. As a rule, c-store employees are not in it for the long haul. ... But they are far more likely to stay if you actively foster a positive learning environment. You need to let them grow as they contribute, and that will let them feel as if they have a future with your organization.” — Nancy Caldarola, Food Training Group
is imperative that a c-store operator create a culture — a healthy work environment that promotes teamwork — and then reward those employees who excel therein. While most c-stores operate on a limited budget, the importance of enticing the right candidate for employment with a few extra dollars should not be discounted. “What’s wrong with a little extra cash?” asked Nancy Caldarola, Ph.D., RD, a new panelist to the CSNews How To Crew who is a management dietician with Roswell, Ga.-based Food Training Group and is director of hospitality, restaurant and tourism management at Gwinnett Technical College in Lawrenceville, Ga.
56 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
CALL TO ACTION: Foodservice 301
• Foodservice requires a large amount of discretionary effort to be successful, so be sure that you regard your employees as more than disposable, carbon-based units. • Encourage your best employees to make a career in retail. • Communicating clear and consistent expectations is key to maximizing productivity and ensuring consistency in your operation.
“Many folks started at a job for extra cash and ended up liking the organization and the work so much that they stayed, and even rose to become senior executives in the industry,” Caldarola said. “It’s all about how the supervisor directs, coaches and encourages the new employee to stay motivated.” Speaking of training, since health code regulations vary from state to state and city to city, should a c-store operator have a formal program to train new employees on the do’s and don’ts of foodservice protocol? “Of course,” said Krebs. “At Rutter’s, safety and sanitation are our top priorities. If employees aren’t empowered through knowledge and education, they can’t be expected to execute these goals effectively.” All Rutter’s employees are Basic HACCP (Hazard Analysis Critical Control Point) certified; all management is ServSafe and Advanced HACCP certified; and all corporate-level employees related to foodservice are ServSafe and Advanced HACCP certified. “In addition,” Krebs said, “our orientation and in-store training programs cover foodservice protocol, and our internal inspections in store locations provide avenues of ongoing education for staff.” Given the abnormally high turnover rate in the c-store industry, one-on-one communication can go a long way toward minimizing poor performance — and maximizing outstanding performance. “Employees who feel connected to the organization are more loyal and have a much better chance of becoming a long-term asset,” said Caldarola, who has more than 45 years of experience in hospitality and healthcare foodservice operations. “The connection starts with a well-orchestrated orientation and good training. Training is so important, and unfortunately, so infrequently completed in an adequate manner.” PLAN FOR SUCCESS
A common lament offered by c-store operators is: Why should we invest in training when they’re going to
FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages
leave anyway? “Then, it becomes a self-fulfilling prophecy,” offered Caldarola. “In order to stop the turnover cycle, start placing emphasis on a well-planned onboarding program and continuous training.” According to How To Crew panelist Tom Cook, principal of Westport, Conn.-based King-Casey, the key is hiring good people. That’s not exactly rocket science, but it is so much easier said than done. “It requires a thorough interviewing process — that is, more than one interviewer — and making sure the new hires have the critical performance factors (intellectual, interpersonal and motivation) you are seeking for the position being filled,” he explained. McLane’s Veale noted it is advisable to hire candidates who display a “foodservice mindset” as opposed to a “retail mindset.” “Foodservice requires an entirely different skill set, ranging from sense of urgency to hygiene and food safety,” she said. “Pulling a retail employee into foodservice without proper training will result in subpar performance and frustration on the side of both the employer and employee.” To minimize poor performance, Veale suggests that an operator identify individuals with successful food experience and then ensure that a thorough training program is in place to prepare these new hires for success. “Having a manager that truly understands the challenges of foodservice, and can support the employee as needed, will go a long way to increasing retention and productivity of foodservice employees in the c-store industry,” noted Veale. Joe Bona, another How To Crew expert and president of Franklin, Mass.-based MoseleyBona Retail, believes creating a food and business culture is first and foremost in fostering employee pride. This is particularly true in the foodservice arena. “Provide incentive programs to hit profit and volume metrics,” he advised. “Hire strong team leaders who are experienced and passionate about your brand.” Bona also advises retailers to provide bi-monthly training sessions in order to ensure alignment and encourage sense of community within your workforce. Another strategy that should be considered is to hold regularly scheduled team award ceremonies to recognize employee achievement, as well as team gatherings like summertime barbecue events to build relationships. “And whenever possible, promote from within instead of hiring leaders from the outside,” Bona added. For Dean Dirks, CEO of Gig Harbor, Wash.-based
58 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
Our How To Crew David Bishop — Balvor LLC Joseph Bona — MoseleyBona Retail Ed Burcher — Coen Markets Nancy Caldarola — Food Training Group Joseph Chiovera — XS Foodservice & Marketing Tom Cook — King-Casey Jack W. Cushman — CST Brands Inc. Dean Dirks — Dirks & Associates Ryan Krebs — Rutter’s Farm Stores Mathew Mandeltort — Eby-Brown Co. LLC Larry Miller — Miller Management & Consulting Services Tim Powell — Q1 Consulting Chad Prast — Murphy USA Inc. Holly Veale — McLane Co. Inc.
Dirks & Associates and How To Crew panelist, several elements can factor into a highly regarded employee’s decision to stay the course, or to seek greener pastures. Among them: better wages and/or benefits, a clean store, and the organization’s culture and values. “Show your new hires a map to growth,” Dirks said. “For instance, point out how one of your district managers may have started as a clerk. Convince them that it’s not a cliché — if you work hard, you will be rewarded.” Dirks also stresses that the manager should interview the prospective employee. “A manager’s personality is a big positive,” he said. “Chemistry begins during the interview process.” Another key to retaining good help cited by several of the How To Crew members: make sure your team members feel their contributions truly mean something. “Employees need to know they are helping to build the organization,” said Caldarola. “Best-in-class employers share results with employees. They bonus at all levels for performance. When people feel they are part of a team, they are better assets.” For Caldarola, it’s important for management and employees not to ruminate about the past, nor dwell on future projections. Everything should be focused on the present. “Make it all about today,” she said. “Continue offering training and chances to move up to higher-level roles. As a rule, c-store employees are not in it for the long haul.” But, she adds, they are far more likely to stay if you actively foster a positive learning environment. “You need to let them grow as they contribute, and that will let them feel as if they have a future with your organization. I think Sheetz does very well at this. Its younger senior leaders get it.” CSN
FOODSERVICE INNOVATORS AWARDS
Prepared Food + Hot, Cold, Frozen Dispensed Beverages
Convenience Cuisine at Its Finest QuickChek heads lineup of 2016 Foodservice Innovators Awards winners By Don Longo
uickChek Corp. is a medium-sized convenience store chain that packs a big punch when it comes to foodservice innovation. The 145-store operator leads this year’s group of six best-in-class convenience foodservice retailers selected as winners in Convenience Store News’ fifthannual Foodservice Innovators Awards program. Whitehouse Station, N.J.-based QuickChek earned the esteemed title of 2016 Foodservice Innovator of the Year, chosen by CSNews’ How To Crew panel of foodservice experts from the retailer, supplier, wholesaler, research and consulting fields. The annual awards program is presented in partnership with Tyson Convenience. Winners are recognized for raising the bar on quality, service and innovation in the fast-growing and critically important foodservice category in the convenience channel. FOODSERVICE INNOVATOR OF THE YEAR:
QUICKCHEK Although it wasn’t the first retailer to launch a mobile app in the convenience channel, QuickChek is likely the first to integrate mobile ordering with its app to support what is already a great foodservice program, one How To Crew judge said in championing the retailer’s nomination for Foodservice Innovator of the Year. QuickChek launched the mobile ordering service in March for freshly prepared breakfast items, custommade subs and salads. Customers can place orders between 5 a.m. and 10 p.m. and select their desired pickup time at any of the chain’s stores throughout New Jersey, New York’s Hudson Valley and Long Island. Orders are prepared to coincide with the selected time of pickup to ensure freshness and correct temperatures. Mobile ordering is the result of customer demand, according to QuickChek CEO Dean Durling, whose
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QuickChek’s “Q Café” menu is now available via mobile ordering.
company has also seen an increase in sales of its signature bakery products made via in-store ovens, freshly made sandwiches, and custom-made espresso-based drinks. Also on the tech front, QuickChek in early 2015 rolled out a self-ordering kiosk system for foodservice. The retailer has been an early innovator around the currently hot foodservice snack daypart, too. It introduced a cheeseburger egg roll to its fresh snacks menu that also includes Buffalo Style Jack n’ Blue Cheese Sticks, Apple Cinnamon Twists, Sweet Dough Pretzel Knots, Popcorn Chicken, Jalapeño Poppers, Mac & Cheese Wedges, Fresh Braided Pretzels, Pizza Stix and Buffalo Chicken Stix. And, late last year, QuickChek rolled out a walking taco line of chips and toppings, targeting on-the-go millennials. Customers can design their own walking taco by choosing a bag of Nacho Cheese Doritos, Cool Ranch Doritos or Fritos, and adding their choice of toppings: QuickChek’s signature spicy chili, shredded cheddar cheese, lettuce, tomato, onions and olives. The chain also expanded its menu with the addition of six signature Mac & Cheese Bowls. On the foodservice beverage front, How To Crew
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judges cited QuickChek’s successful and broad choice of cold and frozen beverages, including coffee-based refreshments. Plus, the company’s award-winning coffee program continues to be a model in the hot beverages area for its seamless introduction of made-to-order service and large variety of condiments. As one judge said, “QuickChek is really a class act that is quiet, but they deserve accolades” for continuously improving their foodservice offer. QuickChek previously won an honorable mention for Foodservice Innovator of the Year in CSNews’ 2013 awards program and was Hot Beverages Innovator of the Year in 2014 when it rolled out its signature Reserve Blend coffee. PREPARED FOODS INNOVATOR OF THE YEAR:
America. The program consists of the Two Alarm Turkey Melt, Philly Steak Melt, State Fair Melt, Three Cheese Melt, and the classic Reuben Melt, plus a Smoked Meat Reuben for the Canadian market. Why is the Melt Program growing so rapidly? “Because it’s good. Seriously, it’s really, really good, and can be made fast and made-to-order. It’s a very popular and fast-growing item,” according to one judge. Under the direction of longtime foodservice maven, Dr. Jack Cushman, and chefs David Haynes and Andrew Franco, CST is also expanding made-to-order subs and pizza from New York to Texas to the provinces of Ontario and Quebec in Canada. Our judges also lauded the retailer’s use of social media, billboards, print, direct mailers, commercials and radio to attract customers to its improved foodservice offering.
CORNER STORE (CST BRANDS) Corner Store, the flagship brand of San Antonio, Texas-based parent company CST Brands Inc., previously won Best Foodservice Promotion or LimitedTime Offer in 2012 — the same year as its future sister chain, Nice N Easy, won honorable mention in the Prepared Foods Innovator of the Year category. Nice N Easy also won honorable mention in 2013 for Best New Foodservice Program or Item, and was honored in 2014 as Prepared Foods Innovator of the Year. Indeed, Nice N Easy’s fresh-food program was one of the things that attracted CST Brands to acquire the Canastota, N.Y.-based chain. Now, CST’s Corner Store customers are getting a taste of what central New York diners have been enjoying for a decade. This year, CST expanded the Melt Program, a “grown-up” version of the grilled cheese sandwich, to its Texas and Canada stores. The Melt Program originated in Nice N Easy’s Easy Street Eatery concept and is now part of the broader CST family across North
Made-to-order subs and pizza are rolling out across CST’s footprint.
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HOT BEVERAGES INNOVATOR OF THE YEAR:
CIRCLE K (ALIMENTATION COUCHE-TARD) This is the first time in the Foodservice Innovators winners’ circle for Circle K. The new global convenience store brand of Canada-based Alimentation Couche-Tard Inc. is being recognized for recent enhancements made to its hot beverage offering. Judges pointed to several areas Circle K’s “Simply Great Coffee” program boasts that have been improved product and presentation. addressed in a major category refresh that is going on across the entire Circle K store base and driven by the international retailer successfully sharing best practices throughout its footprint. Its new global coffee program, first implemented in Europe, features: • An improved presentation that helps elevate the perceived quality of the products. Old coffee brewers have been replaced with new, all-stainlesssteel ones. New, lighter-colored countertops have been installed, along with digital menu boards. The result is a fresh feel that is pleasant and compels customers into the area for a closer look. • An enhanced product offering with the addition of espresso-based drinks such as cappuccino, mochaccino and café latte. These products help
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In today’s hyper-competitive world, you need an edge over your competition. Fried food is an excellent solution for setting yourself apart from the microwave-crowd, while creating something cravable your customers love. CSP named foodservice the most profitable category in their 2015 State of the Industry report, attributing prepared foods with the bulk of the category’s growth. With such high profit margins, fried foods will not only increase your bottom line, but also make you a one stop destination for consumer convenience.
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FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages
provide an excellent alternative that is more affordable than the coffeehouse versions, while still commanding a nice premium compared to the store’s traditional coffee lineup. • New, double-walled paper cups are both enhancing the taste experience and demonstrating environmental responsibility. • Expanded condiments support the growing sales of espresso drinks. • Circle K is actively trying to make it easier for the customer. One example is its more customer-centric terminology, moving from a cup size based on ounces to a more relative description of small, medium and large. In the stores where this program has been implemented, customer response has been very positive, according to the company’s nominators. COLD & FROZEN BEVERAGES INNOVATOR OF THE YEAR: QUIKTRIP
QuikTrip Corp. has been a frequent winner in the CSNews Foodservice Innovators Awards program. In 2012, the Tulsa, Okla.-based chain was the Cold & Frozen Beverages Innovator of the Year; in 2013, it was Hot Beverages Innovator of the Year; in 2014, the retailer won two honorable mentions for Cold & Frozen Beverages Innovator and Best New Foodservice Program or Item; and finally, last year, the chain was Prepared Foods Innovator of the Year. QuikTrip recognizes all the current trends in the cold and frozen beverage categories, and has quality programs in place that take advantage of them. The QT mega-fountain offers the latest in flavors and lifestyle additives, such as extra caffeine and proprietary sports drinks. The selection for frozen carbonated and non-carbonated drinks is likewise better than most of its competitors, including custom flavors; and its dispensed beverage offer also includes four flavors of fresh, made-on-premises iced tea in both unsweetened and sweetened varieties.
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QuikTrip, as part of its QT Kitchens foodservice program rollout, also added a full-service, soft-serve ice cream machine for making customizable shakes and cones. Hand-made, made-to-order smoothies are served as well by QT Kitchens attendants. “They have a wide range of selection, terrific presentation, sharp prices and always top cleanliness,” said one judge. Another added: “They’re still the best.” BEST NEW FOODSERVICE PROGRAM OR ITEM OF THE YEAR: MAVERIK
Another frequent winner in the Foodservice Innovators Awards program, Maverik Inc. takes home this year’s prize for Best New Foodservice Program or Item for its Bonfire Grill made-to-order pizza. Previously, the Salt Lake City-based retailer won Best New Foodservice Program or Item in 2012; Best Foodservice Promotion or LimitedTime Offer in 2013; and was named the
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Foodservice Innovator of the Year in 2014. Maverik this year continues to push the boundaries of fresh foodservice in the convenience channel by piloting the Bonfire Grill pizza program, featured in the chain’s completely redesigned stores where freshfood preparation takes center stage. Neapolitan-style pizza on wood-fire infused crusts, with specialty flavors like Classic Italian and Spicy Thai Chicken, use high-quality ingredients (think Calabrian chilies and fresh Asian slaw) to create unique, destination-worthy food. The pizzas come in two convenient sizes: a personal size that’s perfect for the lunch daypart, and a 12-inch size that spans the dayparts and reaches into the dinnertime offering. By the end of this year, the Bonfire Grill program (including pizza) will have been Select Maverik rolled out to more than 40 Maverik locastores now feature made-to-order tions within the nearly 300-store chain. The Bonfire Grill pizza. company is also testing a few complementary
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7-Eleven created many ways to celebrate Slurpee’s 50th anniversary.
7-Eleven Inc. celebrated the 50th anniversary of its iconic Slurpee frozen beverage line this summer with a number of timely and unique promos. The nation’s largest convenience store retailer reportedly gave away an estimated 9 million free small Slurpees on Free Slurpee Day, July 11. 7-Eleven also introduced a Birthday Cake Slurpee flavor. The 50th anniversary campaign went beyond the Slurpee machine, too, with Slurpee-branded and -flavored items throughout the store, including doughnuts, lollipops, cotton candy, marshmallow pops, candy
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straws, Pop-Tarts, Chapstick, beach towels, socks, insulated beverage holders, T-shirts, and Slurpee party packs including a selfie stick. Other innovative Slurpee promos this year included the launch of the Big Red Slurpee as a new summer variety. Big Red soda has strong roots in Texas, so this flavor was made available regionally in more than 650 participating 7-Eleven stores in the Lone Star State. A second summer partnership, this time with Sour Patch Kids candy, led to the creation of the Sour Patch Redberry Slurpee. This limited-time variety was only available through the end of the retailer’s “100 Days of Summer” campaign. Mondelez International Inc.’s Sour Patch Kids is the No. 1 sour candy brand overall and a top-selling candy at 7-Eleven stores, while fruit-flavored Slurpees are among the most popular drinks. And, just when you thought 7-Eleven couldn’t take the Slurpee craze any further, it introduced a limited-time Wild Cherry Slurpee doughnut. The cake doughnut was speckled with pink inside and topped with wild cherryflavored icing and sugar crystals. CSN
Prepared Food + Hot, Cold, Frozen Dispensed Beverages
Do Dayparts Exist in Retail Prepared Food Sales? The answer is: probably not anymore
1 Consulting recently completed a thorough study of the convenience store prepared foods/ grab-and-go channel. While there were a number of significant findings from this research, there is one in particular we believe is resonating throughout the segment and broader industry. It is the concept of “dayparts” and determining if this actually exists in a retail environment. Take, for example, two shoppers: Mike drives a big rig and stops at a convenience store outside of Atlanta at 2:30 a.m. He By Paul Clarke, orders two hot dogs, chips and a founQ1 Consulting tain beverage. A little farther north, in Chicago, at the same time, Larry is leaving work as a bartender and orders two breakfast sandwiches. Two meals, same time, but are these meals, dinner, breakfast or snack? IT’S NO LONGER A QUESTION OF WHEN, BUT WHAT WE EAT
The idea of “grazing,” or eating multiple meals per day, is not a new concept in away-from-home dining. Look at any casual-dining menu today and it is clear that small plates, “lunch for dinner” and take-home meals for “later” are a reaction to this consumer trend. Convenience store retailers are in the enviable position as the top venue for “snacking,” according to shoppers. In addition, c-stores are more likely than other venues to be open 24 hours a day, which supports offering, for example, breakfast 24 hours a day. Finally, convenience stores have a unique set of patrons that are in-transit or working on shifts, which makes the traditional mealpart difficult to market, capture and define. CUSTOMIZATION & SHOPPER “NEED-STATES” DRIVE PURCHASES
Customizing menus and food offerings by store location may seem daunting. However, convenience
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store operators already understand (or should) should the demographics of their store locations in terms of limitedlimited time offers, promoprom tions and other target marketing tactics. tactic This step of providing p g breakfast all day, or offering energy foods/drinks during the afternoon and late-night hours would only be another step in the process. Suppliers are in a strong position to gain from this local store knowledge as well, in order to best position and place their products. The questions c-store operators and suppliers should be asking include: • Would our top-selling items sell well during another timeframe? Could we offer it all day? • Have we polled our customers and asked if they want roller grill food, breakfast sandwiches, pasta salads, etc., longer (or shorter) than what we currently offer? • Are we willing (as an operator) to deal with 15-20 percent waste during this process? • What equipment do we have that may help us offer a wider variety of hot items for longer or shorter periods? There are, of course, a number of other questions to be answered. But Q1 Consulting believes that a new way of thinking must occur outside of “dayparts” for c-stores to truly capitalize on their strong grazing position. 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 email@example.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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Age Restricted The push is on to increase the minimum age to buy tobacco to 21 across the country By Melissa Kress
n November 2013, New York City Mayor Michael Bloomberg signed into law a bill that raised the minimum age to buy tobacco products from 18 to 21. The law, which went into effect the following May, became the strictest of any major city in the United States. The fact that this happened in New York City and was Bloomberg’s last major move before his 12-year tenure came to an end was not really a surprise. After all, critics called his administration “the Nanny State.” (Remember the controversial “Big Gulp Tax” on sweetened drinks?) While there’s no way of knowing for sure if what happened in the Big Apple’s five boroughs was directly responsible for what transpired next, there is no denying that the move to increase the legal buying age for tobacco to 21 has since swept the country. As of September of this year, there were 194 cities and
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counties that increased the access age to 21, as well as two states, Hawaii and California. This covers a population of more than 60 million, said Rob Crane, president of the Preventing Tobacco Addiction Foundation, a driving force of the “Tobacco 21” movement. Crane is also a professor-clinical with the Department of Family Medicine at The Ohio State University. SAY ALOHA TO 21
Hawaii became the first state to adopt the minimum purchasing age of 21 statewide in 2015, and the law went into effect this January. Roughly nine months in, at least one convenience store chain reports that it has not seen a noticeable difference. Gary Altman, general manager of company-operated stores at Aloha Petroleum Ltd., says the company’s stores have not experienced any significant decline in tobacco sales since Jan. 1. And most of the customer feedback has been positive. From the time of Gov. David Ige’s signature to the time of implementation, retailers had six months to prepare for the change. Aloha was prepared, according to Altman. The state worked with convenience stores to help the process go smoothly, providing new required signage and decals to be placed at point-of-sale (POS) areas. However, Altman does acknowledge that more publicity around the new age limit would have been beneficial. “I would have liked to have seen a more aggressive, proactive media campaign — print, radio, PSAs and social media — two weeks prior to the change so that everyone was aware of it prior to Jan. 1,” he explained. As for internal efforts at the store level, Aloha Petroleum began informing its team members through email, bulletins and
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monthly store meetings in November. The change was also covered weekly in the company’s c-store management meetings with area supervisors. In addition, the chain’s information technology department ensured its POS system would automatically change the age restriction from 18 to 21 as of midnight on Dec. 31. The system prompts the registers to stop a tobacco transaction until a birthday is entered or an ID is scanned. “There were a few smokers in the 18-21 age range who were not happy, but for the most part, the transition went smoothly,” Altman said. SPREADING EAST
Hawaii did not stand alone for long as the only state to prohibit the sale of tobacco products to anyone under 21 years old. In May, California Gov. Jerry Brown signed similar legislation into law, and the new rule went into effect in June. Consumers aged 18 to 20 are no longer allowed to buy tobacco products in California, the largest state by population. Anyone who gives tobacco or tobacco paraphernalia to someone under the age of 21 could be found guilty of a misdemeanor crime. The new rule, which marked the first time that California has raised its age of sale for tobacco since law first took effect 144 years ago, also added electronic cigarettes to the existing definition of tobacco products in the state. “It may seem the new age limit for tobacco sales is taking effect really quickly. The bills were signed into law just five weeks ago. But from a public health perspective, it’s time,” Karen Smith, director of the California Department of Public Health (CDPH) and state public health officer, said at the time of Brown’s signing. To help retailers deal with the change, CDPH developed a Tobacco 21 website that includes educational materials, such as a frequently asked questions document, a summary of the law, tips for retailers, and signage for retailers to post in their stores. Many of the materials are available in Arabic, Chinese, Korean, Punjabi, Vietnamese and Spanish. The department printed and mailed these materials to more than 34,000 licensed tobacco retailers and 2,000 vape shops. Each packet included educa-
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As of September of this year, there were 194 cities and counties that increased the access age to 21, as well as two states, Hawaii and California. tional materials, two copies of the Tobacco 21 POS retailer sign, a window cling, and an order form for additional materials. A series of print and digital advertisements were also created and displayed at gas stations and convenience stores across the Golden State and placed in retail trade publications. These ads were targeted to both consumers and retailers. GAINING SOME STEAM
Aside from these statewide measures, some other recent notable happenings in the Tobacco 21 movement have occurred in Helena-West Helena, which became the first town in Arkansas to adopt the 21 age limit on Sept. 1; and in Portland, Maine, which became the first municipality in that state to do the same. Portland’s change went into effect in July. Massachusetts, though, currently has the distinction of being the state in the union with the most municipalities proofing for 21 when it comes to tobacco — more than 130 cities as of Aug. 1. One of the main concerns among retailers in the Bay State is that the patchwork of local legislation makes it harder for chains to manage their tobacco categories and creates an unleveled playing field for those outlets in towns with Tobacco 21 regulations. A measure to implement 21 as the legal buying age statewide failed over the summer. Similar legislation at the federal level — which would make 21 the legal minimum age to buy tobacco products across the United States — has stalled as well. Companion bills, H.R. 3656 and S. 2100, were introduced on Capitol Hill in late September 2015. The House of Representatives bill was referred to the Subcommittee on Health on Oct. 2, 2015. The Senate measure was referred to the Committee on Commerce, Science and Transportation on Sept. 29, 2015. Federal lawmakers
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have not taken any further action since. Were that to change, though, at least some think the c-store impact would still be minimal. C-STORE IMPACT
The Institute of Medicine (IOM) released a report in March 2015 showing that increasing the minimum age of legal access for tobacco products would likely prevent or delay initiation of tobacco use by adolescents and young adults. The age group most impacted would be 15-17. In states with good youth access enforcement, 18to 20-year-olds supply nearly 90 percent of all tobacco products to youths 17 and under who are just starting to use tobacco, the report cited. “That’s why 21 is so powerful. Not so much because we want to give older adolescents a break — although that’s a good idea, too — but mostly we want to prevent young kids from starting,” said Cane of the Preventing Tobacco Addiction Foundation. “In the first town this was done, high
school smoking dropped in half.” The study, “Public Health Implications of Raising the Minimum Age of Legal Access to Tobacco Products,” was requested by the Food and Drug Administration (FDA) in 2013 — a directive under the Family Smoking Prevention and Tobacco Control Act of 2009. This report is a key driver behind the Tobacco 21 movement, but Cane believes the findings are not necessarily bad news for convenience stores and their tobacco sales. “The good news for convenience stores is that 18-, 19- and 20-year-olds only represent 2.1 percent of tobacco sales nationally, thus a 25-percent drop would be about half of 1 percent,” he said. “Moreover, adolescents generally don’t save. Money not spent on cigarettes is very likely to go to higher-margin items like convenience food and snacks.” CSN
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In the Mood Improve sales strategies by studying how consumers’ emotions affect their beverage choices By Angela Hanson
onvenience store customers frequently make shopping trips to fill a specific, obvious need, such as buying a soda when they’re thirsty or a sandwich when they’re hungry. What’s less obvious is the way their moods can affect the beverages they purchase, which in turn drives outlet choice. Understanding this dynamic can give c-store retailers the opportunity to capitalize on the connection, and give their customers what they really want. “Where people are, what they’re doing and how they feel all impact their motive for consuming a beverage, which ultimately affects their beverage and foodservice channel selection,” said Brad Spickert, vice president, national foodservice and onpremise, for The Coca-Cola Co. “For example, when consumers feel excited, they might want to indulge. Maybe they’re celebrating a special event with friends and want to kick back with a drink they can really enjoy. The highest indexing beverage in this case may be a carbonated soft drink, iced tea or hot brewed coffee.” In contrast, feeling burdened can lead consumers to want to escape. This encourages increased purchases of fun, fruity drinks such as juices, lemonades and smoothies. In its 2016 Away From Home
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Landscape Study, Coca-Cola identified six dominant consumer moods, their motives, and the likely corresponding beverage selections (see infographic on page 80). The Atlanta-based beverage giant also found that approximately 45 percent of the time, people choose a foodservice outlet based on the beverages offered there. “The six dominant mood states and motives stemming from specific situations we identified are very strongly correlated with what beverage categories people select and from what channel,” Spickert said. “This is because beverages have powerful mood-management capabilities, and people leverage them to resolve and amplify their moods.” MEETING BEVERAGE NEEDS
Once c-store operators have a solid understanding of the ways that people feel and make decisions in certain life situations, they can improve their beverage marketing and drive increased sales through targeted communications. “Every week, there are roughly 800 million situations in which people commute to and from work without consuming a beverage,” Spickert said. “This presents a major opportunity for foodservice channels — especially for convenience retailers, given their appeal of a quick and easy stop — to reach out to commuters through radio or billboard advertising, appealing to how they feel during their drive. They can invite commuters who are stressed to indulge or escape with over-indexing beverages like carbonated soft drinks, hot coffee and smoothies.” Developing a solid understanding of consumer moods also allows retailers to identify the most promising growth areas and better adjust their
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out-of-home advertising, zone merchandising, menus and employee training to best meet customer needs. This can be done via the use of technology, such as menu boards and point-of-sale messaging highlighting the top indexing beverages. It can also be accomplished through non-tech methods such as personal interactions, during which store associates can recognize customers’ likely mood states and react accordingly. Having a broad beverage portfolio maximizes the options c-stores have at their disposal to address the needs of consumers in a variety of situations and moods. And knowing what the top beverages are for certain moods and need states can enable them to effectively bundle food and beverages, according to Coca-Cola’s research takeaways. However, it’s important retailers base this strategizing on actual consumer data, either studied by others or what they observe themselves, and not on what they expect. Carbonated soft drinks (CSDs) are most commonly viewed as a snack or lunch/dinner beverage pairing, but Coca-Cola’s research actually found CSDs are among the top three choices for food pairings that include breakfast. In the morning, CSDs are most commonly paired with breakfast sandwiches and French toast, followed by bagels, doughnuts, muffins, eggs, pancakes and waffles. “The popularity of CSDs with breakfast items
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is important to consider given the growing trend of breakfast anytime throughout the day,” Spickert said. MILLENNIAL MOODS
Given the demographic’s size and spending power, it’s important to be aware of the purchasing habits of millennials, in particular. This generation is a strong driver of away-from-home beverage volume. Per week on average, millennials aged 20 to 37 have 23 away-fromhome situations and consume 15 away-from-home beverages (2.7 CSDs). Consumers aged 38 and older have 16 away-from-home situations and consume eight beverages (two CSDs) per week. “The number of away-from-home situations people experience is strongly correlated with the number of beverages they consume. So, it’s not surprising that millennials drive a larger share of beverage consumption compared to Gen X and older generations,” Spickert said. Additionally, millennials are more variety-seeking and drink 4.3 different types of beverages per week, compared to 2.5 different types per week for older generations. Still, not all millennials have an equal beverage value. Millennial men with children have the highest number of away-from-home situations and therefore the most purchase potential. CSN
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Early Evening Eats Ea The opportunity is there for c-stores to take a bigger bite of snacking By Danielle Romano
one are the days when snacking was seen as a one-dimensional indulgence, consumed in the wee hours of the night. Nowadays, snacking occurs across all dayparts, but there is one daypart in particular that consumers indulge in most: p.m. snacking. The growth of p.m. snacking (generally defined as taking place between 2 p.m. and 5 p.m.) is part of the larger upward trend of consumer snacking, as consumers seek to replace full meals with grazing, noted Nicole Peranick, director of global consumer strategy for culinary at Daymon Worldwide, and Jordan Rost, vice president of consumer insights, Nielsen, who both served as presenters for a recent webcast hosted by Convenience Store News. “Fundamentally, a new normal, or a new reality, has emerged in our eating culture as consumer palates and preferences have changed,” Peranick said. Trends changing this culture include: consumers judging value on experience as opposed to stuff; the shift to small portions; urbanization; the shift to “clean” eating; and the nation’s increasing cultural mosaic. As a result of these changes, consumers today are not holding themselves hostage to conventions, as evidenced by 70 percent of consumers claiming anything can be a snack, 53 percent eating later in the day, and 52 percent of millennials saying they prefer to replace a meal with a snack. This new, carefree and flexible approach to eating has also changed consumers’ approach to dining out. They’ve traded in formal atmospheres, conventional meal times and mass-processed foods for casual dining that is approachable, shareable, experimental, localized and “healthified.” Casual dining is setting the stage for snacking to fundamentally displace the traditional three-square-meals-a-day ritual, as Peranick explained. Today’s “always on” culture is altering the landscape, too. “Our ‘always on’ culture is further supporting this fundamental shift to snacking — be that our on-the-move nature, our demand for instant grati-
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fication or our packed schedules, all while operating in a 25/7 digital world,” she said. As for what’s on the horizon, Peranick highlighted five key trends that are now shaping the snacking movement in the United States: 1. Healthification Meets Snackification. The move to healthier, cleaner and purposeful eating is driving innovation in the snacking space. 2. Importing the Global Pantry. Inspiration from global cuisines is inspiring new flavors, formats and eating styles. 3. Rise of Next-Generation Categories. As a result of new consumer need states, next-generation snacking categories are emerging to address these. 4. Communal Snacking for the Everyday. The “casualization” of dining is now migrating to retail snacking. 5. Reimagining Convenience. With convenience as a cost of entry, reimagined formats, shapes and enhanced utility have emerged in snacking. CAPITALIZING ON P.M. SNACKING
Convenience stores already act as a hub for meeting consumer need states. By looking at who, what, where, when and why consumers are snacking, c-store retailers can see how “the idea of snacking is really purposedriven,” according to Nielsen’s Rost. In general, when consumers snack, they are driven by convenience (18 percent), health (25 percent) and taste/treat (27 percent). When broken down by daypart, however, the top needs for snacking are skewed by
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occasion, he detailed. For example, when it comes to breakfast, consumers are looking for health and convenience; when it comes to lunch, they are looking for convenience; at dinner, they’re looking for an array of needs; and when they snack in general, they’re looking for convenience and taste/treat. Snacking peaks during the early afternoon, with 38 percent of consumers snacking in the afternoon. The uptick begins at 2 p.m., spikes at 3 p.m. and remains steady until 5 p.m. “People are having their snack after lunch, or as their afternoon lull is starting to set in,” said Rost. “… As we’re on the go, we’re looking for that next best thing and the next available source for snacking. For a lot of consumers, that very much can be c-stores.” He laid out two ways in which c-store retailers can leverage the p.m. snacking opportunity and, in turn, optimize their sales across many categories: • C-store retailers should recognize snacking is purpose-driven. This will tell them exactly who their
customers are. • Once c-store retailers know who their customers are, they will be able to segment their snacks appropriately. The webcast, entitled “P.M. Snacking: The Hottest C-store Daypart,” was sponsored by Anheuser-Busch, AdvancePierre, McCain Foods, Mars Chocolate North America, The Schwann Food Co. and Red Bull. A replay is available at tinyurl.com/hcd3cc6. CSN
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Car Wash Contemplations Consider these five new and improved reasons to hook up to a car wash By Renée M. Covino
ave thoughts of adding a car wash to your operation been lathering in your mind lately? If you’ve looked into the possibility once or twice before, there is now new and improved reasons to look again — and perhaps this time, go for the hook-up, professionally speaking. The car wash business is cleaning up lately, driven by low gas prices; more erratic and warmer weather patterns (inspiring more frequent car washes); technological improvements; consumer environmental awareness; more efficient purchasing systems; and the increasing value consumers place on their vehicles. “The car wash, if operated properly, can be the most lucrative operation of the c-store business,” said Kevin Collette, vice president of sales, CTO (Compact Tunnel Organization) for Sonny’s Enterprise in Tamarac, Fla., which has been focusing on the convenience store market, having recognizing deeper potential in the channel to offer a professional car wash experience. “The profits car washes are generating, as well as the incremental growth at the pumps and inside the store, are all very appealing to the convenience/gas channel,” he continued. Plus, the channel is experiencing how easy it is to manage a high-volume, professional-level car wash requiring few employees and few vendors, according to Collette.
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While there are multiple factors contributing to today’s high-quality and profitable car wash programs in the convenience/gas channel, these five are at the top of the roster: More Sophisticated Site Evaluations & Education The first step for any successful c-store car wash business is a site evaluation — and the good news is that these evaluations are getting more sophisticated and detailed. The location should be analyzed by traffic count, demographics (including income per family), cars per family, and the degree of car wash competition in the surrounding area, advised Collette. “It’s not good enough today to just correlate the car wash to the gallons of fuel pumped,” he cautioned. “It does not give the retailer a true perspective of the business.” Collette’s bottom line is that c-store operators create a very detailed profit and loss statement that serves as a true means of managing the business. “Look at other professional car washes in the area. Watch how they market and, in general, compete with them,” he stated. A site evaluation and return-oninvestment (ROI) calculation are indeed critical in the determination phase, agreed Laura Edgmond, marketing specialist with Grimes, Iowa-based Ryko Solutions Inc., which now operates under the umbrella of National Carwash Solutions (NCS), along with the MacNeil and
CleanTouch brands. Then, once the evaluation has been completed and the decision made to embark into the car wash business, the most important factor is to have a dedicated person to manage the business “because it is a separate profit center from the convenience store,” according to Charlie Zimmerman, national sales manager for Genesis Modular Car Wash Building Systems, based in Norcross, Ga. A dedicated manager should implement “real operations procedures that will keep the wash operating at the level expected,” echoed Collette of Sonny’s, which
provides its partners with education via the Car Wash College, whereby operators are trained from beginning to end with hands-on experience in the lab and in the field. A dedicated manager should also have data readily available so they can make informed decisions. Innovative Control Systems (ICS) of Wind Gap, Pa., focuses on “network visibility” by offering its partner operators and category managers access to pertinent data (performance, sales, average ticket, number of washes, equipment alerts, etc.). Through its Wash Connect service, this data is available on a dashboard 24/7 so it can be viewed on any device anywhere in
Ready to Go More Pro? If you’re a convenience store operator already hooked up to a car wash, but you want to create additional sales and customer loyalty, you may be part of the rising group that’s in a “shift” phase, approaching the level of a more professional car wash. “The key operators are looking at what they’re offering in type of washes and services available with that wash, and adjusting accordingly,” said Rob Deal, vice president of international and corporate sales for Innovative Control Systems (ICS). “We see real movement from the in-bay automatics, which don’t move a lot of cars, maybe 12 an hour, to a conveyor system, which can move 100 cars or more per hour. So, it’s growth by volume, not by sites — they’re looking at replacing an existing model with a new model.” While this transition requires more capital investment, plus the land necessary (65 feet minimum for an ideal conveyor environment, as well as a trench/underground installation of the system), the payback is typically more rapid. “The more volume you can put through, the faster you can pay back the investment required to do this,” according to Deal. Charlie Zimmerman, national sales manager for Genesis Modular Car Wash Building Systems, agreed that c-stores have embraced the “express model” and are building “short tunnels” to support the model. But he also cautioned that it must first be determined that the location has the space
to produce the cars and warrant the investment. Aside from system type, upgrades in brushes and cloths are also part of the more professional car wash experience, and thus being considered by forward-thinking retailers. In conveyor washes, firmer synthetic filaments are appropriate for tires and wheels; soft cloth or gentle foam is better for the painted car body, where a softer approach is required to produce a shiny car, explained Dan Pecora, part-inventor, with his father, of the first exterior-only car wash in the 1960s and now owner of Erie Brush and Manufacturing Corp. in Chicago. “Tough cloth or tough foam might last a long time, but won’t clean the car’s nooks and crannies,” Pecora stated. “Soft cloth or gentle foam, when done correctly, is gentler on paint and will clean those hard-to-reach areas.” Furthermore, an exterior car wash using a high-quality “gentle foam” with smooth car wash equipment can reduce damage claims to near zero, while offering a better final polish, according to Pecora. Unlike typical foam, which is usually offered at standard levels of softness, gentle foam significantly increases the level of softness, he stated. For those c-stores that have an “automatic culture” and cannot afford or do not have the space and/or volume to upgrade
to a conveyor system, there are still paths for improvement. “The successful ones are including more options like tire shine, hot wax and lava to their systems to compete with tunnel washes and increase revenue,” noted Zimmerman. Beyond increasing vehicle throughput, c-stores are also elevating their car washes by “adding free vacuums and creating loyalty- and incentive-based purchasing programs,” said Kevin Collette, vice president of sales, CTO (Compact Tunnel Organization) for Sonny’s Enterprise. Such sites are increasing their revenues and bottom lines by 300-400 percent, he cited. Utilizing customer information is imperative. Obtaining emails for marketing and monthly wash programs is another big way c-stores can boost business, Zimmerman advised. “We see coffee and food programs, apps and buying programs aimed at keeping and capturing c-store customers. These must be done with the car wash as well,” Collette concluded.
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the world, said Rob Deal, ICS’ vice president of international and corporate sales. Self-Service Technology The car wash industry has come a long way in the past 10 years, with improved technology being a prime factor in why car washes are working better in the convenience store world. The convergence of self-service technologies now makes it possible for car wash operators to provide more solutions with hand-finish qualities, faster and with shorter waiting lines. The three most popular self-service technologies are the vending machine, kiosk and Internet-based applications, according to Bob Roman, president of car wash consulting service RJR Enterprises. “Experience shows these technologies are proven labor-savers that free up associates’ time for more productive activities,” he explained. Touchscreen pay stations are gaining traction in the channel, with some operators realizing higher average car wash sales — about $10 vs. the usual average of $7, Roman cited. Higher customer attraction to the service and higher loyalty rates also go hand-in-hand with the improved technology, as long as operators ensure customers know what to do with it. Social Connections Creating loyalty- and incentive-based purchasing programs is another significant factor in a convenience store’s car wash being more relevant to customers today. Loyalty programs (buy five washes/get one free is a big incentive), wash books (valued at $20), free coffee with a car wash, and fundraising opportunities are some of the ways the top convenience store car washes are being promoted these days, Roman pointed out. C-stores are also keeping up with current car wash trends in this millennial age, such as RFID passes, social media marketing, wash clubs, and remote monitoring. Better Financing Obtaining the proper financing is a crucial step in opening a car wash business, and nowadays there are more financing options available to c-store operators. Ryko Solutions recently partnered with Ascentium Capital to offer affordable and customized finance options for the company’s car wash products, services and technologies. The partnership is designed to provide Ryko customers with a simple and cost-effective way to acquire a complete car wash solution, from friction soft touch to touchless to mini-tunnel systems, according to the company. Additionally, items such as
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remote monitoring systems, activation systems, water treatment, freight, installation, bay modification work and labor may also be financed, significantly reducing out-of-pocket expenses. “Through Ascentium Capital’s consultative approach, finance structures will be tailored to each client’s cash flow,” explained David Miller, senior vice president of marketing and new product development at Ryko Solutions. He views the partnership as a way to assist retailers with “tactical objectives.” “Wow” Experience Consumers visit professional car washes for more than just a clean car; they also go there for all the bells and whistles — the “wow” experience. Convenience store car washes can be about the experience, too. But, in addition to providing it, c-stores must get the message out in order for the experience to attract more traffic. Car wash industry insiders also emphasized it doesn’t have to be a high-end conveyor system to deliver the wow factor. Some savvy, premium in-bay wash retailers are attracting customers by promising to have customers’ vehicles sparkling clean and on the fly in under six minutes — plus the “show” of tri-color foam and bubblegum-scented rinse, noted Roman. To celebrate its 50th year of manufacturing car wash systems, Mark VII Equipment Inc. of Arvada, Colo., recently introduced product innovations boasting “showmanship,” such as LightRails. These stainless-steel guiderails with bright LED lighting simulate an airport runway, providing customers a dramatic show while guiding them safely to the bay, according to Mark VII. LightDoors add even more of a “show” for customers, the company further noted, while allowing operators to custom-brand equipment with their logo and colors. CSN
MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric
Doubling Down on E15 Renewable fuel offering has risen from 129 c-store locations to 275 in just 12 months By Brian Berk
t is clear that millions of Americans are unfamiliar with E15, which means there is a strong possibility that many motorists may improperly fill up using this gasoline and damage their vehicle. Bringing E15 to the market without adequate safeguards does not responsibly meet the needs of consumers.” “EPA’s flawed waivers allowing E15 amount to government bureaucrats issuing short-sighted regulations that negatively impact families and businesses across the country.” “[It is] irresponsible for the EPA to allow E15 without sufficient testing and technical analysis. I support an all-inclusive energy strategy, but experimenting before understanding the consequences and potential cost of using E15 is unfair to consumers.” These comments about the renewable fuel known as E15, a blend of 15 percent ethanol and 85 percent gasoline, were made just three short years ago by various industry players. A betting man might have wagered that despite the U.S. Environmental Protection Agency’s (EPA) 2012 approval of E15 for cars manufactured in the model year 2001 or newer, the new fuel blend was doomed, or at the very least destined to be tied up in the courts for years to come. However, that is not what happened. The tide turned on June 23, 2013, when the U.S. Supreme Court rejected the American Petroleum Institute’s (API) attempt to block E15. If there were such a thing as an Independence Day for a renewable fuel, this would be it. “The industry has always felt E15 would be a mainstream fuel. There’s the price advantage, performance advantage, being cleaner-burning. [E15] has all sorts of advantages over non-ethanol fuel, so we knew it would get big. The question was how long it would take to be a mainstream product,” said Mike O’Brien, vice president of market development at Growth Energy, which represents the producers and supporters of ethanol. Refiners and oil interests, in fact, were caught a bit off-guard by how quickly the industry could go from
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E15 is currently approved for use in 46 states.
blending E10 — today considered standard petroleum under the blend wall — to blending E15, added Michael Frohlich, Growth Energy’s director of communications. “They were also caught off-guard by consumer acceptance of E15,” Frohlich told Convenience Store News. “Clearly, it’s a threat to [oil] interests, proven by the fact that they are throwing everything including the kitchen sink in trying to discredit the fuel.” The number of convenience stores with gas stations selling E15 at their fuel pumps has more than doubled in just 12 months, going from 129 locations on June 30, 2015 to 275 locations across 23 states as of June 30 of this year, according to Growth Energy figures. The list of c-store retailers jumping onboard is practically an industry who’s who, including Family Express Corp., Thorntons Inc., Kum & Go LC, Sheetz Inc., RaceTrac Petroleum Corp., MAPCO Express Inc., Gate Petroleum and Minnoco. In addition, CHS Inc. established the Cenex Tank Program, which provides financial assistance to any of its 1,400 Cenex-branded locations that want to offer E15. CUSTOMER CHOICE
Thorntons, which offers E15 at 43 of its Chicagoarea c-stores, markets its newest fuel option as “Unleaded15” at the pump. Matt Nichols, manager of biofuels/business planning and analysis for the Louisville, Ky.-based chain, said Unleaded15 offers a
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MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric
great value to Thorntons’ Chicago guests and supports its desire to provide the best possible fuel options. “Thorntons has offered E85 for years and, given the market demand for higher ethanol blends, we feel Unleaded15 is the next logical step for our fuel portfolio,” Nichols explained. “Offering Unleaded15 sets Thorntons apart from the competition and attracts more customers onto the store lots. Unleaded15 is a unique fuel product that improves power and performance despite typically costing less at the pump than regular unleaded, and we are excited to make these advantages available to our guests.” For Valparaiso, Ind.-based Family Express, which plans to market its E15 as “Unleaded E15,” the renewable fuel gives the consumer another choice at the pump, the way Tom Navarre, vice president of petroleum marketing and logistics, views it. “It is a higher octane product at a potentially Thorntons sells E15 fuel under the 15 lower cost. Additionally, the expan“Unleaded ” name. sion of renewable fuels is good for our state’s economy and it reduces our dependence on foreign energy, which benefits the entire country.” Altoona, Pa.-based Sheetz, which added E15 to several of its North Carolina sites, is a fan of E15 particularly because it did not have to sacrifice any other fuel offering to add the renewable fuel to its lineup, emphasized Michael Lorenz, Sheetz’s executive vice president of petroleum supply and winner of CSNews’ 2015 Alternative Fuels Leader award. “You get five grades [of fuel] to choose from at those locations [offering E15]. It’s all about consumer choice,” Lorenz said. “Inside our stores, we have a huge food menu and beverage selection. We wanted to offer more fueling options as well.” Also helping along E15’s growth is Protec Fuel Management LLC, a fuel marketing and solutions company that builds E15 and E85 sites for both c-store operators and fleets. Approximately 65 Protec c-store sites now sell E15. Nearly all are operated by the c-store operator once built, with a few exceptions, said Protec Vice President Steve Walk. “To make an analogy, retailers want to sell a wide selection of fuels just like they want to sell both Coke and Pepsi,” Walk said. “No matter what product a retailer sells, they want to make sure [customers] visit
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the pump and then help in-store sales. It’s about offering all fuels and being a one-stop convenience stop.” TESTED & PROVEN
Even more good news for E15 came on Sept. 16, when HWRT Oil Co. became the first company in the United States to offer pre-blended E15 at the terminal level. “This development is a game changer that can rapidly open the market for E15 in the Midwest,” the Renewable Fuels Association, a trade association for America’s ethanol industry, wrote in a statement. “To date, retailers across the country interested in offering E15 have not had access to the fuel at their local fuel terminals. As a result, retailers have offered E15 by diluting a higher ethanol blend (like E85) with regular unleaded, a process that takes additional storage and equipment.” E15 is currently approved for use in 46 states. The remaining holdouts are California, New York, Arizona and Nevada. When c-store retailers want to offer E15 in states that haven’t yet approved the renewable fuel for sale, Growth Energy works with the state’s regulatory commission in an effort to change the wording of laws to allow it. According to O’Brien, Growth Energy is currently making excellent progress in two of the holdout states, New York and Nevada, and expects E15 to be approved for sale in both in the near future. O’Brien, who personally works with c-store retailers looking into the possibility of offering E15, shared his game plan when talking to c-store retailers about adding the renewable fuel to their portfolio. “The retailer has to be able to make money on it and the consumer has to benefit from it,” he said. “Once you clear away all of the rhetoric that the petroleum industry has thrown at it, at the essence is a product with an extremely good business proposition. “Everybody that handles it wins,” he continued. “To start, in the fuel industry, if there is a price advantage, the retailer is likely to win. Ethanol is historically very economical in terms of pricing. Typically, the more ethanol you put into a fuel, the better the price advantage is. And the more ethanol you put in, the better octane you have for performance. And the more ethanol you put in, the more things you take out [such as toxins] that you don’t necessarily want in the atmosphere, so you have a cleaner-burning fuel.” C-store retailers, of course, must do their own due diligence and always have a few questions about E15. But the topic of engine damage and voidance of warranties doesn’t often arise anymore. “It’s extremely rare that I need to talk about that with
MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric
a retailer,” said O’Brien. “The questions are usually about what is the business opportunity for them and the conversation then shifts to: How do we do it? What do we need to
do? How do we register it? What type of equipment do we need? How do we market it?” O’Brien stressed end-user complaints about E15 also don’t exist.
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“There have been zero complaints about this fuel,” he said. “Auto mechanics are selling the fuel, and if there were any concerns about it, we would have heard it by now.” Sheetz’s Lorenz acknowledged he initially had concerns about whether E15 could damage engines, “but we have since allayed those concerns. E15 is the most tested fuel in history. We have been selling E15 for almost a year now and we have had no problems.” The amount of testing performed on E15 was a major factor that won over Nichols of Thorntons, too. “Thorntons takes pride in the quality of our fuel products and when used appropriately, there should be no adverse effects from selecting our newest offering. Prior to retailing Unleaded15, Thorntons received EPA approval on a Misfueling Mitigation Plan and has since adhered to the stipulations of that plan. Thorntons places a strong emphasis on product integrity, proper labeling and product education, which makes us confident in our ability to responsibly retail Unleaded15.” Family Express’ Navarre echoed that he has no misfueling concerns as the fuel will be dispensed out of a single-product hose at Family Express stations. The pumps also will be properly labeled to identify it as Unleaded E15, which will mitigate any such concerns. “If you recall when E10 was introduced many years ago, there were the same questions about the quality of the fuel and the fear that it could potentially damage engines,” Navarre said. “As E10 stood the test of time, we believe Unleaded E15 will do the same.” Still, c-store operators should educate consumers about E15 and continue to do so, Protec’s Walk advises. “People understand gasoline, but not
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MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric
are not quite sure about E15,” he said. Education is a focus in Thorntons’ rollout. “Since selling the first gallon of Unleaded15 on March
4, Thorntons has been very pleased with the guest response. Our goal is to continue to improve that adoption rate through thoughtful promotion and education efforts,” noted Nichols.
STRONGER GROWTH AHEAD?
The biggest remaining challenge to E15’s growth are the major oil companies, according to Walk of Protec, who cites that oil companies have been known to tell an operator that E15 is illegal when it comes to a retailer’s fuel station branding agreement. “That’s the biggest struggle we have from a branded station perspective,” Walk said. “…We’ve worked on some branded stations, but a lot of our growth has been on the unbranded side.” Based on Growth Energy’s figures, an additional 725 sites are set to offer E15 in the near future, said O’Brien. Minnoco members will make up a por-
tion of this group. The Minnesota Service Station & Convenience Store Association (MNSSA) developed the Minnesota Independent Oil Co. (Minnoco) brand of gasoline to give MNSSA members the opportunity to own and control their own brand of fuel, while being able to offer renewable fuels. “When Minnoco decided to sell E15, at the time it was unchartered territory,” relayed Lance Klatt, executive director of the association. “Now [that] you see the growth, you know you made the correct decision for many reasons. You sit back and say, ‘Wow, we were one of the first retail organizations to offer E15 as a choice to the consumer.’” This fall alone, Minnoco has 16 additional locations that will be selling E15. “The consumers love it. They like the higher 88 octane; it supports Minnesota’s economy; and most of all, consumers save on average from three cents to 10 cents per gallon at the pump. It also creates another choice of fuel in the marketplace. Can’t beat that,” concluded Klatt. CSN
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MOTOR FUELS FUELS LEADER OF THE YEAR
Gasoline + Diesel + Ethanol + LNG/CNG + Electric
Pump, Then Plant Alon’s Strive fuel program reduces emissions while giving back to the community By Tammy Mastroberte
lon Brands entered the fueling business in 2000 with the purchase of the Big Spring Refinery in Big Spring, Texas. The company — the largest 7-Eleven licensee in the United States — currently supplies fuel to its 298 company-owned and -operated Alon/7-Eleven branded sites in West Texas and New Mexico, as well as 350 branded distributor sites, independent brands, national truck stop chains and commercial accounts through its unbranded wholesale business. “Our fuel business has grown significantly over the years, increasing gallons sold every year since the company was formed,” said Jonathan Ketchum, senior vice president of Alon Brands, which offers regular, unleaded, unleaded plus, super unleaded, diesel, E85, and compressed natural gas (CNG) sold at truck stop locations. Part of this growth resulted from an “aggressive acquisition strategy,” including the purchase of 160 stores from Southwest Convenience Stores in 2001; the acquisition of 40 Good Times stores in 2006; and the addition of 104 Skinny’s stores in 2007, Ketchum noted, adding the company also increased its focus on its branded marketing and unbranded wholesale business in 2008 and doubled fuel throughput since then. In 2010, Alon retired its 50-plus-year-old legacy fuel brand, FINA, and launched the Alon brand, along with a new way of doing business. Most recently, Alon acquired 14 locations in the Albuquerque, N.M., region, and built its first large-concept convenience stores in Rio Rancho, N.M., and El Paso, Texas, which have been a huge success so far, said Ketchum. The Dallas-based company, which Convenience Store News is honoring this year as the Fuels Leader of the Year, is now more focused on engaging customers at a different level, and the results have been “outstanding,” according to the senior VP. Utilizing social media and sponsorships, Alon runs text-to-win campaigns six times per year that span
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Alon’s Strive program does not require the addition of any new software, hardware or equipment.
two-month periods and offer customers a chance to win free fuel for a year. The company’s also expanded services provided to its dealer network and created internal programs such as the CLEAN Team, whereby each Alon store participates to raise the bar in cleanliness and the customer shopping experience. Each store is inspected and scored, and the top stores receive cash prizes. The grand prize is a new car awarded to the winning store manager. “Last year, we had a gala event for 17 store managers and their spouses, with a chance to win a car. Now, we are including dealers in it as well,” Ketchum said. STRIVING FOR EVEN MORE
In partnership with GreenPrint LLC, Alon Brands launched its Strive fuel program in June 2015. This reduced-emissions fuel program enables drivers to
MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric
support their community and the environment, while reducing tailpipe emissions. The program is the first of its kind in the Texas area, according to Ketchum. “For every gallon of fuel purchased in Albuquerque, N.M. or Lubbock, Midland or Odessa, Texas, Alon will plant trees locally and invest in certified carbonreduction projects, such as reforestation and alternative energy production, to neutralize each driver’s associated carbon emissions by up to 30 percent,” he explained. The company invests in more than 10 certified alternative energy, reforestation, solar power and other projects both locally and globally, which are proven to remove harmful carbon from the atmosphere. In its first year, Alon introduced Strive at 37 sites in Albuquerque; 20 in Lubbock, Texas; 50 in MidlandOdessa, Texas; and finally expanded the program to seven stores in Big Spring, Texas, in late September. Since the launch, Alon/7-Eleven has offset more than 25,000 metric tons of carbon dioxide equivalent emissions as a direct result of Strive fuel purchases, and planted more than 5,500 trees in Texas and New Mexico, Ketchum cited. “Because of the Strive fuel program, we are making a difference in the atmosphere and our environment, as well as the communities and neighborhoods where we have our stores,” he said. The company also partners with other organizations as part of the program, including the Arbor Day Foundation, Keep Albuquerque Beautiful and Keep Odessa Beautiful, to have a positive impact on local parks and schools as well. “The best part is our customers don’t have to do anything differently — just pump the gas as they nor-
Alon says Strive not only benefits the environment, but also the local communities where the chain operates stores.
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More than 5,000 trees have been planted since Alon launched the program in June 2015.
mally would, and they’re making a difference. That’s why we say, ‘Pump Here, Plant Trees,’” Ketchum said. “And unlike alternative fuels, the Strive program requires no new software, hardware, new tanks, vehicles or equipment.” THE FUTURE OF ALON FUELS
The biggest challenge in the fueling industry today is doing all the small things right each day, such as keeping the dispensers and fueling presentations clean, having receipt paper and washer fluid available, pricing according to strategy, and making sure the stores don’t run out of fuel, Ketchum told CSNews. But Alon has its eye on the future as well in regards to what will have the greatest impact on the company itself and the entire convenience/fuel retailing industry. One trend to watch closely, according to Ketchum, is the ongoing improvements being made in fuel-efficient engines and technologies. “This will cut down on the frequency of c-store and gas station visits in general, so we won’t see people on the lot as frequently. We have to become better retailers,” he stressed. Ketchum also believes ethanol’s role as an octane replacement will most likely keep increasing, and alternative fuels growth may become limited without mandates. For Alon, the company has expanded its geographic footprint to include supply in both Arizona and the Mid-Atlantic, allowing it to grow the Alon brand into new markets. The chain intends to continue looking for both acquisition and new-to-industry site opportunities in its geographical area of operation. “Our new store prototype features a minimum of eight to 10 gas dispensers (16 to 20 fueling locations) with Applause TV and full EMV capabilities,” Ketchum said. “All new sites also feature a full complement of Alon fuels and the Strive program.” CSN
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TECHNOLOGY LEADER OF THE YEAR
Mobile Maven From apps to mobile ordering, Maria Fidelibus keeps QuickChek on the leading edge By Tammy Mastroberte
s a graduate of DeSales University in Center Valley, Pa., with a bachelor’s degree in computer science, Maria Fidelibus was a young programmer looking for opportunities. She worked at a foundation, helping children in the computer department, and also for a small consulting firm before ending up in the information technology (IT) department for a regional grocery chain in Philadelphia. When Safeway purchased the chain, she found herself in the banking industry for more than a year, until she got a phone call from Whitehouse Station, N.J.-based convenience Mobile initiatives are a focus for QuickChek, which launched a mobile app last year. store chain QuickChek Corp. “I got a call asking if I was lookretailer executive who demonstrates vision and innovaing to get back into retail,” Fidelibus recalled. tion, and leads the way for his/her company and the She joined QuickChek in December 2003 as the industry as a whole to take full advantage of technolretailer’s vice president of information technology. ogy solutions. Since then, the company’s use of technology has QuickChek is also focused on mobile as a priorevolved significantly, particularly around the growth ity, having launched a mobile app last year and mobile of the foodservice category, mobile applications and ordering, and its entry into the fueling side of the busi- ordering for its foodservice offering six months ago. Customers can pre-order breakfast sandwiches, customness. When she started with the company, there were made subs and salads via the app and pick up their only three QuickChek fueling sites. Just recently, the order at any of the chain’s 142 locations in New Jersey chain opened its 57th store with fuel. and New York. Users can place an order between 5 a.m. “We’ve been focused on all the technology around fuel and supporting our fuel desk and all the and 10 p.m., and select their pickup time. “Our mobile presence is a huge area of focus processes involved,” Fidelibus said. “We support for us, with mobile ordering launching in March,” pricing, inventory management, bill of lading, the back-office, gallon reports and fuel delivery automa- Fidelibus explained. “It’s doing very well and continues to grow for us.” tion as part of the business.” The retailer also continues to pioneer NCR Corp. For these efforts and more, Convenience Store self-checkout lanes. Originally, QuickChek offered Fast News honors Fidelibus as Technology Leader of the Year. The annual award recognizes a convenience store Lane self-checkout lanes with debit, credit and cash
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options, but is now offering cardonly lanes. The offering has been a win-win for both customers and team members. “We continue to look and try to optimize the Fast Lane self-checkout as a large opportunity in our environment, and we continue to refine and try to find the sweet spot to leverage this type of technology in our very high-volume stores where a lot of customers are in and out,” Fidelibus noted. A CHANGING INDUSTRY QuickChek’s app now allows users to order foodservice items via their smartphones.
Since joining the c-store industry in 2003, Fidelibus has watched it evolve into more sophisticated technology systems. When she started, her team supported a back-office computer and a few registers when it came to opening a new store. These days, the infrastructure has grown to include so much more.
“I know this award is tech executive of the year, but I have a department of people seasoned not only in this industry, but in technology.” — Maria Fidelibus, QuickChek Corp.
“Now, a new store has multiple computers, ordering points, and a kitchen monitoring system,” she explained. “We can have 17 computers in a store, and the IT department supports all of that. It’s been a big change. Also, the growth of customer-facing technology — whether in-store ordering points, mobile ordering or self-checkout — it’s all changed significantly in the past 13 years.” To both share and learn from others in the space, QuickChek is a member of c-store industry technology association Conexxus and participates in roundtables and industry events, which Fidelibus believes is a strength of the c-store industry vs. other industries. “The one thing about this industry in particular is the sharing and networking with peers. It is invaluable
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and benefits the entire industry. We share common issues and problems and help each other move our organizations forward,” she said. Looking ahead, Fidelibus predicts the mobile side of the business will continue to grow and change. She foresees retailers offering creative ways for customers to use mobile apps, as well as mobile employees communicating all on one platform. Although she personally is the recipient of the Technology Leader of the Year award, she credits her team for taking QuickChek so far since she joined the company. “I know this award is tech executive of the year, but I have a department of people seasoned not only in this industry, but in technology,” she pointed out. “Many team members have worked here for more than 25 years and are passionate about this business. It’s really about my team and my peer partners at the organization, and the leadership of [President and CEO] Dean Durling guiding the company into the future.” But Durling credits Fidelibus and her leadership for taking QuickChek to the next level of technology, especially her ability to build and assemble a highperformance team. “We have always been a leader in technology, but with Maria onboard, we really stepped it up,” Durling said. “We had great people in IT when she came to us, but she has been able to build, assemble and lead a really strong team. “She is wonderful at working with and developing people, and assessing their strengths,” he added. “She also prioritizes high-value work and is very adept at problem-solving.” CSN
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EMV: One Year Later For the c-store industry, the migration continues and still has its challenges By Brian Berk
f a consumer were to walk into three retail locations of any brand today and attempt to pay for their merchandise, they may have three different experiences at the point-of-sale (POS): the ability to insert their EMV chip-and-signature or chip-and-PIN card into the device; tape over the EMV chip reader with a sign saying “Coming Soon;” or a device without an EMV chip reader requiring a customer to swipe their credit or debit card th the old-fashioned way. Such is life one ye year since the EMV liability shift deadline has passed. EMV — an acronym acrony for Europay, MasterCard and Visa, the three companies that t originally created the security secu standard — is intended to require a chip on a credit car card or debit card to hopefully redu reduce fraud instances at the POS. EMV cards also can become mor more potent in their ability to thw thwart fraud when combined with tokenization, which uses othe otherwise useless “tokens” instead of a customer’s real informat information during the payment process. Certainly progress has been made in the year since the EMV liability shift deadline. According to data from Visa Inc., 326 million Visa chip cards were in circulation as of June 30, with one in every $4 paid in stores with Visa cards using a chip card at a chip terminal. Chip card technology also continues to have a positive effect on counterfeit fraud. At chip-ready merchants, counterfeit fraud fell by 35 percent in March 2016 compared to a year earlier, Visa’s research shows. State by state, New Jersey leads the nation with the highest percentage of chip-ready merchants, followed by Pennsylvania, California, Connecticut and Florida, each of which has more than 30 percent of merchants accepting chip cards in their state, Visa revealed.
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Conversely, Utah, Oklahoma and Texas have the lowest number of chip-ready merchants, ranging from 20 percent to 24 percent of retailers currently deploying chip-ready POS terminals here. So, why is the number of chip-ready merchants still so low one year following the liability shift deadline of Oct. 1, 2015 — the date upon which convenience store retailers needed to upgrade to EMV readers at the POS to avoid being held financially y responsible for fraudulent transactions involving EMV MV chip cards at magnetic swipe readers? s? Suresh Dakshina, akshina, co-founder of Chargeback Gurus, cites four reasons: • Small-business ness owners, already stretched thin, n, do not have the time and can’t put in the he effort to learn about and implement nt EMV-capable solutions. • Retailers resistant esistant to new EMV technologies and software requirements being pushed their way are taking the “iff it ain’t broke, don’t fix it” approach. h. • Retailers are re reluctant to re-train staff — as well ell as educate customers — on how to perform a chip-enabled transaction. • Merchants are historically y used to a small numbers of chargebacks and consider it the cost of doing business. Therefore, they do not believe they are susceptible to fraudulent transactions. In most cases, c-store retailers are only liable for fraud chargebacks if a customer presents an EMV chip card at a magnetic swipe-only terminal. Many banks did not issue chip-enabled credit and debit cards until after the liability shift deadline, so retailers did not need to rush to upgrade their POS devices, noted Keith Jensen, principal of credit card processor Batch Out. “From my understanding, each chip card a bank issues costs $5, so just think about the expense on the part of the bank when you are talking about millions
The Present EMV Deadline Depending upon what day you are reading this, another important liability shift deadline just passed on Oct. 1 regarding ATMs. On this date, the owner of an ATM — whether it’s the c-store operator or a third party — had to update the terminal to accept EMV-ready debit cards. Similar to the EMV upgrading process
incur costs ranging from $300 to $1,300 per ATM, according to Lalani. If a c-store retailer needs to purchase a new EMVready ATM, the price tag generally begins at $1,900 and can reach several thousands of dollars, depending on the model. “You want to encourage retailers to look long-term,” said Lalani. “Making the investment now is a wise decision to protect yourself and your business because the liability
the black market and they’re withdrawing funds from someone else’s account. As an ATM owner, you would have no idea a theft occurred because the ATM did exactly what it was supposed to do.” And when fraudulent transactions occur, they’re usually not for small amounts like $20, Kuhn pointed out. “The fraudsters will withdraw money until the card or the ATM runs out of
at the point-of-sale, some ATM updates were not expected to be completed prior to the Oct. 1 deadline, Amin Lalani, principal at E-Machines, which services and repairs ATMs, told Convenience Store News. “Unfortunately, the process is going at a slightly slower rate than hoped for,” he said. “Bigger institutions have a timeline set up and can work the integration in, but many small and medium-sized mer-chants are not on a timeline. These institutions are likely to be the hardest hit by any fraud that occurs after Oct. 1.” Jason Kuhn, vice president of product marketing and planning at Nautilus Hyosung America, agrees not all ATMs were upgraded in time for the deadline, but he said many retailers are ready. Nautilus Hyosung America is the manufacturer of a majority of the ATMs located at 7-Eleven, Shell, and other branded retail locations in the United States. “When we compare the number of Hyosung ATMs running in the U.S. against the number of EMV kits we’ve shipped to date, we estimate that about 60 percent of the non-EMV ATMs have already been upgraded, or the EMV upgrade kits have already been purchased,” he said. “This is one of our biggest initiatives,” Kuhn continued, “and we’ve been working with our customers both large and small at every step along the way to ensure they’re making the necessary upgrades and have all of the information they need.” As with all EMV upgrades, money is a factor. ATMs that need to be simply upgraded to EMV readers can expect to
will fall completely on you as opposed to your competitor who made the upgrade.” Hoping fraud will not occur on non-EMV compliant ATMs is likely to yield poor results on the part of the retailer, he cautioned. “A lot of fraud that used to occur in other countries is now targeted toward us, because we don’t have this [EMV] system in place. It’s definitely something to be concerned about. With our clients, we are making our best effort to put a timeline in front of them and explain why the upgrade is important. Education is really necessary to mitigate any risk that comes to a business that is thinking more short-term than long-term.” Kuhn agrees the ATM EMV liability shift deadline is nothing to joke about. “Some retailers falsely believe that they don’t have a ‘fraud problem’ and don’t take the liability shift as seriously as they should,” he stressed. “The ATM is designed to validate that the PIN associated with the card swiped is a valid match, and then dispense the requested funds to the cardholder. The problem occurs when the person using the ATM isn’t the actual cardholder; they’re a bad guy who purchased stolen cards and PINs on
cash,” he said. “As a result, tens of thousands of dollars can be lost in a single day at a single ATM.” As the number of EMV-compliant ATMs grows, the probability of fraudulent withdrawals at the remaining non-compliant ATMs will increase, according to Kuhn. He concluded by offering the following advice: “Make sure your ATM is properly upgraded. Retailers must work with their vendors to get ahead of the deadline. EMV has been a challenge for every part of the payment ecosystem, and a lot of the players have been learning as they go. It’s not as simple as just installing a new card reader. If the ATM is not properly configured, transactions that would be EMV will fall back and default to the magnetic stripe. “Work with your service providers and ensure the ATM’s EMV is properly configured to accept EMV transactions for all the Application Identifiers (AIDs) your processor has certified. Additionally, EMV readers require more cleaning that traditional magnetic stripe readers. EMV-specific cleaning cards are available and should be used regularly.”
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of cards,” Jensen said. “[Store] owners did not want to purchase the machines or pay for the development of an integration to a new software, so retailers have taken a wait-and-see approach.” The time it takes to process an EMV chip card transaction — anywhere from eight seconds to 35 seconds — has also been a discouraging factor for retailers, Jensen pointed out. “And that’s if [the transaction] doesn’t fail. I’ve seen instances where it has taken as many as six attempts for a transaction to go through,” he said. “In fact, I saw a chip-enabled debit card have so many problems that the retailer actually asked the customer if she could go to the ATM machine and take out money instead.” Above all else, though, it comes down to the mighty dollar. “People don’t like spending money,” said Ed Levin, CEO of International Point of Sale, a seller of POS systems. EMV upgrades can cost anywhere from $200 and up, while a new POS terminal can run in the four-figure range. “Customers have started to receive their chip cards in the mail and some are asking merchants about EMV readers, but a lot of [consumers] still don’t care. What [may move the needle for retailers] is a lot of credit card processors are sending out letters telling them they need EMV readers or will be liable [for fraud],” he said. Hence, some groups of retailers are “starting to come around” and upgrade to EMV-ready devices, said Levin. “Restaurants are still OK with magnetic swipe cards because they take the card from the customer and swipe it themselves. But at convenience stores and quick-service restaurants, it’s more of a need for a chip reader to be there.” FALLING INTO PLACE
James Hervey, director of product management for Verifone Inc.’s petroleum solutions, stressed that retailers are not adverse to upgrading to EMV transactions. Many have installed chip-card readers, but that is only one step in the long process to actually accepting EMV payments. “At this point, most of the industry has installed EMV-capable devices inside the store. So, when you enter a convenience store, the [POS] terminal should have a card slot that you could put an EMV card in,”
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EMV chip card transactions can take anywhere from eight to 35 seconds, a discouraging factor for some retailers.
Hervey said. “The real problem is it’s a long process to get to the field.” The steps in the process include: 1. Card associations (Visa, MasterCard, American Express, Discover) needed to determine EMV implementation for the U.S. and issue instructions to processors for both issuing and acquiring about how they were going to implement EMV. 2. Processors must then take this information and implement it into a specification. 3. POS providers then need to make changes to their system in order to implement new processor specifications. 4. POS devices need to be tested and certified. “Also, if a major oil company [owns the POS device], they want to do a user acceptance test to make sure everything works for their end-customer,” added Hervey. “They need to be beta tested, field trialed, and then blessed to be rolled out.” One reason certifications have taken so long in the past year is that literally every POS application combination has needed to be recertified using existing resources, according to Michael Tyler, senior director of global petroleum marketing for Verifone. “It was really a logjam to get through that certification process,” he said. The good news is that all of these aspects have finally begun to fall in place. “We are very close to the point where all of these parties are ready to go with EMV,” Tyler noted. “Most oil companies have announced their EMV rollout plans to their constituents. It feels like the industry is very close to rolling out EMV industrywide.”
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The Future EMV Deadline Something a year away may seem very far off. In some instances, it is. But in the case of next year’s EMV liability shift deadline at the forecourt, it’s already starting to get late for convenience store retailers in regards to getting their automated fuel dispensers ready. In fact, Tim Weston, senior product manager for payment at Wayne Fueling Systems, told Convenience Store News that c-store retailers just beginning to upgrade their automated fuel dispensers will have to play catchup to meet the Oct. 1, 2017 deadline. And that’s not even factoring in the sheer cost of the upgrade for retailers. Trade association Conexxus projects the c-store industry will shell out a total of $3.916 billion to upgrade or replace more than 700,000 fuel dispensers by October 2017. The costs of forecourt EMV upgrades are so high that “some stations are just going to duct tape the card slots on the old machines and say come inside and pay,” remarked Coulson Oil Co. Inc. Chairman Mike Coulson. The number of technicians available to physically complete pump EMV upgrades is another serious obstacle to completing the necessary upgrades in time. “Most large petroleum retailers in the U.S. are developing plans to complete EMV upgrades for their network prior to the liability shift date. However, as we continue to approach October 2017, a key challenge facing them is a much higher demand on industry resources to support site installations and upgrades,” explained Luke Grant, director of payment and marketing applications for Gilbarco Veeder-Root North America. For this reason, many retailers have started their EMV upgrades early to ensure they are fully prepared in advance
of the liability shift, he said. “It’s going to be a challenging process, will be expensive and may take longer than we expect,” said Keith Gardiner, IT manager for Chevron Corp.’s Americas Product Business Unit. “[But] we will get through this and hopefully will get done by [October] 2017.” All this doesn’t mean progress isn’t being made. Industry insiders report a greater momentum around the forecourt deadline than there was around the pointof-sale deadline.
Those who selected not to upgrade to EMV POS dispensers have already faced some chargebacks, leading to a pique in interest on the part of c-store retailers, many of whom have said they want to be EMV compliant at the forecourt by next year’s deadline, said Wayne’s Weston. “Unlike indoor [EMV upgrades], folks are saying they don’t want to take a waitand-see approach,” he relayed. “So, we are seeing a sharp uptick in retailer discussions and planning meetings, whereby they are looking at 2016 and 2017 budgets to see if they can make outdoor upgrades.” C-store retailers currently purchasing new automated fuel dispensers are overwhelmingly selecting to have EMV card readers in them, even if they don’t activate the EMV function, according to Weston. The main reason not to activate yet is software updates. Additionally, he reports a major change being seen is an uptick in retailers wanting to actively deploy upgrade kits for existing dispensers. “This way, retailers
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can pre-deploy the hardware and work through the software integration with their POS provider,” he said. “A lot of folks are saying they want to go ‘lights on,’ meaning they’ll be ready before October 2017.” When debating a new dispenser vs. an EMV upgrade kit, Weston offers these rules of thumb: • 2009 and newer automated fuel dispensers often have a PCI-compliant secure platform. If you fall into this category, upgrades are likely less than $2,000 per pump. • Early 1990s-2008 dispensers likely need a PCI secure platform upgrade, as well as an EMV upgrade. These upgrades range from $4,000 to $6,000 per pump. • 1980s and earlier fuel dispensers most likely need to be replaced. This price tag ranges from $10,000 to $20,000 per pump, depending upon what bells and whistles and technology retailers want included in the pump. If c-store retailers shell out this cash and make the necessary upgrades to EMV fuel dispensers, one question remains. Will it prevent fraud? Gilbarco’s Grant says the answer is “yes.” “The forecourt continues to be a target for fraudsters, as it’s much easier to use counterfeit cards and install skimming devices at an unattended terminal like a gas pump,” he concluded. “While I don’t have recent statistics for the U.S., in other EMV markets, we saw increases in fraud at sites that did not upgrade for EMV as fraudsters shifted their focus to less- protected retailers. “The shift to EMV transactions at the pump will help to combat counterfeit fraud and will also reduce the value of any skimmed data. EMV-capable payment terminals for the pump also bring additional security technologies, like encryption, to help combat fraud.” CSN
TECHNOLOGY Enterprise + POS + Digital + Payment Systems + Business Intelligence
Profiting From Your Mobile App C-stores must focus on engaging customers via games, promotions, coupons and more By Tammy Mastroberte
obile apps continue to explode on almost every type of electronic device, from tablets to smartphones to today’s new televisions. No matter what consumers are looking to do, they can find an app to help them do it. Convenience store retailers have been in the app game for the past few years, with many evolving their apps from location finders and gas price updates to mobile payments, games and tying in loyalty rewards. But like all customer engagement technology, simply offering an app does not guarantee success. The goal is
Increasing store traffic for its marketers is the goal of the Club CITGO app.
to keep customers coming back to the app, and eventually roll this engagement into increased store visits and increased spending. “The main goal if you are going to invest the money to create and maintain an app is for it to be something the end user has a good reason to engage with on a daily basis,” said Jonathan Stark, a Providence, R.I.-based author and mobile strategy consultant who has worked with companies including CVS Pharmacy and Staples. “For a lot of retailers, this is not realistic. But for c-stores, it makes sense because someone might stop in every morning for coffee, or as part of their daily routine.” Many c-store chains partner with mobile app companies to develop and integrate their apps. For example, Casey’s General Stores Inc. and QuickChek Corp. both work with OpenStore by GasBuddy, while Rutter’s Farm Stores and Kenjo Markets have teamed up with Verge Retail. Other c-store chains, when starting a loyalty program, will work with their loyalty provider to create a mobile app. This is the route CITGO Petroleum Corp. took for its Club CITGO app. “The Club CITGO app framework was created by Outsite Networks Inc. and is tailored to meet specific CITGO needs,” explained Alan Flagg, assistant vice president, supply and marketing for Houston-based CITGO. “The customization allows [our] retailers to receive all the benefits of the program, while making it unique to each of their retail locations.” TANGIBLE RESULTS
C-stores want to not only offer convenience via their app, but also want to drive tangible results such as deal and coupon redemption, increased store traffic and increased sales. The key to achievement is engaging users to visit the app often. “Coupons, deals, savings, surprises and games can all drive engagement if it’s the right kind,” advised
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Mike Schneider, chief marketing officer at OpenStore. “Experience is the new channel. Before it was a coupon or offer on a website or in an app. Now, it’s not just about having the functionality, but how and when it’s presented.” One way CITGO is driving results through its app is by requiring customers to check-in to utilize the deals and promotions offered, Flagg said, including entering sweepstakes. “Increased store traffic is our biggest benefit, as the app requires check-ins at CITGO locations in order to take advantage of many of the discounts, sweepstakes or other promotional offers,” he noted, adding that the 2016 national promotion is the Ultimate Road Trip Sweepstakes, where consumers can enter by checking in with the CITGO app at any CITGO location to win a Jeep Wrangler Unlimited Sport, plus $5,000 cash, gas for a year or CITGO gift cards. “And increased traffic leads to increased sales on both c-store products and [our] TriCLEAN gasoline.”
“Checking in” at CITGO locations unlocks rewards for users of the Club CITGO app.
Checking in allows customers to access additional rewards, and they are engaged with discounts and coupons for gasoline. CITGO partners with local event venues as well, whereby customers can be rewarded by attending an event via bounceback coupons to the CITGO retail location. Since launching its app in January 2015, CITGO has experienced increases in app users and engagement per location year over year, and the redemption rate on rewards is more than 50 percent, according to Flagg. Like CITGO, QuickChek, based in Whitehouse
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“Just like you have to get customers to walk through the door to the store, you have to give them a reason to open that app in the morning.” — Eric Rush, QuickChek Corp.
Station, N.J., and operating 140 locations, also launched an app in early 2015. Since then, the retailer has continually evolved and updated its app to offer customers more, and increase overall engagement. The goal when launching an app was to add mobile foodservice ordering, but the chain worked to build a base of users first. This past March, QuickChek added the app ordering as an extension of its in-store ordering system, said Eric Rush, digital marketing manager. “Customers can place an order and choose when they want to pick it up in the store,” he explained. “They can then shop the store and pay for it all.” QuickChek started mobile ordering with just breakfast subs and salads, but now it’s rolled out for the chain’s entire foodservice offering, including hot and cold smoothies. Currently, customers pay in-store rather than in the app to encourage instore shopping and increased baskets, Rush shared. The chain worked with OpenStore on the app and Expedian, its in-store ordering company, created the mobile ordering piece. Customers can also interact with the QuickChek app through games. It launched with a bubble pop game, where users can win a prize if they match three things. The retailer has also added a slot machine game. These are both very popular, with 3,200 to 3,500 people per day playing the games alone, according to Rush. “Our app engagement is really high, with 50,000 actions per week, and just loading the app counts as an action,” he said. “The app really turned into a direct line of communication with the customer, and we have received a lot of feedback on it. We were able to significantly improve our direct-to-customer feedback interaction.” Another OpenStore customer, U.S. Gas, based in Fenton, Mo., and operating 19 U-Gas locations, also finds the game feature on its app the most popular among users. U.S. Gas offers prizes as a traffic driver, at times partnering with vendors to offer a free product. The prizes have a high redemption rate of 75
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percent, and customers will often pick up something else while they are in-store claiming their prize, explained Rodney Moentmann, pricing and business development manager at U.S. Gas. The U-Gas app launched in March of this year, along with a Dirt Cheap app for the company’s liquor stores. The U-Gas app provides real-time fuel prices, games, exclusive giveaways and contests, and deals and promotions, such as packaged beverage deals and twofers, according to Lisa Merlotti, marketing coordinator for the company. It also allows the chain to capture more customer data.
granular, those who redeemed an energy drink coupon. “I won’t send a Monster energy coupon to every customer because not everyone is interested in that, so we are gathering the data now to do more targeted campaigns in the future,” Moentmann said. Gathering data first to create a robust and segmented list can help with targeting promotions in the future, according to consultant Stark. Gathering data, looking for patterns and drilling down to a granular level can help target the right promotions to the right customers, thus increasing effectiveness overall of the app. “You can drastically increase effectiveness by sending relevant stuff,” he noted. CITGO keeps an eye on the effectiveness of its app using a variety of analytics, including engagement, redemptions, check-in frequency at the store level, and other activity-based metrics. “The ROI is measured based on funded deal payouts vs. cost of participation,” said Flagg. THE FUTURE OF APPS
U.S. Gas’ U-Gas app features elusive giveaways, contests and games.
MEASURING THE ROI
At QuickChek, more than 113,000 people have downloaded the app since its launch, and the chain utilizes push notification for coupons and weekly deals, as well as in-store beacons so they know when customers are at one of their locations. Through the OpenStore dashboard, the retailer can see the number of delivered coupons, if it was opened, and how many were used at the point-of-sale to measure the effectiveness. “We measure ROI [return on investment] with coupon redemption and market basket, as well as iTunes and Google Play ratings, user downloads, how often people engage with our app, and the clicks they make within it,” Rush said, pointing out that now with the addition of mobile ordering, they can track what food is being ordered as well. U.S. Gas also looks at coupon redemption as a direct measure of effectiveness, along with game usage and overall app activity. The OpenStore technology allows the chain to tag customers and segment them into groups — for example, those who redeemed coupons or, even more
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Although retailers in the c-store industry are at various levels of advancement when it comes to app development, all of those in the app game have room for additional enhancements in the future. “I see apps becoming more seamless and more experience oriented, and I see location-based services, beacons and near-field communication becoming more tightly integrated with them,” OpenStore’s Schneider predicted. QuickChek just launched its full foodservice menu with ordering via the app, and is looking into possibly adding a mobile payment component in the future. “Ultimately, we want to get users to make our app a part of their daily routine, and we are always thinking about what else we can provide, based on internal and partner discussions and customer suggestions,” said Rush. His advice to other c-stores is to treat their apps like a mini-store, and make sure it always offers fresh and new things. It could be as simple as creating a game, but it has to be something fun that customers can engage with. “Just like you have to get customers to walk through the door to the store, you have to give them a reason to open that app in the morning,” he shared. U.S. Gas is focused on driving downloads and app engagement, but would like to incorporate its loyalty program with Kickback Rewards into the app in the future. The retailer is also looking at mobile payments and incorporating ordering into the app at some point, said Merlotti. CSN
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Skimming in the Spotlight Criminals have become more effective at perpetrating pump fraud, but there are solutions By Brian Berk
t is unlikely that many daily newspaper readers went this past year without seeing at least one story headline involving a skimming incident. Skimming entails criminals inserting an illegal device to capture customer credit card and debit card information at the pump or ATM. Several convenience store chains have been hit by this bug at the pump, including Casey’s General Stores Inc., Par Mar Oil Co., Circle K Stores Inc., Virginia’s Speedy’s Mart, and 7-Eleven franchised locations, to name just a few. Statewide sweeps likewise have uncovered plenty of skimming devices at the pump, including 103 devices found at Florida c-stores across 29 counties last year, and six devices found in New York State earlier this year. Even more recently, the Arizona Attorney General’s Office conducted an investigation Aug. 1-12 that turned up 12 skimmers at the pump — this compared to 11 skimmers the office found during the entire year of 2015. Skimming is such a big concern that Gray Taylor, executive director of Conexxus, a nonprofit, memberdriven technology organization, has called skimming one of the convenience and fuel retailing industry’s two biggest concerns and “something that must be fixed.” Conexxus is dedicated to the development and implementation of standards, technologies, innovation and advocacy for the convenience store and petroleum market. At the Conexxus Annual Conference in May, Taylor revealed skimming is so worrisome that he spoke to the U.S. Secret Service about the problem. “They feel we haven’t done anything [to fix the problem],” he said. “We spent an hour and a half showing them we did.”
WHY ALL THE ATTENTION NOW?
Skimming is certainly not a new phenomenon. In fact, Convenience Store News has reported on this problem dating all the way back to 2010. So, why has skimming
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reached a near-crisis level in the past 12 to 18 months? Christopher Ingram, attorney at Vorys, Sater, Seymour and Pease LLP and an expert in the field of skimming, believes it’s because things have changed over the past few years making these illegal devices even more dangerous. “Skimmers are not new. Retailers have had to guard against skimming for several years now. However, in the context of unattended points of sale like fuel dispensers, we’re seeing a perfect storm for skimming,” Ingram told CSNews. “Now, with advances in technology, it is no longer difficult to obtain the technology needed to build a skimming device online. “Additionally, with the recent push to upgrade PIN pads inside stores to accept EMV chips, these new PIN pads generally contain improvements that thwart skimming. As a result, the older technology in fuel dispensers has become the low hanging fruit for cyberthieves,” he added. Criminals are definitely getting more advanced when it comes to skimming. Chris Warren, a police sergeant in Marana, Ariz., told one local news outlet: “What we’re seeing is they are actually opening up the pumps themselves and putting their devices on the inside, connected between the card reader and their computer.” Another major change to skimming fraud recently is the ability for criminals to steal data via Bluetooth technology. Hence, they no longer need to be on-site at
a gas station; they can steal data from a nearby car or hotel instead. This newest wrinkle manifested itself at four Exxon-branded gas stations in the Dallas area in August. Dallas Police Department Lt. Tony Crawford told local reporters that Bluetooth technology not only allows criminals to be off-site, but also allows credit card and debit card data to be stolen instantly, making these criminals much tougher to defend against. “They can do it in a split second; put it on. So they obviously have knowledge of the pumps,” he noted. When trying to determine whom criminals may target, Ingram advises looking first at the path of least resistance. “Criminals do not discriminate among their victims. Older dispensers that lack the anti-tamper technology are obviously more susceptible to tampering,” he said. C-STORES FIGHTING BACK
Fortunately for consumers, several c-store chains are taking skimming seriously, including Maverik Inc. and Ricker Oil Co., which recently invested $150,000 to combat the problem. “Skimming is a major concern,” said Jay Ricker, chairman and founder of the parent company to Ricker’s convenience stores. “Fortunately, in our case, we have been able to find [the skimmers] at our locations before thieves were able to pull the data off. We’ve had five skimming device attempts in three months at our network of more than 50 stores.” According to Ingram, effective methods retailers have taken to combat skimming include: • Re-keying locks on the dispensers so they have unique locks. • Installing anti-tamper devices inside the dispenser. • Upgrading dispensers’ payment card terminals. • Installing security cameras in an inconspicuous manner. • Using anti-tamper tape that reveals when the dispenser has been opened. He also offered the following advice for those looking to combat skimming at the pump: “Operators should create an inspection protocol and ensure that dispensers are inspected on a regular basis. Associates should be trained to know what they are looking for, and to know what steps to take if a skimmer is detect-
ed. Installing customized, anti-tamper tape on fuel dispensers can help provide immediate visual clues during an inspection. Ensuring that video cameras can provide footage that will show if a dispenser is opened is another measure that can be taken, particularly for those dispensers located on the store’s perimeter or those that are not otherwise in the associates’ view from the store.” Help in thwarting skimming can also be found in materials from NACS, the Association for Convenience & Fuel Retailing, and The Pinnacle Corp., which jointly created the SkimDefend app, available for free download on Apple and Android smartphones. The app works alongside tamper-evident NACS WeCare decals, which can be purchased at www.nacsonline.com. These decals help retailers identify potential security breaches when fuel dispensers or other unattended PIN-entry devices are opened to install skimming mechanisms. Of course, the ultimate way for a consumer — and, in effect, a retailer — to defend against skimming is to pay for fuel transactions with cash. Customers thinking mobile payment and digital wallets are an effective anti-skimming method could be out of luck. According to several media reports, Samsung acknowledged its Samsung Pay mobile wallet service is susceptible to wireless credit card skimming, although it characterized the chances of such an occurrence as “highly unlikely.” ATMS PROBLEMATIC, TOO
With a couple of exceptions, the news headlines around skimming in recent months have focused on skimming at the pump. However, retailers also need to be on the lookout for skimming at their ATMs, albeit a lesser problem at c-stores due to constant camera surveillance. Conexxus, NACS and the National ATM Council (NAC) in August debuted their jointly developed ATM Skimming Detection & Deterrence Guide for use at U.S. convenience stores. A copy of this guide can be found at https://www.conexxus.org/wecare/atmskimming. “Conexxus thanks NAC for working with us to develop the guide. Our two organizations recognize the increased near-term potential for card skimming at all POS/ATM terminals with U.S. EMV deployment, and we wanted to proactively address this threat here — as we have with fuel island payment security — and maintain a continued skimming-free environment for our ATM customers going forward,” said Conexxus’ Taylor. CSN
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Australia’s convenience stores are growing through innovation By Don Longo
espite operating in a competitive retail environment, the convenience store industry in Australia has for the past four years outpaced the growth of the grocery channel in that nation through a focus on innovation and communicating a clear value proposition. In a special report exclusively for Convenience Store News, Australasian Association of Convenience Stores (AACS) CEO Jeff Rogut said its convenience channel’s performance — highly credible against the backdrop of tough retail conditions in recent times — owes much to the focus of retailers and suppliers to enhance the quality of the stores and the offer within. Plus, of course, the innovation that has underpinned the evolution of convenience stores in Australia. “As an association, we are always reinforcing the fact that our convenience operators and their many employees have every reason to have confidence in the industry. The focus on innovation in recent times has paid dividends in terms of sales performance and customer-service outcomes, and there’s no reason this can’t continue,” Rogut told CSNews. “For instance, the performance of emerging categories like coffee and food-to-go have provided significant growth to the industry, with scope to build on this in the future,” he continued. “Our industry has
AT A GLANCE:
Comparing the U.S. & Australian C-store Industries U.S. C-STORES
Total Sales Fuel Sales In-Store Sales No. of Stores In-Store Gross Profits Foodservice Sales Cigarette Sales
$602.9 billion (-14.4%) $389.9 billion (-22.2%) $213.0 billion (+4.9%) 154,195 (+0.9%) $57.4 billion (+5.4%) $33.5 billion (+7.1%) $65.7 billion (+3.9%)
$19.9 billion (+1.9%) $12.0 billion (+1.8%) $7.91 billion (+3.7%) 6,042 (0%) $2.64 billion (+1.02%) $393 million (+13%) $2.97 billion (+5.2%)
Source: 2016 Convenience Store News Industry Report, 2016 AACS Industry Report
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Australia is served by more than 6,000 innovative convenience store retailers, including 7-Eleven Australia.
shifted its focus to tap into consumers’ increased preference for healthier, fresher options.” Australia’s convenience channel is fortunate to have more than 6,000 innovative national, as well as statebased convenience retailers, according to Rogut, such as Caltex Star Mart, BP, On the Run, APCO Easy Shop, 7-Eleven, Night Owl, EzyMart, and Coles Express. FOOD-TO-GO ON THE GROW
The emerging focus and subsequent growth in the food-to-go category, encompassing products such as sandwiches and cakes, is a significant win-win outcome for the industry. “The continued growth in food-to-go suggests that as convenience stores evolve their model to reflect consumer
BP and its Wild Bean Café are popular with Australian c-store shoppers.
preferences for fresh-food offerings, as well as healthier options, shoppers become more comfortable buying food in stores, which is a great outcome,” Rogut said. “The growth our operators have experienced in sandwich sales is evidence this format is establishing its rightful place in the convenience channel. By investing in a more enticing fresh sandwich offering, with fresh daily deliveries in some cases, retailers can ensure that grabbing a sandwich extends beyond restaurants, cafes and fast-food outlets,” he added. Food-to-go’s accelerating 13-percent sales growth in 2015 was led by three core categories: fresh cakes (up 28 percent), hot pastry (up 39.8 percent) and sandwiches (up 21.5 percent). Sandwich sales grew 9.2 percent in 2015, up from a marginal gain of just 0.1 percent a year prior. These numbers are from the most recent State of the Industry Report, compiled annually by AACS, which also showed convenience in-store sales grew by 3.7 percent over the course of 2015. Convenience sales have grown at a faster rate than the grocery channel each year since 2012.
“The need for operators to maintain a focus on the customer and optimize the performance of key categories has never been greater,” Rogut said. “Similarly, the need for our industry to continue to look overseas for new ideas, to understand how international trends in convenience might be replicated or interpreted for the Australian market, is essential.” TAKING A GLOBAL VIEW
AACS holds regular overseas study tours to provide a pathway for Australian convenience store retailers to keep on top of international trends and innovations in convenience. Rogut recently visited Japan courtesy of Seven-Eleven Japan to tour the company’s manufacturing facilities, witness new-product testing, visit stores, and understand the distribution process. (See “At the CuttingEdge of Innovation,” CSNews June 2016 issue.) “Our population in Australia is a fraction of the size of the world’s major markets, yet the lessons in convenience we can take on-board have real relevance here,” Rogut said. “For instance, convenience stores
Caltex’s Star Mart has 500-plus locations across the continent.
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The Coles supermarket chain operates Coles Express convenience stores.
in Japan receive up to three fresh-food deliveries per day, and these stores are recognized as a viable, even preferable, outlet for fresh meals.” On the other hand, he added: “Our industry in Australia is thriving despite our smaller population and, in some areas, overseas countries can learn from our successes.” LEGAL TOBACCO STILL HOT
While new products and a fresh focus have opened up new revenue opportunities for Australian convenience stores, traditional performers like tobacco still play an important role. While other countries continue to debate the merits — or otherwise — of tobacco plain packaging, the ineffectiveness of the policy, as well as excise increases in Australia, have been reinforced with the strong performance of legal tobacco, according to AACS’ chief. The association’s latest State of the Industry Report showed that sales growth for tobacco was still in positive territory at 5.2 percent, with the category contributing around $3 billion in convenience store sales in 2015. Tobacco accounted for well over a third (37.6 percent) of overall sales over the course of the year
and, across all merchandise, remained the largest contributor to sales growth by far. Regrettably, however, the criminals behind the illicit tobacco market have “enjoyed” even greater growth since plain packaging was introduced. Plain packaging, along with the Australian government’s approach to a high legal tobacco excise, have made Australia one of the world’s most lucrative markets for illicit tobacco. The government collects no excise on the sale of illegal tobacco, missing out on $1.35 billion in lost tax revenue last year alone, noted Rogut. One in seven cigarettes consumed in Australia are sold illegally, according to the most recent KPMG research. FUEL VOLUMES TOPPED UP
Fuel, a leading sales generator unique to the convenience channel in the country, also continues to perform strongly. Fuel sales volumes grew in 2015 against a backdrop of fluctuating prices. According to the State of the Industry Report, volumes were up 1.8 percent for the year, as convenience stores continue to be the primary destination for fuel purchases. Even so, more significant growth was apparent in
Jack & Co. specializes in fresh food and barista-made coffee.
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Night Owl convenience stores feature a comprehensive grocery and fresh-produce offering.
A Subway sandwich shop is one of several eateries offered by OTR travel centers.
the average litres per transaction figure (up 7.9 percent), following a decline of 12.5 percent in the average price per litre in 2015. CONFIDENT IN CONVENIENCE
Rogut believes the industry’s strong 2015 performance as detailed in the AACS State of the Industry Report reinforces the value proposition of Australia’s convenience channel and the investment leading operators have made in innovation. “By maintaining a firm focus on customer needs and the customer experience, the retailers and suppliers in the industry continue to evolve and innovate
their offer for a bright future,” he said. Looking ahead, AACS plans to sharpen its focus on education, training and development for members. This will include keeping a close eye on international trends and, importantly, maintaining close ties with sister organizations in North America, Europe and Asia. “The AACS will also continue to advocate on behalf of our operators, many of whom are small businesses, across all areas and issues that impact their business and ability to compete — from tobacco regulation, food regulation and new taxes, pay and penalty rates, alcohol sales regulations, container deposit legislation and petrol theft,” Rogut concluded. CSN
A fresh but earthy design sets apart the Urbanista Café & Convenience concept.
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An Extra Dose of Convenience QuickChek debuts its first store offering both pharmacy and fuel By Danielle Romano
made-to-order sandwich, packaged beverage, chocolate for an afternoon pickme-up, fuel fill-up and a flu shot. While it may seem like an odd shopping list to some, to consumers in Beachwood, N.J., this is what a typical run to QuickChek could look like. Located at 533 Atlantic Blvd., QuickChek Corp.’s new 7,460-square-foot store ushers in A newly built, modern facility replaced an existing QuickChek store in Beachwood, N.J. an entirely new definition of “convenience,” as it is the first for the convenience store retailer to offer both pharmacy and fuel and provide a unique service that provided faster cusservices at one convenient location. tomer access, service and convenience than the typical With 10 stores featuring a QuickChek Pharmacy larger grocery store/pharmacy format,” he said. “Most and nearly 60 offering QuickChek-branded fuel in consumers choose a pharmacy because of convenience, its portfolio, the evolution to offering both services and as the New Jersey/New York leader in conveat one store was an easy transition, John Schaninger, nience, it was a natural addition.” the chain’s vice president of sales and marketing, told A QuickChek Pharmacy operates similarly to a groConvenience Store News. cery store pharmacy, representing a small percentage “We had an existing pharmacy store in Beachwood of overall sales, with hours of operation that mirror a where we have been providing excellent care and drugstore chain. However, there is greater opportunity service to the local community for many years,” he for QuickChek because it operates 24 hours a day. explained. “A location opened up nearby, which “In our case, all of our stores are 24 hours a day, allowed us to relocate to a new, modern facility with providing convenient access to over-the-counter medieverything QuickChek is famous for, including pharcines and other non-prescription products at any time, macy and fuel.” day or night,” noted Mike Wunder, director of pharmacy operations for QuickChek and a registered pharmacist. “Our stores also differ in that we are smaller A NATURAL ADDITION in size, making it much faster and more convenient. QuickChek is well-seasoned when it comes to providYou can park close to the entrance, and our pharmacy ing pharmacy services. The c-store retailer opened its first location with a pharmacy in Ewing, N.J., in 1980. department is closer to the front door.” A QuickChek Pharmacy accepts most major preThe addition of this service to its stores came natuscription insurance plans and provides immunization rally, according to Schaninger. vaccines for the flu, shingles, and hepatitis A and B. “[We decided] to enhance our convenience offering
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QuickChek’s pharmacies are designed to be more convenient, with faster service, than the pharmacies in drugstores and grocery stores.
Customers can also receive patient counseling and education, as well as blood pressure screenings seven days a week. The pharmacy comes complete with a full line of over-the counter medications, as well as health and beauty products and cosmetics. “Our customers recognize that our pharmacy team is different from what they experience in a typical chain drugstore,” Wunder explained. “Our pharmacists take the time to talk to our customers; they build a relationship and a level of trust that is important to our customers. While it seems like an odd marriage at first, our customer quickly realizes that a pharmacy in a convenience store can really make a lot of sense. It’s about convenience and service.” The customer-pharmacist relationship is created uniquely, too. Many of QuickChek’s pharmacists have been employees of the c-store retailer for multiple years. Within QuickChek’s 10 pharmacies, nine pharmacists have 25 years or more of tenure with the company. “Our focus is on building a caring relationship with our customer and providing the highest level of customer service in the market,” Wunder detailed. “We frequently hire pharmacists and other pharmacy staff based on recommendations from other pharmacy employees. … We have hired several pharmacists over the years through this relationship.” To determine if a location is the right fit for a QuickChek Pharmacy, the company analyzes demographics, residential population and competition in the market. The c-store operator also assesses whether the potential location has the square footage available to accommodate the pharmacy in the store.
and satisfy commuter customers on the go, as well as the local neighborhood and businesses. Close access to the Garden State Parkway is a “boon for commuters,” Schaninger noted. Open 24 hours a day, the Beachwood store features beverage offerings that earned QuickChek the award for Best Hot Beverages Innovator in the 2014 CSNews Foodservice Innovators Awards program. QuickChek’s hot beverage program includes fresh-brewed coffee, accompanied by a wide variety of lighteners and sweeteners, allowing each customer to customize their cup. The company’s handcrafted Q Café drinks can also be personalized. Foodservice offerings include QuickChek’s proprietary made-to-order subs and fresh-baked cookies, along with other immediate-consumption and takehome menu items. Customers in Beachwood also find at this location eight gasoline pumps offering QuickChek-branded fuel, outdoor seating for 16, and no-fee ATMs. Although the new Beachwood location has only been open since mid-July, Schaninger told CSNews that there has been an increase in customer traffic compared to the previously located store, due to the expanded pharmacy and fuel amenities. “Adding fuel to our format significantly improves the offer to our on-the-go customers, and the pharmacy is another big convenience,” the sales and marketing chief added. As for whether QuickChek has its sights set on opening any more stores in the near future offering both pharmacy and fuel, Schaninger said the chain is always looking for opportunities to add fuel to its legacy stores; if a situation presents itself, the retailer will assess it. Whitehouse Station, N.J.-based QuickChek currently operates 143 convenience stores (57 of which have fuel) in New Jersey, New York’s Hudson Valley and Long Island. CSN
FUELING THE CUSTOMER EXPERIENCE
Located on a highly trafficked road, the new Beachwood store gives QuickChek the chance to service
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Outdoor signage promotes the store’s dual pharmacy and fuel services.
Spotlighting major industry events
A Playbook for Profit McLane National Trade Show highlights new foodservice and technology offerings By Angela Hanson
ighting in the military and winning the Super Bowl may be a far cry from operating a convenience store, but there are more similarities than one might think, according to Chad Hennings, keynote speaker at the 2016 McLane National Trade Show, which took place Aug. 30-Sept. 1 in Grapevine, Texas. His speech was part of the annual event’s “Profit Playbook” theme, which encouraged attendees to plan and strategize for their business the way players and coaches would a football game. Hennings, who took part in 45 successful combat missions McLane National as part of the U.S. Air Force Trade Show and had a nine-year career in Aug. 30-Sept. 1, 2016 the National Football League, Grapevine, Texas discussed how his time in both organizations was part of a “pursuit of excellence” where the steps along the way made it meaningful; not just ultimately achieving excellence. He outlined how members of the convenience store industry could follow their own pursuit of excellence by embracing five key steps: vision, evaluate, train, plan and execute. The event also featured a panel discussion on the state of the c-store industry. The panel’s “starting lineup” included Thomas Briant, executive director and legal counselor for the Minnesota Wholesale Marketers Association; Jason English, managing director, equity research at Goldman Sachs; and Nik Modi and David Palmer, both managing directors for RBC Capital Markets. Discussion among the panelists focused on issues that retailers should be aware of and spanned a wide range of topics, from the potential of a future ban on flavored other tobacco products, to the impact of fresh foodservice on packaged products, to minimum wage increase laws possibly leading to more kiosk service. Briant also noted the greatest threat to retailers that sell tobacco is overly restrictive local regulations, and that “local is all
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The McLane Kitchen booth was equipped with a fully functioning kitchen to serve up samples.
about local” and area officials want to hear from local businesses that would be affected. Morning breakout sessions at the show provided even more education. Deon Johnson, vice president of customer technology for McLane, demonstrated the capabilities of the distributor’s new Premium Order Management Suite (POMS) for Android and Apple iOS mobile devices, which includes ways to increase efficiency and simplicity at a convenience store. “The number of things that take place at the store level is overwhelming,” Johnson said, adding the c-store industry is changing, and change comes from technology. He noted that some of the apps will be most useful after standard office hours, when c-stores are still operating but partner businesses may not be available to them. Retailers will also have the opportunity to preemptively correct errors, such as designating a standard order for an item if the operator neglects to create a specific order. POMS apps launching this year include the Delivery Tracker, which lets store operators stay alerted to the last known location of their delivery truck and the current status using Google Maps. “We understand that
This year’s McLane National Trade Show hosted more than 1,500 attendees and showcased 185 exhibitors on its expo floor.
your time is important,” Johnson said. Other apps include McLaneLink, a new dashboard alert and reporting tool that handles store data and planograms; McLane’s DSD app; and AirWatch device management. The apps are intended to aid chain and single-store retailers alike, regardless of their technical ability, according to Johnson. “We don’t care who you are, it should work,” he told Convenience Store News. “I feel like we’re on the right track because retailers are pushing us and pulling us in that direction. I think that makes a big difference.” During a “State of the Snack Food Industry” panel, Goldman Sachs’ English discussed the “global phenomenon” of snacks gaining share of food around the world, as baked and processed foods are losing share. Global snacking growth is poised to accelerate while packaged snack growth is expected to stagnate, and this is driven entirely by millennials, who are the next decade’s driver of food consumption growth, he stated. Although an entire generation has many internal differences and it is “unfair to put them all in one bucket,” millennials are around-the-clock snackers. In fact, 53 percent of their meals are actually just snacks, English cited. “The idea of three square meals a day died a long time ago,” he said. “Their consumption is different. Therefore, what they buy is going to be different.” ON THE EXPO FLOOR
The trade show exhibition hall featured a wide variety of c-store industry suppliers, many of whom were
showcasing healthier and/or less-processed products. Grab-and-go, convenience-centric items and extensions of already-popular brands were also prevalent. For the first time at any trade event, McLane featured a McLane Kitchen booth with a fully functioning kitchen designed to demonstrate the capabilities of the distributor’s program. Not a retail brand itself, McLane Kitchen facilitates foodservice using existing brands. Every hourly recipe demonstration cooked on-site at the show was made with products McLane Kitchen carries. For instance, retailers are encouraged to leverage the power of strong brands, such as offering a “General Mills Yogurt Parfait” made with strawberries, granola and yogurt. McLane Kitchen also assists store operators with packaging and other materials, and offers ways to customize store-branded cups at minimal cost, according to the Temple, Texas-based convenience distributor. Fresh produce was a focus at the show as well, in tandem with McLane’s collaboration with the Partnership for a Healthy America (PHA). The company’s first list of PHA-approved items will be released in 2017, according to company representatives. This year’s McLane National Trade Show also featured the debut of its newly renamed private label line to CVP (Consumer Value Products). The line was formerly marketed under the Salado Sales name. This move will include the debut of five new private label brands and provide an exclusive mix spanning 240-plus foodservice, automotive, candy, snacks, general merchandise, grocery, health, beauty and wellness products. CSN
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No Signs of Cooling Off The waning days of summer were hot for convenience and gas station industry M&A
hile preparing our latest update on the merger and acquisition (M&A) market during the waning days of summer, the marketplace in the convenience and gas station (C&G) industry was certainly showing no signs of By John C. Flippen Jr. & John Sartory, cooling off. Petroleum Capital and Real Estate LLC Alimentation Couche-Tard Inc. announced its mega-merger with CST Brands Inc. in a deal valued at $4.4 billion. The planned transaction represents the largest merger and acquisition the company has ever completed. But before detailing this and other deals, letâ€™s focus on the Brexit effect on global interest rates, United States central bank policy, the shifting corporate landscape, and select commentary from leaders in the industry. NEWS UPDATE
The Bank of England (BOE) announced shortly after voters in the United Kingdom decided in June to exit the European Union (Brexit) that it would commence with a new and aggressive program of monetary quantitative easing to lower market interest rates in the U.K. and hopefully stimulate the British economy. The BOE is basically betting that its new monetary program will offset the anticipated negative economic impact of the uncertainty surrounding Brexit. The BOEâ€™s action was just the latest in a series of monetary policy initiatives coming from European central bankers that quickly led to another fall in global interest rates. This downward movement in rates was the most recent sign of how central bank policies in the developed world are interrelated and have intensified a worldwide collapse in borrowing costs. The 10-year treasury yield in the United States has dropped from 2.27 percent on Dec. 31, 2015 to a historic low of 1.37 percent on July 8, 2016. The Wall Street investment bank, Morgan Stanley, recently predicted the
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rate may drop to 1 percent before the end of the year. The most startling news relating to these policies is that the total global volume of sovereign and corporate bonds with negative nominal yields now exceeds $12.6 trillion, according to data assembled for the Financial Times by the financial services group Tradeweb. This figure represents almost half of all debt in the western world. These international events are occurring as U.S. Federal Reserve Chairwoman Janet Yellen and the other members of the Federal Open Market Committee (FOMC) continue to debate and worry about the possibility of finally raising short-term interest rates in 2016 by a meager 25 basis points before the end of the year. This year started with many financial experts and the futures market predicting the Fed would most likely raise its short-term benchmark interest rate, the federal-funds rate, by 100 basis points by the end of 2016. The reality for the Federal Reserve is it is hard to raise interest rates in a world where everyone else is cutting rates and overall economic growth and demand is weak in the U.S. and elsewhere around the globe. While central bankers in the United States, Japan, United Kingdom and Europe continue to double-down on extraordinary monetary actions, actions many economic experts are starting to question whether ultra-low rates are really forcing households to save more of their income, not spend more. In addition, numerous financial experts and political leaders are starting to suggest that negative real interest rates in most of the devel-oped world have inspired in the business community confusion, risk aversion and, most importantly, only encouraged business consolidation. Many business leaders seem to lack the confidence needed to expand operations, invest in new plants and equipment, develop new products and create new jobs. In this unprecedented and seemingly never-ending period of ultra-low interest rates, the safest path to growth for many businesses is to grow revenue by acquiring a market competitor.
EXPERT’SVIEW These overall market trends are certainly prevalent in many segments of the C&G industry. RECENT TRANSACTIONS
Listed below is a brief overview of some of the recently announced or completed acquisitions that have occurred in the C&G industry in the second and third quarters of 2016. The level of M&A activity in the industry has certainly picked up over the past two quarters, led by Alimentation Couche-Tard’s blockbuster announcement of its merger with CST Brands on Aug. 22. During Western Refining Inc.’s second-quarter earnings call, CEO Jeff Stevens reviewed its recently completed acquisition of Northern Tier Energy LP and announced that the newly merged company planned to greatly expand its combined retail operation in the Midwest and Southwest sections of the U.S. The newly merged network now includes 400 convenience stores that currently operate under the SuperAmerica, Giant, Mustang, Sundial and Howdy brand names and 114 franchised locations that operate under the SuperAmerica LLC trademark. Western Refining has the financial wherewithal to become one of the newest corporate players in the M&A marketplace if the company follows through on its CEO’s statement. BW Gas and Convenience Holdings LLC, an affiliated company of the private equity investment firm Brookwood Financial Partners LLC, announced its growing chain of convenience stores that are currently concentrated in the Midwest section of the U.S. will be branded Yesway; introduced design plans for the new stores to the public; and discussed its goal of quickly upgrading the sites the company has already acquired. In addition, to add further credibility to its previously stated goal of acquiring between 600 and 1,000 convenience stores throughout the U.S. over the next several years, the company announced that Joe Petrowski, former CEO of Cumberland Farms and Gulf Oil, has joined the firm as a senior advisor and member of its executive committee. These moves may indicate one of the newest private equity players to enter the industry is really serious about developing a national convenience store brand and not simply focused on assembling a network of
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sites that can be quickly sold for a very nice return on its investment in a couple of years. Private equity players have come and gone in the C&G industry over the past several years. Only time will tell if this new investment group sticks to its stated strategic plan. In one of the most surprising announcements of 2016, privately held conglomerate The Guess Corp., which currently operates businesses that market such luxury merchandise as diamonds, fine art, yachts, private islands and jets, issued a press release in July stating it planned to acquire more than 1,000 convenience store sites over the next 12 months. In order to ensure the acquisition program will be successful, the company is planning to offer above-market compensation rates to real estate brokers who can locate potential acquisition targets. In addition, the company promises to pay sellers their full asking price and guarantees a quick closing process that could be as short as 72 hours. In August, The Guess Corp. also announced it had selected Scott & Cormia as its exclusive architecture firm to design the new upscale convenience stores that will be acquired and remodeled by the company. These dual announcements were met with a certain amount of skepticism within the industry.
In this unprecedented and seemingly never-ending period of ultra-low interest rates, the safest path to growth for many businesses is to grow revenue by acquiring a market competitor. TravelCenters of America LLC’s CEO Thomas O’Brien mentioned on the company’s second-quarter earnings call that given the current and ongoing seller expectations from a value standpoint, the company was going to be taking a break from its aggressive M&A activity over the past several years to concentrate on improving the performance of the 200-plus convenience store locations it has already acquired. The CEO also stated the company was willing to become more active again in the marketplace if pricing became more attractive. This decision is not too surprising given O’Brien’s comments in 2015 that multiples sought by sellers were out of whack in many instances, and the company would not overpay for
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EXPERT’SVIEW future acquisitions. Alimentation Couche-Tard announced its planned merger with CST Brands in an all-cash transaction for $48.53 per share, which equaled a total enterprise value of $4.4 billion in U.S. dollars including net debt assumed. Market analysts are projecting that Couche-Tard has agreed to pay somewhere between 10-11 times CST’s trailing EBITDA, before including approximately $150 million to $200 million in postclosing synergies in the final acquisition calculation. The acquisition price represented approximately a 42-percent premium for CST’s stockholders based on the share price prior to the company’s announcement in March that it would explore and review strategic alternatives to enhance stockholder value. Couche-Tard also announced the company entered into an agreement with Parkland Fuel Corp. to sell it a portion of CST’s Canadian assets after the merger for $750 million in U.S. dollars. Texas-based CST currently operates more than 2,000 locations throughout the United States and eastern Canada. In announcing this latest mega deal, market experts assume Couche-Tard won a bidding war that may have involved numerous private equity firms such as Apollo Global Management and Blackstone Group LP, 7-Eleven Inc., Marathon Petroleum Corp., OXXO Mexico (a subsidiary of FEMSA), and Lawson Inc. The two companies are planning to close the transaction in early 2017 and it is still subject to the approval of CST’s stockholders and regulatory approvals in the U.S. and Canada. Prior to CST Brands’ announced merger with Alimentation Couche-Tard, 7-Eleven and its wholly owned subsidiary SEI Fuel Services Inc. closed on the acquisition of 76 convenience stores in California and three in Wyoming from CST Brands for $408 million. This eye-opening acquisition price reflected 7-Eleven’s willingness to pay, on average, more than $5 million per site to expand its market share in the very desirable and high-margin California marketplace. The previously branded Corner Store sites are located throughout California, and the network extends from San Diego to San Francisco. The average per-unit purchase price paid by 7-Eleven indicates that larger corporate consolidators are still willing to pay a high
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multiple for a strategic acquisition located in an attractive real estate market. Global Partners LP completed and/or announced three transactions in the second quarter that strategically fit the new reality for many master limited partnerships (MLPs): their need to reduce the partnership’s overall level of leverage and increase liquidity, while simultaneously growing their revenue streams. In the first transaction, Global acquired a leasehold interest in 22 Shell- and Mobil-branded retail sites in western Massachusetts by entering into a long-term lease arrangement with the prior owner and operator of the properties, O’Connell Oil Associates. This type of acquisition financing allowed Global to minimize the amount of cash it needed to deploy at closing to acquire control of the retail assets and associated cash flow generated by the business. In the second transaction, Global raised cash by selling 30 of its existing retail properties to an institutional real estate investor for $63.5 million, while simultaneously entering into a long-term unitary master lease covering the same locations with the investor that purchased the properties from Global at closing. The company announced the cash raised by the sale-leaseback transaction with the institutional real estate investor would be used to reduce debt under the partnership’s revolving credit agreement with its lenders. Finally, Global announced it had entered into an agreement to sell 31 gas station and convenience store sites located in New York and Pennsylvania, which it had purchased in 2015 as part of the Warren Equities acquisition, to Mirabito Holdings Inc. Binghamton, N.Y.-based Mirabito currently operates approximately 75 convenience stores under the Mirabito, Quickway Food Stores, Convenience Express and Manley’s Mighty-Mart brand names. In addition, both parties agreed to enter into long-term supply contracts for branded and unbranded motor fuel products as part of the transaction. Miami, Fla.-based World Fuel Services Corp. completed its second major acquisition in less than a year when it announced the company had closed on the acquisition of two large petroleum distributors, PAPCO Inc. and Associated Petroleum Products Inc. (APP). Both companies are major suppliers of gasoline, diesel fuel, propane, heating oil, aviation fuel, marine fuel, lubricants and other related services to retail,
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EXPERT’SVIEW commercial, agricultural and residential customers in their respective trade areas. PAPCO is headquartered in Virginia Beach, Va., and services 15 states, with a market concentration in the Mid-Atlantic and Southeast regions of the U.S. APP is headquartered in Tacoma, Wash., and sells its products and services primarily in the states of Washington and Oregon. These two acquisitions of large, privately held petroleum distributors came shortly after World Fuel closed on its purchase of the equity interest in privately held Pester Marketing Co. and its wholly owned subsidiaries in the fourth quarter of 2015. At the time of the sale, Denver-based Pester Marketing owned a network of 57 convenience stores, two terminals and was a distributor of biofuels and lubricants to wholesale, commercial and agricultural customers. Sunoco LP, through two wholly owned subsidiaries, completed the acquisition of 32 convenience store sites, a fuel distribution business and other related assets via two separate transactions in Texas and upstate New York in June. The MLP acquired 18 convenience store sites, five Subway locations, a Tim Hortons quick-serve restaurant and three undeveloped parcels of land from Watertown, N.Y.-based Valentine Stores Inc. In a second transaction located in Texas, Sunoco LP purchased a motor fuel distribution business and 14 convenience store sites from Kolkhorst Petroleum Inc. The stores were branded Rattlers and operate in the Austin, Houston and Waco trade areas. These closings were followed up shortly thereafter with the announcement of two other acquisitions. Sunoco LP agreed to purchase Emerge Energy Services LP’s fuels business for $178.5 million, subject to final working capital adjustments. The acquired fuels business operates two transmix processing plants in Texas and Alabama that can process more than 10,000 barrels of transmix per day, and the associated terminals have more than 800,000 barrels of storage capacity. Finally, in August, Sunoco LP announced it had agreed to purchase six convenience stores and fuel supply agreements with 127 wholesale dealers and approximately 500 commercial customers located in eastern Texas and Louisiana from Denny Oil Co. Inc. for approximately $55 million. During Sunoco LP’s recent earnings call, CEO Bob Owens said the partnership would continue to be on
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the lookout for opportunities to add well-run assets in attractive trade areas and take advantage of the fragmented nature of the industry to drive growth for its unitholders. However, Owens acknowledged the partnership would like to lower its overall level of leverage and, as a result, this objective was causing it to be more selective in the M&A area for the time being. Florida-based private investment firm, Sun Capital Partners, decided to reenter the C&G industry in May by completing the acquisition of 130 Admiral-branded convenience store sites and nine Lemmen-branded retail locations from the privately held Lemmen Oil Co. and Admiral Petroleum Co. All the locations are in the Midwest section of the U.S. The companies did not disclose the terms for the purchase of the two related convenience store businesses, but as is common in many private transactions, most of the family members exited the industry after the closing. Sun Capital originally entered the C&G industry in 2006 through the purchase of the Marsh Supermarkets chain that also included a network of convenience stores. The investment firm subsequently completed a series of additional acquisitions of convenience store sites from 2006 to 2013 and eventually consolidated all the assets to form the VPS Convenience Store Group. By 2013, the VPS Group grew to include more than 400 retail sites throughout the Midwest and Southeast sections of the U.S. Sun Capital monetized its investment by selling all of its assets to Richmond, Va.-based GPM Investments LLC in two separate transactions that closed in August 2013 and the first quarter of 2015. It will be interesting to see how quickly Sun Capital will expand its latest retail platform in the C&G industry and what will be its long-term exit strategy. CSN John C. Flippen Jr. and John Sartory are managing directors of Petroleum Capital and Real Estate LLC (www.PetroCapRE.com). The firm provides buy-side acquisition, refinancing, capital restructuring and select sell-side advisory services in the convenience and gas station industry. PetroCapRE has assisted clients in completing transactions valued at more than $2 billion. They can be reached at jflippen@PetroCapRE.com and jsartory@PetroCapRE.com. Editor’s note: The opinions expressed in this column are the authors’ and do not necessarily reflect the views of Convenience Store News.
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Nothing Less Than 50/50 Better is not good enough. It’s time for gender parity in our leadership
arget Corp. CEO Brian Cornell and PepsiCo Inc. CEO Indra Nooyi are two of the smartest, most innovative leaders in the retail and consumer goods business. Their companies are brand icons, masters of consumer marketing, and trendsetters in talent management By Joan Toth, and sustainability. Network of As CEOs of Fortune 50 companies, Executive Women Cornell and Nooyi deal in big numbers. Target’s sales hit $73.8 billion last year, up more than $1 billion from the year before. PepsiCo’s food and beverage portfolio includes 22 brands that each generate more than $1 billion in annual retail sales. Now, they’re helping the Network of Executive Women (NEW) reshape the retail and consumer goods workplace and focusing on a smaller number: 50. Nooyi and Cornell are co-chairs of the NEW Future Fund, a two-year, $5-million capital campaign to support the goal of 50/50 gender parity. The fund will invest in new technology that will provide insights and analytics on the barriers women leaders face in
Convenience Store News is pleased to continue this series of exclusive educational columns by the Network of Executive Women (NEW), leading up to the 2016 CSNews Top Women in Convenience awards this fall. More than 60 female managers, executives and directors who work in the convenience store industry will be honored in the third-annual program. In addition to being a presentation sponsor for the Top Women in Convenience program, NEW
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our industry and will create powerful, new on-demand leadership learning, talent best practices, and community and engagement tools to address those barriers. LITTLE PROGRESS
Why are these two industry titans devoting their time and resources to the NEW Future Fund? Because despite the business case proving that women’s leadership improves bottom-line performance, there’s been little progress advancing women in the retail and consumer goods industry. Consider a few more numbers: Women make 64 percent of all retail shopping trips and make up 55 percent of our industry’s workforce. But they comprise just 27 percent of senior management in food and beverage (only 22 percent in retail). The industry — and the convenience store segment in particular — is not a first choice for college graduates, and is losing many of the highly trained emerging and mid-level leaders it already has. Nooyi says she is serving as the NEW Future Fund’s co-chair because PepsiCo needs to ensure women
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EXPERT’SVIEW have an opportunity to rise as far as their talents will take them. “We know that when we open the doors of opportunity to extraordinary women, businesses thrive,” she said. “PepsiCo depends on women. We depend on our female nutritionists and marketers to develop foods and beverages that meet the needs of today’s consumers. We depend on our female salespeople to understand the purchasing patterns and family dynamics to help them serve our key customers. And more broadly, we depend on women consumers. Women are the gatekeepers to many of the key shopping experiences today, so you need to win over female consumers. Otherwise, you’re not going to have a successful business,” Nooyi continues.
“There’s no question we’re making progress, but we still have work to do to achieve gender parity in the industry. It starts by continuing to build and support a culture of true workplace inclusion and an atmosphere that empowers women to be leaders and grow in their careers.” — Brian Cornell, Target Corp.
The power of women’s leadership is why PepsiCo has invested in programs that give women and men equal opportunity to advance their careers. With the company’s Pinnacle program, a senior-level female executive mentors five high-potential women. Another program, Lift, pairs senior leaders with young, highpotential female associates. ON TARGET
Cornell has seen firsthand the positive impact women’s leadership can make. At Target, women make up 36 percent of the board of directors and 45 percent of its c-suite, well above industry and external benchmarks. Almost half of its 1,800 Target stores — each with several hundred employees, generating tens of millions of dollars annually — are run by women. “There’s no question we’re making progress, but we still have work to do to achieve gender parity in
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“We depend on our female nutritionists and marketers to develop foods and beverages that meet the needs of today’s consumers. We depend on our female salespeople to understand the purchasing patterns and family dynamics to help them serve our key customers. And more broadly, we depend on women consumers.” — Indra Nooyi, PepsiCo Inc.
the industry,” Cornell says. “It starts by continuing to build and support a culture of true workplace inclusion and an atmosphere that empowers women to be leaders and grow in their careers.” One effort: Target’s Women’s Business Council, which engages women through mentorship and career counseling. The council also does male advocacy work, supports Target’s women-owned vendors and suppliers, and engages Target board members in the conversation. “Encouraging these kinds of activities as a part of our workplace culture is helping us close gaps, foster equity and create opportunities for all leaders,” Cornell said. PepsiCo and Target are the fund’s initial corporate sponsors and others have already pledged their support. Every member of the NEW Board — comprising leaders from some of the industry’s largest companies including Ahold, Chevron, Delhaize, The Hershey Co. and The Coca-Cola Co. — has already pledged their personal financial support. These industry leaders agree: We’re in a highly competitive, low-margin industry, and talent is the difference between success and failure. Led by industry executives, driven by NEW members and powered by the NEW Future Fund, we can make retail and consumer goods the No. 1 industry for talent. To learn more, visit newonline.org/ournewfuture. CSN Joan Toth is president and CEO of the Network of Executive Women, Retail and Consumer Goods, a learning and leadership community representing 10,000 members, 750 companies, 100 corporate partners and 20 regional groups in the United States and Canada. 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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How to Create a Transferable Family Business These seven concepts will put you on the right path to protecting your value
y column in the September issue of Convenience Store News, “Golden Goose or Black Swan?” presented the observation that many family-business owners are not adequately prepared to transfer their business. The article addressed several reasons why business transition planning is important for business owners who want to safeguard the future value of their enterprise. This month’s column follows up on the “why you need a business transfer plan” discussion by posing a new question: How do you create an effective business transfer plan? Below, I outline seven concepts. These By James J. Kirlin, Private Capital “how to” steps can bolster the long-term Solutions Group transferability of your business. Although challenging, they will hopefully inspire you to take the necessary measures to ensure your business will be transferable for the value you expect. CONCEPT 1: THINK ABOUT THE BIG PICTURE
Standing still in today’s business environment is not an option. At any time, unknown forces in the economy and your industry can put your business and wealth at risk. By taking the time to define your vision for both the company and yourself, you will have the foundation for meeting those threats. Without this, it is likely that you could remain trapped in your business, or not receive the value you expect when you exit. Whether you decide to keep or sell, what actions and decisions are you making today that: make you
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and the business ready for the future; protect owner value; and increase the likelihood of a successful transition to a new owner? CONCEPT 2: IMMEDIATELY BEGIN THE PLANNING PROCESS
It is critical to commit to an assessment and review planning process. Take a fresh look at your current strategic corporate and personal planning to uncover the threats, and also identify the opportunities that can make your vision a reality. There are four steps in this process: 1. Review your personal and business goals and objectives. 2. Determine your financial and mental readiness. (A personalized and confidential report that measures readiness is available at http://berireport. com/Survey/Register/91A6A461_8148.) 3. Explore and understand your transfer options. The alternatives include internal transfers (family, key executives, shareholders, etc.), external
A D VE RT O R I A L
Angelica Lasley Brand Marketing Manager Calbee North America
Calbee North America, a company with roots in Japan and a headquarters in Boardman, Ore., harvests the power of nature to make natural, delicious snacks that are healthier alternatives to traditional chips. The company’s lineup includes Harvest Snaps, Whole Cuts and an assortment of Asian-flavored snacks, which fit into today’s lifestyles and diets in many ways. Progressive Grocer: How are Calbee’s savory snacks on trend with what today’s consumers are looking for in snacking? Angelica Lasley: The United Nations has declared 2016 as “The Year of Pulses.” Pulses consist of lentils, dried beans and peas, and there are many benefits to eating them, particularly because they contain high levels of protein and fiber. Pulses can lower blood cholesterol levels, they aid in digestion, help you stay fuller longer and have a low glycemic index, which prevents blood sugars from spiking after eating. From a farming standpoint, they take less water to grow; they have a low carbon footprint and enrich the soil they are planted in. This makes pulses a cheaper and greener source of protein. Pulses are being touted as one of the principal ways in which we can reduce global hunger. Our Harvest Snaps are made from pulses with green peas, lentils or black beans as the principal ingredient. In fact, in our Lightly Salted Snapea Crisps, the green pea content is 70% of the finished product. The high percentage of the principal ingredients gives our product the maximum benefit of each pulse we use, making our snacks not only taste great, but provide a good source of plant protein and fiber, while offering less sodium and fat than traditional potato chips. At a time when consumers are looking for protein from different food sources, the plant protein in our snacks meets their interest and taste in a big-flavor way. PG: How do your new products reflect growing interest in bolder flavors and guilt-free snacks? AL: In the salty snack category, we are seeing a significant emergence of more global flavors.
As you can imagine, social and digital media has brought consumer insights from all over the globe – therefore new flavors that were once exotic are becoming mainstream (i.e., sriracha, exotic peppers, curries, etc.). Bold flavors generate excitement. Our Black Bean Harvest Snaps just launched in Mango Chile Lime and Habanero. There is a dearth of black bean snacks and we believe we have 2 flavors that are really tasty – and they offer 5 grams of protein per serving, 13% of your daily fiber, and less sodium than most snacks. Plus we believe this introduction will bring more male shoppers into the category. We pride ourselves on the fact that consumers can enjoy a really tasty and satisfyingly crunchy snack and still get the benefits of plant protein and fiber with less fat and sodium than traditional chips. For more information, visit http://www.harvestsnaps.com.
EXPERT’SVIEW (outright sale), and strategies for unexpected events such as death or disability. Each are tied to a different value strategy. 4. Review your financial, estate and wealth/investment plan. You should ensure this is aligned with your transition plan and family wealth plan. CONCEPT 3: DETERMINE VALUATION STRATEGIES
How much money will you need when you exit? With a majority of your wealth trapped in an illiquid business, how will you get your equity out if needed? You may discover the business may not be transferable tra for the value expected during duri lifetime or death. Understanding the value of your business and how ho it fits into your financial and estate planning is critical. Do you know what your business is really worth? You may know an approximate value, but b it can be misleading. Actual Act value will depend upon the t transfer method you cho choose to accomplish your business busin and personal goals. There are a number of valuation options available. They are directly affected by the purpose of the valuation, the transfer method available (i.e., employees, sale, shareholders, family), and/or type of buyer (strategic or financial). CONCEPT 4: EXPLORE INDUSTRY ACTIVITY & TRENDS
Evaluate the trends in your market to determine what future owners value in a company they may buy. Assess competitive position and comparable values within the industry; who may be available as a future owner; and consolidation trends. Gathering industry intelligence will contribute to your preparation for making decisions when opportunities appear. CONCEPT 5: MEASURE & MANAGE YOUR COMPANY’S OWNER DEPENDENCE
The value you receive for your business often depends on how much control you want to maintain. Reducing the level of your company’s dependency on you likely increases the value. For example, if you want to keep some control through a sale to executives or share-
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holders, then you are likely to receive a lower value than you would with a sale to an external buyer. CONCEPT 6: ATTRACT, KEEP & RETAIN EXECUTIVE TALENT
Talented executive managers are a value driver for your company. Determine where your key executives rank in terms of skill and ability to operate the business. Make sure you have the best people in place to help the business grow. Then, provide incentive-based compensation programs that align gn the executives with the company’s y’s goals and succession plan. Do not ot rely on salary and bonuses alone to keep them. CONCEPT 7: LEADERSHIP, COMMUNICATION TION & COLLABORATION RATION
Don’t go it alone. How often do you gather an advisor team together to review and make sure all of your planning is on n track to accomplish your goals? Conversations ions with your advisors, family and the executive team about your objectives j are essential. Take time me to learn about their expectations and concerns. Explore goals for the business and key strategic issues, including contingency plans for unexpected events such as death or disability. Also, you may want to consider working with an independent advisor who specializes in business transition planning. They have the experience to provide leadership and “quarterback” the process, in collaboration with you and your advisor team. Ultimately, when it comes to transferring a business, there are no easy answers. Every situation is different. I hope this column helped create a pathway for understanding what you can do to make your business more transferable in the future. 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.
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Clinton vs. Trump What each of their presidencies could mean for your P&L statement
rdinarily, this would be a good time during a presidential election cycle to do what we call a “side by side.” With a month to go in a normal campaign, voters have been given enough information to get a good sense of where the candidates stand on the issues important to them and, by now, business By Joe Kefauver, Align Public Strategies leaders should have a fairly clear picture of the impact both candidates could potentially have on their organizations and business models. But, as the saying goes, this is no ordinary time. Hillary Clinton and Donald Trump are busily laying out their positions on the issues — some in detail, some vague — and within the last several months, both have had to modify their positions at least leas once. This is called “clarifying” in campaign speak. For the issues affecting convenience store operators, some are crystal-clear and some are clear as mud. Also, it is important to note that issue positions designed to get a candidate across the line in November often appear different the following January when something called “governing” begins. But here’s what we think we know: Affordable Care Act: Trump says he will ask Congress to immediately repeal Obamacare on the first day of his administration. He plans to work with lawmakers to “implement reforms that follow free market principles.” What are those exactly? He has not said and it is entirely possible he does not know. His only definitive proposal on health care to date is allowing people to buy insurance across state lines. Hardly visionary. Clinton’s No. 1 health care goal
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is to “defend and expand” the Affordable Care Act, but ease the burden on small businesses. She has not been clear on how she expects to accomplish this in a Republican-controlled Congress. Hardly surprising. Minimum Wage: Here is a story of two flipfloppers. Clinton does not make her position on this simple to decipher. On the one hand, she repeatedly pledges support for the “Fight for $15” movement and says she would sign a federal bill that gradually raises the wage floor to $15 (in different parts of the country). Yet Clinton and her campaign website have said she prefers a $12 federal minimum wage as a floor. My guess is she can freely advocate for $15 an hour if elected, knowing it would ould never get through the House. Trump was against it before he was for it, and then against it and so on — like following the ball in a tennis match. As of Aug. 1, his campaign says ays Trump supports raising ng the federal minimum wage to $10 and he thinks states should set Photo by patrimonio designs ltd / Shutterstock.com any minimum beyond that. But with weeks to go, he is due for at least two more “clarifications.” Pay Equity: Trump has not committed to a proposal on this issue. Case closed? Not quite. His daughter Ivanka floored conservatives during the Republican National Convention by saying her father “will change the labor laws” and support equal pay and paid family leave. Unless Trump intends to turn the country over to his daughter, the candidate’s lack of a stated proposal and previous comments like, “You’re gonna make the same if you do as good a job,” show a lack of interest in changing labor laws. If there is any labor-related issue he actually takes an interest in as president, I think it may be this one. Clinton is on the record since her years in the Senate supporting a new
Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that handles national issues and multistate strategy for a portfolio of flagship clients including the country’s largest employers, Fortune 100 brands and national associations. For more information, go to AlignPublicStrategies.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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com t / Shutterstock.
ity by a slim margin. If that is the case, Speak Speaker Paul Ryan will be the lone Republican leader leade left standing and will be under tremendous pressure to cut deals o on progressive priorities including wage and benb efit proposals impacting impacti convenience store busibus ness models. Expect White House Hou policy to look a lot like lik a third Obama Administratio Administration: left-of-center proposals, uphill battles in Congress, but significant leveraging of the executive and judicial branches to achieve their desired outcomes. If, however, Trump wins, it almost certainly means Republicans kept their Senate and House majorities. That should give c-store operators some level of protection since Trump consistently demonstrates no real policy initiatives or agenda, especially with regard to issues impacting the profit and loss statements of retailers. His most recent wavering on immigration (once, his most hardened position to deport millions of people) proves, without a doubt, he has no fidelity to ANY policy. The “governing” of the nation in terms of a domestic economic agenda would be left to Speaker Ryan and Senate Majority Leader Mitch McConnell. While Trump is off “speechifying,” tweeting and “being Trump,” the hard work will be done by the traditional workhorse — a favorable Congress that Trump will let have its way so that he does not have to be bothered with the nitty gritty. As such, operators will probably have very few legislative and regulatory threats to worry about from a Trump administration. Their only exposure will be when undisciplined, random and often irresponsible statements or tweets send international allies running for cover, making world markets panic. We’re in for a whole different kind of ride then. CSN
Image by hafako
equal pay law, particularly for women. She introduced the Paycheck Fairness Act as a senator to promote pay transparency and give women tools to fight discrimination in the workforce. This qualifies as crystal-clear. Paid Family & Medical Leave: Clinton wants to guarantee up to 12 weeks of paid family and medical leave, and to ensure Americans get at least two-thirds of their pay (up to a specified amount) while on leave. She expects wealthy people to pay into a fund (at no cost to businesses, she says) in order to afford the plan. We call that taxing the rich. Trump’s only significant statement on this is remarking: “We have to keep our country competitive, so you have to be careful of it.” If Trump has a measured tone for rejecting something, that is probably it. Trade: This is the second easiest issue to predict for Trump because he has never wavered from the populist viewpoint. “Free trade” is practically blasphemy to this candidate and his base. Ronald Reagan must be turning over in his grave. Trump slams NAFTA and the TransPacific Partnership (TPP) deal. He pledges to rip up old deals and introduce tough trade measures, especially against China. As for Clinton, she flipped her position on TPP once she became a presidential candidate. She is trying to appeal to the Bernie Sanders coalition with a promise to stop any trade deal that kills jobs or holds down wages in America. Those same progressives protested Clinton for supporting TPP as Secretary of State. This qualifies as clear as mud. Immigration: Easiest comparison of them all. Two words for Trump: wall and ban. That sums up his policy. Build a wall to stop immigration from Mexico and ban Muslims. (Let me clarify — Reagan must be spinning in his grave.) Although lately Trump has loosened the ban slightly, saying there will be strict verifications for Muslims based on their beliefs. Most notably for Clinton, she plans to introduce comprehensive immigration reform with a pathway to full and equal citizenship within her first 100 days. Taxes: Trump has proposed a slash-and-spend policy — large tax cuts across the board with proposals to reduce spending. Since no Congress, regardless of party control, ever reduces spending, economists rightly expect a significant increase in the deficit. Clinton has proposed higher taxes on corporations and the wealthy. Borrow and spend vs. tax and spend. Take your pick. Hypothetically, if Clinton wins by six to eight points or more, it probably means the Republicans have lost the Senate but, in all likelihood, held their House major-
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ADINDEX Acosta ..................................................................................................51 Add Systems .......................................................................................42 Advance Pierre ...................................................................................53 Altria Group Distribution Company .................................................2-3 American Coalition for Ethanol........................................................94 American Licorice ..............................................................................84 Assembled Products/Spray Master..................................................36 Bake N Joy ..........................................................................................65 BIC .......................................................................................................5 Big Red ................................................................................................133 Blu Cigs ...............................................................................................44-45 Calbee..................................................................................................145 Campbell’s ..........................................................................................172 Cash Depot..........................................................................................96 Chef’s Cut............................................................................................63 Cheyenne International ....................................................................99 Chobani ...............................................................................................61 Coca Cola ............................................................................................15 Cookies United ...................................................................................71 Del Monte Fresh Produce NA Inc .....................................................67 Follett...................................................................................................79 Forte Products.....................................................................................66 Goya ....................................................................................................13 Growth Energy...................................................................................93 GSK Group ..........................................................................................39 Heineken.............................................................................................23 Hershey’s ............................................................................................7 Hunt Brothers Pizza ...........................................................................171 Hussmann Corporation......................................................................59 Imageworks Display ..........................................................................103 Inline Plastics .....................................................................................32 Inter-Continental/AlCapone -US .....................................................109 International Paper Company ..........................................................38 Iowa Rotocast .....................................................................................127 J&J Snack Food .................................................................................143 Jack Link’s...........................................................................................19A Regional Jelly Belly............................................................................................137 JT International.................................................................................. 89 JTM ......................................................................................................129 Kretek .................................................................................................117 Krispy Krunchy Chicken....................................................................57,69 KT&G....................................................................................................121,123 Liggett Vector Brands ........................................................................77 Living Essentials ................................................................................37 Logic Technologies ............................................................................CV1,10-11 Mars Chocolate NA.............................................................................29 McKee/Little Debbie ..........................................................................55 McLane Company...............................................................................17 Mondelez International.....................................................................21 MTI/Autofry ........................................................................................64 NAFEM.................................................................................................135 Nat Sherman.......................................................................................75 Paytronix .............................................................................................101 Perfetti Van Melle...............................................................................83 Petrosoft ..............................................................................................139 Phillips.................................................................................................91 Poppies International ........................................................................68 Private Label Manufacturers Association........................................33 Procter & Gamble...............................................................................43 RJ Reynolds Tobacco Company and Santa Fe ...............................9,27 S&M Brands ........................................................................................113 Save-A-Lot..........................................................................................41 SignArt.................................................................................................40 Society Insurance...............................................................................147 Regional Stout Brewing Company ...................................................................81 Subway................................................................................................49 Swedish Match/Longhorn ................................................................73 Swisher International Inc .................................................................95,105 Tillamook Country Smoker, Inc........................................................85 TPE 2017 .............................................................................................141 Universal Merchant Services............................................................Outsert Vilore ...................................................................................................111 Wayne Fueling Systems....................................................................97 White Castle .......................................................................................115 The Wonderful Company / Halos.....................................................31 The Wonderful Company/Pistacios .................................................35 Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 570 Lake Cook Rd. 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Why Non-Perishables Are Key to Retaining Shopper Loyalty at the Convenience Store Wednesday, June 15, 2016 | 11:00 am ET | Duration: 1 hour
While other product categories get more attention and hype, nonperishable products, such as household cleaning, paper, health, beauty and personal care items, are key products to have on hand to attract convenience store shoppers, especially those who might otherwise go to a supermarket, drug or mass retail store. In addition, name-brand non-perishables are especially effective at driving future visits to the store. Join Convenience Store News and its sister company, Carbonview Research, as they analyze the results of an exclusive shopper study on non-perishables in the convenience store channel. CSNews’ Don Longo and Carbonview’s Tanner Van Dusen will examine: • How shoppers view non-perishables in a convenience store • Why brands are important to them • How important is it to carry a wide selection of brands This webinar will focus on shopper insights as it pertains to the non-perishable product sales in convenience stores. Moderator:
Katharine (Tanner) Van Dusen VP, Research Carbonview Research
Don Longo Editorial Director Convenience Store News
Who’s In the Driver’s Seat?
New dashboard dining research reveals influence of children in the household
mom of three makes an afterschool stop at the local convenience store with her children in tow. Her teenage son Ryan makes a beeline to the roller grill, while her daughter Linda is in the mood for a made-to-order milkshake. A fresh-baked cookie, meanwhile, catches the eye of her youngest son Calvin. New research from Carbonview Research, sister company of Convenience
Store News, delves into the habits of U.S. households when it comes to dashboard dining — a.k.a. on-the-go eating in your vehicle — and finds interesting differences between those households with children under the age of 18 compared to those without.
How often do you drink something in your vehicle for the following types of meals?
How often do you eat something in your vehicle for the following types of meals?
(Percent responding very often/often)
(Percent responding very often/often) CHILDREN UNDER AGE 18 IN HOUSEHOLD: YES NO
Breakfast Mid-morning snack Lunch Afternoon snack Dinner Evening snack Late-night snack
36.4% 25.4 35.1 29.8 25.9 24.3 19.5
51.8% 37.1 53.5 43.5 41.2 38.2 32.9
27.3% 18.5 24.1 21.7 16.8 16.1 11.5
Consumers with kids under the age of 18 are more likely than those without to drink something in their vehicles for all mealparts, but especially for lunchtime.
Multiple responses accepted Base: 543 shoppers who own cars and drive to c-stores at least once a month
Breakfast Mid-morning snack Lunch Afternoon snack Dinner Evening snack Late-night snack
31.7% 22.8 32.8 25.4 23.5 22.2 20.9
CHILDREN UNDER AGE 18 IN HOUSEHOLD: YES NO
46.0% 34.8 47.8 40.4 37.3 34.8 34.2
21.2% 13.8 21.7 14.3 13.4 12.9 11.1
The lunch and afternoon snack mealparts are when the biggest divide is seen between consumers with younger children vs. those without eating something in their vehicle for that meal.
Multiple responses accepted Base: 543 shoppers who own cars and drive to c-stores at least once a month
Where do you usually get the food for this meal? Convenience store Supermarket Drugstore QSR/fast-food restaurant Other restaurant Bring it from home Other
36.5% 11.4 3.3 35.8 1.5 10.7 0.7
50.9% 18.5 1.8 14.9 2.3 11.7 0.0
17.1% 11.6 3.8 52.4 4.1 8.9 2.1
43.1% 14.6 5.9 19.2 3.3 13.8 0.0
12.4% 18.3 6.9 33.7 15.3 11.9 1.5
41.8% 17.4 7.1 14.1 4.3 14.7 0.5
42.0% 17.9 4.9 14.8 4.3 13.6 2.5
Among consumers who dashboard dine, convenience stores rank second to fast-food restaurants for their food purchases at lunch and dinner. The rest of the time, c-stores win out.
Base: 271 shoppers who own cars and drive to c-stores at least once a month
Which of the following would prompt you to purchase food at a convenience store? TOTAL
Better price Better selection Special promotion
(i.e., buy one, get one free)
Want to collaborate and share expertise with your peers? The Council of Retail Experts (CORE) is an exclusive network of convenience store retail leaders who do just that. For more information on how to join CORE, please visit www.cvcoreinsights.com.
More convenient location Availabilityy of healthier options Availabilityy of drive-thru Other
CHILDREN UNDER AGE 18 IN HOUSEHOLD: YES NO
42.1 38.9 37.1 32.1 1.6
39.9 45.5 38.5 38.5 1.4
43.8 33.7 36.0 27.0 1.7
Multiple responses accepted Base: 341 shoppers who own cars and drive to c-stores at least once a month 170 Convenience Store News | OCTOBER 2016 | WWW.CSNEWS.COM
Consumers with children under the age of 18 say a better selection would most prompt them to purchase food at a c-store. All other consumers say a better price would prompt them.
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nearly 198 Million adulTS in The u.S. 76% are open To eaTing MeaT SnackS Source: Adults ages 18-64, U.S. Census Bureau and Jack Link’s Protein Snacks Research, 2015
The evolving Shopper: Drive growth and generate profits by understanding shoppers
everal macro trends are influencing shopper behavior across channels and categories – causing changes at retail to happen faster than ever. Shoppers want excitement and evolution in
their stores, and the retailers best suited to drive change are those that continually collaborate with manufacturers to meet the needs of these valuable shoppers.
caTegory aTT aTTiiTude udeS S Several emerging themes are imperative to connecting with and building a relationship with today’s protein snack shoppers. • Buy local, eat organic: appreciation for grass-fed and hormone-free; avoid processed food
• Foodie: enjoy new restaurants; exploring foods
• love meat: meat and protein are integral parts of diet
• Snack oFten: frequent snacks throughout the day
• eat on the run: minimally cook; portability is important
Source: Jack Link’s Protein Snacks Research, 2015
THE EVOLVING SHOPPER
Meat SnaCk ConSuMerS PurChaSe everywhere C-Store
PerC C ent of S hoPPerS S M akinG G P urC C haS S e at C hannel tyP P e.
while meat snacks can be a planned purchase, consumers are 32% more likely to purchase meat snacks at the checkout lane Source: Jack Link’s Protein Snacks Research, 2015
So how do forward-thinking retailers best connect with shoppers? It takes commitment to identifying trends, quickly responding to them and collaborating with manufacturers in meaningful ways to drive sales. Currently, the biggest trends affecting the marketplace today include shoppers who are: • Seeking a healthy balance in their diets • Desiring products that are simple and real • Wanting a flavor adventure • Consuming food throughout the day – anytime and anywhere. While universal in their influence, these macro trends have created big opportunities within the meat snacks category. Consumer attitudes toward meat snacks show a substantial and positive trend, along with a huge opportunity to capture new category users.
Protein rotein!! 25% of consumers don’t know how much protein they consume. The other 75% estimate protein makes up 55% of their diet. Source: Jack Link’s Protein Snacks Research, 2015
• 76% of adults in the U.S. are open to eating meat snacks. • But ONLY half have actually consumed them in past year. • Cravings drive sales of meat snacks! The #1 reason to purchase meat snacks is a craving, with 45% of shoppers citing this reason. Source: Jack Link’s Protein Snacks Research, 2015
Snacking increaSed 47% from 2010 to 2014. Source: Mintel, Chicago
At Jack Link’s Protein Snacks, there is a commitment to uncovering and understanding emerging trends, through deep dives into consumer behaviors and attitudes. Jack Link’s proprietary research has shown the meat snack category comprises several distinct segments – each of which has unique demographic and behavioral characteristics that can be used to better target, attract and convert specific shoppers. Attributes within each segment are unique and require focused strategies to reach the right shoppers.
THE EVOLVING SHOPPER
Meat SnackS haVe StrenGthS WIthIn BrOader SnackInG needS: SatIate SuBStantIVe craVe enerGIze
“I might eat a couple of pieces of beef jerky when I go out just to keep me full.” “I just prefer something that you can chew for a while.” “It’s a very specific thing that you seriously crave every now and then.” “I feel it’s going to give me more power when I’m running too.”
However, one universal opportunity is that cravings are satisfied in all store formats, but most often at the checkout lane with shoppers 32% more likely to purchase meat snacks there. Another opportunity arises in that Jack Link’s shopper segmentation can be overlayed with a retailer segmentation in order to generate an even more effective target. Collaboration between Jack Link’s and retailers in examining and understanding segmentation will grow the meat snacks market to new levels, driving sales and overall basket size. With an understanding of segmentation, what comes next? An analysis of core consumer segments, along with proprietary research, can uncover some key insights to allow retailers to keenly reach the evolving shopper.
Meat Snack eatInG OccaSIOnS there is no typical occasion for eating meat snacks – respondents cite varied times and places. OccaSIOn PurchaSed (recent Meat Snack PurchaSerS) For a Snack at Work
Watching tV/Surfing V/Surfing the Internet
traveling raveling (on a road trip, airplane, etc.)
For example: • Meat snacks help grow the basket: Highprotein meat snacks appeal to a diverse set of consumer groups, encompassing a broad range of snacking need states and occasions.
running errands rrands
Snack for kids ids While Out and about
• Meat snack shoppers often buy on impulse, so providing incremental displays with trusted brands and offering flavor variety will drive interest as consumers seek new items and new food experiences.
hunting/Fishing/ unting/Fishing/camping/h hiking
Further, according to market research firm Mintel, snacks are obliterating meals!
commuting ommuting to/from Work or School
Consumers eat often, eat on-the-go, and eat with more intention in recent years. And it’s not just millennials or dashboard diners – this movement spans demographics. Growing numbers of Americans snack four or five times daily, which adds up to a lot of snacking and even more opportunity to become the chosen snack.
Source: Jack Link’s Protein Snacks Research, 2015
tO drIVe GrOWth and Generate PrOFItS In the Meat SnackS cateGOry, cOntact yOur rePreSentatIVe at Jack LInk’S tOday!